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

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Hong Kong*:  Apr 1 2012 Share

Hong Kong's richest man, Li Ka-shing, yesterday called on the city to rally around its core values of "freedom and rule of law", in the wake of his favoured candidate's loss in the chief executive election. Li was a staunch backer of former chief secretary Henry Tang Ying-yen, but the chairman of Cheung Kong (Holdings) (SEHK: 0001) said he would "absolutely support the [new] government", which takes office in July led by Leung Chun-ying. Speaking at the announcement of the annual results for Cheung Kong and Hutchison Whampoa (SEHK: 0013), Li said the Hong Kong government did not hinge on one person. "It is important to protect Hong Kong's core values - freedom and the rule of law. As for democracy, it is enshrined in the Basic Law and will go on to develop [according to the mini-constitution]," he said. "Everyone should support the government, which is based not only on one person, but the whole administration." Li repeatedly stated his high-profile support for Tang, who lost Sunday's chief executive election with 285 votes to Leung's 689. While some major developers, such as New World Development's Henry Cheng Kar-shun, made a last-minute shift to Leung's camp, Li persisted in his support for Tang. Li reportedly turned down a request from Vice-President Xi Jinping to back Leung. "The election is over," said Li. "We will adopt a co-operative attitude towards the government." Li said he did not fear that the property market would be affected by the new government, stressing he would not withdraw his capital from the city - contrary to speculation during the campaign. "I love our nation and Hong Kong," he said, adding he would not pull out of the city. Hutchison's investments in Hong Kong account for around 16 per cent of the company's global stake. "Hong Kong has the Basic Law and its legal system," he said. "No one has ever been affected because they voted for the other [loser's] side."

Friends of the chief executive-elect Leung Chun-ying defended him on Friday against criticism he is crafty and indifferent to ordinary people’s problems. They also argued that Leung did not originate the controversial 85,000 flats-a-year policy – blamed for causing problems in the property market in the 1990s. However, one friend admitted that Leung’s much-criticised visit to the central governing liaison office on Monday, the day after his victory, had been a mistake. Veteran welfare worker Ho Hei-wah, who has known Leung for more than two decades, said the flat-building policy introduced in 1997 by then chief executive Tung Chee-hwa, had first been proposed by the last governor, Chris Patten. Ho said Leung had merely sat on a committee in 1996 which had advised on the policy. Leung has long been suspected of devising the policy and rival candidate Henry Tang Ying-yen revived these accusations during the chief executive election campaign. Defending Leung on Commercial Radio, Ho, director of the Society for Community Organisation, said the former Executive Council convener was sympathetic to people’s housing problems. Ho said he had advised Leung to visit local communities more in future and show a more human side to the public. On the same programme, Dr Law Chi-kwong, a veteran democrat and also a secondary schoolmate of Leung’s at King’s College, said some people considered Leung was crafty. But Law explained that this was because Leung was over-cautious when answering questions. He said Leung needed to be aware of this. “Sometimes when you speak over-cautiously, it might give an impression that you are lying,” he said. As an example, Law referred to Leung’s answers during the press conference after his victory on Sunday when he was asked whether he thought the liaison office in Hong Kong had canvassed support for him. Leung replied that he “did know what kind of vote-canvassing activities” these were. Law said Leung could have answered this better. He also criticised Leung for visiting the liaison office on Monday. “Why he would visit the liaison office to discuss his trip to Beijing? Shouldn’t he instead be going to the Hong Kong and Macao Affairs Office?” Leung said that during the meeting he had discussed his forthcoming trip to Beijing to accept the top job. Ann Chiang Lai-wan, vice-chairwoman of the Democratic Alliance for the Betterment and Progress of Hong Kong, also praised Leung. “I would describe Leung is a ‘rare species’ in the sense that it’s hard to find a person who would behave and speak as carefully, nowadays,” she said. She also said Leung was respectful to older people.

Legislators on Friday gave preliminary approval to HK$57.3 billion spending in a second round of funding for the Sha Tin to Central rail link. This is despite members complaining that a HK$6.1 billion management fee payment to the MTR Corporation (SEHK: 0066) for building the line is too high, when the corporation’s profit and fare increases are taken into account. The fee is equivalent to 10.5 per cent of total construction costs for the line and the government rejected calls to lower it to 7.5 per cent, saying this would cause delays. Several lawmakers pointed to the rail operator’s planned fare increase of 5.4 per cent in June, despite announcing a 22 per cent profit rise last year amounting to HK$14.7 billion. “Why is HK$6.1 billion needed merely for supervision of the works … why can’t the MTR bear some of the costs?” Legislator Ronny Tong Ka-wah told the Legco railway subcommittee on Friday. Andrew Cheng Kar-foo urged the government to lower the allocation for management fees and consider spending the money on a mechanism to help people cope with the fare rises. But Secretary for Transport and Housing Eva Cheng said that, according to a consultant’s estimate, cutting the fees to 7.5 per cent would mean reducing the number of construction supervisors from 1,000 to 700. “Most of the management fees will be wages paid to staff. Overall quality and progress of the project will be hampered if we cut the fee,” she said. Highways Department principal engineer Henry Chan Chi-yan said a large number of workers were needed because of the complexity of the project. Construction of the 17-km long project would involve 100 contracts at 300 sites over a period of 10 years, he said. Fees for contract management and site supervision by third parties were not included in construction costs. These would be paid from the MTR’s project management fees, he added. The project will next be considered by the Public Works subcommittee of Legco’s Finance Committee on April 18. The link, which includes 10 stations, will connect Tai Wai station on the Ma On Shan Line to Hung Hom station on the West Rail Line. It will also extend the existing East Rail Line from Hung Hom across the harbour to Admiralty. Last year, legislators approved funding of HK$7.7 billion for preliminary work – including expanding Admiralty station and building a new station at Ho Man Tin. Due to concern over MTR fare rises, a review of the fare-adjustment mechanism would be carried out in the second half of the year, Eva Cheng said. An independent consultant has been appointed to review the current process, which calculates fare increases using a formula based on changes in the consumer price index and wages paid to transport workers. The consultant will consider the feasibility of adding new factors, including the MTR’s profits and performance.

 China*:  Apr 1 2012 Share

China said on Friday it had broken the barrier of one billion mobile phone accounts at the end of February, as more people in the world’s most populous country replace fixed phones. The number of mobile phone subscriptions grew 20.7 million in January and February to reach just over one billion, the Ministry of Industry and Information Technology said, up from 900.4 million in April last year. In contrast, the number of fixed line subscriptions fell by 828,000 during that period to reach 284.3 million, the figures showed. Mobile phone use has exploded in the mainland in recent years as handset prices and user charges have dropped, while the continual arrival of new technologies on the market has spurred sales. Of the more than one billion accounts, a total of 144 million used 3G technology – nearly double the figure for April last year. However, the figures do not indicate how many mobile phone users there are in China, as companies and individuals may have two or more subscriptions each. China also has the world’s largest web population with more than half a billion internet users, according to official figures.

The gender imbalance among newborns in the mainland has improved for a third consecutive year but is still alarmingly high, and progress in combatting the problem has slowed. The People’s Daily state newspaper reported on Thursday that 117.78 boys were born to every 100 girls in China last year, down slightly from 117.94 in 2010. The natural gender ratio at birth is between 103 and 107 boys to every 100 girls. Traditionally, Chinese families favour sons, and the mainland’s one-child policy in part drives the practice of selective abortions. China showed more dramatic progress in battling the problem in recent years, with the ratio dropping from 120.56 in 2008 to 119.45 in 2009, and falling sharply to below 117 in 2010. The newspaper says efforts to crack down on illegal prenatal gender tests and selective abortions have helped alleviate the imbalance. Despite the slight improvement, the imbalance is still high and is projected to result in a population with 24 million more men than women of marriageable age by 2020, the newspaper reported. Zhang Jian, spokesman for the National Population and Family Planning Commission, told the newspaper the imbalance would cause serious social problems, such as trafficking in brides and unrest among young males unable to find partners. Yang Juhua, professor of demographics at Renmin University in Beijing, said China should address the gender issue by improving women’s rights. In China, women lag behind men in job opportunities and compensation.

Hong Kong*:  Mar 31 2012 Share

Wen Jiabao yesterday accepted the appointment of Leung Chun-ying as the next chief executive following an election victory that the premier said reflected the community's recognition, trust and expectation. "We believe Mr Leung Chun-ying, after taking office, will lead the government and unite people from all walks of Hong Kong society, carrying forward the cause and forging ahead into the future," Wen was quoted by Xinhua News Agency as saying. "He shall work together with others to boost the economy, improve livelihood, promote democracy and maintain social harmony." Wen said Beijing will firmly implement the principles of "one country, two systems" as well as "Hong Kong people ruling Hong Kong." For his part, Leung expressed gratitude. "I will continue to unite the different sectors and strata of the community with humility, do my utmost, and face up to the challenges ahead," he said in a statement. Leung went to Wan Chai in the afternoon to meet the public, two days after a visit to the central government liaison office fueled suspicions of Beijing's intervention. Leung, surrounded by security guards, received a hearty reception from people eager to be photographed with him. "I hope I will have more chances to come out here and meet the public," he said. "This will bring me closer to the public." Some shopkeepers Leung greeted said he should do more than just shake hands. Leung has to remember the views he receives from the public and reflect their views in the government's policy, they said. "I hope he will keep visiting us in the days to come," one shopkeeper said. "It would be great if he really is as nice as he seems." But in the evening when he toured Laguna City in Kwun Tong, following a visit to Kowloon Bay, he was confronted by protesters. The League of Social Democrats ambushed Leung, calling him a "traitor" for surrendering Hong Kong's autonomy to the liaison office. They also criticized him for trying to push an anti-subversion law mandated by Article 23 of the Basic Law. Leung's progress was stalled for a few minutes. In response to criticism that he plans to set a high nominations threshold for the chief executive election, Leung clarified that he did not mean to, and will listen to views from different sectors.

Hong Kong researchers have been given a top mainland scientific award for their work in developing a treatment for Chinese stroke patients. The Chinese University research team developed the treatment after discovering that strokes among ethnic Chinese were a result of a constriction in the brain’s large blood vessels. (In other patients, they are caused by a constriction in the brain’s smaller blood vessels). The breakthrough is significant because the mainland has one of the world’s highest stroke mortality rates. It is the most common vascular disease in the country, while strokes in western countries are less common and less severe. The Hong Kong team, led by medical professor Lawrence Wong Ka-sing used a procedure known as ‘stenting’ which they say can reduce the incidence of follow-up strokes or death among Chinese patients. The work of Wong and four professors was recognised at a ceremony on Thursday, when they received a Higher Education Outstanding Scientific Research Output Award organised by China’s Ministry of Education. It was one of six such awards received by the university – three in the natural sciences and three in technology. “Right now, stroke patients who are treated in public hospitals will only receive a general scan to see if there is blood constriction, but this does not pinpoint exactly where,” said Wong. “We hope our study will help raise awareness of this illness with Chinese patients and that a treatment tailored for them now exists.” The procedure is only offered at the Prince of Wales Hospital – the university’s hospital in Sha Tin. After research that began in 1998, the team imported the stenting technique from the United States in 2004. It involves inserting a wire-mesh tube known as a wingspan into the large artery of the leg and using a catheter to push it into the restricted artery in the brain. Only five to six people out of 95 have died or suffered a recurring stroke following stenting therapy since 2004, but researchers say an accurate view of its effectiveness will not be available for three years. In 2006, the team placed 40 patients under stenting therapy and 40 patients under an aggressive medical therapy – a treatment relying solely on medicine – to compare results. The rate of recurrence among patients on medical therapy has been about 23 per cent – similar to the rate among general stroke patients. The therapy was approved in the US in 2005 – a year after the Hong Kong team started using it. But it was suspended by the US Food and Drug Administration last April because the rate of mortality and stroke recurrence was 9.6 per cent – deemed too high to continue. “We still don’t know whether the stenting therapy is completely safe, and maybe a therapy relying solely on medicine is the most effective. We will have to wait and see, but at least for Hong Kong it is still safe to use the therapy,” Wong said.

Li Ka-shing, chairman of Cheung Kong Holdings, speaks during the 2011 annual results press conference on Thursday. Hong Kong's Hutchison Whampoa, controlled by Li Ka-shing posted full-year profit up 178pc. Hutchison Whampoa (SEHK: 0013), controlled by Asia’s richest man Li Ka-shing, said on Thursday its last year net profit leapt 178 per cent thanks to strong recurring revenue, earnings and cash flow growth. The conglomerate, whose interests span ports to telecoms and financial services, said it booked a net profit of HK$56.02 billion (US$7.21 billion) in the year to December 31, compared with HK$20.18 billion the previous year. Total revenue grew 22 per cent to HK$387.72 billion, boosted by a gain of HK$44.3 billion from the sale of a ports unit in Singapore in the first quarter of the year. Excluding profits on investment property revaluation and the disposal of investments, net profit totalled HK$22.56 billion last year, or 36 per cent more than the previous year. “In last year, uncertain economic conditions affected most markets and geographies to varying degrees,” Li, 83, said in a statement to the Hong Kong stock exchange. “A measure of uncertainty is expected to remain this year,” citing a short-term slowdown in China due to monetary tightening to manage inflation. “However, given the nature and the geographical spread of our businesses and their track record, I expect, barring unforeseen material adverse developments in major markets, the group will continue to grow its recurrent earnings and maintain a strong financial position and liquidity this year.” Hutchison announced its results after markets closed with its shares down 0.44 per cent at HK$79.05. The overall Hang Seng index had dropped 1.32 per cent.

Former chief secretary Rafael Hui Si-yan, and the tycoon brothers Thomas and Raymond Kwok who control Sun Hung Kai - Hong Kong’s biggest property development company - were arrested by the Independent Commission Against Corruption on Thursday morning for suspected corruption. In a series of raids, ICAC investigators detained Hui, 63, the highest-ranking ex-government official arrested in the anti-graft agency’s 37-year history, at his home on Thursday morning. Sun Hung Kai chairmen Thomas Kwok Ping-kwong, 59, and his brother, Raymond Kwok Ping-luen, 58, were detained around the same time. All three men are still being questioned at ICAC headquarters. No one has been charged. A statement by the ICAC on Thursday afternoon said only that "two senior executives of a listed company... and a former principal official of the Hong Kong government have been arrested for suspected corruption". However, sources close to the investigation confirmed to the South China Morning Post (SEHK: 0583) the identity of those arrested on Thursday. The arrests come 10 days after Sun Hung Kai’s executive director, Thomas Chan Kui-yuen, was arrested by the ICAC in connection with a bribery investigation. The ICAC statement also noted the arrest of another senior executive at the company in question - Chan - and four others for their alleged roles in the same case. All five of those previously arrested were questioned and released on bail. On Thursday morning, Sun Hung Kai Properties (SEHK: 0016) suspended trading of its shares, pending the release of an announcement, which may be price sensitive. The Kwok family, which controls Sun Hung Kai, Hong Kong’s largest property developer by market value, was ranked by Forbes magazine as the third richest family in Hong Kong, with an estimated net worth of US$15.4 billion. Rafael Hui served as chief secretary from 2005 until 2007 and was the chief strategist behind campaign team that helped chief executive Donald Tsang Yam-kuen get elected in 2005.

Sun Hung Kai Chairmen Arrested in Hong Kong - Raymond Kwok, left, and Thomas Kwok, of Sun Hung Kai Properties, are show at a company press conference in Hong Kong in 2010. Two of Asia's richest and most influential property tycoons were arrested in Hong Kong on suspicion of corruption, a case that has also ensnared a former top government official in one of the city's most high-profile bribery allegations in recent memory. The arrests of the two chairmen at family controlled Sun Hung Kai Properties Ltd. is a blow to the blue-chip company, one of the world's biggest real-estate developers, which has built some of the most iconic skyscrapers in Hong Kong's skyline. In a city where a small group of powerful organizations control real estate, transportation, supermarkets and communication, the sight of two tycoons walking into government offices to answer questions in a corruption case was riveting. Thomas and Raymond Kwok were arrested Thursday by Hong Kong's anti-graft agency, Sun Hung Kai said in a statement. The Independent Commission Against Corruption also arrested the city's former No. 2 official, Rafael Hui, also on suspicion of bribery and on suspicion of misconduct in public office, a person familiar with the situation said. Sun Hung Kai also said the ICAC searched the company's offices Thursday. The two Kwok brothers are heirs to their late father's property empire, taking the helm of Sun Hung Kai after ousting elder brother Walter in 2008, following a feud that erupted into a nasty boardroom battle and resulted in the appointment of their octogenerian mother as chairwoman the firm. The ICAC issued a statement late afternoon saying that two senior executives of a listed company in Hong Kong and a former principal official of the city's government have been arrested on suspicion of corruption. The company's shares were halted from trading early Thursday, some 20 minutes after the market opened. No charges have been filed against the individuals. Hong Kong's laws, which are modeled after the British legal system, empower law-enforcement agencies to detain or offer bail to suspects before deciding whether to file criminal charges against them. No details were available about the case. Mr. Hui was a career civil servant who first retired in 2000, but returned to the government between 2005 and 2007 to serve as chief secretary under current Hong Kong leader Donald Tsang. Between his stints in public service, Mr. Hui had been a consultant with Sun Hung Kai, and was also a director for one of Sun Hung Kai's listed units. The relationship between real-estate developers and the government in Hong Kong strike at the heart of simmering social tensions in this city of 7 million. Opposition lawmakers and some social groups have long criticized the government for being too closely aligned with the interests of the developers, which control many of Hong Kong's sectors, leading to consistently high property prices that has contributed to the city's high inflation. Over the past weekend, Hong Kong's pro-Beijing elites selected a candidate not favored by Hong Kong's tycoons as the city's next chief executive. The winner, Leung Chun-ying, had led his main opponent by as much as 30 percentage points. The unpopularity of his rival, Henry Tang, was fuelled in some part by his close ties with the city's wealthy tycoons, many of which continued to support him despite Beijing's clear support for Mr. Leung. The Kwok Family - Patriarch: Kwok Tak-seng; Realm: Co-founded by Kwok Tak-seng, who died in 1990, and Henderson Land Development Chief Executive Lee Shau-kee, Sun Hung Kai Properties Ltd. is Hong Kong's largest property developer by market capitalization. Heirs: Three sons: Walter, Thomas and Raymond. At Sun Hung Kai: In 2008 the eldest son, Walter, was replaced by matriarch Kwong Siu-hing, 79 years old at the time, as nonexecutive director and chairman. Walter had earlier said that his brothers wanted to oust him by saying he had bipolar disorder, though he insisted that he was healthy. Ms. Kwong, Thomas and Raymond Kwok took the reins of the company. In late 2011, Ms. Kwong stepped down, and Thomas and Raymond were appointed joint chairmen and remained directors.

 China*:  Mar 31 2012 Share

Prada's Asia Focus Boosts Profit 72% - Prada has 25 boutiques in China, including this one in Shanghai. 'Our expansion is not complete,' said Deputy Chairman Carlo Mazzi. Prada SpA's sharp focus on Asia resulted in a 72% rise in profit for its most recent fiscal year, a sign that one of the luxury-goods industry's biggest bets on the growing Chinese market is paying off. Prada—which includes the main Prada label as well as Miu Miu, Church's and Car Shoe—said Thursday that net income for the year ended Jan. 31 jumped to €432 million ($575.3 million) from €251 million a year earlier. Sales rose 25% to €2.56 billion. It was the Italian fashion house's first annual report since listing shares in Hong Kong last June. "Our brand awareness is big enough, but our expansion is not complete," Prada Deputy Chairman Carlo Mazzi said in an interview. "In China, we're present in just 10 cities. There are many important cities we are not present in and where we need to open." Luxury-goods purveyors—from watchmakers to clothing labels to wine producers—are banking on newly wealthy Asian shoppers to lift the sector's sales. Through the recent economic downturn, Asian consumers spending at home and abroad counteracted the slumping growth in Europe and the U.S. Now, the Asian-Pacific region has become the largest market for Prada, and it is among the leading regions for other players such as LVMH Moët Hennessy Louis Vuitton SA and Gucci owner. Many luxury-goods analysts expect China to become the biggest country for luxury goods by the end of the decade, supplanting the more mature Japan. Prada's sales in Asia, excluding Japan, soared 42% last year and now account for more than one-third of the group's sales. Eighteen of the 75 stores Prada opened last year were in Asia, bringing its total network in China to 25 boutiques. In Guangzhou and Shenyang, for example, Prada opened stores for both its Prada and Miu Miu labels. Prada didn't neglect other regions. The biggest number of boutique opening were in Europe, where Prada and competing labels such as Hermès, Burberry and Louis Vuitton are pouring millions into flagship shops to burnish their image. Increasingly, tourists—in many cases from China—are the biggest spenders even in European shopping capitals. Sales of high-margin leather goods increased 41% to account for 56% of Prada's sales. Though the Prada brand has become known in the past 20 years as a trendsetting fashion house—making a case for the return of the pantsuit in its runway show last month—its roots are as a luggage maker. Mr. Mazzi said leather-goods sales boomed because they are the most prominent items in new stores, and are best sellers among tourists. Despite Prada's optimism about Asian luxury spending, the company isn't releasing growth targets. Rival Gianni Versace SpA this week predicted three years of at least 10% sales growth. "Markets are too anxious," Mr. Mazzi said. "The top luxury market is a little more sure than the rest of the market."

Australian Prime Minister Julia Gillard pictured at the Nuclear Security Summit in Seoul on Tuesday. Gillard on Thursday described her nation’s relationship with China as “strong, robust” but said they would not always agree after a controversial telecoms contract ban. Australian Prime Minister Julia Gillard described the nation’s relationship with China as “strong, robust” on Thursday but said they would not always agree after a controversial telecoms contract ban. Beijing has criticised Canberra for “obstructing” Chinese companies in the name of security after telecoms giant Huawei was barred from tendering for contracts in Australia’s broadband rollout due to fears of cyber attacks. Gillard said the decision to exclude Huawei from the project was made after taking “appropriate advice”, refusing to elaborate further on “what are ultimately national security matters”. She stressed that the move was “not in breach of any trade rules or trade arrangements” with key export partner China and said it would not hurt ties more broadly. “We’ve got a strong, robust relationship with China, we are deeply engaged at every level … and you will continue to see our relationship with China strengthen and grow,” Gillard told reporters. “Now does that mean that there will never be a moment where we see things differently? Of course not, there will be moments where we see things differently and I’m not surprised that this is [such] a moment,” she added. “But it would be a great error indeed to move from a moment where we are seeing one thing differently and then extrapolate that to the full dimensions of the relationship, a very grave error indeed.” Gillard said Canberra had taken the Huawei decision “for the right reasons, through the right process, based on the right advice about a piece of critical infrastructure for our nation’s future”. The ambitious Au$36 billion (US$37.2 billion) national broadband rollout aims to connect 93 per cent of Australian homes to superfast fibre optic cable internet by 2017. Huawei, on track to become the world’s largest maker of telecoms equipment, was told not to bother bidding for contracts on the network due to fears of cyber attacks from China. The computers of Gillard, and the foreign and defence ministers were all suspected of being hacked in March last year, with the attacks thought to have originated in China. Beijing dismissed the allegations as “groundless and made out of ulterior purposes”.

New Apple? Tim Cook Breaks with Tradition on China Trip - Apple CEO Tim Cook’s trip to China has broken with the company’s traditional style in more ways than one. Firstly, he’s here. Apple’s late co-founder Steve Jobs never traveled to China on official business as CEO in such a public and visible manner, even as the world’s most populous nation was fast becoming the lead market for PCs and smartphones, and even in the face of criticisms of its supply chain here. Mr. Cook has also met with several high-level government officials, including Vice Premier Li Keqiang and officials from the Ministry of Industry and Information Technology and the Ministry of Commerce. Apple has had a relatively small government relations operation in the country for years, industry experts say. And then, this morning, Apple’s public-relations team—known the world over for keeping the company’s secrets more than for engaging with the media — distributed a photo of Mr. Cook at the iPhone production line at a new Hon Hai Precision Industry plant in Zhengzhou, taken Wednesday. The photos show Mr. Cook wearing a yellow factory coat and matching cap, smiling as he watched workers in an assembly line. Perhaps in part because Apple was primarily focused on the U.S. market for most of his tenure, Mr. Jobs said very little publicly about China and Hon Hai, which assembles iPads and iPhones as well as gadgets for many other large electronics vendors. In one rare exception at a conference hosted by All Things Digital, a publishing partner of The Wall Street Journal, he discussed a spate of suicides at Hon Hai factories that he said were “troubling.” But Mr. Jobs sent others in the company, as well as outside experts, to visit Hon Hai and assess the situation there, he explained. This is not Mr. Cook’s first time in China, or his first time breaking away from his predecessor’s style of management. Last week, he announced that Apple would return some of its roughly $100 billion in cash reserves to shareholders in dividends and buy back stock, going against Mr. Jobs’ long-held policy of using extra cash to invest into Apple’s operations. Mr. Cook has said that Mr. Jobs encouraged him to run Apple his own way, and “just do what’s right.” Mr. Cook’s public appearances around the country have been well received by Chinese Internet users, who’ve praised the executive for paying more attention to the Chinese market. The executive’s meetings with Chinese officials and comments about investing more in China this week suggest that attention won’t let up. A greater focus on China from within its headquarters in Cupertino, Calif., and deeper ties with the Chinese government could also help in other challenges, with China now being Apple’s largest market outside the U.S. It could even add a little muscle to Apple’s legal battle over the rights to use the iPad name in China. Still, the changes aren’t all too drastic yet. The description sent to journalists with Mr. Cook’s photo Thursday was brief: “On March 28, 2012, Apple CEO Tim Cook visited the iPhone production line at the newly built manufacturing facility Foxconn Zhengzhou Technology Park which employs 120,000 people.” Requests for more information weren’t answered.

Brics: West's Central Banks Sparking Capital Flow Volatility - Aggressive monetary easing by Western central banks to revive growth in their economies is hurting emerging nations, which are facing a rush of destabilizing capital inflows, a draft declaration by the Brics group of five nations showed Thursday. Brazil's President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao and South African President Jacob Zuma at the BRICS 2012 Summit in New Delhi, March 29. Excessive liquidity because of the central bank actions "has been spilling over into emerging economies, fostering excessive volatility in capital flows and commodity prices," according to the document. According to the document, the group—comprising Brazil, Russia, India, China and South Africa—also wants steps to avoid an escalation of the Iran oil crisis. The group favors a diplomatic resolution to the problem. Heads and several ministers of the five countries are attending the fourth Brics summit in New Delhi.

China Tests Financial Relaxation in Wenzhou - China approved a broad package of financial reforms in Wenzhou, a city known for entrepreneurship and underground lending, in what may be a prelude to a national effort to liberalize China's creaking financial system. The move by the State Council, China's cabinet, represents an important symbolic step toward overhauling a system long seen as a barrier to developing a more substantial and sustainable growth model for the world's second-largest economy. The key test will be whether the Wenzhou reforms are rolled out in other parts of the country. Other promised reform efforts in recent years have failed to materialize, and the government's tendency toward overregulation could squelch innovation and keep its important but shadowy informal lending system underground. In a statement, the State Council said it would allow private lenders in Wenzhou, whose legal status has been in limbo, to operate as investment companies to augment the financing available to small and medium-size enterprises. Smaller companies have long complained they have been starved for funds because China's giant state-owned banks favor other state-owned enterprises, whose ability to repay is considered guaranteed by the cash-rich Chinese government. In addition, the State Council said it is studying allowing Wenzhou residents to invest directly overseas, giving them a way to earn better returns than in Chinese banks, whose deposit rates frequently lag inflation. Currently, China strictly limits such investments. Under the investment proposal, residents in Wenzhou would be allowed to spend up to $200 million a year—or as much as $3 million a person—to set up, acquire, or invest in nonfinancial companies in foreign markets. Wenzhou residents would also be able to reinvest abroad any profits generated abroad. Still, there could be "revisions" in the details pending the State Council's approval, said Su Xiangqing, head of the Wenzhou Bureau of Commerce. The move comes amid increased calls both inside and outside the country for change, with Chinese Premier Wen Jiabao himself telling a news conference this month that China's informal finance system "has still not adapted to the development of our economy and society." Elsewhere, the World Bank and a Chinese government think tank in February called for scaling back state-owned enterprises. Meanwhile, newly appointed securities regulator Guo Shuqing has been pursuing wide-ranging changes in China's stock and bond markets. The Wenzhou approvals are "very significant," said a senior executive at a large Chinese bank. "Right now, China's banks are ill equipped to lend to small- and medium-size enterprises partly because of a lack of expertise in assessing risks." Some business leaders in Wenzhou welcomed the moves. "Formalizing private lending can help us reduce funding costs," said Qu Guoning, who runs one of the hundreds of small makers of electric wires and cables in Wenzhou and has been fretting about how he will fund a planned business expansion. Mr. Qu said he is planning to expand his business into making household appliances, a line of business that promises greater profitability but would need "tens of millions" of yuan in investment. Bank financing, he said, is difficult to get. It is unclear how big China's underground lending might be. In October UBS estimated it could be between two trillion yuan and four trillion yuan in total, or $316 billion to $632 billion. The process of legitimizing informal finance could involve giving existing underground lenders a license to operate as small-loan companies while imposing deposit collection requirements, experts say. Such moves would reflect that the informal sector is also ballooning as a deposit base, with money being drawn in by the potential for high returns but where savers could stand to lose everything if things turn sour. In recent months the local Chinese press has contained many examples of informal lenders going bust, leaving irate depositors behind. Eswar Prasad, a China scholar at the Brookings Institution, said that the government is concerned that the informal banking sector has been gaining so much steam that it could "pose risks to overall financial stability" by eating away at the depositor base of the big banks. That's why, he said, "they are taking steps to bring these informal banks under the regulatory umbrella." Even if it begins to roll out some of these initiatives elsewhere, China still has major work to do. Mr. Prasad said China still must liberalize interest rates, so that China's largest banks respond more to market forces, or proposed changes won't be sufficient. "These steps to formalize the underground banking system are no substitute for more basic financial-sector reforms," he said. There was no indication from the State Council statement that the government was yet ready to move on interest-rate liberalization, even though central-bank Gov. Zhou Xiaochuan said recently that the time was "basically ripe" for such a move. The People's Bank of China reports to the State Council. Early last year, the Wenzhou government proposed to give its locals more freedom to invest overseas, only to suspend the move due to a lack of consent by the central government. Wenzhou officials then worked out a new proposal—similar to the original one—and submitted it for approval as part of the broader plan to make the city a testing ground for financial reforms. While it appeared that the government has now sided with Wenzhou, the State Council statement didn't give unambiguous approval, and it's unclear how much freedom the government is ultimately willing to give Wenzhou residents to invest overseas. Chinese officials are buffeted by crosswinds. On the one hand, some in the State Council worry about large capital outflows as the economy slows. On the other hand, the central bank is continuing its drive to encourage Chinese businesses to invest overseas as part of its effort to diversify its $3.2 trillion worth of foreign-exchange reserves, by far the world's largest. Wenzhou, in Zhejiang province, drew attention to the funding pressures faced by China's private sector last year when Beijing tightened monetary policy, making it harder for the city's small companies to get credit or roll over loans. More than a dozen business owners shut their factories and skipped town, leaving creditors behind, according to state media reports. In China's traditional financial system, banks play the dominant role and interest rates for savers and borrowers are set by the state. That model, designed to shovel low-cost credit from households to state-owned firms, works well to finance investments in infrastructure and capital-intensive industry. But with China's economy now pushing against the limits of a growth model based on investment, the costs are starting to outweigh benefits, analysts say. Cheap capital for state-owned enterprises and real estate developers has led to wasteful investment. Meanwhile small private businesses have been unable to get credit. The State Council statement proposed various ways for big state owned firms to increase lending to private firms by encouraging the establishment of special lending units. But in the past such efforts have proved disappointing. State-owned banks complain that China lacks credit bureaus that would enable them to assess the riskiness of such loans. The shadow banking system—which sprang up in the cracks of the traditional banking system and came to prominence in 2011—sought to supply credit, albeit at often exorbitant rates. The government cracked down on what it considered the most egregious cases, including sentencing to death Wu Ying, an entrepreneur in Zhejiang, for "fraudulent fundraising." She was found guilty after allegedly raising as much as 770 million yuan illegally from the public by promising them high investment returns. Ms. Wu's attorney has contended that she merely borrowed the money from her friends and invested the funds in profitable businesses. The case has prompted widespread sympathy for Ms. Wu.

Hong Kong*:  Mar 30 2012 Share

Hongkongers consumed 25 per cent more foie gras last year as the rest of the world tightened their purse strings, pushing down France's overall export of the delicacy by 8 per cent. Lower demand in Europe was mainly caused by economic troubles in Spain, France's main export market for foie gras, producers' group CIFOG said yesterday. The tsunami in Japan, another major destination of French foie gras, also contributed to the drop in exports. Amigo Restaurant, which serves French cuisine in Happy Valley, said "foie gras sauté" is a top choice for both local and foreign customers. "The majority of our customers order it when they come here. They know it's a signature dish in French cuisine," said the manager. The foie gras dish costs more than HK$300. Red Chimneys in Jordan, Tsim Sha Tsui, recently launched a French-themed buffet, and foie gras is one of the most popular dishes. "Many Hong Kong people love the rich, buttery and delicate flavour of foie gras," said a manager in the restaurant. But most of them would not eat too much as they know the level of cholesterol in it is high." A small rise in sales of foie gras within France, pegged at 1.1 per cent in volume in supermarkets, however, meant that overall sales in 2011 were flat, CIFOG said. Producers said the fastest growing export markets were Asia - where Hong Kong's imports of French foie gras surged more than 25 per cent in volume last year - and the Middle-East, notably the Emirates and Qatar. Sales of halal foie gras - which is prepared according to strict Muslim rituals - were marginal, but producers said demand was increasing quickly, both in and outside Europe. "The halal market has enormous potential," said Brieuc Fruchon, executive director of Rougie, part of the world's largest foie gras maker, Euralis. The producer group forecast an increase in prices in 2012, in addition to the price rise already imposed last year due to higher grain prices, the main feed for geese and ducks. "It is a rise in two steps, essential for the sector, and that should not impact demand. We are talking about a few cents for a festive product," CIFOG president Xavier Gaudio said.

New World Hospitality's Sonia Cheng says the company hopes to have 80 hotels around the world by 2020. New World Hospitality has announced a US$160 million plan to expand the number of hotels under its Pentahotels brand to 30 in the next five years. The expansion will focus on the mainland and cities elsewhere in Asia, said chief executive Sonia Cheng. She said New World Group would own 30 per cent of the hotels and other developers the rest. Pentahotels, a brand launched in Europe, now has two hotels in Asia - in Shanghai and Beijing. The company will open a hotel in Guiyang next year with 197 rooms, and one in Shenyang with 390 rooms in 2014. Cheng said the other new hotels would be in urban centres, convention and exhibition complexes, airports and railway stations. "Pentahotels brings a new concept to China and Asia. We see tremendous potential," Cheng said. The hotel's target customers, she said, were 25 to 35 years old and willing to pay 400 yuan (HK$490) to 500 yuan a night to stay in a new-concept hotel. Half the guests are expected to be mainland tourists. Cheng said the initial response to the brand was not bad, with an average occupancy rate of 80 per cent in the Shanghai and Beijing hotels. "We have a multipurpose lounge, not a lobby, designed as a lively bistro-style gathering place for meeting friends, and as an extension of the hotel's guest rooms," she said. By 2020, the company hopes to expand the brand to 80 hotels worldwide. As well as Pentahotels, New World operates New World Hotels in China and Southeast Asia and Rosewood Hotels and Resorts in North America. The company acquired the latter last year for US$229.5 million. New World Hospitality currently manages a total of 28 hotels under the three brands. Sonia Cheng is no Paris Hilton. The 29-year-old granddaughter of New World Hospitality founder Cheng Yu-tung is a tough-talking Harvard-grad. Even so, she has her work cut out for her. As the newly named executive vice chairman of New World Hotels, Ms. Cheng will manage a $1.1 billion expansion plan in greater China: “We will do whatever it takes to be competitive within the markets we enter,” she says, noting that the company’s goal is to develop 40 hotel properties in China over the next five years – 20 are already in the pipeline. The unit of New World China Land Ltd., which was relaunched recently as New World Hospitality (from New World Hotel Management, Ltd.), currently owns eight properties in China. Ms. Cheng is not one to forget about tradition, but there are old-school things about luxury hotels she won’t miss, as well as some new-school trends she thinks won’t last. 

More super-rich in E Asia than US - Region has 18,000 people worth at least US$100 million, and they spend big on homes, art and wine - The distribution of the world's super-rich is shifting, with the number of people in East Asia owning at least US$100 million in assets surpassing North America for the first time. There were 18,000 of these so-called "centa-millionaires" in Southeast Asia, China and Japan last year, against 17,000 in North America and 14,000 in western Europe. And a study, jointly conducted by Citi Private Bank and Knight Frank, shows Chinese people will rank among the top buyers of the most expensive properties worldwide over the next five years. The growing number of these super-rich also lifted investment in art, wine and sport - so-called "investments of passion" - last year. And wealth creation in the region is set to continue. By 2016, there are forecast to be 26,000 of these super-rich in Asia, compared with 21,000 in North America and 15,000 in western Europe. "Economic turbulence failed to curb the rise in the number of ultra-wealthy individuals last year," the wealth report said. There were 63,000 people worldwide with US$100 million or more in assets, equivalent to a 29 per cent increase since 2006, it said. While the United States economy grew 1.8 per cent and the troubled euro zone expanded 1.6 per cent last year, Asia managed to chalk up economic growth of 7.9 per cent. London School of Economics professor Danny Quah forecasts that by 2050, the world's economic centre of gravity - a theoretical measure of the focal point of global economic activity based on gross domestic product - will have shifted eastwards to somewhere between China and India from the middle of the Atlantic Ocean in 1980. On a country-by-country basis, the US would still dominate in 2016, with 17,100 centa-millionaires, but China would be catching up fast, with their number set to double to 14,000, the report said. "The number and concentration of centa-millionaires accentuate the trajectory of current global wealth flows. Trends seen in this wealth bracket are likely to be replicated in lower wealth tiers in years to come," says James Lawson, a director at Ledbury Research. Last year, Li Ka-shing was ranked as Asia's richest man with a fortune of US$25.5 billion, according to Forbes. Globally, Li rose from the 11th spot to ninth on the world's richest ranking. Chinese, Russians and those from the Middle East and Latin America are expected to be the most important buyers of prime properties worldwide over the next five years. "The Chinese market opened up rapidly in 2011 with buyers from there joining other wealthy investors in targeting the US$1 million to US$3 million Manhattan market," said Jonathan Miller, the head of New York property analyst Miller Samuel. The proportion of high-net-worth individuals expressing a greater interest in investing in fine art rose 25 per cent from 2010; interest in wine investment was up 11 per cent and even the expensive business of investing in sports teams showed no real overall decline in popularity.

ICAC boss stays past retirement for Tsang probe - Corruption watchdog's deputy will ensure continuity in conflict-of-interest investigation - The deputy commissioner of the corruption watchdog will work past his retirement date next month to ensure continuity in the conflict-of-interest probe involving Chief Executive Donald Tsang Yam-kuen. Daniel Li Ming-chak would remain with the Independent Commission Against Corruption until July 31 - 30 days after the new government takes over - instead of retiring on April 18 as planned, the government announced yesterday. Several senior ICAC staff members are near retirement age, and the commission is having difficulty finding suitable replacements. Li's extension was decided by Chief Secretary Stephen Lam Sui-lung under the acting power delegated to him by Tsang (pictured with wife Selina Tsang Pou Siu-mei). Tsang is being investigated for potential conflicts of interest by accepting favours from tycoon friends. Meanwhile, several lawmakers sought to "punish" the chief executive during yesterday's budget debate in the legislature, with three attempts to cut his office budget and socialising expenses. All three motions were defeated in the Legislative Council during a resumed debate on the 2012-13 budget. Civic Party lawmaker Alan Leong Kah-kit proposed a cut of HK$1,055,640 from the budget - Tsang's salary for three months. "Tsang promised to close the city's wealth gap when he sought another term in office five years ago", Leong said. "He has not been doing his job properly. Even worse, he admits accepting tycoons' favours, damaging the image of the government." Cyd Ho Sau-lan, a Labour Party lawmaker, said Tsang and his wife should not receive the HK$273,325 budgeted for their socialising expenses during Tsang's remaining three months in office. "The money is to allow the chief executive to approach [people in] different walks of life [to discuss] policymaking," Ho said. "But instead of using the money properly, Tsang has been socialising only with people close to him or his tycoon friends," so they did not need the money. Albert Chan Wai-yip, of People Power, proposed a full year's budget cut for the chief executive office and executive council "to penalise" Tsang and his team. That would amount to over HK$93 million. Rejecting Leong's motion, Professor Chan Ka-keung, secretary for financial services and the treasury, said: "The motion is not reasonable and not appropriate. "The cut-off is likely to affect the running of the government." Secretary for Constitutional and Mainland Affairs Raymond Tam Chi-yuen said the motion to hold up the Tsang couple's social spending "would create a negative image of the government and produce an international disgrace". Meanwhile, Financial Secretary John Tsang Chun-wah, whose budget proposals in February called for a basket of HK$80 billion in relief measures, asked for support from Legco members yesterday, rejecting criticism that his budget proposals were short-sighted. "Seventy per cent of the budget is spending on non-recurrent expenditures. Of those, 60 per cent is spent to address major social issues such as education and health," Tsang said. The budget debate continued last night.

New top court judge Robert Tang Ching - The government yesterday appointed a judge older than the retiring Mr Justice Kemal Bokhary to fill his shoes as a permanent judge of the Court of Final Appeal - an arrangement that surprised some senior lawyers. Mr Justice Robert Tang Ching, vice-president of the Court of Appeal, will become a permanent judge of the top court on October 25 when Bokhary turns 65, the retirement age for judges, even though Tang is nine months older. Bokhary, who is well known for his frequent dissenting opinions, will then become a non-permanent judge. The appointments surprised some senior counsels since the two judges are effectively swapping positions; Tang is currently a non-permanent judge of the top court. A judiciary spokeswoman said that, by October, Bokhary would have served for over 15 years as a permanent judge of the Court of Final Appeal, and there were no exceptional operational grounds for continuing his tenure. On the other hand, Tang was considered "eminently suitable" for elevation to the Court of Final Appeal, she said. Bokhary said he would have been happy to stay, but his departure was "no big thing". "People speculate as to why I wasn't extended. Then remember this: the loss of one judge, even if he's the most liberal judge in the court - even if he's the only liberal judge in the court - is not fatal," he said outside the court. "The important thing now is for the other judges to demonstrate, as I'm sure they will demonstrate, and make the public believe - as I'm sure the public will believe them eventually - that the judiciary will stay true to their judicial oaths and the people of Hong Kong can be content," he said. Martin Lee Chu-ming, the city's most senior senior counsel, called the arrangement strange. He was concerned that, as a non-permanent judge, Bokhary would have far fewer chances to sit at the bench, rendering rulings by the Court of Final Appeal more conservative. Lee added: "Mr Justice Tang is a good and hard-working judge. There is nothing bad to say about him." While Tang was certainly not as liberal as Bokhary, Lee said Tang was not ultraconservative. Barrister and lawmaker Audrey Eu Yuet-mee called the decision quite odd. It was "inexplicable that when you retire a judge on account of his age, you replace him with another judge born in the same year".

Members of the League of Social Democrats confront Leung Chun-ying (left) during a visit to Laguna City in Kwun Tong. Three days after he won the chief executive election, Leung Chun-ying reached out to the public yesterday, with appearances around Hong Kong, in an apparent attempt at damage control after he was criticised for visiting the central government's liaison office on Monday. Leung's unannounced visit to Wan Chai during the lunch hour was hassle-free and uneventful, though it was criticised afterwards by media organisations, which had not been given advance notice of the trip. Leung made another tour to Telford Garden and Amoy Gardens in Ngau Tau Kok last night. Amoy Gardens was severely hit during the Sars outbreak in 2003, and Premier Wen Jiabao called in during his tour of Hong Kong that year. The chief executive-elect paid a visit to Block E of the private residential estate, home to 22 of the 42 estate residents who died from Sars. Leung received a warm reception in Amoy Gardens, but was confronted by a group of protesters from the League of Social Democrats when he ventured into the Laguna City estate in Kwun Tong last night. The protesters chanted slogans against any plan to relaunch the national security legislation. Leung talked to the former chairman of the League of Social Democrats, Andrew To Kwan-hang, one of the protesters, and said he noted their concern about the possible damage to the rights of Hong Kong people the national security legislation might cause. To said he was surprised by Leung taking the initiative to reach out to him, and the move showed his forthcoming style. Meanwhile, pro-establishment Legco members, divided by the contentious chief executive race, have set up what appears to be a reconciliatory gathering next month. Tam Yiu-chung, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), said Leung had also accepted an invitation to the gathering. More than 30 Beijing loyalist lawmakers will be invited. The meeting was set up amid concerns that the camp would struggle to co-operate in future after its members split between Leung and his rival, Henry Tang Ying-yen, during the bitterly fought election contest. Tam said it would be a regular gathering. "We want to have a chat with Leung this time," he said. Leung had also been invited to the DAB's regular retreat at Kylin Villa in Shenzhen on April 14, Tam said. Earlier in the day, Wen endorsed Leung as chief executive at a meeting of the State Council. He said Leung's victory reflected society's trust and expectations of Leung. "He will work to boost the local economy, improve people's livelihoods, promote democracy and maintain social harmony," Wen said, according to Xinhua. Leung promised to stay close to the public, as he spent an hour handing out campaign pamphlets at a Wan Chai wet market. Leung said: "I hope to shorten the geographical and psychological distance between residents and myself through these visits."

Construction of luxury residential development Kadoorie Lookout is expected to be completed by the last quarter of next year. Tai Hung Fai Enterprise, a small property developer, plans to launch its first luxury-home project in Ho Man Tin this year, with flat prices pitched at about HK$20,000 per square foot. Some market watchers say the pricing is quite aggressive. The developer - whose real estate investments include offices, hotels, serviced apartments, and industrial properties - said Kadoorie Lookout at 110 Argyle Street, Ho Man Tin, will be pre-sold in the second or third quarter of this year. "There aren't many new projects in the area and therefore there is a lot of pent-up demand," said Edwin Leong Siu-hung, Tai Hung Fai's chairman. The single-block development comprises 55 flats including two- and three-bedroom units, four of which are duplexes of about 3,000 square feet each. The size of the remaining flats will range from 900 to 1,500 square feet. Leong said in view of the sale prices of secondary flats at 15 Ho Man Tin Hill, flats in Kadoorie Lookout would be marketed at about HK$20,000 per square foot - meaning they will cost HK$18 million and upwards. The tower is next to the Kadoorie Hill, where luxury homes have long attracted celebrities, according to Leong. It is located a few minutes' walk from the Mong Kok MTR station and the district has 34 prestigious schools. Tai Hung Fai plans to sell about 30 flats and keep the rest for leasing; a 900 sq ft flat can be let for around HK$40,000 a month. Simon Lo Wing-fai, executive director of Asia research and advisory services at property agent Colliers International, expects the project to attract wealthy investors, as they will be more willing to pay a premium price to buy new flats. Lo expects flats at Kadoorie Lookout to sell fast, despite their high prices, given there are relatively few new flats in the area and Tai Hung Fai will not be offering many flats for sale. Kent Chui, a Ricacorp Properties director, said the price of HK$20,000 per square foot was somewhat aggressive, but noted that developers usually announce a high asking price initially before lowering the price to help draw buyers. Chiu noted that the remaining new flats at One Mayfair on Broadcast Drive, Kowloon Tong, were also being marketed at about HK$20,000 per square foot. One Mayfair is a low-density development of luxury homes by Sino Land. Richard Lee Chi-shing, chief executive of Hong Kong Property Services, said there was demand for new luxury flats of about 900 square feet in the area. "The attractiveness of this project is that it is in a luxury area, but conveniently located near Mong Kok," he said. Flats at a neighbouring new project, One Victory on Victory Avenue, developed by Easyknit International and between 350 square feet and 883 square feet in size, were selling for roughly HK$11,000 per square foot on average, Lee said.

The central government on Wednesday appointed Leung Chun-ying as Hong Kong’s next chief executive - starting from July 1. The Xinhua news agency reported that the decision was made at a State Council meeting presided over by Premier Wen Jiabao. Leung won an election for the top job on Sunday, obtaining 689 votes of the 1,132 ballots cast by the 1,200 members of the Election Committee. Xinhua reported that Wen said during the meeting that the election results reflected “Hong Kong community’s recognition, trust and expectations of Leung”. The premier was also quoted as saying he believed Leung would work closely with different sectors to develop the economy, improve livelihoods, encourage democratic development and maintain stability. Leung, a former Executive Council convener, will be the city’s third chief executive following Tung Chee-hwa and Donald Tsang Yam-kuen.

Maids in Hong Kong Denied Residency Right - Eni Lestari (right) from Indonesia, Dolores Balladares (center) from the Phillipines and Ganika Diristiani from Indonesia and representing the Asian Migrants' Coordinating Body outside Hong Kong's High Court Wednesday morning - A Filipina maid's pursuit to seek permanent residency in Hong Kong was rebuffed, the latest development in a case that's ignited tensions over the city's relationship with its domestic help. The government won an appeal Wednesday against an earlier ruling from a lower court that would have allowed the city's nearly 300,000 foreign guest workers to apply for permanent residency, that allows the right to remain in the Chinese territory indefinitely. Though Hong Kong allows other expatriates to secure permanent residency after living in the city for seven years, the city's domestic helpers, mostly Filipina and Indonesian, are excluded from that entitlement. In 2010, after Evangeline Vallejos's application for permanent residency was denied in Hong Kong despite having worked in the city since 1986, she applied for a judicial review of that immigration department decision, in what's since become a landmark labor case. Last September, she was backed by the High Court, which ruled that it was unconstitutional for the government to continue not allowing maids permanent residency. The case has inflamed concern among some Hong Kongers that the city could become overwhelmed if domestic helpers receive permanent residency and bring over their children and other family members en masse. Last year, Ms. Vallejos' lawsuit attracted dueling protests, with maids carrying placards reading, "I love HK" and Chinese protestors shouting slogans about protecting local employment. Amid this background, tensions have also been rising with the mainland as Chinese mothers cross the border to give birth in the city, straining the local health-care system. In Wednesday's decision, the judges affirmed the government's argument that it has discretion to decide who can settle permanently, noting that such discretion exists even for other countries that also have anti-discrimination protection. In one section of today's 66-page ruling, the court declared that numerous exceptions to the city's Immigration Ordinance have existed since 1971, including exclusions of those imprisoned, as well as the issue of Vietnamese refugees between the late 1970's and mid-1990's, who were permitted to remain in Hong Kong as refugees pending resettlement but were denied permanent residency rights. "What makes us different from other expatriates?" said one female worker at a press conference convened immediately after the decision's release. "We also work hard to support our families." Ms. Vallejos's lawyer Mark Daly criticized the decision, saying it's not right for the government to create "second-class citizens." He added he wasn't surprised by the ruling, and that the case will likely proceed to the Court of Final Appeal. "People in Hong Kong should be proud to have [people like Ms. Vallejos] as full permanent residents," he said. Ms. Vallejos was not in court today.

 China*:  Mar 30 2012 Share

President Hu Jintao and wife Liu Yongqing arrive in New Delhi for the BRICS summit, the fourth such meeting of the emerging market economies. President Hu Jintao called on the international community to support the development of emerging markets as he arrived in New Delhi for a BRICS summit, at which Brazil, Russia, India, China and South Africa are expected to sign pledges of closer economic co-operation. At a trade ministers' meeting held on the sidelines of the summit, a top Chinese official said he expected China's economic growth to exceed the government's 7.5 per cent target this year, and that China would help the US and Europe tackle their financial crises. However, he also said Beijing had its own problems to fix. Hu started his two-day trip in India with a banquet hosted by Indian President Pratibha Patil, before joining the formal BRICS summit today along with the leaders of of the other four countries. He also held a talk with Russian President Dmitry Medvedev. Hu said China and Russia would strengthen cooperation in various aspects including energy and aviation. He added that two countries believed the sovereignty of Syria should be respected and China supports the mediation work by UN envoy Kofi Annan. Items at the top of the summit agenda include setting up a BRICS development bank and the situations in Syria and Iran. China Development Bank chairman Chen Yuan said two agreements worth billions of US dollars would be signed by the development banks of the BRICS countries today, allowing them to extend lines of credit in local currencies among member states. In written replies to questions from BRICS media, Hu said the emerging markets had increased their global representation following the financial crisis. "What has happened shows once again that without the rise of emerging markets and developing countries, there will be no universal prosperity (SEHK: 0803, announcements, news) in the world," he said. "The international community should look at these countries from a long-term and strategic perspective and actively support their development." Commerce Minister Chen Deming told the ministerial meeting that the euro-zone debt crisis, the surge in resource prices and recessions in some economies had affected the growth of China's economy, but that economic output could still exceed this year's goal of 7.5 per cent, set at this month's annual meeting of the National People's Congress. "Through our hard-working effort and the slow recovery of the world's economy, our actual growth may go beyond 7.5 per cent," he said, adding that China would rely more on domestic consumption for economic growth. The fourth BRICS summit is being held amid concerns that the group's influence in global affairs is limited because members have different economies and systems of governments and do not trust one another.

Tariffs Hurt America's Other Solar Industry - More U.S. workers will be hurt by photovoltaic-cell duties than 'benefit.' The U.S. Department of Commerce announced last week a ruling to raise trade barriers against solar cells produced in China. The preliminary determination calls for tariffs of 2.9% on cells manufactured by my company, Suntech; 4.73% on those made by Trina Solar; and 3.61% on the rest of solar cell imports from China. Although these initial rates are modest, the department will consider adding more tariffs over the next several months. Doing so would be a mistake. Trade barriers—large or small, at any point in the global solar value chain—are harmful to both America and China. The tariffs arise because a German company with operations in the U.S., SolarWorld, spearheaded a petition claiming that Chinese solar companies are successful because of unfair Chinese subsidies, and also that we sell our products in the U.S. at unfairly low prices. Suntech's success is not based on extraordinary subsidies but on industry-leading technology, quality products and efficient, large-scale manufacturing. Two weeks ago, Suntech set a world record for solar cell conversion efficiency using standard commercial silicon wafers. To the extent that Chinese firms do receive any subsidies, such subsidies are hardly unique to China. SolarWorld itself has received more than $100 million in support from governments around the world, according to news reports. Many other energy-related firms also enjoy various forms of largesse, including ethanol producers and oil companies. Unfortunately, for some in Washington, China-bashing has taken priority over the global imperative to rapidly develop more cost-effective and large-scale clean energy solutions. Even if China doesn't retaliate, solar tariffs will be costly for the U.S. economy by pushing up the price of solar energy, reducing demand, threatening millions of dollars in new power projects and cutting jobs. Only a small proportion of the American solar industry is involved in the kind of manufacturing SolarWorld does, which the antidumping duties are supposed to help save. About 95,000 of the 100,000 solar-industry jobs in the U.S. are either with upstream producers of capital equipment, polysilicon and the like; manufacturers of complementary components such as racks; or downstream services surrounding solar project construction, installation and engineering. All of those jobs are heavily integrated in the global economy and benefit from global free trade, including with China. For example, over the last decade, Suntech has been primarily a net consumer of solar products in the U.S., as we spend hundreds of millions of dollars each year with U.S.-based producers of machine equipment and material inputs. In 2010, we also opened a solar panel manufacturing facility in Goodyear, Arizona, which has already doubled employment to more than 100 jobs. The (questionable) benefits of any antidumping tariff for the fewer than 5,000 workers at companies that directly compete with Suntech and our peers need to be weighed against the potential harm to all the other Americans employed by us, our suppliers and customers. That's why many large and small U.S. solar industry leaders, such as AES Solar, Dow Corning, Grape Solar, GroSolar, GT Advanced Technologies, MEMC/SunEdison, REC Silicon, Rosendin Electric, SolarCity, Swinerton, and Verengo Solar, among dozens of others in the Coalition for Affordable Solar Energy, banded together to oppose tariffs and to defend free trade. They not only represent American consumers; they represent thousands of American manufacturing jobs and 95% of all American solar industry jobs. Unfortunately, by law, Commerce antidumping investigations don't consider this bigger picture. Commerce also isn't allowed to account for the danger of retaliation by a trading partner targeted by antidumping duties, but now that's also a threat in this case as some in China are calling for trade barriers to block U.S. competition. The consequences could be serious. China is the largest customer for many of America's solar products. According to a Brattle Group analysis commissioned by Coalition for Affordable Solar Energy, America could lose 11,000 jobs if Beijing were to impose tariffs on American polysilicon. And trade battles between these two governments could encourage other countries to raise protectionist barriers; a similar investigation is being discussed now in India targeting both the U.S. and China. Hopefully Beijing will avoid the temptation to impose retaliatory antidumping tariffs, and hopefully Washington will avoid any additional tariffs on Chinese imports. Before this trade fight, China and the U.S. were poised to become the world's two largest markets for solar panels within the next few years, if not in 2012. The rapid growth of the global solar industry is made possible by global competition driving down the price of solar products and therefore solar electricity to parity with fossil fuels. Taxing solar products is counterproductive to everything the solar industry has worked to achieve and still hopes to accomplish. Solar technology remains one of the greatest environmental and economic opportunities in the history of human civilization. The world's two largest producers and consumers of energy, China and the U.S., must work together to facilitate global solar industry growth and to solve our planet's energy and environmental crisis.

Tim Parker, Chairman and CEO of Samsonite International, at the company's listing ceremony in the Hong Kong Stock Exchange in June, 2011. Samsonite International, the world's biggest luggage maker, said on Wednesday it plans to add 500 new points of sale in Asia, with 200 of those in China, as it seeks to tap strong growth in the world’s second-largest economy. Chief Executive Tim Parker was speaking on Wednesday after the Hong Kong listed company reported a 75.6 per cent drop last year net profit. Parker said the company was present in 60 mainland cities and would add a further 25 this year. The brand which makes luggage under the Samsonite and American Tourister labels said that after eliminating non-recurring costs and charges, adjusted net income was up 29.6 per cent at US$136.8 million. Shares in Samsonite, which counts Royal Bank of Scotland as a major shareholder, were down 0.85 per cent on Wednesday, compared with a 0.95 per cent drop in the Hang Seng Index.

De Beers Diamond Jewellers, a joint venture between producer De Beers and luxury group LVMH, plans to establish at least six new stores in China this year to cash in on a vibrant appetite for diamonds. “We are looking at expanding our shops in continental China big time this year,” said Philippe Mellier, chief executive of De Beers, at a Mining & Metals Summit in New York. “We are growing the business where the biggest growth is – in Asia.” Mellier said De Beers Diamond Jewellers was refurbishing its flagship store on Old Bond Street, the luxury jewellery quarter in London, and also planned to upgrade its store on Fifth Avenue in New York, but he said; “Our primary focus is China, because it is the fastest growing market.” Mellier said Chinese people were travelling abroad more, to destinations such as Europe, and buying luxury brands. De Beers Diamond Jewellers opened stores in Beijing and Tianjin in the mainland, and a second shop in Hong Kong, last year. De Beers Diamond Jewellers is a equal shares retail joint venture with LVMH (Moet Hennessy Louis Vuitton), a leading luxury products group, established a decade ago. De Beers itself belongs to global miner Anglo American, The diamond industry has seen a flurry of sale and listing activity in recent months. Rio Tinto on Tuesday followed rival BHP Billiton, announcing it was backing away from the diamond business. Rio’s diamond arm, on its books for US$1.2 billion, includes the 100 per cent-owned Argyle mine in Australia, famous for its pink diamonds, as well as 60 per cent-owned Diavik mine in Canada and 78 per cent-owned Murowa mine in Zimbabwe. “We can always look at good opportunities. It is very early and even if we were to look, we would keep it to ourselves,” Mellier said. De Beers operates in Botswana, Namibia and South Africa, but also in Canada – home to BHP’s EKATI mine and Rio’s Diavik, and potentially a key area for diamond exploration – with the Snap Lake and Victor mines. BHP’s mine has attracted interest from smaller diamond miners, the jewellery industry and even private equity, but Mellier said De Beers, the world’s largest diamond miner by value, did not fear competition. “I know what competition looks like,” said Mellier, the first outsider to take the top job at De Beers.

Hard to Swallow: Air Show’s Pricey Meal - It takes a high price indeed to faze the attendees of the Asian Business Aviation Conference & Exhibition in Shanghai this week. Even for nonbuyers, after spending a few days looking at luxurious offerings like a $68 million Airbus Corporate Jet, the $7.2 million price quoted for a Piaggio P.180 Avanti high-performance business turboprop starts to sound reasonable. But then rumors started swirling of a $30 sandwich on offer at the conference’s lunch area. Exhibitors of multimillion-dollar aircraft scoffed — there must be some misunderstanding, they said. And there was: A ticket for a sandwich (accompanied, to be fair, by a salad, drink and baked good of one’s choice) actually cost 240 Chinese yuan, or about $38. Then on Tuesday, said ticket sellers, the order came down from above that the price must be raised, to 300 yuan – US$47.55 at the current rate of exchange. “It must be the best sandwich in the world!” your correspondent said. “No,” came the reply. News of the $50 sandwich lunch (indeed, not the best sandwich in the world) was received with incredulity by an executive whose luxury business jet charter firm charges its clients tens of thousands of dollars for flights of only a few hours. Pausing, he reconsidered: “I suppose that explains why people were lunging at the canapes yesterday.” Even for the captive audiences of private aviation shows, it would seem that some prices are too high.

The most expensive Panda Tea - An Yanshi from Chengdu, capital of Sichuan province, created Panda Tea - tea fertilized with pandas' excrement. The Panda Tea costs 20,000 yuan for a 50g pack, and the rare product is on sale for 440,000 yuan per kilogram. An will apply the Guinness World Record as the world's most expensive tea. An Yanshi said in an interview with Sichuan TV that the income from the Panda Tea will be used for environmental protection, such as tree-planting.

Vice-Premier Li Keqiang (R) meets with CEO of Apple Tim Cook in Beijing on Wednesday. Vice-Premier Li Keqiang said Tuesday that China will strengthen intellectual property rights protection and continue to transform its economy, when meeting CEO of Apple Tim Cook in Beijing. "To be more open to the outside is a condition for China to transform its economic development, expand domestic demands and conduct technological innovation," Li said. He said that trade and economic cooperation together are an "important cornerstone" for the cooperative partnership featuring mutual respect and reciprocity that China and the United States are endeavoring to establish. The vice-premier called on multinational companies to expand cooperation with China, actively participate in the development of the western part of China, pay more attention to caring for workers and share development opportunities with the Chinese side. Cook said Apple will strengthen comprehensive cooperation with the Chinese side and conduct business in a law-abiding and honest manner. Li highlighted the importance of development of new technologies and industries for a healthy recovery and strong, sustainable and balanced growth of world economy. He said the Chinese government will make more efforts to strengthen innovation and cultivate strategic emerging industries.

Plot in classic novel restages in Beijing - The scene of "Lin Daiyu buries the fallen flowers" is restaged at Beijing's Grand View Garden in Beijing, March 27, 2012. Beijing's Grand View Garden is a traditional garden modeled on descriptions from the classic novel, "A Dream of Red Mansions"

Hong Kong*:  Mar 29 2012 Share

The bright lights keep some people awake, but others say they help the city's image. Never a dull moment - Light pollution is taking its toll on the health of people living in the worst affected areas and may increase the risk of cancer, but little is being done to redress the problem. To the residents of certain neighbourhoods in Hong Kong, it may seem as if the nights are just getting brighter and brighter, with eye-popping LED advertising panels, colour-saturated neon signs and floodlit billboards illuminating the streets, adjacent buildings and the night sky all around. Although the bright lights promote the image of a modern and vibrant cosmopolitan city, they may be adversely affecting the daily lives and health of those living amid the glare in the city's high density commercial-cum-residential areas. "In the past couple of years, the light pollution issue has got more serious in the urban jungle," says Edwin Lau Che-feng, a local director of environmental group Friends of the Earth. "There are more and more advertising spotlights, panels and big screens being put up in different parts of the city. The government has received many complaints from the public about [external] lights shining through their windows and curtains." Last year, the Environmental Protection Department (EPD) received 361 complaints about external light installations that were the responsibility of private organisations - mostly about light nuisance caused by advertisements, decorative lighting, or spotlights directed on building facades. The number of complaints has increased dramatically over a five-year period; even in 2007, 40 had been a seven-year high. And of course, many others suffer in silence. "To be fair to the city, they have resolved a lot of the complaints," says Carl Gardner, director of the London-based CSG Lighting Consultancy. Local authorities invited Gardner in October to conduct training seminars on practical lighting improvements based on British legislation. Gardner says the local authorities have been going out to complainants and those responsible for the lighting to reach an informal solution, "but they were starting to find it overwhelming because the number of complaints has increased exponentially". In response to the growing problem, the EPD established a task force of advisers from various professional bodies - environmental groups, advertisers, property developers, lighting designers and engineers - to set up technical guidelines to minimise light nuisance and energy waste. The six-page document, "Guidelines on Industry Best Practices for External Lighting Installations", was released in January (available at the Environment Bureau's website (www.enb.gov.hk) According to EPD information officer Chau Yau-fai, copies of the guidelines will be given to the offending parties when handling light nuisance complaints and compliance encouraged. "Among other things, [the EPD task force] will consider whether a voluntary or a mandatory approach should be taken to regulate external lighting installations," he says. The voluntary nature of the new guidelines has its limitations, says Gardner. "Hong Kong doesn't want to go down the legislative route, but if you don't have any sticks, then you need carrots to incentivise advertisers through subsidies on equipment or tax breaks. Otherwise, you won't get any change." In 2007, Dr Jason Pun Chun-shing, professor of observational astrophysics at the University of Hong Kong, began a light pollution survey in the city funded by the Environment and Conservation Fund. Having collected half a million data points, Pun found that the night sky in urban areas was many times brighter than in rural areas, even when measured on the same night with identical weather conditions. "Unfortunately, in urban locations we don't achieve a good night sky until very late in the evening," says Pun. "City lights should be turned off around 11pm or so, but we still have a lot of lights around 1am, mostly unnecessary." Light pollution is defined as light seeping into the night sky, creating an aggregate halo effect over the city. It is barely noticed by most urban dwellers, but may have manifold environmental effects from the waste of energy to changing the ecological lifestyle of nocturnal animals and plants. Unlike many other cities, Hong Kong's commercial and residential zones are not strictly separated. "In places like Causeway Bay, Mong Kok or Wan Chai, you might see 30 big spotlights shine on an advertising board and just above it would be residential flats," says Friends of the Earth's Lau. In several cases, tenants have complained that the lights actually penetrate through curtains and make it difficult for them to sleep. Because no real studies have been conducted specifically on the health effects of this light trespass, it is difficult to prove any direct danger. There are, however, serious consequences when light at night causes disruption of sleep. David Blask, professor of structural cellular biology at Tulane University in New Orleans, is a leading expert on the link between cancer and light at night. In 1987, he read a paper published by Dr Richard Stevens, an epidemiologist, hypothesising that electrification in industrialised societies may account for the elevated risk of breast cancer, which is roughly three to five times higher than in less developed countries. At the time, Blask was conducting groundbreaking research on the hormone melatonin and its ability to combat cancer. "The literature was quite solid showing that light at night would shut off melatonin production," Blask says. "If you put animals on constant light, the tumours would grow faster. [Stevens] put the experimental work in a context never considered before. The possibility that light at night, which is so prevalent in a 24-7 society, could be a cause of breast cancer by suppressing melatonin is an intriguing and important idea." Melatonin is a powerful antioxidant that can prevent mutations by stimulating DNA repair. It also blocks tumours from taking up linoleic acid, which is "the king of pro-inflammatory fatty acids" and provides the fuel for tumour growth, Blask says. The body is run by an internal clock that's synchronised by light. Darkness - usually around 9pm - triggers the production of melatonin via the pineal gland in the brain. Light deactivates the pineal gland and stops production of melatonin. Since 1993 Blask has teamed up with colleague Robert Dauchy, who pioneered a method to inject and grow human tumours in rats. In one experiment, some rats were kept in a facility with a light leak at night. "We noticed that the tumours were growing much more rapidly in these animals than in the control animals," says Dauchy. They suffused human tumours in rats with blood from volunteers at three different times - daytime, at nighttime and after being exposed to 90 minutes of light at night. They found that tumour growth proliferated with the daytime and light-at-night blood whereas the melatonin-rich nighttime blood shut down the tumour. They also conducted light box experiments in which implanted female rats were kept under light of varying intensities. The brighter the light, the faster the tumours grew. "Melatonin puts cancer cells to sleep at night," says Blask. "Without melatonin, they are awake 24 hours a day." A 2005 study, by epidemiology Professor Scott Davis of the Fred Hutchinson Cancer Research Centre in Seattle, Washington, established the link between night-shift work and an elevated risk of breast cancer. Lau suggests light nuisance could be minimised through mandatory curfews like noise control ordinances. "There should be a time for advertisers to stop shining their spotlights. In different districts, lights may be turned on until 3am. No one is doing any more shopping once they close at 10.30pm, so why do you need all that advertising?" To Gardner, the solution is to regulate design principles. "I've seen signs where 50 per cent or more of the light is spilling across the street. This is the wrong way to do it; with the right technique, you can position the light on the sign with no light spilling on the street," he says. He also suggests dimming the LED lights atop buildings so that the glare does not exceed a limit in square metres. "The city once had quite a good skyline," says Gardner. "But what you notice more and more are the really, really bright building signs - one overpowering the other, with just so many bright spots. It's quite garish. There is no sense of balance over the city." But Pun disagrees: "In this city, brightness means prosperity (SEHK: 0803)." In a 2010 survey by the Advisory Council on the Environment, 70 per cent of 2,700 respondents felt that light pollution existed in Hong Kong, but 78 per cent said lights helped beautify the environment and promoted the city's image. In other words, most Hongkongers like the bright lights, so change may be a challenge.

Democratic Party chairman Albert Ho Chun-yan said on Tuesday he would like to have a serious meeting with chief executive-elect Leung Chun-ying to discuss important issues facing Hong Kong. Ho, who came a distant third in Sunday’s chief executive elections, was replying to Leung’s offer of a “courtesy meeting”. The offer was extended to Ho through Barry Cheung Chun-yuen, Leung’s campaign chairman. Ho said: “I think there is no need to have a courtesy meeting. That doesn’t mean we won’t meet. But if we sit down to talk, I hope it will be a serious working meeting,” he told Commercial Radio. Ho said he was also discussing with Cheung the possibility of Leung meeting pan-democrat representatives – and not just Democratic Party members. Ho said he hoped to meet the chief executive-elect around mid-April. Leung had earlier suggested drinking beer with his rivals after the election. But Ho said it would be better if Leung joined a march planned by the pan-democrats on Sunday. The march is a protest against the central government’s liaison office’s apparent interference in the election. Leung said he looked forward to future discussions with the pan-democrats. He said he also hoped to hold a meeting with rival candidate and former chief secretary, Henry Tang Ying-yen.

Chief executive-elect Leung Chun-ying said on Tuesday he would not be a “yes man” and would deal with Beijing officials in accordance with Hong Kong’s long-term interests. Leung was speaking on local radio about his controversial 90-minute visit on Monday to the central government’s liaison office. The visit triggered criticism about the possibility of intervention by Beijing in local affairs. Leung, however, stressed that he would always uphold Hong Kong’s autonomy. Asked if he would say “no” to future intervention by the liaison office, Leung said: “Over the past two decades I said ‘yes’ and ‘no’ according to the incident itself and the long-term interests of the city.” Leung also dismissed allegations from pan-democrats that he had visited the office to thank the government in Beijing for their support during the election: “The entire meeting on Monday was first on my coming visit to Beijing to accept the appointment by the central government. Secondly, it was on the full implementation of Cepa [the Closer Economic Partnership Arrangement], the 12th five-year plan and the 36 [economic-boosting] policies and measures offered by Vice-Premier Li Keqiang in supporting Hong Kong’s economy,” he said. Leung caused a stir by visiting the office for 90 minutes the day after his election victory and meeting with current Chief Executive Donald Tsang Yam-kuen for only half an hour. “I have scheduled a series of meetings with Mr Tsang in the coming days, but I have no other plans to meet with the liaison office,” he said. Leung stressed that Hong Kong “only has one governing team”. The chief executive-elect also said that resurrecting the national security law required by Article 23 of the Basic Law – shelved after angry protests in 2003 – was “not in my working plans”. “There are a lot of deep-rooted social conflicts which I have to solve, such as the wealth gap and housing problems,” he said. Leung had told journalists, after winning the top job with 689 votes, that he could not rule out restarting consultation on national security legislation. But on Tuesday he said a prerequisite for introducing the law would have to be its acceptance by Hong Kong people. Leung noted that this “could not have been possible” in 2003, when 500,000 people marched in the streets against the proposed law. In another interview, discussing who would appointed the next chief secretary, Leung said: “Popularity is a very important factor for consideration”. Two possible choices for the position, Stephen Lam Sui-lung and Carrie Lam Cheng Yuet-ngor, have very different popularity ratings: incumbent chief secretary Stephen Lam has been the least popular minister in Tsang’s cabinet, while Secretary for Development Carrie Lam has proved the most popular.

Hong Kong Frets Over Low Fertility Rates - child plays with hula hoops at the Southorn playground in Hong Kong. In the 1970s, Hong Kong’s government worked hard to persuade people against having too many children—with posters around town declaring “Two is enough” and “Family planning can make work a delight and life blissful.” Fast forward 40 years, and the reverse is true, with demographers now wringing their hands over low fertility rates. Like much of Asia, with rising education levels, declining marriage rates and longer work hours, Hong Kong has seen its youth population shrink. By 2030, a quarter of its population is expected to be age 65 and above, according to government estimates. Hong Kong’s next top leader, Leung Chun-ying, proposes strengthening financial incentives to coax the city’s residents to start having more babies. According to his campaign platform (in Chinese), Mr. Leung would raise existing tax breaks for families who have babies to HK$80,000 (US$10,300) for their first child and HK$100,000 (US$13,000) for every subsequent child. For a family with three kids, that would total an annual boon of US$36,300 in tax breaks, more than the city’s per-capita GDP. Hong Kong’s government has been a pro-baby cheerleader for some time now. In 2005, Chief Secretary Donald Tsang made serial pregnancy sound like practically a civic duty, telling residents that couples “should at least give birth to three kids to help alleviate the ageing population.” Still, fertility rates have stayed low: In 2010, Hong Kong’s fertility rate was just 1.10 births per woman, well below the 2.1 rate needed to maintain a population at its current levels. But Paul Yip, research chair for Hong Kong’s Family Planning Association, says that even sums as generous as Mr. Leung’s proposed tax break aren’t enough to make the city crawl with extra babies. He notes that it’s extremely expensive to raise a child in Hong Kong, citing a Hang Seng Bank ad that raised some eyebrows for claiming that raising a child in Hong Kong costs as much as HK$4 million (US$515,000). For prospective parents living in tiny apartments (the average flat in the city is just 600 square feet), he says, the idea of an additional child can be stressful. The money parents might save through a tax credit “can buy some milk powder, but it’s not enough to pay for violin and piano lessons,” says Mr. Yip. Low birth rates are endemic across the region. In Singapore, for example, where parents receive cash incentives, the fertility rate is 1.15. The trend is likewise apparent in mainland China, where the fertility rate is 1.8, according to government estimates. (China’s one-child policy permits a number of exceptions, including for rural residents and ethnic minorities.) Meanwhile, with a fertility rate of less than 1, Taiwan is home to the world’s lowest rate of childbirth, despite government-offered subsidies. Part of this trend, says Mr. Yip, can be traced to a growing reluctance among couples to have children, noting that many “want to be child-free” and have become “more individualistic.” Mr. Yip tries not to condemn such an attitude, saying, “if it makes it easier to go on a cruise, or a holiday, that’s your choice, it’s your lifestyle.” But he also argues that more children—who eventually become productive, tax-paying workers—are an economic force that help to support the whole community, especially the older generation. One way to address the local fertility rate would be to allow more mothers from the mainland to give birth in Hong Kong, a controversial trend that is already filling up baby wards in the city. Though most children accompany their mothers back home, as Hong Kong permanent residents, many eventually return to Hong Kong to work or study. However, locals strongly oppose such a population influx, saying it threatens to overburden the city’s hospitals and schools. For the moment, says Mr. Yip, it’s good to see Hong Kong’s next chief executive backing financial incentives for expectant parents. “Children belong not only to me, but also the community,” he says, “and everybody should chip in.”

 China*:  Mar 29 2012 Share

Territorial claims set out in map of South China Sea - The publication is part of a campaign to raise people's awareness of the issue and safeguard sovereignty. Mainland authorities will publish a map of the South China Sea this year to strengthen their claim to the disputed region. The map is part of a national campaign involving a dozen ministries and the Communist Party's publicity department to help raise public awareness of the country's territories and safeguard its sovereignty in disputed areas. In a statement posted on the website of the National Administration of Surveying, Mapping and Geoinformation in the middle of this month, a joint national steering group set out its work priorities for this year. "[The government will] continue the research programme on mapping the South China Sea, making and publishing maps of the South China Sea and its islands with a view to laying out our [territorial] claim," the statement said. Tensions over territorial disputes in the South China Sea have resurfaced since 2009, after a United Nations' commission set a deadline for countries to submit claims for extended exclusive economic zones beyond the 200 nautical miles set out by the UN Convention on the Law of the Sea. Major claimants to the disputed waters include Beijing, Taipei, Vietnam, the Philippines, Malaysia and Brunei. YaleGlobal, published by the Yale Centre for the Study of Globalisation, said Beijing had submitted a map with nine dotted lines, claiming most of the sea, following claims submitted by Vietnam and Malaysia. The new map will be part of a propaganda campaign involving the party's publicity department, the Ministry of Foreign Affairs, Ministry of Education, Ministry of Public Security, Ministry of Civil Affairs, the State Administration of Radio, Film and Television News and Publication and other ministries. "Propaganda and education on national boundaries … serves the need to promote patriotism," the statement said. "It is also needed to safeguard China's dignity and integrity." Professor Du Jifeng , a researcher with the Chinese Academy of Social Sciences' Institute of Asia-Pacific Studies, said Beijing had recently made some relatively aggressive moves in the South China Sea, such as the arrest of Vietnamese fishermen early this month. Neighbouring countries would be further provoked by the release of the map. "But I don't think China will go further than that. Military actions can almost certainly be ruled out."

UN-Arab League envoy to Syria Kofi Annan walks past a paramilitary policeman as he arrives at the Chinese Ministry of Foreign Affairs for talks in Beijing on Tuesday. The former UN secretary-general is proposing a six-point plan to end the bloodshed in Syria. Annan said in Moscow that above all, the Syrian government and opposition must start a political process to resolve the conflict peacefully, adding that it would be up to the Syrians themselves to decide whether President Bashar Assad should step down. Kofi Annan, the United Nations and Arab League envoy to Syria, was in Beijing on Tuesday to seek China’s backing for his plan for a negotiated end to the bloody conflict in Syria. Annan arrived after meeting with Russian President Dmitry Medvedev in Moscow, where he said there was no deadline for ending the Syrian crisis but that it cannot drag on indefinitely. In Beijing, Annan met with Foreign Ministry officials and was to hold talks later on Tuesday with Premier Wen Jiabao. The former UN secretary-general is proposing a six-point plan to end the bloodshed in Syria. Annan said in Moscow that above all, the Syrian government and opposition must start a political process to resolve the conflict peacefully, adding that it would be up to the Syrians themselves to decide whether President Bashar Assad should step down. China – along with Russia – has twice shielded Assad from UN sanctions over his crackdown on a year-long uprising, in which more than 8,000 people have been killed. The two countries called the resolutions unbalanced, saying they blamed only the Syrian government and demanded an end to government attacks, but not ones by the opposition. About 60 countries, including the United States, will attend a “Friends of the Syrian People” conference in Istanbul on Sunday. China’s Foreign Ministry spokesman Hong Lei said on Monday that China was invited but would not attend. Washington and many of its allies have said Assad has lost all legitimacy after a year-long brutal crackdown on political opponents and that he must step down. China says the crisis needs to be resolved through talks. Annan’s proposals include a cease-fire first by the Syrian government, a daily two-hour halt to fighting to evacuate the injured and provide humanitarian aid, and inclusive Syrian-led political talks “to address the legitimate concerns of the Syrian people”. The conference in Istanbul will come as Turkey edges closer to setting up a buffer zone in Syria to protect civilians. Turkish officials have long been hesitant about the idea, but now say a surge of refugees from Syria might compel Turkey, preferably with international backing, to establish the buffer zone on Syrian soil to guarantee the security of its own southern border as well as the welfare of civilians fleeing violence.

South Korea's President Lee Myung-Bak is joined by US President Barack Obama, President Hu Jintao and other leaders for the group photo at the 2012 Nuclear Security Summit at the COEX Center in Seoul. The two-day summit was aimed at curbing the threat of nuclear terrorism. The leaders of South Korea, the United States and China issued stark warnings on Tuesday about the threat of nuclear terrorism during the final day of a nuclear summit that has so far been upstaged by North Korea’s plans to launch a long-range rocket. Nearly 60 leaders have gathered for the two-day conference meant to find ways to keep terrorists from detonating an atomic weapon in a major city. The leaders were to release a communique on Tuesday about their efforts to secure the world’s supply of nuclear material by 2014. Much of the drama, however, has focused on North Korea’s stated plans to launch a satellite on a long-range rocket around the April 15 celebration of the birthday of North Korean founder Kim il-Sung. President Barack Obama and South Korean President Lee Myung-bak on Monday put pressure on China, Pyongyang’s main ally and economic supporter, to use its influence to persuade the North to back away from the launch. Although North Korea wasn’t mentioned in opening summit comments on Tuesday by China, the US and South Korea, the launch was still a major point of discussion in leaders’ meetings on the sidelines. Lee and Italian Premier Mario Monti met on Tuesday and urged North Korea to cancel its launch plans, Lee’s office said. In his opening comments, President Hu Jintao called for the creation of “an international environment conducive to boosting nuclear security.” “We should commit to eliminating nuclear proliferation and the roots of nuclear terrorism,” Hu said. Obama urged leaders to secure nuclear material to prevent terrorists from killing hundreds of thousands of people. Lee said nuclear proliferation and terrorism “are becoming grave threats” to international peace. “There is no border in terrorism,” he said. North Korea’s surprise announcement 11 days ago of a rocket launch came shortly after Pyongyang and Washington settled an aid-for-nuclear-freeze deal that had been seen as a breakthrough. Washington warns that the launch would jeopardise that deal. The impoverished North has a history of angling for food, oil and other concessions in exchange for disarmament pledges and has previously created crises during diplomatic talks in what negotiators see as attempts to secure more aid.

Leaders, ministers in Seoul for nuclear summit - China's President Hu Jintao (R) shakes hands with US President Barack Obama during an expanded bilateral meeting before attending the 2012 Nuclear Security Summit in Seoul March 26, 2012. 

Hong Kong*:  Mar 28 2012 Share

Chief executive-elect Leung Chun-ying paid a high-profile visit to the central government liaison office, sparking indignation and fears of Beijing interference in the city's autonomy. A day after he was elected, Leung spent almost 90 minutes at the office in Western District. He was seen leaving the building with top officials, including the liaison office's director Peng Qinghua, deputy director Li Gang and head of research Cao Erbao. Reports earlier suggested that Cao helped Leung with his election campaign by urging Chief Executive's Office director Gabriel Leung Cheuk-wai to slow down the investigation into the candidate's alleged conflict of interest in the West Kowloon Cultural District design project. Leung's visit to the liaison office yesterday drew intense criticism, with accusations he was personally thanking the Beijing officials for canvassing support that saw him win the election on Sunday. He ignored questions about the purpose of the visit upon returning to his interim office, after making two other stops, in the old government headquarters in Central until a journalist yelled that Leung was showing disregard for the media immediately after he was elected. He made a U-turn at the elevator and denied the accusation. "I went there to talk about my [chief executive] appointment in Beijing," he said. "I also suggested to the central government through the liaison office how Hong Kong can better utilize the support given by the country. This is something many people care about." Earlier, Leung met with Chief Executive Donald Tsang Yam-kuen in Tsang's office at Tamar for half an hour. Leung ignored about 20 protesters from the Neighborhood and Workers Service Centre who wanted to give him a petition about building more public housing and other social issues. The protesters slammed Leung for not listening just a day after he was elected. After the visit to the liaison office, Leung went to the Legislative Council to meet president Jasper Tsang Yok- sing for 15 minutes and then to the Court of Final Appeal to see Chief Justice Geoffrey Ma Tao-li for 30 minutes. When he was waylaid outside the court, he stressed he did not visit the liaison office to thank officials. He also fended off criticism that he found the liaison office more important than Legco and the Court of Final Appeal. "It was just an arrangement according to my time," he said. "I went to Legco before the judiciary mainly because of everyone's schedule." Leung said he wants to meet Henry Tang Ying-yen and Albert Ho Chun- yan and was still awaiting their confirmation. Tang will leave Hong Kong for a few weeks today, Leung said. The Democratic Party's Emily Lau Wai-hing slammed Leung for hurting the city's autonomy. "Is he trying to tell the public that there will no longer be 'One Country, Two Systems'?" Lau asked. Civic Party lawmaker Audrey Eu Yuet-mee said Leung now dares to visit the liaison office publicly after he was elected, compared with keeping it low profile before the elections.

Mega fund proposals to put priority on tourism - Non-profit organisations are likely to be offered money from a multimillion-dollar government fund to stage events aimed at bringing tourists to Hong Kong. The move is planned under reforms to the Mega Events Fund, which previously prioritised sports and the fine arts. The proposals would also mean stricter rules for applicants, who would have to forecast how many tourists the event is likely to attract. The fund started in 2009 with HK$100 million and was given a HK$150 million boost last year. The new proposals were outlined to legislators yesterday by the Commerce and Economic Development Bureau. The fund would also aim to attract privately-run international events to the city, the bureau told a meeting of the Legislative Council's economic development panel. Permanent Secretary for Commerce, Industry and Tourism Andrew Wong Ho-yuen said more Chinese-style cultural activities were expected from fund applicants. But Civic Party lawmaker Tanya Chan questioned the approach. "How many tourists would come here specifically for a Chinese-style activity?" she asked. "Shouldn't the promotion of Chinese culture be a task of, say, the Home Affairs Bureau rather than the Commerce and Economic Development Bureau?" Miriam Lau Kin-yee, of the Liberal Party, said: "Germany has the bierfest, Thailand has the songkran festival and Brazil the carnival. What does Hong Kong have, actually?" The scope of events eligible for subsidies would widen, with applications to hold beer festivals, pop concerts or fashion shows welcomed. The bureau said that over HK$51 million had been allocated from the fund to 16 events, which attracted 170,000 tourists into the city and generated 10,000 jobs. Events it sponsored last year included the Hong Kong Open golf tournament, the cricket sixes and the International Jazz Festival.

Old townhouses razed to clear site for apartments - Li family plan to reassemble part of facade later is dismissed as more decoration than conservation - Diggers clear rubble from the site of the townhouses where a 25-storey apartment block will be built. Two decades-old Chinese-style townhouses in Mid-Levels, owned by banker David Li Kwok-po and his uncles, have been demolished despite their grade two historic listing. The owners are said to be planning to reassemble part of the facade of the building on a 25-storey apartment block they will build on the site - an approach heritage experts dismissed as "decoration" rather than conservation. A heap of rubble was all that was left of 6 and 8 Kennedy Road yesterday, as hoardings reading "revitalising Hong Kong's old buildings" surrounded the site and construction workers transported the waste away. Dr Ng Cho-nam, a member of the Antiquities Advisory Board, said he was surprised by the wholesale demolition, as he had expected the new building to take shape with the existing facade still in place. "Even though the elements are now stored and will be reassembled, this is different from what we imagined. I thought the facade would be kept on site during reconstruction," Ng said. "Reassembling the facade does not equate to conservation. This is just decoration." A person familiar with the project said elements of the facade were being stored in a warehouse in Lau Fau Shan, Yuen Long. The homes were built in 1927 and 1935 by Li Koon-chun, David Li's grandfather and a founder of the Bank of East Asia (SEHK: 0023), for his family. It is jointly owned by the companies of three of Li's sons, including former stock exchange chairman Ronald Li Fook-shiu, Li Fook-hing and Dr Simon Li Fook-sean, who ran in the first election for chief executive in 1996, and a company belonging to Li Koon-chun's grandsons, Bank of East Asia chairman David Li and his brother Arthur Li Kwok-cheung. The family lived in the townhouses until the 1960s. They first applied to build the apartment block and associated recreation facilities in 2010, and applied to the antiquities board for permission to downgrade the historic grading of the mansions to grade three, an application the antiquities board rejected. Board members said the neoclassical architecture was a landmark and a reflection of the life of a well-to-do business family living in Mid-Levels in the past century. But a grade two listing is not enough to prevent demolition, and plans for the new flats were approved by the Buildings Department last year, while heritage officials persuaded the owners to agree to preserve important features such as the facade. Dr Lee Ho-yin, a board member and director of the University of Hong Kong's architectural conservation programme, also criticised the idea of reassembling the facade. "This is a common practice on the mainland, but rejected in places like Canada. Reassembly is not conservation," Lee said. "Either you keep it or you knock it down. It's hard to take the middle path in this case." A spokeswoman for the Bank of East Asia said David Li had no comment on the case. The Development Bureau was unable to give a response yesterday.

The MTR Corp says a stable increase in fare revenue is essential for the company to maintain its service quality. MTR fares poised to increase by 5.4pc in June - It would be the third and largest rise since a fare-adjustment formula took effect in 2007 - Fares are likely to rise 5.4 per cent in June, in the third and largest increase since a fare-adjustment formula came into effect in 2007, the MTR Corp said yesterday. Community groups reacted with anger to the increase, which means an average rise of about 37 cents per trip, and lawmaker Andrew Cheng Kar-foo said: "The increase will create a great burden for passengers and any concession is unlikely to be enough." The groups noted that the adjustment formula was supposed to allow for fare increases during periods of inflation and fare cuts in times of recession. Yet so far it had brought only fare rises, even though the MTR Corp saw net profits jump 22 per cent to HK$14.7 billion last year. The Transport and Housing Bureau said an independent consultant would review the fare-adjustment formula in the second half of the year. Specifically, it will investigate whether factors other than the composite consumer price index (CCPI) and wage indices for the transport sector - such as the MTR Corp's earnings and costs - should be taken into account. The formula is supposed to balance the railway's affordability with its profitability. Starting next year, it will take the profitability into account, subtracting it from the rise in costs and inflation and tending to keep future fare rises smaller during profitable years. But transport analyst Hung Wing-tat said the productivity rate had been set at an unfairly low level of 0.1 per cent. "When there is any inflation or jump in the transport sector's wages, the passengers have to split the extra cost with the MTR. So why, when it comes to a surge in MTR earnings, can passengers only share 0.1 per cent of it?" Hung said. Jeny Yeung Mei-chun, the MTR's general manager of marketing, said a stable increase in fare revenue was essential for the company to maintain its service quality. "Every year, we invest an average of HK$4 billion to repair and upgrade the system, not to mention the various concession packages we offer to passengers, students and the disabled. We need a stable increase in revenue to support the move," Yeung said. The MTR Corp offered a HK$1.7 billion package in fare concessions amid a fare rise of 2.2 per cent last year. Yeung said it was considering an even bigger fare concession package this year. An HSBC report has warned that inflation will intensify again in the second half of the year as the economy revives. The bank projects an inflation rate of 5.3 per cent this year, compared to a government forecast of 4 per cent. A number of public utilities are raising prices this year. The Link Reit (SEHK: 0823) yesterday raised parking fees at 125 of its car parks by 7.6 per cent for private vehicles, by 6.9 per cent for trucks and 9.1 per cent for motor cycles. Urban taxi operators have just applied to raise the flagfall price by HK$3, to HK$23, while Kowloon Motor Bus, which sank into the red last year, said it was under great pressure to raise fares.

Budget airline JV set to launch next year - Bruce Buchanan (left), CEO of Jetstar Airways, Alan Joyce (center), CEO of Qantas Airways Ltd, and Liu Shaoyong, chairman of China Eastern Airlines Corp, at the companies' news conference in Hong Kong on Monday. China Eastern Airlines Co Ltd will establish a budget airline in Hong Kong with Qantas Airways Ltd, the flag carrier of Australia, the companies announced on Monday. The joint venture, named Jetstar Hong Kong, is the first budget airline to register in Hong Kong. The new carrier will have registered capital of $115 million, contributed equally by China Eastern and Jetstar Group, the budget airline subsidiary of Qantas. Jetstar Hong Kong will start operations in mid-2013 with three Airbus A320 aircraft and expand to 18 aircraft by 2015, said Ma Xulun, vice-chairman of China Eastern, the nation's third-largest airline by market value. A cooperation memorandum on the joint venture was signed on March 23, and it is awaiting approval by the Hong Kong Special Administrative Region's government, Ma said. The airline will offer short-distance flights linking China, Japan, South Korea and countries in Southeast Asia. The first route hasn't been announced yet. A budget carrier could be a good choice for China Eastern. The airline's profit dropped in 2011 because of fewer high-end customers. On Sunday, China Eastern said annual net profit fell 9.2 percent to 4.89 billion yuan ($776 million) under China's accounting standards. The number fell even though 68.73 million passengers were carried in 2011, 5.9 percent more than in 2010. "A major reason for the reduction was the low load factor in the business and first class cabins," said Luo Zhuping, board secretary of China Eastern. Luo said the problem reflected global economic uncertainty and affected the entire aviation industry, not just one carrier. Chinese carriers' aggregate net profit last year fell to 26 billion yuan from 35.1 billion yuan in 2010, according to the magazine Air Transport World. "The lower profit was an industry-wide trend, with aviation demand easing on the back of the global economic slowdown," said Li Lei, an aviation analyst with CITIC China Securities Co Ltd. Higher fuel prices also pushed up carriers' costs, he added. Both China Eastern and Jetstar are confident about the budget airline, even if the global aviation sector declines amid economic problems. "I believe Jetstar Hong Kong will become profitable in three years," Liu Shaoyong, chairman of China Eastern, said on Monday. "The carrier will get a 6 to 7 percent market share in Hong Kong by then." Bruce Buchanan, CEO of Jetstar Group, said Jetstar Hong Kong's fares will be 50 percent below the average of those on other flights in the region. Jetstar Group comprises Jetstar Airways in Australia and New Zealand, Jetstar Asia in Singapore, Jetstar Pacific in Vietnam and Jetstar Japan. Jetstar Airways launched a daily Beijing-Melbourne flight with a stopover in Singapore on Nov 24. The carrier has 12 destinations in China. China is already a battlefield for international budget carriers fighting for a share of the huge potential market. A report by research company CIConsulting said that about 70 percent of all domestic routes in China are suitable for budget airlines, and it predicted that 25 percent of domestic services will be provided by low-priced carriers in 2013. Singapore Airlines is scheduled to announce on Tuesday its plans for its new budget subsidiary, Scoot, to enter China's market. The carrier won't begin services for three months. Two main budget airlines in Asia - AirAsia Bhd and Tiger Airways Singapore Pte Ltd - are also attracted to the Chinese market. AirAsia has 10 destinations in China, while Tiger Airways has four. However, China Eastern's participation would not have a huge effect on China's budget aviation industry, analysts said, although it will be the first of China's three largest airlines to enter the budget aviation section. "The new budget carrier is just something that China Eastern is trying out, and it doesn't mean the company will fully turn to budget aviation, " said Li Lei. Li said the markets in Hong Kong and the mainland are different and China's carriers cannot cut most costs to the level of true budget airlines. Compared with international budget carriers, China's carriers lack enthusiasm for the sector. Spring Airlines, currently China's only budget carrier, has about 3 percent of the domestic civil aviation market. "China's airlines will encounter more challenges than foreign carriers, because of the strict industry regulations in China," said Li Xuerong, aviation researcher at CIConsulting. She said China's budget aviation is just taking off and cannot develop on a large scale in a short time.

People's champion or bogeyman? Leung Chun-ying remains an enigma: tycoons fear he is not to be trusted, but those closer to the public say he is a caring man who wants to improve society - Leung Chun-ying and his wife, Tong Ching-yee, celebrate with son Chuen-yan (left) and daughters Chai-yan and Chung-yan (right). Mention the name Leung Chun-ying, and you'll likely hear one of two seemingly diametrically opposed views of the new chief executive. To some, he is a caring, trustworthy politician who stands up for the poor. To others, he is a cunning and calculating man who can never be taken at face value. Leung, known to most Hongkongers as CY, achieved yesterday what seemed unimaginable six months ago. He won the support of a majority of the 1,193 Election Committee members to become the city's third post-colonial leader. That support was in part driven by his popularity among the public. Yet as recently as June last year, he was polling in the single digits. Since October, he has led in every poll. Not everyone was happy. Some members of the business community had taken to saying their favoured candidate was "ABC" - Anyone But CY. They feared Leung would show a populist streak in office and might retaliate against those who had tried to block his path to the top job. Sing Tao News chairman Charles Ho Tsu-kwok, who supported the other pro-establishment candidate, Henry Tang Ying-yen, went to the extent of saying: "I would vote for [pan-democrat] Albert Ho Chun-yan" ahead of Leung - who was a non-executive director of the company until December. "I would not vote for Leung. I have no way to understand his personality and his political platforms … At least Albert Ho will strive hard to liaise with the different parts of the society," he said when asked whom he'd prefer if only Leung and Ho were left in the race. "If there are two swimming pools, one clear and one turbid, which one will you jump into?" And James Tien Pei-chun, honorary chairman of the pro-business Liberal Party, said he would rather cast a blank vote than vote for Leung. "CY has changed a lot over the past six months," he said. "Those who just got to know him will be happy to have known this CY, but his old acquaintances will wonder: which is the real CY?" People closer to the grass roots, like environmentalist and blogger Lam Chiu-ying and Society for Community Organisation director Ho Hei-wah tell a different story. They talk of a man with a "caring heart" and "courage to improve society". Born in 1954, Leung is the son of a policeman who had migrated to Hong Kong from Shandong province. Leung lived with his parents and two sisters in the Police Married Quarters in Hollywood Road, Central. Anxious to get ahead, he and his sisters combined schoolwork with jobs making plastic flowers to supplement the family's income and save money for homes of their own. He studied at Hollywood Road Police Primary School and King's College in Sai Wan before graduating from Hong Kong Polytechnic (now Polytechnic University) in 1974 with a higher diploma in surveying. He then studied valuation and estate management at Bristol Polytechnic (now the University of the West of England) in Britain. Teachers and classmates saw little in Leung to suggest he would rise to his present heights. "Chun-ying studied hard, but he was not a very smart student of the sort who would attract the attention of teachers and classmates," said Leung Chik-wing, who taught him geography at King's College in 1969. His teacher recalls a boy who enjoyed sports, especially soccer. These days, Leung prefers the pool and is a keen swimmer. Gardening is his other well-known passion. Peter Cheung Kwok-che, a schoolmate of Leung's at King's College and now a Labour Party lawmaker, said Leung did not stand out at school, but by the time the pair met again in the 1980s, there were signs of the impressive networking and career-building skills that would take Leung to the top. "We were not close during our time at King's College. When we met again in the old boys' society - after he had returned from the UK - he had got a relatively good career and network," Cheung said. Leung's willingness to help the family of an ex-schoolmate who had died left an impression on Cheung that has lasted three decades. "A schoolmate working for the police in the early 1980s jumped from the roof of Police Station No7 [Western Police Station]," Cheung recalled. "Some old boys gathered to discuss the incident. We found it very suspicious, given that he was an only son and had a police background. CY was very forthcoming in using his network to help the deceased's family try to find the truth." Although Leung's contacts were ultimately unable to unearth the truth behind that mystery, Cheung said, Leung succeeded in using his networking skills to rise in the business world. He joined the Hong Kong office of real estate consultancy Jones Lang Wootton in 1977, rising to become the youngest equity partner in the British company's 200-year history five years later, at the age of 28. After branching out to form his own company, he rose to become chairman of real estate adviser DTZ Asia-Pacific, from which he quit in November to focus on his campaign. Leung's political star was also rising, starting in 1985, when he was appointed to the Basic Law Consultative Committee. Three years later, he became the secretary general of the committee, which was charged with agreeing the details of the city's mini-constitution. In 1996, Leung was named as one of the vice-chairmen of the preparatory committee overseeing Hong Kong's handover to China the following year. He became the convenor of the Executive Council in 1999 and served in the role for more than a decade, until he stood down at the start of his election campaign last year. Some question how Leung managed to rise so quickly. Could it be that he was a member of the Communist Party? Leung has always firmly denied it, but senior lawyer and former lawmaker Martin Lee Chu-ming thinks otherwise. "It would be impossible for Beijing to have trusted him and put him in those crucial positions if he was not a Communist Party member," Lee, the founding chairman of the Democratic Party, has said. Speculation about Leung as a future chief executive candidate began even before Tung Chee-hwa was appointed to the newly created post before the handover. Leung famously answered the question by saying he would not run even in the "nth" chief executive election - in other words, that he would never run. That did little to ease speculation about his future. As long ago as 2004, the South China Morning Post (SEHK: 0583, announcements, news) reported that pundits believed an early chief executive race between Tang and Leung had "already begun". However, Leung did not run when Tung resigned in 2005 nor when Donald Tsang Yam-kuen sought re-election in 2007. Three years ago, Leung invited former lawmaker-turned-political commentator Allen Lee Peng-fei to a face-to-face meeting, the first time the two men had met in 29 years, and told him that he intended to run for chief executive. Another veteran pro-Beijing politician, who did not want to be named, had a similar experience. The politician said Leung invited her for dinner in September 2009 after they had not met for decades. Until scandals over Tang's marital infidelity and an illegal basement at a home owned by his wife derailed the favourite, Leung seemed a long shot. But his path to the top job was itself hardly scandal-free. Cheung, for one, thinks Leung owes Hong Kong an apology for the apparent conflict of interest when he served as a juror for the competition to design the West Kowloon arts hub despite one of the entrants having listed DTZ as a property adviser. "He was negligent in declaring his interests [in 2001], so as a public figure, he should apologise to the public," the former schoolmate said. "But I feel he has been evasive in offering the full account of the story." Leung's claim that a DTZ director gave unpaid advice on land values without his knowledge to that entrant - later disqualified - has failed to win over lawmakers, and he is likely to enter office on July 1 still the subject of a Legco investigation. A dinner on February 10 attended by rural leaders, members of Leung's campaign team and a businessman with alleged triad connections also sparked controversy. Leung's campaign denied any connections with triad members, and no one has admitted inviting the businessman to the dinner in Yuen Long. Leung has been married to solicitor Tong Ching-yee for 30 years. They met while studying in Bristol. Their three children returned from Britain for the election, and the family stood outside the polling station to canvass for votes during the second hour of voting yesterday. Son Chuen-yan is a doctoral student in biology at Cambridge University. Elder daughter Chai-yan is studying at the London School of Economics and Political Science, and younger daughter Chung-yan is a first-year economics student, also at Cambridge.

China Eastern Airlines (SEHK: 0670) and Qantas Airways are joining hands to build a budget carrier called Jetstar Hong Kong. The joint venture comes at a time when airlines have been boosting the number of low-cost, long-haul flights across Asia to exploit the region's strong economic growth. China Eastern and Qantas say they each hold a 50 per cent stake in Jetstar Hong Kong and will equally contribute its initial capital of US$115 million. The capital could be increased to US$198 million. Earlier this month, Qantas and Malaysia Airlines shelved their plan to form a joint venture. Alan Joyce, Qantas chief executive, said Asia remained a priority for the airline and it would continue to explore opportunities in the region. Over in Japan, the proliferation of budget airlines this year is seen as a catalyst for the development of low-cost carriers in the region. Peach Airlines, the Kansai-based budget carrier, launched its inaugural flight this month. Another two Japan-based budget carriers are expected to become operational this year. The three Japan-based budget airlines will fly regional routes after their domestic flight services turn operational. Hong Kong Express Airways, controlled by the HNA Group, had said it would become a budget carrier this year. That is viewed as a bid to distinguish itself from its sister carrier Hong Kong Airlines. Analysts are not particularly optimistic about budget carriers based in Hong Kong, particularly as jet fuel prices are hitting US$140 a barrel. Hong Kong Oasis Airline, a long-haul budget carrier, collapsed in April 2008 when crude oil prices exceeded US$140 a barrel. "Moreover, Hong Kong does not have a budget terminal. It will add to the woes of the new start up," said a transport analyst. To be sure, Japan has a massive domestic market for budget carrier start-ups to grow their business, but Hong Kong does not. Flight routes between Hong Kong and Southeast Asian destinations are already highly competitive. For instance, all the budget carriers - including Cebu Pacific, Air Asia and Jetstar - are operating in Hong Kong. Cathay Pacific Airways (SEHK: 0293) says the industry has become increasingly cutthroat. "We are competing with more than 90 airlines operating from Hong Kong," a company spokesman said.

The MTR Corporation (SEHK: 0066) said on Monday it planned to increase fares by 5.4 per cent in June. The corporation announced the plan after a government survey released on Monday showed a 5.1 per cent increase in the wages of transportation employees in December. This allowed MTR Corporation to increase ticket prices under its fare adjustment mechanism. This takes into account the composite consumer price index and the wage levels of transport workers. MTR Corporation general manager of marketing Jeny Yeung Mei-chun said the mechanism allowed an increase of 5.4 per cent, but the company would announce the actual fares for different journeys in May. Yeung said the company expected the rise would come into effect in June. A 5.4 per cent increase would be the biggest rise since a new fare adjustment mechanism was introduced in 2007. The railway operator has increased fares twice since 2007 – by more than 2 per cent on each occasion.

In 2010, Hong Kong’s government—long criticized by activists for failing to clean up the city’s iconic Victoria Harbor—was handed an extraordinary corporate gift. A group of 17 cruise and shipping lines volunteered to begin burning more environmentally friendly fuel when berthed in Hong Kong’s waterways, at no small expense to their shareholders. Now, though, as the shipping industry reels from billion-dollar losses, the future of that agreement is on the rocks. The so-called “Fair Winds Charter” is slated to expire in December, and without more government support, say companies, prospects for its revival look murky. This month, Hong Kong’s largest container ship operator, Orient Overseas International Limited, announced that its profits slid by 90% in 2011. Likewise, Maersk Line—the world’s biggest container shipping company—has announced that its profits have taken a hit, dropping by a third last year as well. Both companies are signatories to the Fair Winds Charter. The container shipping industry has been badly battered by high spikes in fuel prices and slowing trade volumes and is still struggling to recover from a $19 billion industry-wide loss in 2009. Last month, in a bid to support the Fair Winds Charter, Hong Kong’s government announced that it would begin reducing port dues for shipping companies who make the switch to low-sulfur fuel at berth. Shipping companies, though, say that this subsidy would only offset about 40% of the costs involved in using the cleaner fuel. Teddy Fung, managing director of Orient Overseas Container Line’s Hong Kong branch, said that the company will “certainly” continue its practice of burning cleaner fuel at berth after December. However, no other companies have publicly committed to doing the same. When asked about whether Maersk would continue burning low-sulfur fuel after the Fair Winds Charter expires, Tim Smith, chief executive for North Asia at Maersk, said the company had not yet decided. He noted that last year alone, participation in the Fair Winds Charter cost Maersk over $1.7 million. Similarly, Mr. Fung said that burning cleaner fuel cost OOCL about $1.5 million per year, or about $1,800 for every port call. So far, what the Hong Kong government has offered isn’t enough to assure Mr. Smith that industry will stay on board when the charter runs out at the end of December. “We’re worried that some carriers currently signed up [with the Fair Winds Charter] may say, well, ‘That’s not good enough,’” he said. “And they’ll pull out.” Traditionally, ships at berth in Hong Kong have burned bunker fuel: the inky, viscous sludge left over from the crude oil refining process, which produces far more pollution when burned than fuels such as diesel. Though burning cleaner fuel may be more expensive, environmentalists say such costs are a bargain compared to the environmental toll of burning bunker fuel in proximity to Hong Kong’s densely populated shores. According to a 2007 study by University of Delaware professor James Corbett, pollution caused by the shipping industry kills an estimated 60,000 people a year globally. In the Pearl River Delta, home to the busy shipping lanes of Hong Kong, Shenzhen and Guangzhou, such figures are especially worrisome. After all, Hong Kong is the third-busiest port in the world, with some 425,000 vessels streaming into the city’s waterways in 2010 alone. “There are no other areas that have this density of traffic, population, and weak regulation,” says Veronica Booth, senior project manager at local think tank Civic Exchange. A University of Hong Kong study released in January (pdf) estimated that every year, some 3,200 people are killed by Hong Kong’s air pollution. When it comes to nitrogen dioxide pollution levels, among China’s 32 largest cities, Hong Kong’s are the country’s second-highest. Even limited exposure to heavy air pollution can trigger strokes, arrhythmia and heart failure. Given the impact of shipping pollution, in recent years, governments in Europe and North America have begun requiring ships to burn cleaner fuels when entering their waters. Asia, though, remains a regulatory no-man’s land. Though it might not be customary for industry to lead the fight for more government regulation, Mr. Smith says that in this case, it’s natural. “In the long run, industry knows that we have to switch to cleaner fuels,” he says. However, if the entire shipping industry was to stop using bunker fuels overnight, he says, the costs would run into the “billions” of dollars. “That’s why we’ve been asking the Hong Kong government for help. We’re looking for a road map,” he says. Specifically, Mr. Smith says he would like to see Hong Kong’s government introduce regulations that would require all industry players to switch to cleaner fuels – not just those currently signed onto the charter. “It’s not a level playing field at the moment,” he says. Currently, even with the Fair Winds Charter in place, Hong Kong University of Science and Technology’s Dr. Simon Ng — who closely monitors shipping pollution — notes that only 10% of ships making port calls in Hong Kong are currently switching to cleaner fuels while at berth. Larger entities that aren’t presently participating in the Fair Winds Charter include companies such as the Mediterranean Shipping Company, “K” Line Logistics and China Shipping. “It’s going to take one step at a time,” says Dr. Ng. “The shipping industry’s been badly hit by the economy. And for them to switch [fuels] is going to cost a lot.”

Hong Kong's next leader, Leung Chun-ying, Monday kicked off his first full day as chief executive-elect, meeting with key government leaders and senior Beijing representatives as he prepares to assemble a team of cabinet members and ministers to lead his new administration. Mr. Leung, who was selected as chief executive Sunday after attaining a narrow victory among the elites voting in the city's most contentious leadership race, spent about an hour with current leader Donald Tsang to discuss his plans for the new government. "We will work very hard to ensure that in the next few months, the transition will work well," Mr. Leung said after the meeting with Mr. Tsang. Mr. Leung also met with the officials at the Chinese government's liaison office in Hong Kong, and has plans to meet the city's chief justice and legislative assembly president later in the day. Mr. Leung's victory comes as he faces relatively low public-opinion ratings and a growing divide between the city's business sector and pro-establishment political groups. He had a rating of under 40% among most opinion polls, compared with around 80% for Mr. Tsang when the current chief executive first became leader. "Election uncertainty is over, but Leung's challenge will be to boost his popularity," said Citigroup in a report Monday. Business groups say they remain concerned over whether Mr. Leung would seek to boost his popular mandate at the expense of business interests. "He was elected without much public-opinion support," said Miriam Lau, chairwoman of the pro-business Liberal Party, which opted to support Leung's rival, former finance chief Henry Tang, in Sunday's election. "Will he spend too much public money to buy popular support? That's the business community's worry," said Lau. In light of these challenges, analysts say Mr. Leung's first task will be to put together a new cabinet and political leadership that could mend fences with big business figures, which have mostly backed Mr. Tang and been skeptical of Mr. Leung's plans to significantly boost low-income housing and narrow the city's income gap. Still, analysts say they don't expect dramatic changes in the property market in the near term, noting that Mr. Leung's priority will be to stabilize the Hong Kong economy amid volatilities in the global financial markets. UOBKayHian analyst Sylvia Wong said the city's once-overheated housing market is now more under control with home prices stabilizing and transaction volumes subdued in recent months. This, she said, gives little incentive for Mr. Leung to do anything radical. "If the market softens further as we expect, there will be even less pressure to introduce new policies," she said. Property stocks in Hong Kong rallied Monday morning, with the Hang Seng Property subindex rising 2.3% after falling 6% over the last week, underperforming other sectors. Some analysts say investors had already factored in the election outcomes in recent weeks. Meanwhile, the benchmark Hang Seng Index was flat. Goldman Sachs noted that Leung's more "hawkish" stance in housing policy may still damp investors' sentiment slightly in the short term, although it expects any damage to be limited.

Seoul put on high alert for summit - South Korean police stand by on Sunday as protesters rally against the 2012 Seoul Nuclear Security Summit on the eve of the event. Seoul built a ring of steel around the venue for the 2012 Nuclear Security Summit virtually overnight. Guests at the COEX Intercontinental Hotel woke up on Sunday morning to find its ground floor packed with police officers and security personnel. The hotel, which is next door to the summit's venue COEX Korea Exhibition Center and will host global leaders and delegations attending the summit, has installed X-ray machines and metal detectors in its lobby, while its two revolving doors are now the only points of exit and entry. "The security checks will last for two days from Monday, and during that period the hotel will ensure that all the guests that have checked in are here for the summit," said a staff member at the hotel on condition of anonymity. On Saturday night, yellow and black barriers were placed along sidewalks around the exhibition center and hotel.

 China*:  Mar 28 2012 Share

Australia has blocked China's largest telecoms equipment supplier bidding for its national broadband network project on security grounds. Huawei in bid to lift network ban - Technology giant offers Australia a number of concessions in quest for broadband project - Huawei Technologies, China's largest maker of telephone equipment, will offer concessions to overcome a ban on its bid for Australia's government-backed national broadband network. The Australian Attorney General's office told Huawei in December it could not bid for work on the US$44 billion project, Jeremy Mitchell, Huawei's director of corporate public affairs in Australia, said in an interview yesterday. Huawei will put in place "any measures they need" to be a provider, he said. Huawei was offered no reason for the ban, which appears related to concerns about cyber security, Mitchell said. Huawei was founded in 1988 by Ren Zhengfei after his retirement from the People's Liberation Army in 1984. Ren's past military service was cited as one of the reasons the company may pose a security threat by the US House Intelligence Committee last year, as it opened an investigation into Huawei's expansion in the country. "The bar is set higher for us on security because of our Chinese origins," Mitchell said. "We are confident we can work through this issue. People aren't used to Chinese companies being leaders in this area, so we have to build up trust." Huawei has offered to limit all employees on the broadband project to security-cleared Australian citizens, open up its software code, and would undergo a full audit of security measures, Mitchell said. The network is "a strategic and significant government investment," Attorney General Nicola Roxon's office said. "We have a responsibility to protect its integrity and that of the information carried on it." The office declined in a separate statement to comment on whether Huawei was banned from bidding, citing the confidential nature of communication between the government and companies. Huawei is working on eight broadband networks similar to Australia's in the UK, Singapore, Malaysia, New Zealand, the United Arab Emirates, Cameroon, Benin and Brunei, Mitchell said. The Shenzhen-based company has not been required to provide the package of security concessions it offered Australia in any of those other markets, he said. It was not the first time Huawei was banned by a foreign government over alleged security concerns and its perceived ties with the military. In 2006, the company and its mainland rival ZTE (SEHK: 0763) were banned by India from its lucrative markets on security grounds. Beijing eventually persuaded New Delhi to lift the restrictions. In 2010, Huawei announced a US$2 billion investment to set up its biggest overseas research and development centre in India. The company is now the world's second largest telecommunications equipment supplier, behind Swedish rival Ericsson. It has emerged as a flag-bearer for China's "going out" policy, which encourages mainland corporations to expand into foreign countries and compete with the foreign multinationals for a slice of the global market. Huawei, little known outside China 10 years ago, now derives more than 65 per cent of its revenues from abroad. Last year its revenue stood at 182.2 billion yuan (HK$224.17 billion) - just five billion yuan fewer than Ericsson. The Australian Financial Review reported on March 24 that Huawei was barred from bidding.

Business-jet market set for takeoff - Aviation companies are targeting the Chinese market in the expectation that Chinese businesses will show a greater demand for their services and as authorities relax airspace restrictions. Christophe Degoumois, vice-president of business aircraft sales from Canada's Bombardier Inc, said on Monday that 2,360 business jets will be delivered to China by 2030. Business jets at Hongqiao airport in Shanghai. The Canada-based plane producer Bombardier Inc predicted that China will receive about 2,360 corporate jets by 2030. "The company is expanding the team for sales and marketing in China," he said. He said China is an important market, one that is home to increasingly wealthy individuals, a growing gross domestic product and a government intent on boosting domestic demand, especially consumer demand. Degoumois made the remarks on the eve of the Asian Business Aviation Conference & Exhibition, which is to be held in Shanghai from Tuesday to Thursday. The exhibition is one of the largest such events held in the world. China does not play a large role now in the business-jet industry. But that situation is changing fast. Jing Yiming, vice-president of Shanghai Airport (Group) Co Ltd, said there were 132 business jets registered in the Chinese mainland in 2011, up from 32 in 2008. "About 3,500 flights were taken by business jets in 2011 in Shanghai, making up a third of the total for the country," he said. "And we expect this year will see a 10 to 15 percent increase in traffic." Jet-charter companies in China have also expanded considerably as the country relaxes its restrictions on the use of airspace. "In the past, you had to apply for a route one week ahead of making a flight, while nowadays it takes only one day to apply," Jing said. Kong Linshan, president of Minsheng Financial Leasing Co Ltd, said China's business jet market took off after the 2008 Beijing Olympics, seeing an annual growth rate of more than 150 percent. China is now one of the chief growth markets for business jets. And China has worked increasingly harder to tap that market since 2009. Makers of business jets are expected to pay even more attention to the country during the next decade. "China's business-jet market has become one of the markets with the most potential and is drawing more and more attention from around the world," he said. Over the next three years, the Minsheng Financial Leasing's fleet will contain more than 100 jets. Those will be worth more than $4 billion and make up more than 90 percent of the Chinese market for those aircraft, he said. In China's 12th Five-Year Plan (2011-15), the country's central government said general aviation will be one of the pillars of the country's economic development. The plan calls for developing the industry, building a large number of airplanes and relaxing airspace restrictions. Aviation Industry Corp of China, the country's largest State-owned aircraft producer, said on Saturday it would cooperate with the US-based Cessna Aircraft Co to produce business jets. The companies and the municipal government of Chengdu in Southwest China plan to form a joint venture to produce business jets in that city.

US President Barack Obama shakes hands with China's President Hu Jintao before a bilateral meeting in Seoul on Monday at the 2012 Seoul Nuclear Security Summit. The two men and dozens of other world leaders were to begin the Summit concentrating on curbing the threat of nuclear terrorism, but North Korea's atomic plans will be in focus on the sidelines. US President Barack Obama met his counterpart from the mainland Hu Jintao on Monday for talks expected to focus on a planned rocket launch by Beijing’s ally North Korea, reports said. Hu expressed ”serious concern” about North Korea’s planned rocket launch during the meeting, a US official said. Ben Rhodes, a deputy national security adviser, told reporters that the North Korean issue was one of the first topics discussed by the two presidents. “The two leaders agreed to co-ordinate closely in responding to this potential provocation and registering our serious concern to the North Koreans and, if necessary, consider what steps need to be taken following a potential satellite launch,” Rhodes said. The two presidents are in South Korea for a 53-nation Nuclear Security Summit starting later in the day. Obama told Hu in introductory remarks the situation in North Korea and Iran is “of great importance to us”. China and the United States have a common interest in nuclear non-proliferation, he added. The nuclear-armed North says its launch in mid-April is intended to put a satellite into orbit for peaceful purposes. The United States and its allies say the communist state will be staging a missile test in violation of UN resolutions. They also suspect that Iran’s uranium enrichment program is geared towards making a nuclear bomb. Obama on Sunday urged China to put pressure on the reclusive North more firmly to change its behaviour.

Hotel giants bet big on Sanya tourism - Industry majors keen to cash in on booming sector in southern resort. China's southern Hainan province is a veritable paradise, with tourists flocking to its sunny shores and golden sands. However, a shadow was recently cast over this "paradise". The island and, in particular, its beach city Sanya, made headlines nationwide with the eruption of a tourist overcharging scandal during the Spring Festival holiday in January. Luo Di, who works for a Beijing-based real estate agency, wrote on China's popular microblogging site Sina Weibo that his friend was charged 4,000 yuan ($635) for a simple three-course meal in Sanya. Sanya's industry and commerce bureau also revealed that a seafood restaurant charged customers 9,764 yuan for a seven-course meal during the holiday. These revelations sparked a torrent of complaints from tourists who were angry at being overcharged on the island, with many of them vowing not to travel there any more. Potential investors, however, remain keen to cash in on the island's booming economic activities. Luxury hotels, for example, are speeding up their expansion in Sanya, leading to concerns that a bubble is forming in the city's tourism market. When it comes to high-end infrastructure, many are wondering whether the island has enough bays to accommodate the luxury hotel expansion wave, although they know that the industry's big guns' enthusiasm for Hainan remains undimmed. In a sign of this continued interest from the industry's major players, Sol Kerzner, a South African business magnate operating one of the world's most expensive hotels in Dubai, has made Sanya his first destination in China. Kerzner International Holdings Ltd, based in Dubai, whose flagship brand is Atlantis in the Bahamas and Dubai, has snapped up Tufu Bay in Sanya, virgin territory for tourism. Kerzner, founder and chairman of Kerzner International, said that he planned to open his first Chinese resort in early 2014. The planned resort will take up an area of 16 hectares and have a half-kilometer coastline. High-end hotel operators have long battled for a spot in Sanya, where developed beachside locations have fallen short of the increasing demand since the earliest high-end settlements appeared in 1996. There is no shortage of buyers. Almost every virgin territory in Sanya is snapped up as soon as the local government plans to develop it. The city now boasts a greater density of high-end hotels than any other city in China, including Beijing and Shanghai. Sanya's local government said there are 223 tourism hotels in the city, including 13 five-star hotels, 20 four-star hotels and 26 hotels that have been built to a five-star standard, but have yet to be graded. Almost every famous hotel brand has opened a hotel in Sanya, the crown jewel of Hainan, China's international tourism island. Marriott International Inc opened its third hotel in Sanya last June and has two more in the pipeline. "We are growing an increasingly strong presence in Hainan," said Paul Foskey, chief development officer of Asia Marriott International. "Our existing hotels are performing exceedingly well." Marriott's Ritz-Carlton Sanya located on Yalong Bay is the most successful Ritz-Carlton anywhere in the world, he added. St Regis Hotels and Resorts International Inc, the top high-end hotel brand operated by Starwood Hotels and Resorts Worldwide Inc, invested 2.5 billion yuan in its first Chinese resort in the last available area of coastline on Sanya's crowded Yalong Bay in December 2011. Thanks to this pricey purchase St Regis Sanya became the only resort in the city of Sanya with a yachting marina. On the same day as the St Regis opened for business, MGM Resorts International also opened its first hotel in the Chinese mainland in Sanya. In recent years, five-star hotels have become the major players in the battle for beach resources. And as hotels and resorts in Sanya become increasingly luxurious, super five-star hotels have also joined the fray. The latest developed bays in Sanya will soon be locations for 24 hotels, and all available land there has already been snapped up. This is the reason Kerzner opted for Tufu Bay, in Lingshui county, a relatively remote destination from the urban area of Sanya. In the long-term, a greater variety of hotels enhances the appeal of a destination, increases the marketing channels directed at consumers and attracts more demand, said Hans Galland, senior vice-president of Jones Lang LaSalle Hotels, the hospitality industry division of Jones Lang LaSalle Inc, a Chicago-based real estate investment services company. Galland said that based on the company's estimates, the number of rooms in international four- and five-star hotels in Sanya will increase by about 70 percent this year compared with the end of 2010. According to a plan published by Hainan province's travel committee, 76.8 million person-trips are expected to be made to the island annually by 2020. Too many? As more luxury hotels move in, some industry insiders have warned that Sanya's hotel industry may be overheating due to the abundance of high-end hotels. "The presence of too many high-end hotels has pushed up the average price of hotel stays in Sanya," said Wang Jianmin, a researcher at the Tourism Research Center of the Chinese Academy of Social Sciences. During this year's Spring Festival, a peak season for tourism, the average price of rooms in five-star hotels went up to 3,668 yuan per night, compared to 1,298 yuan one day before the festival. The week after the Spring Festival, in late January, the average occupancy rate of hotels in Sanya remained around 70 percent compared with 80.48 percent during the Spring Festival, according to tourism agencies. Each holiday season, the high price of hotel rooms in Sanya is a hot issue. Although the local government has set a price ceiling to cope with public criticism, the average price of hotel rooms keeps rising. Although they may seem unacceptable to the vast majority of people in China's middle-income bracket, analysts said the soaring prices are normal because they reflect the real demand for quality hotels. "The supply of high-end hotels in Sanya is still not enough," said Galland. Only 9 percent of visitors to Sanya stayed in resort hotels during the Spring Festival, but these hotels were all booked out. Analysts said this showed the big gap between demand and supply for quality hotels in Sanya. If visitors cannot afford a resort hotel, they have to look for cheaper hotels or guest houses, which are nearer to the free public beaches in the city's downtown area. But in these types of accommodation, which are often privately run, customer comfort often takes a back seat, and the only beaches their guests can access are the public ones where pollution is a serious issue. "The government has not designated Sanya as a high-end tourism destination, but actually only rich tourists can enjoy here," Wang Jianmin said. "The high price of hotels puts off some potential tourists." The good news is that the local authorities are already taking steps to address the situation. Available accommodation at guest houses and apartments in high-end communities increased by 18 percent in the past two years. During the Spring Festival, the average occupancy rate of Sanya's hotels declined by 3.44 percentage points compared with last year, according to figures from the local government. Analysts said the presence of more budget hotels will not squeeze the revenues of high-end resorts, since they target a different group of consumers. Alan Leibman, chief executive officer of Kerzner International, said Chinese tourists are looking for better traveling experiences and this gives his company confidence in the long-term market prospects. Hainan also expects to welcome more foreign visitors, who only accounted for about 2.7 percent of the total visitors to the province in 2011. Leibman shares that optimism. He said he was encouraged by his recent trip to Moscow, where many top Russian tourism operators are showing great interest in Sanya. "Our customer group should be a combination of Chinese as well as international guests, who are followers of our hotel brands," he said.

Hong Kong*:  Mar 27 2012 Share

Leung Chun-ying prepares to speak to the media after winning the chief executive election. Leung looks to current team for his top aides - Existing talent to be mined, especially for chief secretary's post; 'consensus' vow on security law - In his first meeting with the media as chief executive-elect, Leung Chun-ying said he would look to the current team of political appointees for his top aides and did not rule out reviving consultation on the controversial national security law. Listing popularity, ability and vision as the prime factors behind selecting his cabinet, he said he would mine the talent in the current cabinet, especially for the post of chief secretary. While the current chief secretary, Stephen Lam Sui-lung, has not been a popular minister, another possible candidate, New People's Party chairwoman Regina Ip Lau Suk-yee, served in Tung Chee-hwa's administration as security minister. Leung also said he would strive for the "biggest consensus" on legislating to implement Article 23 of the Basic Law. He did not rule out launching a consultation on reviving the controversial national security legislation soon after beginning his term in July. Legislation to implement Article 23 - which requires Hong Kong to enact laws outlawing acts of treason, secession, sedition or subversion against the central government - triggered widespread public opposition and was a major cause of the 500,000-strong protest march on July 1, 2003. Leung, who won the election with 689 votes, to Tang's 245, said enacting the anti-subversion law was "a constitutional duty of both the administration and the Legislative Council". "In future, I will seek wide-ranging opinions from society … to reach the greatest consensus," he said, amid chanting from protesters outside the press conference venue. Asked if this implied he would launch consultation on an Article 23 bill, he said: "I will uphold the various rights and freedoms of Hongkongers, because these speech and press freedoms are protected by the law." Leung also brushed aside accusations that the trade-off for his victory - widely perceived to have been achieved with the help of the central government's liaison office - is completing the "four political missions" assigned to him by Beijing; these are reportedly passing national security legislation, constitutional development, implementing national education in schools and "suffocating" RTHK. On constitutional development, he said he was determined to "experience universal suffrage" in five years' time but made no pledges and offered no details. He would not say if he would disclose Executive Council documents related to remarks made by his rival, Henry Tang Ying-yen, suggesting that Leung advocated using riot police against demonstrators in 2003. He also denied the second of Tang's allegations: that he attempted to shorten Commercial Radio's licence from 12 years to three after it aired critical comments. He said he would "use my actions to prove my innocence". This would be "one of the first few things" he would do after taking office. Tang said his defeat yesterday had only strengthened his determination to serve society and strive for universal suffrage in 2017. "Today's loss is not the end. I will stand on the same front with you all to strive for one man, one vote to elect the chief executive in five years," he said. While he congratulated Leung on his victory, he also vowed to monitor the new leader by "listening to his words and monitoring his acts". He did not say in what capacity he intended to continue public service, and sidestepped all questions about whether he would seek a comeback in the 2017 election, run for Legco in September, or join Leung's government if invited. Apologising to his supporters, an at-times tearful Tang said: "We can be upset, but there is no need to be sorrowful." He said he would no longer dwell on the accusations he made against Leung in election forums, and would take full responsibility for disclosing the Exco records. Pan-democrat candidate Albert Ho Chun-yan criticised Leung as a winner with "three lows": low popularity, low support and low credibility. The rank outsider said the pan-democratic camp would need to work harder in future to "safeguard core values of Hong Kong" under Leung's administration.

RTHK plans to recruit around 80 civil servants in the next few months after a decade-long hiring freeze amid a sluggish economy. The public broadcaster is also working on the design and tendering process of its new broadcasting house in Tseung Kwan O. It is expected to be completed in 2017. RTHK told The Standard it launched two open recruitment exercises and hired several program officers last year. Some were former contract staff. The broadcaster is now recruiting journalists, program producers and assistants. Chan Man-kuen, head of corporate communications, said RTHK will launch 19 more recruitment exercises over the next several months. Some of the candidates have already taken written tests and will soon be interviewed. While other government departments resumed recruitment in 2008, RTHK had to wait another year until doubts about its editorial independence as a government department were cleared. Programme Staff Union chairwoman Janet Mak Lai-ching said that although some of the contract staff have been working for a long time, they will neither get promotion nor salary increases for their good performance. "The morale of the contract staff has been hit hard since the government decided not to allow experienced contract staff to directly transfer to the new civil servant posts," Mak said. "Experienced contract staff have to apply through the open recruitment exercises." Even though the nature of the work of the contract staff is similar to that of their counterparts in the civil service, they have dimmer job prospects. For example, Mak said, they are not entitled to monthly retirement pensions. In 2011, at the program-officer grade alone, there were 270 employees on contract and 368 civil servants. Concerns over the editorial independence of the broadcaster mounted when the government chose former deputy secretary for labour and welfare Roy Tang Yun-kwong - a veteran civil servant with no broadcasting experience - as the new RTHK head last September. This came about after failing to find a suitable candidate during a nine-month recruitment process. The post became vacant when former broadcast director Franklin Wong Wah-kay did not renew his contract for health reasons. After Tang assumed the post, the contracts of two popular radio phone-in show hosts, Ng Chi-sum and Robert Chow Yung, were not renewed. The government hopes the Legislative Council Finance Committee will approve funds allowing construction work on the new offices to start next year.

Three civil service associations issued a statement pledging to work with chief executive-elect Leung Chun-ying. The unions said that they hope to strengthen communications with Leung and his team to understand each other's expectations in a new government. They also hope the incoming chief will listen to different opinions, so as to enhance the government's integrity and civil servants' morale. Hong Kong Senior Government Officers Association chairman So Ping- chi said most civil servants felt positive about Leung's performance during the election campaign, while only a few were concerned about the scandals dogging him. So said that Leung will need to handle issues firmly as the SAR's new leader, but added he had not seen any overly strong leadership measures introduced by Leung during his time as council chairman at the City University of Hong Kong. The 60 percent of the vote that Leung received from the Election Committee is acceptable, So said. However, the new chief will face challenges from different segments of society once his term begins, as he would not enjoy a "honeymoon period," So added. He said both Hong Kong's economy and political situation are rigorous, and the issues the next leader will face are more challenging than what his predecessors, Tung Chee-hwa and Donald Tsang Yam-kuen, encountered. He looked forward to meeting the new Cabinet once it is formed. Meanwhile, Federation of Civil Service Unions chairman Leung Chau-ting voiced concerns that the incoming chief executive's governing style may be heavy-handed. He stressed that civil servants are not military troops, and fears the new government will expand the structure of undersecretaries and political assistants - therefore affecting promotion prospects for civil servants. He believes the small number of votes Leung won reflects his low acceptability level, and it may be hard for him to manage his team. The chief executive-elect seldom rarely had contact with street-level civil servants, he said, hoping that communication can be strengthened.

Leung Chun-ying's elevation to the top job may mean less leverage for dominant business interests, especially the heavyweight developers, analysts said. On the other hand, the incoming administration may result in a favorable climate for shares of mid- sized developers. Analysts, however, do not foresee any big surprises. "The market is comparing [the situation of] big developers today with Stanley Ho Hung-sun winding up his Macau gaming monopoly in the early 2000s after Chief Executive Edmund Ho Hau-wah took office. Yes, Ho's market share has shrunk a lot, but it was not too bad in the end," said Alex Wong Kwok-ying, director for asset management at Ample Finance. Leung campaigned on a platform that addresses issues such as housing and the elderly. Shares of the "big four" developers - Cheung Kong (Holdings) (0001), Sun Hung Kai Properties (0016), Henderson Land (0012) and Sino Land (0083) - have plunged from a combined 5.2percent to 9.4 percent in the past week, compared with a 3percent drop in the Hang Seng Index. These developers threw their weight behind Henry Tang. Shares of Bank of East Asia (0023), chaired by Tang's campaign team chief David Li Kwok-po, lost 4.8 percent in the past five trading sessions. SOCAM Development (0983) and Shui On Land (0272), controlled by Leung supporter Vincent Lo Hong- sui, closed down 2.4percent and 0.6 percent respectively, while Ronnie Chan Chi-chung's Hang Lung Properties (0101) fell 1.8percent. Chan also supported Leung. Ample Finance's Wong also expects mainland capital to push back the dominance of local entrepreneurs. Bank of China (Hong Kong) (2388) would be a good bet considering its role as the lender channels funds into the territory, Wong said. Ronald Wan, managing director of investment banking at China Merchants Securities Hong Kong, said Leung has had more interaction with mainland financial institutions than Tang in the past few years. But he does not believe Leung will make drastic policy changes.

Leung Chun-ying says he will choose his new chief secretary from among the current principal officials, indicating little hope for New People's Party chairwoman Regina Ip Lau Suk-yee. "I hope most of the political appointees and civil servants will continue to serve," he said. Forming his political team and rearranging the job duties will be priorities, but Leung said he has not given serious thought to co-opting members of his election team into the Executive Council. He also wants to get opinions from Henry Tang and Albert Ho. However, a source said that "the fact that Beijing and the central government liaison office played a role in the election may scare some people and make it hard for Leung to form a good team." But it is believed that chief secretary Stephen Lam Sui-lung may be asked to stay on. Secretary for development Carrie Lam Cheng Yuet-ngor is also a possible candidate. Another source said Ip is not an ideal candidate in Beijing's eyes. Democratic Alliance for the Betterment and Progress of Hong Kong deputy chief Lau Kong-wah is seen as a possible deputy chief secretary. Financial secretary John Tsang Chun-wah has a chance of keeping his job though there are suggestions that Hang Seng Bank vice chairman and chief executive Margaret Leung Ko May-yee could also be candidates. Secretary for justice Wong Yan-lung is not willing to serve another term and barrister Jat Sew-tong could take over. Hong Kong Institute of Education president and executive councillor Anthony Cheung Bing-leung could become the next secretary of education. Either undersecretary for security Lai Tung-kwok or Police Commissioner Andy Tsang Wai-hung could become secretary for security. To mend fences with some of Tang's supporters, a source said Leung could consider appointing former Chinese Manufacturers' Association of Hong Kong president David Wong Yau-kar to his Cabinet. Other civil servants likely to be considered for senior posts include permanent secretary for financial services and the treasury Au King-chi and permanent secretary for home affairs Raymond Young Lap-moon. Secretary for food and health York Chow Yat-ngok, secretary for labour and welfare Matthew Cheung Kin-chung, secretary for the environment Edward Yau Tang-wah, secretary for transport and housing Eva Cheng Yu-wah, and secretary for constitutional and mainland affairs Raymond Tam Chi-yuen are also likely to be asked to stay on.

Chief executive-elect Leung Chun-ying has moved quickly to try to heal the wounds from a bitterly fought election. He appealed for unity and vowed to defend Hong Kong's freedoms and the rule of law amid concerns he could find the going tough from the outset. Questions were raised because of his lack of popularity compared to poll ratings of predecessors when they started out as well as the form of the campaign. His rating was about 40 percent while Tung Chee-hwa and incumbent Donald Tsang Yam-kuen were at 70 percent when chosen. The former Executive Council convener won the top job with 689 votes from the 1,193-strong Election Committee. Main rival Henry Tang Ying-yen had 285 votes and Democratic Party chairman Albert Ho Chun-yan 76. The Registration and Electoral Office said 1,132 Election Committee members, or 94.89 percent, cast votes. Leung's victory speech was meant to provide immediate reassurances. "I am making a solemn pledge here to the seven million people in Hong Kong: when I assume office, there will be absolutely no changes to the freedoms they enjoy now." On that, Donald Tsang, who makes way for Leung on July 1, said his team will be working for a seamless transition. The 57-year-old Hong Kong-born Leung, a surveyor by profession, also said in his victory speech that parties need to start cooperating immediately. On rivalry, he said there would be no Leung camp, Tang camp or Ho camp. There was only the Hong Kong camp, and Tang and Ho and their supporters could join his team. But Ho was quick to declare that he would not be in a Leung administration, while Tang said he would continue to serve the people in his own way. But Leung was not put off by cool responses to his win as he looked beyond the process that put him in the top job and appealed to the people at large. "I will continue to do what I have always been doing," he said. "I will grab a stool, a notebook and a pen and walk into the crowd with my team and listen to their views. As long as you are willing to talk, I am willing to listen." While Leung gave nothing away about his ideas for his team beyond repeating the line that he would be looking to some members of Tsang's team to work with him, he did say he had an urgent task to prove that allegations against him are unfounded. In part, that could have been a reference to protesters shouting from an adjacent area at the Hong Kong Convention and Exhibition Centre that they do not want a Chinese Communist Party member - alleged by some - as chief executive. And there were various questions thrown his way yesterday about his relationships with the motherland and his ideas of how the SAR must fall in line. On enacting Article 23 of the Basic Law, which involves security and subversion, Leung said it was the administration's responsibility to legislate in this regard. But the public would be consulted. And on incessant questions about whether the central government liaison office canvassed for him, Leung "did not know" what such questions meant. He then insisted he is not a CCP member and had never joined any political party. His remark came as one-time student leader Wang Dan, who was involved in the June 4, 1989, crackdown, claimed in his Facebook page that former CCP member Jin Yaoru told him some years ago that Leung was a party member. It was also noted yesterday that Xinhua News Agency broke the news that Leung had won at 12.34pm - exactly the same time as it was announced by SAR officials.

Chief executive-elect Leung Chun- ying will face enormous challenges in his governance as yesterday's election may likely cause more people to turn out for the July 1 march this year. Leung will have to offer welfare measures to boost what many perceive as his relatively low popularity compared to his predecessors. "The pan-democrats will benefit from the fallout and the central government's high degree of intervention in the chief executive election," said veteran political analyst James Sung Lap-kung at City University of Hong Kong. "I believe the number of citizens joining the July 1 protest this year will sharply increase. Most of them will voice their dissatisfaction over the chief executive election results and express worries over Leung's move to suppress freedom of speech and assembly." Meanwhile, a mock chief executive election conducted by the University of Hong Kong's Public Opinion Programme showed more than 54 percent of some 222,990 citizens had abstained from voting while only 17.8 percent had cast their "votes" for Leung. "With such a low popularity rating, Leung will encounter various challenges in his governance," Sung said. One of the main challenges is that Leung has been lacking the support of giant property developers, including Cheung Kong Holdings' chairman Li Ka-shing, who voted for Henry Tang. "The giant property developers have been lacking trust on Leung. It is possible that they might become more passive in bidding for residential property projects in the future which could hit Hong Kong's economic environment," Sung said. Another challenge is that Leung failed to lure elites from Tang's camp to serve in his Cabinet, which means that his ruling team members are mainly from civil servants and his campaign team. Chinese University political scientist Ivan Choy Chi-keung expects more Leung supporters to run in September's Legislative Council election to consolidate his governance after Liberal Party lawmakers declined to cast their votes for him. Earlier, former lawmaker and Bank of China senior executive Ng Leung- sing said he will consider contesting the Legco banking functional constituency. Another political analyst, Johnny Lau Yui-siu, believes the new government's ties with the business community should not deteriorate and, despite being elected by fewer than 700 votes, Leung will still enjoy a honeymoon period. He expects Leung to offer welfare measures to boost his popularity rating, which stands at less than 40 percent. And the Democratic Alliance for the Betterment and Progress of Hong Kong and the Federation of Trade Unions will have to strengthen district works further to check the spillover effects in the Legco elections, Lau said.

 China*:  Mar 27 2012 Share

Earnings at China Eastern Airlines Corp (0670) dived 7.7 percent year-on-year to 4.5 billion yuan (HK$5.54 billion), or 41 fen per share, in 2011, as operating costs increased. No final dividend was declared. High aviation fuel prices and domestic high-speed rail hurt operations, China's second-largest carrier said yesterday. Aircraft fuel costs surged 35.3 percent to 29.2 billion yuan from a year back. The airline booked revenue of 82.4 billion yuan, up 11.7 percent year-on-year. Revenue from passenger traffic rose 16 percent, while that from cargo and mail traffic fell 4 percent. The number of passengers carried rose 5.84 percent to 68.7 million, but cargo volumes slipped to 1.4 billion kilograms, down 1.49 percent over 2010. Last year the Shanghai-based airline, which flies to 173 countries, added 24 aircraft to its fleet of 353. Capital expenditure was 18.3 billion yuan, down 21 percent from 2010. It warned the mainland aviation sector will face significant pressure amid slower economic growth around the world and cost increases. Shares of CEAC eased 1.9 percent to HK$2.63 on Friday. 

Irish Prime Minister Enda Kenny arrived in China yesterday for a four-day trade mission, one month after Beijing's leader-in-waiting paid a visit to Dublin and vowed support for the euro zone. Kenny touched down in Shanghai, where he was due to meet business leaders and the city's mayor, Xinhua News Agency reported. Kenny will then head to Beijing for talks with Premier Wen Jiabao and Vice President Xi Jinping, who spent three days in Ireland in late February. Speaking ahead of his departure, Kenny said Ireland has been working hard to boost its image in China as it seeks investment as well as new markets for Irish goods to help the euro-zone member emerge from a deep recession. Ireland was forced to seek an 85 billion euro (HK$876 billion) rescue package from the European Union and the International Monetary Fund in 2010, after debt and deficit problems left the economy on the verge of collapse. "We have greatly appreciated the positive signals from China in support of Europe's efforts to resolve the sovereign debt crisis" that has also seen Greece and Portugal receive bailout funds, Kenny said. "There is no doubt that this has helped to stabilize financial markets and in the process made it much easier for us in Ireland to address our own problems." Kenny will also seek to boost the number of mainland tourists in Ireland and to increase cultural links between the two nations. Tourism Ireland, which also represents Northern Ireland in overseas marketing, has already launched an online advertising campaign in China touting the island's scenery and food. Ireland was the only EU country that Xi visited after touring the United States last month.

Hong Kong*:  Mar 26 2012 Share

Actors with the drama troupe Horizonte examine art installations at the East Waterfront Podium Garden yesterday during a free tour. An elderly man totters on his crutch along the Victoria Harbour waterfront while peeking through an undulating blind made of aluminium. "Come over here!" a woman hollers excitedly to him and draws his attention to a large wall of white fabric shaped at one part to form a seat. The man at first appears to be ill and the woman - his domestic helper from the mainland - helps him to sit. In fact, the pair are actors taking the public on an outdoor art installation called ArtAlive@Park. The exhibition, which began on Friday in Tsim Sha Tsui's East Waterfront Podium Garden, displays four installations created by architecture students from the University of Hong Kong. The exhibition will run until May 31. The four installations are each dedicated to showing off the strengths of a building material - aluminium, fabric, bamboo and acrylic. The two actors, Kiu Po-chung and Judy Kwok Wai-fun from drama troupe Horizonte, said they want to portray in their tour - called "A Dialogue With Art" - two ordinary Hongkongers strolling through a park and capture how they would react to architectural art. "The man, who just had a stroke, is a bit grumpy and jaded, whilst the woman is new to the city and is dazzled by the creativity and encourages the man to share her delight," Kiu explained. Simon Go Man-ching, director of local group Hulu Culture and the exhibition's curator, said he wanted to stage a theatrical tour to make art more accessible to the public. "This is not esoteric art to be enjoyed only by some, this is community art in public space to be enjoyed by all," Go said. And as the tour continues, people passing by turn their heads curiously to watch the two - clearly actors with microphones strapped to their shirt - stop to admire the artwork. In a corner of the park, stands an acrylic wall made of interlocking mirrored and transparent panels that reflect the sun and resemble the glass of the building in the background. A little boy passing by watches Kwok play delightfully with the window-like zippers and quickly learns by example and does the same. "And that's the point of public art, it has to blend in with the natural environment and allow the public to interact with it," Go said. "It's not the same as visiting a museum. You can enjoy the artwork at different times of the day." The 15-minute tours are scheduled for 2pm, 3pm, 4pm and 5pm and will be given free of charge on April 14, April 28 and May 19. A second exhibition by architecture students from Chinese University is planned for display in Tai Po between July and September. A third exhibition by City University students will take place between November and next January.

Leung Chun-ying, speaking at his first media conference after being declared the winner of Sunday’s chief executive election in Wan Chai, said he would consult with the public before introducing any national security laws. Chief executive-designate Leung Chun-ying says he will “consult widely” with the public on national security legislation, the introduction of which he says is a duty of Hong Kong under the basic law. Speaking at his first media conference after being declared the winner of Sunday’s election, Leung was twice asked by journalists whether he would attempt to introduce the controversial Article 23 law. An attempt to introduce the law in 2003 was abandoned after massive protests. Leung stressed that the introduction of the law “is not the duty of the chief executive, but of the Special Administrative Region under the Basic Law.” He also pledged to “safeguard the rights and freedoms of Hong Kong people”. Leung also promised to try to resolve the severe conflicts and social problems of Hong Kong, including the wealth gap, inflation, housing issues and education. The former Executive Council convenor said Hong Kong should be instilled with “positive energy”’ through “co-ordination and tolerance.” Article 23 and the 2003 protests became a key issue in the closing days of the campaign, after Leung’s rival Henry Tang Ying-yen said Leung had wanted to use riot police and tear gas against the campaigners. Leung and some other former members of the Executive Council denied he had made such remarks. Leung will become Hong Kong’s third chief executive after winning 689 votes from the 1,193 Election Committee members to secure victory in the first round of voting on Sunday. His chief rival, Henry Tang Ying-yen won 285 votes and Pan-democrat Albert Ho Chun-yan had 76 votes, The result was announced about 90 minutes after the two-hour election ended at 11am. Protestors tried to storm the Convention and Exhibition Centre and clashed with police after the result was announced. Unionist lawmaker Lee Cheuk-yan, who was among the protestors, said Leung’s victory “signifies the era of white terror [a term used to describe repressive political violence] in Hong Kong.” During the clash, police used pepper spray on Lee and other protestors. “We, Hong Kong people, have no rights to cast our votes, We come here just to voice our anger,” Lee said. Tang and Leung had spent the morning making a last-ditch effort to garner votes. Both candidates arrived at the election venue at the Convention and Exhibition Centre in Wan Chai with their campaign teams to welcome the Election Committee members.

Who is Leung Chun-ying? Meet Hong Kong’s next chief executive. Born into humble beginnings in 1954, Leung Chun-ying – popularly known as “CY” – grew up in a cramped government apartment west of the city’s main business district, where his family shared a common washroom with 10 or so other households. Like his predecessor, Donald Tsang, Mr. Leung’s father was a police officer, one who came south from China’s Shandong province in the 1930s, along with many other migrants from the mainland fleeing political tumult at the time. A top student, Mr. Leung won a scholarship to one of Hong Kong’s most elite public secondary schools, King’s College. After graduating, Mr. Leung studied surveying at Hong Kong Polytechnic and then later went to the United Kingdom, where he also earned a degree in real estate management at Bristol Polytechnic, while working part-time at restaurants to fund his studies. Mr. Leung has used the same briefcase since his days as a student in 1975. Mr. Leung returned to Hong Kong in 1977, just as mainland China was beginning its process of economic reform in the wake of Mao Zedong’s death. At the time, Mr. Leung’s expertise as a surveyor was sorely needed across the border, where—encouraged by Deng Xiaoping—local leaders were eager to capitalize on property development. Traveling around China, delivering trainings and lectures, he quickly rose up in his profession as a member of Jones Lang Wootton, a British real estate consultancy firm, helping launch regulation of private ownership of land use rights in cities including Shanghai, Guangzhou and Beijing. When China began the process of negotiating the return of Hong Kong from Britain, Mr. Leung took a leading part in the territory’s transition. In 1988, at just age 34, he was appointed secretary-general of a committee responsible for helping Hong Kong ease back to Chinese control, the Basic Law Consultative Committee, which helped collect opinions to shape the mini-constitution currently governing Hong Kong. After the Tiananmen Square incident, the British tried to accelerate the pace of political reform envisioned in the territory’s Basic Law, but met with fierce resistance by Beijing. During this period, Mr. Leung earned the enmity of pro-democracy activists for his perceived role in helping Beijing roll back some of those reform efforts. In 1997, Mr. Leung became one of the city’s first cabinet members, focusing on housing policy, and in 1999, he was made the leader of the city’s cabinet. He held that position until resigning last year to run for chief executive. Along with his wife, Ching Yee, Mr. Leung has three children, all initialed “CY” — eldest son Chuen Yan and daughters Chai Yan and Chung Yan. In 2006, he became the largest personal shareholder of the London-listed DTZ holdings, a real estate firm.

Hong Kong Elites Select Leung as Leader - The selection Sunday of Leung Chun-ying as Hong Kong's next chief executive highlighted the growing political tensions between the former British colony and Beijing, and the deepening divide between the city's rich and its working class. Mr. Leung, the son of a policeman, won the vote by Hong Kong's elites on the first ballot after a mudslinging campaign between him and his main opponent, Henry Tang. Hundreds of protesters gathered outside the site of the vote, the same downtown convention center where the British handed over Hong Kong to China in 1997. The 58-year-old politician was consistently ahead in public-opinion polls, though his victory wasn't assured until Beijing signaled just days before the vote that he was their favored candidate. Until that point, it was unclear whether he would get the majority necessary to win, potentially forcing a rerun of the election with new candidates. While the candidacies of Messrs. Leung and Tang were supported by Beijing, Mr. Leung was considered closer to the Chinese leadership. Mr. Tang, meanwhile, got the backing of Hong Kong's tycoons, who control most of the city's privately held land and its biggest industries. The role of China in the race became increasingly awkward as the vote grew closer because Mr. Tang had been considered its favored candidate, but a series of scandals pushed his poll numbers into the low teens. Hong Kong's previous selections had a clear leader, so Beijing didn't need to make its views known. When Beijing weighed in last week in a series of meetings with electors, it touched a sore spot with Hong Kong residents, who are increasingly sensitive about the influence of the mainland, both politically and economically. China-Hong Kong relations have been particularly strained in recent months amid growing resentment over visiting mainlanders, who are accused of everything from driving up property prices with their big spending to eating noodles on the city's immaculate subway cars. In his victory speech, Mr. Leung thanked his supporters and vowed to be a leader "for the people," working to unite the local political and business community after a very heated campaign. But his close connection to China—he has been forced to repeatedly deny he is a member of China's Communist Party—was a key subject of Sunday's protests. A trained surveyor, he had a speedy rise through the ranks of power, becoming Hong Kong's cabinet head in 1999. Mr. Leung has also for years been a senior member of the Chinese People's Political Consultative Conference, an advisory body to China's parliament. "Beijing likely put Leung in place to minimize possible political threats that Hong Kong may pose to China's one-party rule," said Dixon Sing, an associate professor at the Hong Kong University of Science and Technology, describing Mr. Leung as "extremely politically conservative." Still, Mr. Leung's plan to build more low-income housing and address the wealth gap likely won him support from the public, though the city's tycoons have remained highly skeptical of him for such populist rhetoric. Instead, the tycoons, including Asia's richest man, Li Ka-shing, have supported Mr. Tang, angering residents who see the government as being too closely aligned with local business interests. Mr. Tang, himself the son of a wealthy industrialist, lost his popular support in a series of scandals, including an extramarital affair and the illegal construction of a huge basement that appeared to contain a wine cellar, at one of his homes. As such, Mr. Leung's victory represents a reversal in a city where there hasn't been a strong government voice. "He doesn't owe the property developers a damn thing," said Michael DeGolyer, political analyst at Hong Kong Baptist University. "The tycoons aren't going to have much ability to resist moves to force them to share more of the pie." The leadership race was unique in that it was a nondemocratic election in a city with all the trappings of democracy. Public-opinion polls tracked the popularity of candidates, showing Mr. Tang's collapse in the weeks before the election. Chinese Premier Wen Jiabao said recently that the city should choose a leader who enjoys the "support of the vast majority of the population." Mr. Leung took 58% of the vote Sunday, versus 39% in the most recent polls. Mr. Tang got 24% versus 22% in the polls, and opposition candidate Albert Ho got 6% Sunday versus 11% in the polls. Notably, in the Sunday vote, just 12% of voters abstained or cast blank or invalid ballots, generally indicating support for none of the candidates, though in the polls, a far higher 21% rejected all the candidates. In a mock democratic online vote over the weekend, 54% of the self-selected voters refused to pick a candidate. The civil referendum, conducted by the University of Hong Kong, recorded nearly 223,000 participants, five times the organizer estimate. Sunday's vote had added significance because the next chief executive election five years from now is supposed to be democratic, though Hong Kong residents are skeptical that China will allow a free election. In mainland China, where coverage of the election was banned in the media, there was deep interest in the race on social media sites such as microblogging site Sina Weibo where Mr. Leung's victory was the top trending topic on Sunday afternoon. The deep interest in Hong Kong's election echoes the surge of interest on the mainland in Taiwan's elections in January, during which thousands of social-media users followed and commented on the island's democratic vote. Likewise, earlier this month, elections in Wukan—the southern Chinese village granted a vote after an uprising over alleged land grabs and other official misdoing—spurred a similar wave of commentary. As chief executive, Mr. Leung will have to confront a raft of issues currently facing the city, including high levels of pollution, an overstretched education system and global economic headwinds. "It seems the economic fundamentals of Hong Kong remains solid, but hidden concerns are emerging amid the global slowdown," said political pundit and former journalist Johnny Lau. If Mr. Leung can't handle tensions with big business in the city, Mr. Lau said, "it will add uncertainties to Hong Kong's economy." The new chief executive takes over from Donald Tsang on July 1. International business leaders were quick to add their voices of support to the newly selected leader. Mr. Leung's "strong win" creates a "real platform to get things done, which should be good for Hong Kong and its role in greater China and the world," said Stephen Bird, Citigroup's Asia-Pacific chief executive. Several hundred protesters shouted slogans outside the voting site. Some marched off to the office of the Chinese government's liaison office in Hong Kong, though the movement failed to gather strength. Early in the day, dozens of pro-democracy electors walked out of the vote proceedings, condemning the "small-circle" nature of the city's elections.

 China*:  Mar 26 2012 Share

Richard Lavin, group president of construction and mining equipment maker Caterpillar, sees finance and distribution as being part of the American firm's competitive strengths against Chinese rivals such as Sany and XCMG in China's fast-growing market. Caterpillar is laying down tracks in China in a big way, with one of its most senior executives now based in Hong Kong. The move to shift group president Richard Lavin to the city makes sense for the company, whose fortunes are increasingly tied to this region. The mainland is now the world's largest market for construction equipment, but Caterpillar is facing stiffer competition from cheaper Chinese rivals. Lavin is the first group president of the world's largest manufacturer of construction and mining equipment to be based in Asia. The former lawyer turned corporate leader has a long connection with Asia, having been based in Hong Kong for Caterpillar in the 1980s. The United States firm, which is listed on the New York Stock Exchange, has five group presidents reporting to the chief executive. Lavin is responsible for the company's three global machinery businesses - excavation, earth moving and building construction products. He is also head of the Japan market, manufacturing in Europe and Latin America, as well as China, India, the Commonwealth of Independent States (CIS, the former Soviet Union), and Indonesia. Reflecting growth in its Asian markets, Caterpillar's global workforce climbed to 152,983 last year from 126,556 in 2010. The company added 7,717 new workers outside the US last year. Caterpillar's earnings surged 83 per cent to US$4.93 billion last year, while revenue soared 41 per cent to US$60.14 billion, the firm's largest annual increase in turnover since 1947. Asia-Pacific was its second-fastest growing market last year, with sales rising 45 per cent to US$15 billion, while Europe, the Middle East and Africa formed its fastest-growing market, with sales increasing 47 per cent to US$14.74 billion. The US giant is however facing stiff competition from Chinese construction machinery makers like Sany Heavy Industry and XCMG. Sany hopes to raise US$3.3 billion in an initial public offering in Hong Kong later this year, while XCMG also aims to list in Hong Kong this year. Lavin has a bachelor's degree from Western Illinois University and law degrees from Georgetown University and Creighton University. He also completed a Brookings Institute management program.

Standard Chartered Bank is supporting regulators in both Britain and Hong Kong with the development of an offshore yuan business in London, says chief executive Peter Sands. "We will play a leading role in the use of the yuan in London," said Sands, who earlier this week was at a meeting for company executives in Beijing addressed by Premier Wen Jiabao. Britain's finance minister George Osborne in January announced that London would seek to become a hub for offshore trading in yuan. But he said this would complement Hong Kong's role and floated the idea of a tie-up between the two financial centres that would include extensions in currency trading hours. Sands echoed these comments yesterday, saying that for London, the world's largest international banking centre, to join Hong Kong as a centre for offshore yuan business was a logical next step in the development of the market. "I don't think this should be seen as something that detracts from Hong Kong's role," said Sands. The chief executive of the Hong Kong Monetary Authority, Norman Chan Tak-lam, said in January that by establishing appropriate links with Hong Kong's offshore yuan platform, banks in different parts of the world would be able to provide a comprehensive range of yuan banking and financial services to meet the rapidly increasing demands of customers. Commenting on the latest developments in Europe, Sands said that even though the European Central Bank had launched a long-term refinancing operation, or LTRO, in December, and a package was made for Greece, this had only given markets some breathing space. "We are not of a view that everything is going to be OK now. There is still a huge amount of work to do and many things can still go wrong." The LTRO injected €489 billion (HK$5 trillion) into Europe's banking system via three-year loans. Standard Chartered Bank did not access the ECB's three-year loan allocations and had no plans to do so, Sands said. On Standard Chartered's own development, Sands said the bank would continue to increase staff numbers this year. The bank's mainland operations accounted for most of last year's global headcount growth of about 2,000 and contributed over 31 per cent to total pre-tax profits reported by the group for 2011. The bank has 84 outlets on the mainland and Sands said the network would be expanded. "It is likely we may hit a hundred outlets by the end of the year," he said, but this would depend on necessary approvals and finding the right locations. The bank made losses of about US$100 million in consumer banking on the mainland last year, as it invested in building its franchise, but it said it was determined to keep making inroads in that market. The bank was still aiming for double-digit growth in revenue this year, despite setbacks last year in two of its largest Asian markets, South Korea and India.

Boeing has thrown its weight behind Airbus in a dispute over European Union airline emissions, which have infuriated the aviation sector, as well as China and the United States. Jim Albaugh, chief executive of Boeing Commercial Airplanes, joined a chorus of criticism of the EU's Emissions Trading Scheme (ETS) that will charge airlines for emissions, something Brussels believes necessary to help defeat climate change. "This is not about Boeing and Airbus; it is about what is best for our customers and how we are going to get the whole industry to reduce its environmental footprint. "I don't think the European ETS approach is the right one," he said, calling for a "standstill" on the ETS and co-operation with the United Nations aviation agency ICAO. Albaugh was speaking after the aviation industry, meeting in Geneva, urged governments to use the UN body to negotiate a global deal on the controversial issue of aircraft emissions. Airbus and other companies last week appealed to European leaders to delay the scheme, which they say has disrupted Chinese government approval of dozens of valuable aircraft orders. Making a rare joint appearance with his chief rival Albaugh, Airbus chief executive Tom Enders earlier told the Geneva conference that he was "not amused" about the delays and urged the European Commission to freeze the scheme pending a wider deal. "Give [the International Civil Aviation Organisation] time to come up with a global regime. Stop it now. Don't go down the road of a trade war," Enders said. Airbus and Boeing compete for jet orders worth almost US$100 billion a year but co-operate on some issues. They signed a deal together with Brazil's Embraer to study biofuel. The China Air Transport Association, the mainland's leading aviation body, said in January that it would not co-operate on the ETS. The organisation represents Air China (SEHK: 0753, announcements, news) , China Southern Airlines, China Eastern Airlines (SEHK: 0670) and Hainan Airlines, which fly millions of passengers to Europe each year. The association and four main Chinese airlines said last year that they would take the matter to court in Germany. India joined China on Thursday in asking its airlines to boycott the EU's carbon scheme, stoking a diplomatic row over the issue.

Chinese President Hu Jintao arrived in Seoul Sunday for a summit aimed at strengthening international cooperation on nuclear security. At the two-day Nuclear Security Summit which will begin on Monday, leaders from over 50 nations and international organizations are expected to review achievements scored since the Washington summit in 2010. They will discuss cooperative measures to combat the threat of nuclear terrorism, protect nuclear materials and related facilities, and prevent illicit trafficking of nuclear materials, according to the host South Korea. The leaders will also exchange views on strengthening nuclear safety, which has become the focus of renewed attention following the Fukushima nuclear accident in Japan last year. Chinese diplomats said President Hu will deliver a speech at the summit to elaborate China's position, efforts and important measures regarding nuclear security. "As a huge country for nuclear energy development, China has always attached great importance to nuclear security and actively participated in international cooperation on nuclear security," Chinese Assistant Foreign Minister Ma Zhaoxu told a press briefing on March 20. Ma said that China hopes the Seoul summit will improve international consensus, promote international cooperation on nuclear security, enhance global nuclear material and nuclear facilities security, and promote the sustainable development of nuclear energy. He also expressed China's willingness to actively participate in the discussion of the communique of the Seoul Nuclear Security Summit, which will be the outcome document from the summit. "The communique will clearly manifest the consensus and resolution of the leaders to enhance international cooperation on nuclear security," he said. According to the International Atomic Energy Agency (IAEA), from 1993 to 2011, more than 2,100 incidents of nuclear and radioactive materials were confirmed, of which about 400 incidents involved unauthorized possession, movement or attempts to illegally trade or use nuclear and radioactive materials. Khammar Mrabit, director of the IAEA's Office of Nuclear Security, said at a press briefing last week that more needs to be done to improve the safety of nuclear and radioactive materials worldwide. "Nuclear and other radioactive materials are still not properly secured. We have roughly around 200 incidents per year," he said, adding that "continuous improvement is a must. Complacency is bad." The Seoul summit is a follow-up of the first summit in Washington in April 2010, at which leaders from 47 states and three international organizations discussed plans to strengthen nuclear security by preventing the misuse of nuclear materials by non-state actors. President Hu attended the Washington summit and delivered a speech entitled "Join hands to meet nuclear security challenges and promote peace and development." On the sidelines of the Seoul summit, Hu is expected to meet some other leaders to discuss bilateral ties and issues of mutual concern. Hu will also travel to New Delhi for a meeting of the BRICS, which groups Brazil, Russia, India, China and South Africa. After that, the Chinese leader will pay a state visit to Cambodia.

Hong Kong*:  Mar 25 2012 Share

Leung Chun-ying elected as Hong Kong chief executive - Leung Chun-ying, former convenor of the Non-Official Members of the Executive Council of Hong Kong, celebrates with his wife Regina Tong Ching-yi as he attends a news conference after Leung won the chief executive election at a vote counting station in Hong Kong March 25, 2012. Leung Chun-ying, former convenor of the Non-Official Members of the Executive Council of Hong Kong, was officially declared the winner of the election of the fourth-term Chief Executive of the Hong Kong Special Administrative Region on Sunday. At about 12:33 pm, Returning Officer Justice Poon Shiu-chor announced that of the 1,132 votes cast by members of the 1,200-member Election Committee, Leung Chun-ying won 689 votes. The two other candidates, Henry Tang Ying-yen and Albert Ho Chun-yan, got 285 votes and 76 votes respectively. At a press conference soon after the announcement, Leung who bowed and waved to the hailing audience said he was grateful for the support of the public throughout the campaign, and it was a privilege of him to serve the communities for the next five years as chief executive. Hong Kong has many competitive advantages, people of Hong Kong are innovative, hardworking and adaptable, as long as we seek the opportunities, our economy will continue to thrive and the livelihood of our people will improve, Leung added. Voting began at 9 am for two hours, with each member of the election committee entitled to cast a single vote by secret ballot. A candidate must secure at least 601 votes to win the election. The main polling station and the central counting station are both located at the Hong Kong Convention and Exhibition Center. The three candidates were nominated on Feb 29, with Leung nominated by 305 members of election committee and Tang receiving supports from 390 members. Ho's nomination was endorsed by 188 members. Incumbent Chief Executive Donald Tsang, whose term ends on June 30 this year, is barred from seeking a third term. Leung Chun-ying (R), former convenor of the Non-Official Members of the Executive Council of Hong Kong, shakes hands with his rival Henry Tang after winning the election of the fourth-term chief executive of Hong Kong Special Administrative Region in Hong Kong, south China, March 25, 2012. 

梁振英當選特首 稱將穩中求變迎難而上 - 3月25日,梁振英勝出後揮手致意。當日,香港特別行政區第四任行政長官選舉結果揭曉,梁振英以689票勝出,當選第四任行政長官人選。 據中新網報道,香港特別行政區第四任行政長官選舉結果25日揭曉。現年57歲的梁振英獲得689張有效票,當選為香港特區第四任行政長官人選。 選舉投票於當日上午9時至11時舉行。主投票站及中央點票站設於香港會展中心。行政長官選舉委員會1132位委員以無記名方式,就梁振英、何俊仁和唐英年三名合資格候選人進行投票。12時34分,香港特區選舉管理委員會負責2012年行政長官選舉的選舉主任宣佈,梁振英獲得689票,得票超過600張有效票當選。整個選舉過程在香港特區選舉管理委員會及候選人的監票代理人、公眾及媒體的監督下進行。 選舉結果宣佈後,梁振英舉行記者會發表感言。他說,感激選委的信任和市民的支持,給自己在未來五年服務香港、服務市民的機會。行政長官工作非常艱巨,自己將穩中求變、迎難而上,以謙卑感恩之心,擔負起這份重大責任。他表示,相信只要大家目標一致、攜手共進,就可以將香港建設成為一個更繁榮、更進步、更公義的社會。 梁振英1954年出生於香港,1977年英國布里斯托理工學院畢業。1997年7月至2011年9月任香港特區行政會議成員,1999年7月至2011年9月任香港特區行政會議非官守成員召集人。他曾任香港特區基本法咨詢委員會執委、秘書長,港事顧問,香港特區籌委會預委會委員兼政務小組組長,香港特區籌委會副主任委員等職。2011年11月27日,梁振英正式宣佈參與香港特別行政區第四任行政長官選舉。 根據《中華人民共和國香港特別行政區基本法》的規定,香港特區行政長官在當地通過選舉或協商產生,由中央人民政府任命。第四任行政長官的任期自2012年7月1日至2017年6月30日。

Many small boats are informally moored using makeshift ladders. Lack of berths leaves boaters high and dry With twice as many pleasure crafts as mooring spaces and marina club membership fees soaring, sailing has been pushed beyond the reach of most. With 733 kilometres of coastline and more than 250 islands to explore, Hong Kong should be a paradise for boaters. But the city's marinas are jammed to capacity and a lack of mooring space makes it impossible for most in the city to enjoy sailing or sea-fishing. A study by Designing Hong Kong and the Harbour Business Forum found that there are twice as many pleasure boats registered in the city - 7,660 - as there are spaces at the 10 marinas and yacht clubs and the 23 designated private mooring areas. That means many owners have to leave their boats at informal moorings in typhoon shelters and waterways. "The existing boat berths at private clubs, public mooring areas and marine department private moorings are full," Tyler Wack, a co-author of the report, said. "If any moorings at private clubs are available, the boat owner cannot afford the membership and mooring fees." The study, called Boating Left High and Dry, was conducted in January and February by a team of students from the Worcester Polytechnic Institute, a college in Massachusetts in America. It found that owners have to wait years for a public berth, and even those who can afford a spot at one of the city's exclusive yacht clubs might find themselves out of luck. "We are full," said Michael Franco from Hebe Haven yacht club in Sai Kung. "We have more than 200 members waiting," the general manager of one of Hong Kong Island's two yacht clubs said. It has 200 hard stands, 213 moorings and 53 berths. But the wait could be as long as seven years and his message is: "If you are planning on buying a boat, forget it!" The story is much the same at the Royal Hong Kong Yacht Club, where the estimated waiting time is up to 10 years. The Aberdeen Boat Club is full, as is the Discovery Bay Marina Club. And not everyone can afford the membership anyway - meaning most of the population is denied the chance to take part in a leisure activity that is part of the fabric of most harbour cities. At Hebe Haven, a lifelong membership costs HK$40,000 for a person aged 30 or older - and that's before you even consider the HK$800 monthly charge. The owner of a 26-foot boat, which is considered small, would have to spend a further HK$990 a month to rent a mooring space, or HK$5,445 for a "walk-on walk-off" berth. "It is impossible to store your boat if you are not a member of a club in Hong Kong," said Simon Milne, a lawyer who keeps his small dinghy on a hard stand at the Aberdeen Boat Club. "Unless you already have a mooring space, you really need to think before buying a boat." Milne is trying to sell his dinghy for HK$40,000 because he has to move to Australia. The Marine Department says the government's responsibility is limited to providing "local vessels and small visiting vessels with places in sheltered areas suitable for taking refuge during inclement weather". The study proposes to regulate existing informal anchorages in Tseung Kwan O, Sha Tin new fishermen's village and Stanley. In many typhoon shelters or waterways, dozens of small boats or dinghies are informally and unsafely moored using tyres and makeshift ladders because their owners have nowhere else to keep them. Some even tie their boats to trees. The study also calls on the government to allocate more areas for dry storage, and estimates it could create about 1,750 new moorings. "The government is not particularly interested in this because they see yachting as an elite activity, and they are not willing to look into expansion of this industry," said Gordon Hui, managing director of luxury boat dealer Sunseeker Asia. The Marine Department says its role is limited to providing professional views on operational and traffic safety matters to marinas. A Home Affairs Bureau spokesman says the government supports in principle the idea of marina expansion to promote sports development. But industry professionals say a more radical approach is needed. "A public marina is the way to go," said Gerhard Kutt, president of HAWC Technologies, a builder of high-speed boats. "Private clubs are expensive. Everyone in Hong Kong should be able to enjoy boating, not just the rich." To him, the area near the site of the new cruise terminal at the former Kai Tak airport site would be ideal. He believes 500 to 1,000 berths could be included, with berthing fees low enough that ordinary families could afford them. To be sure, the situation is not so serious that the recreational boating industry is suffering. "The number of inquiries has dropped dramatically," said James Rayner, a senior broker at boat and yacht dealership Simpson Marine. Rayner said the drop-off was not due to the economic climate but the lack of mooring space. "We are now at such a stage that people are not even inquiring any more." Sunseeker's Hui estimates that his firm's local sales have declined from about 20 units in 2009 and 2010 to about four units last year because of the lack of mooring space. "Not all our customers own the mega yachts above 100 foot - many average owners were purchasing yachts between 50 and 70 foot, but that market has discontinued," he said. Hong Kong is also missing out compared to places such as Singapore, Thailand and especially the mainland, which have all developed marinas to accommodate a rapidly growing fleet. "The business is all in China," Hui said. Extra mooring space could also create jobs, he added. "This industry actually hires several thousand people, giving them jobs as captain, crew and servicing shipyards staff," Hui said. "With the decline of the Hong Kong fishing industry, the next generation would benefit from the yachting industry's continuation."

A Picasso portrait of his lover Dora Maar and Woman in Red Armchair (left) from 1932, and (right) a 1925 work Paul as Pierrot, modelled on Picasso's son. Both are in the collection that will be on show at the Heritage Museum this summer. A collection of works by Pablo Picasso, worth an estimated HK$6.7 billion, will be on show in Hong Kong this summer, in the largest retrospective exhibition of the artist's work ever held in Asia. Works on display will include Woman Sitting in a Red Armchair (1932) and his 1960 large-scale interpretation of Edouard Manet's masterpiece Luncheon on the Grass. Being housed at Sha Tin's Heritage Museum from May 19 to July 22, "Picasso: Masterpieces from National Picasso Museum, Paris" will feature 60 paintings and sculptures. A selection from the collection of the Musée Picasso in Paris, they will range from the artist's earliest creative years to the final works of his life. The exhibition will have a biographical flavour - "a dialogue with his own story" - according to Musée Picasso director Anne Baldassari. The show will be a highlight of the annual Le French May arts and culture festival, which is celebrating its 20th anniversary this year. Baldassari told the South China Morning Post (SEHK: 0583) that the exhibition, which has already been to Taipei, Shanghai and Chengdu, is the largest of its kind to travel to Asia. The opportunity was created largely because the museum in Paris will be closed until next summer for a large-scale renovation - its first since opening in 1985 after Picasso's family donated the art works to France in lieu of paying inheritance tax. Baldassari said it was also an initiative by the museum to reach out to an audience abroad instead of waiting for them to come to Paris. "It is also a mission for us to travel with the collection, to facilitate communication with a global audience," she said. When Picasso's extraordinary theatre curtain, which he painted for the ballet Parade, went on display at Two IFC in 2004, it drew an extra 50,000 people a day to the building. Picasso was the most famous and prolific artist of the 20th century, and his works are among the most sought after in the art market. At a Christie's New York sale in 2010, his 1932 painting Nude, Green Leaves and Bust fetched a record US$106.5 million. Insurance for the Hong Kong show, about HK$20 million, is being largely covered by sponsors BNP Paribas, Louis Vuitton, LVMH and tycoon Cheung Chung-kiu, the chairman of Cross-Harbour Holdings. Smaller-scale exhibitions of Picasso's art works have been staged in Taipei and Japan, but they focused on only one particular period of the artist's work, said Baldassari. The Hong Kong show will be a comprehensive retrospective, and will have "a very strong biographical aspect". Baldassari added: "It's a global survey of his works." Born in Spain in 1881, Picasso developed his artistic talents at a young age, as reflected in early paintings The Barefoot Girl and Man with a Cap. Those two pieces, among his earliest works that will be shown in the Hong Kong show, date from 1895 when he was 14 years old. He made his first trip to Paris in 1900 and settled there in 1904. Picasso used many of his lovers and family members as models, including his son Paulo for the painting Paulo as Pierrot from 1925. Woman Sitting in a Red Armchair is a portrait of one of his lovers, Marie-Therese Walter, whom Picasso met when she was 17 and he was 45. He painted her in bright, cheerful tones, in sharp contrast to the darker portrayal of another lover, the photographer Dora Maar. The sharply different treatments reflect the contrasting emotions he felt for the two woman, said Baldassari. Examples of Picasso's later paintings in the show, including Seated Old Man (1970-71), are self-portraits. Painting them gave him a way to come to terms with his fear of death, Baldassari said. He died in 1973. The show will feature seven bronze sculptures and 50 photographs by or about Picasso. The full programme of Le French May will be announced on March 28. The festival is organised by the Consulate General of France in Hong Kong and Macau, together with the Alliance Francaise. Major partners are the Leisure and Cultural Services Department and the Hong Kong Jockey Club.

People queue to vote in the mock chief executive election at a polling station at Polytechnic University in Hung Hom. Hackers fail to deter voters in mock CE poll - Ordinary Hongkongers queue patiently to have their say in an election from which they are excluded - Hackers' attacks on the online polling system for the simulated chief executive election yesterday failed to deter Hongkongers from queuing outside polling stations for the chance to cast their ballots, which they are not entitled to in tomorrow's election. Dr Robert Chung Ting-yiu, director of the Public Opinion Program at the University of Hong Kong, said unusual activity had been noticed in the system shortly after 7am. Computers could not connect to the University of Hong Kong's server, and the main polling station at Polytechnic University switched from electronic to paper ballots at around 10.30am. By about noon, 11 of the 15 polling stations had resumed electronic balloting. The others, including the main station at Polytechnic University, still relied on paper ballots. Jazz Ma, the university's information technology manager, said the source of the hacking appeared to be local. "Since the design prevents overseas access, it must have been conducted in Hong Kong," he said. Chung confirmed last night that the online polling system had been attack by hackers, but declined to comment on the identity of the suspects. He said he would report the case to the police. Hongkongers, nonetheless, were eager to take part in the exercise, with queues forming outside polling stations in the afternoon that grew to hundreds of people by the evening. At one long queue at Polytechnic University last night, teacher Tedman Chan said he was disappointed that the website was being hacked as it had undermined freedom of expression. "I want my voice heard, even though I have to wait for 30 minutes here after work," Chan said. A 48-year-old man, who only identified himself as Chiu, said he queued to cast his vote after finishing working in Shenzhen. "If I don't vote now, I'm afraid I won't have chance to express my choice in future," he said. The pan-democrats' chief executive candidate, Albert Ho Chun-yan, arrived at a polling station at about 9.30am to find the system out of action. He used the occasion for a little electioneering, criticising rival candidate Leung Chun-ying for being "selfish" for not pledging to maintain or lower the nomination threshold for prospective candidates in the 2017 chief executive election. Chung said last night that he expected the online system to have recovered by late last night. Voting in the simulated poll will continue today at 17 polling stations across the city from 9am to 4pm. A total of 100,000 paper ballots have been printed in case the online system does not recover or comes under renewed attacks. The full result of the simulated election is expected to be announced by 10pm today. Chung said that about 33,000 people had cast ballots online while 11,000 more had cast paper ballots by 9.30pm.

Pacnet, the operator of Asia's largest privately owned submarine cable network, plans to accelerate development of new data centres across the region after yesterday launching a US$44 million facility in Tseung Kwan O. Chief executive Bill Barney said this new infrastructure, called CloudSpace2, was "the most advanced data centre to open in Hong Kong in the last 10 years". "We're in the lead right now, but there are a lot of other companies coming after us over the next 12 to 24 months," Barney said. He said he expected construction to speed up for the rest of the more than 12 "high-tier" data centres Pacnet planned to build across Asia over the next three to four years at a cost of US$300 million. He said these would serve cloud-computing enterprises that demanded "high-power, high-performance and high-availability" features that older facilities could not provide. Cloud computing enables companies and consumers to buy, lease, sell or distribute over the internet as well as private networks a vast range of software, business systems, data and other digital resources, including storage, as an on-demand service, like electricity from a power grid. "Cloud" refers to the internet, which is depicted in that form in computer network diagrams. Such resources are hosted in data centres. These facilities provide a secure, temperature-controlled environment to house large-capacity server computers and data-storage systems, which are maintained with multiple power sources and have high-bandwidth links to the internet. The two-storey CloudSpace2 is located at the Hong Kong cable landing station of Pacnet's EAC-C2C submarine cable network, providing direct connections to mainland China, Taiwan, Singapore, Japan, South Korea and the Philippines. Pacnet has signed up five new customers for CloudSpace2, which is expected to reach full capacity in the next three years. Daniel Lai, the city's new government chief information officer, yesterday said Pacnet's new facility helped "reaffirm Hong Kong's status as the prime location for data centres in the Asia-Pacific region". Other high-tier data centres in development include Google's US$300 million facility in Tseung Kwan O and NNT Com Asia's HK$3 billion complex in the same district.

Comba Telecom Systems, a wireless equipment maker based at the Hong Kong Science Park, has ratcheted up its patent dispute against larger rival CommScope and its subsidiary, Andrew LLC, by suing the two American companies in the United States. The lawsuit filed in the US district court in Delaware seeks to invalidate eight of Andrew's US patents covering remote electrical tilt (RET) antennae, which are used in the base stations of wireless networks. Comba, which this week posted a 9 per cent fall in net profit last year to HK$659 million, said the legal action would protect its ability to compete in the US market after legal actions initiated by CommScope, through its Andrew subsidiary, alleged infringement of patents by Comba related to RET technology. The Hong Kong-listed manufacturer is the leading supplier of base-station antennae used on the mainland. Its products are used by major telecommunications equipment makers such as Huawei Technologies, ZTE (SEHK: 0763), Ericsson and Alcatel-Lucent. CommScope, which is owned by the global private equity firm Carlyle Group, started litigation against Comba in mainland China and Brazil in June last year. It alleged that Comba infringed on certain patents that its Andrew subsidiary had registered in those two markets. Comba said the eight patents targeted in its US lawsuit were closely related to the three patents owned by Andrew that were recently revoked by the European Patent Office. It said those patents were also part of the same patent family that Andrew had asserted against Comba in China and Brazil. In a filing with the Hong Kong stock exchange in August last year, Comba's financial controller, Wilson Tong Chak-wai, said the Beijing High People's Court upheld a lower court's ruling in 2010 that declared Andrew's patents void. Tong also said the Brazilian courts had refused to grant Andrew an injunction against Comba's sale of antennae products in that country.

Norman Chan Tak-Lam, chief executive of the Hong Kong Monetary Authority warns of difficult economic times ahead - Hong Kong Monetary Authority chief executive Norman Chan Tak-lam warned on Friday that Hong Kong might face difficult economic times this year. Speaking at a business forum in Hong Kong, Chan said the city was facing “a rather unusual situation” because of on-going uncertainty in the global economy. He said Hong Kong had to avoid letting its residential property market overheat. “There is a renewed risk of a housing price bubble,” he said. Chan noted that many Hongkongers wanted to buy property because interest rates were low. But if there was an economic downturn, some might not be able to pay their mortgages. He advised banks to maintain prudent lending practices. Chan said his main priority this year would be to ensure the stability of the financial system.

Foxconn International (SEHK: 2038), the world's biggest contract manufacturer of cellphones, swung to a net profit last year as key clients such as Nokia Oyj and Huawei Technologies shifted to higher-end smartphones. Foxconn International, whose Taiwanese parent Foxconn Technology Group assembles Apple’s iPads and iPhones, is expected to benefit as its top customers shift away from low-end feature phones. The company, which assembles handsets for Motorola and Sony, on Thursday posted a net profit of US$72.84 million, ahead of a consensus of analysts’ forecasts of US$27.59 million. “Our efforts in capacity optimisation in various geographical locations and new customer penetration started to create positive impact to our operation results,” it said in a filing to the Hong Kong stock exchange. Foxconn International had a total of 98,868 employees at the end of last year, down about 22 per cent from 126,687 a year ago. In 2010, Foxconn International posted a net loss of US$218.3 million as some of its clients in the competitive mobile handset sector lost market share. “We expect the transition from 2G feature phones to 3G smartphones for Foxconn International’s top clients – Nokia, Huawei, Motorola and Sony – to boost its average selling price,” said Barclays Capital analyst Dale Gai in a report before the earnings release. Nokia is betting on its Lumia Windows phones, while Huawei is shifting towards producing higher-end phones based on Google’s Android operating system to compete with major players such as Apple and Samsung. Barclays estimated Nokia would account for 30-35 per cent of Foxconn International’s sales this year. “We expect Huawei – Foxconn’s second largest customer and a rising star in the smartphone space – to be a key growth driver for the company in coming years,” said Macquarie analyst Kylie Huang. Shares in Foxconn International, which were removed from Hong Kong’s benchmark Hang Seng Index in June last year, have risen about 14 per cent this year on hopes for a better product mix from its clients.

A man casts his vote at a polling box of a mock election for Hong Kong’s chief executive while others line up for a chance to vote at Polytechnic University on March 23, 2012. Cyber Attack Targets Hong Kong Mock Vote - A cyber attack has hit an ambitious project that sought to give ordinary Hong Kong citizens a voice in this weekend’s chief executive poll, with organizers scrambling to provide paper ballots to the tens of thousands wishing to participate in the mock vote. The Chinese territory’s top political job will be decided by a 1,200 person election committee Sunday, but that hasn’t stopped many of the city’s seven million residents keen to take part in the University of Hong Kong’s civil referendum project. Beijing has promised the city universal suffrage by 2017. Thousands of users logged online Friday morning or used the smart phone apps created by Dr. Robert Chung’s group at the University of Hong Kong to cast their vote, but pages didn’t load properly. Dr. Chung said an early-morning cyber intrusion appeared to disable their servers, and that the site had also been experiencing abnormally high hit rates that had overloaded their system, up to a million requests a second. “I think there could be no other explanation than a cyber attack,” he said. “We don’t quite understand the motive,” he added. The city is already rife with reports that China is interfering with Hong Kong politics, and some speculate the civil referendum’s result could embarrass Beijing by highlighting the gap between what the public wants and what the city’s 1,200 electors—mostly business and political elites—will choose. Dr. Chung’s activities have never made him popular on the mainland, especially last December, when a poll he conducted showed low levels of identification with the mainland among Hong Kongers. Pro-Beijing media were quick to accuse him of having “evil” political aims, being a “hateful western-trained dog” and more. Such dislike of polls was repeated this week when a mainland propaganda official based in Hong Kong, Hao Tiechuan, called for the city to adopt laws to more strictly regulate pre-election political surveys, citing similar laws abroad that aim to prevent them from potentially swaying voters’ opinions. Despite the cyber attack, over 14,000 voters had already managed to get into the system and vote by mid-morning. Dr. Chung said that voting—originally scheduled to end by 9 p.m.—would be prolonged through tomorrow, and that paper ballots were also being used as a contingency measure. At a polling station in Chai Wan this afternoon, 30 people lined up to cast their votes at makeshift cardboard booths, as bystanders watched and took pictures. In an effort to prevent ballot-stuffing, each would-be voter was first required to present their Hong Kong ID card, the number of which on-site volunteers were recording by hand and on laptops. One on-site volunteer, when asked whether he was concerned the cyber attack might have made it harder to guard against ballot-stuffing, nodded. “It is so hard to guarantee,” said Alvin Yeung, a Polytechnic University student who signed up to volunteer after seeing an outpouring of Facebook postings urging people to support the referendum, “but we try.”

 China*:  Mar 25 2012 Share

Indonesia's President Susilo Bambang Yudhoyono and President Hu Jintao at a welcoming ceremony in the Great Hall of the People. Ties with Indonesia strengthened - Investment agreements and memorandums on security, drug controls, tourism and trade signed on President Yudhoyono's visit to Beijing - China and Indonesia signed a series of investment agreements worth US$17.4 billion yesterday during a visit to Beijing by Indonesian President Dr Susilo Bambang Yudhoyono, as they pledged to strengthen their co-operative partnership. After talks, Yudhoyono and President Hu Jintao witnessed the signing of six memorandums of understanding covering co-operation on maritime security, combatting drug trafficking, tourism and trade. Businesses from the two countries signed 15 investment deals at a forum attended by Yudhoyono. The deals included a technical co-operation agreement between Indonesia's state-owned steel company PT Krakatau and the Capital Engineering and Research Incorporation, and a US$200 million long-term credit deal to finance the construction of a Krakatau blast furnace complex. Indonesia's PT Bangungraha Sejahtera Mulia and China Railway (SEHK: 0390) Corporation signed a joint investment agreement for infrastructure development. Bilateral trade reached US$60.5 billion last year, compared with US$2.9 billion in 2002, and is expected to reach US$80 billion by 2015. Chinese demand for commodities such as palm oil and tin has boosted bilateral trade. Despite the increasing trade, some Indonesians have complained that their businesses have been affected by Chinese goods entering their market since 2010, when a free-trade agreement was signed. In his talks with Yudhoyono, Hu said China was willing to co-operate with Indonesia on both international and regional issues. "Your visit has a significant meaning to expanding practical co-operation, and upgrading the bilateral strategic co-operative partnership," Hu said in his opening remarks. He added that the two countries should strengthen co-operation on space development and security, stage joint drills and cultural exchanges and co-ordinate responses to major international issues. "China is willing to play a crucial role with Indonesia in international and regional affairs, and co-ordinate with Indonesia in multilateral frameworks to properly address global challenges," Hu said. Yudhoyono also met Premier Wen Jiabao and National People's Congress Standing Committee Chairman Wu Bangguo yesterday. Wen said Sino-Indonesian ties had gathered a positive momentum, but he also warned that East Asia faced challenges both at home and from abroad, and called on China and the Association of Southeast Asian Nations to support each other to ensure peace and stability in the region. Yudhoyono told Hu that Indonesia was willing to step up regional co-operation with China in order to promote stability. Yudhoyono, who arrived in Beijing on Thursday, will leave for Hong Kong today and go on to Seoul, South Korea, tomorrow for a nuclear security summit.

Across America: Nixon's visit celebrated - Consul-General Gao Zhansheng (right) from the Chinese Consulate General in San Francisco, joined by Mayor Ed Lee (left) of San Francisco and Patricia Hayes (center), regional director at the US State Department, greets guests at a reception on March 21. The reception aims to mark the 40th anniversary of former President Richard Nixon's visit to China and the Shanghai Communique which "has changed the world.” Forty years later, "we are thrilled to see that the China-US relationship has become one of the most important, dynamic and promising bilateral relationships in the world," said Gao.

Electric pylons seen against commercial buildings at the central business district in Beijing. China's power consumption is expected to rise 8.5-9.7 per cent in the first half of this year from a year ago, according to the country's power producers association. China's power consumption is expected to rise 8.5-9.7 per cent in the first half of this year from a year ago, according to the country's power producers association. Power usage will rise to 2.44 trillion-2.47 trillion kilowatt hours during the first six months of this year, the China Electricity Council said in a report. The association had earlier predicted an annual rise of 9.5 per cent in China’s power consumption this year to 5.14 trillion kilowatt hours. China consumed a total of 1.17-1.18 trillion kilowatt hours in the first quarter, the report said. The country’s total power use will see stable growth, given higher temperatures and a steady recovery in industrial production, it said. The association said China may face a power supply shortage of 10-20 million kilowatts before the peak summer season.

Dalian exchange ready to hatch egg futures contracts - A chicken farm in Qingzhou, Shandong province. The Dalian Commodity Exchange aims to expand its portfolio of agriculture-related futures contracts to help Chinese farmers adjust production according to demand, said Liu Xingqiang, president and CEO of the exchange. Addition of farm products expected to receive regulatory approval soon - The Dalian Commodity Exchange is preparing to introduce futures contracts for eggs this year and for more farm products in the near future, said the senior executive of the exchange. Liu Xingqiang, president and chief executive officer of the Dalian Commodity Exchange, said it is working to list egg futures, a change that is expected to receive regulatory approval this year. "There is no confirmed timetable," Liu said. "But I expect egg futures will be listed this year if everything goes well." The Dalian Commodity Exchange, in Liaoning province, is one of the three commodity exchanges that operate in China. The exchange is eager to expand its portfolio of agriculture-related futures contracts to help Chinese farmers avoid the risk of price fluctuations. "The price of futures can be used as an indicator for farmers so they can control their farming activities accordingly," Liu said. "When the price of futures (for a certain product) drops, farmers can grow less and vice versa." The Dalian Commodity Exchange offers nine kinds of futures contracts, six of which are related to agricultural products such as corn and soybeans. Liu said eggs are closely linked to corn and bean pulp, both of which are used as chicken feeds. "Given the size of China's population, egg consumption is not as big per capita as it is in Western countries. The market for egg futures is big." Liu said the price of eggs is not only linked to chicken feeds but also plays an important role in people's daily lives. Egg futures have been listed on Western exchanges for a very long time, but this is the first time they have been proposed for listing in China. China has introduced futures contracts for only 13 agricultural commodities, whereas the United States has more than 1,000 such contracts. Liu said that indicates that a great opportunity exists to introduce more futures for the agricultural industry in China. Despite the lack of the contracts, China's agricultural commodities market is the second-largest in the world. Last year, 573 million contracts were traded on it. The Dalian exchange is hoping to see the listing of more agricultural commodities, such as live hogs and timbers, Liu said. Introducing futures contracts for more farm products will help Chinese farmers and agricultural enterprises hedge the risk of price fluctuations and maintain their profits, he added. China's three commodity exchanges in Dalian, Zhengzhou and Shanghai offer 26 futures contracts, for commodities ranging from base metals to agricultural products such as copper, aluminum, corn and soy beans. According to the Futures Industry Association, 578 million contracts were traded on the Dalian Commodity Exchange in 2011, making it the 15th busiest in the world.

Photo products face new anti-dumping duties for five years - A customer tours a digital photo studio at an exhibition in Beijing. China plans to impose anti-dumping duties on photographic paper imported from the US, the EU and Japan. China's Ministry of Commerce imposed five-year anti-dumping duties of 16.2 to 28.8 percent on photographic paper and paperboard from the United States, the European Union and Japan in a final ruling on Thursday. The move indicated that China is warning its trading partners about the intensifying trade investigations into Chinese goods and challenges to China's export regulations, according to experts. The anti-dumping investigation was launched in December 2010 in response to complaints by domestic producers, including Luckyfilm Co Ltd. Under the final ruling, Kodak Ltd faces a duty of 19.4 percent, while Fujifilm Manufacturing Europe BV has a rate of 17.5 percent. Other producers from Japan and the US face duties as high as 28.8 percent. Li Qiang, president of Kodak China, said that "he regrets the ruling", and he said the company did not dump, because Kodak's prices for photographic paper and paperboard products are the highest in the domestic market. Fujifilm did not comment. Imports from the US, the EU and Japan accounted for more than 99 percent of China's total imports of these products since the investigation began. The imports took up 76 percent of the domestic market in the first half of 2010, according to the ruling. "The ruling is, to some degree, related to recent frequent trade investigations (against Chinese exporters) by the US. But it is reasonable and supported by sufficient evidence," said Song Hong, an economist from the Institute of World Economics and Politics under the Chinese Academy of Social Sciences. Sang Baichuan, dean of the Institute of International Business at the University of International Business and Economics, said "the anti-dumping ruling is in line with (World Trade Organization) rules and can serve as a warning against the abuse of trade protection measures from developed economies". Sang added: "China has no intention of trade retaliation or a trade war (with) the US. But the imports of photographic paper and paperboard did hurt the domestic industry and caused bankruptcies and unemployment," Sang said. The final ruling came a day after the US announced anti-subsidy duties against Chinese solar panel exporters in a preliminary ruling. On the same day, the US imposed anti-dumping duties as high as 235 percent and anti-subsidy duties of up to 223.27 percent on galvanized steel wire from China. While Song suggested the ministry conduct more investigations into US exports, including agriculture products, aircraft and automobiles, Jin Baisong, deputy director of the department of Chinese trade and studies under the Chinese Academy of International Trade and Economic Cooperation, a think tank for the ministry, said that "trade protection moves will hurt both". Gary Locke, US ambassador to China, said on Wednesday that the US government is in the midst of a major reform and simplification process that will enable more high-technology goods to be exported to China. Jin said that domestic producers need to seize the chance to enhance their competitiveness through investment in research and development and improvements in technology.

World's dearest Winnie the Pooh - A golden Winnie the Pooh, or Pooh Bear, is displayed at a jewelry store in Chengdu, Southwest China's Sichuan province, March 22, 2012. The 16.8 kilogram golden bear is valued at more than 8 million yuan ($127 m) with all fees included. It will be exhibited in Chengdu for half a month before embarking on an overseas tour. Winnie the Pooh was a fictional anthropomorphic bear created by A. A. Milne. 

Hong Kong*:  Mar 24 2012 Share

Former Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong says his support for Henry Tang is unwavering. His declaration came after Leung Chun-ying appeared to throw out a feeler on radio, saying he would be more than pleased to consult Yam. "I am eager to seek Mr Yam Chi-kwong's advice on various aspects if he is willing," Leung said. But Leung declined to go further into matters that could involve him shaping a Cabinet, saying that under the Basic Law this should only be done after a person has been elected chief executive. And a spokesman for Yam, senior adviser to Tang's election campaign, said: "Mr Yam will continuously offer his unswerving support to Tang to contest the chief executive election." On another front, former education chief Arthur Li Kwok-cheung accused the Liberal Party of being childish in deciding not to vote for Leung and allowing its 29 Election Committee members to cast blank votes. "They are acting like a group of children who don't want to play with him [Leung]," Li said. Li also denied Tang's accusations that Leung suggested during Executive Council meetings in 2003 the use of riot police and tear gas to control protesters and to shorten the length of Commercial Radio's license in an attempt to suppress free speech. Li said he had not heard Leung make such remarks and that Tang probably made the allegations in a fit of temper during last Friday's televised election debate. "Tang has served as secretary for commerce, industry and technology and chief secretary, and his father has close ties with former president Jiang Zemin, and his family is rich, so he probably felt assured of the chief executive post," Li added. "However, he did not anticipate the numerous scandals that were revealed after announcing his bid. As such, he might have lost his temper." But lawmaker Lam Tai-fai, who is a leading supporter of Tang, disagreed with Li's view. Tang does not lose his temper easily, Lam said. Elsewhere yesterday there was talk of central government liaison office deputy director Li Guikang meeting with business chambers and pro- business lawmakers to ask them to support Leung. Tang supporter and lawmaker Lam Kin-fung admitted he had met Li but claimed they had not discussed the election.

Li Ka-shing was invited to meet Xi Jinping - Tycoon won't be swayed - he's backing Tang - Li Ka-shing is sticking to his guns after Xi Jinping apparently asked him to back C.Y. Leung, and four Liberal Party leaders say they will cast blank votes. Asia's richest man, Li Ka-shing, is continuing to support scandal-plagued chief executive candidate Henry Tang Ying-yen despite a meeting with Vice-President Xi Jinping at which he is thought to have been asked to switch sides. The news that the Cheung Kong (SEHK: 0001) chairman is sticking to his guns after the one-on-one meeting came as four leaders of the pro-business Liberal Party decided to cast blank votes in Sunday's election and allow 25 party members to do the same or vote for Tang. Twenty-nine Liberals with a vote in the election nominated Tang. An Election Committee member who nominated Tang told the Post that Li was invited to meet Xi, head of Hong Kong affairs, in Beijing last Thursday. "Xi asked Li to support Leung Chun-ying, but Li insisted on backing Tang," the Election Committee member said. A day after his private meeting with the state leader, Li publicly voiced his support for Tang, while dismissing suggestions that he would withdraw his investments from Hong Kong if Leung wins the poll. A Cheung Kong spokeswoman had no comment on Li's meeting with Xi. In a letter sent to all Election Committee members last night, Leung pledged that, if elected, he would be inclusive and unite all sectors of the community, including supporters of other candidates. A Beijing source familiar with the central government's thinking said top mainland officials met several Hong Kong business heavyweights after the National People's Congress on March 14. The Election Committee member also estimated that about 100 of Tang's 390 nominators might follow Beijing's preference in Sunday's vote. Some of Tang's nominators with a Fujian or Guangdong background earlier confirmed they had been approached by the central government's liaison office in Hong Kong to switch their support to Leung. One member estimated Tang might eventually get about 200 votes. Meanwhile, Liberal Party chairwoman Miriam Lau Kin-yee said voting for Leung would not be an option. "Leung's policies and ideology are a long way from ours and his credibility has also been damaged by recent scandals. There's still not enough reason for us to reverse our stance," she said. Lau said the party's four leaders - herself, honorary chairman James Tien Pei-chun, and vice-chairmen Vincent Fang Kang and Selina Chow Liang Shuk-yee - would cast blank votes to reflect the public's view that none of the candidates is up to the job. Pan-democratic candidate Albert Ho Chun-yan said the 203 pan-democrats on the Election Committee would either vote for him, cast blank votes or be absent from the first round of voting.

Two Hong Kong residential sites were snapped up by mainland developers paying top dollar, with one of the purchases setting a record for the highest per-square-foot price in the New Territories. Chan Cheuk-yin, a vice-chairman of Guangdong-based Agile Property (SEHK: 3383), bought a site in Pik Sha Road, Sai Kung, for HK$700 million. With a maximum gross floor area of 32,787 square feet, the site was sold at HK$21,350 per buildable square foot, which breaks the existing record of HK$14,700 per square foot set by HKR International (SEHK: 0480) for a Sai Kung site in October last year. China Overseas Land (SEHK: 0688) & Investment, one of the mainland's largest developers, won a 32,830 sq ft site on Ap Lei Chau with a price of nearly HK$2.54 billion, or HK$11,044 per buildable square foot. The site attracted 12 bidders and its maximum gross floor area is 229,811 sq ft. This exceeded market estimates of about HK$1.15 billion to HK$2.2 billion, or HK$5,000 to HK$9,573 per square foot. "The [Sai Kung] site will be used to build houses. It is a private project as the site was bought by our vice-chairman, Mr Chan, and not by the company," said Agile's deputy general manager and company secretary Peggie Wai. The HK$700 million price tag was as much as 113 per cent higher than surveyors' forecasts of between HK$328 million and HK$590 million, or HK$10,000 to HK$18,000 per square foot. Chan, who could not be reached for comment yesterday, beat 17 other bidders to win the site, which has a height restriction of three storeys. Alnwick Chan Chi-hing, an executive director of property consultancy Knight Frank, was surprised by the selling price. "The buyer was very aggressive … and the properties built on the site may be sold for HK$35,000 per square foot," he said. Improved market sentiment in recent weeks might have boosted both sites' selling prices, he said. The Ap Lei Chau site is near the bridge linking the island with Aberdeen and is next to Sham Wan Towers, where second-hand flats are selling at more than HK$10,000 per square foot. Du Jinsong, Credit Suisse's head of Asian property research, said the tender results showed mainland developers were optimistic about the Hong Kong housing market as austerity measures continued to bite on the mainland. "It's because they think the Hong Kong market is better than the mainland," he said. While the two developers had invested in other Hong Kong projects, Du believed that other mainland developers would not follow suit because the housing market in Hong Kong differed from the mainland. Centaline Surveyors director James Cheung King-tat said the Sai Kung site was in a luxury residential area while the Ap Lei Chau site was by the sea. The government had not imposed any restrictions on flat sizes and numbers, making them attractive to developers.

Anger at 'Beijing media meddling' - Journalists react to Albert Ho's report of a liaison office phone call accusing a Hong Kong newspaper of smearing the central government - Observers and journalist groups reacted with indignation yesterday after Albert Ho Chun-yan reported that Beijing's liaison office had accused a Hong Kong newspaper of "smearing" Beijing and the office in its election coverage. Ho, the pan-democratic candidate in the chief executive election, told a Commercial Radio show that Beijing's representatives had complained directly to a top manager. "[The officer] left a message: how could you publish things this way, smearing the liaison office and the central government?" Ho said. "A boss of a newspaper called me, saying the liaison office called [his or her] secretary, which he had not experienced before." The South China Morning Post (SEHK: 0583) learned that the newspaper was the Hong Kong Economic Journal, of which Richard Li Tzar-kai, son of Asia's richest man, Li Ka-shing, is a majority shareholder. The phone call was made to Li's secretary, and a message was left. The caller apparently did not specify which story had angered him. The newspaper's chief editor said he was not aware if Ho was referring to his paper in the morning programme. "The editorial department did not receive any calls [from the liaison office]," said Chan King-cheung, adding that Li had not told him about the call or given him instructions on news coverage. One media source said the complaint stemmed from a daily one-page section of the Hong Kong Economic Journal, which often unveiled insider knowledge about local politics. Ho said the call had been made by a "second-tier official" whose rank was equivalent to that of Cao Erbao or Hao Tiechuan, who are the office's head of research, and the director general of the department of publicity, culture and sports, respectively. Cao has reportedly pressured the director of the Chief Executive's Office, Professor Gabriel Leung, not to release details on the 2001 West Kowloon cultural hub design contest that would damage Leung Chun-ying's candidacy in the poll. Leung Chun-ying is involved in a conflict-of-interest row over the contest. Journalists Association chairwoman Mak Yin-ting labelled it unacceptable for the liaison office to make such a call, which did not seem like a normal complaint. "Such a show of attitude clearly goes beyond lodging a complaint. It is a form of pressure." The association later issued a statement "strongly condemning" the interference. Shue Yan University journalism professor Leung Tin-wai agreed, saying the office was now interfering in the local media in an increasingly open manner. "It is [becoming] a trend … [The office] is now doing it in a more naked manner," he said. Hong Kong Human Rights Monitor issued a statement, asking people with knowledge of the matter to disclose further details. It said: "The liaison office's exerting pressure or interference on Hong Kong's press is a serious violation of the freedom of press, depriving the public of their right to know." The liaison office refused to comment on the issue last night.

Police are investigating a cybercriminal attack on Hong Kong's Chinese Gold & Silver Exchange in the past two weeks, part of a growing number of "distributed denial of service" attempts across the city. The attack on exchange members was one of 11 such incidents since the beginning of the year, the same number of cases reported for the whole of last year, a Hong Kong police spokesman said. During the attacks, which the exchange reported to police on March 16, hackers posted false rumours on line about exchange members and prevented clients from accessing the online trading systems of members, said exchange chief executive Haywood Cheung Tak-hay. After the attacks, the hackers threatened members with more severe attacks unless they paid at least HK$100,000. The exchange is adding software to its IT systems to screen out potentially risky e-mails to prevent cyberattacks, he said. Cheung said the recent attack was the most serious the bourse had suffered to date. Its 172 members are mainly gold traders and goldsmiths. "Eight members of the exchange suffered these cyberattacks in the last two weeks," said Cheung. "Before that, we had minor attacks targeting one or two members. For the past two weeks, these attacks have been severe. I think the attacks are organised, that's the problem." He said that the attacks probably originated from China, Australia and New Zealand. "It looks to be the work of criminal elements. It looks to be serious," said Steve Vickers, chief executive of Steve Vickers Associates, a Hong Kong risk consultancy. "It would appear that this is a classic but crude extortion case. But the attack does not have the hallmarks of world-class professionals," said Vickers, a former policeman. There was absolutely no foolproof protection against cyberattacks, he added. "Overall, this should not be the cause of widespread public concern, although the extortion is worrying." The kind of cyberattacks on exchange members in the past two weeks is called "distributed denial of service", which targets companies that use many online transactions and involves attackers preventing the companies' clients from connecting to their IT systems. "It's like putting a rock in front of your store to keep customers away," said Roy Ko Wai-tak, manager of the Hong Kong Computer Emergency Response Team Co-ordination Centre. "The company has to pay blackmailers if they wish to resume trading. Financial institutions are the best target for these hackers because they rely heavily on online transactions and are more likely to pay a ransom since they face huge losses with every minute of a shutdown." The cyberattacks also affected web hosting companies and the IT systems of financial institutions, with reports of criminals attempting to blackmail their victims, a Hong Kong police spokesman said. "Given the increase in such cases, the police held many discussions with industry players over the past year," he said. "With the co-operation of IT specialists, the police enabled e-commerce entities to increase their ability to counter cyberattacks. "The police have been closely co-operating with enforcement agencies in the mainland and other countries to tackle such crimes." More financial institutes may face this kind of cyberattack, Ko warned. Such attacks had been carried out in Western countries in the past two years, but it was not until the middle of last year that Hong Kong police received the first report of "distributed denial of service", Ko said.

Consumer goods exporter Li & Fung (0494) yesterday posted a 24 percent rise in net profit for 2011, beating analyst forecasts as a pick- up in US consumer demand boosted sales. The increase comes a year after the company set an ambitious three-year growth plan expanding its sourcing network to rake in higher profits. Deputy chairman William Fung Kwok-lun said yesterday he is confident the company will meet its growth targets. "Our target for the core operating profit [of US$1.5 billion] is unchanged," Fung said. "We are confident that we can achieve that target by 2013." Fung also said that while an expected devaluation of the euro against the US dollar had dampened customers' purchasing, the US economic recovery is stronger than expected. "The actual US economic recovery is better," he said, adding that prices for some raw materials have come down and overall material costs are down a few percent so far in 2012. Li & Fung manages supply chains for retailers including Wal-Mart Stores and Target Corp. It reported a profit of US$681 million (HK$4.8 billion) for 2011, against a consensus forecast of US$617 million from 18 analysts. The firm signed 18 deals in 2011, including 12 acquisitions for its trading network and six for its distribution network. Fung said the company may slow its pace of acquisitions if the economy improves. "We do more acquisitions if the economy is weak because we can strike a lower price. If the economy grows, our growth can be organic," Fung said. Shares of Li & Fung rose 0.42 percent to HK$19.06 yesterday ahead of the results. 

Vow to fight any poll pressure - The constitutional affairs chief vows the government will resist any pressure and make sure Sunday's chief executive election will be held in a fair and just manner. Raymond Tam Chi-yuen made the pledge after reports suggested the central government liaison office has been lobbying support for candidate Leung Chun-ying. "The SAR government has never bowed to pressure by anyone. This is because the city should be governed by us, the SAR government," Tam said yesterday. "There is also legislation and rules stipulating that nobody should ever use any force or threats to change the independent desire of voters to cast or not to cast a vote for a certain candidate." Anyone who breaches the Elections (Corrupt and Illegal Conduct) Ordinance will face a maximum penalty of seven years in prison. All the mainland officials he has met respect the principle of "one country, two systems," Tam said. He also said the government will adopt a series of measures to ensure a just and fair election. For instance, there are plans to switch off or change the direction of surveillance cameras inside the voting area at the Hong Kong Convention and Exhibition Centre, Wan Chai. Partitions will separate each voting booth and the tops of each booth will be boarded up to ensure total privacy. Photography or video recording inside the voting area will be prohibited. The ballots, booths, voting process and count are all designed to ensure that only the voters themselves know the person they are electing, Tam said. His remarks follow revelations by Liberal Party honorary chairman James Tien Pei-chun that the liaison office has been intervening in SAR elections over the past two years. Tien said that if Leung is elected, the liaison office will have a larger say in the running of the government than before. Albert Ho Chun-yan, one of the chief executive candidates, claimed a newspaper executive told him of a phone call from the liaison office criticizing the publication for reporting its intervention in the election process. Ho also criticized the liaison office for creating what he described as "white terror" or an "atmosphere of terror" in the SAR. "Over the past few months, officials from the liaison office have been actively intervening in the election to an extent that is unprecedented," Ho said. "And the intervention is putting a lot of pressure on members of the Election Committee - to such an extent that they fear they may offend the central government if they do not vote for Leung Chun- ying."

No clear winner as teens cast votes for CE - The chief executive election would end in stalemate if Hong Kong’s young people were selecting the city’s next leader, according to the result of a simulated vote released on Thursday morning. None of the three candidates came close to winning 50 per cent of the 57,040 votes cast in the poll organised by the Boys’ and Girls’ Clubs Association and the University of Hong Kong’s public opinion programme. Leung Chun-ying led the way with 33.6 per cent of the votes cast by 12 to 21-year-olds, followed by Albert Ho Chun-yan at 22.5 per cent, and Henry Tang Ying-yen at 21.9 per cent. Some 16.5 per cent of voters cast blank ballots and 5.5 per cent of the ballots were ruled invalid. Organisers and political scientists say the result shows that Hongkongers do not have a clear preference as to who should lead the city. In the real race for chief executive, the winning candidate must win the support of 601 voters. There are 1,193 members of the Election Committee, and if two rounds of voting result in a stalemate on Sunday, the poll will be rerun at a later date. “Only one-third of the young people voted for Leung even he’s in the lead. That’s a very low rate,” Ivan Choy Chi-keung, a political scientist at the Chinese University, said. “There will be a legitimacy crisis if any of them become the city’s leader.”

For Peter Chan, Story Trumps Style - Peter Chan on location. ‘I always have to struggle through the process,’ he says. Some filmmakers own wineries. Some are musicians, and others run art galleries. Then there’s Peter Chan. “I have no hobbies,” he says. Nor is he especially prolific, averaging just one movie every year or two. But during his 20 years behind the camera, he has scored a string of box-office successes, as well as the occasional miss. He’s also developed a reputation for an ability to adapt to the fast-changing Asian film industry, working in nearly every genre from musicals to romances to horror. “He’s one of the most versatile Hong Kong filmmakers,” says Roger Garcia, the executive director of the Hong Kong International Film Festival, which opened this week. “I’ve always considered myself to be not a technical or stylish director,” Mr. Chan says. “I’ve always considered myself a storyteller, and I think I’m a good storyteller. I try to be stylish, but I always have to struggle through the process. It never comes easy for me.” The Hong Kong festival is holding the first major retrospective of his films, including his 1991 directorial debut “Alan and Eric: Between Hello and Goodbye,” starring Maggie Cheung; the 2007 war epic “The Warlords” with Jet Li; and last year’s “Wu Xia” with martial-arts star Donnie Yen. Born in Hong Kong and educated at American schools in Bangkok and Los Angeles, the 49-year-old director began his career 30 years ago as an interpreter on the set of a John Woo film. Other work followed, and he eventually formed his own production company in the early 1990s. He ramped up the hit-machine with such movies as the gender-identity comedy “He’s a Woman, She’s a Man” by targeting a neglected demographic: young, upscale, urban moviegoers. Mr. Chan then changed course, venturing into art-house territory with “Comrades, Almost a Love Story,” a 1996 drama starring Leon Lai and Ms. Cheung about two mainland immigrants finding love in Hong Kong. “Comrades” scooped up nine Hong Kong Film Awards, including best film and best director, but the critical success brought heightened expectations as well. “That has always been a lot of baggage for me,” Mr. Chan says. “I was much younger and wasn’t very good at dealing with success. So I always had a chip on my shoulder and didn’t know how I was going to top myself.” By that time, too, Hong Kong’s film industry was declared all but dead, reeling from the invasion of Hollywood blockbusters and the drain of top talent, including Jackie Chan and Chow Yun-fat, fleeing for Los Angeles. He, too, responded to the call of Hollywood and directed the 1999 romantic comedy “The Love Letter” for Steven Spielberg’s DreamWorks. It tanked at the U.S. box office. “That film was more director-for-hire,” Mr. Chan says. “I took that much more as a job instead of as a very personal film.” He was back in Hong Kong at the beginning of the millennium and turned his attention to producing films with pan-Asian appeal, including the Pang brothers’ horror movie “The Eye.” But the results proved to be limited. “The truth is, there really never was a pan-Asian market,” Mr. Chan says. “People were trying to figure out the next trend.” By the mid-2000s, he was looking north to mainland China and its burgeoning film industry. The 2005 musical “Perhaps Love” was his first Hong Kong-China co-production. “There are flaws here and there in all my films, but ‘Perhaps Love’ was my most personal,” he says. “It was my first real movie since ‘Comrades.’” All of his films since then have been co-productions, a business model that has now become the norm in the industry by allowing Hong Kong films to be distributed in China without the foreign-import quota restrictions. With last year’s “Wu Xia,” Mr. Chan tackled the martial-arts genre for the first time. “It is my most satisfying movie, while I was making it, because I got to stretch my limits,” he says. But the reception wasn’t what he expected. “It was probably one of my biggest failures,” he says. “In terms of box office, in terms of return on investment, and even in terms of critical reaction. But that’s how it is. Movies are like gambling.” With an eye on the future, he recently launched a Chinese movie channel in Hong Kong called Popcorn with two other partners. They plan to expand the channel to other markets, including Singapore, Malaysia and Taiwan. He’s also finishing work on another action movie, “The Guillotines,” which he produced and will be released later this year. “If I don’t make movies,” he says, “I don’t know what I’d do.”

Television Broadcasts (0511) saw its net profit in 2011 rise 17 percent to HK$1.56 billion, but it failed to keep the lid on costs in the second half of the year as it did in the first six months. Revenue for the year at the leading free TV station operator in the SAR hit HK$5.21 billion, which was up 11 percent on 2010. But bottom-line growth for the year was not up to the pace of the 23-percent growth in interim earnings. The cost of sales in the second half was HK$967 million, according to calculations by The Standard. That was 15 percent higher than in the first half. Selling, distribution and transmission costs as well as administrative expenses for the second half of 2011 surged 29 percent and 37 percent respectively, outpacing revenue growth. TVB will pay a final dividend HK$1.75 per share from HK$1.65 a year ago. The station pulled in HK$3.4 billion in ad dollars, mainly from skin care and cosmetic products, milk powder, electronic equipment and luxury goods. Ad revenue was up 15 percent. TVB has rapidly expanded in China, where income from program licensing and Guangdong landing right fees increased 28 percent to HK$263 million. But TVB said the mainland business environment was challenging amid domestic competition and tighter controls. 

A senior official of the central government liaison office has called for new laws to regulate election-related opinion polls. Hao Tiechuan , director of publicity, culture and sports affairs, wrote in a Ming Pao Daily News column that there are laws in countries like France and Spain that restrict the release of poll results days ahead of elections. The aim, he wrote, is to give voters time to think things through. This will reduce the possibility of being affected by popularity polls. However, pollsters and politicians said it is not necessary for Hong Kong to enact laws regulating poll results. Wong Chack- kie, associate director of the Chinese University of Hong Kong's Institute of Asia-Pacific Studies, said "the aim of those laws that regulate the timing for research institutions to release poll results in some European countries is to prevent parties from manipulating poll results. "As most of the polls conducted by local universities are independent and credible, it is not necessary to enact those laws," he said. Robert Chung Ting-yiu, director of the University of Hong Kong's Public Opinion Programme, said he apreciates Hao's views, and hopes to exchange ideas with him in the future. Political analyst James Sung Lap-kung at City University said he believes Hongkongers will not be influenced by poll results. Democratic Party lawmaker Wong Sing- chi, on the other hand, is concerned that freedom of expression and academic freedom might be undermined if laws determined when poll results can be released.Rita Fan said Hao's idea has nothing to do with pan-democrats' call that Election Committee members cast a blank vote on Sunday.

The Liberal Party has unanimously decided not to vote for Leung Chun-ying in Sunday's chief executive election. Speaking after a two-hour meeting, chairwoman Miriam Lau Kin-yee said the party's 29 votes will not be " bundled" and its Election Committee members can either vote for Henry Tang Ying-yen or cast blank votes. Lau, honorary chairman James Tien Pei-chun, vice chairman Vincent Fang Kang and vice chairwoman Selina Chow Liang Shuk-yee will be casting blank votes. Lau and Chow described the casting of blank votes as a "responsible decision." Lau stressed: "None of our members supports Leung Chun-ying. That is very clear." The party, which represents commercial interests, made the decision based on their respect for public opinion, Lau said. Although Leung's popularity is higher than that of Tang, the party will not vote for Leung because his ideology is too far away from the party's. Lau explained the party nominated Tang - one of its founding members - earlier this year because his platform was close to its thinking. But she agreed some members have doubts over Tang's credibility after a recent spate of scandals. She said those who still support Tang may try to rally support for him but that the party will not ask anyone to vote for any of the candidates. "It will be very difficult for the party to suddenly tell members to vote for Leung Chun-ying," Lau said. "It is not just about what a person has done in the past two to three months, it's about a person's ability." Chow said the party has not thought about whether their decision will result in no candidate getting a majority of votes. "A no-decision may not bring huge harm to Hong Kong. It will instead be irresponsible if we vote for the sake of not letting the election end with a no- decision," Chow said. The party polled more than 1,900 people between March 13 and 20, and about 30 percent said they would cast a blank vote. Slightly more than 30 percent said they would vote for Leung, while almost 20 percent would vote for Tang. Fewer than 10 percent supported Democratic Party chairman Albert Ho Chun-yan. Meanwhile, Ho said after a meeting with the pan-democrats that the 203 Election Committee members said they will vote for him, cast blank votes or not vote at all in the first round. They will all walk out of the venue in protest if there is a second round of voting in the event of a no-decision in the first round. Lawmaker Pan Pey-chyou of the Hong Kong Federation of Trade Unions - with 60 votes - said party members are inclined to vote for Leung. But the party's voting decision will not be made until a meeting this afternoon. Late last night both Tang and Leung appealed for support from Election Committee members. Leung wrote a letter to all members, saying he will "make every effort and sincerity" to gain their support, adding that Hong Kong needs a responsible and capable leader and he will adopt a tolerant attitude to unite the people of Hong Kong. Tang wrote on his election campaign website that the city needs a chief executive who can unite Hong Kong people to ensure "One Country, Two Systems" works. Meanwhile, reports suggested that Cao Erbao, head of research in the central government's liaison office, has persuaded Chief Executive's Office director Gabriel Leung to slow down the investigation into Leung's alleged conflict of interest in the West Kowloon cultural project. The Chief Executive's Office reportedly did not deny the allegation, saying only that it is the office's job to communicate with the liaison office. A spokeswoman for the office did not provide further details regarding the allegation. And liaison office deputy director Li Guikang declined to answer questions after attending a public event.

Hong Kong's competitiveness ranking is based on its infrastructure, economic strength and commercial efficiency. HK among top places for doing business - Boao Forum report ranks city third in Asia for competitiveness, though lagging on education and innovation; global survey rates HK No.1 for business - Hong Kong has moved up two places to become Asia's third-most competitive economy, with its three "tiger" cousins also ranking in the top five, according to an annual report released by the Boao Forum. However, the internal and external environment will affect the competitiveness of the region's economies in the future, the forum's "Asian Competitiveness" annual report for 2012 says. Separately, Hong Kong ranked as the best place to do business based on data compiled by news agency Bloomberg. The city's free-market policies and low corporate taxes as well as its position as the gateway to the world's most populous nation were cited as chief reasons behind its top ranking. The Boao Forum's top five are, in order, Singapore, Taiwan, Hong Kong, Japan and South Korea; mainland China came in at No10, up from 11th last year, among the 37 economies evaluated. Hong Kong was ranked fifth last year. "Hong Kong has become a competitive economy relying on the Chinese mainland as its economic hinterland," the report said. The city leads in three aspects of competitiveness: first-class infrastructure, robust overall economic strength and high commercial and administrative efficiency. "All these advantages contributed to Hong Kong's third ranking in the competitiveness," it said. However, it said Hong Kong lagged far behind its Asian cousins in human capital investment and innovative product research. "Compared with Taiwan, Singapore and South Korea, the enrolment rate of higher education is lower and government investment in education is less, which may influence its innovation output," it said. The city secured top position in a new Bloomberg index based on six criteria including the degree of economic integration and labour costs. The Netherlands, United States, Britain and Australia occupied the next four slots. The ranking marks a victory for Hong Kong, 15 years after the city's return to Chinese sovereignty stoked concern that its role as an international financial hub would fade. Meanwhile, despite rising competitiveness, the Boao Forum warned in the report that emerging economies faced many uncertainties this year. It said continued doldrums in developed economies would affect the sustainable and stable growth of emerging economies. The report warned that some emerging economies would be hit both by high unemployment and high consumer inflation rates. "The need to strike a balance between job creation and growth and inflation management makes it more difficult for those economies to adjust their macroeconomic policies," it said. The report also warned that more trade friction and unstable financial markets would add uncertainty to the development of Asia's emerging economies, as well as those in other countries such as Brazil and South Africa. It forecast China will post robust growth of 8.8 per cent in gross domestic product this year - much higher than the central government's 7.5 per cent projection. The report also said that while the possibility of an economic hard landing for China - the world's second-largest economy and biggest single contributor to global economic expansion - is slim, the scenario "cannot be ruled out" for other emerging economies. The Boao Forum is Asia's version of the Davos World Economic Forum and brings together international CEOs, financiers and academics to discuss socio-economic issues. This year's theme is "Asia in the changing world - heading for healthy and sustainable development". This year the forum will be held from April 1 to 3. TRADE LEADERS: 1. Singapore 2. Taiwan 3. Hong Kong 4. Japan 5. South Korea 6. Israel 7. New Zealand 8. Australia 9. Bahrain 10. China

Strained ties lie ahead if Leung elected, says Ho - Democrats' chairman accuses his rival in race for top job of having a high-handed leadership style - Albert Ho Chun-yan has accused his fellow chief executive contender Leung Chun-ying of having a high-handed leadership style and foresees strained ties with pan-democrats if he is elected. Ahead of Sunday's vote in which the 1,193-strong Election Committee will pick Hong Kong's leader for the next five years, the Democratic Party chairman cast doubts on the integrity of Leung, now widely seen as likely to win, and said he would have difficulties working with him. "The problem with [Leung's] integrity is bigger than his competence … I think he can be ruthless and may try to achieve his aims by all means. Needless to say, many people believe that he is an underground [Communist Party] member," he told the South China Morning Post (SEHK: 0583). "He can be unscrupulous and reckless and may be bold enough to do many things." Ho said this was something Hongkongers did not want to see. He said a rift had developed between Chief Executive Donald Tsang Yam-kuen and the opposition and pan-democrats, but this would escalate and become more serious under Leung. Tsang steps down in June. Ho suggested that Leung's followers might have been behind the attacks on Henry Tang Ying-yen, his main rival for the top job, with supporters like Lew Mon-hung keen to launch negative campaigning. Lew earlier admitted he had made contact with controversial businessman Kwok Wing-hung, nicknamed "Shanghai Boy", because Kwok claimed he had negative material about Tang. Still, Ho said that should Leung be elected, pan-democrats would try to bargain and negotiate with him on policies for the sake of Hongkongers. He said if Leung took office, it could be bad for governance in the short run. "But in the long run, it might push more people discontented with the administration to come forth to strive for democracy." Ho said Democrats would not join the cabinet of the administration or the Executive Council until rules had been laid down on the nomination threshold for the 2017 chief executive election, and that no functional constituencies in the Legislative Council were guaranteed by legislation. He also said Hongkongers were the biggest losers in this election. "The winner is the one who can finally gain power, but not Hongkongers. Many people still don't know how bad [Leung] could be, giving him the highest popular support [among the three candidates]." Ho believed he had largely reached his own goal in electioneering so far, saying he had questioned the pro-establishment runners on constitutional pledges and problems of social justice. As he was now 60, Ho ruled out his chances of running in the next leadership race in 2017. "I will help groom talent to run … Many people are smarter than me. I am not quite charismatic," he said. Leung's campaign office declined to comment last night.

Tang out to show the 'real' Leung - Ex-chief secretary says he made accusations in debate to show rival's true colours - and because he was infuriated by mention of infamous e-mail - Henry Tang Ying-yen chose to reveal Leung Chun-ying's inflammatory comments about using "riot police and tear gas" on protesters as he realised his rival "had a real chance to win" Sunday's chief executive poll. Tang said he wanted people to see the "real face" of Leung during Friday's televised election debate, and so revealed details of Leung's comments at a 2003 Executive Council meeting despite confidentiality rules. Another reason for his comments was Leung's decision to mention an infamous, unverified e-mail supposedly sent by Tang to a former lover. Signs have multiplied this week that Beijing is rallying support for Leung, the former Exco convenor. "Throughout the campaign I have been told by many people that this Leung Chun-ying was not the one they have known for years," Tang said. "I feel there is a need to let the public know what kind of decisions he would take at critical moments." The former chief secretary said on Friday that his comments followed "careful consideration". Tang accused Leung of suggesting to fellow Exco members that riot police and tear gas be used to control protests over the Article 23 security laws in 2003, and calling for a cut in the term of Commercial Radio's licence after criticism by radio hosts. The security law was withdrawn. Asked if the timing of the revelations had been planned in advance, Tang said: "Leung infuriated me at Friday's debate. He quoted unverified e-mails when questioning me. It was low-class and shameless." He was referring to an e-mail published by the Oriental Daily newspaper and alleged to concern an extramarital affair. He is said to have mentioned how "the sofa in the office" brought to mind a woman with whom he is said to have had an affair. In a Wall Street Journal interview, former chief secretary Anson Chan Fang On-sang called Leung a "political chameleon" who "may not share Hong Kong's core values". Meanwhile, ex-security minister Regina Ip Lau Suk-yee said Tang's comments yesterday constituted a further violation of Exco's confidentiality rule and it was so serious a matter that Chief Executive Donald Tsang Yam-kuen himself should publicly address the issue. Other former Exco members also cast doubt on Tang's comments. One, former health chief Dr Yeoh Eng-kiong, said: "Article 23 of the Basic Law was a major piece of legislation ... I do not recall anyone within the government making such remarks." Leung's campaign director, Fanny Law Fan Chiu-fun, said it reserved the right to take legal action and its lawyers agreed Tang's claims breached the Election Ordinance. "There's no time limit for a criminal prosecution," Law said. She again said Tang had fabricated remarks attributed to Leung about the radio licence and the 2003 protests: "The Mr Tang I knew would not do things like this. I don't know if politics twists a person's personality." Leung's campaign chairman, Barry Cheung Chun-yuen, dismissed the idea Leung's sofa jibe provoked Tang into raising the radio licence issue, as Tang first spoke about it before Leung mentioned the e-mail.

 China*:  Mar 24 2012 Share

Beijing said yesterday the detention of two Vietnamese fishing boats and 21 crew near the disputed Paracel Islands was lawful, after Hanoi demanded their "immediate and unconditional" release. Hanoi has said the March 3 arrests "seriously violated Vietnam's sovereignty" and that China must stop its "hindrance of Vietnamese fishermen". Beijing maintained that it held "indisputable sovereignty" over the islands in the South China Sea. Foreign Ministry spokesman Hong Lei said: "The actions of the Vietnamese fishing boats violated China's sovereignty and maritime rights. The actions taken by Chinese authorities were valid law enforcement actions." Hong further urged Hanoi to "manage and educate" its fishermen and end "illegal poaching" in Chinese waters. On Wednesday, Vietnamese foreign ministry spokesman Luong Thanh Nghi demanded the "immediate and unconditional release" of the fishermen. He also said Hanoi would not pay a 70,000 yuan (HK$85,783) fee he said China had requested. Yesterday, Vietnamese Agriculture Minister Cao Duc Phat said he had proposed the country create a new "fish surveillance force" to monitor its fishing fleet in the South China Sea and elsewhere. The force could provide information to help resolve international disputes over fishing, he said. The March 3 incident is the latest in a string of diplomatic skirmishes between the neighbours over islands. In late February, Vietnam claimed China had prevented 11 Vietnamese fishermen from approaching the islands to avoid strong winds. Last week Hanoi said Beijing had "seriously violated" Vietnam's sovereignty by allowing a Chinese oil company to open bidding for oil exploration near the Paracel islands. The two countries also have competing claims over the potentially oil-rich Spratly islands.

Australia's central bank on Thursday signed a currency swap deal with its Chinese counterpart, allowing for up to Aus$30 billion (HK$244 billion) to be exchanged between the two institutions. The purpose of the deal, another example of the growing internationalisation of China’s currency, is to support trade and investment between the two countries, the Reserve Bank of Australia said. “The agreement reflects the increasing opportunities available to settle trade between the two countries in Chinese renminbi [yuan] and to make RMB-denominated investments,” the RBA said. “It follows the decision by the Chinese authorities last November to allow convertibility between Australian dollars and Chinese yuan in the interbank market in China.” The People’s Bank of China has signed currency swap deals with a range of other countries including Turkey, the United Arab Emirates, and Malaysia.

China’s manufacturing sector activity shrank in March for a fifth successive month, with the overall rate of contraction accelerating and new orders sinking to a four-month low, the HSBC flash purchasing managers index showed on Thursday. The PMI, the earliest indicator of China’s industrial activity, fell back from February’s four month high, slipping to 48.1, within a whisker of the level that economists at HSBC consider a crucial level dividing decline from growth. Slowing activity could mean a further relaxation of monetary policy to help underpin growth in the world’s second biggest economy, but lingering inflation risks uncovered by the survey highlight the dilemma facing policymakers in Beijing who are determined to keep a lid on prices. The PMI reading, down from February’s 49.6, is likely to reinforce the more bearish views on China’s economic trajectory. “Growth momentum could slow down further amid a combination of sluggish export new orders and softening domestic demand. This calls for further easing steps from the Beijing authorities,” HSBC chief China economist, Qu Hongbin, said in a statement. An index reading of 50 marks the line between expansion and contraction, according to the methodology of the survey compiled by UK-based data provider, Markit, but index sponsor HSBC reckons factors unique to the Chinese economy makes 48 especially significant. The fall in the new orders sub-index to 46.2 had a particularly bearish effect on the overall index, as it is the single biggest of the five component items comprising the PMI. All five elements signalled a contraction of activity.

Stanford center opens in Beijing - New building on Peking University campus to promote international ties - Following the University of Chicago, Columbia University and other top-tier international universities, Stanford University of the United States launched a research center in China on Wednesday at Peking University. The center serves as the headquarters for Stanford staff conducting research and overseas programs in China. But unlike its peers, the Stanford Center at Peking University owns a 36,000-square-meter building for Stanford's use on the Peking University campus. It is the first US university to construct a building on a major Chinese university campus. Stanford spent $7 million on this project, which was funded entirely by the Stanford International Initiative. The center is located beside the Weiming Lake, one of the most picturesque spots on the Peking University campus. Walking through a white ancient Japanese style bridge, visitors can see the quadrangular house with a templelike dome come into view. The center will encourage more student exchanges, academic collaboration and faculty visits between China and the US, John Hennessy, Stanford president, said at a news conference in the center. "Increasingly, our students want to know and understand more about China, and our researchers want to be working with their colleagues from China to solve the challenges in the world." The president also mentioned that Peking University has begun discussions about Stanford building a center on Stanford campus, but he said he has no details to release because the talks have just started. "I'm glad that we have a home here now," said Scott Rozelle, a Stanford University professor and leader of the Rural Education Action Project, an organization that evaluates and advises on education, health and nutrition policies in China. Matthew Boswell, who works with Rozelle, told China Daily that they used to work at the Center for Chinese Agricultural Policy at the Chinese Academy of Sciences. "When the offices were in short supply, we would have to grab a coffee for a conference," he said. "But now we have our own place, and no longer need to go to a cafe." Jim Plummer, dean of the Stanford School of Engineering, told China Daily that the center will serve mostly as a hub for Stanford students coming to China, because many more Chinese students have already studied at Stanford. "We want to strike a balance," he said. Presently there are more than 1,000 Chinese students studying at Stanford. For more than 10 years, the university has enrolled more students from China than any other country out of the US, according to Hennessy. "As a new platform for Peking University and Stanford to further students exchanges, scholars' visits and other cooperation, the center will provide an opportunity for Peking University and other Chinese universities to share resources and deepen cooperation with Stanford University, and ultimately reach a win-win situation," said Peking University President Zhou Qifeng at the opening ceremony. Gary Locke, the US ambassador to China, voiced his thanks to Stanford for encouraging American students to study in China, to achieve President Barack Obama's 100,000 Initiative plan, which aims to send 100,000 US students to study in China in next four years. "I hope the center will go beyond collaboration between Stanford and Peking University but also serve as a tie between Chinese universities and American ones," said Hennessy.

Hainan Airlines on Thursday said it would start sharing codes with American Airlines (AA) on March 25, a move that will enable China's fourth-largest carrier to extend its reach into the North America market. Travelers choosing Hainan Airlines are now able to book flights on AA's three inter-continental routes -- Beijing-Chicago, Shanghai-Chicago and Shanghai-Los Angeles -- and its 16 domestic routes in the United States, according to a spokesperson for Hainan Airlines. AA passengers can also take Hainan's Beijing-Seattle flights and six Hainan-operated domestic routes connecting Beijng with Haikou, Hangzhou, Fuzhou, Urumqi, Kunming and Guangzhou, he added. Hainan Airlines is a fast-growing Chinese airline that began operations in the southern province of Hainan in 1993. It is now the country's four-largest carrier after Air China, China Southern and China Eastern, operating on nearly 500 routes to more than 90 destinations around the globe.

Washington has agreed to allow some high-tech goods into China - Beijing has welcomed Washington's decision to allow some high-tech items from the US to be exported into China. "We welcome this move, as mutual benefit is the essence of Sino-US economic and trade relations. We hope to strengthen mutual investment for a sustainable, stable and healthy development of bilateral trade links," Foreign Ministry spokesman Hong Lei said at a regular news briefing on Wednesday. Forty-six of the 141 high-tech items requested by China will be granted approval to enter the Chinese market, US Ambassador to China Gary Locke said on Monday during a function to commemorate the 40th anniversary of the Shanghai Communique. "As a result of our work together, the United States has indicated that 46 of these technologies can be readily exported to China, and some may not need a license at all," Locke said. The US government is in the midst of a major reform and simplification process that will enable more high-tech goods to be exported to China, he said. "We need additional detail from China on the remaining requested items, so that we can determine whether and under what conditions they can be exported," he said. In May, the US embassy will bring a delegation of US companies to Shanghai to meet with Chinese companies interested in purchasing these high-tech goods, said the ambassador. Ni Feng, deputy director of the Institute of American Studies at the Chinese Academy of Social Sciences, said this is a direct result of China's repeated requests, adding that Chinese leaders had raised this issue almost every time during high-level dialogues. The announcement comes at a time when pressure is mounting on President Barack Obama as he prepares for a presidential election in which the economy is expected to be the biggest issue. "Considering the sluggish domestic consumption and investment and that there are no emerging industries that could promote rapid economic growth, the only way for the US government to turn around its economy is to boost its exports," Ni said. He said the US traditionally has had three major export markets - Europe, the Middle East and Asia. But since Europe is suffering from a full-scale economic crisis and weapons seemed more popular in the chaotic Middle East, Asia is a good destination for US products, as it has pledged to double its exports in the next five years, he added. "By boosting exports of mature technologies to China, which has a strong operability, the US could make its overseas trade data much more attractive," he said. Meanwhile, Ni added that the decision might be connected with the recent lowered tone by the US on its "return to Asia" strategy, as the decision may alleviate some concerns from China. However, analysts also said the decision by the US to allow some high-tech exports into China was symbolic, and the effect will depend on how it is implemented. Shi Yinhong, a professor of US studies at Beijing-based Renmin University of China, said compared with the trade barriers and pressure that the US has put on China, the decision may have little impact. "We welcome this decision, but how much of an effect will a mere 46 high-tech items have?" Shi said. Shi said he was skeptical whether the US would further ease restrictions on high-tech exports to China, as the US has always been conservative on this issue and not willing to make major adjustments.

The central government plans to take more control of the nation's enormous but opaque local government pension funds, starting with a pilot fund management scheme in Guangdong. But analysts say Beijing's ambition may touch a raw nerve with some local leaders, as investments related to pension funds remain a sensitive issue after a 2005 corruption scandal in Shanghai. The National Social Security Fund (NSSF), which is directly led by the State Council, said this week it had received approval from the cabinet to help manage part of Guangdong's pension fund. The province agreed to authorise the NSSF to manage 100 billion yuan (HK$122 billion) of local pension funds in the initial two-year phase of the plan. Dr Yifan Hu, chief economist at Haitong International, told the South China Morning Post (SEHK: 0583): "I believe most local government pension funds will be unwilling to open their books and let the central government take a look. The whole system feels like a black box." Hu supported Beijing's plan to let the NSSF manage Guangdong's pension fund, which, she said, would help to increase the transparency of fund operations as well as increase opportunities to seek higher investment returns. Yesterday the NSSF said in a statement posted on its website that it guaranteed Guangdong would receive investment returns at least higher than the interest rates of time deposits offered at mainland banks for the money the NSSF would manage for Guangdong. Before the "one child" policy was implemented in the 1980s, China experienced a baby boom during the 1950s and 1960s when Mao Zedong promoted a population policy of "the more, the better". Those who were born at that time are now nearing retirement age. One financial analyst said: "Beijing is facing increasing challenges on how to manage its pension funds, both the national one [NSSF] and the local governments' funds. This is a problem that the central government has to face because the whole country is now rapidly ageing." Hu said the move to let the NSSF manage Guangdong's fund was a clear signal to the rest of the country. "If the Guangdong fund proves a success, then others will have to follow the same route sooner or later," she said. If that happened, Beijing could tighten its control of the country's pension fund system, which is currently complex and disparate. China registered a balance of 2.87 trillion yuan in social security funds at the end of 2011, of which the pension funds totalled 1.92 trillion yuan. Most of the money under NSSF management is contributed by the central government and those state-owned enterprises directly owned and led by the central government. On the other hand, local governments also run their own pension funds backed by local finance and enterprises, and the size and balance of such funds remain unclear in many cities and provinces. In 2005, the central government discovered Shanghai, the country's largest city, misused some of its local pension funds to invest directly or indirectly in infrastructure, property and the local stock market. The scandal eventually cost the job of the city's top party boss, Chen Liangyu, and put Chen and his businessman friend Zhang Rongkun, ranked by Forbes magazine as China's 16th richest person in 2005, in jail. In December last year, Guo Shuqing, the newly appointed chairman of the China Securities Regulatory Commission, said that he wanted to attract more capital from the mainland's pension funds to invest in domestic capital markets. Investors saw Guo's comments as an effort to boost market confidence. Yesterday the mainland's stock market, after a series of rises and falls, closed almost flat, reflecting divergent interpretations of the Guangdong fund news among analysts and investors. Some investors expected that the NSSF would gradually increase its market exposure, with the cabinet possibly approving it to manage more local government funds after the Guangdong one. Others believed that any short-term impact on the stock market would be limited. The NSSF said in its statement that the majority of the 100 billion yuan capital it helped to manage for the Guangdong pension fund would be invested in government and corporate bonds and other fixed-income products and its investment strategy would remain prudential and cautious.

Service center launched for private jets - Staff workers of Zhuhai Xirui General Aviation Company transport a Cirrus aircraft in Zhuhai, Guangdong province, on Friday. Industry players need to invest in infrastructure - The mainland's first fixed-base operator service for private jets was launched in Zhuhai, Guangdong province, last week, which insiders called a breakthrough in the second year of China's reform of airspace management. But the boom of the private jet sector is yet to come, they said, demanding more policy support from the government and more investment in infrastructure by industry players. A fixed-base operator usually provides aircraft sales, storage, repair and maintenance, and sales of aircraft parts, among other services. Chen Shaochang, general manager of Zhuhai Xirui General Aviation Company, which launched the service, said it will open more fixed-base operator facilities in Shenyang, Dandong, Jilin and Daqing in Northeast China in the following years. A network of 40 such facilities is expected to take shape by 2020, which will facilitate those who commute between cities in private jets, he said. Previously, companies would sell aircraft, plane parts and fuel, but most stopped short of providing other services such as aircraft repair and maintenance. "Most companies do not want to invest in such facilities, because they are afraid of losing money with so little business nowadays," said Jiang Li, chief China representative of US plane maker Cirrus. At present, private jets in China cannot fly freely, because low-altitude airspace is under the control of the air force. Any flight by non-commercial planes must go through a lengthy procedure before taking off. It is almost impossible for private jet owners to take off at short notice. Private jet sellers believed that the restriction has dampened Chinese millionaires' enthusiasm to buy small jets, and have called for years for lifting the restrictions. Last year, the air force started a reform that aims to open airspace under 1,000 meters in five to 10 years, which has bolstered the industry's confidence in the sector. Liu Liangjun, general manager of Changsha-based GALink Aviation Technology, which has sold business jets and helicopters and aviation parts for more than 10 years, said that many new companies selling private jets have emerged in the past few years, with optimistic prospects based on a growing number of billionaires in China and the ongoing reform. But most industry players also agreed that it's not the time yet to launch fixed-base operator services in China, he said. "Few private jets are actually used to commute between cities and demand such services, but the cost is huge for the operator," he said. In addition, it is not easy for potential service providers to get qualifications from authorities to provide repair and maintenance service, and building airports for small planes needs to go through complicated procedures, he said. "The reform by the air force to open up low-altitude airspace is not enough. The civil aviation administration should also do something to simplify and ease the approval procedures, and give actual support to the private jet sector," he said. Jiang with plane maker Cirrus said that the current strict requirement imposed by the civil aviation administration is necessary, as safety is the priority. "The industry players must be willing to invest hugely in the infrastructure and sacrifice current earnings," he said. "Fixed-base operator facilities, similar to gas stations and highway rest areas, are infrastructure that must be built for the benefit of the industry. Without them, small jets cannot really fly freely, even after the airspace is open," he said. China only has about 1,000 general aircraft, which include all kinds of non-commercial airplanes. The United States has at least 210,000 private airplanes. Xia Xinghua, deputy director of the Civil Aviation Administration of China, said last year that the fleet of general aircraft is expected to exceed 2,000 by 2015, including 600 private jets.

Hong Kong*:  Mar 23 2012 Share

Hong Kong Democratic Leader Fears Leung Chun-ying Victory - One of the founding members of Hong Kong’s democracy movement has expressed fears for the city’s future if former cabinet member Leung Chun-ying is chosen as the city’s top leader this Sunday, as analysts increasingly expect. In an interview with The Wall Street Journal, Martin Lee, the founding chairman of the Democratic Party, called Mr. Leung an underground “Communist Party cadre”, an allegation that recent statements by his opponent, former financial secretary Henry Tang, have helped fan. Mr. Leung has repeatedly denied that he is a member of the Communist Party. Mr. Lee, who currently practices law in Hong Kong, said he believes that having a chief executive who was too close to China’s Communist Party would be extremely worrisome for the special administrative region. Specifically, Mr. Lee said such a development would fly in the face of guarantees made to Hong Kong that the city would continue to enjoy a high degree of political autonomy after the former British colony was returned to Chinese authorities in 1997. “It would be a complete denial of the Joint Declaration and the Basic Law,” said Mr. Lee, referring to the document signed between China and the U.K. in 1984 enshrining the “one country, two systems” principle, as well as Hong Kong’s mini constitution. The CCP “doesn’t like our core values” such as the rule of law and an independent judiciary, he said. Mr. Leung’s potentially close ties to China’s Communist Party have long been a source of controversy during his campaign. At a debate last week, Mr. Leung reiterated his suggestion that Deng Xiaoping, rather than jailed dissident Liu Xiaobo, should have been the first Chinese to win the Nobel Peace Prize, because his economic policies helped lift millions out of poverty in China. In another debate organized by the pan-democrats earlier this month, when the three candidates were asked to observe half a minute’s silence for the victims of Tiananmen Square, Mr. Leung appeared to be smiling during those 30 seconds, spurring resentment among many Hong Kong residents. Mr. Tang alleged last Friday that Mr. Leung had brought up the idea of sending in riot police and using tear gas to deal with demonstrators in Hong Kong in 2003 if necessary, to ensure that a highly unpopular antisubversion law, Article 23, would be passed. (The legislation was eventually shelved). Last week, former member of Hong Kong’s Communist Party Florence Leung Mo-han, 73, claimed that Mr. Leung is a party member, citing the fact that he was chosen to serve as the Basic Law Consultative Committee’s secretary general at just age 34. Internal party rules, she said, dictated that such a position be held by a party member. Similarly, Mr. Lee said, Mr. Leung’s rapid ascendance to become head of Hong Kong’s cabinet upon the city’s transfer back to Chinese rule—at just age 44—reflects his close relationship with the Communist Party. Calls to Mr. Leung’s staff weren’t immediately returned. Though Mr. Tang—whose father, a wealthy Shanghai industrialist, was friends with Jiang Zemin—was once Beijing’s favored candidate, scandals have battered his approval rating, which is now just 21%, and he faces an uphill battle on Sunday, when the city’s 1,200-member election committee goes to the polls. In two recent debates, Mr. Tang’s performance suggested that he may think his chances are dim. On Monday night, he vowed firm support of universal suffrage and promised to lobby Beijing to restore home reentry permits to pro-democracy agitators — positions popular with Hong Kong residents, but not likely to play well in Beijing. Mr. Leung, though, remained more tight-lipped. “[Mr. Tang] knows he doesn’t have Beijing’s support anymore, so he can say anything he wants,” said Allen Lee, a founding member of the pro-Beijing Liberal Party. “He knows he’s out, but he doesn’t want [Mr. Leung] to be in.” Mr. Lee frames the twists and turns in the final months in Hong Kong’s chief executive race as part of a broader power struggle in China’s upper echelons of power. The struggle pits the Shanghai faction (which includes former president Jiang Zemin) and the so-called “princelings” (like the recently sacked Bo Xilai) against President Hu Jintao and his traditional power base, the Communist Youth League, which analysts perceive as backing Mr. Leung. The latest allegations about Mr. Leung have helped batter his popularity level among Hong Kongers, with his most recent poll numbers falling to 36% in recent days, down from above 50% last month. Mr. Lee said he was pessimistic over the future of Hong Kong, but said “when the crunch comes,” Hong Kong people have shown in the past that they will stand up for their rights. “Hong Kong people have spoken out that they don’t like this type of election. They want universal suffrage.”

Hutchison Telecom Hong Kong (0215) plans to launch fourth-generation mobile services in the first half when more 4G-ready handsets become available in the market. Chief executive Peter Wong King-fai said the 4G network - a frequency division duplex-long term evolution variant that it jointly owns with PCCW (0008) at 2.6 gigahertz - is ready. The company expects more mobile phone models that can connect to the network to be available in a couple of months. Wong said the company will develop the newly-acquired 2.3GHz spectrum as an overlay network. Annual capital expenditure will be maintained at HK$1.2 billion to HK$1.3 billion. Last year's capex reached HK$1.15 billion, excluding the HK$1.08 billion spent on the 2.3GHz band. SmarTone Telecom (0315) has also announced plans to launch 4G services this year. CSL began selling LTE mobile phones last month. Earnings at Hutchison, Hong Kong's largest telco in terms of customers, increased 35 percent to HK$1.02 billion, thanks to an ever growing smartphone market. Consolidated revenue grew 36 percent to HK$13.4 billion. Subscribers increased by 10 percent to 3.51 million, while postpaid average revenue per user rose 11 percent to HK$244 per month. Hutchison Telecom also said it has imposed limits on mobile data after usage exceeds five gigabytes a month to comply with regulatory requirements. Wong said this will have little impact on customers because 97 percent of them fall below the threshold. He also rejected suggestions that current "unlimited" data plans are causing losses. But he believes that under the user-pays principle, fees will be determined by market forces. The company proposed a final dividend of 10.7 HK cents per share, compared with 6.83 HK cents a year ago. Shares of Hutchison Telecom Hong Kong edged up 0.6 percent to HK$3.37 yesterday, versus a 1.1 percent decline in the Hang Seng Index.

Nearly half the people questioned in a snap poll believe Henry Tang was telling the truth when he accused Leung Chun-ying of suggesting the use of riot police and tear gas to quell protesters in 2003. Another poll also showed Leung's popularity rating had dipped further. Despite these setbacks, Leung is still ahead in opinion polls conducted by the University of Hong Kong. The first, which covered 1,026 people between Friday and Monday and was commissioned by i-Cable television, shows his popularity fell another percentage point to 39 percent. Tang stood at 22 percent and Albert Ho Chun-yan at 11 percent. The second, of 509 people between Sunday and Monday, and again commissioned by i-Cable, shows 45 percent believe Tang's allegations. Only 22 percent said they believe Leung, who denies the allegations. A third of 711 people, commissioned by Now TV for Monday night, when the candidates took part in an election forum, pointed to a more significant drop in Leung's lead. About 43 percent said they supported Leung before the forum, but only 32.9 percent ended up impressed with his performance that night. Meanwhile, Liberal Party honorary chairman James Tien Pei-chun said former secretary for security Regina Ip Lau Suk-yee had indirectly agreed to seek People's Liberation Army help should the police fail to handle protesters in the July 1, 2003, march. "We asked Ip how many officers were there in Hong Kong, whether they were enough to handle the situation, and if there were not enough police, should the PLA be mobilized? "Although she did not [name the PLA], she stressed that the situation could be handled. We felt that she meant she will use every means to maintain law and order." Ip denied this, saying she was clearly aware that keeping law and order was the police's responsibility. Asked if she could recall Leung's riot police and tear gas suggestions, Ip said she had "no impression" while Tien "does not remember." But the latter said it would require "superhuman memory" to remember whether Leung said such things almost a decade ago and pronounced himself amazed that former education chief Arthur Li Kwok-cheung can be so sure that Leung, whom Li backs, did not make such suggestions.

Prominent supporters of chief executive candidate Henry Tang Ying-yen appear to be backing away from him amid reports that Chinese Communist Party politburo member Liu Yandong is meeting Election Committee members in Shenzhen to canvass support for Leung Chun-ying. Liu is the only woman in the 25-member politburo and is the highest- ranking female in the mainland. She reportedly has strong ties to President Hu Jintao. The place where the action was apparently under way yesterday has a name that translates as Bauhinia Resort - something of a coincidence bearing in mind the bloom's place in the SAR's official insignia. But just what was happening there was unclear as the resort is not supposed to be open until next Monday, though police were patrolling the area yesterday. At least two cars belonging to the central government liaison office were seen entering the resort yesterday. So was one belonging to National People's Congress delegate and Election Committee member Bernard Charnwut Chan. And many other cars with mainland plates and cross-border plates entered the resort. Word last night was that Wharf Holdings chairman Peter Woo Kwong- ching was staying in a resort in Shenzhen's Nanshan district with Liu and other mainland officials. A company car was seen entering the resort on Monday. Woo had sought to nominate Tang, but he was disqualified for getting his identity card number wrong. A Wharf spokeswoman said she did not have Woo's schedule and did not know if he was in Shenzhen. Meanwhile, another Tang supporter, Liberal Party heavyweight James Tien Pei-chun, said officials from the liaison office were advising some Election Committee members to vote for Leung in Sunday's election. A source had earlier told The Standard that about 150 nominations Leung secured were the work of the liaison office. "Many people" from the liaison office were working to persuade Election Committee members to vote for Leung, he said, though they were not high-level officials. Tien said no one had contacted him, but he did claim that members of Leung's election team were urging Tang supporters to change their minds. He also reckoned that Leung has a better than 50 percent chance of winning. And Heung Yee Kuk chairman Lau Wong-fat, who also nominated Tang, said members of his organization need not fear a Leung win. He also said people should not be against Leung in light of recent allegations of wrongdoing since he has promised to be a chief executive who can face the seven million people in Hong Kong. Lau said he would be pleased if the liaison office invited him for a meeting, though the kuk is about to meet in any event to discuss who to vote for. New People's Party chairwoman Regina Ip Lau Suk-yee said no one from the liaison office has approached her party, which will make its own decision during a meeting on Saturday. Lawmaker Ip Kwok-him of the Democratic Alliance for the Betterment and Progress of Hong Kong said he has not heard about liaison office officials canvassing support for Leung. He added his party will make its voting decision on Friday.

'Long Hair' may lose Legco seat after jail sentence - Leung Kwok-hung calls two-month sentence and invocation of obscure laws 'politically motivated' - Lawmaker "Long Hair" Leung Kwok-hung's Legislative Council seat is in jeopardy after he was sentenced to two months in jail for his role in disrupting a public forum on a proposal to scrap Legco by-elections. A lawmaker who is jailed for more than one month can be stripped of his seat if a motion is passed by a two-thirds majority in Legco. Leung, who condemned the verdict, and four others jailed for three weeks were released on bail pending an appeal. Legco president Tsang Yok-sing said he would take legal advice on expelling Leung (pictured) from the chamber, regardless of any appeal. Leung, 55, of the League of Social Democrats, was convicted on Monday after a trial at Kowloon City Court, along with radio host and newspaper columnist Wong Yeung-tat, 32, mechanic Yung Wai-tong, 59, and students Tang Kin-wa and Chan Sin-ying, both 22. They had pleaded not guilty to charges of criminal damage, acting in a disorderly manner at a public gathering and behaving in a disorderly manner. Leung was also ordered to pay HK$4,150 for damaging government property. Speaking outside the court, Leung said the sentence was severe and politically influenced, as his act had embarrassed forum speaker Stephen Lam Sui-lung, then secretary for constitutional and mainland affairs. "You can lock up my body, but you can't lock up my soul," he said. Sentencing the five, Magistrate Peter Law Tak-chuen agreed that lawmakers should speak out, but said the defendants' behaviour had deprived others of the right to express their views and put their safety at risk. Leung deserved a heavier term for his leading role in the incident, he said. The forum at the Science Museum in Tsim Sha Tsui in September was one of two the government held to consult on the proposal, introduced after Leung and other pan-democrats resigned in January 2010 to force what they called a de facto referendum on universal suffrage. Lawyer Linda Wong Shui-hung, for the students, told the court the conviction was the first time a law banning noisy, disorderly behaviour and displays of abusive words had been used against protesters. It was also the first time that "joint enterprise liability" - where a group can be jointly liable for the a crime of an individual - had been used after a protest.

Beijing lobbies in push for a Leung victory - Central government tells voters and loyalist media it wants candidate with strong public support, sources say, and an end to split in pro-establishment camp - Beijing has already launched efforts to help Leung Chun-ying win the chief executive election on Sunday. According to sources close to Beijing and supporters of Henry Tang Ying-yen, the central government has communicated, through various means, with Election Committee members who nominated Tang, or remain undecided. The word has got out through phone calls by the liaison offices and a meeting in Shenzhen with a state leader. A Beijing source who is familiar with the central government's thinking said it hoped to see a candidate with strong public support. "The central government is now expressing our views and concerns through various channels and platforms," the source said. "We hope to see a candidate with strong public support elected smoothly [on Sunday]." His comments came after some of the committee's 390 nominators of Tang with a Fujian or Guangdong background - more than 40 voters - confirmed being approached by the central government's liaison office in Hong Kong to switch their support to Leung, and some met a state leader in Shenzhen for the same purpose. Those with a Fujian background included Chinese People's Political Consultative Conference deputies Hung Cho-hong, Lo Man-tuen and Sze Chi-ching, while Guangdong-origin voters included CPPCC delegate Peter Wong Kwok-keung and Commercial (First) voter Yu Pang-chun. A Beijing-friendly politician said leaders of the Federation of Guangdong Associations in Hong Kong and the Federation of Fujian Associations were summoned to meet a state leader in Shenzhen yesterday. Some delegates to the CPPCC who nominated Tang were also asked to join the meeting. "The message is loud and clear: support Leung Chun-ying," the politician said. James Tien Pei-chun, honorary chairman of the Liberal Party, also confirmed the moves by the liaison office, saying he expected Leung to win the small-circle election. Tien, whose party will meet today to decide on their final vote, said Leung had an "over 50 per cent chance of winning". When asked if "Leung's era has come", he said: "Yes, the citizens should be prepared for that." Another source familiar with the operation of Beijing-loyalist newspapers in Hong Kong said Beijing informed heads of three such papers - Wen Wei Po, Ta Kung Pao and Commercial Daily - in the middle of last week that Leung had won the blessing of the central government. Beijing-loyalist newspapers had adopted a principle of "equal treatment" for their reports on Leung and Tang in the past few months. But when Wen Wei Po ran two stories on Monday's televised debate on its front page, the bigger story was on Leung. The story on the former Executive Council convenor had bigger headlines, stating Leung's call for "achieving a big reconciliation" and carried a bigger photo of him. Ta Kung Pao ran a story on the two candidates which dominated the first half of page two, with Leung's photo and the headline, "Leung outlines plan for big reconciliation". While the Beijing source said the central government had been refraining from expressing a preference, he said: "Things are getting more and more complicated and could affect Hong Kong's stability. "One bottom line is that we don't want to see an abortive election. This has become a mud-slinging election. Delaying a few more weeks will only lead to more mud-slinging and split the pro-establishment camp." He said that for the chief executive to have a strong mandate, the central government hoped he would get more than the minimum required votes of 601; "690 will be safe". The Heung Yee Kuk vice-chairman Daniel Lam Wai-keung said disputes between some rural leaders and Leung "had been resolved".

 China*:  Mar 23 2012 Share

Where Chinese legal eagles dare to soar - Yingke's Linda Yang and Mei Xiangrong cut the ribbon at the opening ceremony of its New York office last month. As Chinese investors expand their foothold in the United States, a number of law firms based in China are sprouting up in the US. Chinese direct investment in the US is more than doubling annually, says the Asia Society's Center on US-China Relations and the Kissinger Institute on China and the United States. This creates a niche market for law firms based in China that have branched out to the US in recent years. On Feb 23 Yingke Law Firm, based in Beijing, officially opened an office in New York with a celebration at The Down Town Association, a prestigious social club located in Lower Manhattan. The New York office is managed by Zoe Qiao, a managing partner. "More and more Chinese companies are investing in the US," says Mei Xiangrong, Yingke's managing director. "Chinese media are increasing their presence here; Chinese lawyers need to be here too." On the other hand, a homegrown New York law firm, Dai & Associates, doubled the number of its staff between 2008 and 2010 because of the steady flow of Chinese investment into the US. Founded in 2002 by Dai Shang, a lawyer born in China, the company's main goal is to serve the legal needs of companies based in China expanding into the US. The China business of Dai & Associates has risen 320 percent in each of the past two years. About 100 individuals and businesses from various sectors attended the Yingke event, including Morgan Stanley, UBS, Industrial and Commercial Bank of China Ltd and Bank of Communications Co. George Pataki, a former governor of New York, was a guest speaker at the celebration; and Yingke also gained the support of the office of the Mayor of New York, Michael Bloomberg. Mei explains why there is a niche market for firms like Yingke. "We understand Chinese culture. We understand both the US and Chinese legal environments. Western companies may not understand the Chinese legal system as well as us." Yingke, founded in 2001, has 2,000 lawyers in its offices worldwide. It is present in 14 big Chinese cities, in other parts of Asia, and in Europe. Linda Yang, in charge of the international affairs department at Yingke, says Chinese law firms like it act as a bridge for many of these Chinese businesses going overseas, helping them overcome language and cultural barriers. Many of these Chinese entrepreneurs do not speak English. Although the New York branch of Jun He Law Offices, based in Beijing, was originally set up in 1993 to help Western investors enter China, the company has begun to see a new trend - Chinese companies buying assets in the US and Europe. "Because of the financial crisis, the prices of assets are depressed in Europe and the US," says Alex Yong, a partner at Jun He Law Offices' New York branch. "We see Chinese deals every day in Europe." Jun He recently secured a deal to help Zhanjiang Guolian Aquatic Products Co of Guangdong buy Sunnyvale Seafood Corp in northern California. The company also represented Softbank China Venture Capital in buying shares in a US company, and helped Sichuan Tengzhong Heavy Industrial Machinery Co to in its bid buy the Hummer brand and technologies from General Motors Corp. Besides helping Chinese businesses with their legal needs, these law firms would introduce potential US partners to them. "We have been here for a long time," says Yong in his office at Rockefeller Plaza in midtown Manhattan. "We know the US market. We know firms and individuals here." Jun He's New York office has only six full-time employees. Although Yingke and Jun He maintain small offices in New York, they are also expanding to other US cities. In 2010 Jun He set up a branch office in Silicon Valley, California. Yingke plans to set up offices in Los Angeles and Chicago in the second half of the year. Edward Normandin, partner at Pryor Cashman LLP, which is based in the US, says these Chinese law firms, which are not large enough to perform extensive legal services, often refer work to US law firms with which they have established a close relationship. Pryor began its China practice in 2006 to focus on working with businesses based in China in their US acquisitions but does not have a branch office in China. "We don't feel we are competing with them but complementing each other," Normandin says. "We often handle the work in which they don't yet have the full capacity to address. And they give us easy access to legal support for our US clients in China." Other law firms based in China that have recently set up their operations in the US include Dacheng Law Offices, Deheng Law Firm and King & Wood. "These Chinese clients let their Chinese law firms worry about choosing local experts to handle the transactions," Normandin says. "It's the comfort they get from working with Chinese law firms." Dai & Associates was one of the first law firms to enter the market in 2002, when there was not that much direct investment into the US. "I thought there is a niche market that can be served by a leading law firm that understands Chinese culture and Chinese people, and are professional enough to handle their legal transactions," Dai says. Dai came to the US to attend the William & Mary Law School in Williamsburg, Virginia. He previously worked for a State-owned company called China State Construction Engineering Corp. In 2002 he set up his business in Flushing in Queens, New York. Unlike most Chinese law firms in Flushing that serve local clientele, Dai's company focused on attracting businesses from the Chinese mainland. He set up a branch office in Beijing in 2007 to attract Chinese clientele. By 2008 more than 50 percent of his business was related to the mainland, and today more than 90 percent is from there. The company recently moved from Flushing into a Manhattan office in Times Square. "If you want to serve clients from China, image is a very important thing. They don't think that a company in Flushing can handle sophisticated transactions such as anti-dumping," Dai says. As Dai spends up to six months a year in China to meet clients, he leaves the litigation work and other complicated legal transactions to his US employees. He has a total of 17 staff. Dai, who was born in the year of the dragon, believes 2012 is auspicious for him because it is also the year of the dragon. He expects Chinese investments in the US to grow in the next five to 10 years. Likewise, Yingke believes that choosing an auspicious day, the Dragon Heads Raising Day, for its grand opening of the New York firm will bring luck and prosperity to its business. Dragon Heads Raising Day, which always falls on the second day of the second lunar month, happened to be Feb 23 this year. Understanding Chinese culture is precisely why these Chinese law firms believe they have an edge over Western law firms. "Understanding how guanxi (relationship) works is the real niche of our business," Dai says. "A lot of American people try to understand guanxi by going to classes, reading books and making friends with Chinese people. But culture is culture. It's not something you can get from books."

A customer is served at a Bank of China Ltd office in Nantong, East China's Jiangsu province. The bank has opened a trading headquarters in Shanghai and will oversee the bank's yuan-asset trading business. Bank of China Ltd on Tuesday unveiled a trading headquarters in Shanghai that will oversee the bank's yuan asset trading business. The China Banking Regulatory Commission has authorized the second headquarters to conduct business in the proprietary trading of yuan-denominated bonds, money market instruments and precious metals as well as financial institutions-related business, the bank said in a statement. The launch of the new office, which was in the works for two years, is part of the Chinese government's effort to support Shanghai's ambition to become a global financial hub. Shanghai has set a goal of becoming a global clearing center for yuan-denominated financial products by 2015 and a global financial center by 2020. Major domestic financial institutions and national financial regulators have their headquarters in Beijing, a situation that analysts said has blocked Shanghai's drive to become a financial center. Shanghai has the largest number of foreign banks and the biggest non-bank financial industry in China. Besides Bank of China, the other "Big Four" State-owned banks - Industrial & Commercial Bank of China Ltd, Agricultural Bank of China Ltd and China Construction Bank Corp - also plan to set up second headquarters in Shanghai. Bank of China's move "is a milestone in the city's plan to become an international financial center", Shanghai Mayor Han Zheng told the Xinhua News Agency. Bank of China Chairman Xiao Gang said: "Setting up a yuan trading headquarters in Shanghai is an important measure for the bank to ... quicken its strategic development in Shanghai". Bank of China is a leader among domestic banks in yuan and precious metals trading. Last year, the bank's cross-border yuan clearance and settlement business hit 1.7 trillion yuan ($269 billion), the highest among Chinese banks. Nasser Saidi, chief economist of the Dubai International Financial Center, said the move signals Shanghai's future role as the country's main financial center. He added that the Shanghai Stock Exchange will become an international bourse "very quickly". The Shanghai Evening Post has reported that the new headquarters will be on the same administrative level as the Bank of China's Shanghai branch. The bank's existing capital exchange center and information center in Shanghai will be merged into the new headquarters, according to the newspaper.

An official from the Ministry of Commerce said there is little chance that China will join the World Trade Organization's government procurement agreement this year. China will probably not take part in an international agreement on government procurement this year because of increased standards set by developed nations, said an official from the Ministry of Commerce. Meanwhile, China needs to rectify some of its domestic regulations before it can join the agreement, which is meant to ensure that countries allow foreign businesses to compete for government purchase deals, said Suo Bicheng, director of the Department of World Trade Organization Affairs with the ministry. Developed nations always raise the standards that participants in the WTO's government procurement agreement are to meet, he said. "A lot of problems need to be resolved before China can join the pact," Suo added. "We see little chance of there being success in the short term, or even say this year." His remarks came at a time when the European Union is expected to introduce a new version of its government procurement agreement on Wednesday. According to reports, the proposed version would bar companies in certain countries, including China, from taking part in the EU's pact while urging them to further allow European companies to compete for government business. China joined the WTO in 2001, but the country didn't immediately take part in the organization's government procurement agreement. Its first attempt at doing so came in 2007 and was rejected by some of the agreement participants. In July 2010, China submitted a new offer. Various developed countries and regions, led by the United States and the EU, praised the country's revamped proposal, yet said China could not join without making further concessions. The US and the EU have called on China many times to allow more foreign companies to compete for its government business. A spokesperson for the European Commission, the EU's executive body, has been quoted as saying the EU's new offer would let the commission take retaliatory action against countries that are found to have discriminated against European companies that are bidding for government contracts. If they are found to be in violation, they could be prevented from doing business in various European markets. "The EU's new pact, when adopted, won't have an immediate effect on Chinese companies bidding for EU contracts and won't scare China into making concessions over the government procurement agreement proposal, as they expect," Suo said. EU statistics show that non-European companies can bid on only 352 billion euros ($464.2 billion) worth of the region's government-procurement contracts. "It's not a big number" compared with what China could provide, Suo said. What's more, "Chinese companies always find it hard to bid for the deals, since the standards are much too high," Suo said. The European Chamber of Commerce in China estimates the Chinese government's procurement budget calls for spending about $1 trillion. Last December, the WTO finished making a landmark reform to its global government procurement agreement. The new version is expected to pertain to $100 billion worth of procurement contracts from the organization's 42 member countries. Many believe it will pave the way for China and other countries to take part in the agreement. But Suo is not optimistic. "We have already made more concessions in our newest offer to join the government procurement agreement, but still can't meet the demands of some developed nations," said Suo. He said China needs to "rectify laws and regulations that are related to the new pact to meet the international standard, which will take up a lot of time." In November, China made its most recent attempt to enter the agreement and stopped short again of meeting the current participants' expectations. They complained that China agreed to let the agreement apply to far less of its government spending than expected, only to the spending in five of its 31 provinces and regions and not to that of State-owned enterprises. The US has urged China to speed up its adoption of the agreement and has said that the country has not promised to do enough to make that happen. Minister of Commerce Chen Deming said China was willing to join the agreement and was trying to concede more.

The United States Commerce Department announced on Tuesday a preliminary decision to impose duties on solar cells and panels imported from China, a move that has been pushed by US solar companies that have accused China of subsidizing its counterparts. The decision issued a preliminary duty of 2.9 percent on Wuxi-based Suntech Power Holdings, the world's biggest manufacturer of PV solar panels, and a preliminary duty of 4.73 percent on Changzhou-based Trina Solar, another major Chinese producer. All other Chinese solar panel producers and exporters received a duty rate of 3.61 percent. Shares in Chinese solar companies, such as Sun-Tech, Trina Solar and Yingli Green Energy, quickly surged on the New York Stock Exchange after the announcement, a sign that investors are taking the tariff rates as relatively low. Both Suntech and Trina are active players in the US market and have operations in the US. "This initial decision reflects the reality that Suntech's global success is based on free and fair competition. Nonetheless, unilateral trade barriers, large or small, will further delay our transition away from fossil fuels at a time when the majority of Americans demand cleaner and more secure energy such as solar," said Andrew Beebe, Suntech's chief commercial officer, in a statement. "Regardless whether tariffs are imposed on solar cells from China, we can provide our customers in the US with hundreds of megawatts of high-quality and affordable solar products that are not subject to tariffs. As a local manufacturer with production in Arizona, we will continue to remain an active member of the American solar industry and maintain focus on making solar energy affordable for everyone, everywhere," Beebe added. According to JA Solar marketing director Zhang Xiaofeng, the tariff is much less than what was anticipated, which was about 20 percent to 30 percent. They will move forward in the US market if there is no additional increase in duties when preliminary antidumping tariffs are released in May, she said. "If the tariff is similar to this, i.e. 3-4 percent, adding them together is about 8 percent, then there is nothing solar companies should worry about," Zhang said. This decision is another step following last fall's trade petition from SolarWorld and a group of American solar manufacturers claiming Chinese subsidized solar panel producers have pushed their American counterparts out of jobs. But other industry players don't share this view. They say low prices offered by Chinese solar panel makers benefit American customers as well as help create installation jobs in the US. Mark Kingsley, chief commercial officer at Trina Solar, said what the US has done will only create a "lose-lose" situation in the end, and it is "a sad disconnect from the truth." Kingsley said one manufacturing job Trina has in Changzhou will create about four jobs in the US. A recent study by the Coalition for Affordable Solar Energy (CASE) showed that a 100 percent or 50 percent tariff on imported modules would kill about 50,000 or 43,000 American jobs respectively over the next three years. But Chinese companies are doing more than just creating jobs. Trina Solar, partnered with New Jersey-based NRG Energy and the Clinton Global Initiative foundation, recently donated 300 PV solar panels to a humanitarian project in Haiti. "Thanks to China's skills, solar power is so affordable that it can help address these real world problems," Kingsley said after a visit to Trina's solar panels installation sites in Haiti. In 2011, the US imported $3.1 billion worth of solar cells and panels from China, according to the Commerce Department. The Commerce Department will continue to investigate allegations of the solar panels and solar cells being dumped, or sold at less than normal value. It will announce preliminary anti-dumping duties in May and a final decision on the countervailing duties will be made in early June.

A sales representative describes the features of a Rolls-Royce Phantom to visitors. Luxury car dealers cut prices as economy slows - BMW, Audi and Daimler offer discounts to boost sales on mainland, but Rolls-Royce is still confident - The economic slowdown is beginning to affect the mainland luxury car market, with dealers cutting the prices of top-end models such as BMW and Audi. However, the most expensive marque, Rolls-Royce, has yet to feel the chill. "We are in a different segment," said Roll-Royce's director of sales and marketing, Jolyon Nash, yesterday. "When you look at it worldwide, there is always a strong demand for super luxury goods." The China Association of Automobile Manufacturers yesterday revised its estimate of 8 per cent growth for this year's car sales to less than 5 per cent. But fresh from record sales both globally and in China last year, Rolls-Royce says it expects mainland sales to grow at a double-digit pace - without having to offer discounts. "There will be ups and downs in the industry but we are optimistic. In the medium to long run, the luxury car segment will continue to grow," Nash said at the opening of Rolls-Royce's first showroom in Macau. CAAM's deputy secretary general Gu Xianghua said yesterday commercial vehicles would be the hardest hit by the slowdown in sales. Analysts believed that while foreign carmakers, especially those who rely heavily on the mainland market to offset dwindling sales in Europe, would see their profitability squeezed, they would still register growth in earnings. Credit Suisse expects the profit margins of three high-end German carmakers on the mainland - BMW, Daimler and Audi - to fall four percentage points from current levels of 16 to 18 per cent by 2014. According to a mainland website that tracks prices of more than 3,000 dealerships, Mercedes dealers recently offered record markdowns of 25 per cent on high-end models, while BMW and Audi cars are on sale at 20 per cent below sticker prices. The reports said salesmen were offering perks, such as free iPhones and Hermes bag coupons, to boost sales of cars that cost up to 3 million yuan (HK$3.68 million). Rolls-Royce said it had set a bottom limit to prices that dealers could offer, to safeguard the brand's image. Arndt Ellinghorst, an analyst at Credit Suisse, said that would be the right thing to do for a premium brand. "You'd rather lose a customer because of pricing because that is part of your premium heritage: people can't afford it," he said. Rolls-Royce is set to open more dealerships on the mainland - in Chongqing, Tianjin and Qingdao. Nash said that proved the firm's optimism about sales on the mainland. China surpassed the United States as Rolls-Royce's biggest market last year. The company is also expanding its sales network and production in emerging countries such as South Africa, Vietnam and Turkey to avoid an over-concentration in a single market. Meanwhile, the State Administration for Industry and Commerce yesterday ordered an investigation into allegations of fraudulent sales of Chrysler jeeps, Xinhua reported. "Such behaviour seriously hurts the legal rights of consumers. We have ordered relevant provincial departments to launch investigations. We will not be lax in handling any illegal activity," Xinhua quoted a SAIC spokesman as saying. CCTV has alleged some of Chrysler's jeeps contained components which did not originate from the factories where the vehicles were manufactured. This led to suspicion of fraud in these jeeps. Chrysler said it had ordered its distributors to resolve any problems over components in its jeeps. Distributors were told to apologise to customers if problems were found and to replace their faulty jeeps.

Hong Kong*:  Mar 22 2012 Share

Emperor Watch & Jewellery (0887), which sells high-end luxury accessories, is set to further develop its jewelry business after earnings soared 91.6 percent to HK$636 million last year. Earnings per share came to 9.9 HK cents against 6.2 HK cents in 2010. Revenue surged 43.1 percent to HK$5.86 billion yuan, largely on sales in Hong Kong. The company declared a final dividend of 1.6 HK cents, up 57 percent from 2010. It also said managing director Cindy Yeung Lok- si is now chairing the board. Meanwhile, Bawang International (1338) reported its worst performance since listing. Its net losses widened to 558.6 million yuan (HK$686.1 million) last year from 118 million in 2010 as sales of hair-care products such as shampoo were hit by safety concerns. And shares fell 12.3 percent to HK$1.21 yesterday. Retailer and therapeutic tea maker Besunyen Holdings (0926) booked losses of 40.9 million yuan last year compared with a net profit in 2010 as orders from distributors shrank. Revenue dropped by 3.9 percent to 840.4 million yuan. It did not declare a final dividend. The company, which is set to release two new products, says prepayment of 100 million yuan in 2011 will be recognized as turnover this year. Goodbaby International Holdings (1086), a retailer of children's strollers, sees good business as this is the child-popular Year of the Dragon. It expects sales in the first quarter to be up 20 percent. The company reported net profit of HK$176.9 million last year, up 17.2 percent on 2010.A final dividend of 5 HK cents was recommended.

Deanie Ip Tak-han receives the award for best actress for her role in at the 6th Asian Film Awards in Wan Chai. HK-mainland co-productions take five film awards - Hong Kong veteran artist Deanie Ip Tak-han won the best actress prize at the Asian Film Awards last night for her performance as an ageing maid in the drama A Simple Life. The glitzy event also saw two Hong Kong-mainland co-productions become big winners this year, sweeping five prizes. But the coveted best film and best director awards were bagged by the intense Iranian domestic drama Nader and Simin, A Separation, written and directed by Asghar Farhadi. It also took home the best screenwriter and best editor awards. The film took the best foreign language prize at the Academy Awards last month, becoming the first Iranian movie to win at the Oscars. Hong Kong-mainland production Wu Xia, a martial-arts thriller directed by renowned Hong Kong filmmaker Peter Chan Ho-sun, won the best cinematographer, best production designer and best composer honours. Another martial-arts epic and the world's first such 3-D flick, The Flying Swords of Dragon Gate by Tsui Hark, won the best visual effects and best costume designer awards. Ip, 64, won over the judges with her turn as a dedicated maid in an adaptation of a true story about a heartwarming relationship between her ("Sister Peach") and a young master in a big family. She won the same honour at the Venice International Film Festival last year. Ip said: "The role was actually not hard to play because I'm an old woman; my heavy make-up to appear young tonight was harder." Her intimate young master in the film, Andy Lau Tak-wah, lost the best actor contest to Donny Damara of Indonesian production Lovely Man. The awards are organised by the Hong Kong International Film Festival Society. In all, 32 films from 11 countries and territories competed for 14 awards.

A planned 17-kilometre railway link between Sha Tin and Central may contribute as much as HK$88 billion to public coffers in return for granting the MTR Corporation (SEHK: 0066) the exclusive right to manage it for 50 years, transport officials say. The estimated total revenue was on top of HK$4.4 billion in direct economic gains the railway could bring the city in 2021, a year after operations started, the Transport and Housing Bureau said, in an apparent attempt to justify the costly and long-delayed project. The bureau gave the estimates in draft documents prepared for discussion in the Legislative Council next month. The heavily criticised route received HK$7.7 billion funding to undertake preparatory works at a lawmakers' vote in February of last year, despite the hefty budget - made worse through the years because of a delay in the project. The Sha Tin-Central link was first proposed 12 years ago, with 2008 set as the earliest possible completion date. The government delayed the project in 2003, and in 2007 Chief Executive Donald Tsang Yam-kuen decided on 2010 as the likely year of commencement. Because of the delay, the construction bill as projected last year soared by almost one-third, to HK$79.8 billion, over the previous estimate in 2009. The rise was attributed to inflation. In 2008, the Executive Council agreed on using a "concession approach": the government would pay the construction costs and entrust the MTR Corp with the planning and design aspects. The firm would then receive a service concession - to operate the railway line for 50 years - while giving the government a service-concession payment annually. Those payments would total HK$88 billion, or about HK$1.76 billion every year, the bureau estimated. In its first year of operation, the railway was expected to ferry about 1.1 million passengers a day - saving a total of 75 million hours of travelling time every year, the bureau said. That would translate into economic gains of HK$4.4 billion in 2021. Meanwhile, the MTR Corp announced that all 20 interchange train stations would have toilets by 2020. The first stations to be thus equipped, by 2015, were Mong Kok, Prince Edward and Admiralty, where major reconstruction work was to be carried out, operations engineer David Leung Chuen-choi said. Ten of the interchange stations now have toilets. Prince Edward was picked as a priority because of a lack of public conveniences within 200 metres. Yau Tsim Mong district councillor Benny Yeung Tsz-hei said: "Such basic amenities are long overdue. Railway networks elsewhere all have them. It's basic. Even the speed at which they hope to add the new toilets now is very slow." Leung said 13 external lifts would be in place by 2015, and that 200 seats would be installed inside long passageways, such as the one between Central and Hong Kong stations.

Thomas Chan of Sun Hung Kai was arrested by ICAC officers. Sun Hung Kai executive arrested in bribery probe - Thomas Chan, the director in charge of property giant's land acquisitions, is held in ICAC swoop - The Independent Commission Against Corruption (ICAC) has arrested Thomas Chan Kui-yuen, an executive director of Sun Hung Kai Properties (SEHK: 0016), for suspected bribery, the Hong Kong-listed firm announced yesterday. Sun Hung Kai, the biggest Hong Kong-listed property developer by market value, said it was informed yesterday by Chan that he had been arrested in connection with one or several suspected bribery offences. "He is probably the most senior executive at a major developer arrested by ICAC in the past 20 years," said a source involved in property development. "It would be unusual for the ICAC to move on someone so senior, unless they considered it carefully," said Steve Vickers, CEO of Steve Vickers Associates, a Hong Kong investigative and risk consulting firm. It is not known what the charges against Chan are or how much money is involved in the suspected bribery. He is responsible for Sun Hung Kai's project planning and land acquisitions. Sun Hung Kai disclosed it has set up a committee comprising one executive director and two non-executive directors to co-operate with the ICAC's investigation. Sun Hung Kai said Chan's arrest will not affect the company's operations. "If it knows the allegations, Sun Hung Kai should disclose the details for the benefit of shareholders and the public," said corporate governance activist David Webb. The Kwok family, which controls Sun Hung Kai, was ranked by Forbes as the third richest party in Hong Kong with an estimated net worth of US$15.4 billion - Chan is one of five executive directors reporting directly to vice-chairman Thomas Kwok Ping-kwong and his brother, vice-chairman Raymond Kwok Ping-luen. Chan, 65, is head of Sun Hung Kai's project planning and development division, according to the company's 2010-2011 annual report. He has been an executive director of the company since 1987 and an employee of the firm since 1973, according to the annual report. "It's impossible to know at this stage what the allegations are," said Webb. "But there are many aspects of the way the Hong Kong government and the Urban Renewal Authority dispose of land which lacks transparency. A lack of transparency does lend itself to the risk of corruption." Executives at major property developers involved in land acquisitions often negotiate land sales with the government. One method of land acquisition is for property developers to acquire land from private owners in the New Territories. After reaching a land premium negotiation with the government, the farm land would be converted for residential use. "Nearly all of Sun Hung Kai's farm land is acquired by him [Chan]," said another source. "One of his notable successes is the sites in Ma Wan." Chan is a member of the Ma Wan Park Advisory Committee. Sun Hung Kai is currently marketing its Park Island development in Ma Wan. A feud within the Kwok family erupted in 2008, when Sun Hung Kai's then-chairman Walter Kwok Ping-sheung was demoted.

Lawmaker "Long Hair" Leung Kwok-hung arrives at Kowloon City Court on Tuesday before being sentenced to two months in jail for disrupting a public consultation forum last September. Lawmaker “Long Hair” Leung Kwok-hung was sentenced to two months in jail on Tuesday after being convicted of disrupting a public consultation forum on a proposal to scrap Legislative Council by-elections. Leung, as a result of the conviction, could also be forced out of Legco, as the Basic Law states that any lawmaker sentenced to one month or more of prison for a criminal offence can be relieved of his or her duties by a motion passed by two-thirds of the council. Leung and four other activists, who were sentenced to three weeks in prison, have been released on bail pending an appeal. Leung, 55, of the League of Social Democrats, was convicted on Monday after a trial in Kowloon City Court, along with radio host and newspaper columnist Wong Yeung-tat, 32, mechanic Yung Wai-tong, 59, and students Tang Kin-wa and Chan Sin-ying, both 22. They had pleaded not guilty to charges of criminal damage, acting in a disorderly manner at a public gathering and behaving in a disorderly manner in a public place. Sentencing the activists, Magistrate Peter Law Tak-chuen said the chaos at the forum was “unmanageable” and “disgusting”. He said he accepted that lawmakers had the responsibility to speak out on issues on behalf of society. “But we cannot compromise this when it involves other people’s personal safety,” he said. Law said the defendants’ actions had deprived other people of the right to express their views. He said Leung played a leading role in the incident and should be given heavier jail term. Leung was also ordered to pay HK$4,150 for damaging doors and plants, which were all government property. Speaking outside the court, Leung said the term was harsh because his actions had embarrassed forum speaker Stephen Lam Sui-lung, the then-secretary for constitutional and mainland affairs. “You can lock up my physical body, but you cannot lock up my soul,” he said. The forum, held in Science Museum in Tsim Sha Tsui in September, was one of two the government held to consult the public on the proposal, which it introduced after Leung and other pan-democrat lawmakers resigned in January 2010 to force what they called a de-facto referendum on universal suffrage.

The Executive Council has approved plans to build a third runway at the Hong Kong International Airport, Secretary for Transport and Housing Eva Cheng said on Tuesday. Cheng told reporters the Airport Authority would now begin working on an environmental impact assessment, a detailed design and an update of previous cost estimates and financial options. The transport secretary said the project was crucial to the Hong Kong’s economy and competitiveness. “It is not a piece of traffic infrastructure, but an economic engine,” she said. Cheng said the preparatory work would take two years and the authority would submit a finalised proposal to the government for approval in 2015. If approved, construction was expected to take eight years and be completed by 2023, she said. The authority says the third runway will bring in HK$912 billion in economic benefits over the 50 years to 2061, and that it is essential if the airport is to cope with a predicted growth in air passenger and cargo traffic, which both are expected to double from the present levels by 2030. The proposal will require reclaiming 650 hectares of land to the north of the current airport site. Green groups say the reclamation will affect the habitat of the endangered species and increase air pollution. But Cheng pledged that “no stone would be left unturned” when the authority conducts its environmental impact assessment. It had also promised to adopt the latest air quality standards in the assessment, she said. The current estimated cost of the project is HK$136 billion.

Hong Kong Chief Executive Candidates Spar in Last Debate - Hong Kong Chief Executive candidatesHenry Tang, Albert Ho and Leung Chun-ying stand on the stage during a debate organized by the election committee members in Hong Kong March 19, 2012. Hundreds of Hong Kong's business and political elites gathered Monday for their final chance to question chief executive hopefuls just days before they cast ballots to choose the city's next leader. The two leading contenders—former finance chief Henry Tang and former cabinet member Leung Chun-ying—spent much of the two-hour forum at a convention hall carrying on with their fierce smear campaigns targeted at each other, with hopes of swaying voters from their opponents. The winning candidate will need a majority 601 votes from the elites, which constitute the election committee, in the Sunday election. To be sure, the city's chief executives won't be chosen via the popular vote, but instead by this group of 1,200 politicians, businesspeople, and representatives from professional and social groups. China has promised democratic elections for the chief executive from 2017. The election committee, created ahead of the former British colony's handover to Chinese rule in 1997, was intended to be a "broadly representative" body, according to the city's mini-constitution, the Basic Law. But it was also an institution that Beijing set up in order to control Hong Kong's politics. Accordingly, say analysts, the committee is overwhelmingly pro-business and pro-Beijing in its leanings. "Even election committee elections are small-circle elections," said Cheung Chor-Yung, an election committee member who represents the higher education sector. While the committee has expanded from just 400 members in 1996, the majority of Hong Kong's people have no real say in the committee's composition. Instead, just 237,000 qualified professionals were permitted to choose members from their own industries ahead of the current chief executive elections. "People think it's not that credible a system," says Simon Young, an academic who co-authored a 2010 book on Hong Kong's election committee. "There's very little interest." At one point scoring a majority from the committee would have been easy for Mr. Tang, Beijing's once-favored candidate. But the situation has changed now that his campaign has publicly unraveled, with his approval ratings tanking following the exposure of his extramarital dalliances, construction of an illegal basement add-on and more. By contrast, public support for Mr. Leung, whose populist rhetoric has made him the object of suspicion among many local businessmen, has stayed comparatively buoyant at 40%, despite recent allegations suggesting that he has triad ties, accusations he has repeatedly denied. The problem for Beijing, said Dixon Sing, a political scientist at the Hong Kong University of Science and Technology, is that to be pro-Beijing no longer means one thing. "The pro-Beijing camp is now divided over the choice between Tang and Leung." Prior chief executive contests were largely uncontested, and consequently, divining Beijing's choice wasn't difficult. This year, though, Chinese authorities have remained conspicuously mum. In part, analysts suggest, that's because both candidates have become less palatable for Beijing, between Mr. Tang's lack of public support and Mr. Leung's uneasy relations with the city's business leaders. Beijing likely isn't alone in this opinion: a number of election committee members have said they intend to cast blank votes on Sunday, in a gesture of protest against both candidates. "There's a lot of members talking about ABCYT," said Eric Cheung, an assistant law professor at the University of Hong Kong, also an election committee member. "That stands for, anybody but CY and Tang." Nonetheless, the tide could turn to either candidate's favor, analysts say, if Beijing does make a choice. Otherwise, the election could fail to produce a winner, with candidates needing to gain fresh nominations for a new election in May. The new leader takes office July 1. Mr. Cheung noted that the pan-democratic camp, which has been particularly vocal in its support for universal suffrage, and a perpetual thorn to Beijing, has just 200 votes on the committee. "The majority [of committee members] are waiting to receive a clear message from Beijing," he said, "and they will toe the line."

 China*:  Mar 22 2012 Share

Standard Chartered chief executive Peter Sands said he hopes that as soon as this year London will become an offshore yuan centre where companies can raise funds denominated in the currency. "London is the logical place for it to happen," Sands said in an interview on Sunday. "I would hope it would happen this year, but there are a number of things that have to come together to make it possible." China designated Hong Kong as the only offshore centre for yuan trading after allowing settlement of trade using the currency in 2009. That has been a boon for banks including Standard Chartered, which underwrote 18.9 billion yuan (HK$23.2 billion) of bonds in the currency in Hong Kong last year. In addition to London, Singapore is also seeking to become a centre for yuan trading. "Singapore may well be playing a role as well, but London is in a different position, because London is the natural place as a bridge to the West," Sands said in Beijing, where he was attending a forum. "I think it will play quite a distinct role compared [with] either Hong Kong or Singapore." In Hong Kong, Standard Chartered has trailed only HSBC in underwriting the so-called dim sum bonds. HSBC underwrote 32.9 billion yuan of bonds in the city last year and more than 11 billion yuan so far this year. Standard Chartered has underwritten 5.6 billion yuan of the bonds this year. The starting point for London would be to increase yuan trade settlement through the city, which would increase the amount of yuan deposits and create a market for yuan bond issuances, Sands said. The bank has "dedicated resources" in London dealing with the yuan, he said. The Hong Kong Monetary Authority announced in January that it planned to lengthen trading of the yuan by five hours by June, allowing London-based institutions the opportunity to expand their share of yuan trading outside China. That announcement was made as British Chancellor of the Exchequer George Osborne visited Hong Kong and Beijing. Osborne, who said he would discuss development of an offshore yuan market in London with Chinese leaders, met with officials including Vice-Premier Wang Qishan and central bank governor Zhou Xiaochuan during his January trip. "At the moment, there isn't that much [yuan] in London, so it will require a certain critical mass of activity to get it going," Sands said. "Our sense and our experience from Hong Kong is, as soon as we get the component parts of infrastructure and the regulatory frameworks agreed, that it will happen pretty quickly."

Chief officer Li Yimin (left) and sailor Zhu Yaotao steer the patrol ship Haijian 50 in waters near the Diaoyu Islands on Saturday. China will increase maritime surveillance in the disputed islands in the East China Sea to guard its territorial rights, Xinhua news agency reported late on Monday. China will increase maritime surveillance in a group of disputed islands in the East China Sea to guard its territorial rights, Xinhua news agency reported late on Monday. The uninhabited but strategically located island chain known as Diaoyu in Putonghua is believed to be rich in oil and gas reserves, and is at the heart of a long-running diplomatic dispute between China, Japan and Taiwan. “The patrols are part of our important long-term responsibility,” Wu Ping, deputy head of government agency China Maritime Surveillance, told Xinhua. Two Chinese patrol boats recently conducted a mission to monitor “illegal” oil and gas extraction projects around the disputed island chain, the report said. The islands are known as Senkaku in Japan. Disputes over the East China Sea and South China Sea have intensified in recent years with several Asian nations locked in competing claims over parts of the isles. Beijing says it has sovereignty over essentially all of the South China Sea, where its professed ownership of the Spratly archipelago overlaps with claims by Vietnam, the Philippines, Taiwan, Brunei and Malaysia.

Jeremy Lin announces his endorsement deal with Volvo in a news conference in New York on Monday. Freeman Shen (center), senior vice-president of Volvo Car Corp, and John Maloney, president & CEO Volvo Cars of North America, were in attendance. Jeremy Lin, the New York Knicks star, has swept up one of his first major endorsement deals since his meteoric rise to basketball fame. Lin has finalized a deal with Chinese-owned Volvo to endorse the Swedish car brand in the United States, China and in other nations in Asia, according to Volvo Car Corp on Monday. Volvo didn't disclose any financial details in this deal but said the agreement is for two years. As the new Volvo Car Corp Brand Ambassador, Lin said that how Volvo was built was "very much in line" with him as a person. "You may not immediately see the connection between me and Volvo. But both of us are striving to be better and smarter at what we do, and to do it our own way. I hope that my efforts will inspire more young people to follow their ambitions in sports and education, just like Volvo Car Corporation is designing cars around people's ambitions in life," Lin said at a news conference. The 23-year-old is the US-born son of Taiwanese immigrants and created a wave of excitement among basketball fans when he led the Knicks to a seven-game winning streak in February. He set a new NBA record with 136 points in his first five starts. His rise has seemingly supplanted the void left by the retirement of Yao Ming, the former Houston Rockets center. The Chinese American player said that his family was "highly involved in the decision" to sign with Volvo. Lin said he grew up without luxury in his life so "high quality and affordability is important" to him. This agreement is seen as a major step for Volvo, bought by China's Zhejiang Geely Holding Group Co in August 2010, to boost its sales in China. Last year, Volvo sold more than 48,000 cars in China - up 55 percent from 2010. China is now Volvo's fastest-growing market, when it seeks to double its global sales to 800,000 vehicles in the next 10 years. Volvo said Lin's first commercial will come out as early as this summer. "Volvo Car Corporation's choice of Jeremy Lin as the company ambassador derives from our shared ethos of passion, dynamism and progressiveness," said Freeman Shen, senior vice-president of Volvo Car Corp and chairman of Volvo Car China Operations. "We believe Jeremy Lin's character, intelligence, perseverance, and pursuit of excellence are perfectly in tune with Volvo car owners' characteristics of appreciating smart understated luxury with a human touch," said Richard Monturo, vice-president of Volvo marketing. The 6-foot-3 star said that he will be in China this summer.

Cyber attacks on China launched from bases overseas surged in 2011, rising to 8.9 million computers affected from 5 million the previous year, according to a network security report. Japan was the source of most attacks (22.8 percent), followed closely by the United States (20.4 percent) and the Republic of Korea (7.1 percent). The report, released on Monday by China's National Computer Network Emergency Response Technical Team and Coordination Center, found that 11,851 Internet protocol addresses based overseas had controlled 10,593 Chinese websites last year. "This shows that Chinese websites still face a serious problem from being maliciously attacked by foreign hackers or IP addresses," Wang Minghua, deputy director of the team's operation department, said at a news conference on Monday. Attacks included destroying servers, distorting website content and stealing personal data from Chinese Web users. Overseas hackers altered the content of 1,116 Chinese websites, including 404 run by government agencies, Wang told China Daily, adding that they may have been responsible for many more, as the addresses and names they use are often difficult to trace. Although it was discovered that many hackers used Trojan Horse-style programs simply to steal personal data, Zhou Yonglin, director of the team's operation department, said "money is not the sole motivation", as in several cases the hackers had intended to access State networks and steal confidential information. If they had succeeded, "that would have been far worse and would have increased the difficulties the government faces in ensuring online security", he added. Chinese companies and Internet service providers have been urged to invest more time, energy and money into developing online security systems. "Even though the nature of cyber attacks varies, they generally utilize vulnerabilities in the system to penetrate into computer systems," software virus expert Evgeny Aseev told China Daily. Aseev, who heads the Asia-Pacific virus laboratory for Kasperky, a Russian security software company, said malicious software, or malware, is used in more than 20 percent of cyber attacks. He pointed out that many holes still exist in the security of websites maintained by governments and enterprises, which makes them vulnerable targets, while the popularity of social networking sites has made it easy for hackers to lure users into unwittingly downloading malware. Internet users can increase their security by regularly updating their system software and watching out for strange website links while using instant messaging tools, he said, adding that keeping important files data encrypted and using intricate passwords are equally important. Investigations - Kang Kai, the owner of Thinkmo, a website dedicated to learning English in Tianjin, said his website suffered at least one attack every month. "As a small Internet company, we can't afford to employ a big maintenance team. We can only resort to private IT professionals after each attack," he said. To assist attacked private websites and maintain online security, the Ministry of Industry and Information Technology has launched several investigations since June, and authorities prevented the spread of online viruses 14 times last year, the report said. However, China has also been the source of attacks on networks in other countries. "Our team received more than 500 complaints from foreign network associations last year," Zhou said. "Internet security is not one country's duty. It's a global issue." China has established arrangements with 40 countries and 79 organizations to tackle cyber attacks, the report said.

Hong Kong*:  Mar 21 2012 Share

Hongkong and Shanghai Banking Corp will subsidize a maximum HK$10,000 in fees for small business operators who may borrow under a scheme set up this year by the Hong Kong Mortgage Corp. The bank will waive up to three months of guarantee fees. Annual guarantee fee ranges from 18 percent to 35 percent of overall interest rate charged. For a 30-month loan of HK$1 million, the bank will waive between HK$2,965 and HK$5,765 of guarantee fees for three months, according to an HKMC's guarantee fee calculation formula, given overall interest rate of 6.68 percent (prime + 1.68 percent). The subsidy offer is valid until June 30. The move is in line with the small and medium-sized enterprises financing guarantee scheme of the HKMC, a unit of the Hong Kong Monetary Authority. In the budget in February, Financial Secretary John Tsang Chun-wah proposed to make financing more accessible to SMEs and to lower financing cost. HKMC said it will raise the loan guarantee ratio to 80 percent from 70 percent and the government committed HK$100 billion to the scheme. Also, the loan guarantee fee will be cut by about two-thirds to 10-12 percent of the loan interest. Eligible enterprises may borrow up to HK$12 million with repayment period of up to five years. HKMC said loan applications will be accepted from May.

Hong Kong can be model for new cities worldwide - Hong Kong's successful development can be replicated in many new cities around the world, say analysts. "Hong Kong is the most successful economic development model in recent history. We can have hundreds of cities like Hong Kong around the world. The Hong Kong model can be scaled," said Paul Romer, economics professor at the Stern School of Business at New York University. Although it is unrealistic to create hundreds of cities that will become major financial hubs, there is a market for cities around the world like Hong Kong in the 1950s, when millions flocked here, Romer clarified. Since the 1950s, millions of people have moved to Hong Kong to seek better opportunities in a safe environment with the rule of law and an efficient system, Romer said. The global market is undersold for cities like 1950s Hong Kong, Romer added. "That market is mind boggling. Urbanisation worldwide will more than double this century. You will take three to four billion people to cities, and most of that will be in the developing world." "Hong Kong should be the poster child for high-density development for the rest of the world," said Bryant Lu, vice-chairman of Ronald Lu & Partners, a Hong Kong architecture firm. Hong Kong's high-density environment, with mixed-use property complexes integrated with public transport networks, enables an efficient and economical public transportation system, says Lu.

The King of Tonga George Tupou V sits on his throne in Nuku'Aloka, Tonga in this 2008 photograph. King Tupou V, who championed a more democratic system of government in the Pacific island nation, died on Sunday at a Hong Kong hospital. 

New York Knicks guard Jeremy Lin (17) battles for a rebound with Indiana Pacers guard George Hill in the second half of an NBA basketball game in Indianapolis, Saturday, March 17, 2012. New York won 102-88. Lin led New York scoring with 19. The U.S. arm of Swedish car brand Volvo said on Monday it expects to unveil a marketing agreement with U.S. basketball star Jeremy Lin that will cover several international markets. Volvo Cars of North America, Volvo’s sales unit based in Rockleigh, N.J., sent out invitations to a press conference in New York to “announce a dynamic marketing partnership with Jeremy Lin, the popular New York Knicks point guard.” The deal would leverage “the Swedish car maker’s sports heritage,” and Mr. Lin would “help establish the brand with younger and performance-minded customers,” the invitation said. The press conference is scheduled to start at 5 p.m. Monday New York time, according to the invite. It would be one of the first major corporate deals for the 23-year-old New York Knick, who ascended from basketball benchdom to stardom earlier this year. Mr. Lin, the U.S.-born son of Taiwanese immigrants, has captivated Chinese basketball fans, hungry for a hero since the retirement of former Houston Rockets star Yao Ming. Mr. Lin has an agreement with Nike Inc. reached when he was a rookie that the shoe maker is moving to tap, with plans for a Lin-themed shoe. It was still unclear exactly what the value would be of the deal or what exact terms it would involve, but the invitation to the press conference noted that Mr. Lin is expected to help Volvo’s marketing efforts in several international markets. Previously, people familiar with the matter had said that the deal would cover the greater China market. The symbolism of such a deal would be rich. Volvo is now owned by China’s Zhejiang Geely Holding Group Co. The company is trying to boost Volvo sales in China as part of a strategy to double the brand’s global sales to 800,000 vehicles by 2020. Geely plans to invest up to $11 billion in the effort. Volvo sold about 47,000 cars in the country last year, up 54% from 2010. The Knicks are riding a three-game win streak since the sudden resignation of head coach Mike D’Antoni earlier this month. In the most recent of those victories, a 115-100 road win over the Indiana Pacers on Saturday, Mr. Lin led New York with 19 points and six assists, propelling “Linsanity Attacks Again” (林疯狂再度来袭) into the top 10 on popular Twitter-like microblogging service Sina Weibo’s trending topics list. “Yao [Ming] is a Chinese legend, impossible to duplicate,” one Weibo user wrote on Sunday. “Lin is an American dream – he’s more inspirational.” Mr. Lin is nearing 2.6 million followers on Weibo, up more than half a million since talk of the Volvo deal surfaced early last week.

Keanu Reeves landed in Hong Kong this weekend to attend a Sunday afternoon screening of his new documentary on filmmaking, “Side By Side,” part of the Hong Kong International Film Festival. The actor — who has appeared in everything from slacker comedy “Bill & Ted’s Excellent Adventure” and indie hit “My Own Private Idaho” to “The Matrix” blockbusters and Shakespeare’s “Much Ado About Nothing” – produced the film, which takes on a topic that might seem a bit esoteric to most audiences: the science, art and impact of the digital revolution on the movie industry. In interviews with some of Hollywood’s leading directors — including James Cameron (“Avatar”), Martin Scorsese (“Hugo”), George Lucas (“Star Wars”), David Fincher (“The Social Network”), Steven Soderbergh (“Contagion”) and Christopher Nolan (“Inception”) — Mr. Reeves explores how technology is increasingly pushing its way into the industry as digital becomes cheaper to use, and more and more directors turn away from traditional film as the medium to record their stories. The average movie-goer might not be able to tell the difference between the two, but the shift has an enormous impact on the filmmaking process. By the end, though, the documentary’s conclusion befits a romanticized Hollywood ending: A filmmaker should go with his or her heart, and the medium is merely a tool in which to tell the story. Addressing an audience of several hundred at Sunday’s screening, Mr. Reeves also spoke about his directorial debut, “Man of Tai Chi,” the martial-arts movie that he recently began shooting in mainland China. The medium he chose? Well, he’s making it in digital. “It all comes down to resources,” he said. “I wanted to shoot on film, but I couldn’t afford it.”

 China*:  Mar 21 2012 Share

Models depicting the future development of Shanghai are displayed at the city's Urban Planning Exhibition Centre. Mainland cities have grown rapidly in recent years. Nations 'can learn' from China's successes - Developing economies are seeing their populations shift to cities, something Beijing has managed well - The lessons that China has learned from coping with an explosive rate of growth of its urban population can be put into practice in developing economies around the world, say analysts. "The world faces a challenge of rapid urbanisation, and China stands out as a striking success in managing this challenge," said Paul Romer, economics professor at the Stern School of Business at New York University. "China can help the world urbanise and profit by it, with Chinese companies providing infrastructure construction and large-scale real estate development," said Romer, who is also president of Charter Cities, a US urban research organisation. He made the remarks during a recent visit to Hong Kong. They were echoed by Steven Townsend, global director of urban design at Woods Bagot, an Australian architectural and urban design firm. The strengths of China's urbanisation which can be exported to other countries facing the same challenges include its ability to implement large-scale urban solutions and infrastructure such as linking its cities by high-speed rail, Townsend said. One reason for China's successful urbanisation is the firm control over planning by the central government. Romer said the challenge to national governments was to strike the right balance between being authoritarian in certain aspects and letting market forces take charge in other areas - for example, where universities, restaurants and shops would appear. He said it was striking that rapid urbanisation in China had not led to the growth of slums. "To prevent the growth of slums, the Chinese government enforced a requirement that every home should be connected to a sewage system. This has been a real success, and it amazes people in India and Latin America that China is a strong state that enforces laws." The challenge facing urban planners is immense, said Romer, who noted that over a period of 10,000 years cities were established for three billion inhabitants, whereas in the next 50 years another three billion people will need to be housed in urban spaces. The United Nations predicts the world's urban proportion will soar from slightly over 50 per cent last year to 70 per cent by 2050. In 20 years, China's cities will add 350 million people, international consultancy McKinsey forecasts. Faced with these challenges, China should relax its hukou household registration system, Romer said. "Because of the hukou system, you don't have complete mobility. The Chinese government should encourage mobility of people all over China. Badly run cities are where people move away from and well-run cities are where people move to." Romer also questioned the practice of local officials selling land for housing, which risks speculative bubbles. As an alternative, the government might retain ownership of the land, while private companies build and sell the homes. "By owning the land, the Chinese government can stop speculation. If the government leases the land, it will earn a continuous stream of revenue. This approach can address the problem of affordability and avoid speculative bubbles," he said. Traffic congestion is a problem in many major mainland cities, Romer adds, and the central government has failed to implement measures to limit demand for cars by building adequate public transport systems quickly enough. Bryant Lu, vice-chairman of Ronald Lu & Partners, a Hong Kong architectural firm, echoed this criticism and said many mainland cities were not well integrated with transport infrastructure such as train stations and airports. The result is that as already large cities like Beijing and Guangzhou grow even larger, they risk becoming unmanageable urban sprawls, warns Martin Knights, global leader of Halcrow, a British infrastructure planning, design and management firm. "By expanding outwards, you create long distances for people to travel into the city centre," he said. "It's inefficient in travel time, cost of travel, and cost of utilities and services for cities to keep expanding."

Li Keqiang vows changes to China's economic model - Premier-in-waiting says flexible policies to ensure steady, more balanced growth cannot be put off - China cannot delay tough economic reforms, Vice-Premier Li Keqiang said yesterday. Li, widely expected to succeed Wen Jiabao as premier in a leadership transition that begins later this year, promised flexible policies to keep growth brisk and prices stable. China cannot delay tough economic reforms, Vice-Premier Li Keqiang said yesterday. His remarks underscored the top leadership's push for market-based change after the sacking last week of Chongqing party boss Bo Xilai , who pushed for a bigger state role in the economy. Li, widely expected to succeed Wen Jiabao as premier in a leadership transition that begins later this year, promised flexible policies to keep growth brisk and prices stable. Their focus would be on boosting domestic demand and pursuing structural reforms to ensure growth was steadier and more balanced. "China has reached a crucial period in changing its economic model and [change] cannot be delayed. Reforms have entered a tough stage," Li said, echoing comments made by Wen last week. "We will make policies more targeted, flexible and forward-looking to maintain relatively fast economic growth and keep price levels basically stable," Li said in a speech at an economic policy conference attended by top Chinese officials, the head of the International Monetary Fund and dozens of foreign business leaders. He said Beijing would "deepen reforms on taxes, the financial sector, prices and income distribution and seek breakthroughs in key areas to let market forces play a bigger role in resource allocation". Li's renewed emphasis on reform-led growth comes after Wen said slower growth and bolder political reform must be embraced to keep the economy from faltering and to spread wealth more evenly. Wen told a news conference at the end of the National People's Congress that growth would be made more resilient to external pressures, domestic property prices and inflation tackled, 10.7 trillion yuan (HK$13.13 trillion) in debt racked up by local governments dealt with and political change promoted. Zhang Ping, head of China's top planning agency, the National Development and Reform Commission, told yesterday's conference economic policies to maintain relatively fast growth were key to the future. "First of all, we need to maintain steady and relatively fast economic growth - development is the key for resolving all problems in China," Zhang said. IMF managing director Christine Lagarde dangled an additional carrot for reform at the forum, saying that the yuan could become a global reserve currency with the right mix of market-oriented structural change. "What is needed is a road map with a stronger and more flexible exchange rate, more effective liquidity and monetary management, with higher quality supervision and regulation, with a more well-developed financial market, with flexible deposit and lending rates, and finally with the opening up of the capital account," Lagarde said. "If all that happens, there is no reason why the renminbi [yuan] will not reach the status of a reserve currency occupying a position on par with China's economic status." Lagarde's comments were the most direct endorsement to date by an IMF official of Beijing's ambitions for the currency. Beijing operates a closed capital account system, and the currency is tightly controlled, although it has said it wants to increase the international use of the yuan to settle cross-border trade and has undertaken a series of reforms in recent years to that end. China, the world's biggest exporter and second-largest importer, has long wanted to break the US dollar's dominance in cross-border trade, in part to battle internal inflation risks and also to increase Chinese influence on the international financial system.

Despite all the hand-wringing over China's growth trajectory, the Middle Kingdom remains a land of milk and honey for Singapore real-estate company CapitaLand Ltd. President and Chief Executive Liew Mun Leong is a longtime bull on China's property market, often expressing confidence in the macroeconomic fundamentals that fuel housing and commercial-property demand there. Under his leadership, the developer—Southeast Asia's largest by market value—expanded aggressively into China over the past decade, and now owns there a portfolio worth about 12 billion Singapore dollars ($9.5 billion), or 38% of the company's total assets, including residential properties, offices and shopping malls. CapitaLand's China push isn't without its detractors, especially among investors who have shied from the stock amid rumblings of a possible hard landing for the Chinese economy and its softening property market. But Mr. Liew remains unfazed. "Urbanization and economic growth will support demand, and the Chinese people love to buy their own homes," he said. "Also, there's no alternative class of investment—they can't invest outside of China, they don't understand anything about equities, but they understand how to buy an apartment."

China's largest juice maker, Beijing Huiyuan Juice Drinks Food Co Ltd announced on Monday that it will invest 500 million yuan ($79.15 million) to enter the grape wine business. According to a report on the news portal Hexun.com, Huiyuan will first invest 200 million yuan to grow 333 hectares of grapes in Liuhe county, Jilin province, which is expected to produce 3000 tons of grape wine. The company will establish a modern agricultural industrial park including a "chateau" for tourists, The second phase of the project is to produce 10,000 tons of grape juice a year. The total output value of Huiyuan's grape and juice business is expected to reach 600 million yuan, the report said. Industry experts say Huiyuan is seeking new sources of profitability under the current weak juice industry market, the report said.

The 12th China International Petroleum and Petrochemical Technology and Equipment Exhibition (CIPPE), the world's largest one of its kind, kicked off Monday in Beijing, attracting 1,500 enterprises. The three-day event, covering 80,000 square meters of floor space, has attracted petroleum and petrochemical enterprises from 62 countries and regions including the United States, Germany and Russia, with 50,000 visitors expected to attend. With a theme of "Innovation and Participation," a concurrent forum will take place under one roof for professionals from oil and chemical engineering-related Chinese government bodies, China's three oil companies, international oil companies and industry associations, equipment manufacturers, oilfield service companies and engineering firms. They will discuss economic development in future China and market opportunities in the country's changing business environment. The CIPPE involves two annual sessions: one in Beijing in March, the second in Shanghai in August.

Vice-Premier Li Keqiang emphasizes a point during talks with Christine Lagarde, International Monetary Fund managing director, at the China Development Forum 2012 in Beijing on Sunday. China has entered a crucial stage in reforming the economy and will continue to strive to achieve breakthroughs in key areas, Vice-Premier Li Keqiang said on Sunday. Reforms will be given added bite in critical sectors, including taxes, finance, prices and income distribution, Li said in a speech at the China Development Forum 2012. "China has entered a crucial stage in shifting its economic model and cannot be delayed. Reforms have entered a key stage," he said. Li said the overall trend of the economy remains positive with sound economic fundamentals, but it must overcome structural barriers and change the "unbalanced, uncoordinated and unsustainable" growth model. China will make policies "more targeted, flexible and forward-looking" to maintain relatively fast economic growth and keep prices stable, he said. The market will play a bigger role in allocating resources and ironing out any inefficiencies. Boosting domestic demand, enhancing innovation and further opening up will be the three key priorities for the country as it restructures the economy, Li said. 

China's commerce minister reminded the United States to review its restrictions on high-tech exports to China and called on the US to further open its economy to Chinese enterprises and investors. "The US has constantly told us it plans to loosen its restrictions on high-tech exports to China in the past three years, but I didn't see any concrete progress, and, recently, I cannot hear even a whisper from them about it. I hope the discussion can continue," Chen Deming said in a speech at China Development Forum 2012 on Sunday. The US restricts the sale to China of about 2,400 products for both military and civilian uses. In 2009, US President Barack Obama asked Secretary of State Hillary Clinton and various agencies to re-examine the country's limits on high-tech equipment shipped to China. "Using national security as an excuse, the US declined to export high-tech products to China, many made from the rare earth metals exported from China. Similarly, does China also have a security problem in exporting its rare earth metals? It's a question worth thinking about," Chen said. Rare earth metals, a group of 17 elements used in high-tech products including mobile phones, hybrid car batteries, wind turbines and energy-efficient lighting. On Tuesday, the US, the European Union and Japan jointly asked the World Trade Organization to help settle a dispute with China over Beijing's restrictions on exports of rare earths. Meanwhile, Chen urged the US to be more open in attracting Chinese investment. "We hope the US will open up so that Chinese businesses can invest there and thereby increase US export capacity," Chen said. The productivity of the US is higher, especially in the high-tech sector and high-end service industry. If the US allows more Chinese companies to invest in the US, that will improve its capability in exports and narrow its trade deficit, Chen said. China has made efforts to cut its reliance on exports, and its trade surplus as a percentage of GDP fell below 3 percent last year. The decline in China's current account surplus to less than 3 percent of its GDP "is a significant response" to the argument about the Chinese currency, International Monetary Fund Managing Director Christine Lagarde said on Sunday. The drop in China's current account surplus to 2.8 percent of GDP last year, compared with around 10 percent in 2007. China's trade deficit was $31.5 billion last month while imports grew by 39.6 percent compared with February last year, more than twice the rate of export growth. China, now the world's second-largest importer, is expected to become the largest importer and the largest internal market in the world in the coming few years, with an annual growth between 15 percent to 18 percent of its total volume of retail sales, much higher than the GDP growth, Chen said.

Hong Kong*:  Mar 20 2012 Share

Edward Yau Tang-wah, Hong Kong's environment secretary, and French Transport Minister Thierry Mariani with a Renault Fluence Z. E. Renault unveils its latest electric-powered sedan - Firm hopes to sell 100 of HK$388,000 vehicles in city in first year; government orders 30 of the French car - Hong Kong may constitute just a small part of Asia's fast-growing car market, but carmakers such as Renault are eyeing the city's niche market for environmentally-friendly vehicles. Renault yesterday unveiled the city's fourth wholly electric car amid growing demand for "green" vehicles. While only 300 out of the 630,000 local licensed vehicles are powered by electricity, Renault hopes its launch of the Fluence Z.E., a HK$388,000 electric sedan, will draw 100 local buyers in its first year. "We expect Hong Kong to lead our Asian markets including Australia, South Korea and Singapore in the sales of electric cars," said Arnaud Mourgue, the French firm's Asean and Japan area operations manager. "Few other places have a target for electric vehicles, and the government is also active in building supporting facilities." The government is targeting 30 per cent of private vehicles and 15 per cent of buses to be hybrid or electric vehicles by 2020. It ordered 30 Fluence Z.E. cars yesterday, which will arrive before September. Renault is the fourth passenger electric car model being marketed in the city, behind Mitsubishi, Nissan and electric sports car maker Tesla. Electric carmakers worldwide are keen to tap Hong Kong's market, as the city has no car production industry to compete with. Furthermore, the city's compact urban setting fits the relatively short driving range of electric cars, and the government is offering incentives to `green' car buyers. Evan Tang, brand manager at Wearnes Motors, Renault's local distributor, said it might be overly optimistic to expect annual sales of 100 cars. Tang said Nissan's Leaf and Mitsubishi's i-MiEV have only sold a total of about 150 electric cars in the past two years. "The government may be keen to build charging facilities, but it is not easy to retrofit existing property developments, which is really the key to success," he said. "It requires the approval of those estates' incorporated owners, and it is a big problem regarding how individual electric-car owners pay for charging their cars." There are currently about 370 standard charging locations and four quick-charging locations in Hong Kong. They will be respectively increased to 1,000 in the next few months and 1,500 by next year. But few charging outlets are located at shopping malls and fewer still at private properties. That is why most of the city's 300 electric cars are owned by the government and public utilities. Renault's new electric model cannot use quick-charging outlets because it uses alternating current, not direct current. The government said incentives had been provided to new estate developments for the construction of electric-car chargers in the past two years.

Zhenli Ye Gon is in jail in the US fighting extradition. Hong Kong court's 'drug money' knockback for El Chino - Businessman behind bars in US fails in legal bid to unlock multimillion-dollar fortune in city bank accounts to fund his battle against extradition to Mexico - A mainland-born businessman snared in top-level political intrigue in Latin America has failed in his bid to unlock tens of millions of dollars from an alleged drug trafficking fortune frozen in Hong Kong bank accounts. Chinese-Mexican pharmaceutical entrepreneur Zhenli Ye Gon is behind bars in the United States battling extradition to Mexico over alleged links to one of the world's biggest narcotics rackets. He had hoped to use the Hong Kong money to sustain his five-year legal battle to stave off his forced return to Central America, where he fears his life would be in danger. But in a judgment just handed down by Hong Kong's Court of Appeal, three judges rejected his bid to have US$10.217 million released from Bank of China accounts in the city. Hong Kong's secretary of justice froze the accounts in December 2009 after an application from the Mexican government. A legal source close to Zhenli Ye Gon - whose notoriety earned him the nickname "El Chino" in the US and Mexico - described the decision as "disappointing" in light of the legal cost of his extradition battle. According to court documents, the funds are held in accounts linked to the businessman and also a Hong Kong registered company Unimed, of which he is a director. The Mexican authorities say Zhenli Ye Gon smuggled 70 tonnes of chemicals used to make methamphetamine into the Central American country between 2005 and 2007. They also seized US$205 million in cash, weapons, jewellery and vehicles from his mansion in Mexico City. The Mexican authorities said the drugs were bound for the North American market and he was arrested in Maryland, Virginia, by the US Drug Enforcement Agency in 2007. US authorities decided to drop the charges against him last year but Mexico still wants him extradited. He was awarded Mexican citizenship by former president Vicente Fox and had hoped to make his Unimed firm Latin America's biggest pharmaceutical company. He denies he is a drug smuggler and insists he was operating a legal pharmaceutical business. He claims the cash seized from his mansion was from a political slush fund for the country's sitting president, Felipe Calderon, whose aides ordered him to keep it or be killed. Calderon and the Mexican government rejected his claims as "pure fiction". The Hong Kong court refused to release the money mainly on the grounds that the allegations against him were still under investigation. Last year embarrassed US prosecutors asked a judge to drop charges against him because of problems with evidence, earning a lambasting from the judge. "I'm not pleased at all with anything I've heard from the United States government," US District Judge Emmet Sullivan said. The main reason for the charges being dropped was a witness's relationship with the Mexican government, the US court heard. The legal source said it was too early to say whether Zhenli Ye Gon would lodge a further appeal against the Hong Kong court's decision.

Tsang Yok-sing told Commercial Radio that Wen Jiabao's comments had been misinterpreted. Premier's chief executive comments are 'clarified' Legco president says Wen was speaking against conspiracy tactics, not favouring one candidate - A leading member of Hong Kong's Beijing-loyalist camp sought yesterday to clarify Premier Wen Jiabao's comments on the chief executive election, saying they had been misinterpreted. Legislative Council president Tsang Yok-sing, from the Democratic Alliance for the Betterment and Progress of Hong Kong, said Wen's emphasis on the need for "openness" in the race for the top job was a call against "conspiracies" and did not suggest that an aborted election would not be tolerated next Sunday. In Wen's remarks after the close of the annual session of the National People's Congress on Wednesday, he said that as long as "the principles of openness, justice and fairness are observed and the relevant legal procedures are complied with, the Hong Kong people will elect a chief executive who enjoys the support of the vast majority of the people in Hong Kong". Local political pundits saw Wen's remarks as a vote in favour of the most popular candidate, Leung Chun-ying, the former Executive Council convenor, who has long held a lead in the opinion polls over the front-runner, Henry Tang Ying-yen, the former chief secretary. They also said Wen was implying that Beijing did not want a failed election on March 25. But Tsang told Commercial Radio yesterday that Wen put "openness" ahead of justice and fairness because he did not want to see underhanded tactics in the election. "Openness means one should not do something secretive or in the dark," Tsang said. "There should be no conspiracy in the election, and the candidates should only use tactics that are open and above board. Isn't it very pertinent?" Leung and Tang have been dogged by scandal allegations in the past weeks, and some observers have suggested that "black material" was fed to the media by the other camp. Tsang also said the premier's remarks on following legal procedures do not mean an aborted election could not produce the city's next leader. He said Wen was suggesting that, according to "relevant legal procedures", a new election would be needed if none of the three candidates received more than half of the 1,193 election committee votes. Tsang said he would not cast a blank ballot next Sunday, nor would he encourage others to cast blank votes, even though he apparently stood to be the biggest beneficiary of a failed election. Tsang earlier said he would consider running for the top job if the election was aborted. Johnny Lau Yui-siu, a veteran China watcher, said Wen's comments did not favour either side. "Both candidates are acceptable to the Beijing government, and it's leaving them to fight for their own fate," Lau said. "Wen's remarks were very balanced. It's only that some people were interpreting them basing on their own needs."

Candidates Go on the Attack During Hong Kong Debate - Hong Kong Chief Executive candidates Chun-ying Leung, Henry Tang and Albert Ho stand on the stage before a live television debate in Hong Kong Friday. Hong Kong’s chief executive race devolved Friday night into a bitter cross-fire between candidates during the race’s most high-profile debate yet, with the two top candidates calling each other liars and mutually challenging their opponent’s integrity. It was live-broadcast to an audience of Hong Kong’s 7 million residents and carried in Chinese media markets in multiple countries, including a live feed in Australia. In an audience poll taken towards the end of the debate, Chun-ying Leung won the support of 44% of respondents, followed by 23% for Albert Ho — who chairs the city’s minority Democratic Party and is widely seen as having no chance in the race — and just 13% backing Henry Tang, Beijing’s onetime favored candidate.

 China*:  Mar 20 2012 Share

Sino-Japanese co-produced movie Tokyo Newcomer to hit screen - The Sino-Japanese co-produced movie Tokyo Newcomer is scheduled to give the nationwide debut on March 23.

US-based PayPal hopes to become the first foreign online payment service provider to win a domestic payment licence in China, where the e-commerce market is worth an estimated US$121 billion. Senior vice-president for Asia Rupert Keeley said the company was cautiously optimistic that the People's Bank of China would give it a licence, after applying late last year. China has kept a tight grip on its electronic payment services business, and industry players have often called for it to be relaxed. No overseas companies have so far been awarded a permit to process domestic payments in China. But last year local operators such as Alipay, owned by mainland e-commerce giant Alibaba (SEHK: 1688, announcements, news) , were granted the payment licences. PayPal, which yesterday launched a smartphone app and plug-in device to let small business owners take credit and debit card payments through their mobile devices, said it hoped to introduce the same technology to the mainland once its licence was approved. The company said small business owners often lacked access to credit card payment devices, and risked losing customers. The service known as PayPal Here solved this problem, enabling anyone with an iPhone to receive credit card payments, although the service was expected to expand to include other smartphones as well. Hong Kong, where half of the population has a smartphone, is one of the first markets to get the service. PayPal planned to open an office in India, and expand operations elsewhere in Asia, Keeley said. At present, PayPal has offices in six Asian markets, including the mainland, Hong Kong, South Korea and Singapore. PayPal's business has expanded significantly, largely due to its operations in emerging markets. It has more than 106 million active accounts in 190 markets worldwide. China's ballooning online market and fast-growing economy is attracting strong interest from overseas companies, and local players are scrambling to meet the challenge. Alipay has about half of the mainland online payments market, and last month announced a landmark alliance with the mainland unit of Standard Chartered Bank. The milestone is expected to help swell the number of Alipay's registered accounts, which was more than 650 million last year.

'People's Premier' leaves a mixed legacy - He helped turn China into an economic powerhouse, but Wen failed to fulfil promises of social reform - Quantitatively, Premier Wen Jiabao can lay claim to being the most outstanding head of government in recorded history. But critics and admirers alike say that qualitatively, his record has been mixed. Wen, 70, who will step down from his Communist Party post in about six months and give up the premiership in March next year after two five-year terms, met or exceeded numerous targets set in the 10th and 11th five-year plans, running from 2001 to 2010. Since taking office in 2003, he has overseen the continuation of one of the most remarkable economic transformations in history, taking the mainland from the world's sixth-largest economy to No2, trailing only the United States. During his reign, the mainland became the world's wealthiest nation in terms of foreign reserves - now US$3.2 trillion; the world's largest exporter, car producer and consumer; and home to the world's longest high-speed rail system. He has overseen the world's largest poverty-eradication campaign and succeeded in lifting tens of millions of people out of misery, with per capita income growing from US$800 to more than US$4,000 in the past decade. Since 2010 the country has also replaced the US to become the biggest single contributor to global economic growth, accounting for 17 per cent of the expansion in global output that year and about 30 per cent last year. With its growing economic clout, China has become one of the rule-makers of the global game, representing developing countries in the restructuring process after the 2008 financial crisis. However, he has generally failed to live up to expectations on economic reform and social development, despite his exceptional record on economic growth. Some analysts say the phenomenal growth of the past decade has been achieved at excessive cost, with environmental damage, a deteriorating economic structure and an ever-widening wealth gap. Wen came to power amid great hopes for reform, but mainland critics say he has reached few of the goals he set for himself in this regard when he was appointed premier. These include reducing bureaucrats' economic power, breaking up state monopolies in many highly profitable sectors, deregulating state controls on prices and restructuring the banking and financial markets. Wen has also failed to curb rising inflation and skyrocketing house prices, improve education and medical services, narrow the widening income gap, crack down on widespread corruption, and improve the environment and food safety. "Wen has made no progress in regards to market and social reform, strengthening the rule of law and improving governance. And no progression means retrogression," said Professor Zhang Ming , a political scientist at Renmin University. Shen Jianguang, chief China economist with Mizuho Securities, said he had seen a great deal of progress on economic restructuring and social development recently. "Now I do see important changes last and this year that make the economic structure more balanced and income disparity improve," Shen said last week. Wen has gained popularity by showing sympathy with ordinary people, especially following the Wenchuan earthquake in 2008. But some critics say the "People's Premier" has failed to live up to his promises on some livelihood issues, such as narrowing the income gap and building up the social security system, despite the government's soaring fiscal income. Wen is credited with abolishing the age-old agricultural tax in 2006, but farmers have still fallen further behind their urban cousins economically in recent years. Peng Wensheng, chief economist with China International Capital, said the mainland's Gini coefficient, a measure of income inequality, had risen from 0.35 in 1990 to 0.55 last year, according to World Bank estimates, well above the international warning level of 0.4. Meanwhile, income inequality between urban and rural residents has also worsened significantly, with the ratio of per capita urban disposable income to rural net income increasing from 1.86 in 1985 to 3.13 last year, Peng said in a recent report. Hu Yifan, chief economist with Haitong International Research, pointed out the lack of progress in building a social safety net and welfare system under Wen. "A reliable social safety network is far from established after a decade's efforts." Citing the fact that in the past 10 years, the mainland's gross domestic product has grown, on average, by more than 10 per cent a year, while fiscal revenues have grown by more than 20 per cent a year, Hu said the pension fund pool had become relatively smaller, making it harder to deal with the retirement of the baby boom generation. In a panel discussion at the annual session of the National People's Congress in Beijing, a Guangdong NPC deputy lambasted the central government for taking the lion's share of national income - but failing to properly use taxpayers' money to benefit the people. "The central government has taken 55 yuan (HK$67) from every 100 yuan in GDP," said Wang Nanjian , also head of Guangdong's taxation bureau. "They got that much but did not use it properly." With increasingly widespread discontent, many look back nostalgically to the time of Wen's predecessor, Zhu Rongji . Zhu, a reform-minded and no-nonsense economic tsar, took a tough approach against corrupt officials, fostered a market-based economy, brought China into the World Trade Organisation (WTO), overhauled state-owned enterprises and restructured the banking system. Many NPC and Chinese People's Political Consultative Conference delegates say Zhu outperformed Wen in several areas. "Premier Zhu is more capable," said CPPCC member General Huang Quangui. Another member of the influential body, Zhang Hua , said: "Premier Zhu was no-nonsense and did what he said. He was bold and resolute in his work. Premier Wen is relatively soft." Tim Condon, chief Asia economist with the ING banking group, said it was not flattering to compare Wen's record with Zhu's. "Zhu managed the economy during the Asian crisis, laid out the blueprint for banking reform, reformed the [state-owned enterprises] and secured accession to the WTO. In contrast, economic reform has gone nowhere during Wen's tenure," he said. But Condon said it was not really fair to compare their performance. "Zhu picked off the low-hanging, pro-market reform fruit. And more ambitious reforms would involve ceding too much policy discretion to market forces," he said. "It cannot afford to give it up, at least not yet. So while Wen has an unimpressive record as an economic reformer, it is unlikely to be eclipsed by that of his successor," Condon said, referring to premier-in-waiting Li Keqiang . Condon said Li would face the same constraints on pushing reforms as Wen. Johnny Lau Yui-siu, a Hong Kong commentator and veteran journalist who has covered China for many years, said there were two reasons why Zhu outperformed Wen. Firstly, Zhu came to office when the mainland faced a very difficult and complicated domestic and international environment. Secondly, his achievements were pioneering ones, laying the foundations for the mainland's phenomenal growth. Wen was just trying to maintain Zhu's legacy. In recent years, Wen has made repeated calls for Western-style political reform, making him the most outspoken communist leader since the military crackdown on the pro-democracy movement in 1989. And while he might appear to be a lonely voice among the Communist Party leadership, many critics say he has failed to back his words with real action. Some say he has just been cultivating his public image before retirement - or at most playing a role to balance the communist leadership's conservative image. Others say there has also been limited progress in areas that are not politically sensitive, such as streamlining the bureaucracy, and promoting transparency and the rule of law. Liu Xirong , an NPC deputy and former deputy chief of the party's Central Commission for Discipline Inspection, pointed out in a panel meeting that the number of civil servants on the mainland had grown from 6 million to 10 million in the past four years. And, in his book China's Best Actor: Wen Jiabao, dissident author Yu Jie dismissed Wen's image as a reformist and said he deserved an Oscar for the political role he played. Zhang said Wen might want to do something in political reform but his power in this area was limited. Political affairs generally fall into the jurisdiction of the party, not the government, though Wen is No3 in the party's hierarchy. No matter what his score, Wen will leave a raft of thorny issues to his successor. Zhang, the Renmin professor, said that while many believed the mainland had become stronger on the international stage, he saw a weaker nation in terms of governance, rule of law and social harmony. "The country might be getting richer, but its people are not feeling safer and getting happier," he said.

Hollywood invasion has China filmmakers reeling - American blockbusters deal may force producers to strike back with quality rather than quantity - Underdogs fighting off a foreign invasion or small-time hopefuls competing against all odds for the spotlight. Those could be plot lines for Hollywood scripts - or the real world plight of China's movie producers, now that Beijing has approved imports of a new wave of American blockbusters. A deal hammered out during the visit of Vice President Xi Jinping to the United States last month paved the way for the import of 14 premium format films, such as IMAX or 3D, which will be exempt from China's annual quota of 20 foreign films per year. While Chinese theatre owners are likely to welcome the opportunity to fill more seats by screening Hollywood spectacles, the deal means more competition for China's already out-gunned directors and producers on silver screens in their own country. "The import of these movies, I believe, will be a huge shock to Chinese filmmakers," said Qin Hong, the chairman of Stellar Megamedia, a major Chinese film producer and cinema owner. Qin said the deal could make it very difficult for China's small film producers to survive and it might force them to consolidate industry resources into the hands of a few major film conglomerates. China's film industry has been growing rapidly, with box office revenues jumping more than 25 per cent annually over the past decade, according to state media. But for all the films Chinese producers are cranking out, their pull at Chinese box offices, like their budgets, often pale in comparison to big Hollywood features. In 2011, ticket sales topped 13 billion yuan (HK$15.9 billion), about a fifth of US theatre revenues. But almost half of that came from showings of 50 foreign films. The rest was split among China's 791 domestic productions, the head of China's film and television watchdog said, according to state media. Industry experts say Hollywood's looming shadow means Chinese producers will need to focus on quality over quantity if they are going to elevate their appeal to a Chinese audience. Christopher Bremble, who heads Beijing-based special effects firm Base-FX, said China's movie industry was playing catch-up, and certain fields, such as special effects, lagged 15 years or more behind Hollywood. Still, Bremble said China is a country of fast learners and that the new film deal could spur higher quality domestic movies. Qin said film producers thanked the government for its help in resisting Hollywood's drive into the market after China joined the World Trade Organisation, but that the movie deal marked an "appropriate opening", one that ultimately was needed to drive quality and creativity. "We can't forever exist under a protective umbrella," he said. "We need to develop and expand on our own," he said.

Hong Kong*:  Mar 19 2012 Share

(Left to right) Chief executive candidates Leung Chun-ying, Henry Tang and Albert Ho during the televised debate - with no chance of winning the election, Ho revelled in his role as the spoiler. 

Lawmakers will get a 10 per cent pay rise and more operating expenses in the new legislative term that starts in October. It comes after the Executive Council's adoption of the recommendation of an independent commission. The pay rise will lift lawmakers' monthly salary from HK$73,150 to HK$80,465. That is little more than half the amount they would have received had a controversial proposal by a Legislative Council subcommittee been adopted. In addition, lawmakers' annual budget for operating costs - for staff salaries and office rents - will rise from about HK$1.7 million to HK$2 million. The wage increase has yet to be approved by Legco's Finance Committee, but its chairwoman, Emily Lau Wai-hing, said she expected it to be passed. The recommendation came after a heated debate last month when the Legco subcommittee proposed pegging lawmakers' wages to about half the pay of ministers, meaning they would have received about HK$141,000 a month. But the proposal backfired amid public discontent with lawmakers' performance and a debate on whether directly elected and functional constituency lawmakers should be paid the same. Lau had written to the government asking for a mechanism to decide lawmakers' pay, as they were also split on whether their pay should be linked to that of heads of government bureaus. A government spokesman said yesterday the Executive Council had approved the commission's recommendation to increase lawmakers' pay by 10 per cent. Under the new arrangement, lawmakers will be able to carry forward any unspent surplus from their expenses for staff wages and office rents, giving them more flexibility to retain experienced staff. The wage increases are expected to add about HK$126.6 million in costs over the four-year term. But the government said lawmakers would have more resources to better serve the community. It said the independent commission had adopted a holistic approach and took into account a basket of factors before making its recommendation. Those factors include lawmakers' increased workload, public expectations, and salaries and rental costs in the private sector. However, Lau said the increased operating budget remained insufficient for lawmakers to retain staff or attract young talents to pursue a career in politics, as most were underpaid at about HK$10,000 a month. Tam Yiu-chung, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, said he respected the commission's decision. "Our party's stance has been allowing the independent commission to decide on the issue because they would have acquired better information than us," he said. Tam said he was still concerned that the newly created "super-seat" lawmakers who will be elected by more than three million voters across the city would be short of resources. But he did not want the lawmakers to be paid differently.

The bill for the construction of the Sha Tin-Central rail link has soared by almost one third to HK$79.8 billion, the government announced yesterday. The increase, blamed on the rising cost of construction material, will see costs rise by HK$20 billion more than original estimates by the time the line is completed in 2020. Lawmakers said the increase - which has come to light just two weeks after the government said the cost of the eight-month delay to the scheme due to a legal challenge would be minimal - was too much and urged the government to control construction costs more tightly. The Legislative Council will be asked to approve a government request for HK$57.3 billion for the second stage of funding for the project on Friday. "We will try our best to explain to the Legco members [the reason for the extra cost]," a Transport and Housing Bureau spokesman said. "Most of the sum arises from inflation in the cost of construction materials, the price of which rose by 50 per cent between 2009 and 2011." Asked if the price could rise even higher, the spokesman said: "The sum we are mentioning now is the estimate of many experts. We are confident that this expected amount is reasonable." According to estimates in September last year, the link was projected to cost HK$64.9 billion. "The government should be stricter in controlling the cost of construction," said legislator Wong Sing-chi, of the Democratic Party. However, work on the project should begin as soon as possible to ease traffic problems, he added. "The traffic from Sha Tin to Central ... is extremely congested during busy hours," Wong said. "The project needs to start as soon as possible, as it has been discussed for a decade already." The spokesman said construction could begin as soon as the middle of this year if funding is approved. The section between Tai Wai and Hung Hom is expected to be completed by 2018, with the final stretch from Hung Hom to Admiralty expected to be completed by 2020. Last year legislators approved funding of HK$7.7 billion for preliminary work - including expanding Admiralty station and building a new station at Ho Man Tin. The project was delayed for much of last year when the Court of First Instance upheld a legal challenge to the environmental impact assessment for the Hong Kong-Macau-Zhuhai bridge project, of which the 17-kilometre link forms part. The ruling was overturned by the Court of Appeal in October. The delay was not responsible for the increase in costs, the spokesman said. "The environmental impact assessment has suspended the project for eight months," he said. "But we can chase back the time by being faster. Overall progress can still stick to the original plan." Some 90 per cent of the link will be built underground, so the impact on the public will be limited, he added. Residents of 20 blocks of flats, mostly in Kowloon district, may feel limited effects from the work as the line will go under the buildings. Plans for the Sha Tin-Central link were first put forward in May 2000, with 2008 set as the earliest possible completion date. The government delayed the project in 2003 and 2010 was set as the likely start date by Chief Executive Donald Tsang Yam-kuen in 2007. Despite fierce criticism of the cost of the project, lawmakers voted in February last year to approve funding for the scheme.

Dolphin expert and conservationist Richard O'Barry (left) and the boss of Ocean Park, Allan Zeman, speaking at the forum at Baptist University in Kowloon Tong yesterday. Dolphins at Ocean Park 'should be set free' - Expert tells boss Allan Zeman that HK attraction can play a 'key role' in ending trade in animals - Ocean Park should take a lead in ending the practice of keeping dolphins in theme parks, a renowned conservationist said yesterday. At a forum attended by Allan Zeman, the attraction's boss, Richard O'Barry said most dolphins captured in the wild were imported into China. This meant the park could play a key role in stopping the trade. O'Barry, who featured in the Oscar-winning documentary film The Cove about brutal dolphin hunts in Japan, said the education value of keeping dolphins in theme parks was questionable and that Ocean Park should phase out the practice. O'Barry, who first worked with dolphins while a trainer on the 1960s television series Flipper, invited Zeman to see for himself the dolphin hunts in Taiji, Japan, in which more than 1,000 dolphins and whales are captured for sale to theme parks or for human consumption each year. "Ocean Park is not [importing dolphins from the wild], but their colleagues [in the theme park industry] are ... they are connected," O'Barry said after the forum, organised by the international student group Aisec at Baptist University. He told Zeman that he should "go to Taiji, learn more about the issue and send the message to the rest of the industry". Zeman said Ocean Park had abandoned the practice of importing dolphins captured in the wild. He said 70 per cent of the dolphins taking part in the park's shows were bred in captivity, while the others were imported before his time or borrowed from an aquarium in South Africa. "The dolphin show before my time was purely about entertainment," Zeman said. He said tricks like getting dolphins to jump through hoops had been dropped, while visitors now had a chance to learn about marine conservation. "What I see now is a very simple tank show. What's really important is the message," he said. O'Barry said he had never visited Ocean Park and never would. He said: "I get a hangover from a dolphin show. I can actually feel the dolphins' depression." But he will take a boat trip today to see the city's wild dolphins with the Hong Kong Dolphin Conservation Society. The city's waters are home to a small population of endangered Chinese white dolphins. O'Barry helped make Flipper, the story of a young boy and his friendship with his pet dolphin, an international television hit. But he was converted to the cause of freeing the creatures when one of the dolphins that played Flipper, Kathy, died in his arms. O'Barry believes the dolphin effectively committed suicide by closing her blowhole voluntarily. Ocean Park is not the only institution in the city facing criticism over its treatment of dolphins. Hong Kong Airlines faced controversy last month after pictures emerged of five live dolphins being flown from Osaka in Japan to the Vietnamese capital Hanoi in tanks on one of its aircraft. The airline said it was "very unlikely" to fly dolphins again.

Li Ka-shing has rallied behind Henry Tang. Li Ka-shing voices his support for troubled Tang - City's richest man backs scandal-hit candidate, rejects talk he would withdraw investments if Leung wins - In a highly unusual move, Hong Kong's richest man, Li Ka-shing, yesterday publicly voiced his support for scandal-plagued chief executive candidate Henry Tang Ying-yen, while dismissing suggestions that he would withdraw his investments from Hong Kong if Leung Chun-ying wins the election. Li's comments came amid warnings from Tang's tycoon supporters that a Leung administration could jeopardise the city's economy. "There will be no such thing," said Li yesterday morning in response to suggestions that Cheung Kong (SEHK: 0001) and Hutchison Whampoa (SEHK: 0013) - companies controlled by his family - would take their investments out of Hong Kong if Leung wins the March 25 poll. "I love Hong Kong," he said. "Hutchison Whampoa's investment in Hong Kong accounts for 15 to 16 per cent of its global investment." In a rare gesture, the tycoon spoke to TVB (SEHK: 0511) outside his house in Southern District, to declare his support for Tang. The proportion of Hutchison Whampoa's investment in Hong Kong is higher than in any of its 52 other countries worldwide. "I nominated Henry Tang," said Li. "His experience and work in the administration are good for Hong Kong. I will definitely vote for him on March 25." In previous years Li has commented on chief executive elections only during press conferences relating to the annual results of his flagship companies. The property conglomerate has pledged five votes for Tang, who had 390 nominations. Last week, Li's eldest son, Victor Li Tzar-kuoi, said Hong Kong's political environment was jeopardising the company's investment returns. "The returns from overseas investment are hardly achievable in Hong Kong under the current political environment," he stated on March 8. The comment was seen as an oblique warning against voting for Leung. Another developer, Alan Chuang Shaw-swee, chairman of Chuang's Group, warned a day after Victor Li's comments that a Leung victory could cause a 30 per cent depreciation in the property market. Jeffrey Lam Kin-fung, a member of the General Chamber of Commerce and a Legco member for the commercial sector, said investors could withdraw their capital from the city if a person with no government experience became chief executive. For more than a decade, Li's family has at times hinted at the possibility of relocating its investment from Hong Kong. In 1998, Li Ka-shing said he might pull out of a HKS$10 billion project because of worries about the "political environment". Two years later, he repeated the words at a company meeting. Veteran Beijing loyalist Ng Hon-mun said Li's public support reflected Tang's poor election prospects. "He was creating some leeway for himself by promising not to withdraw his investments even if Leung wins the seat," said Ng, a former deputy with the National People's Congress. "Business is business," said Dr James Sung Lap-kung, a political scientist at City University. "Whoever wins the election, the tycoons will be able to fit into the new ecology. I don't think they can't work with Mr Leung."

New iPads reach HK market - An employee at the Hong Kong Apple Store presents the new iPad to a customer on Friday. Gadget lovers in Australia, Japan and Hong Kong became the first people to snap up the new iPad. Like victors in a sporting event, each person who managed to get a new iPad was cheered and applauded by Hong Kong Apple Store workers on Friday, the first day the tablet was available to consumers. Some who hoped to be among the first to take a bite of the new Apple entered a drawing on the company's website, others waited in long lines at stores. "This one is for my friend in Hangzhou, because it's still hard to get the new iPad on the Chinese mainland," said a consumer surnamed Zhang, who won the right to buy the tablet in the drawing. He bought a 32 gigabyte new iPad, priced at HK$4,688 ($604), for his friend in the capital of Zhejiang province. It's not known when the new iPad will be sold on the mainland. Apple Inc started selling the new iPad on Friday in more than 10 countries and regions, including Hong Kong. Not all of the customers wanted them for personal use. Scalpers were out in force on Friday, trying to score the tablets at the Apple Store and from other retailers. Meanwhile, the Guangdong Provincial High People's Court is still handling the trademark dispute between Apple and Proview Technology Shenzhen Co Ltd, and some local governments have started confiscating Apple iPads, generating concern that the company's newest product won't be available on the Chinese mainland's market. While potential customers may have worried about the legal dispute, scalpers and gray-market vendors were uncertain they could meet the overwhelming demand for the new iPad. A few hours after the iPads arrived in Hong Kong, smuggled tablets could already be found on the Chinese online-shopping website Taobao.com. An online-shop owner in Shenzhen, whose online alias is "Xiaobu", said his store already has 300 iPads in stock. His price for the 16G WiFi version is 3,988 yuan ($630), 800 yuan higher than the official price. "Every ID is allowed to book only three new iPads. The first 300 units are almost sold out, but the second group of 300 will arrive soon," the shop owner said. Zhongguancun, Beijing's largest electronic market by sales, is fully prepared for the new gadget's arrival. "The earliest that Zhongguancun could get the first new iPad is Saturday. The sale price is expected to be about 1,000 to 1,500 yuan higher than in Hong Kong," said Li Hailian, a vendor in Zhongguancun's IT mall. Consumers who buy the new tablet from scalpers in Hong Kong have to pay additional fees, ranging from HK$500 to HK$1,000. But some said this latest version might not be as hot as the iPad 2, which was launched about a year ago. "There were many more scalpers trying to buy iPad 2 from consumers last year, and the prices they offered were higher," said an office worker named Mok. He intended to resell six tablets to scalpers after buying them in retail stores. Legal experts said Apple has to obtain the ownership of the iPad trademark before it can sell the next-generation tablet on the Chinese mainland. "There is no doubt that Proview Shenzhen holds absolute ownership of the iPad trademark on the Chinese mainland," said Guo He, professor of the College of Intellectual Property Rights at Renmin University of China. Apple has to take the consequences not being able to register the trademark on the Chinese mainland, he said.

 China*:  Mar 19 2012 Share

Chongqing's new boss Zhang Dejiang - Chongqing residents are still gasping at its sudden change of leadership - with the resume of new party boss Zhang Dejiang appearing on the front page of major newspapers in the southwestern municipality yesterday. The Chongqing Daily, Chongqing Evening News, and Chongqing Economic Times all ran Vice-Premier Zhang's resume after he was brought in to replace the controversial Bo Xilai , and ran big headlines about the meeting on Thursday chaired by central organisation department chief Li Yuanchao at which the switch was announced. Chongqing television broadcast a municipal government meeting yesterday chaired by mayor Huang Qifan , which tried to convey a message of business-as-usual by passing legislation plans on livelihood issues such as public housing and schools. Huang, a trusted ally of Bo, said at Thursday's meeting he would support Zhang's leadership, although observers are still keeping a close eye on his political fate. Chongqing residents, however, expressed mixed feelings about the abrupt leadership change yesterday. Huang Zheng said he admired Bo for his unreserved devotion to the improvement of ordinary people's livelihoods, ranging from public order and tree-planting to environmental protection and the building of infrastructure. "I guess his downfall resulted from his siding with the wrong faction in political struggles," he said. A middle-aged woman, Meng Bin, said: "Those who served as our leaders yesterday have today stepped down, or even been placed under investigation. Things have changed in such a drastic way. It's all about political struggle." A police source who refused to be named said that all inscriptions or billboards with any mention of former police chief Wang Lijun had been either whitewashed or removed since early this month. Wang apparently attempted to defect at the US consulate in Chengdu , Sichuan , on February 6. Many are also curious whether the red campaign championed by Bo, and which featured the singing of revolutionary songs, will continue under Zhang, who is known to be a conservative and received his university education in North Korea. Others wonder whether Chongqing Satellite Television will be allowed to broadcast commercial advertisements again. Bo had banned them. All mainland newspapers were ordered to only use Xinhua's report. Some newspapers ran it as a headline on their front pages, but others, including the Guangdong-based Southern Metropolis Daily and Southern Daily did not mention Bo's fall on their front pages at all.

An amendment to the Land Administration Law is expected to give farmers more compensation and opportunities for future development when their land is requisitioned, the Ministry of Land and Resources' official mouthpiece says. Besides one-time cash compensation for the requisitioned land, the amendment will require local governments to provide farmers with job opportunities and occupational training, the right to keep part of their land, and stocks when the land is requisitioned for commercial development, the China Land and Resources News reported yesterday. The revision process, which started in April, is expected to be completed this year. Premier Wen Jiabao listed the issue as a top priority before his term ends next March. Discontent over land compensation has become a major cause of conflict in rural areas in recent years, with local governments requisitioning rural land cheaply before selling it on to developers at great profit. Instead of an "attachment to the land", such as wells and trees, a farmer's house should be subject to separate compensation in the future, the report said. Under current practice, a local government deciding how much compensation to pay for a rural house only factors in the cost of building the house, but not the value of the land it was built on. "The revision would bind these two things together during assessment for compensation, because when you own a house, it includes your right to use the land beneath it," Li Jinping , a lawyer specialising in requisitions, said. In cases where another parcel of land is allocated for the rebuilding of a farmer's home, the local government should pay the rebuilding cost. In cases where no residential land is allocated, farmers should be compensated according to the local urban living standard, the report said. A dispute-mediation system should also be established to give farmers more rights to take part in the land requisition process, it said. Li said that because of a lack of state-level regulations on rural land requisitioning, local governments had dealt with the issue in their own ways, which mostly put farmers at a disadvantage. For example, in most places, the size of the house or apartment a rural family is relocated into is based on the number of people in the family, leading to conflicts, he said. "According to this rule, for families which have many members but a small house, it's a good deal. But for those with fewer people but a large house, it means a big loss," he said. Professor Zhu Qizhen , who studies rural issues at the China Agricultural University, argued that farmers deserve not only compensation for their land and residence, but more help in seeking future sources of income after they lose the land. "Because to them, a residence is not only a place for living, but also a place for production," he said. At the National Rural Work Conference in December, Wen promised regulations this year to lift farmers' share of profits from the sale of land. Revising the Land Administration Law was a necessary first step, Li said.

China to be hotbed of luxury hotels - Sanya, the southernmost city in China, is trying to make itself into the Miami of the East as part of a plan to attract more tourists from home and abroad. Judging by its hotels, though, Sanya may already be a step ahead of the city of pink flamingos and South Beach. Plans now exist to complete 40 five-star hotels in five years in a 19-kilometer stretch of Haitang Bay in Sanya. According to reports, half of them will be operating before 2015, almost doubling the number of hotels in the city. Phoenix Island, in Sanya, is one of many large-scale developments providing luxury hotels and boutique apartments. The massive construction project in the coastal city is a prime example of what's happening throughout China, as international and domestic companies move quickly to build luxury hotels. According to Meadin.com, a web portal for the hotel industry in China, the country now has 660 five-star hotels and another 500 that are either under development or waiting for five-star recognition. Many large international hotel companies have recently announced development plans for China, not only for the largest cities but also for places that are slightly smaller. The InterContinental Hotels Group Plc now manages 154 properties in China and has another 142 in its plans. The number of hotels under development in China, which accounts for a quarter of the company's total in the world, is the highest for any hotel group, said Keith Barr, chief executive officer of InterContinental Hotels Group Plc Greater China. "As the first international hotel company to have entered the Chinese market, we arrived here first and we want to stay," he said. Hilton Worldwide, meanwhile, plans to quadruple the number of hotels it has in China by 2014, bringing it to 100. The move will make China the company's second-most-important market after the United States. Marriott International Inc also has big plans. Every month in the next three years, one hotel under the Marriott brand will be opened, said Simon Cooper, president and managing director for the Asia Pacific division of the company. Figures from the National Bureau of Statistics in China and the United Nations World Tourism Organization indicate that China will move alongside the US to become one of the two largest hotel markets in the world by 2025, when China is expected to have 6.1 million hotel rooms, the same number the US is to have by that time. Boston Consulting Group, a management-consulting firm, has predicted that China will surpass Japan to become the second-largest market for tourism in the world by 2013, holding an 8-percent share of the global market. The increasing popularity of travel has been a driving force behind the construction plans. The China National Tourism Administration said domestic travelers made 2.64 billion trips last year, 13 percent more than in the previous year. The number is expected to increase to 3.3 billion by 2015. At the same time, international travelers made 57.3 million trips, 2.3 percent more than in 2010. Another reason for hotel chains' ambitious plans is the good business results they have lately enjoyed. InterContinental Hotel Group's annual report for 2011 showed that its revenue for each available room, or RevPAR, increased by 10.7 percent in China. RevPAR is a gauge of the hotel industry's performance and is calculated by multiplying a daily average cost of renting a room at a hotel by its occupancy rate. Excluding hotels in Shanghai, which greatly benefited from the 2010 World Expo, InterContinental Hotel Group's RevPAR in China increased by 17.4 percent in 2011 from the year before. In comparison, the company's 2011 global RevPAR was up by only 6.2 percent year-on-year. Furthermore, the company's revenue in China increased by 15 percent to reach $205 million and its operating profit increased by 24 percent to reach $67 million.

Monkey King swings into New York exhibit - For hundreds of years, Chinese children have grown up with the Monkey King, the epic tale of a young, mischievous primate born from stone and possessing supernatural powers. After being imprisoned under a mountain as a result of impudence against the deity Buddha, he later accompanies a monk on an adventure-filled spiritual quest to India to find Buddhist sutras. Naturally, as children's stories go, he learns a few lessons along the way. Now, a new exhibit at the Children's Museum of Manhattan attempts to teach kids about China through this timeless story about teamwork, cleverness and the importance of behaving. A Monkey King exhibit attracts a child at the Children's Museum of Manhattan in New York. Monkey King: A Story from China is on exhibit at the museum for the second time after a tour of seven cities around the United States over the last eight years. Andy Ackerman, executive director of the museum, told China Daily that the curators worked with New York City's Flushing community to develop the idea for the exhibit. "We asked one simple question: If you're growing up in China, or you're Chinese American, how do you learn about your own culture? And the Monkey King came up over and over again. We talked to people about their memories of learning the story as children, and how they then taught their kids about it." Some of the videos from those interviews are included in the exhibition. The museum also sent a team to China to view cave etchings of the legend, and consulted Chinese scholar Anthony Yu, who translated the original text of Journey to the West, the 16th century novel by Wu Cheng'en, on which the legend is based. The Monkey King has been adapted into movies, cartoons and comics. The way in which children have experienced the story has carried across generations, Ackerman said. "The best part of the exhibition has been seeing the sharing among generations when families come to view the exhibition," Ackerman said. "That's really cool, to see grandparents, parents and kids, taking it in together." The exhibition, which is for ages 4 and up, leads children first through the story of the Monkey King's misbehavior and background, and then on the journey to India. Although the story itself has many religious undertones, the museum chose to present the details in a non-religious context, said Kristin Lilley, art director at the museum. "Religious values come up with cultural values, because they're often intertwined," she said. "We're not talking about religion directly, but we talk about the importance of respecting an authority figure, and behaving, and how you cooperate, and so on." The exhibition showcases a number of values including persistence and respect of authority, Lilley said. "Kids are naughty all over the world, and so teaching that there's a value in behaving will hopefully be a great lesson for kids to learn," she said. "It's a long journey, so not losing perspective about getting to the end of your journey and not giving up - that's all part of it. A lot of those are values you want kids to learn, whether they're learning about Chinese culture or just learning about being good kids." Lilley believes the exhibition highlights certain differences between Chinese and Western values. She pointed to a previous exhibition about Greece, in which the value was placed on an individual hero. Odysseus is the only one in a crew to return home, and he is lauded as a hero for surviving - whereas in the Monkey King story, the value is placed on teamwork and keeping every member of the team safe, she said. She also pointed to the value placed on age and longevity in the Monkey King, a contrast to the Western focus on youth and vitality. Additionally, the exhibition attempts to address some of the things American kids are generally less knowledgeable about, Ackerman said. One display features a screen in front of which kids feel as though they are flying through the clouds above China, and learn about geography in the process. Being knowledgeable about other cultures is increasingly important, Ackerman said. "If you don't develop the skills early on to embrace the way other people think, you're going to be at a tremendous disadvantage," he said. "The importance of being a world citizen is absolutely critical, today more than ever. In order to understand other cultures, you have to start young." Children today are more aware of China than they used to be, he said. "But that's partly because of how little they knew about China before," he said. Elementary schools are much more focused on teaching history from diverse perspectives, and the Internet has changed the average child's worldview. "Geography's not a boundary anymore and language isn't either, so the boundaries that are in my brain don't exist in a 5-year-old's brain anymore. These changes are happening fast, and you either embrace it or you fight it," he said. "We embrace it - but that doesn't mean that you should lose all the amazing qualities of traditional cultures either. That's what this exhibition is attempting to celebrate."

Program helps rural poor develop incomes - Nong Hongneng, a farmer in Shangguoling village of Napo county in the Guangxi Zhuang autonomous region, feeds chickens in his farm recently. He began raising chickens and pigs in 2008 with the help of the local government's supporting policies. Looking back on his time as a migrant worker in Dongguan - a manufacturing hub in South China's Guangdong province - the chicken and pig farmer Nong Hongneng, 45, utters a deep sigh. "When I worked in Dongguan, I was always being scolded by my boss, and I earned hardly any money," he said. Nong was lured back to Shangguoling, a village in Napo county in South China's Guangxi Zhuang autonomous region, by the favorable policies of his hometown government to help returning migrant workers develop their own businesses. Guangxi, a region with one of the nation's largest poor populations, was engaged in a decade-long poverty reduction campaign from 2000 to 2010. Nong started his chicken and pig farm in 2008, and he was soon honored by the local government for his success and given more support by the government. Last year, his farm had 500,000 yuan ($79,000) in revenue. Nong's ambition grew even stronger when he learned in February that Guangxi was reviving its poverty alleviation campaign. Guangxi has selected 6,540 villages and 57 counties as the main targets of the campaign over the next 10 years, said Mo Yanshi, deputy director of the regional office of the poverty alleviation and development. Guangxi's rural poor population reached 10.12 million, more than 20 percent out of its residents, when the nation reset the poverty level last year to 2,300 yuan in annual per capita net income. Previously, it had been 1,196 yuan. During the 12th Five-Year Plan period (2011-15), the region will develop 3,000 impoverished villages to increase the per capita income to 5,000 yuan. Over the next four years, a total of 150 billion yuan will be invested in fighting regional poverty, 80.2 billion yuan of which will come from the central government, said Mo. Most of the funds will be used to help low-income residents create or develop their own businesses and ultimately have sustainable, stable and relatively high incomes, Mo said. Nong, who is also expected to benefit from the campaign, built his second pig farm with the help of the local government, which gave him steel and cement for the construction. For Ma Zhenlong, a tobacco planter in Dehe, a village in Napo county, the help with planting techniques is more important. Ma, 62, returned home in 2009 to plant tobacco and expanded his tobacco field to about one hectare with support from the government. "Our village is one of the key targets of the poverty reduction campaign, and they have not only given us money and built a tobacco drying house for us, but have also sent experts to show us how to plant and bake tobacco," Ma said. To alleviate the pressure of borrowing, the regional government will pay the interest on loans taken out by rural poor families. The interest subsidy policy started in the last poverty alleviation campaign. In 2009, Nong got subsidized government loans that helped him expand his farm. "With government support, I have more confidence to develop my business," Nong said. Meanwhile, the region is conducting a pilot program to set up mutual aid funds in some poor villages to ease the funding shortage. The funds will be from 150,000 to 300,000 yuan, depending on the village population, and will be managed by associations of local farmers. To channel the poverty alleviation fund to the right people, Guangxi will conduct a census of the poor in the next three months. The region plans to help the rural poor increase their annual incomes by 12 percent by 2015. "I hope to earn enough money to build a new house to replace my current old tile-roofed one," said Ma.

Hong Kong*:  Mar 18 2012 Share

Li Ka-Shing Throws Weight Behind Henry Tang 1 week before election - One week before Hong Kong chooses its next leader, the city's richest man, Li Ka-shing, weighed in on the heated race for the first time, voicing his support for former finance chief Henry Tang. "I nominated Henry Tang. I think his work experience with the government is good for the people of Hong Kong," Mr. Li told a television crew early Friday. The comments by the 83-year-old tycoon come as Mr. Tang's chances of becoming chief executive look increasingly remote. Once seen as Beijing's favored candidate for the role, the scandal-plagued Mr. Tang trails far behind his main opponent, former cabinet member Leung Chun-ying, in the latest popularity polls. While Beijing likely will have the final say on the winner, analysts say the central government will need to take into account local public opinion in its decision because choosing an unpopular leader could jeopardize its influence over Hong Kong once universal suffrage is introduced in 2017 as promised. Mr. Li, who controls blue-chip developer Cheung Kong (Holdings) Ltd. 0001.HK -0.27% and conglomerate Hutchison Whampoa Ltd., 0013.HK +0.74% said he will vote for Mr. Tang in the March 25 election, in which 1,200 predominantly Beijing-backed business and political elites will cast their ballots. Mr. Li, one of the biggest corporate players in Hong Kong, also denied speculation he would withdraw his investments from the city should Mr. Leung win the election. Apart from being one of the city's biggest landlords, Mr. Li also controls the smaller of Hong Kong's two power providers and operates the city's biggest supermarket chain, electronics retailer and drug store chain. While Mr. Li's business acumen has earned him the nickname "Superman," many local residents and politicians have become increasingly critical of his and other tycoons' monopoly over land and other resources in this city of 7 million. Many of Hong Kong's leading developers continue to back the 59-year-old Mr. Tang, who has close ties with the city's business community, despite recent questions against his integrity after he admitted to extramarital affairs and an illegal basement addition to his luxury home. Meanwhile, analysts said the relationship between the strong-minded Mr. Leung and many of the city's developers has been tense. However, he is more popular with the public due to his humble family background, although some have criticized him for being too loyal to Beijing. The Beijing government has reiterated that it would accept either candidate as chief executive. Despite reservations developers have about Mr. Leung, companies will likely support Beijing's choice, said political commentator James Sung. Many of them have significant investments in mainland China. "Almost all of Hong Kong's most valuable land is already in the hands of these developers. This would continue to allow them to have huge bargaining power when dealing with the future chief executive—be it Leung or Tang," said Mr. Sung.

A Hong Kong-mainland energy consortium is in talks to acquire a majority stake in Castle Peak Power (CAPCO), Hong Kong's largest power-generation firm. CLP Power, which owns 40 per cent of CAPCO, said yesterday it had joined with China Southern Power Grid to negotiate buying a 60 per cent stake in CAPCO from United States firm ExxonMobil Energy. The deal, if it happens, would give China Southern unprecedented access to the city's closely-held electricity market. But it would also mean ExxonMobil's exit from the city's power market. CAPCO owns three power plants in Castle Peak and Black Point in Tuen Mun, as well as Penny's Bay on Lantau. The plants have a combined generation capacity of 6,908 megawatts, and were valued at HK$22.68 billion as of December 31 last year, according to CLP's annual report. China Southern does not own any power-generation assets. It solely distributes and transmits electricity in five southern mainland provinces - Guangdong, Guangxi, Yunnan, Guizhou and Hainan. CLP Power is the larger of Hong Kong's two electricity suppliers, serving customers in Kowloon, the New Territories and Lantau. The potential deal marks the second attempt by mainland state-owned power firms to break into the city's market that is dominated by CLP Power and Hongkong Electric (SEHK: 0006), which serves the Hong Kong and Lamma islands. Former premier Li Peng's daughter Li Xiaolin, the head of state-owned power producer China Power International (SEHK: 2380), tried in vain to break into the market a few years ago. Analysts say ExxonMobil's desire to exit from the city's power market may be due to political and public resistance to raising tariffs. CLP Power was forced to reduce its tariff increase to 4.9 per cent from the previously proposed 9.2 per cent on January 1. It did so after wrestling with the government in the last two weeks of December. "It is a clear signal that ExxonMobil finds the investment no longer attractive," said an analyst at a Southeast Asian brokerage. "Unless partnering with either CLP or Hongkong Electric, it is virtually impossible for any outsider to step into the market." Some analysts are intrigued by the timing of the proposed deal. ExxonMobil was the largest US investor in the city in 2006, and it had threatened to shun Hong Kong if the renewal of the scheme of control agreement between the government and CLP Power resulted in a lower investment return. The scheme of control was renewed in 2008 after being enacted for 41 years to govern the return of CLP Power and Hongkong Electric's energy supply businesses in Hong Kong. The latest contract ties their profits to spending on fixed power assets. It stipulates that both firms will reap a 9.99 per cent return on average net fixed assets in use, compared with 13 to 13.5 per cent previously. Last month, Sir Michael Kadoorie, chairman of CLP Holdings (SEHK: 0002), delivered a rare criticism of the government. He said it had failed to inform or was having difficulties in explaining to the public the trade-off between using clean fuel and tariff increases. BOC (SEHK: 3988) International said the consolidation of the local power-generation sector could be neutral or adverse to CLP Power. 

Up to 12,000 residents who slip through the city's safety net of welfare and relief measures will get a one-off housing subsidy in a HK$60 million giveaway from the Community Care Fund, Chief Secretary Stephen Lam Siu-lung said. The proposal prompted a call from one lawmaker to turn the scheme into regular welfare for the grass roots. The plan is aimed at so-called N-nothings - a loosely defined group of people who cannot benefit from any of the relief measures offered in the annual budget because they are not welfare recipients, taxpayers or public housing residents. Tenants of subdivided flats or bed spaces are set to get help from the HK$10 billion government/business fund, following criticism that the latest budget neglected the N-nothings. "The scheme we are considering aims to help those who are inadequately housed, as we understand their difficulties in coping with daily life," Lam said yesterday. Those eligible could receive an allowance equivalent to two months of their rent, he said. Applicants must pass income limits to be set out by the fund, but existing beneficiaries of Comprehensive Social Security Assistance will not qualify, nor will property owners. "We do not want to have people obtaining double benefits," Lam said. "We do not know how much each family will receive, but we will make reference to those who live in public housing" in the wake of a two-month rental waiver for tenants of public rental flats under the last budget. "The monthly rent for a single tenant in public housing is about HK$900. This is a standard we will make reference to," he said. "We believe the financial implications of this scheme will be limited - somewhere between HK$50 million and HK$60 million." Democrats lawmaker Wong Sing-chi said the one-off subsidy was only a short-term measure to ease the outcry of the city's neediest people. "This is just a way for the government to temporarily smooth grievances from N-nothings, who are angered by the last budget," Wong said. "The subsidy should not be a one-off thing. It should be regular welfare for the grass roots." The last budget with its HK$80 billion worth of tax relief was criticised as a measure to please the middle class. Lawmakers have long berated Financial Secretary John Tsang Chun-wah for neglecting the N-nothings, who are not entitled to tax rebates or bonus welfare payments, mainly because their wages are too low to fall into the tax net. They are also not entitled to public housing rent waivers because they are still in the queue for a flat and live in a subdivided private flat. They may not even benefit from the electricity subsidy as it goes to the landlord. Welfare sector legislator Peter Cheung Kwok-che welcomed the proposal, but said the income limits should not be tighter than those for public housing residents.

 China*:  Mar 18 2012 Share

Gilles Dufour, design director of Erdos Group, believes blending European and Chinese aesthetics in designs will help the brand revitalize itself. French designer Gilles Dufour breathes new life into a Chinese company - Walking into Gilles Dufour's Beijing office, one thing immediately strikes the eye: the amalgam of Western and Eastern culture. Colorful traditional Chinese silks are strewn around and on the sofa and desks, and European artworks, most of them abstracts, hang on the walls. Together they add up to an unusual mixture of soft harmony and romantic flair. "Don't you think it is amazing ... the two different styles together?" says Dufour, a former art director for Chanel who helped the French fashion powerhouse's chief designer Karl Lagerfeld for almost 15 years. "One is reserved and peaceful, while the other is enthusiastic and free." It was enthusiasm that brought Dufour, now 60, to China to work for the Erdos Group, which makes cashmere wear. The world famous designer says working here is about much more than money or fame. Being here, he says, has led him onto new paths of creativity that have revitalized his life. After being engaged in the European fashion industry for 37 years, he says, what he fears most is a lack of inspiration. "The Western fashion industry is exciting, of course, yet fast developing China, this glorious country with time-honored history, attracts me very much. I (wanted) to change my life path and immerse it with the development of this country." As for Erdos Group, for whom Dufour is design director, it needs to change a lot to attract more customers and expand its international market, he says. Erdos, reputedly China's biggest cashmere brand, needs to change because in the past its design has been aimed mainly at elderly people, he says. Erdos had a turnover of 7.74 billion yuan ($1.22 billion, 953 million euros) last year, a 13.8 percent increase compared with 2010. The growth in sales figures has been accompanied by marked changes to the company. "The general public usually held the stereotype that cashmere clothes are out of date and mainly for middle-aged people," says Dufour, who has worked as chief design director for Balmain, Pringle and other major fashion brands. Modernizing the designs and pitching them to younger people is a big challenge, he says. "If using one word to describe why I chose Erdos, this domestic brand, as a new starting point for my artistic career, 'change' tops the list. Not only for Erdos, but also for me. "When both sides meet and want to revitalize together, sparks emerge. So I became the first European designer to be hired by the Chinese company." He believes that blending European and Chinese aesthetics in the designs can help the brand revitalize itself and become internationally competitive. Once a month Dufour, who splits his time between Paris and Beijing, flies to the Chinese capital to show to his Chinese colleagues designs and pictures he has collected in Europe, and then decides which patterns should be put into production. As part of the makeover for the product line, he has introduced new materials such as cotton and leather into the cashmere clothes to rejuvenate them. "If all of the clothes are just made from cashmere, they are boring. What the European (design) focuses on most is diversification. It is like making up your cashmere doll. You can make up its face and decorate it with different ornaments." Given Dufour's undoubted position in the lofty heights of the global fashion industry, anyone meeting him is likely to be surprised at how down to earth he is, which may well be reflected in his designs. Unlike many European designers who are keen on extravagant designs that can be impractical as everyday wear, Dufour wants his products to be readily accessible by the public. "A designer should make products tailored to the target customers, and since Erdos wants to attract customers from all ages and social groups, I do not go to extremes." Well aware that his knowledge of Chinese culture is limited, Dufour sometimes watches Peking Opera, visits the renowned 798 art zone in Beijing and strolls the streets of the capital observing what people are wearing. "A domestic brand such as Erdos needs to establish a strong customer base domestically first and then (enter) the overseas market," he says. Under his leadership, the brand catalogue has become a lot weightier. In 2008 the autumn-winter catalogue consisted of 800 items; these days the line-up is about 1,200, Erdos Group says. It is also largely because of Dufour's influence that the way Erdos shops look has changed, the aim being to offer customers a more enjoyable shopping experience in elegant surroundings with the help of better lighting, decor and displays. Zhang Yiling, general manager of Erdos Garment Co Ltd, who directly oversees design, says: "What attracted us most to Dufour was not his fame in the fashion industry, but his idea of innovation. We can provide him with the best platform to bring his innovation into full play." ufour says he was excited to join Erdos as it was going through a transformation. "I can enjoy greater freedom to realize my design ideas in this fast developing company than in other established fashion houses like Chanel." He says he is eager to see some Erdos products sold in Paris. "A lot of my friends are amazed by my products for Erdos, even though they just get glimpses from the product catalogue. They always ask me where to buy." His success in China has proved his choice to work for Erdos was the right one, he says. "When I took the position as Erdos design director, lots of my friends said I was taking an adventure. In many people's minds, China still lacks the favorable conditions for arts and fashion. (It's) mainly famous for the cheap labor and relatively low prices. But I am confident that domestic brands will experience fast growth and enjoy long-term success." Dufour says China has many advantages in design because it has accumulated a lot of experience in doing OEM for big foreign brands. "And now Chinese companies are also making efforts to establish their brands. I strongly believe they will realize their goals, but branding requires time and patience. It can take dozens of years to catch up with the foreign names." He has exerted his considerable influence in the industry to help the group tap the international market. With his help, Erdos Group has successfully developed several original equipment manufacturers of international brands such as Chanel to work for the Chinese company to produce evening dresses and jewelry such as necklaces. And whenever and wherever he meets old colleagues, he shows them his Erdos designs. "I am also a marketing person for Erdos group, not just a designer," Dufour says, grinning broadly.

China Mobile was the world's biggest mobile operator last year, with 649.6 million subscribers. China Mobile (SEHK: 0941,) said yesterday Lu Xiangdong had resigned as an executive director and vice-president of the telecommunications giant because of his inability to perform his duties amid a probe related to financial issues. The company said in a filing to the stock exchange earlier this month that Lu was "assisting judicial authorities in the investigation of suspected financial-related issues". Lu oversaw the Beijing-based carrier's development strategy, planning and construction, in addition to procurement, according to the company's annual report last year. The resignation leaves the company's upper management depleted amid rising competition from industry rivals. Chairman Wang Jianzhou, 63, is expected to retire this year. Wang said: "I am ready to retire. As to when that will happen, it is up to the upper-level department to decide." Meanwhile, the company is still talking to Apple about offering iPhones to customers while rivals China Unicom (SEHK: 0762) and China Telecom (SEHK: 0728) are already issuing the popular smartphone. "I can't reveal how many iPhone customers we have, "but every month a big number of iPhone users subscribe to our service," Wang said. "Apple and China Mobile both hope to realise co-operation as soon as possible as it will benefit both sides." An HSBC research report this week said it expected China Mobile to be able to sell the iPhone 5 by September, and upgraded the company's stock to "overweight" with a target price at HK$100. China Mobile, the world's largest telecommunications operator with 649.6 million subscribers at the end of last year, yesterday reported net profit of 125.9 billion yuan (HK$153.9 billion) for last year, up 5.2 per cent from 119.6 billion yuan in 2010. Revenue rose 8.8 per cent to 528 billion yuan. The mainland is the world's biggest mobile-telephone market, with 987.6 million users by the end of January. But as its new users are mostly from the rural areas, the average revenue per user (arpu) has been decreasing in recent years. China Mobile's monthly arpu for last year was 71 yuan, down 2.3 per cent from 2010. The company said capital expenditure for this year would be 131.9 billion yuan, 2.6 per cent more than last year's 128.5 billion yuan. It will be used on upgrading its technology and coverage in the country. This figure does not include the amount that will be spent on the construction of its 3G, or TD-SCDMA (time-division synchronous code division multiple access), and 4G, or TD-LTE (time-division long-term evolution) networks, as the money will come from parent firm China Mobile Communications. Chief executive Li Yue said the company aimed to add 30 million 3G users this year. To realise this target, he said the firm would increase handset subsidies to 20 billion yuan, a rise of 17.6 per cent from last year. China Mobile shares yesterday rose 0.53 per cent to close at HK$84.65.

China overtook the United States to become the top foreign investor in Germany in 2011 in terms of investment project numbers, according to statistics released by the Germany Trade & Invest (GTAI) agency on Thursday. Chinese investment projects in Germany have totaled up to 158, ahead of the United States '110, Switzerland's 91 and France's 53, said a statement by GTAI, the economic development agency of the German government. The foreign investment projects in Germany mainly concentrate in the mechanical engineering and automotive sectors, which account for 20 percent of the total, as most of them involved in the new production bases, in comparison with 13 percent being pumped into the sphere of new technologies, 6 percent into the field of renewable energy. In a latest sign of the strong Chinese investment tide in Germany, automotive supplier Heibei Lingyun Industrial Group Corporation earlier this week agreed to buy Kiekert, a German maker of latch systems for cars. Early this year, Chinese construction equipment manufacturer Sany Heavy Industry wound up a landmark acquisition of Putzmeister, a German engineering firm. The deal has been deemed as one of the biggest investment projects in the mechanical manufacturing and engineering sector, the pillar industry of the German economy. More than half of the total foreign investments in Germany still come from the European countries, according to the GTAI.

US President Barack Obama talks about a trade case against China with John Bryson, commerce secretary (left), and Ron Kirk, US trade representative, at the White House on Tuesday. The US, EU and Japan jointly requested consultations with China under the WTO framework in a challenge to China's restrictions on exports of rare earths. China will soon consult with the United States, European Union and Japan on the nation's export restrictions on rare earths, tungsten and molybdenum, the spokesman for the Ministry of Commerce said on Thursday. "China will properly respond to the consultation request from the three (parties) following the dispute settlement procedure of the World Trade Organization, and consultations will soon start," Shen Danyang told a news conference in Beijing. On Tuesday, the US, EU and Japan jointly requested consultations with China under the WTO in a challenge to China's restrictions on exports of rare earths, a group of 17 key elements used in high-technology products including hybrid car batteries, wind turbines and energy-efficient lighting. Under WTO rules, China has 10 days to respond to the request. A failure to respond, or failure to reach agreements within 60 days, would lead to the establishment of an expert panel to investigate and rule on the case. "China's policy of managing the export of raw materials is justified and in line with WTO rules. It aims to protect the environment and resources, and it is not intended to limit free trade, nor to distort trade for the protection of domestic industries," Shen said. Li Chenggang, head of the ministry's department of treaty and law, told China Daily on Tuesday that he is "neither optimistic nor pessimistic about the final result of the case". Sang Baichuan, dean of the Institute of International Business at the University of International Business and Economics, expressed worries that China has a high possibility of losing the case. "The rare earths case is a follow-on from the dispute on China's restrictions of nine raw materials. But the WTO did not support China's claim of environmental protection and resource exhaustion in its ruling in January," Sang said. The rare earths case came as US President Barack Obama approved a bill on Tuesday to impose countervailing duties on non-market economy goods. US Trade Representative Ron Kirk said on Wednesday that "the launch of the case against China, along with the creation of the Interagency Trade Enforcement Center, reflects the Obama administration's commitment to make all of our trading partners play by the rules". Shen said that China rationally determines annual export quotas after considering domestic and global market conditions, as well as the carrying capacity of resources and the environment. The quota "roughly meets the normal demand in the global market, which shows that China is a responsible member of the WTO", Shen added. China supplies more than 90 percent of the world's rare earths demand. Its reserves account for 36.4 percent of the world's total. Foreign trade - Turning to trade, the deficit situation of the first two months of the year isn't likely to persist throughout the year, and the government will take steps to stabilize foreign trade, Shen said. The trade deficit in February, at $31.49 billion, "was mainly caused by the (Lunar New Year) holiday distortion and is not likely to continue through the year", he said. "Overall, China will have a trade surplus in 2012, though the surplus will continue to narrow, and its contribution to the GDP growth will further drop amid the pursuit of more balanced trade," he added. China's exports in February rose 18.4 percent year-on-year to $114.47 billion, while imports surged 39.6 percent to $145.96 billion, according to the General Administration of Customs. Shen added that "appropriate rises in labor costs will upgrade exporting industries, optimize the manpower structure and drive exporters to invest more in research and design and overseas sales networks".

An emigration agency helps a client in Nanjing, Jiangsu province. Of about 960,000 Chinese with assets worth more than 10 million yuan ($1.6 million), 60 percent were either thinking about emigrating or taking steps to do so, according to the Private Banking White Paper 2011, released by Bank of China Ltd and the Hurun Report last year. New figures reveal the true cost of the country's 'investor emigration' The scale of the exodus of wealth from China caused by investor immigration is much larger than previous estimated, according to China Daily's interviews with emigration agents and experts. Last month, Legal Evening News, a Beijing metropolis daily, said 10 billion yuan ($1.57 billion) has found its way abroad annually since 2009. The figure was based on the investor emigration requirement and the number of investor emigrants publicized by the governments of the United States, Canada and Australia. Investor emigrants to those three countries are believed to account for 80 percent of the total number of Chinese emigres. However, emigration agents said the figure underestimates the real scale. That's because many people will transfer more money to their new 'home' countries once they've obtained permanent residency. "Usually they will at least buy a house after they get residency," said Cai Hong, a manager with emigration consulting company HHL Overseas Immigration & Education. "And they usually make a one-off payment,"Ma said, referring to the fact the emigrants have no need to resort to a mortgage. Considering the average price of a house in the major cities of the United States, Canada and Australia - the countries where Chinese investor emigrants are most likely to settle - and the fact that around 80 percent of them will buy a house, an estimated 10.3 billion yuan finds its way into the property markets of the three countries per annum. Adding in the money invested to secure permanent residency, which China Daily estimates to be 21.49 billion yuan, and the estimation that the three countries account for 80 percent of the emigrant population, the total wealth exodus could reach at least 39.75 billion yuan a year. The Canada case - For its safety, relatively short waiting time to obtain permanent residency and good returns on investment, Canada has always been the premier choice for wealthy Chinese looking to obtain permanent residency through investment, emigration agents said. Prior to 2010, a foreigner simply had to invest C$400,000 ($405,600) and prove net assets of C$800,000 to apply for permanent residency. However, in 2010, Citizenship and Immigration Canada, the country's immigration authority, doubled the threshold to limit the explosion in applications. Demand has been so strong that Canada imposed a cap of 700 applications per annum, starting on July 1, 2011. That quota was quickly filled, with 697 of the 700 applications coming from China. The cap put a brake on the fever. The number of successful applicants from the Chinese mainland dropped from around 2,000 in 2010 to 697 in 2011, according to figures from the Canadian immigration authority. However, potential immigrant investors quickly found another point of entry through Quebec's investor immigrant program. Since last July when the federal government's door closed, the Quebec program has seen the initiation of 200 applications from Chinese people every month. "We expect the federal government's program to reopen this year and another 2,000 Chinese investors will get permanent residency," said Ma Yuan, an emigration expert with J & P Star Consulting Co Ltd, a Beijing-based emigration consultancy. She said the Canadian program is particular favored by Chinese investors for its safety. Unlike the US program, which requires investment before permanent residency is granted, applicants to Canada invest their funds only after permanent residency is approved. The C$800,000 seed capital is returned to the applicants five years after residency is granted. Applicants can even invest just C$220,000 and obtain a loan of C$580,000 from Canadian banks to bridge the gap. The C$220,000 will be transferred to the bank that issued the loan as interest five years later. By comparison, the United States' investor immigrant program, the EB-5 program, despite its lower initial threshold (the minimum investment requirement is $500,000), does not guarantee against a loss of investment, which means that applicants might lose their seed capital and still not obtain permanent residency.

Hong Kong*:  Mar 17 2012 Share

Hongkongers will be among the first to get a two-centuries-old glimpse into a legendary emperor’s private garden in the Forbidden City, when a blockbuster exhibition opens at the Museum of Art in June. Emperor Qianlong, a major collector and patron of the arts during the Qing dynasty, had the garden built during his reign from 1735 to 1796. Its gates have never been opened to the public, and the exhibition will display 95 items – 43 from the garden and the rest from the Palace Museum. One-third of the artefacts are being shown outside the mainland for the first time, as part of Hong Kong’s celebrations of the 15th anniversary of the city’s handover from British rule. The museum’s chief curator, Eve Tam Mei-yee, said the exhibition is intended to unveil an “intimate” side of the emperor, who dedicated himself to collecting art treasures from across the country. “The exhibition gallery will be designed to reconstruct the sense of intimacy and the allure of Qianlong Garden,” Tam said. “It will attempt to show the emperor’s philosophical thoughts and religious beliefs, and his pursuit of longevity and eternal bliss through the design of the artefacts.” The artworks are exceptionally precious and were all hand-picked by the emperor himself, reflecting his taste, she added. The original garden, also known as the Ningshou Gong Garden, was located in the northeastern corner of the Forbidden City. The first phase of its restoration was completed in 2008, and the work is expected to continue until 2019. Some of the artefacts were shown in three cities in the United States last year, and Hong Kong will be the first Asian city to exhibit them. The exhibition will feature ink paintings, calligraphy, furniture, mural paintings, architectural ornaments and religious art on loan from Beijing’s Palace Museum, or Forbidden City. The highlights will include a stage for the emperor’s private viewing of operas; a portrait of the emperor in his prime, chasing a deer when he was 32 years old; and a panoramic painting of a domestic scene, depicting a perfect family in Qianlong’s eyes. Also on display will be a panel from a cosmogram – a symbol representing cosmological beliefs – in which Qianlong replaces the Buddha Amitabha at the pinnacle of Tibetan Buddhist heirarchy. The exhibition – “A lofty retreat from the red dust: the secret garden of Emperor Qianlong” – will be at the Museum of Art in Tsim Sha Tsui from June 22 until October. Admission fees are HK$20 for adults and HK$10 for students, older people and the disabled.

View of the entrance to the Galaxy Macau Hotel on Taipa island. Macau casino operator Galaxy Entertainment said on Thursday its net profit more than tripled last year. Casino operator Galaxy Entertainment Group (SEHK: 0027) said on Thursday annual net profit jumped more than three-fold, although just short of expectations, as wealthy Chinese flocked to its new US$2 billion casino, the only one to open in Macau last year. Relying heavily on gaming revenues, Macau has remained insulated from weakness in the global economy with mainland gamblers continuing to surge into the only place where they are allowed to legally gamble at casinos. Galaxy has seen its shares rocket 73 per cent higher in past 12 months, outperforming most of its peers including a 10 per cent gain for Wynn Macau. “We had a record breaking year in many respects with the opening of Galaxy Macau. We really believe the best is yet to come for Galaxy Entertainment,” Chief Financial Officer Robert Drake said over the phone. Galaxy, a US$10 billion company controlled by Hong Kong property and construction tycoon Lui Che Woo and 13 per cent owned by European private equity firm Permira, reported net profit of HK$3.0 billion for last year. That was up from HK$898 million a year earlier although shy of a forecast of HK$3.3 billion from Thomson Starmine, with analysts attributing the shortfall to bigger-than-expected losses on changes in assessing the fair value of financial instruments. Macau, a tiny enclave located on the heel of China’s southern coast has been a huge cash cow for casino operators including Sheldon Adelson’s Las Vegas Sands, and Sands China. Themed as a golden turreted palace and situated next to Sheldon Adelson’s gondola-filled Venetian property, Galaxy’s new resort helped its Macau market share surge to 22 per cent in October, making it the second-largest operator after Macau pioneer SJM Holdings. That market share has since fallen to 17 per cent in February, a level analysts expect it to keep despite the opening of a new Adelson’s casino in April. They remain bullish on the stock due to still buoyant demand from China’s burgeoning middle class who remain eager to spend heavily inside Macau’s kitschy casino fortresses. But Edwin Fan, an analyst at Bank of China’s Investment Banking Group in Hong Kong who rates Galaxy a buy as the group’s top casino pick, noted there were some risks of slower-than-expected VIP growth. “The ongoing slowdown in China’s economy could dampen consumer sentiment and enthusiasm for gambling,” he said. A potential sell-down of Permira’s stake after it sold some of its holding last year suggests downside risks for current shareholders but also a buying opportunity for others, he added.

Union keeps lid on ad campaign until eve of poll - HKU student body won't disclose more about its campaign against C. Y. Leung until March 23 - The Hong Kong University Students Union says it will not disclose more details about its controversial advertisement campaign against chief executive hopeful Leung Chun-ying until March 23 - two days before the election. The campaign, which cost the union HK$387,550, has drawn criticism; many people asked whether the decision was politically motivated and had undergone proper procedures. Union president Dan Chan Koon-hong yesterday remained defiant, saying the campaign was necessary and he would risk imprisonment for it. But his statement failed to address the criticisms directed at the campaign. In a rare move, the student unions at other seven tertiary institutions in the city signed a joint petition urging the HKU union to clarify its stance on the chief executive election. The controversy began after the union placed full-page adverts in eight newspapers, calling on Leung to explain what happened at a February 10 dinner attended by rural leaders, members of Leung's campaign team and a controversial businessman known as "Shanghai Boy". The move raised eyebrows, as the union had steered clear of previous controversies. Some former members of the union feared the campaign had compromised its neutrality, while others criticised it for giving legitimacy to a "rigged" election. Chan, a second-year social science student, yesterday said the move was to raise discussion over "black gold politics" - a term used to describe collusion between politicians and triads. "Even if that brings legal liability, or imprisonment, I'm willing to shoulder all the responsibility," he said. Chan was referring to a comment by Leung, who said he was told the adverts "contained legal problem[s]" but did not plan to take legal action against it. Leung made the comment on a radio phone-in programme in which Chan also took part. Chan said the decision to run an expensive advertising campaign, instead of using public statements or a press conference, was because old methods had failed to gain public attention. "Without spending the money, we would not have the chance to talk to Leung directly." A petition signed by the seven other student unions - the only one not to sign was that of the University of Science and Technology - said Chan's explanations failed to address their concerns. "We are not targeting HKU and do not want to split academia," said Eddie Chan Shu-fai, president of Lingnan University's student union. "But Chan has to explain their stance on the election, and why they asked Beijing to show its concern." Eric Cheung Tat-ming, an assistant law professor at the University of Hong Kong, said running advertisements during an election without candidates' consent could risk a legal challenge, but the party which printed the adverts could apply for court exemption if it could prove it had no intention of favouring certain candidates. Meanwhile, HKU alumnus Rocky Yung said he had filed a complaint to the Independent Commission Against Corruption against the HKU union, citing section 23 of the Elections (Corrupt and Illegal Conduct) Ordinance. The section states it is illegal for anyone, other than an election candidate or his/her expenses agent, to incur any expenses in connection with the election. A group of former HKU students also sent an open letter to the media condemning the students union's action.

Lines drawn in twin face-offs for chief rivals - The three chief executive candidates, who are expected to attend a forum and answer questions from members of the Election Committee on Monday, will have no chance to question each other, the organizer says. However, they will be able to slug it out tomorrow in a debate at RTHK Television House in Kowloon Tong. Monday's forum will be held from 7.30pm to 9.30pm at Kowloon Bay International Trade and Exhibition Centre. Bernard Charnwut Chan, the organizing committee chairman, said the format will be flexible. Veteran media host Ng Ming-lam will be the moderator of the forum's four sessions. The forum and tomorrow's debate could decide who will win the March 25 chief executive race. The Election Committee has 1,200 members. At the forum's first session, the candidates - Henry Tang Ying-yen, Leung Chun-ying and Albert Ho Chun- yan - will be given three minutes to "sell themselves." They will later field questions from the Election Committee members. They can put their questions in a box before the debate. About 15 members will have the chance to quiz the candidates in the second session. Each candidate will have 17 minutes to answer his questions. In the third session, the three hopefuls will answer questions from the public, who can leave queries on the committee's website. Ng will select 10 questions in the presence of the candidates' representatives before the event. In the fourth session, each candidate will be given two minutes to deliver his closing statement. Chan said the format was mapped out based on a similar forum conducted in the 2007 chief executive election for the two candidates - Civic Party lawmaker Alan Leong Kah-kit and Donald Tsang Yam-kuen. "Since no session was set up for candidates [Leong and Tsang] to directly question each other in the 2007 election forum, the committee decided not to insert such a session in this year's forum," Chan said. He added that the candidates accept the current arrangement. The forum will not be open to the public because the venue can accommodate only a few. He said the cost of organizing the forum is around HK$400,000, which is shared by 13 members of the organizing committee. It has invited Election Committee members to join the event and Chan hopes that they will also help to bear the cost. The committee estimates that around 600 to 800 Election Committee members will attend. RTHK will provide live coverage of the event.

Premier Wen Jiabao spoke out on Hong Kong's chief executive election for the first time yesterday - but still left the city in the dark about which candidate Beijing backs. He said at an annual press conference to mark the end of the National People's Congress session that he believes the winner on March 25 will have the support of the vast majority of Hongkongers. "I believe that, as long as the principles of openness, justice and fairness are observed and relevant procedures are complied with, the chief executive election will result in a leader who has the support of the vast majority of the people in Hong Kong," he said in a wide-ranging three-hour press conference. His remarks follow intense speculation on whether Beijing will indicate its preference for either Henry Tang Ying-yen and Leung Chun-ying. Leung supporter Lew Mon-hung said Wen's reference to a "vast majority" means Beijing tends to support Leung. Tang wrote in his election campaign website that he "very much agrees" with Wen that the Election Committee will go for a man who has the support of most Hongkongers as long as openness, justice and fairness are observed. Most NPC delegates and politicians believe Wen did not hint at which candidate Beijing favors. "The situation Hong Kong faces now is certainly difficult," Wen said. "But this reminds me of a sentence [late paramount leader] Deng Xiaoping said: 'Hong Kong people can definitely rule Hong Kong well. They need to have confidence.'" Wen said he would like to see Hong Kong again and visit the people of Amoy Gardens, the housing estate at Ngau Tau Kok at the epicenter of the SARS outbreak in 2003, where a total of 42 residents died. Wen last visited the city that year. He would also like to have exchanges with students at the University of Hong Kong. Wen said Hong Kong has been through a rough period since the handover, experiencing two financial crises. But Hongkongers have surmounted their difficulties under the SAR government's leadership and the city still has high status as an international financial center. But in the face of inflation and the economic recession, Wen said Hong Kong must work hard to improve the economy, the people's livelihood and foster democratic development. Issues such as education, housing and health must be handled well. NPC delegate and Hong Kong Federation of Trade Unions lawmaker Wong Kwok-kin said the next chief executive definitely needs to be popular and endorsed by most Hongkongers as it will be difficult to govern without support. He said he is leaning toward voting for Leung at this stage. Democratic Alliance for the Betterment and Progress of Hong Kong chairman Tam Yiu-chung said Wen did not indicate which candidate Beijing favors. Ocean Park chairman Allan Zeman said he will vote for Tang but will support Leung should Tang fail to win. Meanwhile, a University of Hong Kong's Public Opinion Programme poll of about 1,000 people conducted between March 9 and 13 shows Leung's popularity dropped one percentage point to 44 percent compared with an earlier poll. Tang's popularity edged up one point to 20 percent, while the third candidate - no-hoper Albert Ho Chun-yan - stood at 11 percent.

Premier Wen Jiabao yesterday assured Hongkongers that the March 25 chief executive election will produce a leader who enjoys the support of the "vast majority" of the city. Wen's remarks, at the final news conference of his tenure following the closing ceremony of the National People's Congress session in Beijing, came amid increasing speculation over which of the two front runners, Henry Tang Ying-yen and Leung Chun-ying, will win Beijing's approval ahead of the Election Committee's vote on March 25. Hong Kong and Macau Affairs Office director Wang Guangya said last July that the city's next leader, who will take over from Donald Tsang Yam-kuen in July, will require a "rather high degree of acceptance" by the public. "I believe that as long as the principles of openness, justice and fairness are observed and the relevant legal procedures are complied with, the Hong Kong people will elect a chief executive who enjoys the support of the vast majority of the people in Hong Kong," Wen said. Despite the city's per capita GDP reaching a record high of US$34,200 last year, Wen added, Hong Kong still faced challenges in view of economic uncertainty and a widening income gap. "Hong Kong now faces both difficulties and opportunities," he said. "The financial crisis in the world and the European debt crisis have exerted an adverse impact on Hong Kong and pressure is still there. "Hong Kong is under the dual pressures of slowing economic growth and inflation. Under such circumstances, Hong Kong must continue to work hard to develop the economy, improve people's lives, advance democracy and maintain social harmony." Wen also cited a saying, attributed to late paramount leader Deng Xiaoping , that "there should be confidence that the Hong Kong people can run Hong Kong well". Critics were divided over whether Wen's comments indicated Beijing's preferred candidate, with the political pundit James Sung Lap-kung saying they had covered only matters of principle and were impartial. "His stress on openness, justice and fairness implies that he doesn't want to see smear campaigns," Sung said, adding that he believed the social and economic issues touched on were the areas that Beijing wanted the next leader to address. Commentator Allen Lee Peng-fei said he believed Wen's mention of a leader backed by "the vast majority" suggested Beijing preferred Leung, who has been leading in opinion polls by 20 or more percentage points for several weeks. His view was echoed by Leung's supporters, including Chinese People's Political Consultative Conference delegate Lew Mon-hung. Political scientist Ivan Choy Chi-keung said Wen's remarks suggested the chances of a failed election were diminishing. "He seems to stress that the problem [of recent scandals] can be solved as long as the election is held according to procedures and in a fair and just manner," Choy said. Local NPC deputy Maria Tam Wai-chu said she believed Wen's remarks were objective and had no implications for either candidate. In a statement, Tang said he agreed with Wen that the city would elect a leader backed by the vast majority and expressed confidence in his abilities to handle the challenges spelled out by Wen. Leung made no comment. Pan-democratic candidate Albert Ho Chun-yan, who has no chance of winning, said a widely supported chief executive could be elected only if there was universal suffrage.

Hong Kong University Students Pay US$40,000 to Stir Up Hong Kong Elections - The University of Hong Kong’s student union took out a series of ads challenging Chief Executive hopeful Chun-ying Leung on his politics on March 12, 2012. To get to the bottom of Hong Kong’s latest election scandal, students at the city’s most prestigious university have spent US$40,000 – and are even willing to risk going to jail. The University of Hong Kong’s student union this week paid for a series of ads in eight local newspapers, demanding to know whether chief executive hopeful Chun-ying Leung – who leads public opinion polls with 44% support – has been fraternizing with gangsters and intends to practice “black gold politics,” a term referring to collusion between triads and politicians. The question posed by the students adds to scandals surrounding the two main candidates and concerns a controversy over whether Mr. Leung’s campaign backers were responsible for inviting a businessman, who holds alleged gang links, to a recent banquet they attended. Naturally, Mr. Leung’s team is in full damage control mode, and is attempting to distance themselves from Kwok Wing-hung, also known as “Shanghai Boy.” Locals already call the race, to be decided in just 10 days, as a face-off between a “wolf” and a “pig.” Mr. Leung is seen as a clever, if somewhat untrustworthy “wolf,” in contrast to his opponent, local business favorite Henry Tang, who’s been called a “pig” for his love of wine and complacent attitude. Since placing the $40,000 ads, HKU’s student union has found itself in a firestorm of controversy. According to Eric Tat-ming Cheung, assistant law professor at HKU, it’s likely that spending money on such ads violated local election law, though he also suggests a court case would have difficulty proving the students were actually intent on damaging Mr. Leung’s campaign. “They weren’t doing it in bad faith,” said Mr. Cheung. “If there was any violation, it was done inadvertently.” Even if they did violate Hong Kong’s election law, HKU student union president Dan Chan Koo-hong has told local media that he’s willing to go to jail if that was the case. He argued that Mr. Leung’s alleged ties to the world of Hong Kong’s triads are far more alarming than controversies about Mr. Tang’s illegally built basement that earlier stirred up calls for his resignation from the race. The student union didn’t return repeated calls for comment. “Maybe their [intentions] were good, but they shouldn’t use the money of the student union to do this kind of thing,” a Hong Kong Polytechnic University second-year student surnamed Kwok told China Real Time, noting that at the very least, his own student union wouldn’t be able to afford such an act. Political adverts haven proven an effective way to get attention in the past. Earlier this year a full-page newspaper ad denouncing mainlanders in Hong Kong as “locusts” galvanized local residents and sparked a similar fury of debate. Student unions at seven other schools yesterday released a joint petition urging HKU to clarify its position in the chief executive election, noting that it was odd that the union’s ad only targeted one candidate. Spending money in connection with an election is illegal for anyone other than a candidate or one of their agents. However, Mr. Leung’s campaign says it has no intentions of pursuing legal action against the students. Ahson Wong, student union president at Hong Kong Baptist University, said in an interview that the students he represents aren’t supportive of either Mr. Tang or Mr. Leung. Likewise, the Chinese University of Hong Kong’s student union has urged the 1,200 members of Hong Kong’s Election Committee—who are the sole voters in this current election—to cast blank ballots on March 25, when the contest ends. Though the ads may have been expensive, the student union coffers at the University of Hong Kong remain remarkably flush. According to Mr. Chan, the union drew on its HK$10 million (US$1.3 million) reserve fund to support the ad—not the HK$1.8 million (US$232,000) the union annually receives in student fees.

Taiwan protested yesterday over a Philippine plan to explore for oil and gas in disputed waters in the South China Sea. "The Reed Bank is part of the Spratly islands ... and we reject any claim or occupation by any means of the islands and the surrounding waters," the foreign ministry said. The Philippines is planning to accept bidding to explore and drill for oil and gas in the Reed Bank, according to the ministry. Taiwan, Vietnam, Brunei, China, Malaysia and the Philippines claim all or part of the Spratlys. All the claimants except Brunei have troops based on the archipelago of more than 100 islets, reefs and atolls, which has a total land mass of less than five square kilometers. The Taiwan coast guard has a garrison of 130 on Taiping, the biggest island. The security chief has called for more military resources.

 China*:  Mar 17 2012 Share

China's fifth-biggest lender, Bank of Communications (SEHK: 3328) (BoCom), unveiled plans on Thursday for a 50 billion yuan (US$7.9 billion) private share placement. Bank of Communications, China’s fifth-largest lender, said on Thursday that it will raise 56.6 billion yuan (US$8.9 billion) in a private share placement to replenish core capital. The bank said it would price each new Shanghai-listed share at 4.55 yuan and each Hong Kong-listed share at HK$5.63, in a statement posted on the Hong Kong bourse. HSBC Holdings (SEHK: 0005), China’s Ministry of Finance and the country’s pension fund were among the subscribers, it said. The deal would make BoCom the latest bank to tap the market to replenish capital following rapid loan expansion and tighter regulation. The bank’s Hong Kong- and Shanghai-listed shares have been suspended pending details of the plan, it said late on Wednesday. “A private placement is probably ideal under the current circumstances,” said Alex Lee, an analyst at DBS Vickers in Hong Kong. “These are likely to be long-term shareholders, and that removes the likelihood of selling pressure you may get if you have a general rights issue to a more fragmented general audience,” he said. IFR, a Thomson Reuters publication, reported last month HSBC, China’s finance ministry and the National Social Security Fund – the three biggest holders of BoCom’s Hong Kong-listed stock – would take part in the deal, citing two sources close to the lender. HSBC controls 20 per cent of BoCom. Raising funds from a private placement would help ease pressure on the stock price from a massive new supply of shares. BoCom’s Hong Kong-listed shares have risen 14 per cent so far this year, roughly in line with a 15 per cent gain in the broader Hang Seng index. BoCom, originally set up to fund communications and transport projects, has the lowest capital adequacy ratios of the five largest banks in China. Its 9.24 per cent core capital ratio compared with 10.57 per cent for larger rival China Construction Bank (SEHK: 0939), 10.03 per cent for Industrial and Commercial Bank of China (SEHK: 1398), 9.92 per cent for Bank of China and 9.36 per cent for Agricultural Bank of China Bank. China’s listed banks are expected to raise more than 100 billion yuan (US$15.78 billion) through equity financing this year next year to replenish capital, the official China Securities Journal reported in December. Earlier this month, Industrial Bank said it will raise up to 26.4 billion yuan (US$4.2 billion) by issuing shares to four institutional investors and use the money to supplement its capital base and improve its capital adequacy ratio. China is planning to roll out new rules on banks’ capital requirements on July 1, the 21st Century Business Herald reported last month.

China will change three members of the central bank's monetary policy committee, according to a circular released Wednesday by the State Council, or the Cabinet. The circular said the State Council has approved the appointment of Qian Yingyi, Chen Yulu and Song Guoqing as new members of the monetary policy committee of the People's Bank of China. Qian is currently the dean of Tsinghua University's School of Economics and Management. Chen is the president of the Renmin University of China, and Song is a professor of the National School of Development of Peking University. Meanwhile, Zhou Qiren, Xia Bin and Li Daokui will no longer be members of the committee, the circular said. The committee was established in 1997, tasked with advising on the country's monetary policies. There are currently 15 committee members, including central bank officials, ministers from other government departments and economists.

Cooperation between China and US healthy for both, premier says - Premier Wen Jiabao said on Wednesday that China will intensify its currency regime reform and the foreign exchange rate has possibly reached "equilibrium", a signal that there is little room for the renminbi to appreciate soon. "In the Hong Kong market, the non-deliverable forwards (a type of futures contract) have started to fluctuate in both directions. And this tells us that the exchange rate of the renminbi has possibly reached equilibrium," Premier Wen Jiabao said at a news conference at the end of the National People's Congress session. "China will go on intensifying foreign exchange reform, especially to allow relatively wider, two-way fluctuation." The yuan has gained 30 percent in real terms since 2005. But it dropped by 0.7 percent against the dollar this year after surging by 4.7 percent in 2011, while China's exports have been hurt by the slackened global demand, especially because of the European debt crisis. In February, China's imports gained by 39.6 percent from a year earlier, and exports grew by 18.4 percent, causing a $31.5 billion trade deficit in February, the biggest since 1990. Experts said this will slow the pace of gains in the Chinese currency in the coming months. "The premier's remark on equilibrium means China will not allow its currency to rise by much in the short term, or say this year," said Li Wei, an economist at Standard Chartered Shanghai. "And it also shows the nation is not optimistic about China's economy and the exports dragged down by the European debt crisis," he added. In the annual Government Work Report last week, Wen cut China's expected economic growth rate this year to 7.5 percent. "China aims for quality growth in the economy, and we want to solve the problem that China's economy is unbalanced, uncoordinated, and unsustainable," Wen said. Some countries, including the United States, have been pressuring China to allow its currency to rise further, saying its trade surplus demonstrates the need. But Wen said China's foreign trade is "basically balanced", and the surplus dropped to 2.8 percent of the gross domestic product last year. During this year's NPC and CPPCC sessions, People's Bank of China Governor Zhou Xiaochuan said China may "appropriately" widen the yuan's trading band. "Premier Wen's remarks that China will continue to push for relatively big-scale and two-way fluctuation in the currency is excellent because it takes us a lot closer to the point that the renminbi can be freely traded," said Simon Derrick, head of currency strategy at BNY Mellon, an investment management and services company in New York. Stephen Gallo, head of market analysis at financial service provider Schneider Foreign Exchange in London, agreed. "Overall, the recent fluctuations in renminbi are more important from a structural rather than a cyclical perspective - in other words, China's words and its deeds certainly suggest that the case for a more flexible yuan is gaining traction on the part of policymakers," Gallo said. The best way to solve the "difficulties and frictions caused by the trade imbalance between China and the US is to cooperate", Wen said. Wen's remarks come at a time that trade and economic tensions between China and the US have been intensifying for several months, in which time the US lodged an appeal about China's rare earths exports policies with the global trade arbitrator and established an interagency trade enforcement unit to see whether nations, including China, play by the rules. On Tuesday, the US brought up a case before the World Trade Organization about China export restrictions on rare earths, 17 rare elements used in a number of high-tech items ranging from wind turbines to missiles. Japan and the European Union joined the US in challenging China's export policy. Wen didn't mention the rare earths case during the news conference, but he called for cooperation between China and the US. "Cooperation would lead to healthy and sustainable growth for both economies," he said. China and the US should promote "bilateral trade and two-way investment", enhancing cooperation in new energy, new materials, environmental protection, aviation and other high-tech fields, Wen said.

Hong Kong*:  Mar 16 2012 Share

Peter Pang and Muhammad Ibrahim of Bank Negara Malaysia. The Hong Kong Monetary Authority has teamed up with Malaysia's central bank and Euroclear Bank to launch a pilot platform for crossborder bond investment and settlement to boost Asia's bond markets. The platform will be launched on March 30, and will be expanded in the second quarter when the HKMA links up with JPMorgan and Euroclear to provide cross-border repurchase services, allowing banks to use bonds held through the platform as collateral for short-term funding in yuan, Hong Kong dollars, US dollars or euros. Malaysia's Bank Negara will not initially join this second phase. More than 30 banks and investment firms in the city have expressed interest in the new platform and other central banks in the region. HKMA deputy chief executive Peter Pang Sing-tong said the link-up between the clearing houses of the HKMA, Bank Negara and Euroclear would make it easier for investors to trade and settle Asian debt securities, particularly Hong Kong's dim sum bonds or yuan-denominated debt securities, as well as Malaysia's Islamic sukuk bonds. "The two products that have caught most attention of global investors are the sukuks in Malaysia and the dim sum bonds in Hong Kong," Pang said yesterday. He said the platform would be able to "connect the global market with the vast and increasingly prominent financial systems in the Islamic world and China". Issuance of dim sum bonds has surged in recent years, to 172 billion yuan or US$27.3 billion at the end of last year, just over four years after China started to allow yuan bond offerings in 2007. Sukuks in Malaysia rose to US$113.9 billion from US$41.3 billion in 2006. Pang said the platform would boost the debt market and hence improve financial stability in the region by encouraging investors to put more into long-term bonds instead of chasing short-term gains, possibly helping to avert a property bubble by diverting money into debt securities. Muhammad Ibrahim, a deputy governor of Bank Negara, said the platform "marks a major milestone for regional financial integration" and provided banks and investors with "an efficient and cost-effective access to the bond markets in Malaysia and Hong Kong". At present, investors wanting to trade dim sum and sukuk bonds have to use a variety of banks, which increases costs and settlement time. The new platform will save time, money and risk for banks and investors by setting up a centralised network. Euroclear will provide Asia debt securities information to users, and Asian investors can also trade and settle the 300,000 securities held at Euroclear. Anso Thire, a managing director and head of business development at Euroclear, said the cross-border collateral arrangement to be introduced in the second quarter would help banks manage liquidity. "As a result of the crisis in Europe and America, the days of unsecured lending are over," Thire said.

Mainlanders say cheers to HK for wine trade boom - Abolition of duty has established the city as regional hub for overflowing Asian markets, survey reveals - The consumption of imported wine on the mainland shot up sixfold in just five years, making it the fastest-growing market in the world, a global survey shows. That's something to raise a toast to, despite a forecast that the rate of growth will be much lower in the next five years. An industry practitioner describes the pace as "still solid growth". But when it comes to drinking it, Hongkongers are the thirstiest in Asia, doubling Japan's consumption. That could be attributed to the abolition of wine duty in 2008, said Vinexpo, a global wine exhibition that commissioned the study and is coming to the city in May. Hong Kong was "firmly established as the regional hub to the booming China and Asian markets" after the duty was scrapped, it said. The survey results, released by the International Wine and Spirit Research yesterday, cover 28 producing countries and 114 markets. Buoyed by the growing appetite on the mainland, Chateau Lafite Rothschild - one of the most renowned French wine estates - started to build its first Asian winery in Penglai, Shandong province, at the weekend. From 2006 to 2010, the volume of imported wine consumed in China grew more than six times. Affluent Chinese were reported in recent years to have driven up prices of expensive wines. They drank 262 million bottles of imported wine last year, making China the biggest market in Asia, overtaking Japan, the survey shows. But on a per capita basis, each adult Hongkonger drank an average of five litres a year. The Japanese came second with a rate of 2.4 litres per year, followed by the Singaporeans at 2.2 litres. Mainland China is fourth with 1.3 litres. By comparison, the French and Italians are the world's top tipplers, expected to down 50 litres of wine per capita by 2015, according to Vinexpo's data. Hong Kong re-exported 40 per cent of the 60 million bottles of wine it imported in 2010. Consumption in China for wine in general has also grown 1.4 times to 1.54 billion bottles from 2006 to 2010. It further grew to 1.87 billion bottles last year, making the country the fifth biggest market in the world. Although researchers expect China to power on, figures indicate a slower pace of growth. The study projects the rate of growth of imported wine would drop to 113 per cent from last year to 2015. Consumption of wine in general would increase by only 54 per cent, it says. Robert Beynat, chief executive of Vinexpo, still saw great potential in the mainland market. "[The pace of growth] won't be as fast as before, but it will be fast," he said. Vinexpo's chairwoman Dominique Heriard Dubreuil said she would not see it as a slowdown. "It's still solid growth." China is forecast to become the sixth biggest wine-producing country in the world in three years, after France, Italy, Spain, the United States and Argentina. Domaines Barons de Rothschild Lafite, Chateau Lafite's parent company, started construction of a 1.73-hectare winery on Sunday. It will be the third production base of the winemaker, which produces the world's most expensive wines. The project is a co-operation venture with Citic East China, the country's largest state-owned investment company. The first phase will cost 100 million yuan (HK$122.5 million). Vinexpo Asia Pacific will be held at the Convention and Exhibition Centre, featuring trade exhibitors from 30 countries.

Cathay Pacific's new 747-800 cargo jet sites on the tarmac at Chek Lap Kok airport. Cathay Pacific (SEHK: 0293) on Wednesday said its last year net profit plunged 61 per cent as it struggled with high fuel prices as well as softening demand for its cargo business, and warned of a challenging this year. The Hong Kong flag carrier said it earned HK$5.5 billion (US$709 million) last year, well below the record HK$14.0 billion profit it recorded in 2010, despite a 9.9 per cent increase in total revenue to HK$98.41 billion. “After a record year in 2010, we faced a number of major challenges last year,” chairman Christopher Pratt said in a statement to the Hong Kong stock exchange, where the airline is listed. Passenger revenue for the year rose 14.2 per cent to HK$67.78 billion. It carried a total of 27.6 million passengers last year, a rise of 2.9 per cent from 2010, as demand for premium class travel remained robust. Pratt said the challenges included the instability of the global economy, the weakness of the air cargo market, the impact of natural disasters in Japan and Thailand, unrest in the Middle East and continued high jet fuel prices. “Fuel is our biggest single cost and the persistently high jet fuel prices had a significant effect on our operating results last year,” Pratt said, adding that gross fuel costs surged HK$12.46 billion, or 44 per cent, last year. The airline also noted weakened demand for cargo shipments from its two key markets, Hong Kong and mainland China, as well as the European market, due to falling exports amid weak consumer sentiment. Cargo revenue for last year was up 0.3 per cent to HK$25.98 billion compared with 2010, but the load factor fell. Cathay Pacific shares fell 2.82 per cent to HK$15.14 after the announcement. Pratt warned of a challenging year ahead, with pressure on Cathay’s economy class yields and cargo business due to global economic uncertainties. “As a result, this year is looking even more challenging than last year and we are therefore cautious about prospects for this year,” he said. “We will continue to be vigilant in managing our costs while not compromising the quality of our products and services or our long-term strategic investment in the business. Our financial position remains strong.” Cathay has a fleet of 133 aircraft and, along with subsidiary Dragonair, flies to more than 160 cities. Cathay’s announcement comes as the aviation industry comes under pressure from soaring fuel prices and low demand, with regional players like Singapore Airlines, Qantas, Malaysia Airlines and Air New Zealand posting dismal earnings. Singapore Airlines has asked its pilots to volunteer for unpaid leave for up to two years and said it would raise fuel surcharges after reporting a 53 per cent plunge in third-quarter profit. Air New Zealand said it would slash more than 400 jobs after a 61.2 per cent slump in half-year profit, while last month Qantas said it would slash at least 500 jobs, cut costs and close two international routes after posting an 83 per cent slump in first-half net profits. Cathay has received the green light from Hong Kong’s civil aviation authorities for its application to raise passenger fuel surcharges by up to 7.0 per cent this month. The application is reviewed on a monthly basis. The International Air Transport Association in December cut its forecast for the sector’s profits this year to US$3.5 billion, down from its earlier forecast of US$4.9 billion. The IATA warned of losses of more than US$8.0 billion under a “worst-case scenario” in which the euro zone debt problem evolved into a full-blown banking crisis and a European recession.

Gloomy Hiring Prospects in Hong Kong - Stocks are sizzling in Hong Kong, up 16% this year, but when it comes to hiring it looks more like a bear market, with the city’s employers feeling the gloomiest they have since 2009. According to survey of 810 local employers conducted by ManpowerGroup, employer hiring expectations are the weakest they’ve been since the fourth quarter of 2009. Over 80% of those surveyed expect that their staffing levels will stay flat in this upcoming quarter, while just 11% anticipate that such levels may expand. That’s in sharp contrast to the mood last year around this time, when optimism over China and Hong Kong’s economy prompted nearly 70% of Hong Kong respondents to a Hudson Highland Group Inc. survey to say they planned to increase hiring. Hong Kong’s GDP growth dropped from 4.3% in the third quarter of 2011 to 3% at the end of last year, notes Lancy Chui, Managing Director of ManpowerGroup Hong Kong, resulting in “less confidence” in employment prospects. She also cites “surging retail rents” as a factor in explaining Hong Kong’s tamped-down job creation, as well as financial headwinds more globally. Plus, the banking sector that lies at the heart of the city has endured job cuts, especially at Western banks suffering the fallout from Europe’s debt crisis and a generally weaker global economy. Students about to graduate are still feeling relatively optimistic about their prospects, said Herman Chan, who directs careers and placement at the University of Hong Kong. However, he said, the number of companies that have posted jobs online to target HKU students has dropped slightly, as have the number of jobs they’ve been offering. “People are always asking me if I have a crystal ball,” Mr. Chan said in an interview, describing himself as “rather cautious” in his attitude toward those current job-seekers. “My expectation is [the job market] will be similar to 2011 for graduates, but not better.” Across the Asia Pacific region, Manpower reports, their survey found that employers are feeling most buoyant about new hires in India, Taiwan, New Zealand and Singapore—and most wary of adding new staff in Hong Kong and Japan. Still, if local employers hesitant to invest in more staff needed more persuading, they could refer to a new report (pdf) by the Economist Intelligence Unit that shows Hong Kong’s workforce boasts the highest level of human capital in Asia—earning top marks on quality of education and healthcare, as well as levels of risk-taking and entrepreneurship among its citizens. Globally, only Dublin outranks Hong Kong on that measure.

Kazuo Okada, chairman of Universal Entertainment Corp., in Hong Kong on Feb. 28. Food Fight: Okada Takes His Beef (And Pasta) to Hong Kong - Japan gambling mogul Kazuo Okada says Steve Wynn, with whom he’s embroiled in an explosive legal battle, built his first casino called “Wynn” as a “monument to himself.” But Mr. Okada seems to be taking a cue from his former business partner-turned-nemesis by building a restaurant named after himself. Less than 36 hours after filing a 107-page countersuit against the man who had once pledged his love to him–and with whom he had invested nearly $3 billion in assets–Mr Okada bounced back with an announcement about his new business venture. K.O. Dining Group, a new hospitality brand launched by Mr. Okada’s pachinko empire Universal Entertainment Corp., has plans to open three fine dining restaurants and a 10,000-bottle wine cellar this spring at the Harbourfront Landmark skyscraper in Hong Hum, a neighborhood in Hong Kong’s Kowloon area that is popular with Japanese expatriates. The group is also “actively” seeking opportunities to expand further in Hong Kong and beyond, according to executive director Yohei Nakamura. An earlier Facebook event posting shows the group held recruitment fairs Nov. 29 and Dec. 6, originally hoping to launch Japanese restaurant “Kazuo Okada,” Chinese establishment “Yu Lei,” Italian restaurant “Messina” and the “Chairman’s Cellar” in February. That was the same month Wynn Resorts Ltd. closed “Okada,” a Japanese restaurant at Mr. Wynn’s Las Vegas casino that he had named after his former partner and once described as his favorite. A temporary brown wall decorated by a giant mirror is now hiding the lavish restaurant that once wowed diners with super fresh ingredients served at tables overlooking a waterfall and koi pond. A Wynn spokesman said the closure was due to a long-planned renovation. The head chef at Mr. Okada’s upcoming “Kazuo Okada” restaurant is Hirofumi Imamura, according to K.O. Dining. Also on his resume: executive chef at the Wynn Macau “Okada” restaurant, which is still open, and executive sous chef at the now shuttered “Okada” at Wynn Las Vegas. A representative for K.O. Dining declined to comment on the Wynn dispute. A representative from Wynn didn’t immediately return requests for comment. This isn’t the first time something has found itself off the menu following a Wynn divorce. The popular “Elaine Wynn salad” at the lively Café Esplanada in Mr. Wynn’s Macau casino was renamed the “Wynn Mediterranean salad” after he and Elaine Wynn divorced for the second time in January 2010.

 China*:  Mar 16 2012 Share

Real estate in Shanghai is set to take off again with the introduction of lower mortgage rates for first-home buyers. Property developers are happy too. State banks cut rates for first-home buyers - Potential property owners in Shanghai get 10 per cent discounts as lenders push to develop mortgage business in one of the mainland's richest cities - The mainland's big state banks and their smaller rivals in Shanghai have rapidly revived efforts to attract local mortgage clients, offering first-home buyers discount rates much lower than last year's industry average. The move comes at the same time as cashed-up Shanghai locals use a loophole in the mortgage approval system to buy a second or even third home as investments, gambling on the uptrend of property prices in China's richest city this year. At least three of the Big Four state-owned banks - Agricultural Bank of China, Bank of China and China Construction Bank (SEHK: 0939, announcements, news) - started to offer a 10 per cent discount to the benchmark mortgage rate this month to those who want to buy their first home in Shanghai, according to sources. The minimum requirement of property down payment remains unchanged at 30 per cent. Agricultural Bank of China's (Agbank) Shanghai branch is understood to have been among the first to announce the mortgage discount a few weeks ago. Agbank's move is seen in the local banking and property industry as a catalyst pushing more banks to join this latest wave of mortgage business competition. "It's no longer a secret," said one person who declined to be identified as he was not authorised to speak to the media. "Initially, Agbank staff promoted the 10 per cent discount thing quietly and privately, but now it's public knowledge among property agents and buyers." It is not known how long such mortgage discounts will last but Agbank's recent strong efforts to promote mortgage business in Shanghai came after a decision from management at the bank's headquarters in Beijing, said one of the people. Such moves are certainly good news to some cash-hungry property developers as they want quick capital returns to ease financing troubles. Beijing had asked domestic banks to support first-time home buyers, the official China Securities Journal reported on Tuesday, citing a government document. Share prices of most listed developers rose on the news with some stock even hitting the 10 per cent daily uplimit. Some smaller rivals of Agbank such as Shanghai Rural Commercial Bank also recently began to offer 10 per cent discount mortgage rates to first-home buyers in the city, said one of the people. Mid-sized China Merchants Bank (SEHK: 3968) and Shenzhen Development Bank are mulling similar moves to lure property investors in Shanghai, one of the most expensive cities on the mainland in terms of living cost and property prices. It is so far unclear whether such policies might spread to other mainland cities as different branches of the big banks had the authority to set mortgage rates above or below the regulatory benchmark rate, said the people. Last year, many banks offered 1.1-1.2 times the benchmark rate amid the government's efforts to curb fast-rising property prices. Meanwhile those who want to buy second or third home in Shanghai are exploiting an unusual loophole to pretend they are first-home buyers when applying for mortgages. A technical error in the current approval system has meant the banks can only read ID cards with all Arabic numerals, something they have to do to verify if the ID card holder is a first-home buyer. This meant someone whose ID card contained the letter "x" rather than all Arabic numerals could apply for as many mortgages as they wanted as a first-home buyer, said a banking source in Shanghai. "Some rich people are looking for those so-called X ID cards. They want to collect the cards, buy properties then sign an under-the-table deal with those card holders to make sure the rich people are the real owners of these properties," said one banker. He said this practice reflected the high call for investment properties. The problem has been identified and officials are working to fix it.

The yuan fell versus the dollar on Wednesday, and has weakened 0.68 per cent this month as the People’s Bank of China (PBOC) widens the currency’s trading band via its mid-point. While the PBOC has talked about a widening of the yuan/dollar trading band for years without matching words with deeds, it appears to be serious this time. The mid-point has had its second-biggest 10-day loss since China established a domestic foreign exchange market in 1994. In the government’s clearest signal that it is ready for two-way trading of the yuan, Premier Wen Jiabao said on Wednesday that China will intensify reforms of its currency regime and allow the yuan to float more freely. “In the Hong Kong market, NDFs have started to fluctuate both ways. This tells us the yuan is possibly near a balanced level,” Wen told a news conference on the last day of the this year National People’s Congress meeting. Still, for now the PBOC keeps a tight grip of the yuan’s value, with its midpoint largely deciding the yuan’s direction and the extent of a daily fall or rise, while the yuan has continued trading in a relatively narrow range. Dealers said the market may well lose its direction if the PBOC loosens its grip immediately because Chinese companies have never been given the right to price the currency. As a result, any reforms of the yuan’s pricing mechanisms will take time, dealers said, warning against possible excessive interpretation of the recent yuan depreciation. “The PBOC appears to be really doing something this time to let the yuan move more widely,” said a dealer at Chinese commercial bank in Shanghai. “But it has not nudged from the position that it is only the central bank that decides the value of the yuan,” he said. “So at least for now, you still cannot look at the market to see the direction of yuan movements. You still have to guess the PBOC’s intention.” Spot yuan was trading at 6.3364 against the dollar at midday, weaker than 6.3270 at Tuesday’s close and dropping 0.68 per cent from 6.2936 at the end of last month – exactly the amount of loss the PBOC has permitted for its midpoint in the same period of time. Before Wednesday’s trading began, the PBOC set the yuan’s midpoint at 6.3328, weaker than Tuesday’s 6.3259. The PBOC’s fixing has lost 0.68 per cent over the past 10 trading sessions. The midpoint is the daily base rate from which the yuan can rise or fall 0.5 per cent in a day, used by the PBOC to help express the government intentions for the yuan’s value. Offshore, benchmark one-year dollar/yuan non-deliverable forwards (NDFs) started to imply yuan depreciation late on Tuesday and implied a yuan fall of 0.17 per cent at midday compared with a fall of 0.10 per cent implied at Tuesday’s close. The spread of the spot yuan traded in Hong Kong and in the mainland exchange in Shanghai narrowed to only 16 pips from 125 pips at the close on Tuesday. Dealers trading in the domestic market warned that the greater volatility of yuan/dollar trading will not automatically lead the yuan to depreciate against the US dollar. The yuan is still expected to appreciate this year, although the pace in the first half may slow due to China’s weakening export growth, they said. The currency is expected to rise 0.7 per cent in the first half, less than half of the 1.9 per cent pace seen in the same period last year, traders said. While the central bank is likely to allow the yuan to stage more swings in coming months, traders expected the currency to move mainly in a range of 6.25 to 6.35 per dollar, and end the first half at around 6.25. Many traders believe the government sets undisclosed targets for the yuan’s exchange rate to help it manage the economy.

China's Wage Hikes Ripple Across Asia - More Asian governments are pressing businesses to hike wages as a way to prevent outbreaks of labor unrest, raising the specter of higher manufacturing costs for global companies—and the products they sell world-wide. In the latest move, Malaysia's cabinet has approved the country's first-ever minimum wage to be imposed soon, according to people familiar with the matter. The decision follows similar moves elsewhere in the region, as officials from Thailand to Indonesia follow efforts by China over the past two years to boost pay after years of widening gaps between rich and poor. Global companies already have been facing higher labor prices in China over the past year, despite a weak global economy, as workers demand a greater share of the country's economic boom. In recent months, the pressure also has intensified in countries across Southeast Asia that have marketed themselves as alternatives for companies seeking to escape China's rising costs, leaving those companies now with fewer places to move. Over the past year, for example, U.S. menswear retailer Jos. A. Banks Clothiers Inc. has moved some manufacturing from China to cheaper locations in Asia such as Indonesia, as the price of labor and goods increased. CEO Neal Black said that while he hasn't noticed wage inflation in Indonesia yet, he expects it. "The garment business always moves around the developing world," Mr. Black said. "It brings jobs, those people become skilled and then move on to products like electronics." 

Hong Kong*:  Mar 15 2012 Share

Hong Kong's workforce is the most productive in Asia, a report says, helping the city rank as the fourth most competitive in the world. But poor environmental protection cost Hong Kong the top spot in Asia as it was pipped by Singapore, which ranked third in the world. New York topped the list ahead of London. The report, compiled by the Economist Intelligence Unit (EIU) for Citigroup, ranked 120 cities in terms of their economic strength, financial maturity and global appeal. While Hong Kong ranks level with Singapore in many areas, it lags far behind on environmental and natural hazards, falling outside the global top 50, behind even Guangzhou. Only Dublin bettered Hong Kong in respect of human capital, which measures the size of a city's working population, the quality of education and health care and the ease of hiring and firing foreign nationals. The report praises Hong Kong as a relatively dense and compact city, contrasting it with the urban sprawl of places like Mexico City. Business groups and environmentalists urged the city's leaders to heed the report's message on the environment. David O'Rear, chief economist at the General Chamber of Commerce, said: "It is very important that we have a clean and healthy environment. We can do a lot better." Helen Choy, general manager of environmental group Clean Air Network, said the city needed to change its mindset on pollution issues. She said: "Officials should look at other cities and notice that the economy will not be affected if more measures are in place to improve the environment." While cities from the United States and Europe make up 24 of the top 30 overall, all but five of the top 20 cities marked for economic strength are in Asia. Nine - including the top three of Tianjin , Shenzhen and Dalian - are in China. Leo Abruzzese, the EIU's global forecasting director, said: "Economic dynamism is definitely rising elsewhere, especially in Asian cities, but US and European cities have legacy advantages that give them a strong competitive edge."

Leung Fuk-yuen and Hau Chi-keung, New Territories Election Committee members representing the Heung Yee Kuk. Leung Fuk-yuen speaks to the press on his way to the Independent Commission Against Corruption headquarters in North Point yesterday. Plot thickens in 'triad' probe - Rural leader admits to lining up dinner involving Election Committee members, Leung's officers and a controversial businessman called Shanghai Boy - A rural leader has now admitted lining up a dinner with the campaign officers of chief executive contender Leung Chun-ying - a meal that has left suspicions of triad involvement clouding the March 25 election. Kam Tin Rural Committee chief Tang Ho-nin backtracked on remarks he made on Sunday to the effect that he had neither organised nor attended the February 10 dinner, at which at least one guest was suspected of having triad links. An investigation into the controversial dinner is widening after more attendees approached the Independent Commission Against Corruption to offer information. And the combination of initial stories, subsequent versions, claims and counter-claims of who sat where and when is adding to the mystery. Lew Mon-hung, a Leung nominator who was one of the guests, yesterday refuted a media report alleging he arrived at the restaurant in Lau Fau Shan with the controversial businessman at the heart of the scandal, Kwok Wing-hung, nicknamed "Shanghai Boy". Lew's driver also said he had driven only Lew. Tang told Commercial Radio: "It was Lew Mon-hung who asked me to help invite rural leaders who sit on the Election Committee for dinner to talk about [Leung's] platforms. "It was San Tin Rural Committee [chairman] Man Chi-sheung who booked the table. I told him how many guests would come and he made the booking." Man declined to comment. Tang's latest account also differs from Lew's earlier version. Then, Lew said he had asked Heung Yee Kuk vice-chairman Lam Wai-keung to set up a dinner after the Lunar New Year with New Territories Election Committee members. Lew added that Lam later told him he had helped set up the meal but would not attend. Lew said he then called Tang about making arrangements. Lam, responding to Lew's comments, denied having lined up the dinner. It also remained unclear who invited Kwok, when he came and where he sat. Rural leader and Election Committee member Leung Fuk-yuen earlier said Kwok was at the restaurant right at the start of the dinner, but Tang yesterday said Kwok had turned up in the middle of the meal. Tang said no one had invited Kwok and that he believed Kwok knew Lew. He added that Kwok had left after chatting for a while. While Tang said Kwok sat between him and Leung Fuk-yuen, yet another attendee, rural leader Hau Chi-keung yesterday insisted Kwok had sat next to Lew. Both the rural leaders and Leung's camp deny inviting Kwok. Leung Chun-ying's campaign director Fanny Law Fan Chiu-fun, her two deputies, and a Leung supporter, Lew Mon-hung, who all attended the dinner, approached the ICAC and the police of their own volition to give information on Sunday. Yesterday, Leung Fuk-yuen also visited the ICAC headquarters in North Point. He believed other rural leaders would also go to the commission. "There have been many rumours in these days. It is necessary for us, as witnesses, to actively clarify the facts with the ICAC," he said. Meanwhile, Legislative Council president Tsang Yok-sing yesterday vetoed lawmaker Andrew Cheng Kar-foo's request to convene a special Legco meeting to discuss how to maintain a clear and just chief executive election. In Beijing, Tsang said the issue was not so urgent that the meeting had to take place today.

Michael Lynch declined to say what potential new names might be under consideration. Arts hub authority casts for new name - Chief executive Michael Lynch wants to distance the project from various political and funding scandals in a rebranding exercise, hoping to focus attention on future - The chief of the West Kowloon arts hub is searching for another name for the project to distance his HK$21.6 billion development from a list of political and funding scandals lengthening almost daily. Michael Lynch, chief executive of the West Kowloon Cultural District Authority, conceded that its name was linked with controversy and said the authority was working on a rebranding campaign. "I'm not sure if I will be consulting a fung shui master on the name," Lynch told the South China Morning Post (SEHK: 0583,). "I think we will use a more established marketing and branding company to help us do that." His revelation comes as controversy widened yesterday to possibly include former chief executive Tung Chee-hwa, a vice-chairman of the Chinese People's Political Consultative Conference. Tung could be among the witnesses summoned to Legislative Council hearings on the project, which will start on Saturday, said Andrew Cheng Kar-foo, vice-chairman of the council's select committee. The hearings, expected to take six weeks, were initiated by lawmakers who invoked special powers to investigate chief executive candidate Leung Chun-ying for a possible conflict of interest in a 2001 design contest for the arts hub. Leung was a juror and has been accused of failing to declare his business connection with an unsuccessful Malaysian contestant. Leung said he was not made aware of the relationship. Other witnesses will include Financial Secretary John Tsang Chun-wah, who served as Tung's secretary for planning and lands. Tung will be asked to testify "when necessary", Cheng said. Lynch, a veteran Australian arts administrator, said: "The issue of the name is going to be an important part [of the project's development]. There are a lot of things happening, starting to point us to the right direction. [We are] going forward, rather than arguing or justifying what we [did] the last couple of years." He declined to say whether any potential names were under consideration. Looking into the future, Lynch said the authority had started talks with the government on funding the hub's infrastructure separately, including the construction of a reactor that will turn food waste into biogas to provide at least some of the project's energy. The reactor was proposed as part of the zero-carbon plan initiated by the hub's architect, Norman Foster. The plan was described as unfeasible in an assessment conducted by the authority's own consultant. While admitting the authority had to take a realistic approach, Lynch said he had never given up on the plan. "The three words - sustainable, accessible and connected - are still driving most of my thinking. "I'm not going to make silly, outrageous or unrealistic promises about whether we will be able to achieve the zero-carbon plan. People have to be a bit realistic. Forty hectares on top of railway stations will be impacted by what's around it," he said, implying that a zero-carbon emission target would be daunting.

Property developers are crying foul after the Executive Council yesterday approved new regulations to govern home sales. The Residential Properties (First- hand Sales) Bill, which faced strong objections from developers, will be presented to the Legislative Council for approval next week. It proposes to make developers quote prices of flats based on saleable, rather than gross, area - with big fines and lengthy jail terms for those who fail to comply. The maximum penalty for breaching the regulation will be a HK$5 million fine and up to seven years' imprisonment. The Real Estate Developers Association had earlier urged the government to also include gross floor area - for which there is no uniform definition - in sales documents. REDA executive committee chairman Stewart Leung Chi-kin said the new regulation is unacceptable. "Real estate agents are allowed to quote their prices of secondary homes in GFA, with which the average price per square foot would be lower. "But developers are not allowed to give our prices in GFA. Is that fair?" The first reading of the bill in Legco will be next Wednesday. Under the regulation, saleable area will be adopted as the sole measurement in quoting the size of a property and the price per square foot in sales brochures, price lists and advertisements. But property developers want gross floor area to be included in sales materials. Following Exco's approval, Secretary for Transport and Housing Eva Cheng Yu-wah said: "Having a unified definition to calculate the area of a unit is the basis for the legislation. "Some suggested including the gross floor area as a reference. But it is ridiculous to have some parts of the price list as references, while the real information is stated already." Centaline managing director Louis Chan Wing-kit welcomed the new measures. He said agencies will have to be more cautious with small details, but in the long run "buyers' confidence and transactions will be boosted as the penalties are now more harsh than many places in the world." Lawrence Poon Wing-cheung, a specialist in real estate development at City University of Hong Kong said: "Secondary homeowners will have no option but to adapt by giving saleable area." Cheng said the proposed legislation also requires developers to disclose the distance between the lowest residential floor and the street next to it. This was brought in following a complaint from the buyer of a flat at Oceanaire in Ma On Shan built by Cheung Kong Holdings (0001). The flat, said to be on the podium floor, was actually at ground level. It was presold for HK$7 million after the sales brochure had claimed it was below "the fifth floor." Two sites to be sold through public tender in May could fetch between HK$1.33 billion and HK$1.38 billion. A 46,845-square-foot site in Tseung Kwan O area 56A is likely to sell for between HK$979 million and HK$1.03 billion, representing between HK$3,800 and HK$4,000 per buildable sq ft. It offers a GFA of 257,647 sq ft, which means only 310 to 326 units can be built. A 50,473-sq-ft plot in Kau To, Sha Tin, could sell for between HK$300 million and HK$403 million, or HK$6,000-HK$8,000 per buildable sq ft. It offers GFA of 50,375 sq ft. Tenders close on May 18.

The Standards: Top News - Leung Chun-ying's supporter Lew Mon-hung 'drove triad chief to dinner' Notorious gangster Kwok Wing-hung, or "Shanghai Tsai," arrived for a dinner attended by chief executive candidate Leung Chun-ying's aides and Heung Yee Kuk members in a private car that is believed to be owned by core Leung supporter Lew Mon-hung, according to an East Week report. The magazine further reported that another underworld figure Cheung Chuen-hon, nicknamed "Tsai Tsai" was also present in the seafood restaurant in Lau Fau Shan, sitting next to Kwok. But Lew denied he had gone with Kwok to the restaurant, saying he went there by himself. The magazine reported yesterday that based on closed-circuit television footage, a silver seven-seater vehicle, believed to be Lew's, pulled over in front of the restaurant at 6.50pm on February 10, the evening of the dinner. Lew and Kwok were reportedly inside the vehicle. The dinner was set up to give the Leung camp a chance to lobby kuk members who sit on the Election Committee that selects the chief executive. Two of these - Leung Fuk-yuen and Hau Chi-keung - were quoted as saying that Kwok was already there when the dinner started. Hau said Leung Chun-ying's campaign director, Fanny Law Fan Chiu-fun, talked about her camp's manifesto and refused to make any promises on how to help New Territories residents resolve the matter of their illegal structures. Yesterday, another kuk member, Tang Ho-nin, admitted helping arrange the dinner and being at the gathering. Tang earlier denied being the middleman for the event as well as being there. "As Lew had asked me to help arrange the dinner, I asked the kuk members to come over for the gathering and express their views on the manifesto," Tang said. Tang insisted he did not invite Kwok and said another kuk member, Man Chi- sheung, had helped make the booking. Lew has said the dinner was arranged by kuk vice chairman Daniel Lam Wai- keung, a claim Lam denies. Lew said yesterday his version of events and Tang's are consistent. Meanwhile, Leung Fuk-yuen went to the Independent Commission Against Corruption headquarters in North Point to give his account of events that night. Unconfirmed reports said that three kuk members have been invited by the ICAC to assist in its probe. For his part, Leung Chun-ying said the truth behind the controversial event has been revealed. But he admitted the row has affected his campaign. "I'm dealing with the matter seriously. Now that the truth of the matter has surfaced, I hope Election Committee members and the public will know the facts," he said.

 China*:  Mar 15 2012 Share

Investors have more confidence in bond funds - Industry's gross sales reach US$37.5 billion, with the favoured most investment choice taking 44.4 per cent - The low interest rate environment and overhanging uncertainties in the global economy make bond funds an increasingly attractive option as investors look for stable returns, according to the Hong Kong Investment Funds Association. Equity fund sales remained lacklustre in the first two months of this year despite the steady rebound in stock markets, the association said. The city's fund industry registered net sales of US$6.2 billion last year, down 0.7 per cent from 2010. Gross sales increased 30.2 per cent to US$37.5 billion. Sales were robust in the first half of the year as high inflation and low interest rates drove investors into stocks, but they dipped in the second half as the euro-zone debt crisis and concerns about the United States economy sent global markets tumbling. The sell-off saw the industry suffer net outflows of US$469 million in September and US$290 million in October. However, moderate net inflows returned towards the end of the year. Association chairman Kerry Ching Kim-wai said heavy outflows from equity funds had stopped this year as fund managers finished allocating their assets. But sales of equity funds remained flat in the past two months even as stocks rebounded. Interest in bond funds continued to grow steadily last year, with net cash inflows recorded every month. Bond funds accounted for 77.5 per cent of the industry's net inflows and 44.4 per cent of overall sales. Ching said money flows could be more volatile with equity bond funds as they mirrored the movements in global stock markets, but bond funds were likely to see steady growth as investors focused on both global bond funds and also the riskier, more rewarding emerging markets high-yield bond funds. Investors' appetite in greater China equity funds and emerging markets equity funds were especially sensitive to changes in market sentiments. Greater China equity funds were among the most popular choices of investors, Ching said, but the category suffered the greatest outflows last year among all equity funds, recording a net outflow of US$566 million. It was followed by emerging markets equity funds, with US$301 million. Hong Kong equity funds attracted most of the inflows, pulling US$522 million in net inflows.

Mainland property developer Agile Property Holdings (SEHK: 3383) said it would issue US$700 million of senior notes due 2017, raising proceeds for the purchase of new land sites, refinancing and for general working capital purposes. The notes will bear interest of 9.875 per cent per annum payable semi-annually, Agile said in a filing to the Hong Kong stock exchange on Wednesday. HSBC, Standard Chartered Bank and UBS are the joint lead managers and joint bookrunners for sale of the notes. Agile’s move comes as China’s property developers are looking for various means to bridge an estimated US$111 billion financing gap in the year ahead, with the government clamping down on their favoured trust-market funding route.

China should raise petrol and diesel prices to reflect the recent surge in crude oil prices, a top executive with China’s leading oil and gas firm said on Wednesday, the latest industry official to ask for an increase. Any price increase would be the second so far this year and would raise China’s fuel prices to fresh highs, raising concerns about inflation just as the economy slows down. “My feeling is that prices should be adjusted: 22 working days have past and crude prices have gained more than 10 per cent,” Jiang Jiemin, chairman of both China National Petroleum Corporation (CNPC (SEHK: 0135)) and PetroChina (SEHK: 0857), told reporters on the sidelines of China’s parliament meeting. According to China’s fuel pricing formula, the government may consider lifting fuel prices if a moving average price for a basket of crudes rises over 4 per cent in a month. But Beijing, worried about inflation, often postpones raising prices, meaning refiners often run at a loss as they are unable to pass on any increases in their crude oil costs to consumers. China last raised petrol and diesel prices by 3-4 per cent on February 8. Crude oil prices have gained about 9 per cent in the following month, but the government has held off announcing any changes during the parliament meeting, which ends on Wednesday. Some analysts said the government could raise petrol and diesel prices by at least 400-500 yuan a tonne, or about 5 per cent. Chinese oil firms make a profit on oil and gas production, fuel sales and chemical businesses but their refineries bear the brunt of losses caused by government price controls.

China is set to become one of the biggest international producers of foie gras, much to the chagrin of the mainland's fledgling animal rights movement. The move comes as concerns about force-feeding connected to the French delicacy is driving the industry out of developed nations. But plans to establish a massive production facility on the shores of Poyang Lake in Jiangxi province, announced by a British investment company, have prompted a Beijing-based environmental group to call for a boycott of the delicacy. The Darwin Natural Knowledge Society has launched a campaign condemning the project, which it believes would be one of the biggest in the world. "As we understand it, the project has already started, and the first products are expected to be on the market by the end of this year," said Liu Huili , a spokeswoman for the society. "Foie gras production is inherently cruel, as the force-feeding causes the ducks' livers to swell up to six to 10 times their normal size." Concerns over the traditional gavage method - force-feeding ducks and geese through a metal tube inserted down the bird's throat - has led to growing pressure for a ban in all European Union countries. A food fair in Germany in July caused a minor diplomatic incident after it banned French producers of foie gras from attending, on the grounds of animal rights concerns. The society's comments were in response to an announcement by Creek Project Investments, a British-based company, that it would invest about 100 million yuan (HK$122.5 million) in duck and geese farming in Ganlu township, south of Jiujiang , Jiangxi, with a goal of producing 1,000 tonnes of foie gras a year. The company's website says it expects the project to reap an annual income of close to 900 million yuan, and a profit of about 102 million yuan. However, Bryan Cook, one of Creek Project's directors, denied that the figures were projections of the company's own involvement. "That is the size that the local government has set out for the industry to produce," he said. "It is too early to say just how big our involvement will be, as it depends how many local farmers agree to work with us. "We are probably a year to a year-and-a-half away from being ready, as it takes around 18 months to get geese to the right size. We have got some two million geese in the market and have orders in to get 15 million more." Cook said the company would "do all that needs to be done" to ensure it complies with laws against animal cruelty.

Chinese lawmakers on Wednesday passed into law controversial changes that give the police powers to detain some suspects for up to six months in secret locations known as “black jails”. Detentions in unofficial locations such as hotels or guesthouses in China are well-documented. Last year many people – from renowned artist Ai Weiwei to rights lawyers and petitioners – were illegally held in locations away from formal detention areas, sometimes for months. But critics say the amendments to China’s Criminal Procedure Law would legalise the practice for people considered a threat to the Communist Party such as political dissidents, dozens of whom were detained last year. The bill was passed at the final session of the National People’s Congress, with 2,639 delegates voting in favour of the amendments. Only 160 lawmakers opposed the bill, and 57 abstained from the vote. “The legislation would provide dangerous exemptions from due process for entire categories of criminal suspects, including those who simply wish to peacefully express their opinion,” Amnesty International said in a statement. The proposed amendments caused a storm of protest from rights groups and judicial reformers when details first emerged last year, and have since been watered down. A new clause in the latest draft would oblige police to inform relatives of those held outside formal detention centres within 24 hours of their detention, although it is not clear whether the location would be disclosed. Liu Xiaoyuan, a lawyer and friend of Ai Weiwei, said in his blog that the modification from the original draft was “obvious progress.” “But when all is said and done, the law is only written on paper, and the crux is whether law enforcement agencies strictly respect it,” he said. China uses three methods of locking up suspects – formal arrest, formal detention and “residential surveillance”, which can be at home or in other locations, usually hotels or guesthouses. In the first two cases, suspects are held in formal areas of detention such as police stations or prisons. The controversy focuses mainly on the latter, where there is little accountability and where critics say police may feel freer to use torture. The amended law for the first time includes a clause to allow police to hold some people under “residential surveillance” away from home for up to six months. This form of detention is limited to people suspected of terrorism, endangering national security or serious bribery, where holding them under surveillance at their homes would impede investigations. But activists point out that the charge of endangering national security is not clearly defined, and is regularly used to silence government critics. Rights groups and legal scholars however say other amendments to the criminal law are positive. Human Rights Watch said in a statement it welcomed provisions that could “strengthen procedural protections and due process for ordinary criminal suspects.” The group said this included “stricter time limits for detentions, better guarantees for access to a lawyer, and greater protection for juvenile and mentally ill defendants.”

Hong Kong*:  Mar 14 2012 Share

Hong Kong Top lawmaker Jasper Tsang Yok-sing points finger at Chun-ying camp over smear - Top lawmaker Jasper Tsang Yok-sing believes the smear campaign he faced after suggesting he may join the chief executive election originated with the Leung Chun-ying camp. The Legislative Council president said allegations that he was suffering from cancer, had borrowed money from his family and that accounts he kept as a school supervisor were confused could only have come from those with inside information, though he believes that Leung was not personally involved. The smear campaign began in mid- February after Tsang said he was mulling joining the election after the two leading candidates came under fire - Leung over claims of conflict of interest in the 2001 West Kowloon design contest and Henry Tang over an illegal basement at a family home. Tsang said he had earlier asked a former employee of Leung to liaise with a renowned doctor in Guangzhou to treat one of his friends. Tsang said it was likely that Leung's supporters seized the opportunity to suggest he was suffering from cancer. Commenting on reports he had borrowed money from his family, Tsang explained he had asked his younger brother to lend him a sum of money during a private gathering in which some of Leung's supporters were present. Tsang also said only people with inside information would know the financial details in one of the subsidized schools of Pui Kiu group when there were accusations that the school's financial position was unclear when he was the supervisor. Tsang has ruled himself out of the March 25 election, but remains open to the possibility of joining the contest if there is no clear winner. Tsang said he is now preoccupied with preparing a political manifesto aimed at balancing the interests of various parties in the city that he will use to seek another term as Legco president in September if he does not run in the chief executive election. In a separate development, Leung's campaign director Fanny Law Fan Chiu- fun named Heung Yee Kuk member Tang Ho-nin, chairman of the Kam Tin Rural Committee, as the man who arranged the controversial dinner in a Lau Fau Shan restaurant last month at which former notorious gangster Kwok Wing-hung, nicknamed "Shanghai Tsai" was present. Law and two deputies, Lau Ping- cheung and Tang Shuk-tak, who had attended the dinner along with key Leung supporter Lew Mon-hung and kuk members, went to the Independent Commission Against Corruption headquarters and Wan Chai Police Station on Sunday and offered to be witnesses in investigations over "black gold" politics, or underworld involvement in an election. "We kept in touch with Mr Tang Ho- nin concerning the arrangements for the dinner and we suppose that Tang had helped arrange the dinner," Fan said. "But I am not sure who made the booking at the restaurant." Another kuk member, Leung Fuk- yuen, said that Tang had told him he had arranged the dinner for kuk representatives and Leung's camp. But Tang told the media earlier he did not arrange the dinner. Tang could not be reached for comment last night. Meanwhile, Henry Tang defended his decision to lodge a complaint with the police, saying he is not worried about winning or losing, but is concerned about allegations of criminal influence in the electoral system.

Next Media (0282), which publishes Apple Daily and Next Magazine in Hong Kong and Taiwan, forecast losses in the 2011-2012 financial year to widen "significantly" from a year back as operating costs of the television and multimedia businesses increase. The media group posted a profit warning again yesterday after a similar notice in October last year. Next Media said it expects to record further losses from continuing operations in the second half of the financial year ending March 2012. This is mainly due to rising operating costs related to the expansion and development of TV and multi-media operations, and postponement of the launch of Next TV channels on a multi-system operator network in Taiwan. The launch was originally scheduled for January this year, the company said. This resulted in a delay in revenue contribution from the division. But the group did not comment on the performance of the free newspaper Sharp Daily in Hong Kong, the distribution of which began in September last year. The company incurred HK$275 million losses in the six months to September 2011, mainly due to the HK$496 million loss on television operations in Taiwan, compared with a loss of HK$459 million in the financial year 2010-2011. Since launching in late 2009, Next TV has been the company's "black hole" with accumulated losses exceeding HK$1 billion. The company has tried to cut losses in its multimedia non-paper media businesses. Earlier this month, it closed down the business channel of Taiwan's Next TV and laid off some of the 30-odd staff, Taipei-based United Daily News reported. In the middle of last year Next Media also sold 70 percent of its animation business to Jimmy Lai Chee-ying, chairman and major shareholder, for US$100 million (HK$780 million). Shares have gained 2.9 percent this year, compared with the 15 percent rise in the benchmark Hang Seng Index.

Mainland and Hong Kong legal experts have said that the best way to deal with the influx of pregnant mainlanders heading to the city to give birth would be by amending local laws as it would be impractical to ask the National People's Congress to again clarify the Basic Law, the city's post-colonial mini-constitution. Their comments follow a week of renewed controversy over the issue. After Hong Kong delegates to the NPC supported a call for Beijing to review the Basic Law at the weekend, a legislator submitted a private member's bill to Legco seeking to overturn a Court of Final Appeal ruling that upheld the right of abode for children born in Hong Kong to mainland mothers. Alan Hoo of the Basic Law Institute, an NGO, said yesterday he believed mainland officials would find it impossible for the NPC to interpret the same matter twice, after its first review more than 10 years ago. Instead, the solution lay within all three branches of Hong Kong authority: the executive, the legislature, and the courts. He said it was urgent that the Immigration Ordinance be immediately amended in line with the 1996 opinion, either through a government initiative or by legislators through a private member's bill. This would allow the government to stop giving right of abode to children born in Hong Kong to mainland mothers, and if a legal challenge was brought to the courts, the Court of Final Appeal could make a correct ruling in light of changed circumstances and more evidence of the intention behind the Sino-British Declaration that led to the Basic Law. "The government does not only have a legal responsibility to follow a ruling of the CFA or the Legislative Council, but also to safeguard the constitution ... and follow the Basic Law," Hoo said. "But if it doesn't want to self-correct, a private member's bill could help put the discussion before the legislature. "Seeking interpretation is no longer a question of whether it would impact on our judicial authority, but a matter of constitutional crisis." The seeds of the crisis were sown in 1999 when a CFA ruling ran counter to pre-handover Sino-British documents and a Beijing interpretation made it clear that, under the Basic Law, children born in Hong Kong to mainland parents were not entitled to right of abode. However, the court ruled in 1999 that nine-year-old Ng Ka-ling, who was seeking to be reunited with her Hong Kong-resident father after the handover, had the right of abode. Fearing an influx of mainland immigrants, the Hong Kong government sought the first interpretation of the Basic Law from the NPC's Standing Committee. The committee ruled in the Hong Kong government's favour, saying that only mainland children who had entered Hong Kong legally could obtain right of abode. But in the 2001 case of three-year-old Chong Fung-yuan, the court ruled Chong and all children born in Hong Kong, regardless of the origin of their parents, enjoyed right of abode. The Standing Committee immediately pointed out the discrepancy between this ruling and its 1999 interpretation, but the city government amended its immigration rules in compliance with the court's ruling. Hong Kong Secretary for Justice Wong Yan-lung said over the weekend that seeking reinterpretation of the Basic Law should be undertaken cautiously, to safeguard the city's judicial authority, and that the government should try other, more administrative measures. But Wong's predecessor, Elsie Leung Oi-sie, said the root of the problem lay with the CFA ruling in the Chong Fung-yuan case, and that the only way out was for the chief executive to seek a reinterpretation from the NPC, triggering the appeal by the Hong Kong delegates. Wang Zhenmin, a former member of the Basic Law Committee, said yesterday that the Standing Committee should consider and respond to the petition by Hong Kong's delegates, but it was most likely it would say there was no need to reinterpret the Basic Law. He said this did not mean the judgment of CFA had been wrong in the Chong Fung-yuan case, and that making a new ruling on the right of abode of children born to mainland parents would not affect the authority of the CFA. Administrative measures in both Hong Kong and Guangdong had already failed to resolve problems and it was now up to the Hong Kong government to get a new ruling, he said.

Hong Kong University Student union ads take aim at Leung Chun-ying in what it calls "black gold politics". Eyebrows raised as HKU body pays HK$300,000 for space in eight newspapers questioning chief executive candidate's role in 'black gold politics' - The University of Hong Kong's student union took an unusual and expensive step into the chief executive election campaign yesterday. It placed advertisements in eight newspapers questioning candidate Leung Chun-ying's involvement in what it calls "black gold politics". Newspaper insiders say the union would have spent at least HK$300,000 on the full-page advertisements, which urge Leung to clarify what happened at the now notorious February 10 dinner attended by members of his campaign staff. Also at the dinner was controversial businessman Kwok Wing-hung - known as "Shanghai Boy" - who is allegedly linked to a complaint to police by rival candidate Henry Tang Ying-yen. "Does it mean `black gold politics' is the tactic deployed by the Leung camp in the election campaign and in governing Hong Kong if elected?" the union asked in its advertisement. The term "black gold politics" refers to collusion between triad societies and politicians. A former union president said the union had never placed a newspaper advertisement on any issue in her time, while a political scientist said student unions normally did not take sides in local elections. Union president Dan Chan Koon-hong refused yesterday to disclose the cost of placing the adverts. "We went through all the official procedures, obtaining approval from our committees, before this was passed," he said. The current affairs committee, made up of 16 student representatives, approved the advert on Saturday. The finance committee then approved the expenditure. "This [the dinner incident] is very serious, and ... it's getting very confusing," Chan said. "I think it's time someone steps up and gives a clearer and more truthful account of what actually happened." He said this was more serious than the secret basement at a home owned by Tang's wife and Leung's alleged conflict of interest in his role as a judge in the 2001 West Kowloon arts hub design contest. Chan said the money for the adverts came from the union's HK$10 million in reserves and not the HK$1,800,000 it receives in student fees each year. The union had not received and would not receive any outside funding to place the adverts. The full-page advertisements were placed in Ming Pao, the Hong Kong Economic Journal,Apple Daily, Sing Tao Daily and the free papers Metro Daily, AM730, Headline Daily andSharp Daily. Dr Ma Ngok, a political scientist at Chinese University, said the union's move was unusual. "The HKU student union stated its position on local elections, a move departing from the normal practice student unions have adopted in the past three decades," he said. Gloria Chang Wan-ki, who was president of the student union in 2000, questioned whether paying for the advertisements was a proper use of the union's money.

Student representatives at the University of Hong Kong consulted the dean of law before publishing full-page newspaper advertisements that challenged chief executive candidate Leung Chun-ying, the student union president said on Tuesday morning. Dan Chan Koon-hong said the dean of law, Professor Johannes Chan Man-mun, saw the adverts before they were sent to eight newspapers and published on Monday. The advertisements were non-partisan and solely aimed at “upholding core values”, Dan Chan said. “We have no preference in the choice of chief executive candidate. We just want Leung to respond to the public over the allegations so that the freedom and safety we uphold as core values would not be affected by ‘black gold’ politics,” Chan said on a radio programme. “Black gold” refers to collusion between triad societies and politicians. “The newspapers had not read the content of the ad before accepting our orders … the choice of newspaper was adjusted after some rejected the deal, when they learned we were from the HKU student union,” said Chan. “But we consulted Professor Chan Man-mun on the content of the article.” He confirmed that the ads, printed in eight Chinese dailies, cost around HK$300,000. The adverts urged Leung to clarify what happened at the now notorious February 10 dinner attended by members of his campaign staff. Also at the dinner was controversial businessman Kwok Wing-hung, known as “Shanghai Boy”, who is reportedly mentioned in a complaint to police by rival candidate Henry Tang Ying-yen. Following the dinner, allegations surfaced that Tang had received threats from triads. All sides have distanced themselves from the dinner and denied having invited Kwok. As a result, it is now unclear who organised it. Leung, telephoned by the radio show host, said the ads “contained legal problems”. “My first impression was that these ads have spent a lot of money … and I was told by friends in the legal sector that they contained legal problems, as they affected my election campaign,” said Leung. Under Section 23 of the Elections (Corrupt and Illegal Conduct) Ordinance, it is illegal for any person other than a candidate or his agent to spend money at, or in connection with, an election. Leung promised the radio host he would not take legal action against the ads.

Construction of the West Kowloon arts hub could cost taxpayers up to HK$16 billion extra because of a sharp rise in project costs and lower-than-expected returns on investments to help fund it. According to the latest budget estimate for the HK$21.6 billion project - carried out by University of Hong Kong Professor Chau Kwong-wing - an additional HK$9.2 billion to HK$16.4 billion would be needed to maintain the scale and quality of the planned 40-hectare cultural precinct. Chau, head of the university's Department of Real Estate and Construction, was asked by the South China Morning Post (SEHK: 0583, announcements, news) to review the project's budget. His first assessment, which he conducted in 2008 at the request of lawmakers, predicted a shortfall of HK$6.4 billion. According to the Architectural Services Department's tender price index, which reflects materials and labour, the construction costs of public tenders have jumped by 76 per cent since the third quarter of 2006 - when consultancy GHK put the project cost at HK$21.6 billion, which is still the current estimate. The lower range of Chau's estimated budget shortfall is based on a smaller increase of about 42 per cent in the cost of private tenders compared with government tenders, as the former is considered to have passed its peak in 2008. The rise in construction costs is set to continue as the department has released figures dated only to the second quarter of last year. "The consultant obviously underestimated the budget and overestimated the return" [on investment], Chau said. Michael Lynch, chief executive of the West Kowloon Cultural District Authority, which is responsible for the project, also thinks the current funding is inadequate. Appointed as the authority's CEO in May last year, Lynch said it might have been "a little too prudent" in its past investment and that he had hired a team of professionals to look for better options. The authority had begun talks with the government about issuing bonds as a financing solution and reviewing the commercial feasibility of the performance venue, he said. The government's original estimate was based on assumptions that construction costs and inflation would rise by 2 per cent a year and the annual rate of investment return would be about 6 per cent. Instead, inflation over three years has been between 3 and 8 per cent. The apparently prudent investment approach of setting aside half of the project's funds in short-term HK dollar and yuan deposits and the other half with the Monetary Authority brought an annual rate of return of 1.1 per cent in 2009 and 3.4 per cent in 2010. "In the past we are a little too prudent [in investment]," Lynch said. "We now have a much more professional team working on the finances. The last thing I want to find is that we are getting involved in [investment] activities that work against the long-term interests of the project."

Hong Kong Airlines Bets on London Business-Class Flights - A Cathay Pacific plane takes off past a Hong Kong Airlines jet at Hong Kong's international airport. Hong Kong Airlines is looking to compete with Cathay with the launch of an all-business-class flight to London. The launch of Hong Kong Airlines Ltd.'s all business class long-haul flights to London reflects an unconventional and risky attempt by the startup carrier: it is attempting to break the dominance of Cathay Pacific Airways Ltd. and other international airlines in the city's highly competitive aviation marketplace. The foray by the fledgling carrier, backed by Chinese aviation and leisure conglomerate HNA Group Co., is part of a major expansion drive that involves ramping up its fleet and destination count. The goal is to get investors on board ahead of an initial public offering, expected later this year that will raise up to US$300 million. Hong Kong Airlines President Yang Jianhong said he expects the route to break even in its first six months at a targeted 75% load factor. Mr. Yang told The Wall Street Journal that many celebrities and investment bankers have expressed interest in the London flight, and added that the new route alone will likely account for around 10% of its total passenger revenue after one year. Its revenue for January-September period in 2011 was 2.84 billion yuan ($449.8 million), more than double its 2010 full-year revenue of 1.08 billion yuan. Mr. Yang also said the airline is considering launching similar premium services to Paris later this year. Operating more than 20 Boeing and Airbus jets, Hong Kong Airlines last week began flights to Taipei—one of the world's most profitable commercial air routes—and unveiled plans to hire hundreds of flight attendants to boost its cabin service staff by nearly 60% by the end of this year to meet the needs of an expanding fleet. On Wednesday, the airline inaugurated a daily service from Hong Kong to London's Gatwick airport using Airbus A330 planes configured with two types of business class seating, aiming to capture business and premium leisure traffic between the two international financial hubs by charging lower prices. Since its launch in 2006, Hong Kong Airlines has struggled to compete effectively in its home turf against the much bigger and financially sound Cathay Pacific. The smaller airline resorted to flying to short-haul regional routes between Hong Kong and leisure destinations in Asia. Meanwhile, the city's high cost base—including high wages and airport fees—prevented the carrier from pursuing a low-cost business model, which has been hugely successful in other parts of the region with brands like Malaysia's AirAsia. The move to start all-business class flights underscores the pressing need to carve out a niche for itself. Dozens of companies have in past decades tried and mostly failed to sustain profitable all-premium flights, as they grappled with heavy capital obligations from surging costs as well as inconsistent demand. Short-lived European and U.S. luxury carriers such as Silverjet, Maxjet Airways Inc. and Eos Airlines Inc. all went bust around the 2008 financial crisis. Analysts and industry veterans say Hong Kong Airlines faces similar challenges, especially as fuel prices continue to soar. Compounding the impact on the airline is the need to load large amounts of fuel for each of its long, 12-hour-plus journeys. Competition on the route is rife, with five airlines currently operating nine daily nonstop flights to London from Hong Kong. Reflecting a possible supply glut, Australia's Qantas Airways Ltd. plans to discontinue its daily Hong Kong-London flight from late March. Yet unlike the earlier unsuccessful ventures, Hong Kong Airlines has the backing of a financially robust parent. Hainan province-based HNA Group, which also controls China's fourth-biggest airline, Hainan Airlines Co., has in recent months emerged as one of the most active Chinese companies seeking overseas investment opportunities. Hainan Airlines in December bought a 19.02% stake in Hong Kong Airlines for 842 million yuan, which helped boost the company's financial strength. "With strong Chinese backing, the carrier should have sufficient funds to cope with its expansion plan in the near term, but if the macroeconomic conditions go against its capacity boost in the longer run, its business might be hurt because of excess supply," said Kelvin Lau, an aviation analyst at Daiwa Capital Markets. A person familiar with the situation said Hong Kong Airlines' inaugural London flight, which included VIPs and other guests, was around 70%-80% full. However, the person said bookings for the first month of flights remain under 50% of capacity, highlighting the difficulties to fill all 116 business class seats on each flight. But by selling tickets at a steep discount to traditional business class fares, Hong Kong Airlines hopes to tap a potentially large market for customers who are able to spend more than the average economy fare for a better seat yet are unwilling to fork out the huge difference for typical premium travel. An average roundtrip Hong Kong-London business-class ticket on Cathay Pacific in April, at 51,370 Hong Kong dollars (US$6,586) each, costs more than seven times the average economy fare, according to its website. Hong Kong Airlines charges standard fares of HK$16,640 for each 'Club Classic' seat, and HK$33,640 for each 'Club Premier' flat-beds, which are more comparable to Cathay Pacific's business-class product. Nonetheless, reliability and connectivity remain key concerns for business travelers, with price playing just one part in the equation. Many corporate travelers with membership of mileage clubs won't easily switch to other carriers. "Many business travelers couldn't afford to use an airline (with limited schedules) no matter how cost-effective and comfortable the offering might be. So that favors the incumbents," said Martin Craigs, chief executive at Pacific Asia Travel Association, which represents airlines, hotels and other travel-related firms in the Asia-Pacific region. Mr. Craigs noted that some leisure travelers may accept exceptionally low pricing, but ultimately, they would "want convenience and peace of mind about schedule reliability." "Therefore, no matter what price you offer a flatbed at, people are still going to ask, am I here to get to my meeting the next morning?"

Hong Kong Airport Plans to Add IMAX Theater - An artist rendering of the IMAX theater in Hong Kong International Airport. In Hong Kong for a long layover? Travelers to and from the city will soon have access to the world’s largest airport entertainment option to help pass the time. UA Cinemas recently said that it would be opening an IMAX theater in Hong Kong International Airport in the second quarter of 2012. The cinema will be located in a new “entertainment zone” in Terminal 2. On Feb. 14, the airport ranked No. 4 in the 2011 Airport Service Quality Awards produced by Airports Council International, falling behind airports in Seoul, Singapore (“arguably the world’s most fabulous airport,” according to Middle Seat columnist Scott McCartney) and Beijing. The council’s annual rankings are based on passenger-satisfaction surveys and are considered one of the air-travel industry’s most prestigious accolades. The Hong Kong airport’s new movieplex will seat up to 358 and have a screen that is 45 feet high and 75 feet wide, making it the largest of Hong Kong’s three IMAX theaters. It will show both 2-D and 3-D movies. While its impact on passenger satisfaction remains to be seen, it will be the first airport IMAX theater in the world.

 China*:  Mar 14 2012 Share

Beefing up sales as diets change - A beef seller counting his money after a whole day's business at a free market in Nanjing, the capital city of Jiangsu province. Beef is expected to occupy an increasing part of the proportion now taken by pork and chicken in Chinese people's daily diet in the years to come, according to United States' consulting company Frost & Sullivan. People are eating more of the red meat because of its reasonable price and nutritional value - Beijing college student He Rongxi goes to the Jade Palace Hotel in Haidian district at least twice a month with her parents because she likes the beefsteaks the buffet serves in the hotel's cafe. They spend 354 yuan ($56) each time through group buying coupons from sozhe.com to have a big dinner at the buffet and eat as many steaks as they like, He said. He's family is not an isolated example. Since last June, when pork prices rose at least 50 percent, Beijing housewife Wang Lu buys at least 1 kilogram of fresh beef flank each time she goes shopping at eastern Beijing's Ito Yokado supermarket. "Beef is not as tender as pork is but we have got used to that," Wang said. "Beef contains less fat and tastes good, and the most important thing is that the price of beef has been comparatively stable." Chinese people's diets are experiencing an unprecedented change as they eat more beef than ever before. China has already become a net beef importer because its domestic production cannot meet the stronger-than-ever appetite for beef, United States' consulting company Frost & Sullivan said in its latest report. The average price increased $3,205 a ton for China's boneless frozen and fresh beef imports during 2001 and 2011, according to chinafarming.com. According to the Ministry of Agriculture, the Chinese mainland's beef production was estimated to reach nearly 6.39 million tons in 2011, but apparent consumption on the market for this kind of meat was more than 6.4 million tons last year. Apparent consumption is composed of production plus net imports, sometimes also adjusted for changes in inventories. It infers the total that is used in the country for any purpose. In 2011, the mainland bought 33,900 tons of beef products from abroad, an increase of 10,200 tons from the previous year. Meanwhile, it also sold 17,700 tons of the meat products to Russia, the Middle East and Hong Kong, representing a drop of 4,400 tons from 2010. Major beef suppliers for Chinese consumers were Australia and New Zealand, according to Frost & Sullivan. "Beef imports will not be more than 1 percent of the total market demand in China over the next five years," said Alex Zhang, senior consultant, China, Frost & Sullivan. Zhang predicted that over the next 10 years the country's per capita beef consumption will still lag far behind two other Asian economic powerhouses - Japan and South Korea. He said his estimates are based on the current annual growth of 1.8 percent in China's per capita beef consumption. China's per capita beef consumption was 4.63 kilograms in 2011, as compared with 13.7 kg in South Korea and 9.7 kg in Japan last year, said G. H. Huang, research director of BRIC Consultants Ltd, quoting figures from China's National Bureau of Statistics and the United States Department of Agriculture. However, the Frost & Sullivan report predicted that along with the improvement in Chinese people's living standards, their demand for beef and beef products will grow stronger. The nation's current per capita beef consumption leaves a great room for growth, said Zhang of the consulting company. In December, the average price of fresh beef was 39.78 yuan a kilogram in the Chinese market, representing a sharp increase of 110 percent from the same period in 2006. In contrast, the urban residents' per capita income rose 85 percent over the past six years, according to the National Bureau of Statistics. "Beef is expected to occupy an increasing part of the proportion now taken by pork and chicken in Chinese people's daily diet in the years to come, as the grass-fed animal's meat contains more protein, low fat and rich unsaturated fatty acids," said the Frost & Sullivan report. Industrial experts said that the Chinese government is expected to formulate preferential policies to prop up a rapid development of fine-bred livestock farms in the country to ensure an adequate supply of high quality beef products and stimulate market demand to grow faster. Only 1 percent of China's 47.17 million slaughtered cattle were done in finely equipped manufacturing companies in 2010, leaving the majority dealt with separately by household-sized private businesses across the countryside. As a result, quite a few cattle farms haven't yet to undergo necessary inspections and monitoring to ensure their beef production meets relevant international quality and hygiene standards, according to the Frost & Sullivan report. The most profitable parts of the beef industry are the slaughtering, processing and marketing. The five biggest profit earners in the industry are all located in North China. They are Haoyue Group in Changchun, Inner Mongolia Kerchin Cattle Industry Co, Dalian Xuelong Industrial Group, Hebei Fucheng Wufeng Food Co in Sanhe and Tianjin DawnRun Beef Group. Haoyue in Changchun, Jilin province, slaughters 500,000 cattle annually, producing various meat products totaling 100,000 tons a year. Kerchin Cattle owns a grassland of 120,000 mu (8,000 hectares) in Inner Mongolia autonomous region, with 12,000 cattle. The company now boasts it is producing organic beef products to meet high-end market demand. Xuelong now slaughters more than 30,000 cattle a year for beef production in Dalian, Liaoning province. Fucheng Wufeng in Sanhe, Hebei province, saw its sales exceed 500 million yuan in 2010, of which the beef business made up 260 milion yuan. It slaughters more than 100,000 cattle annually, producing 9,000 tons of beef products, 20,000 tons of animal feed and 30,000 tons of organic fertilizer. Tianjin DawnRun Beef acquired 80 percent of the shares of the Beidahuang Beef Industry Co in Heilongjiang province in November 2010. It is believed to be the first merger and acquisition in the country's beef producing industry and made the company a national beef producing business.

China plans to put its first aircraft carrier into service later this year, a top navy official said. Xu Hongmeng, deputy commander of the Navy of the Chinese People's Liberation Army, told the People's Daily on Sunday the PLA "has a plan" to put it into service this year. The carrier has undergone four sea trials since last year. According to media reports, the former Varyag, which is docked in Dalian Port, in Northeast China's Liaoning province, is currently equipped with life-size model planes. China's first aircraft carrier, a retrofitted former Soviet vessel, set out on its maiden voyage on Aug 10 and returned to port five days later. It underwent three more sea trials in the Pacific. Rear Admiral Cao Dongshen, a deputy at the 11th National People's Congress, China's top legislature, told China Daily on Monday that the refitted aircraft carrier will not be deployed as part of a single fixed fleet, but will keep traveling. The carrier will be used mainly for experiments, training and scientific research, Cao said on the sidelines of the annual national legislature session. Cao brushed aside a report that China is building overseas naval bases, because the country has a near-shore defense policy. Wang Dengping, the political commissar of the Navy's North China Sea Fleet, told the media on Sunday that possessing an aircraft carrier will not change China's defense policy. China has 3 million square kilometers of sea area yet only one aircraft carrier, which is mainly committed to scientific research and training. Our near-shore defense policy will not be changed, Wang said. Analysts said that China's weaponry is developing in line with its overall national strength and rising defense needs. Along with its economic development, China has seen an increasing amount of overseas shipping of strategically important materials in recent years. Lieutenant General Xu Xiaoyan, an officer with the PLA General Armament Department and also an NPC deputy, said it will take some time for China to build an aircraft carrier whose components are all domestically developed. An aircraft carrier is a complex piece of equipment and merely to make all of its electronics systems compatible with each other is an arduous task, said Xu. With its rapid economic growth, China needs to invest more in equipment and rapidly boost its defense capacity, he said. The vessel, an Admiral Kuznetsov class aircraft carrier, measuring 304.5 meters long and displacing 58,500 tons, was intended for the Soviet navy. But its construction was halted when the Soviet Union collapsed in 1991. Engineers in Ukraine disarmed it and removed its engines before selling it to China in 1998. China is the last permanent member of the United Nations Security Council to operate a fully functioning carrier. The United States, Britain, France, Russia, Spain, Italy, India, Brazil and Thailand operate 21 active aircraft carriers, with the US alone having 11. India bought and commissioned an aircraft carrier in the late 1980s and Thailand did so in the 1990s.

An Airbus A380 seen over the roof of Beijing's airport building as it prepares to land. Airbus says China has yet to approve orders for 45 aircraft from Chinese airlines. End row over carbon scheme, E.U. urged - With US$12 billion worth of orders from China at stake, Airbus has teamed up with airlines to pressure policymakers to settle the controversial issue - Airbus is ratcheting up pressure on European Union policymakers to resolve rising international tensions over the controversial emissions trading scheme after claims that US$12 billion worth of contracts have been withheld by Beijing. Airbus and eight European airlines yesterday called on officials from countries including Britain and Spain to settle the issue that could cost the aircraft maker market share to rival Boeing. Airbus' opposition is a huge setback to the 27-nation bloc as the emissions trading scheme is not only opposed by more than 40 nations outside Europe but also increasingly by airlines and aircraft makers on its own soil. Charges on carbon emissions for entire flights into or from Europe have drawn strong criticism from nations including China, India, the United States and Brazil. They say the scheme goes beyond lawful boundaries by charging for emissions that occur outside Europe. Airlines will start paying next year for the emissions they make this year. In joint letters to the leaders of Britain, France, Germany and Spain, Airbus and a growing number of European airlines urged the governments to stop escalating the trade conflict with China and other countries opposed to the emissions trading scheme. "Counter-measures and restrictions on European airlines are in preparation, such as special taxes and even traffic rights limitations," the letter said. In China, approval for 45 wide-bodied aircraft had been suspended, Airbus said. The letter suggests the disputes over the scheme should be resolved under the United Nations International Civil Aviation Organisation. Hong Kong Airlines said last week it was considering cancelling an order for 10 A380 aircraft after Beijing banned mainland carriers from participating in the emissions scheme. The mainland's four largest carriers - Air China (SEHK: 0753), China Eastern Airlines (SEHK: 0670), China Southern Airlines and Hainan Airlines - have placed 631 firm orders with Airbus, accounting for 5 per cent of its total orders of 11,570 aircraft as of the end of last month. An official from the Civil Aviation Administration of China said the orders, which have been put on hold, were not firm and did not necessarily relate directly to the disputes between Beijing and Brussels. "In light of uncertainty over the European debt crisis, it is reasonable for the airlines to review their order books in response to the softening in travel demand," the official said. Mainland carriers need to get approval from the CAAC to buy aircraft. An Air China spokesman said she was not aware of the suspended orders. China Eastern and China Southern declined to comment. The International Air Transport Association, which represents more than 230 airlines, has called for a global solution through the UN agency. "I can't help feeling this would be easier if other states did not feel they were under duress from Europe," said Tony Tyler, the association's chief executive.

Plans are afoot to introduce a nationwide residence permit system to pave the way for better access to social services for migrant workers, who were long disadvantaged under an outdated household registration scheme known as hukou. A draft of the regulation is being circulated among government departments for consultation and it will be submitted to the State Council for approval within the year, said Deputy Minister of Public Security Huang Ming, speaking on the sidelines of the Chinese People's Political Consultative Conference at the weekend. He said the proposal would allow migrant workers to apply for a permit in the city where they live, and access basic social services there. Huang said his department was also finalising a "dynamic population database" in partnership with other bureaus to help it address the needs of migrants, numbering 230 million by the end of last year, according to official statistics. The decades-old hukou system often makes it difficult for migrant workers, including educated office employees and business owners, to access public services in the cities where they have lived for years. For example, if children from migrant families want to sit national college entrance exams, they must return to where they were registered by their parents, which is usually their parents' hometowns. This year, Zhejiang and Guangdong became the first mainland regions to introduce a system that will allow migrants and their children gradual access to services such as schooling, social security and even drivers' licence exam registration. Professor Yang Tuan, from the Chinese Academy of Social Sciences, said a new residence permit system would be a welcome step in opening up public services for those workers, especially in light of a recent shortage in young migrants who were being driven away to other jobs due to dissatisfaction over the quality of social services afforded to them in mainland cities. However, while the new residence permit system will go some way to addressing the plight of migrant workers, Yang said policymakers still needed to address unequal access to social welfare and public services faced by people in rural areas and smaller cities under the hukou regime. "As a legacy from the planned economy, the hukou system can no longer be justified, as the country has come a long way in its economic development," Yang said.

China yesterday welcomed a Russian and Arab League joint plan for ending the deadly violence in Syria as "positive", and renewed its call for a "political settlement" to the conflict. Russian Foreign Minister Sergei Lavrov and his Arab counterparts on Saturday issued a five-point statement after holding talks in Cairo, calling for "unhindered humanitarian access" in Syria as well as an end to the violence. They also agreed on setting up a mechanism for "objective monitoring" in the country and agreed on no foreign intervention, according to a statement read out by Lavrov and Qatari Foreign Minister Sheikh Hamad bin Jassim Al-Thani. "We believe that the five-point plan reached between Russia and the Arab League is of relevant and positive significance to the political resolution of the Syrian issue," Foreign Ministry spokesman Liu Weimin said. "We hope the international community will continue to make positive efforts for the fair, peaceful and proper solution of the Syrian issue." Earlier this month China unveiled its own six-point plan, calling for an immediate end to the conflict and for dialogue between President Bashar al-Assad's regime and the opposition. Beijing's proposal also rejected foreign interference or "external action for regime change" in Syria but supported the role of the UN Security Council "in strict accordance with the purposes and principles of the UN charter". The West and the Arab world have been piling pressure on Assad's regime to prevent a year-old uprising from spiralling into all-out civil war. Beijing and Moscow have drawn criticism for using their veto powers as permanent members of the UN Security Council to block resolutions condemning the crackdown.

Rivals merge to form online video giant - Youku and Tudou will put aside their differences for the US$1 billion deal. Two mainland internet firms are setting aside their bitter rivalry to merge, in a record-breaking deal to create the country's biggest online video-services provider - though they still must prove they are profitable. Youku and Tudou, both Nasdaq-listed internet video companies, said yesterday they had signed an agreement for Tudou to combine with Youku in a 100 per cent stock-for-stock transaction. The new company will be called Youku Tudou Inc. The merger is valued at US$1.04 billion, according to Thomson Reuters, making it the biggest mainland internet deal by stock swap on record. Youku is the mainland's largest online video-services provider and the second-largest worldwide, behind YouTube, according to Comscore. YouTube is barred on the mainland. The deal marks a milestone for the two former rivals, which have locked horns in court over alleged copyright infringement and unfair competitive practices. Other leading players in the mainland's online market include v.qq.com, ku6.com, tv.sohu.com and PPLive. Youku held a 21.8 per cent market share as of December 2011, while Tudou, ranked No 3, had 13.7 per cent, according to Beijing-based research firm Analysys International. "We intend to lead the next phase of online video development in China," Youku's founder, chairman and chief executive, Victor Koo, said in a statement. Xie Wen, an internet analyst and former Yahoo China president, said: "The deal will solidify Youku's leading position in China. However, I think deeper integration is needed." Despite the two companies' solid market position, two people working in the industry, who declined to be named, did not expect regulators to oppose the deal, saying the mainland tended to take a relaxed view of such transactions. However, the two companies face the challenge of proving to investors that online video is a profitable business as they contend with the high cost of bandwidth infrastructure and licensing content. Tudou reported a net loss of 511.2 million yuan (HK$625.74 million) last year, and Youku reported a net loss of 172.1 million yuan. While their income largely comes from advertising, both are trying to make internet users pay a premium for high-quality content such as new movies. "After the merger, the new company's competitor won't be other video websites. It will be web portals providing comprehensive services - like Sina, Sohu and Tencent (SEHK: 0700)," Xie said. These portals were heavyweights and video websites were in a difficult position, he said. "Besides, the deal does not touch the macro-environment under which the video sites are operating," he said, referring to the strict government monitoring. Beijing takes a cautious approach to online content, and its so-called Great Firewall has prevented internet users from accessing some of the most popular websites in the world, including YouTube, and social networking websites Facebook and Twitter.

Half Shenzhen's buses to be electric or hybrid - Plan to replace more than 50pc of its combustion engine fleet would reduce dangerous air pollution - A taxi is charged in Shenzhen. The city, which ranks second to Beijing as having the most vehicles of all kinds on the mainland, is concerned about fine respirable particles. In a bid to become China's electric vehicle capital, Shenzhen has set a goal to replace more than 50 per cent of its combustion engine buses with electric or hybrid ones by 2015, a move that would reduce air pollution, especially of dangerous fine respirable particles. Shenzhen mayor Xu Qin said during the current National People's Congress in Beijing that within three years the city would ban from the road all vehicles that failed to meet the country's advanced emission standards. The "green" credentials of electric cars is controversial. Some researchers say that only when renewable sources - such as solar, wind or hydropower - are used in making the car and generating the electricity to run it will emissions truly fall to zero. Nevertheless, Xu said adopting electric would greatly reduce air pollution in Shenzhen, which ranks second to Beijing as having the most vehicles on the mainland. "Electric cars consume electricity rather than petrol, so at least there'll be zero emission of PM2.5 from the public transport system," he was quoted as saying by yesterday's Nanfang Daily. PM2.5 refers to respirable suspended particulates of 2.5 microns or less, which include cancer-causing particles. Xu said 3,000 electric or hybrid vehicles were put into use in Shenzhen last year, and a further 2,000 were planned for this year. Shenzhen's transport commission said earlier that the city planned to put on the road 5,000 hybrid and 1,000 electric buses, and 3,000 electric taxis, by the end of 2015. This could cut 300,000 tonnes of carbon dioxide a year, The Economic Observer reported. According to Shenzhen's environmental protection bureau, the city's roughly 2.3 million vehicles emitted nearly 50 per cent of total PM2.5 and nitrogen oxides. Official figures suggest that 23 per cent of the city's emissions come from its 13,000 buses and 14,000 taxis. Professor Eric Cheng, a specialist in electric vehicles at Polytechnic University, said Hong Kong, which offers fewer government subsidies to promote use of electric vehicles, was unlikely to follow Shenzhen's example. "Everybody wants such a move," he said. "But it's nearly impossible for Hong Kong's privately owned bus operators to replace half of their vehicles with electric or hybrid ones, as the cost is too high. Without abundant government subsidies, it could take a decade for Hong Kong's bus companies to replace half of the buses with electric or hybrid ones." Although coal accounts for more than 80 per cent of the fuel mix in China's power plants, Cheng said: "Filters in power plants are much more advanced than those on buses or taxis, and the percentage of electricity from coal will surely decrease if we have an eye on the future." In Shenzhen, every electric bus put on the road has received a one million yuan (HK$1.22 million) subsidy since 2010, half from the central government and half from Shenzhen's. Subsidies for hybrid buses have increased from 300,000 to 600,000 yuan last year.

Ample room for cuts to reserve ratio, says Zhou - Central bank governor's remark reinforces market's expectation of another reduction - Zhou Xiaochuan says any cuts would be more about management of liquidity than monetary easing. People's Bank of China governor Zhou Xiaochuan says there is "ample room" for further cuts to the reserve requirement ratio of the country's major lenders. But he stressed that any such action would be more about the central bank's management of liquidity than monetary easing. However, Zhou's comments reinforced the market's expectation that the central bank will follow up last month's cut with another reduction in the reserve ratio - the amount of cash commercial banks must hold as reserves - to free up more money for lending, after disappointing data was released over the weekend. "In theory, there is ample room for RRR cuts. But we need to take into consideration the different restriction factors, and we need to see the advantages and disadvantages of adjustment, especially its impact on financial flows," Zhou told a news conference on the sidelines of the National People's Congress session. "The RRR is over 20 per cent now. We have had much lower RRRs, such as the 6 per cent in the late 1990s, and there is even lower than that in some countries," he said. Recent data suggests the world's second-largest economy is losing steam, raising the likelihood of more monetary easing by Beijing soon. On Saturday, the customs office said the world's biggest exporter recorded its largest deficit in at least a decade. This came 24 hours after the national statistics agency said although inflation cooled last month, retail sales, capital investment and industrial output fell below forecasts. Since December, the government has taken steps to fine-tune its two-year-old policy of macroeconomic tightening to take into account global economic changes. This has included two cuts in the reserve ratio. However, Zhou said the adjustments were not necessarily indicative of monetary easing or tightening but were more related to the central bank's management of liquidity, such as its purchases of foreign exchange. Zhou also dismissed suggestions that the central bank's recent moves to cut the reserve requirement ratio were designed to boost confidence in the stock or property markets.

US President Barack Obama will on Tuesday announce a new trade suit against China prompted by Beijing’s restrictions on the export of rare earth materials used in manufacturing high-tech products. A senior White House official said on condition of anonymity that the United States would bring the case at the World Trade Organisation with the European Union and Japan, in a new sign of election-year trade tensions with Beijing. China is the world’s largest producer of rare earths – 17 elements critical to manufacturing a range of high-tech products from iPods to missiles – and its moves to dictate production and exports have raised a global outcry. Critics say Beijing’s strategy is aimed at driving up global prices of the metals and forcing foreign firms to relocate to the vast emerging nation to access them. But Beijing says the restrictions are necessary to conserve the highly sought natural resource, limit harm to the environment from excessive mining and meet domestic demand. The Chinese government has set its this year export quota for rare earths at around 30,000 tonnes, the same level as last year. Yet exporters only filled roughly half the quota last year. State media have already reported that China was bracing for renewed calls to ease its rare earths controls after the WTO ruled that limits on such key raw materials broke trade rules. China has also called for greater use of rare earths for its own domestic manufacturing, a move which also raised concerns in the West. Rare earth goods have a wide range of applications in the military and technology sectors of the economy in particular. They are used in products including computers, MP3 players, disc drives, missiles and flat screen televisions and cellphones. Obama, facing fierce election-year pressure on China from Republican opponents, has repeatedly called on Beijing play by the “rules of the road” as it rises to become one of the dominant players in the global economy. The US president has already launched a new enforcement centre to more aggressively challenge “unfair” trade violations, including by China. In other disputes, Washington has accused China of artificially undervaluing its yuan currency in order to boost its own exports, hurting US manufacturers and hobbling the economic recovery. But China defends its exchange rate regime, saying it is moving gradually to make the yuan more flexible. During a visit earlier this year to Washington by China’s presumed next ruler, Vice President Xi Jinping, Obama spelled out expectations of China on trade. “We want to work with China to make sure that everybody is working by the same rules of the road when it comes to the world economic system,” Obama said, as Xi sat by his side ahead of their Oval Office talks. “That includes insuring that there is a balanced trading flow not only between the United States and China but around the world.” Xi used the visit to express hopes that US election-year politics would not have a “regrettable impact” on ties between the world’s two largest economies. The United States has also accused China of subsidising its auto parts sector and of not doing enough to crack down on US-developed and produced computer software. Early in the Obama administration in 2009, Washington also slapped harsh tariffs on Chinese tires, even as the White House sought to establish a co-operative relationship with Beijing on geopolitical issues.

Taiwan protested on Tuesday morning against a Philippine plan to explore for oil and gas in disputed waters in the South China Sea where Taipei claims sovereignty. “The Reed Bank is part of the Spratly Islands … and we reject any claim or occupation by any means of the islands and the surrounding waters,” the foreign ministry said. The Philippines plans to accept bids for exploration and drilling for oil and gas in the Reed Bank, it said. Taiwan, Vietnam, Brunei, China, Malaysia and the Philippines claim all or part of the Spratlys, which could lie on top of large oil reserves. All claimants except Brunei have troops based on the archipelago of more than 100 islets, reefs and atolls, which have a total land mass of less than 5 square kilometres. The Taiwanese coastguard currently has a 130-strong garrison on Taiping, the biggest island in the Spratlys archipelago. Taiwan’s security chief has called for Taipei to commit more military resources on the Spratlys, reacting to reports that rival claimants to the disputed waters are building up their armed presence.

Hong Kong*:  Mar 13 2012 Share

Panel may quiz Leung before poll on March 25 - First hearing to probe conflict-of-interest claims against chief executive candidate is on Saturday - Chief executive candidate Leung Chun-ying may not be able to avoid facing a lawmakers' inquiry into conflict-of-interest allegations before the city's next leader is chosen on March 25. At the first meeting yesterday of a Legislative Council select committee formed to investigate allegations - which concern Leung's role as a judge in a West Kowloon arts hub design contest in 2001 - members decided to begin hearings on Saturday. The first witnesses to be called will be key government officials involved. Leung is due to be summoned on March 20 - five days before the vote to choose the city's next leader - and will testify under oath. Whether Leung gives evidence that day or at a later date will depend on the progress made in the previous session. Leung is accused of failing to disclose his company DTZ's business relationship with one of the contest entrants. Leung says he was not made aware of the relationship. Former chief executive Tung Chee-hwa, whose administration stands accused of covering up Leung's failure to declare DTZ's connections with Malaysian contestant Hamzah & Yeang, is not among those named on the initial list of witnesses. Legco passed a motion earlier this month to invoke special powers to force a full-scale probe. In a letter to Legco president Tsang Yok-sing on March 2, Leung called on the committee not to start the hearings until after the election because he thought an investigation before the vote might be unfair to him. He also asked Legco to "consider reconstituting the select committee with members coming only from among those who have not nominated any candidate"; he said if it consisted of members who were "likely to have a prejudice" against him, its credibility would be undermined. Six of the 12 committee members nominated Leung's rivals, Henry Tang Ying-yen or Albert Ho Chun-yan. The only Leung supporter is Paul Chan Mo-po. Lawmakers agreed to hold three hearings on March 17, 20 and 31. A spokesman for Leung said yesterday that he respected the committee's decision and would try his best to co-operate, but he needed time to prepare for the hearings. Separately, Buildings Department chief Au Choi-kai said the investigation of illegal structures found at Tang's family home in Kowloon Tong was expected to be completed by the end of May.

Who asked Mr Kwok to dinner? No one admits inviting businessman thought linked to alleged Tang triad threat, who dined with Leung aides - Top-level calls for an end to smear tactics in the campaign to elect Hong Kong's next leader appeared to fall on deaf ears yesterday. Key players in the latest scandal to rock the chief executive election race clamoured to distance themselves from a controversial businessman at the centre of a storm over triad threats. Two power brokers gave opposing accounts of a now-infamous dinner attended by members of a rural lobby group and the campaign team of chief executive contender Leung Chun-ying. The dinner, at a seafood restaurant in Lau Fau Shan last month, is at the centre of a scandal over alleged triad threats against rival candidate Henry Tang Ying-yen, which prompted the latter to call in police. The dinner was attended by Leung's campaign director, Fanny Law Fan Chiu-fun, and deputies Kaizer Lau Ping-cheung and Karen Tang Shuk-tak, as well as a Leung supporter, Lew Mon-hung, and eight members of rural body the Heung Yee Kuk with votes in the election. Also at the dinner was controversial businessman Kwok Wing-hung - known, too, as "Shanghai Boy" - who is thought to be linked to Tang's complaint to the police. All those present deny inviting Kwok, and Leung and his campaign team have sought to distance themselves from the businessman. The saga took a new twist yesterday when an unnamed kuk member was drawn into the controversy. Lew, a member of the Chinese People's Political Consultative Conference, said a "heavyweight kuk member" helped arrange the meeting to aid communication between Leung's camp and the kuk over illegal structures in the New Territories. Lew said he did not know who issued the invitation to Kwok. "I'm friendly with a kuk Election Committee member ... We reached a consensus and I helped contact [Kaizer Lau for the dinner]," he said. The kuk middleman - whom he refused to name - contacted kuk representatives, Lew said, and he did not know in advance who would attend the dinner. Lew said he and three Leung campaigners paid HK$500 for the meal. Lew said Kwok was no stranger to the kuk: when land or old buildings were to be bought for new developments, he was the person the kuk would seek help from, Lew said. Echoing Lew's comments, Leung denied yesterday having anything to do with Kwok. "I, Leung Chun-ying and my campaign office members do not know Mr Kwok Wing-hung." Leung and Lew both said it was Lew who conveyed a message that some kuk members would like to express their views on New Territories issues but that Leung's campaign office did not organise the dinner. Kwok could not be reached for comment yesterday, but the Chinese-language newspaper Ming Pao quoted him as saying that a rural representative invited him to the dinner. Four kuk Election Committee members who were at the dinner offered a different version of events, though. They said the dinner was initiated by Leung's camp, and they did not know Kwok. They also said that during the dinner, Kwok was sitting near Lew, while kuk members were on the other side of the table. "We didn't pay for the dinner, Leung's camp did ... We said we would share the bill, but no one asked us to pay," kuk member Hau Chi-keung said. Kuk chief Lau Wong-fat said he did not believe the villagers were linked to triad members. Kuk members on the Election Committee nominated Tang but say they will vote according to the candidates' experience and proposals. On Friday, Tang reported to the police that an unnamed person related to a gang had threatened to release "black materials" via the media within days over an unspecified matter. Last week Vice-President Xi Jinping called for Hongkongers to work together, and yesterday senior officials including Chief Secretary Stephen Lam Sui-lung urged participants to uphold Hong Kong's reputation for clean elections. The Hong Kong Island regional crime unit was investigating Tang's complaint, a police spokesman said.

Police check two minibuses after a crash on Hiram's Highway yesterday. An investigation is focusing on whether speed was a factor. Almost two dozen people were injured when two red minibuses collided head-on on Hiram's Highway in Sai Kung yesterday. Police said 22 people were injured after a Sai Kung-bound minibus from Kwun Tong apparently crossed into an oncoming lane to overtake another vehicle, crashing into a Mong Kok-bound minibus near Marina Cove, Pak Sha Wan, at about 4pm. Seven fire engines and 14 ambulances were sent to the crash scene. "One of the drivers had his head trapped in the front [of the minibus]," Tai Po fire station chief Ronald Wong said. The driver was pulled out alive but suffered a number of fractures. The police said one of the seriously injured was taken by helicopter to Pamela Youde Nethersole Eastern Hospital, while 18 other wounded were taken to Queen Elizabeth Hospital and Tseung Kwan O Hospital. The Hospital Authority also sent a medical team to the site to help with the immediate treatment of less seriously injured. Police said there were no skid marks on the road from the minibuses. The front sections of both vehicles were badly damaged. The vehicles' windows were also smashed and fuel was splashed over the road. Officers were investigating whether speed was a factor in the crash. The two-lane highway is a popular route for locals making weekend getaways to Hong Kong's countryside. The crash also occurred on a section of the highway that is part of a road improvement scheme, according to the Transport Department's website. The website does not say when public consultation for the project is due to be completed. A fatal accident involving a tour bus happened nearby in 2008, killing 19 members of a Japanese religious group. Their vehicle careered down New Hiram's Highway and toppled over onto a noise barrier at the Nam Pin Wai roundabout.

 China*:  Mar 13 2012 Share

Wang Binghua (third from left), chairman of the State Nuclear Power Technology Corporation, is among top government advisers who deny concerns that Beijing's ambitious nuclear expansion plan is reckless. Nuclear ban set to end soon - Beijing is poised to back new reactor projects after carrying out safety checks on all existing atomic facilities, according to top aides and power firm executives. Beijing is nearly ready to lift its year-long ban on nuclear project approvals, top government advisers and senior executives of power firms say on the eve of the first anniversary of Japan's nuclear crisis. They also called for the construction of more nuclear reactors in inland provinces in a bid to reduce the mainland's dependence on polluting coal-derived energy. Their advocacy comes despite simmering opposition to nuclear power due to safety, security and environmental considerations. Wang Binghua , a member of the Chinese People's Political Consultative Conference (CPPCC) and chairman of the State Nuclear Power Technology Corporation, said Beijing had concluded safety checks on all operational reactors and other facilities under construction, and that approvals for new nuclear projects were expected to resume this year. Beijing had suspended approvals for new reactors and launched comprehensive safety reviews and stress tests on mainland nuclear plants within a week after Japan's Fukushima Dai-Ichi plant was crippled by a magnitude-9 earthquake and tsunami a year ago today. Japan's nuclear crisis also triggered a heated debate on the mainland in the past year about the safety of atomic energy, as Beijing plans to become the world's top nuclear power by 2020. "The safety checks found major problems that need to be rectified in 14 areas," Wang said without providing details of the safety review findings. He said while some problems had been corrected, others were being addressed or had been listed in a three-year rectification plan. Wang and Zhang Guobao, a CPPCC member and former director of the National Energy Administration, dismissed concerns that Beijing's nuclear expansion plan, especially in inland provinces, is reckless. "China must develop inland reactors and that's the consensus among the nuclear industry, local governments and the public," Wang said. He noted that central provinces - such as Hubei , Hunan and Jiangxi - had few alternatives to nuclear power in resolving power shortages. Pointing out that 100 out of 104 operational nuclear reactors in America were built inland, Zhang voiced his support for the mainland's nuclear expansion, including the construction of inland reactors. However, many nuclear scientists and environmentalists are at loggerheads with nuclear advocates. He Zuoxiu , a research fellow at the Chinese Academy of Sciences, slammed Beijing's original plan to build more reactors than the rest of the world combined in the next decade as another "Great Leap Forward". The term refers to the disastrous Mao-era pursuit of industrialisation in the late 1950s. Even so, speculation has been rife that Beijing may moderate its nuclear ambitions and shift its priority from speed to safety following the safety review, as well as public fears of Fukushima-style disasters. CPPCC member Lu Qizhou , chairman of China Power (SEHK: 2380) Investment Corporation (CPIC) - one of five state-owned power producers - blasted mainland media for their coverage of problems at a pioneering inland reactor in Pengze county, Jiangxi. Lu, who represents the project's developer, said the reports that sympathised with local critics of the project were "media hype" and "an insult" to local residents. The Pengze project, which was planned near the provincial border, has come under fierce opposition from local authorities and residents in adjacent Wangjiang county, located just across the Yangtze River in Anhui province. Wang, whose firm helped choose the reactor's site, also denied allegations that preliminary studies had overlooked earthquake risks and the environmental impact on 200,000 people living within a 10-kilometre radius of the plant. Separately, Zhang and Lu expressed dismay at Myanmar's decision last year to halt the construction of the Myitsone dam project, one of seven dams CPIC planned to build along the Irrawaddy River, which will cost a total of US$20 billion. "We were invited by the Myanmar government to build the project, which would greatly benefit the local economy and its people," said Zhang. Myanmese environmentalists and local residents have been opposing the project for years, and the decision to halt the project was seen as a rare victory for the Myanmese.

Moutai aims high for global reach - Having built a reputation as China's top liquor brand, Moutai is now aiming to become a world-famous drink. Ji Keliang, the honorary chairman and chief technical adviser of China Kweichow Moutai Distillery, told China Daily that he was confident in the quality and unique flavor of the liquor, and the sophisticated technology used in its distillation. But he admitted the sales of Moutai products outside of China is still quite limited. This was due in part to the difference in drinking habits. There is a greater choice of alcoholic strengths and flavors in other countries. Ji, 73, has worked for the distilling company for nearly 50 years. He became chairman in 1998 and retired from the position last year. The group aims to further increase its output to about 100,000 tons by 2015, from about 60,000 tons in 2011, he said. It will bring the group an income of 50 billion yuan ($7.9 billion). The company saw an income of 23.7 billion yuan last year. "If Moutai succeeds in the international market, it can set a good example for other Chinese liquor brands," said Liu Yuan, secretary-general of the China National Association for Liquor and Spirits Circulation. Moutai's strategy is to promote itself together with traditional Chinese culture. "Instead of selling the liquor alone, we will combine our products with the Chinese culture," Ji said. Yi Jigang, the former chairman of liquor maker Guizhou Dongjiu, backed the strategy. "It's vital you exploit the culture behind the product," he said. "Moutai will get more recognition from Western consumers when it allows them to also get a taste of the rich Chinese culture behind the brand." But Yi warned that Chinese liquor producers did not currently have the international marketing capability and would be greatly restricted if they relied too much on foreign distributors. In the market at home, although Moutai enjoys a high degree of recognition and popularity, its image has been tainted by being associated with lavish lifestyles, including that of government hospitality. The price of a 500 ml bottle of ordinary Moutai liquor is more than 1,500 yuan after it saw a series of recent price rises. During the Spring Festival, the price of a bottle rose to 2,300 yuan, almost the basic monthly salary of a production worker. But Li Zhanshu, Party chief of Guizhou province, where the Moutai company is located, argued the high price of the drink was due to the marketing strategy. "The public and government are both consumers in the market. There is demand from the government and we should not oppose such demand," Li told a news briefing on Wednesday during the National People's Congress session. He added that if Moutai was banned in government banquets, some places might offer Chateau Lafite Rothschild instead, an imported French wine that is even more expensive.

Chief justice Wang Shengjun delivers a report on the work of the Supreme People's Court at a meeting of the annual parliamentary session on Sunday. Admitting problems in China's judicial system, chief justice Wang Shengjun Sunday vowed to push forward reform to realize judicial justice. China needs to improve the work of courts and deepen the reform of its judicial system, Wang said in a report on the work of the Supreme People's Court delivered at a meeting of the annual parliamentary session. "Some courts have not done well in improving transparency of court affairs and promoting democratic judicial system," he said. Some judges behaved badly and had poor working style while irregular practice in court proceedings, delay of hearing could still be found, he said. A small number of judges were even found taking bribes and perverting the law, he added. This year the supreme court will work to reform the court procedures, speed up proceedings of civil cases involving a small sum of money, and improve rules for citizens to observe trials, he said. Chinese courts will better accept and respond to supervision from lawmakers, political advisors and the public, he said. He urged more efforts in accepting supervision from the general public, including soliciting opinions from the public, giving more heed to media reports and voices of netizens as well as promptly responding to social concerns.

Hong Kong*:  Mar 12 2012 Share

New grouping wins rights to Kai Tak cruise terminal - Worldwide Cruise Terminals Consortium has been awarded the right to operate and manage the long-awaited cruise terminal at Kai Tak. The consortium is required to pay the government a fixed rent as well as a variable rent. The fixed rent for the 10-year operation is around HK$13 million. In addition, the government will receive a percentage of the operator's gross receipts as variable rent, with the percentage increasing from 7.3percent to 34percent as gross receipts rise. The grouping is made up of Worldwide Flight Services, Royal Caribbean Cruises and Neo Crown. The government said Neo Crown is owned by Shun Tak Holdings, which has core businesses in property development, leasing and management, and transportation. A spokeswoman for the Tourism Commission said it is necessary to charge a variable rent as this will guarantee the government a higher rental income if usage and operation of the cruise terminal is satisfactory. The consortium will pay the government 7.3 percent of revenue if it is less than HK$30 million a year. Between HK$30 million and HK$60 million, the percentage will be 18 percent. The figure will rise to 23 percent of revenue between HK$60 million and HK$90 million, and then to 34 percent for sums higher than that. Worldwide Flight Services has a 60 percent interest in the consortium, while Royal Caribbean Cruises and Neo Crown each have a 20 percent stake. The consortium will be responsible for the berthing of vessels and managing traffic, transport, security and shops. The government said the terminal building and first berth are likely to begin operations in the middle of next year. Barry Nassberg, chief operating officer of Worldwide Flight Services, said yesterday the company will co-operate with the Tourism Board to encourage more cruise liners to berth in Hong Kong. It will also develop new shore excursion programs to lure overseas visitors. Li Kui-wai, associate professor of economics and finance at City University, said the terms set by the government are quite attractive and likely to encourage the consortium to invest more in promoting Hong Kong as a cruise hub. The Kai Tak cruise terminal, which will cost about HK$8.15 billion, is expected to bring in between HK$1.5 billion and HK$2.6 billion a year by 2023 and create 5,300 to 8,900 jobs.

Li Ka-shing has anointed his eldest son Victor Li Tzar-kuoi to lead the Cheung Kong group of listed companies, saying he is ready to assume the mantle of the business empire at any time. "If I were to tell Victor two minutes before I depart that I was going on vacation for two months, I would have confidence that the company would operate as smoothly as normal," he told Forbes Magazine in a rare interview. "I have been teaching him by example how to be a leader since he was a boy." Victor Li, 48, is deputy chairman and managing director of Cheung Kong (Holdings) (0001) and deputy chairman of Hutchison Whampoa (0013). He also chairs Cheung Kong Infrastructure (1038) and CK Life Sciences International (0775). But the elder Li, known as Superman for his business prowess, emphasized that having a succession plan does not mean he has any immediate intention to retire. "I am not saying that I have a timetable for retirement - I am very healthy." And even if he does retire, he will remain at the Li Ka Shing Foundation, which has donated US$1.6 billion (HK$12.48 billion) to education causes worldwide. Li, 83, is the world's ninth richest man with a net worth of US$25.5 billion as measured by Forbes. He says he reads books about science, economics, politics and philosophy. Recently, he read about Zhang Juzheng, an influential political leader of the Ming dynasty. "I know how to find peace within my heart and soul," Li said. "If I have a rare vacation, I will spend it reading." Explaining his inclination to see the bigger picture in business, he said: "Business people in general shouldn't have an overly narrow view of their industry." Rather, "they need a 360-degree perspective and to look at everything from all possible angles." He reminded young entrepreneurs that starting a business is not easy. "Hard work is more important than opportunities. If you don't work hard, opportunities will slip away." Li said he taught his younger son, Richard Li Tzar-kai, two lessons on business. The first is to "leave something on the table for the other side" in transactions because that will help to bring deals back to you in the future. The second is that success is all about planning, studying downside risk and execution. "Arrogance leads to failure."

A proposed monorail for the West Kowloon Cultural District could be replaced with more eco-friendly transport, the arts hub authority told Town Planning Board members when it introduced its master layout plan yesterday. The suggestion arose as board members said accessibility to the 40-hectare site was one of their major concerns, with one suggestion Venetian-style water taxis. Board member Anna Kwong Sum-yee suggested the advantages of a water taxi system like that used in Venice. "Given the availability of pontoons in the design, water taxi tours will be suitable and allows visitors to tour around the whole arts hub in half an hour," she said. Kwong said similar transport could be found in Singapore and Thailand. Another board member, Dr Lo Wai-kok, said: "How can a visitor walk from the Xiqu Centre in the east to the mega performance venue in the west? It's like walking from Jordan to the Star Ferry Pier in Tsim Sha Tsui." Lo urged the authority to plan extensively for connections within the site, especially for the elderly and handicapped. He also asked if the monorail proposal was still in the plan. The authority's executive director, Dr Chan Man-wai, replied that the distance from the east side to the west side was about 1.5 kilometres, but the authority had planned transport within the hub to allow easier access, including a travelator, or moving walkway, to convey visitors from opposite ends of the site. Chan said the travelator would be covered to allow travel in all types of weather. He also disclosed that the authority might replace the proposed monorail with eco-buses or trams that would connect the arts hub with other parts of Tsim Sha Tsui. Critics have said that a monorail would be expensive and could block the view of the harbour. Julia Lau Man-kwan, another board member, questioned whether visitors needed to walk 500 metres to a venue after parking their cars. Chan said parking spaces would be spread across the site. There would also be plenty of dropping-off areas throughout the district, especially along Austin Road. According to the master layout plan, the design will adopt a stepped-height approach with lower buildings located near the harbour. The highest building at the site would be no higher than 100 metres. Of the total gross floor area of 739,550 square metres, no more than 20 per cent would be designated for residential use, the authority said. While arts and cultural facilities will account for 35 per cent to 40 per cent of space, retail, dining and entertainment facilities would cover about 20 per cent of the floor area. The remaining 25 per cent would be designated for hotels and offices. A spokeswoman for the Planning Department said the board endorsed the authority's plan after discussion yesterday. The plan will be on show for two months.

Design contest streamlined for fairness - West Kowloon arts hub sets two-stage process for declarations of interest in competition to pick architectural team for first venue, the Xiqu Centre - The design competition for the first West Kowloon arts hub venue will adopt a "cautious" two-stage process for declarations of interest to ensure a fair contest for the building to showcase Chinese opera. The West Kowloon Cultural District Authority yesterday announced the details of the design competition for the Xiqu Centre, the first of 17 arts venues. It will be built at the corner of Canton Road and Austin Road West, where the authority staged its first cultural program, Cantonese Opera Bamboo Theatre, during the Lunar New Year. The authority said it streamlined the competition so the Xiqu Centre could open before the end of 2015. It will feature a 1,100-seat main theatre, a smaller one of 400 seats, and a teahouse for 200 customers, plus training and educational facilities. It did not say whether its "cautious" procedure for declarations of interest was influenced by recent conflict-of-interest allegations against chief executive hopeful Leung Chun-ying over his role in an arts hub design competition more than 10 years ago. Design teams must first detail their credentials. The assessment will attach great weight to their creative design, credentials and track record, as well as the qualifications of team members. Each team must declare their actual, potential and perceived conflicts of interest when submitting their application during the pre-competition period. Teams do not submit designs at this stage. Four to six teams will be shortlisted to enter the actual design contest, which will include schematic plans and models. At this stage, the shortlisted teams will make further declarations of interest. Each shortlisted team will be paid a nominal HK$1 million for their submissions. A similar procedure will apply to members of the yet-unnamed jury. The number of jury members has yet to be finalised, but two stand-by jurors will be appointed, so they can replace anyone who is deemed unsuitable to cast a vote. The arts hub's executive director for project delivery, Dr Chan Man-wai, insisted the winning team would be chosen not just on the strength of creative ideas; it must be willing to work with all parties - especially Cantonese opera professionals - to create a venue to meet users' needs. "Design is an interactive process. The shortlisted teams will have to take part in workshops with industry professionals," Chan said. It had not been decided how and when to engage the public in the competition. Lee Shing-see, representative of the development committee, will chair a steering committee for the competition. Members include Liza Wang Ming-chun, opera performer and chairwoman of the Chinese Artists Association, and Yip Wing-sie, music director of the Hong Kong Sinfonietta. Bernard Lim Wan-fung, architect and president of the Hong Kong Institute of Urban Design, is the competition's independent adviser. 

 China*:  Mar 12 2012 Share

A customer chooses peanuts at a supermarket in Huaibei, Anhui province. Consumer price inflation fell to a 20-month low of 3.2 per cent last month. Dip in mainland inflation may ease monetary curbs - With the latest economic data pointing to a dramatic slowdown in growth, experts say policymakers may now have scope to relax their tight policy stance. The mainland's consumer inflation fell sharply last month, and other key economic indicators dropped early in the year. Together, they suggest a dramatic slowdown in economic growth and give policymakers more room to stimulate demand given continuing concerns about sluggish US growth and the euro-zone crisis. The consumer price index rose 3.2 per cent year on year last month, a 20-month low, after rising 4.5 per cent in January, and the producer price index was flat, compared with a 0.7 per cent year-on-year increase in January, the National Bureau of Statistics said yesterday. Growth in capital investment slowed to a 10-year low and factory output growth fell back to its lowest since July 2009, while retail sales also cooled more than forecast in the first two months of this year. The numbers confirm that China, the biggest single contributor to global growth, is also losing steam. "The inflation story is over," said Sun Junwei, a China economist with HSBC. Alaistair Chan, an economist with Moody's Analytics, said diminishing inflation pressures gave government scope to ease monetary policy. Hopes that Beijing might soften its monetary stance lifted Asian markets, with Hong Kong's benchmark Hang Seng Index rising 0.89 per cent and the Shanghai Composite gaining 0.79 per cent. Song Yu, a China economist with Goldman Sachs, said he believed policymakers were now more concerned about growth risks, given yesterday's data. "At the same time, the larger-than-expected fall in CPI/PPI inflation is likely to alleviate the concerns they have on policy loosening," Song said. Sun said the latest data left the People's Bank of China with fewer excuses for not softening its stance in order to promote growth - especially given the sharp slowdown in exports so far this year. "Get ready for more steps towards policy easing after the NPC meeting," she said, referring to the National People's Congress, which winds up its annual session on Wednesday. However, Lu Ting, the chief China economist with Bank of America-Merrill Lynch, sounded a cautionary note, saying inflation had been "artificially tamed" in the past because the government had controlled many prices. "With falling CPI inflation, Beijing is likely to seize the opportunity to raise regulated prices such as power tariffs and may even carry out other price reforms," Lu said. Data from two months was released together by the NBS to minimise distortions from the timing of the Lunar New Year holiday, which in some years falls in January and in other years in February. In the first two months, the CPI was up 3.9 per cent compared with a year earlier. On a month-on-month basis, the CPI fell 0.1 per cent in February, the NBS said. Inflation has declined steadily from the 37-month peak of 6.5 per cent in July last year, but rebounded in January, sparking concerns that price pressure had not been extinguished. But economists said the week-long Lunar New Year holiday in January boosted food prices that month, an effect which was then reversed last month. The government's official target calls for holding inflation below 4 per cent this year. Food prices, which account for nearly one-third of the weighting in CPI's calculation, increased 6.2 per cent last month from a year earlier, compared with a 10.5 per cent rise in January. The price of pork, the nation's staple meat, jumped 15.9 per cent year on year after surging 25 per cent in January.

China says developing nations can take more action on climate change only with more money and technology from rich countries, which need to recognise their past responsibility for greenhouse-gas emissions. "Social and economic development and poverty eradication are first and overriding priorities of developing country parties," the National Development and Reform Commission said in a submission on the website of the UN climate unit. "Whether the developing-country parties could enhance their actions both on mitigation and adaptation depends on the enhanced finance-and-technology support by developed-country parties." There was a risk that developed nations might be double counting when they used carbon markets to help reduce the cost of greenhouse-gas cuts, the submission said. They would do so by arguing that buying emissions credits fulfilled their financial and technology-transfer commitments, and offset emissions at the same time.

Cherish China political system, NPC chairman says -Western political systems were not suitable for China. National People's Congress chairman Wu Bangguo vowed yesterday that the mainland would stick to its socialist path, saying that Western political systems were not suitable for China despite growing calls for political reform. In a report delivered to the annual session of the NPC in Beijing, Wu said that a socialist system with Chinese characteristics had guaranteed development and the country "must cherish it even more and adhere to it for a long time to come". "We need to be fully aware of the essential differences between this system and Western capitalist countries' systems of political power," he said. "We need to remain sober-minded and take a firm and clear stand on major issues of principle and unwaveringly keep to the socialist path of political development with Chinese characteristics." Critics have been calling for a revamp of the political system, especially since pro-democracy revolts swept the Arab world last year. Wu told last year's session that China would not employ a system of parties holding office in rotation and would not exercise separation of powers. There have been new calls for reform this year, with some scholars, including famous economist Wu Jinglian , expressing concern that economic reforms will stall if there is no political reform. Wu urged 2,978 NPC deputies yesterday to have "a firm grasp of the correct political orientation". "Comrades working at people's congresses should enhance their theoretical competency, maintain a high level of political unity with the party central committee, and take a clear stand in rejecting the influence of all erroneous ideologies and theories." Wu said 2012 was an important year for the NPC because the Communist Party would hold its 18th congress this autumn, overseeing a change of leadership. "To ensure the success of the 18th congress, it is crucially important for us to firmly follow the general principle of making progress while maintaining stability," he said. Wu also said the NPC would pay attention to the transformation of the mainland's economic development model, vowing to tackle the problems of unbalanced development and focus on boosting domestic demand, increasing investment in science and technology, reducing emissions and promoting the use of alternative sources of energy. He said the NPC had investigated how to prevent local government debt risks and establish a mechanism to ensure basic funding for county governments. Local government debt has grown rapidly, sparking concerns about the ability to repay loans. Wu said the NPC had vowed to prevent local governments from making payment guarantees in violation of regulations and to subject their budgets to review. The NPC will also launch studies on the reform and development of state-owned enterprises, on strengthening environmental protection and on promoting urban community development. Wu said the mainland would also accelerate personal income tax reform to adjust income distribution. Legislation will focus on society and culture. The NPC will deliberate drafts of the mental health law, law on insurance for military personnel, and draft amendments to the civil procedure law. Laws will be drawn up to promote a healthy online culture and national information security.

Beijing Friendship Hospital and Health Minister Chen Zhu = China's push to overhaul its health-care system is encountering challenges from public hospitals, Health Minister Chen Zhu said, an obstacle that has broad implications for the country's economic outlook. On the positive side, Dr. Chen said that China has extended basic medical coverage to 96% of rural Chinese. Until a few years ago, the bulk of the rural population had no health insurance, which meant that a serious sickness within a family often led to financial ruin, and returned many farmers to the poverty they had recently escaped. However, Dr. Chen portrayed a situation that increasingly worries health-care experts: that the biggest obstacle to fixing health care in China is public hospitals that see reform as a threat to their for-profit status—and to the income of both doctors and administrators. "The major challenge is the reform at the public hospitals," said Dr. Chen in an interview. China in 2009 embarked on an ambitious three-year, $125 billion effort to expand health-insurance coverage, improve primary-care facilities and revamp the public-hospital system, among other goals. The push fits in with China's broader economic goal of spurring domestic consumption: The government hopes that a better social-safety net will encourage families to spend more of their savings. It has made major strides, experts say, especially on extending insurance coverage to the country's 833 million rural residents. But public hospitals, historically the backbone of treatment in China because of the lack of primary-care facilities, have fought the overhaul. They benefit from the current system in which they are allowed to make up for low government-set prices for beds, nursing care, operations and other services by reaping profits from the sale of drugs and diagnostic tests. The system has led to massive overprescription of expensive drugs, and needless testing. In the past three years, reforms have created a list of "essential drugs" for common illnesses whose prices are fixed at a discount and whose use doesn't lead to a commission, which has helped lower health-care costs at some hospitals. Such moves, however, have lowered hospital revenue, which has prompted resistance from hospitals and doctors. "China has not been able to make much movement because the government and the minister of health are trying to change the hospitals' motive, structure and management," said William Hsiao, an economics professor at Harvard University's School of Public Health who studies Chinese health reform. "Hospitals and physicians are fighting back furiously." Hospitals appear to be shifting away from drugs on the essential list to more expensive drugs and passing the higher costs on to patients, according to research from Dr. Hsiao and his colleagues recently published in the medical journal the Lancet. Dr, Hsiao said China has made great strides in improving the primary-care infrastructure. According to his analysis, around 92% of the Chinese population has some form of insurance coverage, slightly below Chinese government claims, though the coverage for many is limited. "The strategy is: get everyone covered, then deepen the coverage," said Dr. Hsiao. However, he said the inability to successfully curb costs at hospitals could have trickle-down effects for insurance coverage. "When the public hospitals, which are the mainstay of the provision for health care in China, are for-profit institutions, they will use every possible means to get money out of the patients or the insurance, so the insurance fund is going to have a tough time to sustain itself," said Dr. Hsiao. Currently, the total health expenditure in China accounts for about 5% of its gross domestic product, and of that, about 28% is paid for by the government, 35% by individuals and the remainder by employers. By the end of 2015, the goal is to increase the government's contribution to about 33% and reduce individuals' out-of-pocket expenses to 30%, said Dr. Chen. Dr. Chen, a hematologist, was in New York to receive an award from the National Foundation for Cancer Research for work that he and colleague Wang Zhenyi conducted on leukemia. The only nonparty member among China's senior leaders, Dr. Chen became a self-taught "barefoot doctor" when he was sent to the Chinese countryside for re-education in the 1960s. Later he obtained his doctorate in Paris. He said the workload of doctors has almost doubled at hospitals over the past three to four years as more people have gotten insurance and have begun seeking medical care. "Nowadays, everybody wishes to see the best doctors," Dr. Chen said. In the next phase of reform, the Health Ministry will seek to protect doctors' salaries by increasing government investment in hospitals and relying more on payments from insurance, said Dr. Chen. The low cost of medical services, like operations or nursing care, also needs to be addressed he said. "We need to increase the price of nursing fees, operating fees," he said. The ministry will begin pilot projects in hospitals at the county level in some 300 of 2,800 counties across China, using public funds to improve equipment and using insurance to pay for operational costs, said Dr. Chen. If successful, it plans to launch the problem nationally at the county level next year. China also has another tier of hospitals in cities, and is conducting pilot programs in hospitals in 17 cities, including some of the largest like Beijing, Shanghai and Shenzhen. Part of the pilot programs will include ongoing tests of various payment policies, including paying a set amount per patient or a lump sum for a particular diagnosis. The government also wants to improve training of general practitioners and attract new talents at the grass roots level, such as at village clinics, instead of just big hospitals.

Chinese auto workers assemble vehicles at a car plant in Hefei, east China's Anhui province. China swung to a massive trade deficit in February, due partly to seasonal distortions but also to faltering demand for the country's exports. The weak export performance comes on top of a raft of disappointing economic data on Friday that economists said will add to the likelihood of additional easing by the central bank and other policy makers. "Overall, economic conditions are getting weaker at a fast pace," said Nomura economist Zhiwei Zhang. "The slowdown is happening faster than the government expected." China posted a trade deficit of $31.48 billion in February after reporting a $27.28 billion surplus in January, according to data released Saturday by the General Administration of Customs. Economists had widely expected the trade balance to swing to a deficit, as imports recovered from a temporary disruption during the Lunar New Year holiday in January. But the size of February's deficit is well beyond the range of analyst estimates. It is the largest monthly deficit in Dow Jones data dating back to 2000, when the overall economy was much smaller, and likely the largest ever. Economists polled earlier by Dow Jones had a median forecast of an $8.5 billion deficit. The biggest deficit forecast, from Bank of America-Merrill Lynch, was $23.2 billion. Following the poll, some analysts adjusted their estimates after Commerce Minister Chen Deming said at a press conference on Wednesday that preliminary data for the first two months of this year show that China's exports can increase by 7% in 2012. Nomura's Mr. Zhang, for instance, said he expected at $28 billion February deficit based on Mr. Chen's remarks. Mr. Zhang said Saturday the surprisingly large deficit was due to especially weak exports, likely due to faltering demand for Chinese goods in the European Union and other markets. Exports rose 18.4% in February from a year earlier, having fallen 0.5% in January. Economists had expected exports to rise 28.8% in February. Imports rose 39.6% from a year earlier, compared to a 15.3% decline in January. Economists had expected a 26% increase. For January and February combined, exports rose 6.9% while imports rose 7.7%. The January-February trade deficit came to $4.25 billion, compared with a slight deficit of $890 million in the first two months of last year. Analysts say that China is still likely to run a trade surplus for the full year. The country's manufacturers often stock up on imported supplies early in the year that are then fashioned into exports later in the year, leading to seasonal deficits early on. The country's overall trade deficit has been shrinking for several years, leading Chinese officials and many analysts to argue that the country is rebalancing away from reliance on external demand and that the yuan is less undervalued. On Saturday, Former Vice Commerce Minister Wei Jianguo told Dow Jones Newswires on the sidelines of the annual meeting of China's legislature that the country's foreign trade will face stiffening challenges this year. The country's exports are likely to rise at a single-digit pace this year, he said, having risen 20.3% last year.

Hong Kong*:  Mar 11 2012 Share

A new advertisement outside the famous Yung Kee restaurant in Central, which celebrates its 70th anniversary later this year. A family's legal tussle over the ownership of Yung Kee has not halted the famous Central restaurant's quest to upgrade its 70-year-old brand as anniversary celebrations loom. The family business, known for its roast goose and fine cuisine, has made headlines after the eldest son of company founder Kam Shui-fai challenged his younger brother in court. But away from the courtroom, the restaurant has appointed public relations agency Trimaran to devise a year-long branding and marketing campaign, the first time in seven decades it has sought help from an external agency. "This collaboration aims to enhance the awareness and perception of Yung Kee's brand, cuisine and service offerings to the Hong Kong and Greater China market," Trimaran said. The 70th anniversary celebrations, to start in November, will allow locals to reminisce about the old-world charm of Chinese restaurants, the firm said. The agency also aims to promote the Yung Kee brand and Cantonese cuisine to food-lovers worldwide. Yvonne Kam, daughter of Kam Shui-fai's second son Ronald Kam Kwan-lai, had earlier said the restaurant could be closed for a month this year for renovations. The premises were too old - Yung Kee has occupied its Central location since the 1960s - and the ventilation system needed to be fixed, she said. But a Yung Kee spokeswoman said yesterday it was too early to tell if a closure was necessary. "The biggest worry is it would affect our customers," she said. She added that the court case would not affect the celebrations and said: "Both bosses are devoted to continuing the restaurant business. Its operation is not affected. "The agency will be responsible for related promotions, press coverage and advertising ... maybe for some seasonal dishes." Hardy Kam, son of eldest son Kinsen Kam Kwan-sing, who is fighting his brother Ronald Kam in court, said he had no idea about the new PR campaign and would not comment. In the Court of First Instance, Kinsen Kam demanded either he could buy out his brother's 55 per cent share or his brother could buy out his 45 per cent share, claiming that he was stripped of his power when his brother unfairly obtained majority control. If that did not materialise, he wanted the court to issue a winding-up order, which could result in a forced sale of the company. Lawyers for both sides have completed their submissions and are awaiting the judge's verdict.

Tang seeks protection over alleged triad threats - Chief executive candidate says he feels intimidated that gangs could be involved in a smear campaign - Henry Tang arrives for an election forum on the rule of law and core values, held in Wan Chai. Chief executive candidate Henry Tang Ying-yen has asked police to step up protection for him as the force's organised crime unit launched an investigation over alleged triad threats. In the latest, bizarre twist of an increasingly bitter election campaign, the scandal-hit candidate said he felt intimidated by allegations that gangs could have got involved in initiating a fresh smear campaign against him. A police spokesman last night confirmed they had received a complaint from Tang that was being investigated by the organised crime and triad bureau. Tang said a gang-related member, who he did not name, had made threats to him through the media that "black materials" would surface within days. He also accused a supporter of fellow candidate Leung Chun-ying, CPPCC member Lew Mon-hung, of allowing gangs to become involved in the election. "Lew Mon-hung has met people with a triad background and stated the people provided information about 'collusion between business and government' involving me," Tang said in a written statement. Following a forum he attended last night, he said he felt his personal safety was under threat. "After discussing the matter with my staff, I decided to report the matter to police." Lew last night rejected Tang's allegations as groundless. At the same time, Leung's campaign office issued a statement saying that Leung had often reminded his campaign staff to abide by clean tactics. The developments come a few days after it was revealed that Lew, as well as Leung's campaign director, former senior official Fanny Law Fan Chiu-fun, joined a dinner that an alleged former gang member also attended. Lew later admitted he attended the dinner and said he heard that some of the diners knew of evidence that showed collusion between Tang and big business. The Democratic Party yesterday afternoon made a report to the Independent Commission Against Corruption, urging the graft-buster to look into the matter. The party said Lew could have threatened the outcome of the election, citing the Elections (Corrupt and Illegal Conduct) Ordinance, which stipulates that it is corrupt conduct to threaten to use duress against an election candidate. Late last night, Tang sent a letter to Election Committee members saying the alleged incident had tarnished Hong Kong's rule of law and the electoral process.

Jay Walder, chief executive of the MTR Corp, said he could not predict by how much train fares in Hong Kong would rise this year. MTR Corp profits up 22pc to HK$14.7b - Earnings from transport operations fall despite rise in fares and passengers, but property profits rise and mainland and overseas operations climb 8pc - Net profit at MTR Corporation (SEHK: 0066), the city's only rail operator, climbed 22 per cent to HK$14.7 billion last year thanks to better earnings from its property and commercial businesses and its overseas rail operations, the company said yesterday. Earnings from its transport operations in Hong Kong, however, fell 6 per cent to HK$2.7 billion, despite a 2 per cent rise in fares on average and a 5 per cent rise in total journeys. Regardless of the drop in the profitability of its local operations, the MTR Corp announced a HK$1 billion enhancement project yesterday, including installing washrooms at interchange stations, and external lifts, wider gates and platform seating. While train fares are due to be increased this year under the current adjustment mechanism, chief executive Jay Walder said that because the fare adjustment would be based on data still to released, including the composite consumer price index (CPI), "I can't tell the size of the fare increase now." Hong Kong's CPI rose to 6.1 per cent in January. The profit margin of its local train operations dropped to 20 per cent last year from 22.2 per cent in 2010, still relatively higher than other franchised public transport operators in the city, and demonstrators protested at the MTR Corp's earnings press conference yesterday against any further fare increases. Walder said a review of the fare mechanism would be conducted by the government later this year, though he did not speculate on how fare adjustment methods might change. The MTR Corp's railway operation on the mainland and in the United Kingdom (where the company is a partner in the London Overground service), Sweden and Australia reported an 8 per cent rise in profit, helped by the Shenzhen-Longhua line being completed in June. Operations in Stockholm started to break even last year. Walder said the company was in the bidding for another metro service in the UK. The company's Melbourne operation was "severely compromised" by unusual and adverse wet weather last year, Walder said. The MTR Corp, which also owns and operates 12 shopping malls in the city, including the International Financial Centre in Central, saw its earnings from rental and management fees increase to HK$2.48 billion last year from HK$2.30 billion. Revenue from property sales, mainly at Festival City in Tai Wai, increased 22 per cent to HK$4.9 billion. This year's property profits would by driven by a residential project at the Che Kung Temple in Sha Tin. David Tang, the MTR Corp's property director, said pre-sales would be rolled out as long as approvals were issued by the government, hopefully later this year. Five development sites above MTR stations will be offered for tendering this year, including Tai Wai and Tin Shui Wai. Tang did not give a timetable for the re-tender of the Bayside site at Tsuen Wan West station after the tendering process was aborted in January. Long Ping North and Long Ping South may be tendered out this year, he said. The company won its first mainland property development project last August, for the site above the Longhua depot. MTR Corp said it was concerned about advertising revenue in light of uncertainty in the global economy. Its revenue from advertising sites in stations increased 21.7 per cent year-on-year to HK$893 million last year. The board recommended a final dividend of HK 51 cents a share, giving a total dividend for the year of HK 76 cents a share.

Li Ka-shing back as Asia's richest - HK tycoon tops Forbes list again after seven years, taking over from Indian steel baron Lakshmi Mittal - Hong Kong tycoon Li Ka-shing has reclaimed the top spot as Asia's richest man after a seven-year gap, unseating India's Lakshmi Mittal in the latest Forbes billionaires list published yesterday. Li, 83, is worth US$25.5 billion, according to Forbes, overtaking London-based Indian steel baron Mittal, who lost US$10.4 billion last year as shares in his firm ArcelorMittal, the world's biggest steelmaker, plunged. Mittal, who also dropped out of the global top 10 for the first time since 2005, is now estimated to be worth US$20.7 billion and was placed in 21st position. Li, nicknamed "Superman" for his long-running business success, started out as a maker of plastic flowers and now commands a vast empire with interests including property, telecoms, utilities, ports and retail. One in every seven residences in Hong Kong was built by Li's companies, which also handle 70 per cent of the city's port traffic, said Forbes. The second richest Asian on the Forbes's annual list is India's Mukesh Ambani, with US$22.3 billion in 19th position. His wealth declined as shares of his oil and gas conglomerate, Reliance Industries, dropped in value amid falling gas output. Globally, Li rose from the 11th spot to ninth on the world's richest ranking, while Mittal slipped to 21st spot. The Forbes ratings were at odds with the Credit Suisse Global Wealth Report, released by Bloomberg on Monday, which had Ambani as Asia's richest man, with Li in second place and Mittal in third. Meanwhile, there were no surprises at the top of the Forbes list, which Mexican telecoms tsar Carlos Slim topped with a US$69 billion fortune. Li was the only Asian in the top 10, along with three Americans, one Brazilian, and four Europeans. Software magnate Bill Gates, founder of Microsoft, was in second place with US$61 billion, Forbes said. Next was Berkshire Hathaway chairman Warren Buffett, with US$44 billion. In fourth place was French billionaire Bernard Arnault, the chairman of Louis Vuitton Moet Hennessy (LVMH), with US$41 billion, while Inditex co-founder, Spanish billionaire Amancio Orega, was fifth with a US$37.5 billion fortune, The top 20 Asian billionaires were collectively worth US$264 billion last year, US$15 billion poorer than the previous year due to weak global financial markets. Hong Kong names were in the top 30, with Sun Hung Kai Properties (SEHK: 0016)' joint chairmen Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen and their families listed in 27th position with US$18.3 billion. Henderson Land Development (SEHK: 0012) chairman Lee Shau-kee was two slots below, sharing the 29th position with Saudi Arabia's Prince Alwaleed Bin Talal Alsaud, both on US$18 billion. "Choppy stock markets took the sheen off the world's billionaire factory, hurting the fortunes of its wealthiest," Forbes said. Indians continued to dominate among the Asians with eight in the top 20, despite a weakening rupee and a slowing economy.

CPPCC delegation made up of city's business elite - Hong Kong's delegation to the CPPCC is virtually a list of the city's rich and powerful - but there are signs this policy may change in the run-up to 2017 - The composition of the Hong Kong delegation to the Chinese People's Political Consultative Conference (CPPCC) is by no means a microcosm of Hong Kong society. The disproportionately high number of delegates from the business sector underlines the central government's "united front" effort directed towards Hong Kong's business elite in the past two decades. The united front policy sought to build a broad base of support from beyond the Communist Party, and in Hong Kong it focused on wooing the business elite. Of the roughly 200 Hong Kong delegates to the nation's top advisory body, more than 60 per cent are businesspeople. On the provincial level, 90 per cent of the Hong Kong delegates to the provincial chapters of the CPPCC in Guangdong and Fujian are businesspeople. Among the 950 delegates to the Guangdong chapter of the CPPCC, 130 come from Hong Kong and Macau, with more than 100 being businesspeople. Of the remaining 820 delegates from the province, just 69 come from the business community. The situation is in stark contrast to two decades ago, when businesspeople accounted for fewer than half of local CPPCC delegates. At that time, delegates from traditional leftist organisations, professional and cultural sectors formed the backbone of Hong Kong's delegation. In the early 1990s, Beijing stepped up its united front policy towards Hong Kong's business community and the seats on the CPPCC have been used to reward businesspeople who support Beijing's policy towards the city. A mainland academic familiar with Hong Kong affairs said the lion's share of seats for Hong Kong delegates went to the business sectors in the past two decades because of the central government's need to ensure a smooth transfer of sovereignty and stability in the city. The Hong Kong delegation is virtually a list of the city's rich and powerful. It comprises tycoons like Wharf Holdings (SEHK: 0004) chairman Peter Woo Kwong-ching, Hopewell Holdings (SEHK: 0054) chairman Gordon Wu Ying-sheung, Sino Land chairman Robert Ng Chee Siong, Shui On Group chairman Vincent Lo Hong-sui, and Victor Li Tzar-kuoi, son of Hong Kong's richest man, Li Ka-shing. Tai Hay-lap, a Hong Kong delegate to the CPPCC and a secondary school principal, said there had been an imbalance in the composition of Hong Kong's delegation. "When I was appointed a CPPCC delegate in 2003, I was one of the few with a non-business background," he said. "I hope more people from the education sector and other professions are appointed in the future." The imbalance has drawn the attention of Chen Mingyi, deputy director of the Hong Kong, Macau, Taiwan and Overseas Chinese Affairs Committee of the CPPCC. Speaking at a panel discussion of the CPPCC on Tuesday, Chen said businesspeople make up 90 per cent of Hong Kong's delegation to the CPPCC. It wasn't clear whether he was referring to the national or provincial level. "With Hong Kong preparing for universal suffrage in 2017, there is a need to recruit more people such as intellectuals and professionals from sectors such as science and technology, health and the media," Chen said. The changes should take effect when the CPPCC's new five-year term begins next year, he said. The mainland academic believed Chen's views were shared by some mainland officials. Chen was a party secretary of Fujian province in the 1990s, where Vice-President Xi Jinping was his deputy. Xi is expected to be named as President Hu Jintao 's successor this year. James Tien Pei-chun, a Hong Kong delegate to the CPPCC and honorary chairman of the pro-business Liberal Party, said it was natural for businesspeople to form the overwhelming majority of the city's delegation. "Hong Kong excels in financial services and trade. Businesspeople are able to offer advice to the country if they are appointed to the CPPCC," he said. Political commentator Johnny Lau Yui-siu doubted Chen's remarks signalled an imminent shift in Beijing's united front policy towards Hong Kong. "Chen's comments and suggestion are sensible. But the central government will continue to count on the support of big businesses in Hong Kong," he said.

US campaign to lure cruise line operators - Local team heads to international conference in Miami to tout Kai Tak facility for 2013-14 season after consortium wins management contract - Top executives from Worldwide Flight Services will fly from Hong Kong to Miami tomorrow to kick off a marketing and promotion campaign to lure cruise lines, operators and retailers to the Kai Tak cruise terminal. The team from WFS and the government will promote Kai Tak at a four-day international cruise conference and exhibition in Miami after the Worldwide Cruise Terminals Consortium was awarded the operation and management contract for the terminal yesterday. The group is led by WFS, which already provides passenger and airline-related services at Hong Kong International Airport, with a 60 per cent stake. Shun Tak Holdings (SEHK: 0242) subsidiary Neo Crown and Royal Caribbean Cruises, the world's second largest cruise line, each have a 20 per cent interest. Barry Nassberg, executive vice-president and chief operating officer of Worldwide Flight Services, said the cruise terminal "will be an iconic structure closely identified visually with Hong Kong". The 30,000 square metre three-storey terminal is being built at a cost of HK$5.6 billion, with the first berth due to become operational in mid-2013. The two-berth facility, which has been delayed by about 18 months, will be capable of handling mega-cruise ships of up to 220,000 gross tons. Jeff Bent, WFS director for cruise projects, said that while cruise lines typically fix itineraries two years ahead it was "not too late" for Hong Kong to be included in the 2013 and 2014 seasons. Bent added the terminal "could well become a tourist attraction in its own right", luring local people and visitors to the facility in the same way Chek Lap Kok airport did when it opened. Bent, who is visiting the Miami cruise show with Ron Taylor, WFS vice-president for Hong Kong and the Asia-Pacific, will also meet local representatives of global cruise companies to promote the terminal. Bent said it was "well suited for conventions and events" when passenger liners were not in port. The terminal consortium won its contract against competition from another bidder thought to be a group led by Dragages Hong Kong, which is also a shareholder in AsiaWorld-Expo. A Tourism Commission spokeswoman said: "The major selection criteria were the tenderers' experience in managing cruise terminals, plans for operating the terminal, plans for promoting the terminal as well as their proposed rents." Aside from managing and operating the terminal, the consortium will be responsible for arranging the berthing of cruise ships, the embarkation and disembarkation of passengers, traffic and security arrangements and its promotion. The group will pay the government a fixed rent of HK$13 million for the 10-year concession plus a variable rent based upon a percentage of the gross receipts of between 7.3 and 34 per cent. Analysts said that as a management contract, the terminal concession was unlikely to add significantly to Shun Tak's top or bottom line. They thought there was a possibility the new terminal could lure cruise ships away from the existing Ocean Terminal which may hurt operator The Wharf. Hong Kong, a budding cruise hub, is expected to become pivotal in multi-stop Asian travel because of its strategic position, tourism veterans say. Having a cruise terminal that can start accommodating the world's largest vessels by next year can also reinforce the city's regional standing. "Hong Kong will be seen as a [must-see stop] on Asian cruise itineraries, thanks to its geographical and aviation advantages," said Ronnie Ho, from Jetour travel agency. The city is in a good position to develop short-distance tours with stops in major Asian cities, Ho said, although it might be less scenic compared to cruise stops in the Mediterranean and Caribbean. While cruise travel is still at its early stages in the city, plans seem headed in the right direction, with the government's announcement yesterday that the Kai Tak cruise terminal would be operated by the Worldwide Cruise Terminals Consortium - marking an end to a four-year tenancy battle. Two rounds of tender in 2008 had failed to name an operator. Travel Industry Council chief Michael Wu Siu-ieng was optimistic about the domestic market. "In the past, only the retired got on vessels. Now white- and blue-collared workers are also showing interest as they look for more relaxing travel experiences." He said cruise tourism would boost multi-destination tourism between Hong Kong, Macau and Guangdong. Last year, there were 702,017 inbound cruise visitors, 6.3 per cent more than a year ago. Mainland China contributed 507,000 visitors. Travellers from Europe, the Middle East and Africa came in second, but their combined total dropped 34.9 per cent from a year ago to 49,922. The new terminal is expected to put an end to embarrassing logistical snarls, such as when the Queen Mary 2, the world's largest transatlantic ocean liner, and the Diamond Princess were forced to berth at Junk Bay. The latter's 3,000 passengers had to take a 15-minute trip to Central on smaller boats, which the operator called a shameful experience. Tourism sector lawmaker Paul Tse Wai-chun said cruise travel was still a novelty for mainlanders, adding that Hong Kong had to be a step ahead of other Asian destinations. The Tourism Board will devote HK$15.5 million to promote cruise tourism next year, and will launch a fund to attract ships to Hong Kong.

Smoker may have sparked nine-hour tunnel blaze - Kowloon-bound carriageway will be shut for at least three days after fire during work on water mains - Investigators are looking into whether cigarette smoking caused a fire inside the Lion Rock Tunnel that lasted for nine hours yesterday and led to the closure of its Kowloon-bound carriageway for at least three days. The fire broke out in a drainage tube below the dual-lane carriageway at about 3.30am. Thirty-five fire engines and more than 140 firefighters were put into action. The blaze was put out at 12.30pm. The Highways Department said the closure was needed because of the collapse of concrete pieces and exposure of the metal frames along the 60-metre-long ceiling of the underground drainage tube. The fast lane of the affected carriageway is expected to reopen before the morning rush hour on Monday, but it is unknown when the slow lane will be ready for operation again. In the meantime, the Sha Tin-bound carriageway of the tunnel was converted to two-way traffic. The MTR Corporation (SEHK: 0066) and bus companies have been asked to increase their services during the closure. The blaze brought a public apology from the Water Supplies Department for causing a road closure and traffic congestion, as its workers were carrying out rehabilitation work on the water mains inside the drainage tube when the fire broke out. Water supplies are not affected. About 20 workers from a contractor for the department were applying non-flammable protective materials to the outer shell of the water mains, about two metres below the tunnel, when protective materials and asphalt-encased water mains ignited. One worker said he heard someone shout "dense smoke", "fire" and "run". He said: "After I ran out, thick smoke filled the tunnel and I could not see the road inside. My face mask was blackened by smoke." He was among workers who climbed out of the tube through manholes. No injuries were reported. The commander of the Fire Services Department's New Territories East division, Leung Kwok-ming, said firefighters' efforts were hampered by dense smoke, high temperatures and the narrow space in the confined fire scene. "There was intense heat in the tube, which was filled with thick smoke," he said. "Inside it is narrow and wide enough to accommodate one person only." The department said there were no suspicious circumstances and the cause was under investigation. A senior resident engineer with the water department, Roger Leung, describing the incident as "strange", said workers used non-flammable protective materials and no combustion was required in the work. He said he did not rule out the possibility that the fire was caused by smoking, but, he said, they were also looking into whether other factors such as a short-circuit caused the blaze. "Under our guidelines, smoking is prohibited in a confined space." Leung said existing asphalt encasing ageing water mains could burst into flames if a spark landed on it. Chief engineer Yung Kin-yee of the Highways Department said there was no sign of road subsidence even though concrete fell down from the ceiling of the underground tube and metal frames were exposed.

Pro-government lawmakers defeated an effort to acquire official documents relating to the controversial cross-border driving scheme, in a transport panel meeting on Friday morning. Some lawmakers on the Legislative Council panel wanted to see documents on discussions held between Hong Kong and Guangdong authorities, to see if the city was under an obligation to let mainlanders drive their cars across the border. The motion, to use the Power and Privilege Ordinance in seeking the documents, was put forward by independent lawmaker Andrew Cheng Kar-foo and defeated in a 6-3 vote. This came after Secretary for Transport and Housing Eva Cheng assured the panel, in a letter, that the government’s press releases had “fully reflected the records of the meetings”. She told the panel on Friday morning that it was against the government’s practice to release exchanges between authorities to the public. Lau Kong-wah, of the Democratic Alliance for the Betterment and Progress of Hong Kong, said the request to release minutes was unnecessary because Eva Cheng had confirmed that the press releases were truthful. Andrew Cheng said it was important for lawmakers to have access to the documents, so they would know whether the city had any obligation to go ahead with the scheme’s second phase, which will allow mainland cars coming to Hong Kong. The Civic Party’s Tanya Chan said lawmakers needed to know more about the process of the discussions on the cross-border plan. Many Hongkongers have voiced their objections to the scheme in the past few weeks, fearing increased danger on the city’s roads if mainland cars are allowed into Hong Kong. They are also worried that more mainland pregnant women will give birth in the city without registering with hospitals. Eva Cheng said the government would seek the legislature’s approval before the second stage of the plan – allowing mainland drivers into the city – was rolled out. It would also go ahead only if the first stage – Hongkongers driving into the mainland – proved to be successful. The first drivers are expected to pass through the Shenzhen Bay control point on April 27. The government says it has no timetable in mind for the second phase, under which cars from Guangdong will be allowed into the city on a similar basis.

The best way for Hong Kong to stem the influx of mainland mothers giving birth in the city is to ask Beijing to interpret the Basic Law, former secretary for justice Elsie Leung Oi-sie said on Friday, as the debate continued in the Legislative Council. Beijing, Leung noted, has interpreted the city’s mini-constitution four times since the 1997 handover, and each time it solved “a problem Hong Kong itself could not resolve”. Leung, a vice-chairwoman of the Hong Kong Basic Law Committee, was speaking to Hong Kong media during a visit to Beijing. An alternative approach, she said, would be for the city’s immigration authorities to stop issuing birth certificates to babies born to these non-local parents. But that option would probably violate laws and trigger legal challenges against the Hong Kong government, Leung said. Many mainland mothers-to-be want to give birth here because of the high standard of medical care and the right of abode conferred on babies under the terms of the Basic Law, the city’s mini-constitution. But their rising number has prompted the Hong Kong government to adopt a series of measures such as a quota for booking hospital beds, raising medical fees and stricter border controls, in a bid to curb the influx. Critics say these steps have been ineffective, and instead recommend amending the Basic Law or getting Beijing to reinterpret it. Many observers, especially legal experts, worry that such steps would undermine the city’s rule of law. Leung dismissed these concerns, saying the power of interpretation was not exercised lightly. “It is not intended as a measure for the central government to control Hong Kong or to tread upon the judiciary’s independence,” she said.Meanwhile, in the Legislative Council’s security panel meeting on Friday, undersecretary for security Lai Tung-kwok said the government has not considered a solution suggested this week by influential mainland legal expert Qiao Xiaoyang. That was to trigger a legal challenge that would let the Court of Final Appeal overturn its 2001 ruling granting right of abode to babies born here regardless of their parents’ immigration status. “The government is open for all opinion to tackle the problem”, said Lai, adding that the bureau would act in accordance with the law. Lai noted that the individual visit scheme – which allows mainland tourists from certain provinces to obtain a visa that can be renewed online – has made it easier and more convenient for mainland women to make their way to Hong Kong, including those who are pregnant. Civic Party lawmaker Audrey Eu Yuet-mee asked Lai: “How are the women able to birth to their babies on a tourist visa, which only allows them to stay seven days? “Obviously there is some thing wrong with the border controls” said Eu. “The border visual inspection to determine whether a woman is pregnant is clearly not enough.” Lai maintained that administrative measures to tighten the border, by Hong Kong and Guangdong, have been effective in blocking entry by women who are into their 28th week of pregnancy or later. Guangdong has launched two large-scale inspections against 62 companies and organisations suspected of helping mainland women travel to Hong Kong illegally, Lai said. Most of these companies have been shut down. Twelve were caught red-handed and 25 people were arrested for further investigation. Hong Kong immigration has rejected entry to some 400 pregnant women this year, Lai said. “But I cannot say whether there is a decreasing trend. We need more observation to determine whether the number is steadily decreasing.” Some lawmakers argue that the best solution is to change the right of abode law. “Administrative measures alone are not enough to control the influx,” said lawmaker Lau Kong-wah of the Democratic Alliance for the Betterment and Progress of Hong Kong. “The legal issue of the right of abode should be resolved by the government or the problem will never go away.”

In Hong Kong Race, a Candidate’s Remark Makes Markets Panic - Deciphering where the winds are blowing in Hong Kong’s current election isn’t easy, but yesterday, the markets offered a glimpse of what traders may be thinking. Once Beijing’s favored candidate to take over the city’s top job, Henry Tang has seen his reputation tank in recent weeks, with his campaign roundly mocked after allegations surfaced that the candidate had engaged in an extramarital affair, constructed an illicit luxury basement add-on and fathered an illegitimate child. Yesterday, though, the markets suggested: don’t write off Henry Tang quite yet. In a Thursday interview with The Wall Street Journal, Mr. Tang didn’t rule out adjusting the Hong Kong dollar’s trading band against the U.S. dollar, though he affirmed the need to maintain the U.S. currency peg. That news was enough to send the normally staid trading floor into a panic, with his comments pushing the U.S. dollar to a low of HK$7.7545 late Thursday, compared with a high of HK$7.7645 earlier in the day. At the moment under Hong Kong’s currency board system, the Hong Kong dollar is allowed to trade in a range of HK$7.75 to HK$7.85 to the U.S. dollar. Mr. Tang, former financial secretary for Hong Kong, said the peg has given Hong Kong “the stability…that [has] facilitated many of our exporters so that they don’t have to account for exchange risks.” Mr. Tang explained that the trading band “was put in place for a reason.” “I would not speculate or comment on whether this is the right moment to expand the band so that we will have more wiggle room, but I think by putting in a mechanism, one can make use of the mechanism to the best interest of Hong Kong when necessary,” he said. Though Mr. Tang’s political capital may have plummeted – he trails his opponent by 30 points in public surveys – the jolt in the market suggests that traders are taking his chances quite seriously. After all, Hong Kong’s next chief executive will be chosen on March 25 by a committee of just 1,200 largely pro-business, pro-Beijing members. Though Beijing has promised universal suffrage by 2017, it’s unclear what that will look like. As Mr. Tang’s comments rocked the market and local outlets jumped on his words, he told Hong Kong media late Thursday that he had no plans to alter the currency peg and the Hong Kong dollar trading band if he is elected. The Hong Kong Monetary Authority likewise reiterated Friday that it sees no need to adjust the Hong Kong dollar trading band and added it has no plans to do so. On Friday, the Hong Kong dollar pared some of the previous session’s gains, and some traders argued that the market had overreacted to Mr. Tang’s remarks. By early afternoon Friday, the U.S. dollar regained some ground to hit HK$7.7576. “It remains questionable whether he will become the next chief executive,” said a senior trader at a U.S. bank, noting that the market “clearly overreacted” to Tang’s comments. “I believe many traders weren’t taking his comments too seriously, but instead used this as an excuse to sell the greenback and that’s it,” he said. Though Mr. Tang was busy working to clarify his views on currency on Thursday, the chance to shift the conversation may offer a welcome change of pace from discussion of the more colorful scandals that have lately trailed the candidate, including most recently, allegations that he has ties with a gangster known as “Shanghai Boy.” He has denied the rumors.

 China*:  Mar 11 2012 Share

Bo Xilai, Party chief of Chongqing, speaks at a panel meeting of the Chongqing delegation on Friday at the ongoing National People's Congress session in Beijing. The Party chief of Southwest China's Chongqing praised the crackdown on gangs in the city, saying the campaign is aimed at creating a favorable environment for residents and businesses. "On this issue, should we pretend to be deaf, or should we be responsible to the people? We chose the latter," said Bo Xilai during a panel deliberation of the government work report by the Chongqing delegation at the ongoing National People's Congress session. "We cannot make it 100 percent correct, but we gave it 100 percent," Bo told a crowd of reporters after the panel discussion on Friday. Bo, 63, has been the Party chief of the municipality since 2007, after serving as commerce minister. 

China is gearing up to channel more foreign reserves toward overseas acquisitions, a top banker has said. Li Ruogu, chairman and president of the Export-Import Bank of China, said the next two years would be a key period for Chinese enterprises to buy overseas assets from European and North American companies. "We expect the State Administration of Foreign Exchange will set a higher foreign currency quota for us to support enterprises' overseas purchases," he told China Daily in an exclusive interview. The Export-Import Bank of China is one of two major non-commercial banks, along with the China Development Bank, supporting Chinese enterprises going overseas. Li said last year about one-third of the bank's total loans were in foreign currency, and he expected the ratio would rise to almost one half in 2012. "In the next two years, Chinese enterprises have very good opportunities to purchase more national resources and financial institutions in emerging markets and Australia," Li said. "But that would be from the hands of players in Europe or the United States, as they've been severely influenced by the economic slowdown and debt plague," he said. Li, also a member of the National Committee of the Chinese People's Political Consultative Conference, made the remarks on the sidelines of the annual session of China's top political advisory body. The Export-Import Bank of China is prominent in the African market while the Chinese Development Bank stands out in Latin America and Central Asia through backing local acquisitions by Chinese companies. "We are planning to broaden overseas networks in Europe, US and Africa to strengthen support for increasing overseas acquisitions by Chinese enterprises," Li said. It now has offices in France, Russia and South Africa. According to Pricewaterhouse-Coopers, mergers and acquisitions by Chinese companies continued to be active in 2011, with transactions during the year increasing 5 percent to a record high 5,364. It said more Chinese mainland enterprises will be seeking overseas acquisitions in 2012. "We have noticed a rising demand from our clients to borrow foreign currency, especially dollar-denominated loans to make overseas purchases. But given that China still has restrictions for exchanging the yuan into other currencies, we could only lend out very limited loans in foreign currency," he said. "The foreign exchange watchdog should not set any quota in that regard, given that the currency exchange with the non-commercial banks will not pose any investment risk to the foreign exchange reserves." Li Jie said the move will reduce the central bank's yuan-denominated debts, and cut into the country's $3.2 trillion in foreign reserves, a result that China would like to see. The large amount of foreign reserves will be increasingly challenging for China's asset management, said Yi Gang, deputy governor of the central bank and head of the State Administration of Foreign Exchange. He said as companies and individuals generate more willingness to obtain foreign currencies for overseas investment and purchases, the foreign reserves will decline naturally and the investment dilemma for the government will be eased. Guo Tianyong, an economist at the Central University of Finance and Economics, said earlier that China should use its foreign reserves to back investment by domestic enterprises in the real economy overseas, rather than focusing on stable returns and risk control.

Chinese economist lands key IMF secretary post - Jianhai Lin chosen to handle fund's operational side in a move tipped to facilitate Beijing's role in debt rescue - International Monetary Fund managing director Christine Lagarde has named Chinese economist Jianhai Lin as the fund's secretary. The IMF announced the appointment on Wednesday, set to take effect on March 22, with Lin becoming the first Chinese to head the secretary's department in the Washington-based global body. He will succeed India's Siddharth Tiwari, who was recently appointed director of the IMF's strategy, policy and review department. Analysts said Lin's nomination was the latest sign of China's clout and the increased importance of emerging economies. "It confirms the rising influence of China in international affairs and international organisations, especially as the IMF might rely on China to invest [in bailing] Europe out of its sovereign debt crisis," said Hu Yifan, chief economist with Haitong International Research. Beijing has said that it would prefer to use the IMF as a platform to help rescue the euro zone and has indicated that it is willing to make a contribution from its US$3.2 trillion foreign reserves, the world's largest. Weeks after Lagarde was elected to the top post after the arrest of predecessor Dominique Strauss-Kahn in May over an alleged sexual assault, she appointed Zhu Min , former People's Bank of China deputy governor and special adviser to the IMF's managing director, as a deputy managing director of the fund. Lagarde lauded Lin's wide-ranging IMF career in both country and policy work, saying his breadth of experience had been of particular benefit to the IMF. His skill in building consensus among staff, management and the IMF's global membership was essential during one of the most challenging periods in its history. Lin has been acting director of the secretary's department since November. Hu said having a Chinese IMF secretary would make co-ordination easier, as major duties would deal with the operational side of the fund. The secretary's department is responsible for daily security work of the IMF board and also regularly liaises with the fund's 187 member countries on institutional matters. Lin studied at the University of International Business and Economics in Beijing and the University of California in Berkeley, and earned his doctorate in international finance from George Washington University. Before joining the IMF, he worked in the financial sector and academia. After the management shake-up at the IMF in July, two of its four deputy managing directors are now Asian; one is Japanese and the other is Chinese. In another key posting, Peking University economics professor Justin Lin Yifu was appointed the World Bank's chief economist in 2008. Beijing has argued that it should have a greater say in the IMF and World Bank, which is traditionally helmed by an American. World Bank chief Robert Zoellick, its 11th president, announced he would step down in June after his five-year tenure. Beijing said the next president of the World Bank should be chosen based on merit. Analysts said Beijing had maintained a similar position when the IMF, an institution traditionally headed by Europeans, was searching for a new chief last year.

China is blocking orders for at least US$12 billion worth of Airbus jets to protest the European Union’s emissions trading fees, in a new challenge to the programme aimed at fighting global warming, the planemaker said on Thursday. With some analysts warning of a brewing trade war, Airbus spokesman Stefan Schaffrath said his company is seeing “retaliation threats” from 26 countries, “in particular from China.” Speaking to reporters, he said 35 orders by Chinese airlines for A330 planes are on hold because China’s government is refusing to approve them. He said orders for another 10 A380 superjumbos are also under threat, and that the combined list prices of the aircraft is US$12 billion. “The economic impact is real,” he said. Officials at the Chinese embassy in Paris could not be reached for comment on the Airbus statements on Thursday. EU officials defended the emissions system. Asked about the Airbus complaint at the daily midday briefing, EU spokesman Isaac Valero Ladron said, “I’m not in a position to make any comments about possible trade decisions. I think it’s in everybody’s interest to reduce greenhouse gases, which affects climate change, and airplanes affect that, as well.” The emissions trading system went into effect at the start of the year as part of European efforts to reduce global warming. Airlines flying to or from Europe must obtain certificates for carbon dioxide emissions. They will get free credits to cover most flights this year but must buy or trade for credits to cover the rest. The United States, China, Russia, India and many other countries are opposed and say the bloc cannot impose taxes on flights outside its own airspace. EU officials have said they acted unilaterally because of a doubling of aviation carbon emissions in Europe between 1990 and 2006 and the inability of governments to forge a global deal on reducing emissions. Schaffrath insisted that Airbus is working to reducing emissions but argued that a Europe-only measure creates trade imbalances. “Our sector is committed to green aircraft,” he said. “We truly believe that the global issue of emissions does not know boundaries, and we need a global solution.” Airbus made its warnings on the same day that its parent company EADS NV reported its annual earnings. EADS CEO Louis Gallois warned that the emissions scheme would cost Airbus and other European companies business globally. Schaffrath said the Chinese blockage could threaten Airbus’ plans to ramp up production of its popular planes. China has said it will prohibit its airlines from paying the EU fees, and in Washington Congress has voted to exclude US airlines from the emissions cap-and-trade program.

Hon Hai Precision Industry Co. founder Terry Gou is again in the spotlight. But this time, it isn’t about his treatment of employees in China. Instead, it’s about another delicate matter: his age. The 61-year-old Hon Hai chairman and chief executive appears to be in good shape. He continues to claim that he has slept no more than five ours a day since founding the electronics assembly giant in 1974. Last year his second wife gave birth to his fourth child. But that hasn’t stopped investors from wondering who might take over when Mr. Gou retires – and whether the assembler of everything from Apple Inc.’s iPad to Sony Corp.’s PlayStation has a succession plan. The questions, which have been floating around for years, are springing back to life after Taiwan Semiconductor Manufacturing Co.’s Morris Chang, 80, recently picked three new chief operating officers, among which at least one will probably become the chip foundry’s future CEOs. Among Taiwan’s 30 largest listed companies in market capitalization terms, 25 of them have chairmen or founders aged 60 or above, according to the Commonwealth Magazine, a respected local financial magazine. Among them, 19 haven’t publicly disclosed a succession plan, the magazine says. A succession plan is “a serious concern because Terry Gou is the icon of Hon Hai. He is the key to winning orders from major clients like Apple and H-P [Hewlett-Packard Co.] He has close relations with Apple CEO Tim Cook,” said a Taipei-based hedge fund manager. Hon Hai said in an emailed response that the company “has a very strong leadership team, led by the company’s founder and chief executive officer, Terry Gou. Gou serves as a very active and successful chairman and chief executive officer and has no plans to relinquish those responsibilities.” Capital Securities analyst Diana Wu said Hon Hai’s share price has a “Terry Gou premium.” “Gou’s dominant management style is well-known. Investor confidence in Hon Hai’s growth is mainly based on his strong execution. Although Gou is still young and energetic, it’s important to lay out the succession plan to ensure the sustainable development of Hon Hai,” Wu said. In Taipei, shares of Hon Hai ended at NT$101.00 Thursday, amid pressure on profit margins from clients and global economic sluggishness eating into demand. Bernstein Research analyst Alberto Moel added: “I’d be certain that if something were to happen to him the company’s stock price will certainly be affected, even if there is a deep bench and a clear succession plan. Just that nobody that I know knows what that looks like. So I have no idea on whether Hon Hai’s succession plan is adequate, assuming one exists.”

Coastal provinces attract largest concentration of FDI, report says - For China's provincial leaders eager to woo overseas investors, a report released on Monday may provide some timely guidance. Using the FDI Performance Index adopted by the United Nations Conference on Trade and Development to discover if areas have received FDI infows appropriate to their economic power, the report reveals three provincial clusters, according to Karl Sauvant, senior fellow of the Vale Columbia Center on Sustainable International Investment. The locations in the first cluster, all of which perform better than might be expected given their economic size, are virtually all coastal areas. Led by the municipalities of Shanghai and Tianjin, and including provinces such as Liaoning, Jiangsu and Hainan, the first cluster contains nine of the top 11 performers. Chongqing in western China and Jiangxi in the central area are the only two non-coastal areas in the top 11. Provinces in the middle cluster, mostly provinces in the western and central areas, are rated as underperforming. Meanwhile, provinces in the bottom cluster, which mainly comprises those wholly in the western regions, are underperforming signi0 cantly. Even though the coastal region has been the best performer, its share of China’s total FDI infow declined to about 75 percent between 2007 and 2010 from 89 percent between 1987 and 1990. Over the same period, FDI in the central region rose to roughly 17 percent from below 4 percent and that in the western region fluctuated, but was mainly lower than 10 percent. Sauvant said the report should be of interest to provincial authorities, particularly to the agencies that offer investment promotion, as it provides a provincial performance comparison. "In particular, they (the provinces) can explain their performance and what they intend do about it," said Sauvant, who co-wrote the report with Chen Zhao, an associate of the National Committee on US-China Relations, and Xiaoying Huo, a research associate at the Vale Columbia Center. According to Sauvant, there is a clear, if not strong, trend for FDI to move away from the coastal regions and toward the center. Yet the fact that the figures for the western region have not changed very much would suggest that more policy action is required. "The question is whether more can be done,” said Sauvant, acknowledging that things have improved in the western region since local governments took measures to improve infrastructure and education. He suggested that the western regions should pair their investment promotion agencies with those from the coast. Companies in the coastal region are either moving labor-intensive production work out of China or are considering moving further inland. He also suggested that provinces should appoint an investment ombudsman to resolve any problems and mediate between investors and the authorities. Sauvant believes China will continue to be an attractive destination for FDI. "It may be less attractive for labor intensive industries. But at the same time, given the improvement in infrastructure, skills and education, it will remain attractive for more advanced technology," he said. "More importantly, as long as economic growth continues in China, it will be a very attractive location for investment," said Sauvant, a former director of UNCTAD’s Division on Investment, Technology and Enterprise Development, which handles FDI within the UN system. However, Sauvant emphasized that this does not mean the greater the amount of FDI, the better. "It's about good FDI, which makes a maximum contribution to the social, economic and environmental development of the recipient," he said. Statistics show that the FDI infow to China reached $116 billion in 2011, a rise of 9.7 percent over the previous year, although growth was slower than the 17.4 percent registered in 2010. Analysts believe that the euro debt crisis, a weak recovery in the United States and China's new policies to discourage investment in the automobile and polysilicon industries may have a negative effect on FDI infows.

Hong Kong*:  Mar 10 2012 Share

Former Hong Kong Financial Secretary Henry Tang, a contender in the race to be the city's next chief executive, didn't rule out adjusting the Hong Kong dollar's trading band against the U.S. dollar if he is elected, but affirmed the need to maintain the U.S. currency peg. "The peg with the U.S. dollar has actually served Hong Kong well for nearly 30 years. We have had the stability…that [has] facilitated many of our exporters so that they don't have to account for exchange risks," Mr. Tang said in an interview with The Wall Street Journal. Many lawmakers have recently criticized the currency peg for contributing to rising inflation in the city, as food imports from mainland China, which account for the bulk of Hong Kong's food supplies, have become much more expensive amid an appreciating yuan and a weaker U.S. dollar. Rock-bottom interest rates, even while the city's economy continued to soar, have also fueled asset prices in Hong Kong, particularly in the property market. Hong Kong's government pegged the local currency at 7.80 Hong Kong dollars per U.S. dollar in 1983, partly as a bid to boost confidence amid mounting uncertainties about the city's 1997 handover to Chinese rule. Now, about 15 years since the change in sovereignty, some analysts are suggesting that it may be time for Hong Kong to consider modifying the peg or abandoning it altogether. The currency regime was last overhauled in 2005 when the Hong Kong dollar was allowed to trade in a tight band between HK$7.75 and HK$7.85. The Hong Kong Monetary Authority said Thursday it sees no need to adjust the trading band and added it has no plans to do so. As finance chief, Mr. Tang helped oversee the implementation of the trading band in 2005. "Putting in this band actually introduced a mechanism where we could have more wiggle room when we want to," he said. "That band was put in place for a reason. I would not speculate or comment on whether this is the right moment to expand the band so that we will have more wiggle room, but I think by putting in a mechanism, one can make use of the mechanism to the best interest of Hong Kong when necessary." Mr. Tang's poll numbers have languished, and his chances of becoming the city's chief executive are looking increasingly dim. Once seen as Beijing's favored candidate, he now trails his opponent Leung Chun-ying by 26 percentage points in most recent polls. A series of scandals have dogged his campaign, including an extramarital affair and public fury over an illegal basement addition to his luxury home. Sporting a colorful aqua tie with a fish theme, Mr. Tang, 59 years old, seemed unfazed by his campaign's unpopularity. He spoke ebulliently about how Hong Kong's current chief executive race is the last one before the city's leader will be chosen via universal suffrage in 2017. The winning candidate of the March 25 elections will be chosen by a 1,200-member election committee composed largely of political and business elites. Despite his flagging poll numbers, Mr. Tang said he was better-equipped to shepherd Hong Kong along its path to democracy than Mr. Leung, a former cabinet member, saying the city needs someone who is able to "build consensus" across parties to enact political reform. A spokesman for Mr. Leung didn't return calls seeking comment. Specifically, Mr. Tang endorsed the idea of lowering barriers to entry for future chief executive candidates. To run for chief executive, candidates currently must receive nominations from one-eighth of the city's election committee. Mr. Tang on Thursday supported the idea of reducing that threshold down to one-tenth, or even one-twelfth. The rules for choosing candidates in the 2017 election haven't yet been set. On Hong Kong's development as an offshore yuan hub, Mr. Tang said he believes more channels need to be created to allow yuan funds raised in the city to be remitted to mainland China. He said that while sizable amounts of yuan-denominated bonds have been sold, the market has still fallen short of its potential. "Until they open up more of these channels, I believe the constraints will put a cap on the development of that particular sector," said Mr. Tang, who pledged to work closely with Chinese regulators to boost the channels for yuan fund flows into China. Mr. Tang said his experience with financial policy-making had left him better suited than Mr. Leung to secure the trust of Chinese officials. Looking forward, Mr. Tang cited the need for government to be more proactive in helping diversify Hong Kong's economy into more creative industries, including media and technology. He argued that Hong Kong can continue to build on its reputation for "brand quality," especially when it comes to consumers from mainland China, who know that "when you buy soy sauce [in Hong Kong], you get real soy sauce." Makeup, skin-care products, pharmaceuticals and cooking sauces are manufacturing areas Hong Kong could further explore, he said. When it comes to the scandals that have engulfed his campaign, Mr. Tang said he was surprised at the public outcry that followed revelations of his illicit basement, which local media outlets likened to an "underground palace." "In retrospect," he said, "I could have handled it better by coming clean on it earlier."

Two residential sites open for bidding at Ap Lei Chau and Sai Kung are expected to draw keen interest from developers and could net the government up to HK$2.33 billion, say surveyors. "The sites are well situated and the one on Ap Lei Chau offers a sea view," said Midland Surveyors director Alvin Lam Tsz-pun. "Also, unlike some previous land sales, the government has not imposed any restrictions on flat sizes and numbers. So I believe the lack of restrictions is a key reason why both sites will attract developers." Covering 32,830 square feet, the lot on Ap Lei Chau has a maximum gross floor area of 229,811 square feet. It is near the bridge linking the island with Aberdeen and is next to Sham Wan Towers, where second-hand flats are selling at over HK$10,000 per square foot. The site has a view of the Aberdeen yacht club and the Aberdeen South Typhoon Shelter. Surveyors expect it to sell for between HK$1.15 billion and HK$1.84 billion, or HK$5,000 to HK$8,000 per square foot. Lam, who estimates the site will sell for HK$8,000 per square foot, said 200 to 300 two- to four-bedroom flats could be built on it. He said there had always been strong demand for sites on the Hong Kong side of the island, and it would attract medium-sized to large developers. Vincent Cheung Kiu-cho, the national director of valuation advisory services at property broker Cushman & Wakefield, also forecast that the site would be sold for HK$8,000 per square foot because of the sea view it offered and its convenient location near the MTR's South Island line, now under construction. Cheung said the winning bidder could sell flats at HK$12,000 or more per square foot. He believed the two sites would draw keen interest, with at least six developers bidding. The site in Pik Sha Road, Sai Kung, has a maximum gross floor area of 32,787 square feet. Surveyors expect it to sell for between HK$328 million and HK$590 million, or between HK$10,000 and HK$18,000 per square foot. The area has a height restriction of three storeys. Centaline Surveyors director James Cheung King-tat said the Sai Kung site was surrounded by villas and the winning bidder was likely to develop luxury houses. "Houses in the secondary market are selling at over HK$20,000 per square foot in the area, depending on the location, but there isn't much new supply on the market." He expects the site to sell for around HK$18,000 per square foot. Ringo Lam Chun-chiu, valuations director at AG Wilkinson & Associates, said the two sites were better located than the Peng Chau one sold last month which attracted only two bidders. It sold for HK$19 million, or below HK$516 per square foot - far below market estimates. "With the increases shown in property sales in the last few weeks, the land sales will be an indicator showing whether developers believe this improved sentiment can persist," Lam said. Tenders for the sites close on March 16.

Sino Land bought this 49,127 sq ft residential property site on Peng Chau for HK$19m, or HK$516 per square foot - 47 per cent less than the HK$36 million the market expected. For the first time in more than a decade, a residential site on the island of Peng Chau off the northeastern coast of Lantau Island has been bought by a major developer. But Ray Leung, who owns an apartment with sweeping sea views on the tiny island, does not expect Sino Land's foray to inject new life into the stagnant property market, where prices have consistently lagged Hong Kong Island's. In 1993, Leung paid HK$800,000 for a 350 sq ft holiday home with a 350 sq ft terrace and a 350 sq ft roof in Nam Wan on the island's southern tip. "The view is excellent, but not the valuation," he said. "And I don't expect that any big names like Sino Land marching into the island will boost prices." Unlike the static valuation of his holiday home, the value of his 800 sq ft home in Serenade Cove on Castle Peak Road has surged by 74 per cent to HK$4 million since he paid HK$2.3 million for it in 2006. Sino Land said last week that it had bought a 49,127 sq ft waterfront residential site at Peng Lei Road on Peng Chau for HK$19 million, or HK$516 per square foot. The price tag was 47 per cent below the market expectation of HK$36 million. Leung said he had been leasing his flat in Peng Chau to a friend for about HK$2,000 a month. "That is lower than the market rent, as I don't want to let it to someone I don't know." He has no intention of selling the flat, however, since the price he might obtain would be insufficient to buy another place in Hong Kong with panoramic sea views. "And it has good fung shui," Leung said. An agent at Cheuk Wai Property in Peng Chau said there had been no increase in inquiries from prospective buyers in the area since the news of Sino Land's acquisition. He said there had been no new supply in the area since 1997. Peng Chau is dominated by three-storey village houses with floor areas ranging from 350 to 700 square feet, and a handful of privately built housing estates. "Many village houses are 30 to 40 years old, while the youngest development is 15 years old," the agent said. "Property prices here lag behind the rest of Hong Kong. "Even when compared with other outlying islands such as Lantau, Cheung Chau and Lamma Island, Peng Chau is the slowest in terms of development." The agent also said transaction prices in Peng Chau were between HK$2,000 and HK$3,000 per square foot, with prices subject to the quality of the development and location. Last month, two flats at Monterey Villas in Peng Chau were sold, according to GoHome.com.hk, a property website. A 441 sq ft flat at Monterey Villas was sold for HK$1.2 million, or HK$2,721 per square foot, and a 405 sq ft flat changed hands for HK$900,000, or HK$2,222 per square foot. The agent said Monterey Villas was first launched for pre-sale at HK$3,000 per square foot in 1997. As prices in Peng Chau are about half that of housing estates in urban areas and even lower than prices in Shenzhen, the agent said a growing number of retirees had been buying homes on the island. "As the stronger yuan currency makes the living standard higher in Shenzhen, I see some old people have moved back to Hong Kong recently," the agent said. "Their savings definitely cannot afford to buy a home or even a small flat in the city centre. When they visit Peng Chau, they will find flats here to be more affordable. With the environment being quiet and more laid-back, Peng Chau has become an alternative for retirees." Patrick Chow Moon-kit, head of research at Ricacorp Properties, said the Peng Chau site was sold for a reasonable price to Sino Land, considering construction costs on the island would be higher than in urban areas and the New Territories. With construction cost estimated at HK$1,600 per square foot, Chow said the development cost, excluding interest expenses, would be about HK$2,116 per square foot.

Contrary to the present wisdom that investing in bonds and other fixed-income assets is less risky and generates more stable returns, fund manager Blackrock contends Asian equities are the more prudent investment choice right now. Real bond yields have turned negative in the United States and Britain and reached an ultralow level in most developed countries. But most governments still have more than two-fifths of their pension assets in cash or in fixed income, where it is earning next to nothing or even losing money. Some have more than 60 per cent in bonds and cash, according to a Towers Watson 2012 pension assets study. "Asia has much sounder economic fundamentals," said Joshua Crabb, director and fund manager of BlackRock Asia Pacific Equity Income Fund. "This is translating into higher GDP growth rates, earnings and dividends." Stopping inflation from cutting into the value of assets has become more pressing as Hong Kong's consumer price index rises, surging to 6.1 per cent last month. The purchasing power of HK$1,000,000 would fall by more than 60 per cent over the next quarter century, should inflation rates stand at 5 per cent a year. Even if inflation slows to 3 per cent over that period, the same amount of cash would still lose 40 per cent of its value. The valuations of equities in the region with high dividend yields and good fundamentals have reached a low level, which could provide the necessary inflation protection over the long term, Crabb said. Such equities include telecommunications stocks of companies that serve the mainland and Southeast Asia and mainland property companies and banks. China, however, has lowered its gross domestic product forecast to 7.5 per cent for the year, which would be the first time that growth has fallen below 8 per cent in eight years. Not surprisingly, the move sent a shock wave through global stock markets on the concerns about the stability of the Asian economy. "We view this downward revision more as recognition that China's trend growth rate is slowing due to demographics and structural reasons, rather than an imminent cyclical slowdown," a Bank of America Merrill Lynch report said yesterday.

Apple CEO Tim Cook speaks during an Apple event as he introduces the new iPad as an image the device is projected on screen in San Francisco, California March 7, 2012. Apple Inc took the wraps off a faster 4G-equipped iPad on Wednesday, hoping the latest version of its tablet can safeguard its dominance as rivals from Amazon to Samsung pile into the market. CEO Tim Cook, presiding over his biggest product launch since 2011's voice-enabled iPhone 4S, introduced the highly anticipated third iteration of the tablet, which commands upwards of two-thirds of the growing market. The newest iPad will be capable of operating on a high-speed 4G "LTE" or Long-Term Evolution network. At speeds roughly 10 times faster than current 3G technology, that may help banish the sometimes shaky video quality of older devices. Apple is betting a 4G-equipped iPad will tempt more US consumers to pay extra for higher-quality video on the go. That, in turn, should give Verizon Wireless and AT&T Inc a revenue boost, analysts say. Apple said the new iPad will start at $499 for Wi-Fi only models - the same starting price as the previous model. Models capable of 4G speeds will start at $629, not including service plans. The new iPad will be available starting on March 16 in the US, Canada, UK, France and Germany. Until now, buyers have been reluctant to shell out extra cash even for iPads with slower 3G connections. The cheaper Wi-Fi-only model - with much more limited Web access - is by far Apple's top-selling one today. The company is counting on a warm reception to its latest tablet to fend off an increasingly aggressive challenge from Google Inc Android-powered tablets, with Microsoft Corp software-driven devices slated to come soon. "Everyone's been wondering who will come out with a product that's more amazing that the iPad 2," Cook said. "Stop wondering: we are." The global tablet user base reached 67 million in 2011, according to researcher Strategy Analytics.  Earlier in the session, Cook again held forth on what he called a "post-PC world", in which users move increasingly away from traditional desktop and laptop computing and toward an array of portable devices. And he announced that the company's new $99 Apple TV set-top box, a concept that late CEO Steve Jobs had called a "hobby," now supports high-definition 1080p screen technology. "Last year alone we sold 172 million post-PC devices," Cook told the audience at the Yerba Buena Center in downtown San Francisco, Apple's preferred venue for product unveilings. "And this made up 76 percent of our revenues. This is incredible."

 China*:  Mar 10 2012 Share

The International Monetary Fund Managing Director Christine Lagarde named Lin Jianhai as IMF secretary on Wednesday. "Jianhai has had a wide-ranging fund career in both country and policy work. This breadth of experience has been of particular benefit to the IMF, where Jianhai's skill in building consensus among staff, management and our global membership has been essential for the productive work of the executive board during one of the most challenging periods in the fund's history," said Lagarde in a statement. Lin was born in Wenzhou, East China's Zhejiang province, in 1955 and studied at the University of International Business and Economics in Beijing and at the University of California, Berkeley. He holds a doctorate in international finance from George Washington University. Before coming to the IMF in 1989, he worked in the financial sector and academia. Lin will lead the IMF secretary's department that is responsible for the operations of the IMF 24-member executive board and serves as a main contact point for the institution's 187 member countries, according to an IMF statement. Lin's appointment will take effect on March 22. Lin, who has been acting secretary since November, will succeed Siddharth Tiwari of India, who was named a policy director. In July, Lagarde selected Chinese economist Zhu Min as the first Chinese to hold the post of a deputy managing director.

Value Partners Group (SEHK: 0806) has agreed to buy KBC Asset Management’s 49 per cent equity interest in a Chinese mutual fund venture, confirming an earlier report that Belgian financial group KBC Group was close to striking a deal on selling the asset. Value Partners will buy the equity interest in the total registered capital of KBC Goldstate Fund Management for 40.5 million yuan (US$6.42 million) from KBC Asset Management, it said in a filing to the Hong Kong bourse on Thursday. Under China regulations, the 49 per cent shareholding in a licenced mutual fund management firm is the maximum shareholding that can be owned by a non-mainland shareholder, Value Partners said. The deal, which has been approved by the China Securities Regulatory Commission, is pending further regulatory approvals from the Ministry of Commerce, it added. KBC Goldstate, which is 51 per cent owned by Chinese securities group Goldstate Securities Joint Stock, manages 7 mutual funds with 970 million yuan (US$153.73 million) of assets under management as of the end of December last year. In January, sources had said Belgian financial group KBC Group planned to sell the stake in its struggling Chinese fund venture to Hong Kong-based asset manager Value Partners. Shanghai-based KBC Goldstate’s business has shrunk four-fifths over the past five years, sources had said. KBC had been actively looking for buyers for its struggling China fund business, as part of a strategy by the banking and insurance group to scale back its global presence after being hit by the 2007-2008 global financial crisis.

A worker assembles lithium ion batteries in Tianjin. The average annual growth rate of lithium carbonate use in China is about 25 percent, mainly driven by mobile phones and other electronic devices. The Australian lithium start-up Galaxy Resources Ltd plans to invest in the production of batteries for electric bicycles in the Chinese market, a sign that foreign companies see opportunity in the mainland's growing industry of new energy vehicles. The company invested $A100 million ($105.6 million) to build a lithium carbonate plant, which started production on Wednesday in Zhangjiagang, Jiangsu province. The new plant has an annual production capacity of 17,000 tons of lithium carbonate, the largest in the Asia-Pacific region so far. Galaxy already has 34,000 tons of spodumene, a source of lithium, stockpiled at the Jiangsu Lithium Carbonate Plant and another 20,000 tons at a nearby port. Lithium carbonate is used in lithium-ion batteries, which in turn go into mobile phones, computers and electric vehicles. "The growing number of electric bicycles in China will create huge demand for lithium batteries," said Iggy Tan, managing director of Galaxy Resources. He said that 20 million to 30 million electric bicycles are sold in the nation annually, and more than 90 percent of them use lead-acid cells. Only 3 percent use lithium batteries, which demonstrates the huge potential for growth. The average annual growth rate of lithium carbonate use in China is about 25 percent, mainly driven by mobile phones and other electronic devices. However, a single electric car's battery capacity is equal to the capacity of 1,000 iPad batteries, which shows that the growing use of alternative-fuel vehicles will greatly boost the demand for lithium batteries. Tan said even though the electric vehicle market is still five to 10 years from maturity, the demand and opportunities are real. Thus, the company's next plan is to open a lithium battery factory in China. "Compared with electric cars, I think producing batteries for electric bicycles is a better choice to start up in the lithium battery market," Tan said. "It is easier to reach the end consumers." The company will invest $140 million to open a lithium battery factory soon, though the exact timing depends on the output by the lithium carbonate factory. "For us, the lithium battery business for electric cars is still in the future, because the technology is not mature enough in the Chinese market," he said. The company aims to make 620,000 battery packs annually. Galaxy owns the world's second-largest hard rock lithium mine by production, Mt Cattlin, which holds 18 million tons in reserves. As for the choice of Zhangjiagang to build the factory, Tan said costs are lower in the area because the factory is close to key suppliers of reagents (used in tests of chemical reactions) including sulphuric acid, soda ash and caustic soda. Also, the local government has provided support to the company and four local banks have offered financing. The company had planned to list in Hong Kong in March 2011 but suspended the process because of high costs and economic uncertainty caused by the Japan earthquake. Anthony Tse, executive director of the company, said that it didn't have any near-term plans to attempt another listing, at least not this year. Lithium prices and demand have been increasing, but the Chinese market faces a glut, said Xu Hongli, analyst at Platts, a global provider of energy, petrochemical and metal data. She said that many domestic lithium carbonate producers are considering expansion because of the encouraging policies for the electronic-vehicle sector during the 12th Five-Year-Plan (2011-15).

Beijing is to take action to make its coal-fired power plants and heating facilities go green amid public concern over the city's poor air quality, said a government official. Zhang Gong, director of Beijing municipal development and reform commission, said that an estimated 80 billion yuan ($13 billion) will be invested to switch the city's coal-fired power plants and heating facilities to natural gas. "We want to make sure that power plants and heating facilities will be fueled by natural gas in the coming three to four years, reducing the use of coal as much as possible," Zhang said on the sidelines of the annual session of the National People's Congress. Zhang said the move is set to improve Beijing's air quality and ease public concern over PM2.5, particulate matter smaller than 2.5 micrometers in diameter, which can be hazardous after reaching a certain concentration. Emissions from coal-fired power plants and heating facilities, as well as from the 5 million cars running in Beijing, are a major source of PM2.5 in the capital, according to research conducted by the municipal government. Coal consumption in Beijing was around 26.3 million tons in 2011, with coal-fired heating and power plants accounting for 73 percent. The remainder was for industrial use, Zhang said. "So reducing the use of coal is our priority to cut the concentration of PM2.5 in the city," he said, adding Beijing will use more green energy in the near future. PM2.5 has been put higher up the government agenda amid growing concern over poor air quality in China's big cities. According to a statement by the State Council at the end of February, the four municipalities - Beijing, Shanghai, Tianjin and Chongqing - and 27 provincial capitals, as well as three key regions - the Yangtze and Pearl river deltas and the Beijing-Tianjin-Hebei region - will monitor PM2.5 this year. More than 100 smaller cities will adopt the new air quality standards in 2013. The statement said the standards will be extended to all cities by 2015. Beijing has been releasing the data on the concentration of PM2.5 to the public since January. Replacing coal-fired plants with natural gas-fueled ones will make significant contribution toward improving air quality, said Ma Jun, director of the Institute of Public and Environmental Affairs, a Beijing-based non-governmental organization. "However, it may take longer than expected," Ma said. He said Beijing is actually a relatively small consumer of coal compared with its neighbors in Hebei province and Tianjin. "The hard work done by Beijing alone is not going to improve the overall air quality unless the neighboring cities also make an effort," he said. Zhang from the reform and development commission of Beijing said that the experience of Western countries shows that improving air quality is a long and complicated battle. "The government is no longer focusing solely on the economic growth of the city. We want to have sustainable development and create a livable city for the people," he said, adding that is the reason that the government has set an annual target of 8 percent GDP growth during the 12th Five-Year Plan period (2011-15) instead of the double-digit growth of previous years.

China's own C919 commercial airliner, domestically produced, will be ready for export to overseas markets starting in 2016, after two years of test flights, said Wu Guanghui, the chief designer. Wu, deputy general manager of the Commercial Aircraft Corporation of China and a member of the Chinese People's Political Consultative Conference National Committee, said the company had already received orders from the United States and Singapore, bringing the total number of domestic and overseas orders to 235. "The first plane will be off the assembly line as early as next year. Production on a much larger scale will take place in 2016, after two years of test flights," Wu said. The narrow-bodied airplane can carry 168 passengers and has a maximum flight distance of 4,400 kilometers to "cover all domestic flight routes and as far as Southeast Asia", Wu said. The first batch of the C919 planes will use the advanced LEAP-X1C engines, which are installed in Boeing and Airbus SAS aircraft. The imported engine, jointly developed by General Electric and Safran SA, is expected to lower fuel consumption by 13 to 15 percent, Wu said. However, development of a Chinese-made engine for the airliner is currently under way. Wu said the company's domestically-made engine for the plane, codenamed "Yangtze 1000", will be installed later. "In the future, C919s can carry either of the two engines. However, the plane will definitely have a Chinese heart," Wu said. In 2010, at the China International Aviation and Aerospace Exhibition in Zhuhai, Guangdong province, the Commercial Aircraft Corporation of China received orders for about 100 units from domestic and overseas airlines, including Air China, China Eastern Airlines and GE Capital Aviation Services, according to China Economic Weekly. However, the government won't need to solicit sales for the C919, since "it will enter market competition", Wu said. "China's homegrown airliner is still at an early stage. It still needs time," he added. Wu expects global demand for airliners to reach 20,000 over the next 20 years. In 2030, the total number of commercial airliners globally will increase to 36,000, more than double the current figure of 17,600, according to the Commercial Aircraft Corporation of China. According to an earlier report in China Daily, the corporation predicts in a 20-year industry forecast that passenger revenue per kilometer will increase by 4.9 percent annually. About 4,700 of the new C919 aircraft, valued at about $500 billion, are likely to be delivered to Chinese carriers, which are expected to comprise 15 percent of the world's total number of commercial aircraft by 2030, compared with 9 percent today.

Hong Kong*:  Mar 9 2012 Share

A tearful Lisa Kuo Yu-chin opened her heart to the world yesterday and vowed: "If you asked me to start all over again, I'd still marry Henry Tang." Chief executive hopeful Henry Tang Ying-yen is caught up in stories of a wayward love life and is facing claims he has an illegitimate daughter. His wife said in an emotional interview on Commercial Radio that Tang is no different from others and has made mistakes in life. "The most important thing is that my husband knows the way back," Kuo said. "My husband is a person with rich emotions. Every time he strayed [in his love life], he knew the way home." She gave him a score of 90 points out of 100 as a husband, and urged the public not to write him off because he falls short of perfection. Kuo said she felt nothing when looking at photos carried by several Chinese-language newspapers which are purportedly of Tang's illegitimate daughter. Earlier, Tang indirectly admitted he has a child born out of wedlock while stressing he will not comment further "to avoid hurting an innocent third party." Tang reportedly had a child when he was a student in Britain before graduating with a bachelor of arts degree from the University of Michigan in the United States. "He loves children a lot," Kuo said. "He doesn't want to hurt them because they are innocent." Asked if she knew whether Tang is still in contact with the girl, Kuo said: "I don't know. But I feel that we really need to protect the next generation. I don't really want to talk about this. I believe that he can handle the matter himself. As he said before, he will regret what he's done for the rest of his life. "I think that is the biggest punishment." Asked how many times Tang has strayed, Kuo said: "It really doesn't matter. I might have neglected him at times. Over the past few decades he strayed in moments of weakness. "But he came back finally. I feel deeply satisfied that he is faithful to me. "After I signed [the marriage document] at the age of 29, I realized that I had to stay with him through our best and worst times. This is a promise in marriage. "My husband and I will never give up our marriage." Kuo, who wore a scoop-neck dress and necklace with crucifix, insisted she will always support her husband. "Who hasn't made mistakes? He made mistakes. But he was willing to admit them and face up to them. I believe he has got the most vision, understanding and love to serve the people of Hong Kong."

Sing Tao News Corporation chairman Charles Ho Tsu-kwok says any question about a child born out of wedlock is a personal issue for Henry Tang Ying- yen and has nothing to do with public interest. But Ho said the City University expansion and West Kowloon cultural hub controversies hounding Leung Chun-ying are of major public concern because the projects are funded by taxpayers. "His [Tang's] personal issues and his credibility while working in the government are two different things," said Ho, a member of the standing committee of the Chinese People's Political Consultative Conference. He said in Beijing that people talk about an alleged love child only because Tang is a public figure. He doubted this could pose a problem since whether Tang has a love child or not concerns only Tang and his wife Lisa Kuo Yu-chin, Ho said. But taxpayers' money is involved in the controversies embroiling Leung. "Government subsidies are involved. It is money from the taxpayers," Ho said. If government policies require the future chief executive to respond to rumors of a love child, then Tang will have to come clean, Ho said. The Legislative Council last month urged that a task force probe allegations that Leung was involved in a conflict of interest while a judge at a West Kowloon design competition. He was also involved in another supposed conflict of interest when he was City University's council chairman and the company of an election campaign team member won the tender for a multi- million-dollar construction project. Meanwhile, Tang refused to comment on reports he fathered a child with a woman he had an affair with. Speaking after a meeting with Election Committee members in the film industry, Tang said that since he joined the government he has been concerned with the sector's development and that he is determined to see it prosper if he is elected. Filmmaker Ng See-yuen said media reports about Tang's personal life are exaggerated and meant to be a smear campaign. "There have been so many reports about the scandals," Ng said. "I and other film practitioners ignore these reports. We are not really interested in rumors. We hope Hong Kong can become a city full of positive energy." Although he did not say if he will vote for Tang in the March 25 election, Ng said the chief executive candidate made contributions to the movie industry while he was in the government. For instance, producers can now shoot movies on the streets without many restrictions and police are willing to cooperate, Ng said. Secretary for Development Carrie Lam Cheng Yuet-ngor, meanwhile, told the Legislative Council's Finance Committee that the Buildings Department may have to invite more than 40 witnesses to help with the investigation into the illegal structures at Tang's Kowloon Tong home.

The influx of foreign companies listing in Hong Kong shows the strength of the local stock market but also bring new enforcement challenges to regulators in the city, the secretary for financial services and the treasury said yesterday. Professor Chan Ka-keung told an investment seminar: "Our regulators may not have as much access to information [for foreign companies] as they would for Hong Kong companies. Is that an issue? Is that something investors are willing to accept? Is it something that can be solved by disclosure? All these issues need to be discussed." Chan said both mainland and international listings were the driving force. He said the Hong Kong bourse had attracted more than 645 mainland listings raising a total of US$412 billion since 1993, and the HKEx (SEHK: 0388) had started casting its net more widely since 2009. International listings represented 52 per cent of total initial public offering (IPO) funds raised last year, followed by mainland companies, with 36 per cent. Hong Kong companies accounted for the rest. Big name IPOs include L'Occitane from France, Prada from Italy, Vale from Brazil, and Russian aluminium giant RUSAL. "The number of listing applications from foreign companies has climbed over the years and our regulators and professionals have gathered valuable experience. I believe it is time to re-examine the efficiency of the process and the user-friendliness of the rules," Chan said. He added that since last November the exchange could now process and approve a debt securities application in two days. Chan said many foreign listings sought case-by-case waivers from the exchange, and asked whether the rules could be changed to provide greater clarity for foreign companies, citing overseas listed companies seeking a secondary listing as an example. "It begs the question on whether our market and investors would be open to a lighter approval process in Hong Kong if these foreign companies are already regulated by a highly credible exchange and, of course, the companies need to have a good track record," Chan said. Joseph Tong Tang, executive director of Sun Hung Kai Financial, said the influx of international listings provided more choice for Hong Kong investors. "But in terms of regulation, we would like to see the HKEx and the Securities and Futures Commission maintain their high regulatory standard. That is important to investor protection for the long term." Tong said his firm had tried in vain to arrange for an African firm to list in Hong Kong. "Unlike advanced markets like the US or Britain, some emerging markets in Africa have very different taxation and regulation from Hong Kong," Tong said. "These companies find it hard to meet Hong Kong disclosure requirements, but it's not a good idea to lower our standards. It is better for Hong Kong regulators to keep the standard high to maintain the quality of our market."

Hong Kong is facing a judicial crisis with almost a quarter of the city's positions for judges and magistrates lying vacant for at least nine months. This has caused a backlog of trials which one lawmaker warned yesterday "deals a blow to the very foundation of the rule of law". The judiciary admitted to a Legislative Council panel yesterday that 45 of the city's 189 posts for judges and magistrates had been vacant since last June, causing delays in the hearing of cases. Judiciary Administrator Emma Lau Yin-wah told Legco's finance committee she was authorised to start a recruitment exercise last June after several judges retired and others were promoted. But not one new judge has yet been appointed. Lau said recruitment was "ongoing", with 26 of the vacancies for magistrates - the most junior members of the judiciary. Lawyer and lawmaker Audrey Eu Yuet-mee asked: "The magistrates are the easiest to hire. Why is there still a shortage after such a long time? This is inexcusable." Lau said deputy magistrates could fill vacancies in the short term. She added that the most chronic shortage was in the Court of First Instance, which had been most affected by promotions and retirement. Eu warned of potential damage to justice caused by delays. "After you queue up a long time for a trial, you wait a great deal of time again for a judgment," she said. "It deals a blow to the very foundation of the rule of law and quality of the judiciary." An advertisement seeking applications for Court of First Instance judges was posted on the judiciary website last week. Applicants for the HK$210,000 per month posts must have 10 years' experience as a barrister. According to the judiciary's annual report, the average waiting time for a criminal case in the High Court, which includes the Court of First Instance, rose to 53 days last year from 50 in 2010. For civil cases, the wait rose to 117 days from 89 days in 2010. Eu also asked Lau, who was appearing before the committee to request funds for the appointment of two magistrates to sit on the Lands Tribunal, why only three magistrates were assigned to work as coroners. She said families had to wait for more than a year for an inquest. But Lau said the standard waiting time for an inquest was being met. Legal sector lawmaker Margaret Ng Ngoi-yee said the judiciary should plan for the replacement of judges in advance, especially when it knew that a judge was retiring. The Bar Association said the problem was not down to lack of interest among lawyers in becoming judges. And Albert Luk Wai-hung, a barrister, said the use of deputy judges acting on a short-term basis had helped keep the court system stable in recent years. The judiciary said last night: "The timing and frequency of recruitment exercises need to be carefully planned so as to achieve optimum results. It is not desirable for an open recruitment exercise to be launched each time a vacancy arises."

Hong Kong Home to World’s Priciest Luxury Homes - Two IFC office building seen near Conduit Road 39, one of Hong Kong’s most luxurious residential towers. It may not be a desirable title, but Hong Kong wins it, hands-down. When it comes to high-end apartments – of the kind often preferred by expatriates looking to roost – the city boasts the most expensive in the world. Renting an unfurnished, three-bedroom apartment in Hong Kong’s most desirable neighborhoods will set you back over $11,800 a month, according to new data from ECA International, a human-resources consulting firm. In other words: if you’re planning to budget for similarly choice accommodations in the “Pearl of the Orient,” prepare to set aside nearly $142,000 for your housing per year. That figure marks a 15% increase from 2011, according to ECA. It is also more than five times the average Hong Konger’s salary. The jump in prices comes down to a rise in demand, says Lee Quane, ECA International’s regional director for Asia. Gone are the days when companies would send only senior managers to set up camp in Hong Kong, he says: “There’s a new generation of [expatriate] staff in Hong Kong – relatively young, more junior.” Although the footprint of Western companies in Hong Kong has stayed relatively fixed, given the critical growth of Hong Kong’s IPO market an increasing number of companies from Korea, Japan and mainland China are choosing to expand their presence in the city, opening new offices and helping drive up demand, he says. That, Mr. Quane notes, combined with high sales tags on Hong Kong homes, has created a “double whammy of demand,” as local residents likewise turn to the rental market, pushing rental prices up. Current rents for three-bedroom apartments in Hong Kong’s high-end neighborhoods are more than $2,300 more expensive per month than comparable digs in Tokyo, which ranks second to Hong Kong in high-end residential real-estate prices. Of course, Hong Kong’s extremely finite amount of space also contributes into its prices. Hong Kong is one of the world’s most densely populated cities: in parts of Kwun Tong district, for example – not among Hong Kong’s most desirable neighborhoods – some areas totaling less than a square mile are home to over 54,500 people. At least Hong Kongers can console themselves with the diversity of apartments available on the market. Once you factor in two-bedroom apartments in lower-cost areas, ECA’s analysis finds, Hong Kong slips to fifth place, with Tokyo outstripping it as the world’s priciest location. (To conduct its analysis, ECA surveyed neighborhoods typically favored by the city’s well-heeled: for example, areas in Mid-Levels, Discovery Bay, West Kowloon, the Peak etc.) If you’re an expat priced out of Hong Kong’s cushiest apartments, Mr. Quane points to Karachi, Pakistan, as an alternative. There, ECA’s report notes, a comparably plush three bedroom will cost you an average $360 a month – the cheapest luxury housing in Asia.

 China*:  Mar 9 2012 Share

Mainland consumers will develop stronger brand loyalty in the coming decade, says McKinsey in its latest consumer behaviour forecast. Calling the new trend good news for companies, Max Magni, a McKinsey principal based in Hong Kong, said that as brand stickiness increases, companies should de-centralise their decision-making structures to make the best of an increasingly disparate group of consumers as well as the country's distinctive regional markets. McKinsey's studies showed the percentage of respondents on the mainland who stick to their preferred brands rose from 21 in 2009 to 23 last year. It is estimated that by 2020 the figure will be between 30 and 40 per cent, comparable with developed markets. It is currently 34 per cent in the US and 33 per cent in the UK. In its "Meet the 2020 Chinese Consumer" report, the management consultancy studied 49 cities across the mainland. It found regional differences are so great that no universal "China strategy" can ever work. "For example, a portfolio that works for the cluster of cities around Hangzhou on the wealthy east coast won't work for the cluster of cities around Chengdu," Magni said. "Sometimes I tell my clients, you need to see China like a continent, not a country." He said that to take advantage of the opportunities presented by the mainland's still-developing consumer markets, brands must target groups by income, gender and age rather than take a blanket approach. Chinese consumers are pragmatic and like to purchase products that they truly need, he added. Yuval Atsmon, another McKinsey principal, said China is at a turning point as the population is getting older, the degree of urbanisation is deepening and income is increasing. Beijing has been trying to encourage domestic consumption to drive economic growth as a way of moving away from its reliance on exports, creating a massive opportunity for the consumer goods industry. The McKinsey report expects volumes of online retail sales on the mainland to continue to boom. Sales have already tripled to about US$120 billion from 2009 to 2011.

Commerce Minister Chen Deming meets the press in Beijing, where he says the government will cut taxes on exporters to boost foreign trade. Claiming that a US trade bill targeting Chinese exports violates World Trade Organisation rules, China's commerce minister said yesterday that his country was not obligated to follow the mandate. US President Barack Obama is set to sign the bill into law to empower the US Department of Commerce to impose duties on subsidised goods from China and Vietnam, a move that the White House says will protect American jobs. Speaking for more than three hours at a news conference during the annual session of the National People's Congress, Commerce Minister Chen Deming reiterated that China would abide only by rules of the international organisations it had joined. "In terms of economics and trade, for example, we follow the rules of the WTO, but we have no obligation to follow domestic laws or regulations in any specific country that are not in line with the rules of international organisations," Chen said. Defending against accusations that China has subsidised exports, Chen said such practices were "actionable subsidies" allowed under WTO rules, and he pointed out that Washington had also subsidised US carmakers in the form of bailouts. Late last month, Obama signed an order to create a "trade enforcement unit" tasked with investigating and countering unfair trade practices around the world to protect American business interests abroad. Chen said China would be keeping a close eye on the US task force. "We are paying close attention to its operations and watching to see whether it obeys the rules of international trade," Chen said, adding that Beijing hoped to co-operate with it. Additionally, he pledged to protect the legitimate interests of Chinese corporations and the country in accordance with the law. China is also studying the US-initiated free-trade agreement known as the Trans-Pacific Partnership, which according to some Chinese academics sets standards that Beijing would not accept and were aimed at isolating the world's second-largest economy and largest exporter. Regarding the European sovereign-debt crisis, Chen said Europe could recover, but it might take some time for its efforts to bear fruit. Europe, he said, should boost employment while implementing austerity measures. He added that China had already begun expanding imports from Europe and investing in the region, which would help provide more jobs there. Chen also revealed that export targets in first two months of this year did not meet expectations, but he still expected the country to meet its official target this year of a 10 per cent rise in foreign trade. Preliminary data last month showed that China's exports and imports were on track to increase by 7 per cent this year. Foreign trade in the first two months of last year totalled US$495.83 billion, representing a 28.3 per cent year-on-year growth from 2010. China's exports slowed from a year-on-year growth of 27.8 per cent in August to just 12 per cent in December. Chen said the country's foreign trade still faced challenges, including from uncertainties in some developed countries and rising labour costs at home. He said the government would reduce the tax burden on struggling exporters. "If we issue new policies, they will include incentives for foreign trade instead of restrictive measures," Chen said. Commenting on US criticism on the yuan's exchange rate, Chen said all countries should strive to keep the exchange rates of their currencies stable amid the backdrop of the global financial crisis. Deliberately devaluing or strengthening a currency was "not desirable" and would undermine economic recovery. Chen said China's upcoming talks with Japan and South Korea on a free-trade agreement would strengthen East Asian trade ties, but not at the expense of international liberalisation. "If these three countries - China, Japan and South Korea - can have their own FTA, then we will accelerate the entire process of economic integration in East Asia," Chen said as the three nations prepare for a mid-May summit in Beijing to launch negotiations on the tri-party pact. Chen said Tokyo's decision to participate in the US-backed Trans-Pacific Partnership would not negatively affect Japan's engagement in other regional initiatives.

China No. 1 for Watches - A Cirque Animalier wristwatch by Cartier. Despite last year’s move by Beijing to ban outdoor ads that promote a lavish lifestyle, and the government’s announcement that it was targeting lower GDP growth, the march of the Chinese luxury consumer goes on. This view was confirmed by a report published Wednesday, which says the future looks good for watchmakers who continue to roll out boutiques in China. According to the World Watch report — a study produced by the Digital Luxury Group — China has surpassed the U.S. as the country exhibiting the greatest demand for watches, with 23% of all watch-related Internet searches. The report identifies and analyzes more than 1 billion watch-related search-engine queries and translates them into the client preferences driving the industry. “We don’t say these numbers perfectly align with sales of the watchmakers, but experience has shown that they do reflect to some extent commercial reality,” said Florent Bondoux, from the World Watch Report. The figures tend to confirm where the interest in luxury watches is strongest, and therefore where a majority of sales take place. But it is also about deciphering client preferences and forecasting where tomorrow’s clients are being nurtured. Omega (with 20.2% of all searches) followed by Longines (18.9%) are the most popular of the luxury watch brands sought out in China, particularly good news for their owner, Swatch Group, which sells 39% of its products in greater China today.

Hong Kong*:  Mar 8 2012 Share

A mother and her newborn baby return from Hong Kong through Luohu port in Shenzhen, Guangdong province. Hong Kong should take measures to curb the rapidly rising number of mainland women delivering babies in the special administrative region, political advisers said. "Mainland women having babies in emergency rooms seriously endangers both the mothers and health workers in Hong Kong," Anthony Wu, chairman of the Hong Kong Hospital Authority, told China Daily. Being born in Hong Kong means the baby will get Hong Kong permanent residency, something many mainlanders want their children to have. Some 1,219 mothers from the mainland gave birth to babies in emergency rooms in Hong Kong in 2011, nearly triple the amount in 2010. Among them was an HIV-positive mother whose condition was detected after the labor, said Wu, who is also a member of the Chinese People's Political Consultative Conference National Committee. In 2011, of the 44,000 mainland women who gave birth in Hong Kong, 33,000 went to private hospitals, official statistics showed. In fact, the quota for private hospitals remains unchanged. They prefer mainland mothers because they have higher incomes, Wu said. Currently, a natural birth costs nearly HK$40,000 at private hospitals. "We've kept most of the maternity beds at public hospitals for local mothers, but there are frequent complaints about a strain on beds at private ones," Wu said. Chan Yuen-han, a CPPCC member from Hong Kong, also called on the Hong Kong government to issue measures to prevent mainland mothers from giving birth in the special administrative region. "Hong Kong has limited resources, not only in providing beds for pregnant women but in education and healthcare. If there are more women from the mainland giving birth in Hong Kong, we will face a big shortage of social resources in the near future," Chan said. Sources with the Hong Kong Hospital Authority said the government intended to limit the number of pregnant women from the mainland giving birth in Hong Kong to 35,000 at both private and public hospitals each year. "The limitation should not been seen as a bias against mainland mothers. The existing Hong Kong government, to some extent, has failed to protect its residents' rights in previous years when many local pregnant women found it hard to give birth in Hong Kong," Chan said. Peggy Tai, a spokeswoman for Queen Elizabeth Hospital, which is public, said the hospital would try to ensure that local pregnant women in Hong Kong have priority in using its maternity service. Tai added that the public hospital has been recruiting doctors and nurses to strengthen its staff, in order to promote the quality of service. Among an estimated 51,000 local pregnant women each year, several thousand choose to deliver babies at private hospitals, previous reports said. Last year, of a total of 49,000 women delivering babies at private hospitals, 33,000 were from the mainland, according to Wu. Yu Kai-man, head of the Obstetrics and Gynaecology department of Union Hospital, a private hospital, said they would be accepting fewer mainland mothers in the future and probably reduce the number by 10 percent next year. More local pregnant women would be admitted and given better service in the hospital. "We don't have enough obstetricians to handle the increase of total births," Wu said, adding that there are now about 1,000 obstetricians in Hong Kong. The limit on pregnant women from the mainland was not discriminatory, he said. "With sufficient hospitals and medical workers, we would surely welcome pregnant women from the mainland," he said, adding that it would be good for babies born to mainland mothers to stay in Hong Kong, to help relieve the local aging problem.

Li Ka-shing, nicknamed "Superman" for his investing prowess, has been dethroned as Asia's richest person by Indian tycoon Mukesh Ambani, while the number of billionaires in the region has surpassed those in Europe and North America. Li, 83, now ranks second in Asia, with a US$25.8 billion fortune. He is sandwiched between two Indian tycoons, the other being Lakshmi Mittal - the chairman of the world's biggest steelmaker, ArcelorMittal. Ambani's fortune is estimated at US$26.8 billion, and Mittal's at US$23.6 billion. The three men's fortunes account for about 11 per cent of the combined net worth of the world's 20 richest people. More Asians are set to dominate the rankings in coming years, after the number of billionaires in the region surpassed Europe's in 2010 and North America's last year, Credit Suisse Group says. "Asia is witnessing a tremendous economic boom now, and the entrepreneurs who are steering economic prosperity (SEHK: 0803, announcements, news) are cleverly optimising these opportunities," said Noor Quek, former head of business development for Southeast Asia at Citigroup's private-banking unit, who now runs Singapore-based family office adviser NQ International. "Growth in the number and wealth of Asian billionaires will be exponential, and the process has started." The number of US dollar billionaires in Asia rose to 351 last year from 245 in 2010, the Credit Suisse Global Wealth Report states. Europe had 251 billionaires, while North America accounted for 332 last year, the Zurich-based bank said. Li is still China's wealthiest person and ranks 12th worldwide, according to Bloomberg data. Lee Shau-kee, 84, the founder of Henderson Land Development (SEHK: 0012), is the fifth-richest Asian, with an estimated net worth of US$19.8 billion.

Tung Chee-hwa in tribute to Leung's maritime work - Former chief executive's praise for City University law program seen as endorsement of candidate - In a subtle nod to chief executive candidate Leung Chun-ying, former Hong Kong chief executive Tung Chee-hwa praised a maritime law programme that Leung helped to set up at City University while he was its council chairman. Tung never mentioned Leung by name, but his statement during a meeting at the Chinese People's Political Consultative Conference in Beijing is being viewed as significant. It is the first time that Tung has publicly expressed support, even indirectly, for Leung, though he is widely viewed as a strong supporter of the former convenor of the Executive Council. "If I did not get it wrong, there is a maritime law programme at the City University [which teaches] on arbitration, insurance ... it is a successful programme," said Tung (pictured) during a CPPCC meeting. "As Hong Kong excels in financing, and the shipping business in Hong Kong involves a lot of financing and management, it incurs a lot of legal issues. It touches on maritime law." Tung, who is also a CPPCC vice-chairman, said City University's programme, which was advocated by Leung during his tenure as the university's council chairman, was conducive to strengthening Hong Kong's maritime status. Leung's election platform highlights the importance of maritime law education in Hong Kong, to build the city as a major training ground for shipping talent. Meanwhile, a Hong Kong CPPCC delegate said Tung praised Leung before CPPCC chairman Jia Qinglin at a dinner on January 1. Nine Hong Kong delegates, including Tung and several members of the CPPCC Standing Committee, joined the dinner hosted by Jia. "Tung told Jia that Leung was a professional, competent person," said the CPPCC delegate, who did not want to be named. "It is a long-standing practice within the Chinese officialdom that a predecessor's comments are valued highly when a government post is up for grabs. Tung's good words for Leung did him a big favour," the delegate said. Sources in Henry Tang Ying-yen's camp said earlier that Tung had canvassed votes for Leung. Continuing his attacks on Leung, in an interview with TVB (SEHK: 0511) yesterday, Tang alleged his arch-rival had close links with property developers. This is a charge Tang has faced, as he was nominated by property tycoons to run in the race. Joseph Yam Chi-kwong, former chief executive of the Monetary Authority, stood by Tang and insisted that the scandal-plagued candidate had learned from his mistakes. "I support a person who knows his mistakes and corrects them," he told Commercial Radio. "I support a person who has experienced a harsh political baptism."

The committee set up to review rules covering potential conflicts of interest among top officials will present its findings to the government in May. After the five-member independent panel's first meeting yesterday, chairman and former chief justice Andrew Li Kwok-nang said: "A clean government is one of the traditional core values of Hong Kong. The committee will review all regulations covering high-ranking officials and the chief executive." Also on the panel are former Chinese University pro-vice chancellor Liu Pak- wai, International Social Service (Hong Kong) chief executive Stephen Yau How-boa, Jockey Club chairman and veteran accountant Brian Stevenson and Hong Kong Economic Times Holdings chairman Lawrence Fung Siu-por. Added Li: "We most assuredly need a sound mechanism [to govern the conduct and integrity of officials.] Only with such a mechanism can we gain public confidence and safeguard the reputations and dignity of officials." The panel was set up by Chief Executive Donald Tsang Yam-kuen after he was accused of accepting favors from tycoons in the form of trips on private jets and luxury yachts and in renting his Shenzhen retirement penthouse. Li said panel members have declared their relationships with some Executive Council members. He added that the committee will not look into whether Tsang violated the anti-bribery ordinance as its main task is to tighten existing procedures. It will also weigh whether to disclose further details of the internal rules mapped out by Tsang to govern his acceptance of hospitality from friends, such as paying the equivalent of public- transport fares for each journey. Public comments will be invited next month. Meanwhile, Ming Pao Daily reported that Tsang and his wife Selina Tsang Pou Siu-mei stayed at Venetian Macao's Palazzo suite with younger son Thomas Tsang Hing-shun and his girlfriend during Christmas Eve in 2007. The hotel said the suite is usually reserved for high rollers but is available for booking if lying vacant. Tsang's office confirmed the visit, saying the son had booked the suite and the chief executive had not been involved in any misconduct or gambling. However, the office could not confirm whether the Tsangs had stayed at the Palazzo suite or Paiza Mansions. Thomas Tsang has said his parents may have stayed at Paiza Mansions, based on pictures he saw on the internet, as the trip happened years ago. In Beijing, National People's Congress Standing Committee member Rita Fan Hsu Lai-tai said the controversy shows Tsang had been careless in accepting invitations from tycoons, and called on the next government not to commit the same mistakes. And at a special meeting of the Legislative Council finance committee, Secretary for Civil Service Denise Yue Chung-yee said Tsang did not consult her bureau when mapping out internal rules for the acceptance of hospitality by officials. Labour Party lawmaker Cyd Ho Sau- lan said that the pan-democratic camp will consider a no-confidence motion if it fails to invoke Legco's Powers and Privileges Ordinance to investigate Tsang's jaunts with tycoons. 

Guangdong party secretary Wang Yang said he hopes the next Hong Kong chief executive will continue to forge economic cooperation with the mainland. Wang praised Donald Tsang for fostering close ties and maintaining the SAR's stability and prosperity. Wang met Tsang on the sidelines of the National People's Congress in Beijing. Tsang thanked Guangdong authorities for supporting Hong Kong in the development of its services and export industries. Separately, Tsang called on Hongkongers to be more accommodating in comments on recent friction between locals and mainlanders. Feelings ran high after Peking University professor Kong Qingdong described Hongkongers as "the running dogs of the British government" following an incident in which locals scolded a group of mainland visitors for eating on the MTR. Tsang made the remarks when he visited a metro line run by the MTR Corporation and mainland transport companies in Beijing. He said Hongkongers and mainlanders should accept their cultural differences and respect each other. Last month, a local group published a full-page newspaper advertisement depicting mainlanders as "locusts" because they have strained the territory's resources through the influx of mainlanders giving birth in Hong Kong hospitals.

 China*:  Mar 8 2012 Share

Shoppers at Harrods department store in London. According to China UnionPay Co Ltd, overseas consumption made through its credit card network jumped by 66.7 percent to 300 billion yuan ($47 billion) last year, up from 180 billion yuan in 2010. The Chinese may have spent more than ever in their history on overseas purchases in 2011, a year that saw a large increase in the value of the goods they bought using bank cards. That's what a senior executive at China UnionPay Co Ltd, the only credit card network in the country, said on Tuesday. Su Ning, the board chairman of the bankcard association China UnionPay and a former deputy governor of People's Bank of China, the country's central bank, said the value of overseas purchases made through its network increased by 66.7 percent to reach 300 billion yuan ($47.5 billion) last year, rising from 180 billion yuan in 2010. If the account also looked at cash payments, which Chinese consumers prefer to use when buying goods, "the total overseas spending figures would be astonishing", he said. Su is also a member of the Chinese People's Political Consultative Conference and made his remarks while attending a group discussion held on Tuesday. He said the government should charge lower import tariffs on goods, especially on luxury products. Doing so, he said, will help move consumption from the overseas market to China. To boost imports, the second-largest economy in the world has lowered the import tariffs it charges on 730 kinds of goods since Jan 1, said Finance Minister Xie Xuren on Tuesday. But those changes have stopped short of lowering the tariffs charged on luxury goods. An official at the Ministry of Finance's budget division said on Tuesday that import tariffs and consumption taxes have contributed greatly to the country's fiscal revenue, as have value-added taxes. Authorities plan to work harder to rebalance the economy and ensure that consumption plays a larger role in supporting economic growth, Premier Wen Jiabao said when he delivered his annual report at the opening of the National People's Congress on Monday. "Although external imbalances have improved markedly, internal imbalances have deteriorated, thus requiring urgent structural reforms to achieve a shift to consumption-driven growth," said Liu Ligang, head of China economics at Australia and New Zealand Banking Group Ltd. In 2011, domestic consumption contributed 51.6 percent of the country's GDP growth, according to data from the National Bureau of Statistics. The value of retail sales last year stood at 18.1 trillion yuan. That was an increase of 11.6 percent from the year before if the effect of inflation is excluded from the results. Despite that apparent increase, the actual rise in consumption was likely much smaller, since the final figure was buoyed by government spending, said Xu Shanda, former president of the State Administration of Taxation. "Although the country is promising to stoke domestic demand, we, as local government officials, have very few ways to spur consumption," said Li Yong, director of the management committee of the Tianjin Economic-Technological Development Area. "And boosting investment is still preferred by officials because it is the most efficient way to shore up GDP growth."

Workers assemble cars at Geely Auto's factory in Ningbo, Zhejiang province. Beijing has ordered government departments to buy local cars. The European Union Chamber of Commerce in China dismissed suggestions that it would mobilise retaliation against Beijing's proposal to exclude foreign carmakers from a public fleet procurement program expected to be worth 12 billion yuan (HK$14.7 billion) a year. The chamber, which represents European carmakers in China, said yesterday that while such a move is "discriminatory" to its members - which include Volkswagen - the last thing they want is a war between countries that hurts development of the car industry. The tensions follow the issuance of a procurement list by China's Ministry of Industry and Information Technology on February 24, which proposed 412 domestic brands made by 25 carmakers from which officials could buy vehicles. Former favourite brands for officials such as Audi, Honda and Toyota were all excluded, ostensibly due to a new rule that requires a government fleet supplier to spend no less than 3 per cent of its revenue on research and development. Chamber secretary-general Dirk Moens told Bloomberg earlier that "as an industry you cannot expect to be warmly welcomed outside of your country if at the same time you start closing the industry in your country." The comment was considered a threat to Chinese carmakers' expansion in Europe. Great Wall Motor recently opened the first Chinese car plant in Bulgaria, and Zhejiang Geely planned to set up a car sales network in Italy. The Chinese government took carmaking off the "encouraged" foreign direct investment list months ago, as Premier Wen Jiabao pledged to control growth of the country's car manufacturing capacity amid slowing demand. The change was considered a major setback for luxurious carmakers such as Jaguar Land Rover, which was said to be seeking approval to form a 17.5 billion yuan car venture with Chery Automobile. In a statement yesterday, the chamber said China's latest restrictions on public fleet supplies contradicted a policy introduced just six months ago that included both foreign and local car brands for officials. It urged Beijing to revise its procurement list. However, Bill Russo, senior analyst at consulting firm Booz & Co and former head of Chrysler's business unit in China, said it was not uncommon for national governments to prefer domestic car brands in the procurement of government vehicles. He doubted the European Union could retaliate in any way. "It was an internal procurement policy," Russo said. "Whatever the Chinese government wants to buy, it really is their own choice, I don't see any trade issues there." Russo said the move was actually good for foreign carmakers like Audi to focus more of its resources and energy on China's lucrative retail sector. Audi said earlier the new restriction would hurt less than 5 per cent of its sales this year.

A man casts his vote at the weekend during an election for a seven-member village committee in Wukan. Village poll nothing new, says party chief - Guangdong leader says election in Wukan - seen as a symbol of democracy - was carried out according to mainland laws - Guangdong party secretary Wang Yang yesterday played down the significance of the weekend's village committee election in Wukan, denying it was a political novelty and saying it was simply carried out according to existing mainland law. "Factually speaking, Wukan's election was carried out in accordance with [the national] village committee's organisation law and Guangdong's provincial village committee election law," he said after a panel discussion with a Guangdong delegation in Beijing yesterday. "There is nothing new and [we] merely fully implemented what's already on the books. This allows [Wukan] to correct past mistakes [made in other] elections, that's all." The fishing village in Guangdong has been hailed by overseas media and mainland internet users as a pioneer of grass-roots democracy on the mainland. But Wang said it had nothing to do with political reform. Wang also defended his decision to send a high-profile task force to the restive village - widely seen as a conciliatory gesture to defuse longstanding tension between villagers and local authorities over land grabs. But Wang said his deputy, Zhu Mingguo , was sent to negotiate with Wukan village representatives only because the government wanted to take the opportunity to get more experience in promoting grass-roots elections. Johnny Lau Yui-siu, a Hong Kong commentator, said Wang had adopted a safe approach in the run-up to the leadership reshuffle expected at the Communist Party congress this autumn. "If he plays up Wukan's election as an innovative gesture, he will be making one of the worst political mistakes, like [Chongqing party chief] Bo Xilai , who was deemed to be breaking China's political ethics by playing up the local government," Lau said. Observers say Wang, a closely watched political star tipped for promotion to the party's supreme Politburo Standing Committee this autumn, turned the Wukan crisis into a political gain by adopting a liberal approach to defusing local tensions. Professor Guo Weiqing , from Sun Yat-sen University's school of government, said Wang was right to say "there was nothing innovative legally about Wukan's election" But he said Wukan should be recognised for its efforts to implement the legal requirements for village elections by fairly selecting an electoral committee as well as a villagers' representative committee. Wukan wrapped up its election of a seven-member village committee at the weekend. The villagers now face the challenge of getting their stolen land back. They began months of defiance in September, at one stage driving out police trying to stop their protests. Provincial leaders intervened in December after the death of a protest leader in custody. Villagers were allowed to stage elections after the previous village governing body was dissolved.

China lowered its economic growth target this year to below the symbolic 8 percent level maintained since 2004 as it prepares to face myriad challenges in the external environment. Premier Wen Jiabao said yesterday China aims to achieve growth of 7.5 percent this year. The shift is also seen as a means to achieving balanced economic growth. "We will focus on raising the quality and efficiency of economic development, to be consistent with the aims of the 12th Five-Year Plan," Wen said as he delivered the government work report to the National People's Congress session, which opened yesterday. He reiterated the government aims to deliver steady and robust economic development and will adhere to a "proactive" fiscal policy and "prudent" monetary policy. Actual economic growth rates have outpaced targets every year since 1999. In 2007, growth soared to 14 percent against a mere 8 percent target. Gross domestic product growth was 9.2 percent last year and 8 percent was forecast for this year. Stock markets reacted negatively to the news. Shares tumbled as investors interpreted the lower growth rate to mean China has lost confidence in the global economy. But monetary officials denied Beijing had taken a bleak view. People's Bank of China adviser Li Daokui, who has repeatedly said China can maintain growth above 8 percent, said 7.5 percent "is still very good" because there are "substantial uncertainties" both within the country and externally. Francis Lui Ting-ming, an economics professor at Hong Kong University of Science and Technology, ruled out further fiscal stimulus. Policymakers are wary of useless projects by local governments, he added. "Some projects are not accretive to future growth and lending caused problems last year as monetary policy tightened." Beijing unleashed a 4 trillion yuan (HK$4.92 trillion) stimulus package following the global financial tsunami of 2008. Despite financial turmoil elsewhere, China achieved growth of 9.6 percent in 2008 and 8.7 percent the following year. In 2010, growth was 10.4 percent. Referring to the lower growth target, Goldman Sachs said it was a signal from Beijing that local governments should not focus solely on the pace of GDP growth. Meanwhile, the export growth target was set at 10 percent this year compared with 20.3 percent last year. Wen forecast the trade surplus will narrow further. The annual inflation target was maintained at 4 percent - the same as last year - although consumer prices edged up to 5.4 percent in 2011. Zhang Wen, chairman of the National Development and Reform Commission, said he is "confident" the inflation target can be met. Vigilance will be needed to minimize risks from rising global commodity prices, the commission chief said. As for property, Wen reiterated that curbs on the private residential market will be maintained. Land supply will be increased, he said, to allow home prices to return to a reasonable level. Five million social housing units will be completed this year, while construction will begin on seven million homes. Hang Seng Bank senior economist Yao Shaohua said China has to transform into "a domestic-driven and consumption-based economy." HKUST's Lui said policymakers are perhaps less worried about unemployment amid slightly modest growth. Wen set the target for broad money supply, or M2 growth, at 14 percent, which is 0.4 percent above last year. The fiscal deficit is forecast to be 800 billion yuan, or 1.5 percent of GDP, compared with the 900 billion yuan deficit last year.

For the past few years, China has been rapidly building its infrastructure. The pace has been so fast, in fact, that many people say the United States could learn a thing or two. About 100 workers do routine checks on more than 30 high-speed trains every night at this depot in Wuhan, capital of Hubei province. The United States plans to open its first high-speed rail line in California, and a Chinese company might be one of the bidders for the project. California is home to six of the US' 10 most congested metropolitan areas, and its population is predicted to grow by more than 20 million in the next four decades. High-speed rail lines, airports and train stations are springing up nationwide, while in Beijing alone four new subway lines will start operation this year, taking the city's network past the 450-kilometer mark. By contrast, US infrastructure is crumbling. Two years ago, New Jersey canceled a project to build a tunnel between the state and New York's Manhattan district because of short-term budgetary gaps. Commuters instead take trains that share a tunnel under the Hudson River with Amtrak, the national rail carrier, running on tracks built in 1910. Nearly one-third of roads in the US are in poor or mediocre condition, and one-fourth of its bridges are either structurally deficient or functionally obsolete, according to the American Society of Civil Engineers, which rated the US transit system "D" in its annual infrastructure report. The World Economic Forum's economic competitiveness ranking showed the overall US infrastructure rating has fallen from 8th place to 16th in the past three years, while China rose from 46th to 44th. US President Barack Obama has on many occasions stressed the need to rebuild his country's infrastructure. In the 2013 budget he sent to Congress on Feb 13, he proposed more than $350 billion in short-term measures for job growth, including an investment of $50 billion toward the surface transportation re-authorization bill for roads, rails and runways. Last year, in his speech on a job creation plan, Obama proposed spending $80 billion on infrastructure, $30 billion of which is for repairing and renovating schools. Yet, even that amount cannot compare with what China has committed to infrastructure construction. China's Ministry of Railways said it will spend about $300 billion on building transport systems through 2020, while the US Federal Railroad Administration plans to commit about $8 billion in similar projects in 2012. Industrial experts point out what the US government lacks most is funding and this is where Chinese companies can step in and help rebuild the US infrastructure. Yuan Ning, president of China Construction America, a wholly owned subsidiary of China State Construction Engineering Corp, said the perfect way for China and the US to collaborate is through a public-private partnership. PPPs are government services or private-business ventures funded and operated through a partnership of the government and one or more private-sector firms. Chinese companies can bring expertise and capital and can work with the US government on various infrastructure projects, Yuan said. "It's a win-win solution." Robert Hormats, US under secretary for economic growth, energy and the environment, agreed that PPPs are a good way to work with Chinese companies in infrastructure projects. "Chinese investment can be really helpful," he told China Daily after the Bloomberg China Conference in New York on Feb 1. "We would love to have more of that, and we will be pursuing that dialogue with the Chinese." China's Commerce Minister Chen Deming said he was impressed by the high quality of US subways and other infrastructure when he visited 20 years ago, but many roads, railways and ports today need renovation. The country hopes to achieve cooperation with the US on infrastructure, he told members of the American Chamber of Commerce last year, adding: "We are willing to turn some of our holdings of your debt into investment in the US, hoping to create jobs for the US." Bill Graves, president of the American Trucking Associations, said the Obama administration and Congress both need to focus on finding funds for infrastructure. "In order to do this efficiently and safely, we need the administration and Congress to come together on a well-funded multiyear highway bill that makes smart investments in roads and bridges with real dollars," he said in response to Obama's State of the Union speech in January, which called for rebuilding US infrastructure.

Hong Kong*:  Mar 7 2012 Share

Shares in property developer Pacific Century Premium Developments (SEHK: 0432) leaped 30 per cent when they resumed trading after a five-week break on Monday, as the company announced a HK$1.7 billion (US$219 million) share buy-back plan. PCPD, run by executive chairman Richard Li Tzar-kai, plans to buy back 926 million shares, or 38 per cent of the company’s stock, at HK$1.85 each, the company said in a filing with the Hong Kong stock exchange. The purchase price represents a premium of 31 per cent over the company’s price before its shares were suspended at the end of January, but a discount of 38 per cent to its net asset value at the end of last year. Hong Kong property developers have been trading at sizeable discounts to their net asset values, with the sector beaten down by the prospect of sluggish residential sales. Phone company PCCW (SEHK: 0008), which controls 62 per cent of PCPD’s shares, said it does not plan to delist or privatise the developer. PCPD said it intends to issue bonus shares in the company to ensure the proportion of shares in public circulation remains at 25 per cent, as required by the Hong Kong stock exchange, with shareholders receiving up to four bonus shares for each share they own. The move requires approval by the board. Anglo Chinese Corporate Finance is the financial adviser on the share buyback, with Rothschild advising the board and independent shareholders.

Premier Wen Jiabao used his annual work report to the National People's Congress in Beijing on Monday to stress the central government's support for Hong Kong to become an offshore yuan trading centre. But Wen did not mention the city’s chief executive election in the address, or Beijing’s preferred candidate for the March 25 race. The central government promised in its 12th five-year plan, released in March last year, to develop Hong Kong into an offshore yuan hub, but the premier’s reference on Monday was the first time the commitment has been included in a national work report. Wen also added the phrase “promoting democracy” as a target of Beijing’s support. “We fully support Hong Kong and Macau to develop their economies, improve people’s livelihood and promote democracy,” Wen said. In last year’s work report, the premier only mentioned the central government’s support for two special administrative regions to develop their economies and improve people’s livelihood. But veteran China-watcher Johnny Lau Yui-siu said there was no need to over-emphasise the phrase’s addition in this year’s work report. “In their previous speeches, state leaders like President Hu Jintao and Wen Jiabao listed ‘promoting democracy’ in Hong Kong as one of major tasks of the Hong Kong government,” Lau said. Professor Ng Ching-fai, deputy head of the delegation of Hong Kong NPC deputies, said it was natural for the premier not to mention the chief executive election in his work report. “The central government will not publicly state its position on the chief executive elections, particularly during the current sensitive period,” Ng said. Wen also said in the work report that Beijing would grant Hong Kong companies wider access to the mainland’s service industries. The premier said the central government would support cross-border infrastructure projects such as the Hong Kong-Zhuhai-Macau bridge, a pledge made in work reports in recent years.

The former head of Hong Kong’s Monetary Authority stood firm by besieged chief executive contender Henry Tang Ying-yen on Monday – insisting that the unpopular candidate had learned from his errors. In an apparent reference to scandals over Tang’s marital infidelity and an illegal basement, Joseph Yam Chi-kwong said he believed the former chief secretary would not repeat his past mistakes. “I support a person who knows his mistakes and corrects them. I support a person who has experienced a harsh political baptism. I think he [Tang] won’t repeat his past attitude,” Yam told local radio. Yam also vouched for Tang’s ability to reform the financial and property sectors, even though leaders in these sectors have nominated Tang for the top job. “Certainly, there is something within such industries [that needs] to be rationalised,” Yam said, in response to questions about the so-called hegemony – or oligopolies – in property and finance. “And, Henry Tang can do this. [He] can strike a balance using a foundation of reason and theory.” But, he stopped short of saying what needed to be changed and insisted that “success in industry doesn’t equate to hegemony”. Yam was head of the Monetary Authority when Tang was the city’s financial secretary and its chief secretary. He also helped write Tang’s economic platform, and his support has not wavered for the candidate since Tang declared he was running. Yam also dismissed critics who claim Hong Kong’s economy is being planned by Beijing because of the city’s inclusion in the central government’s 12th five-year plan in 2010. “I don’t think we have been ‘developed’. Hong Kong should not have its economy developed or planned,” Yam said. “This [proposition] is mistaken.” The former monetary chief appeared on the radio show alongside accounting constituency lawmaker Paul Chan Mo-po, who nominated Tang’s main rival, Leung Chun-ying; and Democratic Party vice-chairman Sin Chung-kai, a deputy of rank outsider Albert Ho Chun-yan. Chan said that under Leung’s leadership Hong Kong would strengthen ties with the mainland to help local businesses expand across the border. He said Hong Kong civil servants based in the mainland could be given the task of forging such links. “Leung talks about ‘internal diplomacy’, by which he means regular communication and socialising with the mainland’s city, provincial and central governments,” Chan said. Sin said the present administration had not responded swiftly enough to the needs of business.

 China*:  Mar 7 2012 Share

Jaguar Land Rover and Chery Automobile Co are seeking regulatory approval for a 17.5 billion yuan (US$2.78 billion) car venture in eastern China, two people with direct knowledge of the deal told Reuters on Monday. The deal marks Jaguar Land Rover’s latest effort to expand its appeal in the world’s largest auto market where luxury sedans and SUVs remain in hot demand even as the overall car market cools. The JLR-Chery venture, to be located close to Shanghai in Changshu city, will make Land Rover SUVs initially, followed by Jaguars in the second phase, one person told reporters. “The plan is still subject to the approval of the National Development and Reform Commission at this stage. The size of the investment could be adjusted accordingly,” another person said. Both sources declined to be named because of the sensitive nature of the proceedings. JLR, controlled by India’s Tata Motors had previously explored joint venture deals with other Chinese partners, including Great Wall Motor, but made little headway. A Tata Motor spokesman declined to comment on the Chery tie, but its CFO, C.R. Ramakrishnan, said recently that JLR had already picked a Chinese partner. The Chery tie, if approved, will give JLR a much-desired local production base in China where global luxury markers including BMW, Mercedes-Benz and Audi have already made windfalls, thanks to growing ranks of wealthy Chinese. All three German marques, which started local manufacturing in China years ago, saw their China sales rise more than a third last year when the overall market slowed after years of frantic expansion. JLR sold 42,000 cars in China last year, about 13 per cent of Audi’s tally of roughly 313,000. When China opened its doors to foreign automakers 30 years ago, the approval process was relatively straightforward. But now that General Motors, Volkswagen and other foreign producers dominate the market and China’s native auto industry remains uncompetitive, Beijing has started to raise the bar for new entrants. The government recently removed the auto industry from a list of encouraged industries, making it tougher for foreigners to win new auto projects. Fuji Heavy Industries, which intends to make Subarus with Chery in China, submitted its deal for approval last year, but regulators have yet to announce a decision and it is unclear when, or whether, they will approve it. Fuji said Monday it has no update on its application for a joint venture in China. Officials at Chery declined to comment. In a bid to shore up domestic carmakers, Beijing recently said it would implement new rules requiring government departments to buy only local car brands. If foreign cars made at a local-foreign auto venture want to sell cars to Chinese government agencies, the venture must set up its own joint research and development facility and invest 3 per cent of its annual proceeds in R&D for at least two consecutive years, according to the country’s new rules. The venture is also required to develop and build its own car brand. It is unclear whether any similar rules are in place for new foreign joint ventures and it is unclear what JLR has committed in order to get a foothold in the country. A source told reporters that the carmaker has committed to jointly invest in a research facility with Chery. “It’s hard to second guess the whether the JLR deal would get the green light. But one thing is obvious, it’s getting harder and harder for foreign automakers to get joint venture deal in China,” said John Zeng, director for industry consultancy LMC Automotive Asia Pacific region.

China Southern Airlines Co Ltd's third Airbus A380 jumbo jet made its maiden flight on March 2, and began its Beijing--Hong Kong route. The round flight airfare for first class was 11,580 yuan ($1,838), business class was 8,340 yuan, and economy class started at 1,830 yuan.

A saleswoman dressing a lingerie model at a department store in Nanjing, the capital city of Jiangsu province. Chinese women are no longer satisfied with merely comfortable bras, knickers or nightwear. They want attractive styles and a sense of luxury in wearing them. What do vendors of underwear actually sell? It's not just lingerie, according to Yang Shibin, leader of the China Knitting Industrial Association. "No, they are not selling the products but a culture and a lifestyle," he insisted. As the result of the economic development of the country, the so-called intimate apparel industry is growing bigger and has been attracting large numbers of investors in recent years as demand rises. Chinese women are no longer satisfied with merely comfortable bras, knickers or nightwear. They want attractive styles and a sense of luxury in wearing them. Companies are working hard to meet the changing demands and make profits by creating new trends. According to statistics from cloth.hc360.com, one of the biggest business websites in the clothing industry in the country, the total revenue of China's intimate apparel market in 2010 was 3 billion euros ($3.9 billion). It is experiencing an annual growth rate of 10 percent. Among the potential consumers of about 525 million for intimate apparel in China, 21 percent of them are aged 15 to 24 and 41 percent are aged 25 to 44. The latter has more purchasing power than the former. The statistics show that about 140 million Chinese people prefer high-end intimate apparel and their annual budget for clothes including underwear is 300 euros a person. Dong Li, 51, who owns a small private company in Shanxi province, said she usually spends 300 yuan ($47.62) to 450 yuan on a foreign-branded bra. "I like the simple design and the high quality of the materials of foreign brands," she said, adding she also likes buying nightwear and homewear in various colors and styles. "I believe that choosing many items of homewear in different styles is a new fashion which can help the family feel clean, warm and interesting at home," she said. However, not all women prefer foreign-branded bras. Wang Qi, 25, an office worker at an IT company in Beijing, said the prices of foreign brands are expensive and they often don't fit the size of Asian women. "I like push-up bras which have padding inside the cups' linings because it makes me appear to have larger breasts and I can show a beautiful cleavage sometimes in summer," she said. "But most foreign brands don't have such a design. They are more natural in design, color and style." The growing demand and promising future of the industry has attracted many youngsters to study design, production and marketing for underwear. Xi'an Polytechnic University set up a department of intimate clothing at its clothing and art design college in 2008. It is the first department specializing in the underwear industry in China. Liu Chi, who majored in clothing engineering at a United Kingdom college, was appointed the director of the new department after she returned to China. She said the intimate apparel industry in the United States and Europe has a longer history and their producers have better materials, knitting skills and technology than domestic ones. However, Chinese companies have been rapidly narrowing the gap in recent years. "The rapid growth of the industry is the result of soaring market demand, especially for high-end products," she said. "In China, many film stars and businesswomen require private custom-made bras for attending important occasions. The average price for these kind of bras can be more than 10,000 yuan each." The 7th China International Intimate Apparel Culture Week as well as the Shenzhen Lingerie Fair, supported by the Ministry of Industry and Information Technology, will be held in Shenzhen on May 7 this year. Representatives of both domestic and foreign brands will attend the fair to exhibit their products including bras, home and nightwear, men's underwear and swimming costumes and trunks. In 2011, the annual event had a turnover of 2.35 billion yuan, according to the organizer. "The fair will help domestic companies to learn experience from their foreign counterparts and also create a chance for customers to get in touch with the latest fashion trends," Liu said. According to the National Bureau of Statistics, China has more than 3,000 companies producing lingerie, of which only 13 percent make a profit, leaving the majority of the market share to be cornered by overseas brands.

Hong Kong*:  Mar 6 2012 Share

Sun Hung Kai Properties (SEHK: 0016) sold 64 flats in the sixth and final-phase release of its Park Island development over the weekend, generating sales revenue of about HK$800 million. Selling prices for the flats in the AnaCapri complex ranged from HK$7,068 per square foot to HK$13,300 per square foot. The developer earlier had unveiled the target price of HK$10,000 per square foot for standard units in the development. However, the HK$7,068 price tag was still about 28 per cent above the HK$5,500 average transaction price realised in the secondary market in Park Island, agents said. About 50 per cent of buyers already owned flats at Park Island, 30 per cent were tenants in the complex, and the remaining 20 per cent were end-users mostly living on Hong Kong island, according to Victor Lui Ting, an executive director at Sun Hung Kai Real Estate Agency. AnaCapri comprises 65 flats in three seven-storey blocks, including 11 ground-floor homes with garden areas ranging from 689 square feet to 4,393 sq ft. Six of the ground-floor units also come with private pools. The project is due to be completed early next year. Lui said that the last unit would be sold when the development was completed. The first batch of units in the Park Island complex was sold in 2002 at HK$2,255 per square foot. Cheung Kong (SEHK: 0001) also sold more than 20 flats in its Festival City development in Tai Wai on Saturday, with prices averaging more than HK$9,000 per square foot. In the secondary market, 62 flats were sold at 10 selected major housing estates over the weekend, down 6.1 per cent compared with the same period a week ago, according to property agent Midland Realty. Midland Realty director Sammy Po said the decline was partly prompted by increased asking prices from owners. Po said some flat owners were seeking to take advantage of improved buying sentiment by raising prices above the level that many buyers were willing to pay. Sales in the secondary market picked up last month, with 3,428 transactions lodged with the Land Registry, up 26 per cent from January's 2,721.

Mainland brokerages are on the fast track to expand in Hong Kong through mergers and acquisitions or by grabbing account managers from local firms, say people familiar with the expansion bid. Southwest Securities, a mid-sized brokerage based in Chongqing and listed on the Shanghai stock market, is eyeing several small local brokerages in Hong Kong for possible acquisition, according to those briefed on the plan. And another brokerage has put Hong Kong's Value Convergence Holdings on its radar in the hope that a takeover could help it get a footprint in the local market rapidly, added another source, who declined to name the potential mainland investor. Many small securities firms in Hong Kong are already operating on very lean budgets amid fierce competition. And most are struggling to generate enough profit to survive in the lacklustre trading environment. Competition for brokering and trading business is so intense that some Hong Kong securities firms have advertised that they will charge less than HK$10 per transaction to lure retail clients. But the capital-rich mainland securities firms seeking to access the Hong Kong market may not be targeting quick profits. Rather, they will focus on growing a local client base to gain a good offshore platform for more international business and clients, sources say. Some major players in the mainland's capital market, such as Beijing-based China Citic Securities and Shenzhen-based China Merchants Securities, have already set up Hong Kong offices. "Those who already have offices in Hong Kong can focus more on organic growth by expanding staff and business," said one securities executive. "The alternative of setting up everything from scratch - including all the required licences, and hiring people from receptionists to traders - could be too slow, especially if your rivals are already way ahead of the game," he added. Southwest Securities recently lured several directors and vice-president-level executives from the Hong Kong office of its bigger rival Merchants Securities, said the sources. Southwest does not have an office in Hong Kong yet, but the hirings are understood to be the first step in its expansion into the local industry. Meanwhile, ABC International, the investment-banking arm of the Agricultural Bank of China - one of the mainland's Big Four lenders - recently hired a headhunter to look for experienced professionals to join its Hong Kong office. ABCI wants people to fill a range of important functions from account managers to research analysts, and its hiring plans are the most aggressive since it opened its Hong Kong office in 1995, according to a person familiar with the situation. "There are some businesses - for example yuan-related products - that Hong Kong securities firms are not allowed to participate in, but mainland companies can offer," said a senior executive at a leading mainland firm. "So I think in the long run the trend will be for Hong Kong firms to tie up with mainland partners." Indeed, such a trend is already well under way in the banking sector. The mainland expansion coincides with a trend for cash-strapped European banks to sell off Asian assets because of the euro debt crisis. Last month, the South China Morning Post (SEHK: 0583) reported that Royal Bank of Scotland Group (RBS), which has been majority-owned by the British government since the global financial crisis, was in the final stage of talks to sell some of its Asian assets to regional institutions, including China International Capital Corp (CICC), the country's No1 investment bank. CICC - led by Levin Zhu, the son of former premier Zhu Rongji - plans to take RBS's Southeast Asia equities-research team, with most staff based in Singapore, and Malaysia's CIMB is set to take RBS's research team for the rest of Asia and Australia, according to people briefed on the matter. CICC and CIMB also plan to acquire some other investment-banking businesses from RBS.

Xi Jinping greets Hong Kong delegates in Beijing. The vice-president told them that "turmoil is a disaster", according to meeting attendees. China's leader-in-waiting Xi Jinping yesterday warned the Hong Kong people that they must stay united - but gave no hint about his stance on the city's chief executive contest. Despite mounting speculation to the contrary, the vice-president revealed nothing during the Chinese People's Political Consultative Conference in Beijing about the party's preference between the two front runners in Hong Kong's unusually contentious leadership fight. He met Hong Kong deputies, but did not talk about Leung Chun-ying or Henry Tang Ying-yen and made no mention of the March 25 poll, according to Xinhua reports and delegates to the top advisory body. Instead, the vice-president urged Hongkongers to "stay united among brothers for the greatest strength", according attendees at the meeting. Meanwhile, Chief Executive Donald Tsang Yam-kuen - in Beijing for the gathering - vowed to serve until the end of his term despite questions about his dealings with tycoons. He said the central government was fully aware of his situation. Tam Yiu-chung, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) and a local deputy, said Xi was concerned about the city's disunity. "Xi said that when two brothers are of the same mind their sharpness can cut through metal," Tam said. "Xi called for better unity in Hong Kong to face future development problems." Tam said the DAB would decide soon whether to vote unanimously for a particular candidate. Chan Kam-lam, another DAB lawmaker, said Xi told the delegates that "harmony is a fortune ... [and] turmoil is a disaster". According to state news agency Xinhua, Xi also told the deputies to "more actively participate in social-political affairs and maintain the stability and harmony of the society". He advised them to "strive for rational communication for the greatest tolerance" of opinions. Cheung Kong (SEHK: 0001) Holdings vice-chairman Victor Li Tzar-kuoi said he was not lobbied by the central government. "[My choice] depends on the observations in the past 10 or 20 years, not the past two or three months," he said. Lew Mon-hung, a strong supporter of Leung, was the first delegate who shook hands with Xi - despite custom dictating that the CPPCC's standing committee members should be first. Another Leung supporter, Shui On Group chairman Vincent Lo Hong-sui, was the second.

The former general manager of TVB (SEHK: 0511), Stephen Chan Chi-wan, who was acquitted of corruption charges last year, is the new chief executive of Hong Kong's leading radio station, Commercial Radio. He said he planned to stay in his new job "at least until the next Hong Kong chief executive settles down". The surprise appointment came less than a week after Chan left TVB. He first tendered his resignation in November after a court acquitted him of charges brought by the Independent Commission Against Corruption over allegations arising from his time at TVB. The Department of Justice said after Chan was acquitted that it planned to file an appeal, but has not yet done so. Chan told the South China Morning Post (SEHK: 0583, announcements, news) yesterday that the appointment, made in a hurry, did not state the duration of service but he was committed to work in his new post for at least five months. "I've pledged to stay at least until the next chief executive settles down successfully," Chan said. "The contract did not state the duration of work; it was a decision that brooked no delay." He said he had originally planned to leave Hong Kong to study overseas. But he ran into the radio station's vice-chairwoman, Winnie Yu Tsang, last Thursday and she persuaded him to join. "I assured her right away," Chan said. He said because of recent changes in Hong Kong politics, he would start hosting a new programme alongside some of the channel's primetime political commentators. "This will be a show about the electoral contest," Chan said. "Whatever I need to do, I do; whatever I need to say, I say at once." He said he hoped to help Hongkongers find the way ahead amid the recent chaos. Chan said he had told TVB before the public announcement of his appointment at Commercial Radio. He worked as a civil servant before joining Commercial Radio in 1992, where he was responsible for administrative affairs and later worked as a disc jockey. He switched to TVB two years later. The South China Morning Post reported last week that TVB was to form a joint venture with the state-owned Shanghai Media Group. The former head of the Shanghai Media Group, Li Ruigang, resigned as deputy secretary of the Communist Party's Shanghai Municipal Committee and is expected to take up a senior position at TVB, according to officials from the Shanghai government.

 China*:  Mar 6 2012 Share

Latest US data suggest the percentage of US dollar holdings in China's foreign- exchange reserves has fallen to a decade-low of 54 percent from 65 percent in 2010. Purchases of US securities amounted to just 15 percent of the increase in foreign-exchange reserves in the 12 months to June 2011, down from 45 percent in 2010 and an average of 63 percent over the past five years. The fear that China - the top buyer of US Treasuries - is losing its appetite for the notes makes investors twitchy about the potential volatility of dollar assets, especially US bond yields. The data only flags China's holdings of US Treasury securities in June last year when US bond yields rose. But that was when the Fed had just completed the second round of quantitative easing, while the European debt crisis had yet to worsen. We must wait and see if China has really cut its exposure to the dollar. In fact, China had earlier aimed to raise its holdings of securities priced in euro. But with Europe's fiscal situation being even more precarious than that of the US, a shift of reserves into euros brings its own risks. Won't the US take any actions to prevent China from reducing its dollar holdings further? Overall, foreign demand for dollar securities as a safe haven remains strong now - with the benchmark 10-year bond yield near 2 percent. However, the US dollar will no longer be attractive once the global appetite for risk rises. Then, the US will pressure China, deepening bilateral trade disputes. Andrew Wong Wai-hong is chairman and chief executive officer of Lyncean Holdings Limited.The views expressed are his own.

China will overtake the United States as the world's largest e-commerce market next year, when its annual online sales hit 1.5 trillion yuan (HK$1.85 trillion), according to global consultancy Bain & Company. At that point, online sales in China would represent as much as 7 per cent of the country's total retail sales, versus a 3 per cent share of the total last year. Growth in online sales would be fuelled by an expected increase of more than 60 per cent in the total number of online shoppers and a projected 40 per cent or more surge in their spending, Bain said. Currently, consumer-to-consumer (C2C) shopping portals such as Taobao.com take 80 per cent of China's online market share, compared with the 20 per cent take by business-to-consumer (B2C) sites. "An explosive B2C growth is under way, fuelling the expansion of China's entire e-commerce industry," said Serge Hoffmann, a partner at Bain and author of the report. "Many big traditional retail names are gearing up to seize the opportunity, including Wal-Mart." Wal-Mart, the largest supermarket operator in the world, announced last week it had taken a controlling stake in Shanghai-based shopping website Yihaodian.com, a move to test the waters in the fast-growing e-commerce sector on the mainland. A survey conducted by Bain found that more and more Chinese shoppers are shifting online for the sake of convenience and variety, although price is still the primary motivator. Around 19 per cent of 600 respondents said convenience was the most important reason for them to purchase goods on the internet, and 15 per cent pointed to variety as the major reason. According to the survey, the most popular categories for first-time online buyers are electronics, apparel, and groceries. Around 40 per cent of shoppers in first- and second-tier cities plan to increase their spending this year. Nearly half of the respondents decide where to shop online largely based on word-of-mouth recommendations and search engine results. Despite increasing competition from B2C retailers, the overwhelming leader, Taobao.com, is still one of the fast-growing players. The site is using its 370-million-user base to feed traffic to Tmall, its entry in the B2C market, which it hopes to build into China's largest B2C site.

NPC spokesman Li Zhaoxing says new election guidelines and a re-allotment of deputy seats will be discussed at today's annual meeting. Next year's National People's Congress (NPC) will have roughly one deputy representing every 670,000 citizens, marking the first time that urban and rural residents will have equal representation. NPC spokesman Li Zhaoxing confirmed yesterday that new election guidelines and a re-allotment of deputy seats for the next NPC will be among the agenda items for the annual meeting, which begins today and will be the fifth and last session for the current NPC. Prior to 1995, there was a NPC deputy for every 800,000 rural residents and one for every 100,000 urban residents, to protect workers' rights in the cities. Following the gradual growth of the urban population, this ratio was reduced to four-to-one in 1995, and finally removed in a revision of the Electoral Law in March 2010. While saying that elections for the next NPC will enhance the voting rights of Chinese citizens, Li also said it would be difficult for direct elections to be further expanded beyond the current scope, which is limited to the election of deputies of people's congresses at grass-roots levels of counties and villages. "All forms of democracy must be compatible with the conditions of a society's economy, politics and culture," Li said. "Our country is geographically vast with a huge population, and economic and social development across the country is uneven, with some places remaining difficult to access. It is still difficult to have all-out direct elections." The Electoral Law currently specifies that the number of NPC deputies will not top 3,000, so following the 2010 amendments, the number of deputies to be elected by each constituency must be re-allotted. These constituencies are currently all the mainland provinces and municipalities, Hong Kong, Macau, Taiwan, and the People's Liberation Army. Besides the principle of allotting a seat for every 670,000 citizens, Li said there would be a basic number of eight seats for every province, autonomous region or municipality directly administered by the central government, regardless of population. And every ethnic minority will have at least one deputy. These NPC deputies are to be elected within the next year by deputies for provincial-level people's congresses, who will be in turn elected by deputies for city-level people's congresses, who will be elected by deputies for county- and village-level people's congresses. Direct elections for county- and village-level deputies began last year. Professor Zhang Qianfan of Peking University said he hoped the new deputy-seat allotment could partially address the current problem of NPC delegates having a weak link to the local needs of their province. He said that due to the current indirect-election system, a largely agricultural province may not have many NPC delegates representing the farmers, "because they are elected by the provincial people's congress deputies, rather than by the local residents".

China sets out stance on Syria, rejects 'interfering' - Beijing calls for unity in the Security Council following a split with Western counterparts - China has warned other powers not to use humanitarian aid for Syria to "interfere" in the strife-torn Middle Eastern country, while urging unity in the UN Security Council following a split with Western counterparts over the crisis. The Foreign Ministry laid out its stance on Syria yesterday as the Security Council contemplates a new resolution. Two previous ones were stymied by Chinese and Russian vetoes. Even China, which has talked up the scope for compromise between Syrian government and opposition forces, sounded bleak about the unstinting violence. "It is deeply worrying that the situation in Syria remains grave. Violent clashes are continuing, political dialogue still cannot start, and the prospects of a peaceful settlement to the crisis are still dim," said the statement from an unnamed "leading official" in the Foreign Ministry. The unusually long six-point statement appeared to be Beijing's effort to lay down its position on any fresh international action authorised by the UN Security Council. Foreign Minister Yang Jiechi revealed the plan in a phone call to Nabil al-Arabi, secretary general of the Arab League, Xinhua reported. Yang said China supports efforts by Arab countries and the Arab League in promoting a political solution to the Syrian crisis. The foreign minister also said China is willing to conduct thorough consultations with all concerned parties. Western powers have proposed a UN resolution authorising humanitarian aid. And the newly appointed UN-Arab League envoy on the Syria crisis, former UN secretary general Kofi Annan, is seeking to staunch the violence. Syrian forces bombarded parts of the shattered city of Homs on Saturday and for a second day blocked Red Cross aid meant for civilians stranded for weeks without food and fuel in the former rebel stronghold, activists and aid workers said. "The Syrian government and all parties concerned should immediately, fully and unconditionally cease all acts of violence," said the statement. "As a permanent member of the Security Council, China is ready to earnestly fulfil its responsibilities, engage in equal-footed, patient and full consultation with other parties on the political solution to the Syrian crisis in an effort to safeguard the unity of the Security Council." Until now, Beijing has mostly avoided singling out the Syrian government when calling for an end to the bloodshed. China and Russia joined other UN Security Council members on Thursday in expressing "deep disappointment" at Syria's failure to allow the UN humanitarian aid chief Valerie Amos to visit the country. But China has also long been reluctant to back international intervention in a domestic conflict. That wariness was rekindled last year when Nato forces cited a UN resolution to protect civilians in warring Libya as grounds for an air bombing campaign that was crucial to eventually ousting Muammar Gaddafi. China abstained from the Libya resolution, but later suggested Nato powers exceeded the UN mandate. The latest statement emphasised China does not want to open the way to similar action against the Syrian government through any international humanitarian action. "We oppose anyone interfering in Syria's internal affairs under the pretext of `humanitarian' issues," it said.

Hong Kong*:  Mar 5 2012 Share

Troubled Asia Television faces yet another shake-up after its senior vice-president announced on his microblog that he was quitting, just months after joining the station. Internationally acclaimed journalist Cheng Yizhong (pictured) announced his resignation on his Sina Weibo microblog early yesterday. He joined the station in July. "As the decision maker and I have totally different ways of thinking and style, I have decided to quit my job as senior vice-president. Different minds, different paths," he wrote. He did not specify who the "decision maker" was, but it probably referred to the station's major investor, mainland tycoon Wong Ching whose role in ATV's management is under investigation by the Broadcasting Authority. An ATV spokesman confirmed that Cheng left his job on Thursday for personal reasons, but refused to comment further. Cheng would not comment yesterday. His resignation is the latest blow to hit a broadcaster riven by suggestions of interference from its main investor and boardroom battles over its finances. ATV was fined a record HK$300,000 by the Broadcasting Authority in December for wrongly reporting the death of former president Jiang Zemin in July. The authority said the station had "adopted an irresponsible approach" in running the story and had refused to disclose the procedures taken to verify its information. The Broadcasting Authority's investigation did not find any direct evidence that Wong, a relative of Jiang, was involved. The investor claimed he first heard of Jiang's "death" from watching his own station. But a separate investigation into Wong's role in the management of the broadcaster is under way. The results of it are expected soon. In September, the Court of First Instance ordered the station's management to release financial and other documents to its directors after director Kevin Tsai Shao-chung launched a lawsuit to gain access to the documents, which had been kept from him for more than a year. The next month, Norwares Overseas, of which Tsai's father Tsai Eng-meng is chairman, filed an application to have the broadcaster liquidated. The Taiwanese snack food tycoon has engaged in a lengthy boardroom battle with Wong for control of ATV. Cheng enjoyed a high-profile career in print media before joining ATV. He helped found the Southern Metropolis News in 1997 and the Guangzhou-based paper hit headlines worldwide by breaking news of a severe acute respiratory syndrome epidemic in 2003 despite official censorship. It later broke the story of the brutal death of a migrant worker in a Guangzhou detention centre. After being arrested, fired as editor-in-chief and stripped of his Communist Party membership in 2004, Cheng was awarded the 2005 World Press Freedom Prize by the UN cultural body Unesco. Most recently, he was vice-president and executive publisher of monthly magazine Asian Business Leaders. Last week, the South China Morning Post (SEHK: 0583, announcements, news) reported the station's rival, Television Broadcasts (SEHK: 0511), is to form a joint venture with state-owned Shanghai Media Group. Li Ruigang, SMG's former boss and the chairman of Shanghai-based China Media Capital, is expected to run the venture from Shanghai. Li recently resigned as deputy secretary general of the Communist Party's Shanghai Municipal Committee, and Shanghai government officials said earlier that Li was expected to take a senior job at TVB. It was also understood that he would take a position in Hong Kong.

 China*:  Mar 5 2012 Share

Because of growing disposable incomes and improved health awareness, the Chinese are more willing to spend on nutritional supplements. Every time she takes a business trip to the United States or Europe, Wang Qi is given a shopping list by relatives and friends. Every time, the list is filled with names of high-end cosmetics brands and luxury items. Recently, however, that list has grown. The 32-year-old Beijing-based executive assistant says she doesn't remember when the list started to grow but the names of nutritional supplements have been piling up. Shopping for vitamins now consumes most of her time shopping overseas. "People around me seem to be more concerned about their health than previously," Wang said. With improved living standards in cities and a heightened belief that vitamins contribute to better health, Chinese urbanites have been exhibiting a greater demand for nutritional supplements in recent years. The demand has attracted more nutritional-supplement manufacturers from around the world to cash in on the trend, despite the fact that most of the world's vitamins are already produced in China. Vitamins in China, which has already cornered the vitamin A and C markets, often go hand in hand with the nation's food industry, with billions of dollars in goods exported each year. There are thousands of drug companies in China. It is estimated that the sales of vitamins and dietary supplements as well as food and drug additives in China will reach 600 billion yuan ($95.2 billion) by 2015. Additives now take up a large portion of sales in the country. But one of the main reasons that the door is open for international vitamin makers is that most of the vitamins produced in China are shipped overseas and sold under foreign brands, according to Zhang Yongjian, an expert with the China Health Care Association, affiliated with the Chinese government. Zhang said other reasons for increased demand include "growing disposable incomes and improved health awareness, together with worsening health problems and an aging population". According to the latest report by the association, the average spend on healthcare products by Chinese consumers in 2011 accounted for 0.1 percent of their total expenditure. In developed economies, people spent just 0.03 percent on nutritional supplements. But Zhang, the main author of the report, said that although China's nutritional-supplement industry is far smaller than in developed countries, the business is growing. Over the past two decades, Chinese expenditure on health products has grown at an annual rate of between 15 and 30 percent, far higher than the 13 percent in developed countries over the same period. Backed by his report, Zhang believes China will become one of the world's largest markets for dietary supplements in the near future. The growing market in China has attracted multinational manufacturers of nutritional supplements, despite the high threshold to enter the market and cumbersome approval procedures. Statistics from the report show that over the past 15 years roughly 644 types of nutritional supplement have been exported to China, with 63 percent coming from the US. Michigan-based Amway Corp, a direct-selling company and manufacturer of primarily health, beauty and homecare products, is one of the biggest foreign players in the field. According to the market intelligence company Euromonitor International Ltd, Amway led in the sales of dietary supplement in 2010 in China, with a market share of 16 percent. But it faces challenges from competitors who are increasing their presence in China, such as NBTY Inc, the New York-based manufacturer of vitamins and nutritional supplements. General Nutrition Centers Inc, a Pennsylvania-based manufacturer and retailer of health- and nutritional products, is another competitor. It launched products in major Chinese cities including Shanghai, Guangzhou and Shenzhen in August. David Zhang, CEO of GNC China, said the company aims to become the leading nutritional-supplement brand in China. "An increasing number of Chinese consumers, particularly in big cities, are looking for leading international brands that can provide trusted product quality and innovative product lines," Zhang said. He added that GNC plans to further expand its presence in all major Chinese cities by next year. "China is already the second-largest country for nutritional supplements, according to Nutrition Business Journal. We believe China's nutritional food market will experience rapid growth in the next five years," said Zhang. Currently GNC products sold in China are produced and imported from the US. "We have adapted a multichannel strategy to list our products in premium supermarkets, high-class department stores, health and beauty stores as well as on e-commerce (sites)," Zhang said. One outcome of the competition has been the diversification of China's dietary supplement industry. Several foreign vendors are focusing on the production of healthcare products for specific groups. Guangzhou Biostime Inc, a subsidiary of the UK-based Biostime International Holdings Ltd, is a provider of premium pediatric-nutrition and babycare products. It was one of the first companies to introduce children's probiotic supplements, a dietary supplement to aid digestion, to China in 2003. The product instantly became the company's biggest seller. According to Euromonitor International, Biostime held market share of 85.4 percent in retail sales of children's probiotic supplements in China in 2009. Leo Zhu, the company's senior sales director, said sales of probiotic supplements in China are growing at about 20 percent annually. "We have been focusing on affluent Chinese consumers, who have bigger consumption power and are more willing to buy nutritional supplements for their children," Zhu said. Despite the encouraging sales growth of premium imported food supplements across the Chinese mainland, industry experts warn that foreign companies should gain greater knowledge of the Chinese market and be more cautious before heading to the country. "Because of the huge cultural differences, a Western healthcare producer must be patient when tapping the Chinese market," said Luo Yang, an expert with the China Chamber of Commerce for Import and Export of Medicine and Health Products. "It needs to make sure it understands the needs of Chinese shoppers." She warned that if an imported brand sticks with its past experiences rather than adjusting its strategy to fit the Chinese market, that company could eventually be forced to withdraw. Along with the influx of international brands, local manufacturers of nutritional supplements are looking for a way forward. But because more nutritional food companies have emerged in China in recent years, products made by domestic enterprises are less popular for a number of reasons, including a lack of innovation and research and development as well as poor marketing models. To reverse this situation, several major domestic producers have begun to seek help from companies in the US and Europe. As China's biggest importer of drug and healthcare products, China Meheco Corp, a State-owned enterprise listed on the Shanghai Stock Exchange, began to develop its own branded food supplements in the US in 2007. "The R&D capability of US healthfood companies is ahead of China, so we want to improve our product quality through technical cooperation with them," said Du Xiangdong, a general manager at China Meheco. "Taking into account the diets and physical condition of Chinese people, scientists and researchers from both sides will work together to produce formulas that are best suited for Chinese (people), which I think will help to improve our competitiveness."

China to boost defence budget by 11.2% for 2012 - Li Zhaoxing, spokesman for the Fifth Plenary Session of the 11th National People's Congress (NPC) gives a press conference in the Great Hall of the People, ahead of the session's opening in Beijing on March 4. China said Sunday it plans to raise its defense budget by 11.2 percent to 670 billion yuan ($106.4 billion) in 2012. The year's draft defense budget is 67.6 billion yuan ($10.7 billion) more than that of 2011, said Li Zhaoxing, spokesman for the annual session of China's national legislature. "The Chinese government follows the principle of coordinating defense development with economic development. It sets the country's defense spending according to the requirement of national defense and the level of economic development," Li said. Highlight of the conference - Law amendment to balance human rights protection. The draft amendment to the Criminal Procedure Law, to be submitted for final review and voting, highlights the principle of protecting human rights and punishing criminals as a whole, said a spokesman in Beijing Sunday. Reform and opening up pose opportunities, challenges. China's reform and opening up are always seen as a strong driving force for social and economic development and the country now faces new opportunities and challenges, a spokesman for the top legislature said Sunday. 

Paul Baldwin of the US consulate in Guangzhou was among the numerous foreign observers and journalists who came to witness the elections. Residents of Wukan, southern Guangdong province, fill in forms yesterday before voting to select a chief and a deputy chief for the village. As Wukan villagers cast ballots to reclaim governance of their community, people were flowing in from Guangdong and beyond, hoping to learn from Wukan's example and air their own grievances for the 100-odd journalists and observers witnessing the milestone event. A handful of Cantonese-speaking Huangtian villagers, who live near Shenzhen airport in Baoan district, wandered by a playground at Wukan Primary School yesterday, trying to grab reporters who could spare a moment to hear their stories. "For 30 years, our village's finance records have never been revealed to the public," said Lin Yongguang, a 41-year-old baker. "The power of the whole village is controlled in the hands of a single family." "The party secretary sold our collective land at a dirt-cheap price to his son," he said. "Two of our villagers who had petitioned against the corruption have been detained for more than four months." Lin said he was moved by the orderly scene of Wukan's election. "It's amazing to see how successful their election is. People are so united together." A group of Pingle villagers from Jinxiang township in eastern Guangdong's Lufeng city had their own woes to relate. They said a dam had for the past two decades been rented out and used as a fish pond for a mere 1,800 yuan (HK$2,200) a year. "We have no water to irrigate our farmland during winter when they drain the dam," said one of the villagers, Zheng Shuchang, 35. "Our land subsidy has also been stolen by village officials; each of us gets only 62 yuan for three years." "We want our stories to be heard by the world as no local press will talk to us," Zheng said. "We also want to learn from Wukan's election model. Our village's election is so messed up that ballot results are never counted in public or disclosed." "The residents' united spirit [in Wukan] is something we can learn from. I wish to see a fair and open election in our village one day." Meanwhile, a man who had been locked up for more than 15 months in a detention centre in Lufeng's neighbouring city of Haifeng carried around a plastic bag full of petition materials that he handed to reporters outside the ballot station. Yuan Hanjie, who had been opposing the practice of illegal land sales in Meixing village, Meilong county, told of how he was framed for the undeserved jail term: "I had been petitioning for years and approaching different levels of government petition offices, but no one cares much about our suffering." Land grabs were also a concern for Hua Youjuan, the recently elected head of Huangshan village committee in Hangzhou , Zhejiang . Hua said her father and a fellow villager were arrested eight months ago while petitioning to get their land back. She was in Wukan, she said, hoping to speak to international journalists and to learn from the village's model. Hua and her mother were closely watched by the authorities yesterday. Villagers said Hua arrived last week and her mother reportedly poured petrol on herself in an attempt to set herself on fire. She was stopped before any harm was done.

Beijing yesterday announced its standard name and location for the Diaoyu Island and for 70 affiliated islets, after Tokyo released names for 39 uninhabited islands to outline Japan's exclusive economic zone. Four were part of the disputed Diaoyus in the East China Sea, according to Tokyo. Sino-Japanese experts said bilateral tension was likely to escalate if Japan moved further to extend its claim. The Foreign Ministry in Beijing said it firmly opposed Tokyo's naming in regards to the Diaoyus, known as the Senkaku Islands in Japanese. "I would like to reiterate that any unilateral action taken by the Japanese side about the Diaoyu Island and its affiliated isles is illegal and invalid," spokesman Hong Lei said. "No matter what names Japan has given to the isles affiliated with the Diaoyu Island, it will not change the fact that these islands belong to China." His written statement came as the State Oceanic Administration released standard names for Diaoyu and its 70 affiliated islets, each with its own Chinese name, Pinyin spelling and location. Beijing had repeatedly said the Diaoyu island chain is Chinese territory, pointing to official documents from the Ming and Qing dynasties that recorded the names of the islets, said Niu Zhongjun , an international relations specialist at China Foreign Affairs University in Beijing. The documents recorded Chinese military and civilian activities that took place on the islands, Niu said. "This is the first time Beijing has formally announced the official standard names of the 71 islands in the disputed waters of the East China Sea," he said. "I believe Japan has its own names for some of the islands, but the history of their names should be much younger than ours." The islands, which are believed to be surrounded by oil and gas reserves, have long been a source of bilateral friction. Jiang Lifeng , former director of the Chinese Academy of Social Sciences' Institute of Japanese Studies, expected Japan to respond to China's naming by remeasuring its sea territory in the East China Sea, including the Diaoyu island chain. "Japan is trying to draw international attention to the issue of the Diaoyu Islands," Jiang said. "Tokyo is going to fish in troubled waters as it finds Beijing is now busy dealing with Vietnam and the Philippines over territory disputes in the South China Sea. But its actions will only create more obstacles in the development of Sino-Japanese relations." Japan declares the Diaoyu Islands, 500 kilometres from Okinawa and 190 kilometres from Taiwan's Keelung, as part of its territory. Japan has 99 isolated islands that serve as the boundary for its EEZ, but 49 had no official names on maps, Tokyo said. Taipei yesterday also protested to Tokyo for renaming four islets in the disputed island chain over which it also claims sovereignty.

The first China-engineered improved third-generation nuclear power plant will be showcased in Putian county, Fujian province, by as early as 2013, Chen Bingde, chief engineer of Nuclear Power Institute of China and a member of the Chinese People's Political Consultative Conference National Committee, told China Daily on Saturday. An extension of the Qinshan Nuclear Power Plant was constructed in December 2010. The institute is a division of China National Nuclear Corp, the largest State-owned nuclear enterprise in China. The company built the Qinshan Nuclear Power Plant, China's first, in 1991. "The Putian plant will adopt China-developed nuclear technology model ACP100, which is considered much safer and having higher energy efficiency compared to current second- and third-generation plants," said Chen. He said it will have some improved third-generation nuclear power facility's features, including smaller size, shorter construction time and higher safety level. The new technology's final aim is to eliminate the emergency evacuation zone of a nuclear plant, he said. The construction time is expected to be shortened from the current 50 months to 30-40 months. "In the near future, nuclear plants can be built right next to cities," he explained. The concept of the new plant is a 100,000-kilowatt-grade nuclear power facility, with very low cost. After the Japan radiation leaks about a year ago, the demand for safer nuclear power plants has become stronger worldwide. Fourth-generation nuclear technology is now being studied by many countries, according to Chen. South Korea leads the trend. Seoul is planning to acquire a construction license by the middle of this year. The United States has stronger theoretical development, while China performs better on the experimental aspects, added Chen. He said China's nuclear plants are safe. After the Japanese accident, many third-generation reactors underwent 25 measures to improve safety, including strengthening the protection wall and adding back-up electricity power generators. Some second-generation reactors were upgraded with new technology. Most of China's nuclear technology was imported from other countries, such as the US, France and Russia. Only the Qinshan Nuclear Power Plant applied China-developed technology, he said, and "it has maintained safe and stable operation for 20 years. "We have exported Qinshan plant technology to Pakistan, and some other developing countries will be our next targets." However, China still falls behind in some core technologies compared to Western countries. "If China wants to export our own nuclear technology, we need to develop our own core technology and get rid of the dependence on foreign technology." The China National Nuclear Corp invested 1.75 billion yuan ($278 million) on research and development last year, a 20 percent year-on-year increase.

Hong Kong*:  Mar4 2012 Share

Hong Kong retailers had forecast that sales would grow by more than 20 per cent in January. Hong Kong retailers are heading for turbulence as the year-on-year growth in retail sales unexpectedly weakened to 15 per cent in January from 23.5 per cent in December. January's sales, estimated at HK$43.2 billion, came in below the forecast for the month from the Hong Kong Retail Management Association, and the decline comes as retailers rental costs and payrolls are on the rise. The trade body expected sales for the month to be more than 20 per cent up on the same month last year, helped by higher spending in the lead-up to Lunar New Year and the government scheme under which HK$6,000 will be given to each holder of a valid Permanent Identity Card aged 18 or above on March 31. The disappointing sales figures were not confined to jewellers and watch retailers, who suffered their eighth successive monthly drop in sales growth in January. Sales growth was also down in the furniture, automobile and footwear sectors. The softening in the property market as well as lay-offs in the banking and financial sectors over the past few months accounted for slower sales of furniture and cars, said Caroline Mak Shui-king, chairman of the Retail Management Association. "To my surprise, footwear sales did not increase but dropped in the lead-up to CNY, as Chinese are not supposed to buy shoes after then," Mak said. In a poll conducted by the retail trade body of 42 retail companies responsible for operating 2,200 shops in the city, 60 per cent of respondents said they expected growth in sales this year, while 28 per cent anticipated a drop in sales. The negative outlook was seen in responses from fast food shops, department stores, electronic goods outlets, and furniture stores. "Meanwhile skyrocketing rental costs and the implementation of minimum wages have weighed on the retail industry," Mak said. In this environment there would be widespread shop closures throughout the city if sales growth was to fall below ten per cent, she warned. The January results were, however, distorted by the difference in the timing of the Lunar New Year, which fell in late January this year versus early February last year. "It would be more meaningful to analyse the retail sales figures for January and February combined for a clearer picture of the underlying trend," a government spokesman said yesterday. Supermarkets and outlets selling electrical goods and photographic equipment were the exceptions to the poor sales performance in the sector in January, thanks to growth in tourist arrivals during the month. Visitor arrivals in January reached 4.14 million, a 15.1 per cent year-on-year increase. The Tourism Board said on Wednesday the growth was mainly led by the increased traffic from the mainland during the Lunar New Year holiday. More than 3.1 million visitors arrived from the mainland, up 23.9 per cent on arrivals in January of last year. Of these, 69.5 per cent, or more than 2.15 million, travelled under the Individual Visit Scheme, up 24.5 per cent from the same time last year.

Chief executive candidate Henry Tang Ying-yen lashed out at rival Leung Chun-ying for the second day in a row, questioning his ability to handle financial crises in Hong Kong. Tang’s volley on local radio on Friday morning was the second time that the ex-chief secretary had attacked the former executive council convenor by name. On Thursday, Tang described his rival as unreliable and warned the public to be wary of him. Amid worries that Europe’s debt crisis might trigger a global recession, Tang said: “It now comes to a perilous moment as Hong Kong faces the threat of a crisis. To ensure stability, we absolutely cannot rely on Leung Chun-ying, who lacks experience and speaks empty words. “Handling a financial crisis is a serious thing. If a company goes bankrupt, it harms the interests of shareholders and employees. The extent of the blow would be limited. “[But] if Hong Kong’s economy went bankrupt, those affected would be [some] seven million people from more than two million Hong Kong families.” Tang was referring to a December report in the Chinese-language Sing Tao Daily that claimed Leung lost almost all of his investment in British property firm DTZ after it was bought by Australia’s UGL and delisted last year. Leung has described the report as “unverified” and “seriously untrue”. The two candidates are in a three-way race with Albert Ho Chun-yan for the city’s top job, which will be decided in a vote of the Election Committee’s 1,200 or so members on March 25. Tang, who became financial secretary in 2003 amid the economic turmoil of the Sars epidemic – said he was better suited for the top job than Leung. “If we talk about experience in dealing with crises, I have that experience,” he said. Leung did respond to Tang’s remarks on Friday. But, one of his core supporters, Dr Lew Mon-hung, hit back, saying Tang failed to keep the election contest a “fight between gentlemen”. “I think the tactics employed by Tang, that is, pointing to someone by name and warning Hong Kong people to be wary of him, are a departure from a gentlemen’s fight,” Lew said. “I think there is room for improvement [in Tang’s election tactics].” Lew is a Hong Kong delegate to the Chinese People’s Political Consultative Conference.

Lawmakers are preparing to call chief executive candidate Leung Chun-ying to testify in front of a special investigative committee before the March 25 election. The inquiry is unlikely to conclude before the poll, however, leaving Leung's reputation hanging in the balance as the city's top job goes to the vote. In a vote on Wednesday night, the Legislative Council invoked special powers to set up a legislative select committee to look into an alleged conflict of interest when Leung sat on a judging panel for an arts hub design contest back in 2002. Labour Party chairman Lee Cheuk-yan said yesterday: "I hope the first hearing can be lined up before March 25 ... Leung Chun-ying should be the first to testify to help lawmakers find out if he had any financial ties with the companies concerned." Those companies include the Malaysian firm T. R. Hamzah & Yeang, which led a group entry in the competition. DTZ, Leung's company, was listed by Hamzah & Yeang as property adviser on its bid. Lee said he wanted to hear from the four DTZ staff members named in Yeang's entry, as well as Malaysian architect Ken Yeang, then-secretary for planning and lands John Tsang Chun-wah, and Eric Johnson of the Planning and Lands Bureau at the time. "If the four DTZ personnel are called to testify, we can find out if they had told their boss [Leung] about [the fact that they had given land price information to an entrant]." He said he hoped the first hearing could be convened in mid-March. Lee Wing-tat of the Democratic Party said: "I personally believe that it would be best if a hearing can be convened [before March 25]. At the start, Leung Chun-ying should be invited to give us documents and an explanation on some key issues." The issues, Lee Wing-tat said, included whether Leung had known his company had advised the Hamzah & Yeang team before failing to declare the potential conflict of interest. "Time is running short ... The probe should be done within this legislative term [which ends in July]," he added, but stressed lawmakers could not rush the process. He also suggested that the chairperson of the committee should be someone who has not nominated any of the chief executive candidates - Leung, Henry Tang Ying-yen or Albert Ho Chun-yan - in an effort to maintain impartiality. Lawmaker Ip Kwok-him, of the Democratic Alliance for the Betterment and Progress of Hong Kong, and Federation of Trade Unions legislator Wong Kwok-hing said their groups had not yet decided whether to sit on the panel. However, Ip said the investigative committee should involve lawmakers from various political parties and groups. He added that independent lawmaker Li Fung-ying might be a good choice for chairman.

 China*:  Mar 4 2012 Share

U.S. Agriculture Secretary Tom Vilsack announced Thursday that he would lead a trade mission to China at the end of March to strengthen business ties. The trade mission will be made up of more than 40 U.S. companies and representatives from six states as well as a senior official from the Agriculture Department. They will travel to the Chinese cities of Chengdu and Shanghai on March 23-28. In 2011, China became the number one market for U.S. agricultural goods after purchasing 20 billion dollars worth of U.S. agricultural exports. Sales of U.S. food and agricultural products to China grew by 80 percent in three years. Last month, Chinese Vice President Xi Jinping and Agriculture Minister Han Changfu attended the first China-U.S. Agricultural Symposium in Des Moines, Iowa. Han and Vilsack signed a Plan of Strategic Cooperation designed to guide the two countries' agricultural relationship in the next five years. Monsanto, the world's biggest seedmaker, plans to boost investment in China because of the newly-drafted government policy, Chief Technology Officer Robb Fraley said on a seminar recently.

Customers use an ATM at a branch of ICBC in Beijing. China's top state banks make more funds available to property developers to boost housing supply, the PBOC said on Friday. China's Big Four state-backed banks will lend more to qualified property developers to boost entry level housing supply, a statement in the central bank's newspaper on Friday said, a signal that they are ready to ratchet up real estate lending. The four banks, which account for about 40 per cent of total loans in China, said they would accelerate loan approvals for both developers and first-time home buyers. They will also help first-time home buyers by charging them lower rates if necessary, the statement said. Property stocks in Shanghai jumped 2.15 per cent on the news, with investors acutely attuned to the slightest hint of a loosening of tightening measures implemented by the government since late 2009 to curb property speculation. According to the statement published on the front page of Financial News, a paper run by the People’s Bank of China, the Big Four banks “will proactively support qualified property developers to develop common commercial housing that is in demand to boost effective supply of common commercial housing.” The core commitments outlined are all consistent with long-standing government pledges to help first-time buyers get onto the housing ladder, but expectations are running high that lenders will go further than basic requirements to help offset the drag on economic growth that real estate tightening causes. “The banks’ decision is in line with the trend of [expectations of] property control relaxation – China’s property policy tightening cycle has peaked,” Hua Zhongwei, an economist with Huachuang Securities in Beijing, said. If property developers and first-time home buyers find it easier to get bank loans, China’s housing market could rebound sharply, especially in second and third-tier cities, Hua said. Li Shaoming, a property analyst with China Investment Securities in Beijing, said while banks would increase lending to low-margin and relatively cheap apartment projects, they will be less generous to high-end projects such as expensive villas. For two years, China has restricted bank lending to the real estate sector and limited citizens’ ability to buy multiple homes, or homes in other cities, to curb speculation in high-end housing that saw prices in key cities double between mid-2009 and the end of 2010. The measures depressed property trading turnover across the country, reduced land sales revenues for local governments, and forced banks to give up lucrative lending business. Beijing has repeatedly vowed to keep the control measures and bring home prices back down to what Premier Wen Jiabao has described as a “reasonable level”, but property developers, local governments and banks are trying to get around the rules. Local governments from Shanghai to Wuhu have tried to “fine-tune” policies laid by the central government, forcing China’s housing ministry to step in and restore controls. The Big Four state-run banks are Industrial and Commercial Bank of China (SEHK: 1398), China Construction Bank (SEHK: 0939, announcements, news) , Bank of China and Agricultural Bank of China. Chinese banks extended 1.26 trillion yuan loans, or 17.5 per cent of total new loans, to property developers and home buyers last year. In 2010, Chinese banks lent 2.02 trillion yuan to developers and home buyers, or 26.9 per cent of total new loans of the year, according to central bank data. China’s housing market is vital for the health of the broad economy as real estate investment represents about 13 per cent of China’s GDP and drives demand in about 40 different industries. Investors fear that too sharp a correction in real estate risks pulling down the country’s economic growth, which hit its slowest pace of expansion in 2½ years in the last quarter of last year at 8.9 per cent versus the previous year.

Beijing Diversifies Away From U.S. Dollar - Fresh data suggest China is moderating its appetite for investing in U.S. securities, a trend that could mean lower flows of cheap capital from Beijing and a possible rise in borrowing costs across the American economy. An analysis of U.S. Treasury data suggests China, with $3.2 trillion in foreign-exchange reserves, has begun to rapidly diversify its currencies portfolio. "It clearly indicates China's intention not to put all its eggs in one basket," said Lu Feng, director of Peking University's China Macroeconomic Research Center. China still remains a strong buyer of U.S. debt. China's holdings of U.S. securities rose 7% to $1.73 trillion as of June 30, an increase of $115 billion from 12 months earlier, Treasury data show. But the percentage of dollar holdings in China's foreign-exchange reserves fell to a decade low of 54% in the year that ended June 30, from 65% in 2010. The Treasury data provided the most comprehensive read on China's holdings of U.S. securities available. A comparison with China's own foreign-exchange reserve data suggests a marked reduction in the share of reserves parked in dollars. But difficulties in measuring China's holdings, exacerbated by what some analysts call an attempt by Beijing to hide the allocation of its reserves, mean that it is possible the data overstate the trend. The purchase of U.S. securities amounted to just 15% of the increase in China's foreign-exchange reserves in the 12 months ended June 30, down from 45% in 2010 and an average of 63% over the past five years, according to calculations based on information published by the U.S. Treasury and the Chinese government. Economists have long warned that if China starts to cut back its purchases of U.S. securities, U.S. interest rates could climb, damaging the American economy and ratcheting up the government's borrowing costs. "We've been worried about China refraining from buying U.S. debt for three years now, and it really has not occurred," said David Ader, head of government bond strategy at CRT Capital in Stamford, Conn. China's foreign-exchange reserves have ballooned over the past two years, and the country has plenty of money to support the U.S. and other debt issuers. "China has been diversifying for several years," Mr. Ader said. "It's been incremental and they've told us that much. Simply diversifying into another currency certainly made sense." Some economists said China's move was well-timed. "It would be optimal for China to adopt a contrarian strategy and pick times when the dollar is strong to aggressively diversify the currency composition of its reserve portfolio away from the dollar," said Eswar Prasad, a China scholar at the Brookings Institution. China won't say how it invests its foreign-exchange reserves, which have grown rapidly over the past decade. Beijing has used its control over the exchange rate as a key plank of its economic-development strategy and has racked up immense trade surpluses. That requires China's State Administration of Foreign Exchange to invest the proceeds overseas. In the past, SAFE has hinted that about two-thirds of its stash is held in U.S. securities, a percentage that generally has been in line with annual data collected by the U.S. Treasury. Officials at China's foreign-exchange agency didn't respond to questions faxed to them on Thursday. China's leaders have made increasingly strong statements that they would like to help the 17-nation euro zone deal with its troubles. In February, Premier Wen Jiabao, speaking at the EU-China summit, said "Europe is a main investment destination for China to diversify its foreign-exchange reserves." Klaus Regling, the chief executive of the European Financial Stability Facility—the euro-zone's rescue fund for Greece and other financially troubled nations—was in Beijing in October for talks with SAFE. Regular talks have continued since then and EFSF documents show that Asia, apart from Japan—essentially China—accounted for between 14% and 24% of purchases for three EFSF bond sales worth €13 billion in the first half of 2011. That was before Mr. Regling's Beijing trip. China has many reasons to try to reduce its exposure to the dollar. They include very low yields paid by Treasurys and a vulnerability to U.S. decisions on managing its debt, which could lead to inflation that would erode the value of those holdings. Last summer's political debate over raising the U.S. debt ceiling sparked worries that the U.S. could default on obligations. China also would have good reason for deepening its ties to other currencies. Buying some undervalued European assets during the debt crisis over the past year might have been a smart move. And China has an interest in supporting its exports by helping bolster the currencies of its biggest customers. Meantime, overall global demand for U.S. securities has remained strong as investors seek a haven during troubled times. Foreign holdings of U.S. securities increased $1.8 trillion, or about 17%, to $12.52 trillion over 12 months to June, according to the Treasury data. To arrive at the percentage of dollar holdings in China's reserves, U.S. Treasury data on Chinese purchases of U.S. securities must be compared with Beijing data on its foreign-exchange holdings. That calculation is complicated by the impact of currency movements on the value of China's reserves. Even so, it is clear that China is purchasing fewer dollar-based securities than it had in the past. While China's holdings of U.S. securities rose 7% in the year that ended in June, China's total foreign-exchange holdings increased by 30% to $3.2 trillion, an increase of $743 billion. Essentially, the pace of China's purchases of U.S. securities didn't come close to matching the pace of expansion of its foreign-reserve pile, reducing the percentage of dollar holdings. Monthly figures on China's holdings of U.S. Treasurys have been seen as less reliable than the annual survey. But the Treasury has now introduced a new survey technique intended to improve the accuracy of the data. The latest monthly numbers show China's holdings of U.S. Treasurys dropped to $1.15 trillion in December, falling $156 billion since the period covered by the annual survey. That suggests China's diversification away from dollars may have continued in the second half of 2011. It is also unclear how much of Chinese dollar holdings are reflected in the latest data. China could have dollar-based assets outside the U.S., held by fund managers in other countries or on deposit in the international banking system. Where China has pulled back on U.S. securities purchases, others have stepped up. Japan has more than compensated for the difference and other investors in the U.S. and abroad have done the same. That has supported Treasury prices and largely kept the 10-year yield below 2%—lower than it was last summer before any pullback from China.

Hong Kong*:  Mar 3 2012 Share

Chief executive candidate Henry Tang Ying-yen hit out at his rival Leung Chun-ying on Thursday – describing the former Executive Council convener as a “giant of words” whom Hongkongers should be wary of. Appearing on a local radio program, Tang was asked to comment on Leung and another rival candidate, Albert Ho Chun-yan. While saying Ho was a respected opponent who had principles, Tang warned that Leung could not be trusted. “In my 20 years in politics and nine years in government I have seen many people who are giants of words but dwarves in action,” added Tang. He suggested that Leung had been involved in some unpopular policies, including one in the late 1990s to maintain the combined public and private supply of flats at 85,000 units a year. The measure was later scrapped and blamed for worsening a property market slump. “Negative equity, [people committing suicide by] burning charcoal … these are scary things to think about,” Tang said. But Leung responded on another radio program, saying Tang’s comments were vague and he should give more concrete examples to support his claims. Leung said critics had previously pointed to his advocacy of a welfare state as a cause for concern, but Tang and Ho now featured welfare policies in their platforms even more prominently than he did. “What is exactly in me is it that people should be wary of? ... I don’t mind criticism but they should be more concrete,” Leung said. The exchange came one day after the nomination period for the chief executive election ended. Electoral officials confirmed Tang, Leung and Ho were the only three candidates in the race for the top job. Tang is entangled in a controversy over an illegal basement at a luxury house while Leung is facing a Legislative Council inquiry into his alleged conflict of interest as a juror in the 2001 West Kowloon art hub design contest. Both Tang and Leung said on Thursday they were confident of winning the top job. “I surely hope to win in the first round of voting by getting 601 votes. I am, to some extent, confident of that,” Leung said.

Holding Back Tears, Hong Kong Leader Proffers Apology - A TV screen displays Hong Kong Chief Executive Donald Tsang attending a question and answer session at the Legislative Council in Hong Kong, Thursday, March. 1, 2012. Donald Tsang is very, very sorry. Appearing before a packed house of legislators in Hong Kong on Thursday, the city’s top leader – who has faced a barrage of criticism following reports that he accepted luxury trips and favors from businessmen – looked penitent, and offered his apologies. At times he appeared to be holding back tears. He apologized to the public and to the civil service for not meeting their expectations of a leader, and said that with Hong Kong’s development, the public has learned to have higher expectations of its leaders than ever before. “We learn from our mistakes,” he said. “We learn to become more sensitive [to public expectations].” He refrained from making eye contact with legislators, and stayed intent upon his notes throughout his delivery. “It matters little if you lose faith in me,” Mr. Tsang said. “But don’t lose faith in the Hong Kong institution,” he said. Mr. Tsang pledged to fully cooperate with the Independent Commission Against Corruption probe into his activities. He also said he would abandon the three-story penthouse in Shenzhen that he leased from a mainland tycoon with substantial business interests in Hong Kong. However, he refused to name any of the people who hosted him on the private yachts and jets. The latest scandals facing Hong Kong’s chief executive have revealed gaps in the city’s conflict-of-interest regulations, says Dixon Sing, associate professor in social science at the Hong Kong University of Science and Technology. In particular, he says, the loophole that allows the chief executive to sidestep codes of conduct that govern civil servants and politically appointed officials needs to be addressed. “Otherwise,” he says, “we leave it open for future chief executives to fall prey to temptation.” As for what the rest of Mr. Tsang’s tenure will look like – he has four months before he steps down at the end of June – Mr. Sing sounds less than sanguine. “I think there’s little he’s going to accomplish,” he says. At the very least, Mr. Tsang expects that he will be taking fewer joyrides on boats and luxury aircraft with his friends. “I believe after this incident, no one will ever invite me on a yacht again; no one will ever invite me on a private plane again,” he said. “This has been the biggest lesson of my life.”

Total advertising expenditure in Hong Kong this Lunar New Year holiday grew 12 per cent to HK$1.86 billion, led by the cosmetics and skin care industry, up 72 per cent year-on-year. Campaigns for cosmetics and skin-care products highly prized by mainland shoppers helped drive advertising spending in Hong Kong to a record high this Lunar New Year holiday. The media monitoring firm AdmanGo estimated that total advertising expenditure in the city from January 16 to February 5 this year grew 12 per cent to reach HK$1.86 billion, up from the HK$1.66 billion total in the previous Lunar New Year break, from January 27 to February 16, 2011. AdmanGo's sales and marketing director, Jennifer Ma, said: "Demand from mainland travellers who visited Hong Kong had prompted many retailers, especially those from the cosmetics and skin care products industry, to increase their ad spending during the Chinese New Year [holiday] period." Data from the Hong Kong Tourism Board show that total visitor arrivals from the mainland rose by almost a quarter year-on-year to 3.1 million in January, making up the majority of the city's total of 4.14 million visitors over the month. Nine tenths of advertising spending during the Lunar New Year holiday went to campaigns on television, newspapers, magazines and outdoor media, according to AdmanGo. The city's banking and investment services industry remained at the top of the league table during the period, with campaigns totalling HK$153.97 million, down 1 per cent year-on-year. Close behind was the cosmetics and skin care products industry, which registered the biggest jump in expenditure during the period. Total advertising campaigns by the sector climbed 72 per cent year-on-year to HK$148.51 million. Hong Kong's No 1 top-spending advertiser during the holiday was the New York-based cosmetics giant Estee Lauder, which boosted its campaigns 146 per cent year-on-year to HK$19.27 million. It rose from 22nd place the previous Lunar New Year. "The brand made a huge investment to market its Advanced Night Repair Synchronised Recovery Complex product," Ma said. The French luxury make-up brand Lancome became the city's No 7 top-spending advertiser during the Lunar New Year holiday after its campaigns increased more than four-fold year-on-year to HK$15.81 million. The company, which was ranked No 84 the previous year, is owned by L'Oreal, the world's largest supplier of cosmetics and beauty products. Another aggressive holiday advertiser from the cosmetics and skin care products industry was Olay, a multi-billion dollar skin care brand owned by the consumer goods giant Procter & Gamble. Olay was Hong Kong's 11th top-spending brand, and increased its campaigns eight-fold year-on-year to HK$14.5 million. It was ranked No 210 a year earlier. Park'n'Shop, the large supermarket chain owned by the conglomerate Hutchison Whampoa (SEHK: 0013), remained the No 2 top-spending advertiser in Hong Kong during the Lunar New Year holiday. The firm's spending grew 22 per cent year-on-year to HK$18.88 million.

The head of the anti-corruption watchdog will not be involved in its investigation into Chief Executive Donald Tsang Yam-kuen after declaring his own conflict of interest. ICAC commissioner Timothy Tong Hin-ming said he had close links with the developer of Tsang's retirement penthouse in Shenzhen. The investigation was only confirmed on Tuesday night and there are fears it may now be affected. Tong's contract is due to expire on June 30, while the ICAC's head of operations, Daniel Li Ming-chak, is set to retire in April, and the government has yet to announce their successors - which would need the approval of the chief executive. Rebecca Li Bo-lan, director of operations (private sector), is widely tipped to succeed Li as head of operations. Another of Li's current deputies, Steven Lam Kin-ming, has only held his position in an acting capacity for one month. Tsang's case is understood to have been handed to senior directors due to the sensitivity of the case. But of the six directors and assistant directors of ICAC's operations department, four are acting. Of the 20 principal investigators or senior principal investigators who are also team leaders, eight are acting. Tsang has admitted failing to declare plans to lease a 6,500 sq ft penthouse in Shenzhen from mainland property tycoon Bill Wong Cho-bau - a major investor in the Digital Broadcasting Corporation. It recently obtained special approval from the Chief Executive in Council to allow former education minister Arthur Li Kwok-cheung to be appointed DBC chairman. Li would ordinarily have been barred under the Telecommunications Ordinance from chairing the company as his brother, David Li Kwok-po, is a director of PCCW (SEHK: 0008), another big media player. A spokesman for the Independent Commission Against Corruption confirmed that Tong knew Wong. "When ICAC commissioner Timothy Tong Hin-ming was commissioner of customs and excise, he was introduced by other government officials to Wong at an official occasion," he said. Tong headed customs and excise between September 2003 and June 2007. He said Tong had then met Wong on other occasions, including both official and social, and had played golf with him. He said Tong had already declared the relationship to the ICAC on Monday. The spokesman said that according to the operation and declaration mechanism, any of the commission's investigators, including the commissioner, would refrain from handling any case if he or she had links to the person involved. Lawmakers expressed concerns that the investigation would be affected and urged the government to sort out the looming gaps at the top of the watchdog.

A firefighter battles the blaze in Fa Yuen Street early on December 6, 2010, that damaged 29 shops and 49 market stalls. A cook who lit a chain of fires in a "drunken prank" that left a HK$20 million trail of destruction would spend a long time in jail, a judge said yesterday. Kwong Chi-sing, 33, pleaded guilty in the Court of First Instance to four counts of arson. He admitted setting fires in Mong Kok's Fa Yuen Street and three back lanes in Mong Kok and Sham Shui Po early on December 6, 2010. Several people, including a firefighter, suffered smoke inhalation and minor injuries in the fires. The blaze in Fa Yuen Street, a popular tourist destination, damaged 29 ground-floor shops and 49 market stalls that were packed with stock. Remanding Kwong in custody pending sentencing on March 21, Mr Justice Alan Wright called for background and psychological reports to help determine why the cook committed the crimes. He said it seemed bizarre that Kwong, who was previously of good character, had lit several fires within a short time. "If it was one fire, it's easy to understand. It strikes me [as] very unusual conduct," Wright said. Kwong's lawyer, Liza Yip, said her client could not explain why he committed the attacks, but he had been unhappy at work and suffered stress. She said Kwong had earlier been drinking with friends and loitered drunk in the streets for several hours before he used his cigarette lighter to set the fires. "It was just a drunken prank," Yip said. Prosecutor Agnes Chan said the arson attacks took place between 4am and 5am. The Fa Yuen Street blaze took firemen about 4-1/2 hours to bring under control. Six fire engines were deployed and tenants of nearby buildings were evacuated. Kwong was arrested on December 11, 2010, in the kitchen of the Victoria Harbour Roast Goose Seafood Restaurant. It is understood Kwong's arrest followed a call to police by a man who claimed to recognise the cook on a wanted poster. Describing the ferocity of the Fa Yuen Street blaze, Chan said: "One stall selling footwear including shoes and slippers was completely gutted by the fire. "All the wooden structures were completely consumed, and the metallic supporting structures were severely deformed. "All the goods inside were reduced to ashes, leaving behind only remnants of some shoe soles." Chan cited a forensics expert as saying the fire was particularly intense because the market stalls were highly flammable and packed closely together. She added that a large amount of stock including shoes, underwear and clothes was destroyed, causing huge economic loss. The judge said it was inevitable that Kwong would receive a "substantial custodial sentence".

 China*:  Mar 3 2012 Share

China will be alert to threats posed by the trade task force in the United States to investigate and crack down on what it claims are unfair practices by Washington's trading partners, officials from the Ministry of Commerce warned on Wednesday. US President Barack Obama signed an Executive Order on Tuesday establishing the Interagency Trade Enforcement Center to see whether trade partners, including China, "play by the rules". "China is not the only target but we cannot ignore the negative impact it will exert on China and Chinese exports in the long term," an official from the ministry's bureau of fair trade for imports and exports, who requested anonymity, told China Daily. "We have to closely watch what cases the agency might launch and prepare for possible countermeasures." Trade relations must benefit both parties, a Foreign Ministry spokesman said. "The essence of China-US trade should be mutually beneficial," said Hong Lei, Foreign Ministry spokesman, in response to the US move. Both parties should be able to discuss and resolve the causes of any friction, he said. Obama announced the creation of the center in his State of the Union address in January. The Executive Order marks its official launch. The center will "bring the full resources of the federal government to bear to investigate and counter unfair trade practices around the world, including by countries like China", Obama said. Although China is not the only nation that will be investigated by the center, experts believe it will probably be the main focus. "I am sure that China will be the major target," Zhou Shijian, a senior trade expert from Tsinghua University, said. There are growing fears that anti-China rhetoric will increase as the presidential election campaign heats up. Republican presidential hopeful Mitt Romney has criticized Obama for what he described as being soft on China. "The election campaign will lead to growing trade friction between China and the US," Zhou said, but dismissed the likelihood of a full-blown trade war. The center will be up and running in a few months. "In a matter of just 90 days, we will hire leadership and core staff ... and we will put them to work on the toughest cases," US Commerce Secretary John Bryson said. Zhang Yansheng, secretary-general of Academy Commission of the National Development and Reform Commission, said that the "goal of the move is obviously connected to the US election and targets China. The US fears China will challenge its global position." The establishment of the center was welcomed in the US. "President Obama took a significant step forward in ensuring America's continued economic growth and security by establishing it," said US Trade Representative Ron Kirk. This center will "ensure that America's trading partners play by the rules. It will help American workers and businesses compete and win on a fair global playing field", Kirk said. Zhou said China should be "fully prepared" for trade disputes. "We must be hard in fighting back," he said. In November the US Department of Commerce launched an anti-dumping and anti-subsidy investigation against Chinese solar panel producers and a month later, the US International Trade Commission issued a preliminary determination saying that Chinese imports are harming American industry. After the solar panel case, the US launched an anti-dumping and anti-subsidy investigation against wind towers imported from China and Vietnam, arguing that the imports hurt the US wind tower industry.

The southwestern municipality of Chongqing led the mainland in competitiveness gains between 2006 and 2010, a government think tank said yesterday. Anhui province, a major exporter of migrant workers, was the second most improved while top coal producer Shanxi witnessed the biggest regression. Jiangsu had the most competitive economy on the mainland in 2010 after trailing Shanghai, Guangdong and Beijing in 2006. The four regions topped the competitiveness rankings for all five years. The Chinese Academy of Social Sciences (CASS) released its "Report on Overall Competitiveness of China's Provincial Economy During the 11th Five-Year Period" in Beijing yesterday. Professor Peng Zhenhuai, head of the Local Government Research Institute at Peking University, said Chongqing's recent economic success could partly be attributed to its party chief, Bo Xilai. "Under the current Chinese political system, Bo's position as a member of the central Politburo has created an advantage for Chongqing's growth," he said. None of Bo's four predecessors, since Chongqing was made a directly controlled municipality in 1997, were Politburo members at the time. A big inland port on the upper reaches of the Yangtze River, Chongqing is strategically located and has enjoyed a great deal of support from the central leadership, especially since Bo became party secretary in 2007. It tied with Tianjin for first place in terms of economic growth last year. The CASS report shows that while western regions still lag far behind their eastern counterparts, the gap has been narrowing. The report divides the mainland into four regions - east, northeast, central and west - with the west achieving the biggest improvement in competitiveness between 2006 and 2010, followed by the central region and the northeast. Professor Li Minrong , a main drafter of the report, said yesterday that the impact of the global economic downturn on the mainland gradually lessened as one travelled from east to west. While eastern areas had suffered significant declines in major economic indicators, and central regions, largely reliant on mining, were seriously influenced, the west and northeast had kept growing, he said. Han Jun , a researcher at the State Council's Development Research Centre, said the slowdown in the east was partly because the mainland's demographic bonus was disappearing as labour shortages became more common and labour costs rose. "And it's exerting a greater impact on the coastal areas," he said. Twenty-three of the 31 provinces, directly controlled municipalities and autonomous regions on the mainland had achieved annual gross domestic product of more than one trillion yuan (HK$1.2 trillion) by last year, the report said. Guangdong, Jiangsu and Shandong ranked first, second and third in terms of GDP last year. Besides mainland provinces, municipalities and autonomous regions, the report also included Taiwan, Hong Kong and Macau for comparison purposes. It said that if they were part of the mainland economy, Taiwan would have replaced Jiangsu as the most competitive region in 2010, with Hong Kong ranked third and Macau ninth.

The mainland government has formally adopted new pollution standards encompassing smog-related pollutants such as fine particles after a national outcry over last year's increasingly bad air in urban areas. The new standards, which the Ministry of Environmental Protection revised late last year, were aimed at easing mounting public discontent over official pollution readings that showed positive air-quality figures, even on smoggy days, Xinhua said, citing a statement released after a State Council meeting yesterday. The revised standards include the level of fine particles, known as PM2.5 (airborne particles smaller than 2.5 microns in diameter), which are a health risk because they penetrate the lungs, and ozone. Premier Wen Jiabao , who chaired the meeting, also reaffirmed a timetable for monitoring smog-related pollutants. While cities in affluent, yet smog-hit, regions - such as the Pearl and Yangtze river deltas, and the area covering Beijing and Tianjin - must start monitoring PM2.5 this year, the data will be measured across the mainland and released by January 1, 2016. As many as 17 mainland cities, including Shanghai, Nanjing , Hangzhou , Chengdu , Wuhan and Zhengzhou , have started monitoring the pollutants. Beijing, Wuxi and Guangzhou were among the first cities to make public part of the monitoring data, China News Service reported. The statement also said urban air pollution troubles, especially persistent smog, remained a daunting challenge, due to rapid industrialisation, urbanisation and soaring discharge of pollutants. Tackling such pollution woes, it said, would require co-ordination and collaboration among local authorities in a region. The government also rolled out measures to step up efforts to crack down on polluters in energy-intensive and heavy polluting industries, such as those in power generation, steel, petrochemicals and construction materials. It also vowed to tighten emission controls and promote clean energy sectors in key regions, but it did not give further details. Analysts welcomed the new pollution standards and the State Council's renewed pledge to take on widespread smog problems, saying it was a step in the right direction amid public calls for the truth. "It is a commendable step for the central government to acknowledge the urgency of cleaning up filthy air as well as the necessity for a joint regional effort," said Zhou Rong , a campaigner with Greenpeace China. But Zhou and other environmentalists said the monitoring timetable released yesterday failed to provide a direct answer to public calls for immediate access to official PM2.5 data, which had been at the centre of nationwide debate since October. "We have yet to see a clean-up timetable or information about when air quality will meet the newly revised national standards," Zhou added. Mainland authorities have been under fierce attack for their reluctance to lift secrecy on pollution data. Apparently embarrassed by mounting claims that the government was playing politics with smog problems, Wen urged the environment ministry and local governments to act.

Hong Kong*:  Mar 2 2012 Share

TVB (SEHK: 0511) plans to form a joint venture with the state-owned Shanghai Media Group to help it expand into the mainland market. SMG's former boss Li Ruigang is expected to run the venture out of Shanghai. Li (pictured) headed the SMG from 2002 until August last year, when he was asked to join the Shanghai city government. He raised eyebrows recently when he resigned as deputy secretary general of the Communist Party's Shanghai Municipal Committee. Li's only job title now is as the chairman of Shanghai-based China Media Capital (CMC), a semi-official investment fund backed by SMG and China Development Bank. Li helped launch CMC in 2009 during his tenure at SMG, the mainland's second-largest media company by revenue after the state broadcaster, China Central Television. CMC will also be involved in the planned joint venture with TVB and SMG, according to people with knowledge of the matter. Shanghai government officials said on Tuesday that Li had in recent months been expected to take a senior job at TVB and it was understood that he would take a position in Hong Kong. It now appears he will first play a senior role in the joint venture and will be based in Shanghai. Li's departure from the city government, which rarely happens at such senior level, is understood to be intended to allow him to return to the media business. A TVB spokeswoman last night confirmed the company's joint-venture plan with SMG and CMC. The company's shares yesterday shot up 4.4 per cent to close at HK$49.45 in heavy trading. Li, a member of the Communist Party, may find it difficult to join TVB directly any time soon, given Hong Kong's regulatory restrictions governing the media, which require clearance from the Hong Kong Broadcasting Authority for non-permanent residents to take senior positions. "Given Li's Communist Party membership, it's difficult for him to come to Hong Kong to work and take a direct role in TVB," said a person familiar with the matter but who declined to be identified because of its sensitive nature. By running the joint venture, rather than taking a senior post at TVB, Li would avoid conflict with the Broadcasting Authority. Its permission is not required for a mainland-based media joint venture involving Hong Kong companies. At CMC, Li recently impressed the industry by setting up a joint venture with US filmmaker DreamWorks Animation to produce Chinese films using US technology. The plan for Shanghai-based Oriental DreamWorks was announced during Vice-President Xi Jinping's visit to the US. TVB is not involved in this venture. Li had previously won plaudits for transforming SMG into a national media giant from being a city-focused broadcaster after he took office in 2002. SMG and CMC were among the rumoured bidders for TVB in 2010.

The site of the future west apron. It and the midfield expansion will add 36 more parking spaces to the 145 already at Chek Lap Kok. A HK$2.2 billion project to create 16 new parking spots for planes in the next two years was intended to take advantage of a rebound in the global economy, the Airport Authority said at the launch of the development yesterday. The authority's announcement of the new 436,000 square metre parking apron at the western end of the airport comes less than three months after it broke ground on its HK$9 billion midfield expansion scheme. Together, the projects will add 36 more parking spaces to the 145 already at Chek Lap Kok, allowing the airport to handle more passenger and cargo flights. Most of the parking slots on the western apron, the first nine of which will be ready next year, will handle cargo planes, although they will be available to passenger and business planes as well. Private jet operators have complained of congestion at the Business Aviation Centre. The remaining spaces will open in 2014. Volumes at the world's busiest airport for cargo were down 4.6 per cent last year to 3.9 million tonnes, but the authority's deputy director of airport operations, Ng Chi-kee, was optimistic about the future. "The pace of decline of the cargo volume started to slow down in the last quarter, and we expect it to pick up more quickly in the next few years," he said. "It takes 18 to 20 months to build a new apron, so it's necessary to start construction as soon as possible to prepare for the rebound of the global economy." The west apron will also be designed to accommodate aircraft with longer fuselages, such as the latest generation of the Boeing 747 freighter, the B747-8F. Ng said the development would help handle the increase in traffic as the Civil Aviation Department raised the capacity of the two runways from 62 flights an hour to 68 by 2015. Passenger and cargo numbers had already outstripped the authority's growth projections, Ng said. But he said the new development had nothing to do with the controversial plan to build a third runway at Chep Lap Kok as air traffic was expected to increase regardless. "The west apron development is necessary to provide sufficient parking stands for both passenger flights and cargo flights," he said. The HK$9 billion midfield expansion, to be built between the two runways, will see the construction of a new taxiway, 20 parking spaces and a new concourse by 2015, boosting the airport's handling capacity to 70 million passengers and six million tonnes of cargo per year. Space between the midfield and west apron expansion areas will be retained to support future expansion, which will depend on approval for the third runway. The government is expected to give a decision on the HK$136.2 billion runway before its term of office ends in June. The airport handles 920 planes a day, 15 per cent being cargo flights.

Cheng Yu-tung, the 86-year-old patriarch of property titan New World Development Co., has handed the reins of the blue-chip empire he co-founded to his eldest son, becoming the first of the city's aging real-estate tycoons officially to retire. The elder Mr. Cheng, who in December added to his family fortunes with the US$2 billion stock-market listing of his jewelry business, has emerged as one of Asia's richest people and is respected for his business acumen. He was among the first developers to expand into the People's Republic of China years before investing in the country became a sure bet, later reaping handsome profits from his investments. Yet typical of many rags-to-riches billionaires in Hong Kong, Mr. Cheng also is known for living a relatively modest lifestyle, riding the subway during his younger years and often appearing in public wearing rumpled suits. He frequently had lunch with colleagues at the company's basic canteen. On Thursday, he will relinquish the title as New World's chairman, a post he held for three decades, to be succeeded by his son Henry, the company's 65-year-old managing director. Cheng Yu-tung in recent years gradually has stepped back from managing his companies, while grooming his grandchildren for more prominent roles in the family business. The company on Wednesday named Henry's 32-year-old son, Adrian, as joint general manager, overseeing New World's day-to-day business. Henry's 31-year-old daughter, Sonia Cheng, was appointed to the company's board. "It is rather unusual for Chinese families to make the transition so definitively," said Roger King, director of the Center for Asian Family Business and Entrepreneurship Studies at the Hong Kong University of Science and Technology. "Often the patriarch remains…as the ultimate decision maker. In fact, the younger generation won't make any key decisions without the blessing of the patriarch. That's [the Chinese] tradition," he said. Other leading Hong Kong property tycoons, such as 83-year-old Li Ka-shing, chairman of Cheung Kong (Holdings) Ltd., and 84-year-old Lee Shau-kee, patriarch at Henderson Land Development Co., haven't publicly indicated their succession plans and remain decision makers at their companies. These tycoons all began building their fortunes as young men after World War II in Hong Kong's land-starved real-estate market, ultimately rising to create sprawling empires and families to match. They've generally stayed in power into their mid-80s as their children either left their businesses or failed to step out of their father's shadow. Other tycoons, such as gambling magnate Stanley Ho of SJM Holdings Ltd. and Chen Din Hwa of Nan Fung Development Ltd., have retained titles even as they have grown too ill to manage their business empires. At SJM and Nan Fung, family feuds over power and money have filled the pages of the city's newspapers. The Cheng family is seeking to carry out a more orderly transition. To accomplish that, Henry Cheng will need to prove his ability to lead one of Hong Kong's most prominent companies, now that he no longer is in the shadow of his father. The younger Mr. Cheng succeeded his father as the company's managing director in 1989, 17 years after working as his understudy. In an early attempt to make a name for himself, the Henry Cheng was energetic in diversifying New World's businesses, making much publicized investments in areas such as television and hotels. But some of the acquisitions proved unprofitable, leaving New World sagging with debt and forcing Cheng Yu-tung in the early 1990s to return to a higher profile. Henry Cheng said making mistakes helped make him smarter. "In fact, making mistakes doesn't matter. The most important thing is you work with the overall interest of the company at heart," he said at a news conference Wednesday. He said he has worked with son Adrian in recent months to revamp the company's management to make it more modern and transparent, hiring external talent to fill management positions, for example. New World on Wednesday named Chen Guanzhan, a former university lecturer and Chinese official, as executive director, working alongside Adrian as joint general manager. New World said the elder Mr. Cheng will be named chairman emeritus, entitling him to take part in board meetings as he wishes. News of his retirement also comes amid concerns over his deteriorating health, though he continues to make frequent public appearances. Cheng Yu-tung fled poverty in southern China in the 1940s for a better life in the former Portuguese enclave of Macau, where he married a jeweler's daughter and moved to Hong Kong to develop the family's jewelry business. He later bought out his father-in-law's company and subsequently expanded into property, construction and hotels. He helped set up New World in 1970 and became chairman in 1982. New World, with assets including department stores, hotels, ports and shopping malls, on Wednesday reported a 5.22 billion Hong Kong dollar (US$673.1 million) profit for the half ended Dec. 31, up 20% from a year earlier, lifted by gains in office and retail rentals. With a market capitalization of HK$65.54 billion, New World is dwarfed by Chow Tai Fook Jewellery Group Ltd., the company Cheng Yu-tung bought from his father-in-law and expanded into one of the world's biggest jewelers, with a large network of retail outlets in China. In December, Chow Tai Fook listed in Hong Kong and as of Wednesday's close was valued at HK$132 billion.

Chief Executive Donald Tsang Yam-kuen is not the only Hongkonger planning to retire on the mainland. Many middle-class residents are considering the move across the border because of prohibitive property prices in Hong Kong. "Many middle-class people have moved back to China in the last two to three years because Hong Kong is getting more expensive," the head of residential property for greater China at DTZ, Alan Chiang Sheung-lai, said. "People want to improve their quality of living when retiring, but it's very difficult to upgrade their properties here." Chiang said many financial sector workers with monthly family incomes of HK$100,000 or more were now planning to move to the mainland about eight to 10 years before they were due to retire. By contrast, retirees moving to the mainland in the 1980s and 1990s were less well-off. A 1,000 square foot home for a middle-class family may now cost HK$15 million in Hong Kong, or HK$15,000 per sq ft, he said. But a family could buy a luxurious home in the Pearl River Delta region with a price tag of 4,645 yuan per sq ft (HK$5,720) or more. For example, flats at the Shenzhen private estate Mangrove West Coast, which is conveniently located near the Lok Ma Chau border crossing, are selling from about 2,800 yuan per sq ft (HK$3,447), and the location is comparable to, or even better than, One Silversea in West Kowloon, where flats are currently selling for between HK$14,000 and HK$18,000 per sq ft on average. "So flat prices on the mainland are one-third or even one-fourth of those in Hong Kong," Chiang said. Earlier this month, the Housing Society announced its "Joyous Living" retirement projects in North Point and Tin Shui Wai, into which well-off retirees can move from the age of 60 onwards after paying a one-off lump sum rent. A 74-year-old retiree, for example, will pay about HK$3 million if he chooses to live in a 500 sq ft flat, equating to HK$25,000 per month if he were to die 10 years after moving in. The chief executive of Midland Immigration Consultancy, Thomas Kut On, said that by comparison, HK$3 million could buy a 1,000 sq ft flat in Shenzhen's Futian district. An added attraction was that mainland properties showed a higher potential for price growth in the long term due to strong demand, he said. The chairman of EK Immigration Consulting, Eddie Kwan King-hung, said HK$25,000 was sufficient to pay the rent on a flat of more than 2,000 sq ft in the most luxurious property project in Macau or on the mainland. About 98 per cent of people leaving Hong Kong for retirement would choose the mainland or Macau, while the rest might return to Canada or the US where they once lived, he said. Many of his Hong Kong friends who had migrated overseas returned to southern China for retirement because it was close to Hong Kong and offered a similar lifestyle but was cheaper, despite the appreciation of the yuan. "Even our chief executive [Donald Tsang] chooses to spend his retirement life in China, not to mention other Hong Kong people," he said. According to the East Pacific Group, Tsang has paid the market rate of 800,000 yuan (HK$985,000) per year to rent a 6,500 sq ft penthouse in the East Pacific Garden in Shenzhen. With that budget, Kwan said, one could only rent a flat of less than 2,000 sq ft at The Cullinan or the Harbourside in West Kowloon. "It's unquestionable that you can get a more comfortable and sizeable home on the mainland than in Hong Kong with the same budget," the general manager at Centaline Immigration Consultants (Hong Kong), David Hui, said.

Sun Hung Kai Properties (SEHK: 0016) (SHKP) says it has secured 90 per cent of its HK$32 billion sales target for the financial year to June after posting a slightly higher-than-expected interim profit. For the six months to December, SHKP posted a 13 per cent rise in underlying net profit to HK$11.77 billion, beating the market forecast of HK$11.5 billion. Including a HK$9.46 billion revaluation gain on investment properties, net profit edged up 0.5 per cent to HK$21.13 billion, from HK$21.01 billion a year ago. Turnover rose 15.58 per cent to HK$36.42 billion. SHKP declared an interim dividend of 95 HK cents, the same as last year. Thomas Kwok Ping-kwong, SHKP's co-chairman and managing director, was upbeat about the city's property market over the medium to long term despite the current global economic uncertainties. "Property developments require four to five years to complete," he said. "In facing the global challenges ahead, we need to build up a strong financial position and try to reduce the gearing." SHKP said its gearing ratio, a measure of debt, stood at 16.5 per cent, down from 17.1 per cent in December. However, Kwok noted that construction costs had increased by 10 per cent, which could weigh on the firm's profit margin. His brother Raymond Kwok Ping-luen, the firm's co-chairman, said SHKP had shown its strong ability to raise debt financing during the financial year. "The funds will be used for refinancing existing loans and will also partly be used to finance land acquisitions," he said. SHKP has issued new five-year bonds worth US$500 million, as well as five- to 15-year bonds worth HK$1.1 billion. The firm said earlier this year there was a US$275 million "retap" of the US$500 million five-year bond issuance and a new US$900 million 10-year US dollar bond issuance. Its cash and bank deposit amounted to HK$9.22 billion as at December. For the six months to December, SHKP said it added four development sites with a total attributable gross floor area of 4.94 million square feet. Its total land bank amounted to 46.7 million sq ft and more than 26 million sq ft of farmland. Victor Lui, executive director of Sun Hung Kai Real Estate Agency, said 90 per cent of its HK$32 billion sales target for the financial year to June had been met. He said four major residential projects - comprising a total gross floor area of more than 2.32 million sq ft - would be marketed over the next nine months. They are in Tuen Mun, Yuen Long, Ma Wan and Tseung Kwan O. Profit from property sales fell 12 per cent to HK$7.68 billion, while rental income reached HK$5.27 billion for the six months to December, up 14 per cent from the same period a year earlier. In the six months to December, four projects with 2.6 million sq ft of floor area were completed, with residential space accounting for 2.4 million sq ft. They are The Wings, a joint venture with MTR Corporation (SEHK: 0066), in Tseung Kwan O, Imperial Cullinan in Tai Kok Tsui, Avigon in Tuen Mun, and Lime Stardom in Kowloon. SHKP shares rose 2.55 per cent to HK$120.40 ahead of the interim results announcement.

Margaret Leung Ko May-yee, who is ending a decades-long career in banking, plans to keep her options open - including the possibility of taking up a ministerial role in government. Set to retire in May, the vice chairwoman and chief executive of Hang Seng Bank (0011) spoke yesterday of her desire for greater involvement in public service despite holding 13 public posts. Asked whether she would join the government - say, as financial secretary - Leung replied: "Being a government official? I am open to all options. But I need to take some rest first." She added she hopes "to participate more in voluntary activities." She kept mum when asked if she would support New People's Party chairwoman and lawmaker Regina Ip Lau Suk-yee in the chief executive race. But foremost in Leung's mind are family matters and taking a break. She wants to take a break in Zhangjiajie, a scenic city in Hunan province next month, before she leaves the HSBC Group after a 34-year banking career. "My daughter is very happy about my retirement, because I can spend more time at dinner with her," the 59-year- old said. She will be succeeded at Hang Seng Bank by Rose Lee Wai-mun, currently China and Hong Kong adviser to HSBC, and Leung's classmate in middle school. She also hopes Hang Seng Bank will be able to name a chief executive from internal ranks one day. Meanwhile, the lender is likely to recruit some of those being laid off from parent HSBC Holdings (0005), Leung added. "We will also hire management trainees in Hong Kong, and carry on recruitment in the mainland." Hang Seng Bank aims to open 20 more branches in the mainland by 2014, adding to the current 39 outlets. Leung said the United States is likely to launch a third round of quantitative easing in the third quarter. Hang Seng Bank shares hit a five- month high of HK$106.70 yesterday, up 5.1 percent. 

Leung Chun-ying is caught up in a fresh conflict-of-interest row, this time involving a member of his election campaign and a HK$700 million construction project. But speaking at a forum on the SAR's future leader, the chief executive candidate was quick to deny any involvement. East Week magazine reports that Leung recommended former Hsin Chong Construction Group non-executive director Chan Ka-kui to City University's council, soon after himself becoming council chairman in 2008. In 2010, Hsin Chong won the university's HK$700 million tender to build two new blocks under expansion plans to prepare for the "3+3+4" education reform. The company submitted the bid when Chan was still non-executive director but he had resigned by the time results were announced two months later. The magazine quoted an insider as referring to the university's code of conduct, under which council members "cannot offer benefits to themselves, their families or friends [nor] influence council decisions to benefit themselves or their companies." East Week also said Hsin Chong hired Leung's firm DTZ Holdings as project consultant after it won the tender, raising concerns about conflict of interest. Several university staff, including associate professor Yu Fu-keung, were quoted as saying that Leung caused discontent among them because he ran the university as a business. Chan said he had no connection with Hsin Chong when he became a council member, though he was still a non-executive director at the time. "I made a declaration to the council, and followed university rules," Chan said, adding he did not know DTZ had been hired as project consultant. Leung said the project award was made by the university's tender committee. The process was completed according to university rules, and there was no need for council members to make declarations on this matter, he added. Neither Leung nor Chan was a member of the tendering committee. Leung also said he was DTZ Asia Pacific chairman at the time and had no "concrete dealings" with DTZ Holdings, stressing he did not seek any business opportunities for Hsin Chong. Meanwhile, the Legislative Council is expected to pass a motion to use the Powers and Privileges Ordinance to force the disclosure of all documents related to Leung's alleged conflict of interest in the West Kowloon arts hub design contest of 2001. Many pan-democrats, supporters of top-job rival Henry Tang Ying-yen, and even those of Leung have said they will vote for the motion. The Democratic Alliance for the Betterment and Progress of Hong Kong will make a decision today. As for Tang's illegal basement scandal, development chief Carrie Lam Cheng Yuet-ngor said she will attend a special Legco panel meeting. She also said the government visited Tang's Kowloon Tong homes sooner than in most cases because of the public concern involved.

More than a dozen extra aircraft will be able to park at Chek Lap Kok airport by 2014 as part of a new development to help manage increasingly heavy passenger and cargo traffic, the Airport Authority announced on Wednesday afternoon. The authority said a 430,000 square metre apron at the western end of the airport island would be built, adding 16 plane parking stands to the existing 145 stands. Ng Chi-kee, the authority’s deputy director of airport operations, said construction would begin in the middle of the year, and be completed in two phases. The first phase of nine stands would open next year, and the rest would be ready by 2014. Ng said the new apron was necessary regardless of a third runway, because the authority expected air traffic in the city to continue to grow. The development would help meet the Civil Aviation Department’s target of raising the hourly handling capacity of the two runways from the present 62 flights per hour to 68 by 2015, he said. Three of the stands on the west apron would be able to hold new types of aircraft with longer fuselages, Ng said.

Regina Ip Lau Suk-yee, chairperson of the New People's Party, announced on Monday at her office in Wan Chai that she did not have enough nominations to be a candidate in the chief executive election. Next month’s chief executive election will be a three-horse race after one aspirant for the job failed to secure enough support to become a candidate by the close of nominations on Wednesday. Shortly before the nomination period ended at 5pm, New People’s Party chairwoman Regina Ip Lau Suk-yee said she had to give up her bid for the top job because she had not gathered the 150 nominations needed to stand. “It is with regret that I cannot provide one more option in the election,” Ip said. Her failure leaves three in the race: former chief secretary Henry Tang Ying-yen; former Executive Council convener Leung Chun-ying; and Democratic Party chairman Albert Ho Chun-yan. About 1,200 Election Committee members will cast their ballots on March 25 to decide which one will become the city’s next chief executive. Ip declined to reveal the exact number of nominations she secured, but said she was at least 20 short. And, although she gained some new nominations and pledges of support in the final hours, she was still “not close enough” to 150. Ip’s announcement followed her meeting on Wednesday with members of the pro-Beijing Democratic Alliance for the Betterment and Progress of Hong Kong, which held key votes for her bid. She said she failed to secure the backing of the party’s top leadership because they had already decided not to nominate anyone, and there was not enough time to contact other members individually. Meanwhile, Tang, Leung and Ho, each submitted further nominations to electoral officials before 5pm. Tang handed in 13 more votes, taking his total to 391; while Leung increased his tally by 15 to 305; and Ho submitted five new names to finish with 188.

 China*:  Mar 2 2012 Share

Five hundred new cabs were put into service on Tuesday to help ease the heavy demand for taxis during rush hour in the city. The new orange cabs are only allowed to operate between 7:30 am and 7:30 pm and they all have two Chinese characters meaning "rush hour" on top. An orange taxi designated for rush hour drives along a street in Guangzhou, Guangdong province, on Tuesday. Some 500 such cabs have been put into service since Tuesday. "The new cabs will help meet the growing demand for taxis from local residents and tourists," said Lin Chi, an official from the Guangzhou transport commission. "Guangzhou government plans to increase the number of cabs by 1,000 during rush hour to help meet the city's great demand for taxis this year. And the rest of the 500 new cabs will gradually be put into use in the following days," Lin said on Tuesday. "Relevant departments have introduced concrete and effective measures to ensure that the new cabs only operate during permitted hours," Lin said. The cabs are equipped with global positioning systems and their fare meters will be locked from 7:30 pm to 7:30 am, he added. Jin Wenzhou, deputy dean of the school of civil engineering and transportation under South China University of Technology, said the increase in the number of cabs would have little adverse effect on the city's normal taxi business or on the income of taxi drivers. Guangzhou, which has a population of more than 12 million, has around 17,000 cabs in service, Jin said. "Lack of cabs, plus the city's traffic jams, have made local residents and tourists feel that it's difficult to take a taxi in the city, particularly during rush hour," he added. But Jin said he was against blindly increasing the number of cabs in the city in the future. Many local residents have welcomed the increase in the number of cabs. Chen Chuxin, who works in Guangzhou's Tianhe district, said the city needed to increase its cab fleets to meet growing demand. "I always find it very difficult to take a taxi in the busy Tianhebei road after work in the afternoon," he said. B