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

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

      061101-donald tsang.jpg (11044 bytes)   

 video  

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

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

 

Chinese business etiquette

Newsletter

Biz: China Hong Kong Hawaii SF

Seminar Material

What people said about us 

China Earthquake Relief

Tax & Government

Hawaii Voter Registration

Biz-Video

Hawaii's China Connection

Doing Business in Hong Kong & China

Share Hong Kong, China & Hawaii Biz*            

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

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

Hong Kong, China & Hawaii News Archive for Year 2002  Archive Jan 1, 2003.........:>
January - April 2003  May - July  2003  Aug - Sept 2003  Oct - Dec  2003 January - Mar 2004  April - June 2004  July - Sept 2004
Oct - Dec 2004 Jan - Feb 2005  Mar - Apr 2005  May - Jun 2005 July - Aug 2005 Sept - Oct 2005 Nov - Dec 2005 Jan - Feb 2006 
Mar - Apr 2006 May - Jun 2006 Jul - Aug 2006 Sept - Oct 2006 Nov - Dec 2007 Jan - Feb 2007 Mar - Apr 2007 May 2007 June 2007
July 2007 Aug 2007 Sept 2007 Oct 2007 Nov 2007 Dec 2007 Jan 2008 Feb 2008 Mar 2008 May 2008 June 2008 July 2008
Beijing Olympics Aug 2008 Sept 2008 Oct 2008 Nov 2008 Dec 2008 Jan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 June 2009
July 2009 Aug 2009 Sept 2009 Oct 2009 Nov 2009 Dec 2009 Jan 2010 Feb 2010 Mar 2010 Apr 2010 May 2010 June 2010 Jul 2010
Aug 2010 Sept 2010 Nov 2010 Dec 2010 Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 June 2011 Jul 2011 Aug 2011 Sept 2012
Oct 2011 Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012
China Projects Bidding Information - update daily    Scholarship & Grants  News Archives in PDF Format 

Do you know our dues paying members attend events sponsored by our collaboration partners worldwide at their membership rates - go to our event page to find out more! After attended a China/Hong Kong Business/Trade Seminar in Hawaii...still unsure what to do next, contact us, our Officers, Directors and Founding Members are actively engaged in China/Hong Kong/Asia trade - we can help!

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

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

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

Wine-Biz - Hong Kong Brand Hong Kong Video

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

成功之道 武进制造 Wujin - Changzhou - Jiangsu Province - China http://www.hkchcc.org/wujin.htm 

 HK$6,000 will be given to each holder of a valid Hong Kong Permanent Identity Card 

Happy Chinese New Year - Year of the Dragon - January 23 2012

Honolulu Chinatown - Year of the Dragon 2012 Lion Dance with Firework http://www.youtube.com/watch?v=-VoFfOglJuI

President Obama's Lunar New Year Message - Year of the Dragon http://www.youtube.com/watch?v=C6gfkYAo5gE

Under the Hawaii State Law "Asian Lunar New Year Commemoration Week" The one week period following the day of the Chinese New Year shall be known and designated as the "Asian Lunar New Year Week of Commemoration in Hawaii". This week is not and shall not be construed as a state holiday. [L 2007, c 48, §2] click for more details

Meetings and Exhibitions Hong Kong - Converging Possibilities - English the Official Language http://www.youtube.com/watch?v=eUyutVdnPIo

Share on Facebook

Hong Kong*:  Apr 30 2012 Share

As its service-oriented economy complements the strengths of ASEAN countries, Hong Kong is ready to serve and to be included into the China-ASEAN community, the city's Financial Secretary John Tsang said here on Friday. The Association of Southeast Asian Nations (ASEAN) has initiated the study on the economic benefits and implications of Hong Kong joining the Asean-China Free Trade Agreement (FTA) since last year. Tsang said in an interview with Xinhua Friday that the secretariat of this union was still going through some "cost- benefit" analysis in this regard. "Hopefully before the end of this year, they would come up with a decision as how to take this matter forward." Noting Hong Kong's staunch role as a service economy, Tsang displayed confidence in what the city had to offer to the China- ASEAN community, saying it was ready to make contribution. "For example, Hong Kong has a very strong financial service sector, which is required by many countries in this region, to help them raise funds, capitals and acquire professional expertise in other service areas, such as logistics, tourism," said the finance secretary. "We are keen to be a member of this community. Hopefully our wish to be included in this process would be favorably answered," he added. Recalling the history of Hong Kong-ASEAN economic ties, Tsang said the city, as a small but outward economy, used to rely heavily on the United States and European countries and was thus extremely vunerable to the fluctuation of the international market. Back in 2007 when the current government took office, it started to make changes. "We look more to the emerging economies like ASEAN countries to develop a much bigger market. What we are looking to bond with them is not just direct and simple relationships but complex and multidimensional ones," said Tsang. "Now, we are beginning to see results, as the financial structure of western world is wobbling and a long period of time is expected for it to recover." Speaking at a luncheon hosting hundreds of HK and Thai business elites earlier the day, Tsang hailed the strong trading relations between the two sides. Last year, Thailand was Hong Kong's 9th largest trading partner and 11th largest export destination. Meanwhile, Hong Kong was the kingdom's 7th largest trading partner and 4th largest export market. Despite the devastating floods, the trade value between HK and Thailand exceeded HK$120 billion ($15 billion), a 7 percent increase year-on-year.Tsang also noted that Thailand was spearheading a trend of using Hong Kong as a springboard to reach market in Chinese mainland. Last year, 16.7 percent of Thailand's trade with the mainland was routed through Hong Kong.

A Repulse Bay residential site could set a record for price per buildable square foot in the SAR. The 46,700 square foot plot, tenders for which close at noon today, is expected to fetch between HK$1.36 billion and HK$1.91 billion - or HK$39,300 to HK$45,400 per buildable square foot. The current record in the category is held by a 79,148 sq ft site on Mount Kellett Road, The Peak. In 2006, Sun Hung Kai Properties (0016) paid HK$1.8 billion, or HK$42,196 psf for it. "The [Repulse Bay] site should attract interest from large and medium-sized developers," Midland Surveyors director Alvin Lam Tsz-pun said, forecasting it to fetch at least HK1.89 billion. But topping the current record may prove challenging. Vincent Cheung Kiu-cho, national director of valuation at Cushman & Wakefield, said: "The winning developer will need to bear the responsibility of site formation work, which adds [greatly] to construction cost and time." With a gross floor area of around 42,000 sq ft, the plot will likely be developed into a low- density project with several detached houses. Meanwhile, Sa Sa International (0178) chairman Simon Kwok Siu-ming reportedly put on the market a 6,150 square foot detached house in the neighborhood. He is seeking HK$360 million, or about HK$58,537 per sq ft.

Revealed: who paid what in race for chief - Half of Leung Chun-ying's campaign chest of HK$14.84 million in his winning run for chief executive came from a low-profile association and six individuals, according to expense statements. The documents submitted to the Registration and Electoral Office showed that the Association of Experts for Modernization, of which National People's Congress deputy Maria Tam Wai-chu is honorary chairwoman, donated just over HK$1 million to Leung. "The donations were all made voluntarily," association chairman Patrick Tse Kwing-chuen said yesterday. Tam also donated to Leung, Tse said. Leung has been close to the association, showing up at its general meeting last year, where two officials from the central government liaison office were also present. But Tse stressed that no one from the liaison office had forced them to make the donation. The six individuals chipping in HK$1 million each include tycoon Li Ka- shing's sister-in-law Catherine Chong Yuet-ngai, Cammy Poon Kwok-ling, Albert Li Chee-man and Lei Ioc-heng. Six other individuals and companies each donated HK$500,000. Among them was Sun Hung-kai Properties former chairman Walter Kwok Ping-sheung. Chow Tai Fook Nominee Limited, chaired by Henry Cheng Kar-shun, also donated HK$500,000. Cheng was earlier criticized for changing support from Henry Tang Ying-yen to Leung. Of the HK$14.84 million Leung raised for his election campaign, he spent HK$11.2 million. The biggest chunk, HK$3.3 million, went for rental, office expenses and transportation; HK$2.5 million went to agents and election assistants. Compared with Leung, Tang received fewer large-sum donations, with the biggest amount just HK$200,000. Ten people each donated HK$200,000 to Tang, with three of them having close relationships to Li Ka- shing. They include Grace Woo Chia-ching and Justin Chiu Kwok-hung, who are both executive directors of Cheung Kong (Holdings). Canning Fok Kin-ning, managing director of Hutchison Whampoa, also donated HK$200,000. Those who donated HK$100,000 to Tang include Lifestyle International Holdings boss Thomas Lau Luen-hung, Liberal Party honorary chairman James Tien Pei-chun, and Macau casino tycoon Stanley Ho Hung-sun and his daughter Pansy Ho Chiu-king. Tang raised HK$11.29 million for his election campaign, of which he spent HK$10.97 million. The biggest items of expenditure were also rental, office and transportation, at HK44.45 million. Tang also spent almost HK$3 million on hiring agents and election assistants. Both Leung and Tang have said they will donate the unspent campaign money to charity.

Parents will have to dig even deeper to keep their children studying under the English Schools Foundation. The ESF will increase tuition fees by as much as 5.05 percent for the next school year, which is due to begin at the end of August. The foundation has informed parents - with regret - that primary school tuition fees will go up by 4.92 percent to HK$66,100 a year. Tuition fees for students in Year Seven to Year 11 will rise by 3.05 percent to HK$98,000, while those for Years 12 and 13 will increase by 5.05 percent to HK$102,000. "The board is very conscious of the pressure that these increases will place on families and very much regrets that this is so," ESF chief executive Heather Du Quesnay wrote in a letter seen by parents yesterday. "However, in a climate of rising expectations of education, it has a responsibility to maintain and improve the quality and standards offered to ESF students." The increases come as part of a cost review to seek ways to increase competitiveness. Part of the fee increases will go to ESF staff, who are getting a pay rise of 4 percent. The staff payroll makes up 80 percent of the ESF budget. The rises are also to cover spending of HK$3 million on an ESF Therapy Centre. Furthermore, the ESF needs to spend HK$2.6 million to open and extend learning support classes at Sha Tin Junior School, Sha Tin College and Kennedy School, Du Quesnay wrote. The ESF was hoping expenditure would have been met by subvention from the Education Bureau, but will now have to pay itself owing to the failure of the government to decide in time on the future of the subsidy. The bureau has frozen the annual subvention at HK$280 million for more than a decade. "The board is acutely aware of the impact of fee increases on parents and has taken every opportunity to press the Hong Kong government to recognize that as long as the subvention is frozen, all additional cost will fall directly on parents," Du Quesnay wrote. Peter Law of the ESF Concerned Parents Group, who has a child in Year Eight at Sha Tin College, said the ESF should use its huge reserves to cover pay rises for staff. A bureau spokeswoman said the subvention review is proceeding. The ESF raised primary and secondary school fees by an average of 2.75 percent for the current 2011-2012 academic year. There was an average increase of 4.83 percent in the 2010-2011 academic year.

JPMorgan Chase wants to build up revenue in Asia-Pacific. JPMorgan Chase named Jeff Urwin as its new chief executive for AsiaPacific, to take over from Gaby Abdelnour who said last month that he was leaving the firm. Urwin, who will move from New York to Hong Kong, will keep his current role as the firm's head of global investment banking coverage, capital markets and mergers and acquisitions. He will continue to report to Jes Staley, chief of the investment bank's operations. "Basing our global head of investment banking in Asia-Pacific further cements our ongoing commitment to the region and its importance," Staley said. It would be the first time JPMorgan's global head of investment banking was based in AsiaPacific, the company said. Urwin is a relative newcomer to JPMorgan, having come to the bank through its acquisition of Bear Stearns in March 2008. Urwin has no direct experience of running an Asia-based investment banking business, having been co-head of North American investment banking before his appointment in his current role last June. JPMorgan, the third-ranked adviser on mergers globally this year, is second in the Asia-Pacific region after Morgan Stanley, according to data compiled by Bloomberg. The firm has advised on US$24.1 billion of deals in the region this year, including Hong Kong-based Hutchison Whampoa (SEHK: 0013)'s €1.3 billion (HK$13.37 billion) purchase of Orange Austria in February. Abdelnour was tapped to run the firm's Asia-Pacific unit in July 2006. Under his leadership, JPMorgan set up a securities joint venture on the mainland, bought a stake in a trust and a guarantee company, and established a locally incorporated bank. He was, however, once global head of emerging markets for Lehman Brothers, in which role his coverage included Asia, excluding Japan. Before joining Lehman Brothers in 1991, Urwin was head of business in the developing countries division at Midland Bank in Britain and he graduated from Birmingham University in 1978. In his role as head of investment banking coverage, newly created for him, Urwin oversaw the deal origination efforts of JPMorgan's investment bank. He takes over at a time when JPMorgan's investment bank is riding high globally, but when the firm is pushing to build up its Asia-Pacific revenue. Urwin will move to Hong Kong next month, according to JPMorgan. A New York-based real estate blog reported in February that Urwin's 8,800 sq ft, US$26 million Upper East Side townhouse in Manhattan was up for sale again, according to a Corcoran listing. Separately, Morgan Stanley hired Bank of America's Gabriel Butler as head of electronic trading for Asia, excluding Japan, according to two people familiar with the move. Butler, who was head of electronic trading sales at Bank of America Merrill Lynch - where he worked until last week - would start at Morgan Stanley in Hong Kong by August, the people said. Butler replaces Joseph Sarcona, who was promoted to global co-head of listed derivatives for the electronic trading team in New York, they said.

Goldman Sachs neither admits nor contests HKEx's findings, but accepts the censure and had co-operated fully, the exchange said. The Hong Kong stock exchange has publicly censured Goldman Sachs Structured Products (Asia) for breaching listing rules by allowing errors in the documents related to HK$600 million worth of Nikkei-linked warrants it issued last year. The errors caused "damage to the reputation of the Hong Kong derivatives market", said a statement issued by the stock exchange listing committee yesterday, adding that Goldman Sachs' failure to ensure accuracy in its warrant documents amounted to a breach of rules that could damage investor confidence. The committee said it had considered suspending the Wall Street investment bank from trading but decided against it as the bank had already voluntarily halted the issuing of warrants in Hong Kong for eight months - from April to November - and had addressed the regulatory concerns arising from the errors. The bank was cleared by the exchange in December to continue issuing structured products. Chim Pui-chung, legislator for the financial services sector, said public censure was too light a punishment. "The Goldman Sachs warrant incident was a serious mistake that affected not only the investors who had traded that warrant but also dented the reputation of the Hong Kong derivatives market. A censure is nothing. The exchange should slap a heavy fine on them as a warning to all warrant issuers," Chim said. In February last year, Goldman Sachs issued the listing documents regarding the launch of the Nikkei 225 Stock Average Index warrants containing the errors, which caused mispricing. The mistake caused the price of the warrants to soar, and they traded normally for six weeks before the errors came to light. This caused disorderly trading of the warrants at the end of March and disputes broke out between Goldman Sachs and investors. The warrants were finally suspended from trading on March 31. The warrants never resumed trading and expired at the end of last year. Goldman Sachs offered to buy back the warrants at a high price to compensate the affected investors. The offer was accepted by 88 per cent of holders. The stock exchange listing division said the errors were an isolated incident and "appear to have resulted from human errors and not systemic failure". But "the errors were material", it added. The bourse also noted that "Goldman Sachs did not request suspension sufficiently quickly once a disorderly market arose". For the purpose of settlement, the stock exchange statement pointed out that Goldman Sachs "does not admit or contest the (listing) division's assertion of its breach of the listing agreement", adding that it accepted the censure issued against it. The stock exchange said Goldman Sachs had fully co-operated with the subsequent investigation and retains a clean record. The exchange added that the public censure applied only to Goldman Sachs and not any of its current or former directors.

More than a fifth of the residential development planned for a West Rail station in Yuen Long has been cut.
It is the fourth such move by the government in 11 months to address public concern about the wall effect created by high-rises along rail lines that block air flow and spoil the view. One of five 25-storey residential towers planned above a four-storey podium at Long Ping North Station will be removed from the plans. Three of the remaining towers will increase to 26 storeys, the fourth will be cut to 16 and the podium will be cut to one storey. Cuts have already been made at Nam Cheong Station and two Tsuen Wan stations on the same line. Activists fighting massive developments welcomed the change, but urged the government, as the major shareholder of the MTR Corporation (SEHK: 0066), to do the same with projects above other railway stations. While property development rights along the West Rail line - run by the Kowloon-Canton Railway Corporation before the merger of the two rail operators - are under government control, those along other lines belong to the MTR Corp. "Why did the government do nothing to push for a better design when it plays an influential role in the company?" Green Sense president Roy Tam Hoi-pong asked yesterday. For example, one MTR project at Tai Wai would have six high-rises of about 50 storeys standing close together and facing in one direction above a 38-metre podium, he said. In other changes at Long Ping North, the car park will be hidden in the basement to reduce development bulk, and instead of standing close together the towers will be spaced not less than 15 metres apart to improve the air flow and views. A five-metre space around the site will be reserved for landscaping. The revision also raises the proportion of small and medium-sized flats - of 538 sq ft or less - from 61 per cent to 75 per cent - to meet housing demand from the wider community. A 60-place day care centre for the elderly will also be built in addition to a care home for the elderly. The revised plan was published by the Town Planning Board yesterday and is open for public comment until June 28. The board will examine the plan on July 22. In May last year the government said it would cut two high-rises and two low-rises from the Nam Cheong Station project. The reduction in the two projects at Tsuen Wan Station is smaller. One near the harbour had its podium trimmed and the city centre project had two blocks cut by 12 storeys.

The number of new flats completed in the first three months fell to a four-year low, prompting warnings of further price rises. Only 600 apartments were finished, a drop of 77.8 per cent compared with the 2,700 in the fourth quarter of last year, Transport and Housing Bureau statistics show. Sales of new homes remain strong, with only 4,000 flats at completed projects still unsold at the end of last month, 42.8 per cent fewer than at the end of last year. Property analysts believe the supply shortage will continue for two or three years, despite the efforts of chief executive-elect Leung Chun-ying to increase land supply and bring prices for the average Hongkonger down. The government forecasts that the number of completed flats will increase by 25.8 per cent this year, to 11,890. But Alva To Yu-hung, head of research at DTZ, said supply was still far below the average of 25,000 completed each year in the 1990s. "We will continue to face a shortage of supply in the short run, and if the economic performance is positive, property prices will increase steadily," he said. Centaline's Centa-City Leading Index, which tracks average selling prices at 100 large housing estates, shows that property prices remain close to the market peak in 1997. The firm's senior associate research director, Wong Leung-sing, expects the index will exceed the market peak for 1997 in the second quarter. This month Financial Secretary John Tsang Chun-wah warned of a property bubble and urged buyers not to dash mindlessly into the market. He said prices had risen 74 per cent since early 2009 and were 5 per cent higher than in 1997. The government has begun to increase land supply to cool the market. Yesterday it announced it will invite bids next month to develop the HK$10 billion site of the former North Point Estate. The increase in land supply meant the number of flats under construction increased to 4,900 in the first quarter, the most since the third quarter of 2010. The government estimates the housing supply in the next three to four years will climb to 64,000 flats, a three-year high. "But it takes times to complete the flats, and the housing shortage will continue until the supply of private housing increases," said Eddie Hui Chi-man, a professor in the department of building and real estate at Polytechnic University. Professor Chau Kwong-wing of the University of Hong Kong's department of real estate and construction said future land supply would rely on Leung's political skills. "The new government should increase land supply substantially by zoning more sites for residential development," he said.

Leung Fuk-yuen said he would not be pulling down fences at the zoo (top). He said he had lost enthusiasm for running the park, which he said did not make his family any money. Leung Fuk-yuen surveys the remains of the toilet at the Tai Tong Lychee Valley park in Yuen Long. Rural strongman Leung Fuk-yuen has reluctantly demolished most of the structures he built on government land in a country park that he has illegally occupied for almost two decades, ahead of today's deadline. By yesterday, a toilet, some stone chairs and other recreational structures at his Tai Tong Lychee Valley commercial park had been demolished, while a pavilion has been moved to Leung's adjacent private land. A ticketing booth will be moved in the next few days. But Leung - who is a prominent member of the Heung Yee Kuk rural affairs body who is campaigning against a crackdown on illegal structures on village houses in the New Territories - says he will keep the fences and shelters of a zoo that he had been told to demolish, citing "animal welfare". He claims the zoo is on private land, which the Lands Department could neither confirm nor deny. "They told me to demolish the structures, so I did," he said. "I have no enthusiasm for running this park any more. It was to educate children about nature. But if the government is so insistent, what can I do?" Leung said in a statement he would not rule out legal action "to protect owners' rights" if the government decided to prosecute him. The Lands Department knew the 12,400-square-metre park had been using government land for 18 years but acted only after it came under fire from the Audit Commission. The illegal occupation came to the attention of the public with the release of a report by the Director of Audit last week. The commission said about 4,700 square metres of Leung's park was in Tai Lam Country Park, Yuen Long. Structures built on government land lying outside the country park will also have to be removed by May 18. "The lychee valley existed before the government decided it was part of the country park," Leung said. "Our ancestors lived here hundreds of years ago, and we planted the trees decades ago. "I don't know what the government should do about the trees if they say we're occupying the land illegally. Perhaps they should just fell them." He said that he would not take down the structures surrounding the zoo, home to a few emus, lambs and rabbits. "I don't care if they come and demolish the fences and shelters," he said. "But if there's any animal cruelty involved when it happens, it's not my responsibility." Leung said the government's decision to stick to strict definitions was nonsense as the land in that area was a mixture of government and private land and visitors to the country park had to cross private land to get in. He said he was not making a profit from the park, and criticised the government for failing to support organic parks. "All admission fees go to maintenance of the park," he said. "I have no problem closing it down. I have lost enthusiasm anyway." The park's facilities also include areas for ox-cart rides, horse riding and war games. Park workers said visitors had told them that "they would be sad if the park closes". The controversy over the valley dates back to 1995 when villagers resisted government attempts to remove the lychee garden, which encroached on seven hectares of the country park. During the occupation, Leung submitted eight short-term tenancy applications, all of which were rejected by the Lands Department.

Panchen Lama Holds Court in Hong Kong - In his first appearance outside the Chinese mainland, a crimson-clad Norbu bowed before a relic said to be a 2,500-year-old vestige of the skull of Buddha and read a prepared speech. Buddhist teachings are the “sweet dew that ends human suffering and is a way to promote world peace,” said Norbu, who also inveighed against the corrupting influence of greed and “materialist technology.” Barry Sautman of the Hong Kong University of Science and Technology, whose research has previously focused on Tibet, says that one theme that struck him in Norbu’s speech was its emphasis on the evils of greed. As Norbu makes a play for greater public support, such a theme “may be a way for him to differentiate what he has to say from the whole scene of officialdom in China,” says Sautman. 

 China*:  Apr 30 2012 Share

Lawmakers have warned it is time to take action over the growing problem of mainlanders illegally holding dual citizenship. The dual-nationality debate heated up after a Xinhua report made an unusual reference to the wife of Chongqing's embattled former party chief Bo Xilai as Bo-Gu Kailai, fuelling speculation she may secretly have obtained foreign citizenship. Bo's wife is usually referred to as Gu Kailai in media reports. The addition of a husband's surname to a woman's name has become rare on the mainland but is common in Hong Kong and among Chinese living abroad. Many mainlanders who moved abroad and acquired foreign passports after China began opening up had retained their Chinese citizenship, which is against Chinese law, members of the Standing Committee of the National People's Congress said at a session on Thursday. They said it caused problems when it came to population policies and within the justice system. By law, a Chinese national automatically loses his citizenship once he takes foreign citizenship. In reality many holders of foreign passports still use their identity card when returning to the mainland, and their permanent residence registration is still valid with the police, Xinhua quoted NPC deputy Chen Yiyu as saying. Some who had applied at consulates abroad to give up their Chinese nationality after acquiring a foreign passport remained Chinese citizens on police records because the foreign ministry had failed to pass on the information, said Jin Shuoren, another NPC deputy. A People's Daily article this month said that dual nationality was being used by some corrupt cadres to make it easier to hide illicit payments. Moving bribes abroad and "secretly acquiring foreign citizenship or dual nationality" was a new challenge for the Communist Party's battle against corruption, the article said. Professor Gong Shaopeng, of the China Foreign Affairs University, said statistics on how many mainlanders hold dual nationality were not available because there was no database holding records about border crossings and foreign citizenship. Many people do not file an application to cancel their Chinese citizenship when acquiring foreign nationality, he said, because "on the one hand, dual nationality is legal in the country they now live in, and on the other, Chinese citizenship is more convenient if one day they return". Despite the lawmakers' concerns, there have been calls for China to recognise dual citizenship. Wang Huiyao, director of the Centre for China and Globalisation, said that allowing dual citizenship would not only help attract investment, talent and technology from abroad, but would encourage overseas Chinese to defend China's interests. They could also leave assets on the mainland if allowed to retain Chinese nationality. He said more than 1.9 million mainlanders had gone abroad to work or study since 1978, and fewer than one third had returned.

US energy giant ConocoPhillips China and its partner the China National Offshore Oil Corp have agreed to pay 1.68 billion yuan ($267 million) for the oil leaks off northern Bohai Bay, China's maritime watchdog announced on Friday. ConocoPhillips China will pay 1.09 billion yuan in compensation for the oil spills, while China National Offshore Oil Corp and the Chinese unit of ConocoPhillips will pay 480 million yuan and 113 million yuan respectively for environmental protection efforts in Bohai Bay, according to the State Oceanic Administration. Such efforts include habitat restoration, reducing the discharge of oil pollutants, and monitoring and research on the impact of oil spills on the environment, the administration said on its website. The two leaks in the Penglai 19-3 oilfield, the country's biggest offshore oilfield, released more than 700 barrels of crude oil into the waters and triggered widespread anger and criticism from the Chinese public about ConocoPhillips' inefficiency in dealing with the accidents. It's the latest move after the two oil companies said in January that they had reached agreements with the Ministry of Agriculture to settle the fishery compensation, under which ConocoPhillips will provide 1 billion yuan to improve fishery resources in the waters. The two companies also promised to put a total of 350 million yuan to work on fishery resources recovery and conservation. Both of the companies didn't clarify whether the latest funds announced on Friday are linked to the previous ones, but did confirm the administration's statement, without elaborating. The government ordered the US company to suspend operation of the oilfield in September after claiming that the oil leaks were caused by "negligence." Zhong Hua, chief financial officer of the China National Offshore Oil Corp, said on Tuesday that the company's net production in the first quarter declined by 6.3 percent year-on-year to 79.8 million barrels of oil equivalent, partly due to the suspension of production at the Penglai 19-3 oilfield. Even so, he said the company is confident it will realize its previous annual target of 330 to 340 million barrels of oil equivalent. "The compensation amount is higher than expected. But it's not a matter of capital. More importantly, it's a turning point for the oil producers that they will pay if they leave environmental protection behind in pursuit of profit," said Lin Boqiang, director of the China Center for Energy Economic Research at Xiamen University. "We hope the accidents, on the positive side, will help fill the absence of domestic laws and regulations on environment protection during oil and gas exploration and development activities," he said. For the victims of the oil spill, the compensation has yet to materialize. Ma Rongbao, head of Panshan county's Sandaogou village, has seen his fish harvest halved so far this year. He said he hasn't received any claims and had no idea when the money would be allocated to him or how much he could receive. "I can't be sure whether the lower harvest is caused by the oil pollution or by the bad weather. It would be hard to calculate the real loss," the 51-year-old said. The added compensation is necessary since sea animals had been left out of the previous reimbursement plan, said Tian Jiguang, director of a non-governmental organization in Liaoning dedicated to protecting marine life. Zhao Jingwei, a Beijing-based lawyer representing 107 households of fishermen in Hebei province, said how to allocate the money and who is to supervise the allocation are "crucial". "It's all about execution of the plan," Lin said.

Hong Kong*:  Apr 29 2012 Share

Ken Yeang speaks at the design forum in Admiralty. The architect at the centre of a conflict-of-interest row involving chief executive-elect Leung Chun-ying reiterated last night that he did not know Leung - as he visited the city just days after the close of a Legislative Council inquiry he was "too busy" to testify at. The presence of Malaysian architect Dr Ken Yeang in Hong Kong surprised members of the panel investigating Leung's role in the 2001 West Kowloon arts hub design contest. Yeang admitted he had declined to take questions from the panel despite being asked to do so four times. "I was busy. I told them I did not know Leung before, during and after the competition … The election [for chief executive] is over now," Yeang said. He denied the panel's claim that he had been offered the opportunity to give evidence by teleconferencing. Yeang was in town to convene an architecture seminar at the Asia Society in Admiralty and planned to leave Hong Kong immediately after the event finished last night. The 10-year-old competition entry that sparked the recent controversy was led by Yeang's company and named Leung's surveying firm DTZ as a "property adviser". With Leung one of the judges, the alleged conflict of interest resulted in the entry being disqualified. Leung has denied his firm was part of Yeang's team. In February, Yeang denied having had any contact with DTZ, although he said other firms involved in the entry might have done. He distanced himself further by saying he "did not sign any papers" regarding the contest and wanted to stay out of politics. But documents disclosed for the inquiry showed he did sign a registration form. Yeang said yesterday he signed only to assert copyright. Ip Kwok-him, chairman of the investigating panel, expressed his surprise at Yeang's visit but said the committee would not resume hearings. Nor could it force him to testify. "Since our special powers do not cover people from overseas, it is difficult to say he is unco-operative," Ip said. Committee member Lee Wing-tat said he was "disappointed" in Yeang's explanation: "Our focus was not just whether he knew Leung, but also his knowledge of the correspondence between the firms in his team and Leung's firm." Fellow committee member Tanya Chan said Yeang had failed to understand that his evidence was very important to Hong Kong people.

Police keep watch as a mother picks up her child at the ESF Kindergarten in Stubbs Road where the kidnap attempt took place. The four-year-old daughter of billionaire Florence Tsang Chiu-wing and her family have been placed under police protection after the girl and her grandmother escaped a kidnap attempt on Wednesday. Police have also stepped up surveillance at all border checkpoints in an effort to prevent four would-be abductors from fleeing the city to Macau or the mainland. The bungled kidnap took place when the grandmother, 60, arrived to pick up the girl in a seven-seater Toyota at the ESF International Kindergarten (Hillside) on Stubbs Road. At about 4pm, the four men approached as she got into the vehicle with the girl, said police. "Some of the abductors pushed the two victims into the car and, at the same time, the others dragged out the chauffeur," a police source said. But the men were unable to start the car, and when an expatriate man shouted at them, they fled on foot. An air pistol, a paper cutter and adhesive tape were found at the scene. No one was injured. The culprits spoke Putonghua when they ordered the victims not to shout for help, according to the source. "We believe it is not a random attack and the girl is their target," the source said. "The girl and her family have been placed under police protection after the incident and police patrols around their home have also been stepped up." Tsang became Hong Kong's newest billionaire after being awarded a divorce settlement of HK$1.2 billion in December. Her ex-husband, Samathur Li Kin-kan, is a son of billionaire property tycoon Samuel Lee Tak-yee. The settlement was to "maintain the lifestyle to which Tsang had become accustomed". It included a HK$250 million Hong Kong property and a London property worth HK$30.53 million. It also allowed HK$2.5 million for buying two cars in Hong Kong and another HK$1 million for a car in London. Police chief Andy Tsang Wai-hung stressed police were treating the case seriously and said initial investigations indicated the victims did not know the would-be abductors. He said police were currently treating the case as an attempted robbery, but "we do not rule out any other possibilities". Tsang appealed to witnesses and others who might have information about the case to come forward. "We wish to bring these culprits to justice as soon as possible. We need your help in order to do this," he said. Anyone with information is urged to contact police at 2860 7886. A spokeswoman for the kindergarten yesterday said an e-mail was sent to parents about the incident. The e-mail read: "A group of men approached and restrained one of our children's grandma in the family's vehicle." The spokeswoman added that security at the school was sufficiently strict. "Everyone has to ring the bell to get in. There is also a closed-circuit television at the entrance. No stranger could go into the campus." Yesterday, parents picking up and sending their children to school said they were not worried. "I am not a tycoon, so why should I be worried?" one grandparent said. From February 2 to April 16 of this year, police followed up on 22 cases of suspected child abduction in the city. Seven of the cases were misreported and another seven were misunderstandings. Two others were discovered not to be abductions or criminal in nature. The six remaining cases are being followed up by police, but their investigations so far have found no proof of child abduction. From 2009 to 2011, police received a total of three reports of child abduction. All three children were found and three people were arrested.

Chief executive-elect Leung Chun-ying is planning a shake-up of the government's housing policy, with the financial secretary in his new administration taking responsibility for both public and private housing, according to a source familiar with the restructuring plan. The new policy was aimed at achieving a coherent approach to housing, by making one minister responsible for policies that were currently divided between two bureaus, the source said. In a similar move, the deputy financial secretary - a newly created post - will be responsible for strengthening pillar industries such as aviation and shipping, according to the source. "The chief executive-elect wants to send a political signal through the proposed change that the housing issue will be top priority for his administration," a source familiar with Leung's restructuring plan said. Under the current structure, introduced by Chief Executive Donald Tsang Yam-kuen in 2007, the Transport and Housing Bureau, which reports to the chief secretary, oversees policies related to public housing and the Housing Society, which manages subsidised housing. Private-housing policies fall under the portfolio of the Development Bureau. Under Leung's plan, both public and private housing policies, as well as the Urban Renewal Authority and the Housing Society, will be placed under a policy bureau answerable to the financial secretary. This is one of the options being deliberated by Leung. A final decision will be made after taking into account the work load of a single policy bureau. The chief secretary will be responsible for population policy and constitutional reform, which will be a thorny issue in the run-up to 2017, the earliest year for the election of the chief executive by universal suffrage. The deputy chief secretary, another post to be created by Leung's administration, will oversee policy portfolios such as education, welfare, culture and the West Kowloon Cultural District project. Secretary for Development Carrie Lam Cheng Yuet-ngor, considered the current government's most popular minister, is widely seen as the favourite to be the new chief secretary. Lam, who served as deputy secretary for the treasury 10 years ago, is also an ideal candidate for the next finance chief, given her familiarity with housing policies. In his policy platform, Leung proposed that the Commerce and Economic Development Bureau be split into an industrial, commercial and tourism bureau and an information and technology bureau. Meanwhile, a cultural bureau would be formed. The newly installed deputy financial secretary will be assigned to boosting knowledge-based industries and capitalising on the opportunities arising from the mainland's 12th five-year plan. The deputy financial secretary will also be responsible for implementing the 36 measures to boost Hong Kong's economy that were announced by Vice-Premier Li Keqiang during his visit in August, and for overseeing the newly created information and technology bureau. The Commerce and Economic Development Bureau will also be responsible for the aviation and shipping industries, now under the Transport and Housing Bureau. Consolidating Hong Kong's position as a maritime hub is one of the key planks in Leung's election platform. Fanny Law Fan Chiu-fun, head of the chief executive-elect's office, has been lobbying major political parties over the past few days to support the restructuring. She met the Liberal Party and the Democratic Alliance for the Betterment and Progress of Hong Kong on Wednesday, and yesterday met heads of various government bureaus and departments. Today, the Legislative Council's House Committee is scheduled to discuss the transition arrangements between the incumbent and the next administration. A government official, who declined to be named, expected Leung to submit a draft list of principal officials to the central government by the middle of next month.

Beijing's Tibetan protégé comes of age in HK - Young Panchen Lama delivers first public speech outside mainland, in move described as 'political' - The Panchen Lama chosen by Beijing but disputed by Tibetans in exile marked his political coming of age in Hong Kong yesterday, delivering his first public speech outside the mainland to an international audience at the World Buddhist Forum. The 22-year-old Panchen Lama - the second-highest Tibetan spiritual authority - made a well-prepared but cautious speech in front of more than 4,000 monks, nuns and scholars from 50 countries. Seldom seen in public, he has previously attended only two public forums on the mainland. Observers said the Hong Kong event was intended by Beijing to boost the spiritual leader's international standing and recognition. Anointed by Beijing, the young Panchen Lama - whose real name is Gyaincain Norbu - is not recognised by followers of the exiled Dalai Lama, the top Tibetan spiritual leader. "The Chinese government wants to promote the Panchen Lama as the most significant leader of Tibetan Buddhism," said Barry Sautman, a social science professor at the Hong Kong University of Science and Technology, who studies Tibetan issues. "It does signify first that the Chinese government indeed wants people generally, and Tibetans especially, to accept the Panchen Lama." The bespectacled 22-year-old made his political debut with well-groomed ease, although at times he showed a flicker of nervousness. After bowing to a 2,500-year-old holy relic said to be part of the skull of the Buddha, he read a prepared speech. Buddhist teaching is "sweet dew that ends human suffering and is a way to promote world peace," he read, making only occasional eye contact with his audience. "[Greed] has unbalanced ecosystems, contaminated the environment, caused natural disasters, spread epidemics [and] induced wars … endangering all sentient beings." Jiang Zhaoyong , a Beijing-based ethnic issues scholar, agreed with Sautman, saying the Hong Kong trip was intended to win international recognition for the Panchen Lama and that he would visit more overseas places in future. Gyaincain Norbu arrived in Hong Kong on Wednesday - the 23rd birthday of his rival, Gedhun Choekyi Nyima, who was picked by the Dalai Lama as the 11th Panchen Lama in 1995 but rejected by Beijing and taken into custody. He has since vanished from public sight.

Hongkongers should “tune their minds” away from expecting one-off relief measures every year, an adviser to chief executive-elect Leung Chun-ying’s recent election campaign said on Friday. Laurence Ho Wing-him, a former deputy secretary for food and health who helped draft the social welfare policies in Leung’s manifesto, said the new government should “spend money in a more systematic way”, improving public services by increasing the budgets for recurring spending items. “It’s not that all giveaways should be scrapped, but at least part of the surplus should be used to improve services,” he said in a radio interview. “The past government did not want to commit because they were not sure whether their income would be the same every year. But looking at the past nine years, it’s clear [that the surplus is stable].” Financial Secretary John Tsang Chun-wah said in February he expected a surplus of HK$66.7 billion for the current financial year. Laurence Ho said government spending had increased more slowly than economic growth. The economic situation has changed since 2003, with more cash flowing into the city due to more co-operation with the mainland and Southeast Asian countries, he said. The income from profits tax, salary tax and stamp duty adds up to more than HK$200 billion, which is enough to cover most recurring spending. “So many things could be done with the HK$66 billion surplus. The spending on elderly services every year is only HK$4 billion and for medical services HK$30 billion,” he said. Meanwhile, Ho said a proposed increase in the old-age allowance, or “fruit money”, could not be implemented until after the next Lunar New Year, unless the current government takes action. “It’s not easy for civil servants to help because of the complicated system and paperwork. But the new and current government should discuss some urgent issues, at least, as soon as possible,” he added. Leung has proposed increasing the subsidy to HK$2,200 from the current HK$1,090. Ho urges lawmakers not to argue about the amount of the increase when the proposal is presented to the Legislative Council, and to accept a basic check of recipients’ assets. This is “so it could be implemented quickly,” he said.

 China*:  Apr 29 2012 Share

China gives the yuan more muscle - Beijing sets trading marker at record high in friendly gesture to US ahead of economic summit - Beijing set the reference rate for the yuan at a record high yesterday, one week ahead of an economic summit between the nation's top policymakers and their United States counterparts. The People's Bank of China put the central parity rate at 6.2829 per US dollar yesterday, 0.15 per cent higher than Wednesday's 6.2923 per dollar, and the third straight increase. On the China Foreign Exchange Trade System, the yuan rose as much as 0.09 per cent in intraday trading before slipping 0.03 per cent from a day earlier to end at 6.3060. The central bank sets the reference rate each day and the value of the yuan can rise or fall as much as 1 per cent during the intraday day trading. The daily fixing, known as central parity rate, normally reflects Beijing's attitude towards the value of the currency after China lifted a peg to the US dollar in 2005. "China is sending a friendly message to the US and other major economies that we don't want to see trade frictions," said Yinshu Capital chairman Huang Feng. "The reference rate is more a result of politics than economics." Vice-Premier Wang Qishan is due to meet US Treasury Secretary Timothy Geithner in the fourth round of a strategic and economic dialogue in Beijing next week. Beijing, under pressure from US politicians to revalue the currency, has been gradually making the yuan stronger, a move that dented the mainland's export growth as Chinese-made products consequently became more expensive. The central bank doubled the size of the daily trading band to 1 per cent from the previous 0.5 per cent, hoping to make the currency value more flexible to deflect criticism from Western countries. The record central parity rate did not translate into an all-time high closing of the yuan yesterday because traders were mixed about the short-term direction of the currency's value. Li Yang, a former adviser to the People's Bank of China, said earlier this year that the yuan's value would stabilise by the end of the year amid the country's shrinking trade surplus. The State Administration of Foreign Exchange reported yesterday that capital inflows fell by 56 per cent year on year to US$49.9 billion in the first quarter, leading to a smaller increase in foreign reserves. This in turn could ease the pressure on the yuan to strengthen further. A consensus prediction among economists is that the yuan would strengthen to 6.2 against the dollar in the coming months in tandem with wild short-term fluctuations. "The more drastic the step taken by the central bank to strengthen the daily fixing, the more likely a correction in trading would take place," said a currency trader at the Bank of China. "It doesn't seem that China can afford a higher yuan from now on," he added. Since 2004, the yuan has risen nearly 30 per cent against the US dollar. "The business environment has already become tough for export-oriented companies," said Chi Bangfa, an owner of a machinery business.

US Treasury Secretary Timothy Geithner speaks at the Commonwealth Club on Thursday in San Francisco, California. Before heading to Beijing for a fourth round of the US-China Strategic and Economic Dialogue, Geithner discussed the United States' economic relationship with the mainland. The United States is willing to open up its markets to China and give it more access to US technologies if Beijing makes progress on key issues, US Treasury Secretary Timothy Geithner said on Thursday. “We are willing to continue to make progress on these issues, but our ability to do so will depend in part on how much progress we see from China on issues that are important to us,” Geithner said ahead of government meetings in Beijing next week. Geithner said China’s financial system is still dominated by large state-owned banks that favour lending to large state-owned companies, and he urged the country to raise the ceiling on deposit rates so that households could earn a higher return on their savings. Higher deposit rates would help reduce the need to save, increase income and the ability to consume goods and services, including those from the United States, he told the Commonwealth Club of California. Geithner pledged the United States would continue to push aggressively for fair treatment of US companies doing business with China, and he repeated that the yuan needed to appreciate more rapidly. A stronger, more market-determined currency will provide China the “independence and flexibility to respond to future changes in growth and inflation,” he said. Geithner said China had made significant progress on a number of US objectives, including opening up new sectors of its economy to foreign firms and committing to improve the protection of US intellectual property rights. China also eased some restrictions on its currency by doubling the size of the yuan’s trading band against the dollar. “The economic relationship between the United States and China provides significant benefits to both our nations. Even though we compete in many areas, our economic strengths are largely complementary,” he said. Geithner and Secretary of State Hillary Clinton will meet with their counterparts in Beijing next week as part of a series of continuing talks designed to strengthen ties between the world’s two largest economies. US lawmakers acknowledged that the majority of states and congressional districts were benefiting from a jump in US exports to China, but said more had to be done to open Chinese markets to American goods and services. Foreign banks and institutions “currently face a nearly impossible uphill struggle in the Chinese marketplace,” Democratic Senator Mark Warner and Republican Senator Mike Johanns said in a letter to Geithner this week.

Preserved fruit is the latest addition to the mainland's expanding list of unsafe foods, after an investigation by state television found that some were processed in filthy factories and contained excessive additives. Preserved peaches were found packed in bags that had been used to hold animal feed, and hawthorn berries were soaked in a pool of water that contained garbage. The China Central Television report detailed illegal processes at 16 preserved-fruit companies, mostly from Hangzhou in Zhejiang province and some from Linyi, Shandong province. Tests by a Beijing laboratory on samples bought from several of the Hangzhou companies showed they all contained excessive pigments, bleaching agents and preservatives, the report said. At one manufacturer of preserved fruit in Hangzhou, the date on several hundred boxes of preserved fruit, which were ready for sale, was found to be marked as two weeks later than when they were packaged. At another company, the date was more than a month late. Some of the illegally processed preserved fruit was destined for big supermarkets, including Wal-Mart and Tesco. A sales clerk at an unidentified supermarket in Hangzhou's Tangqi town, where many fruit-processing factories are located, was quoted by CCTV as saying: "Locals don't eat the preserved fruit. Maybe they know [how they're produced], so they avoid them." The Hangzhou Municipal Quality and Technical Supervision Bureau immediately launched an investigation into the factories. In Linyi, two factories from Pingyi county that were mentioned in the report were shut down by local authorities, and one of the owners was detained on Tuesday night when the report aired, the local government said on its microblog account. Shanghai Laiyifen, a preserved-foods retailer that is supplied from three of the processing factories mentioned in the CCTV report, said that samples had all passed third-party tests before the scandal broke. It said it would assess its suppliers but did not say whether it would stop dealing with them.

Scandal will not affect Sino-US ties, Locke says - Bo Xilai holds talks with Gary Locke, US ambassador to China, in 2011. America's ambassador to China, Gary Locke, says the explosive Bo Xilai affair will not affect Sino-US relations because Washington will not "get drawn" into one of the biggest political scandals to shake up the Communist Party leadership. Appearing on CBS' Dan Rather Reports programme on Wednesday night, Locke spoke for the first time about the scandal amid speculation over the role Washington and Locke played in the incident that sparked it. The Bo saga has been linked to the United States from the beginning, with the opening act of the high drama seeing Bo's right-hand man, Wang Lijun, flee to the US consulate in Chengdu on February 6 and ask for asylum. When asked whether the US would get drawn into the scandal, involving political corruption and possibly murder, Locke told Rather via satellite from Beijing that while the scandal was of "great interest and [the subject of] intense discussion among the Chinese people, the United States will not be affected". Bo has been sacked as party secretary of Chongqing and stripped of his membership of the Communist Party Politburo for "serious discipline violations". His wife, Gu Kailai, has been arrested for the alleged murder of a British businessman - a scandal that came to light when Wang fled to the US consulate. "China is undergoing a leadership transition in the coming autumn," Locke said. "There will be a new set of leaders. Vice-President Xi Jinping is expected to be the president of China. "But all that will be decided in autumn. China is really ruled and governed by a group of nine. And there is a lot of speculation, a lot of debate on who those nine will be. And of course one of the people who was expected to be vying to be one of the nine is now stripped of his positions and power within the government." Locke said online social media was forcing the government to become more open, echoing comments by his predecessor, Jon Huntsman. "What's really interesting is the world of social media," Locke said. "The world of social media is now forcing the government to be a lot more open, to expose the shortcomings, whether there is a train crash, … a food scandal to even corruption within the government." Appearing on a CNN International programme on Tuesday night, Huntsman said Beijing's handling of Bo's scandal suggested growing transparency within the party as a result of the popularity of social media. Locke did not mention his personal role in the Bo saga, despite reports he supported granting asylum to Wang, who eventually left the consulate and was escorted to Beijing by state security officials.

Journey to the moon - China plans to launch its third moon orbiter Chang'e-3 next year, which will conduct a soft landing on the moon, as part of the country's robotic lunar exploration program. Only 12 Americans have so far walked on the moon. The next person to do so could be from China. According to a white paper, China's Space Activities in 2011, released in December, preliminary research on a manned moon landing will be carried out in the next five years, along with research on a heavy-thrust carrier rocket, vital for launching manned spacecraft to the moon. Scientists expect a manned moon landing could be achieved by China in 20 years, though there is no fixed timetable yet. Experts, however, say that before taking the giant step, China needs to complete its robotic lunar exploration program, as it will lay the platform for successful moon landings. The chief scientist for the lunar exploration program, Ou-yang Ziyuan, has already indicated that China has the ability to launch men to moon, but it's "a single-trip ticket", meaning the nation does not have the capability to ensure that astronauts can return to Earth. "The three steps set in the unmanned lunar exploration program are something China must undertake before commencing the plan to send men to the moon," he says. China adopted the robotic lunar exploration program in 2004, which includes three steps - circling the moon, landing on the moon and returning with a sample. China has completed the first step by launching the Chang'e-1 probe in 2007 to orbit around the moon, thereby becoming the fifth country in the world to independently launch lunar orbiters. It is now in the second phase of achieving a soft landing on the moon. Chang'e-2, the backup satellite for Chang'e-1, was modified and launched in 2010 to test some key technologies for soft landing. "Next year, the country's third lunar probe, Chang'e-3, is expected to be launched as planned and will conduct a soft landing on the moon," says Ye Peijian, chief designer of Chang'e-1 and chief commander of the satellite system of the Chang'e-2 and Chang'e-3 missions. The orbiter will carry a lunar rover and other instruments for territory survey, assessment of living conditions and space observations. "Chang'e-3 will be the first spacecraft with the first-ever China-designed 'legs' The lunar rover is also the first of its kind to be tested in the harsh environment on the moon," he says. Preparations have also been advanced for the third phase, which aims to bring soil samples back to Earth before 2020. Both the United States and the former Soviet Union have already sent spacecraft to the moon, but in two different ways. Hu Hao, chief designer of the program's third step, says that scientists have finally decided on how to achieve the goal of returning soil samples from the moon. According to Hu, China will carry out a "Lunar Orbit Rendezvous" - the mode used by the Apollo Programs - to collect as many samples as possible. Under the plan, a rocket will be launched from Earth that will put four modules into the lunar orbit. Two modules will land on the moon, while one will scoop up soil. The soil sample will be placed into the ascending module that will blast off from the lunar surface and dock with the orbiting module. The sample will then be transferred from this module to another one that will be jettisoned for Earth re-entry. Though the US has done this kind of exercise more than four decades ago, the Chinese aerospace scientists have no one to count on, but rely on themselves to solve the major technical problems, Hu says. China plans to scoop up as much as 2 kilograms of soil samples, but how to do it could also be a tricky problem. The former Soviet Union's three missions collected just over 300 grams of lunar soil. The US had better success and returned 381.7 kg of rocks and other material from the moon, thanks to astronauts' participation. "China's mission is also a robotic one. The probe could land on an unknown spot that could be rocky, and drills could fail to deeply penetrate the lunar surface, just like a mission by the former Soviet Union," he says. The difficulties also include how to launch the ascending module from the lunar surface and how to conduct rendezvous and docking operations in the lunar orbit. "China conducted its first spacecraft rendezvous and docking operation in the low-Earth orbit successfully last year. But how to do it in a lunar orbit more than 300,000 km away from Earth is a new challenge," he says. The space docking last year relied on the global positioning system, which, however, will not be of much use during a lunar orbit rendezvous. The docking ports on the ascending module and the orbiting module need to be redesigned and tested, as the modules are much smaller in size. Finally, scientists also have to solve the problem to have the probe re-enter the Earth atmosphere safely. China also lacks experience in how to make the sample-carrying capsule re-enter the Earth atmosphere safely, he says. While previous re-entries of unmanned and manned spacecraft were made at 7.9 km per second, the return capsule with the lunar soil sample will be hurtling to Earth at, or close to, speeds of 11.2 km per second. He says that the third phase will launch two orbiters to achieve the goals before 2020. Earlier reports said that the first of these is likely to be launched around 2017. "We are under pressure as only a short time is left," he says. Scientists are also stressed due to the public's unrealistic high expectations for success, he says. In recent years, consecutive successes in the space sector have buoyed expectations for more missions. "People now tend to underestimate risks in space activities. They think it is easy and have little tolerance for failure. But even space powers like the US and Russia have had several failures," he says, adding that more tolerance is essential for the healthy development of China's aerospace industry.

Hong Kong*:  Apr 28 2012 Share

The Hong Kong stock exchange is investigating three mainland private firms involved in "possible fraudulent activities and false accounting," Secretary for Financial Services and the Treasury Caejer Chan Ka-keung said yesterday. Chan said seven firms have been suspended from trading by the bourse as of April 12. Four of the companies were listed within the past three years. He noted that while Hong Kong's initial listing criteria are comparable to international standards, there is room for continued review of regulations concerning sponsors that conduct due diligence. "We've seen some recent cases that strengthened our view that regulations of sponsors need to be tightened," he said. Securities and Futures Commission chief executive Ashley Alder said the regulator will start public consultation in the next two or three weeks. The watchdog is considering making sponsors liable to both criminal and civil charges for misleading listing prospectus, he told Reuters. The balance sheets of several mainland private enterprises have come under close scrutiny in recent years after claims emerged that they were fabricating some figures. Among the locally listed stocks suspended for some time was Realgold Mining (0246), which was said to hold two different account books for different regulatory bodies and made certain unannounced connected transactions. Chaoda Modern Agriculture (0682) has been suspended since September last year on insider trading allegations. A local media report accused the firm of inflating its production capacity and sales figures. China Forestry (0930) shares were likewise halted for more than a year as the company claimed it was defrauded by its former chief executive. Boshiwa International Holding (1698) was suspended last March after its auditor quit after questioning the authenticity of a payment.

Immigration officers are bracing for a flood of 3.5 million visitors for the long weekend holiday. The holiday lasts from Buddha's Birthday on Saturday until Labor Day on Tuesday. Nine percent more visitors are expected than in the same period last year when 3.44 million passengers passed through land, sea and air control points. Lok Ma Chau Spur Line sectional commander Sunny Ho Yin-sun said that of all the control points, Lo Wu will be the busiest, with an expected 188,000 travelers exiting there on Saturday. Travelers are advised to avoid crossing at Lo Wu during the busy hours from 9am to noon, or from 5pm to 7pm during the four days. A joint command center at Lo Wu will be set up by the Immigration Department, police, Customs and Excise Department and the MTR Corp to ensure smooth passenger flow. "More than 90 extra staff will be deployed in the first front," Ho said. "Additional counters will be set up to handle the expected surge in visitor numbers." He warned that despite the heavy passenger flow there will be no let-up in efforts to stop pregnant mainlanders from trying to enter Hong Kong to give birth. However, it is believed the holiday may be less lucrative for local retailers this time because of stricter controls adopted by mainland customs. The mainland has already banned the import of swallow's nests. A spokesman for Sing Hing Hong, a dried seafood shop in Sai Wan, said mainland customers account for up to 30 percent of sales. But it expects profits to be affected by rumors that fake swallow's nest is selling in Hong Kong. The shop spokesman said it has lowered prices to HK$2,000 to HK$3,000 per gram.

Rift between Ronny Tong and party widens - Lawmaker unhappy with amendments made to the copyright ordinance by the Civic Party, saying he feels he has been left to bear criticism alone - The rift between Civic Party lawmaker Ronny Tong Ka-wah and the party he co-founded is widening with his displeasure over its handling of amendments to the copyright ordinance. It is not the first time the barrister-lawmaker - whose relations with the party have deteriorated since its decision in 2010 to join a campaign to trigger five Legco by-elections in the hope of forcing a de facto referendum on the pace and scope of democratisation - has voiced his dissatisfaction with the party. Tong denied yesterday that he would quit - but would not completely rule it out, either. "There is a [Legislative Council] election coming up, and every politician must consider if he is going to run, and what his role will be in future," Tong said. He is one of the four members of the Legco bills committee on amendments to the copyright ordinance, and had proposed an amendment that would make parodies criminal only if they caused "non-trivial" economic loss to the original authors. Tong's amendment is aimed at reducing the chances of comedians and satirists facing prosecution, as it is usually difficult to prove if a parody causes economic loss. However, his proposal angered internet users, who accused Tong of supporting the government's bill, which they nicknamed the "Article 23 of the cyber world", in a reference to the national security legislation. Tong stressed that his proposed revision had been discussed among pan-democrats and was only aimed at "minimising the evil" if the bill was going to be passed anyway when it was tabled again on May 9. Tong said yesterday he felt he had been left to bear criticism alone "in a Cultural Revolution fashion". "I think the pan-democrats might have underestimated the public response, and if we have done anything wrong we should bear collective responsibility. It would be unfair for me to face it on my own." Tong also attended a meeting with internet user representatives with his Civic Party colleague Tanya Chan, who proposed a revision to exempt all parodies from the bill. "It would only be a political show," Tong said. "I think it is impractical because the government said it will be difficult, and the proposal has not been discussed among us." Civic Party leader Alan Leong Kah-kit said yesterday the party was not standing against Tong, and stressed that Chan's proposal was in line with Tong's. "He is representing us on the bills committee, and we should have said this more clearly."

Extra beds will be provided at private hospitals this year for pregnant mainlanders married to Hong Kong men as part of a long-awaited government policy to differentiate them from mainland couples. The health minister said yesterday that the Department of Health would issue additional delivery quotas to private hospitals serving this group of women as necessary. Dr York Chow Yat-ngok was speaking in the wake of an announcement by chief executive-elect Leung Chun-ying that mainland women without a Hong Kong husband would not be allowed to give birth at the city's private hospitals from next year, although this did not apply to cross-border couples. A decision has yet to be made on whether the same will apply to public hospitals. Hong Kong-mainland couples will be required to provide four documents, including a marriage certificate, when booking a bed. Four private hospitals, Union, Baptist, Precious Blood and St Teresa's, will open more spaces to accept women in this group who are expecting this year but have not yet secured a bed. About 100 women with deliveries due before the end of next month will be able to make a booking with identity documents and provide marriage documents later. "There has been consensus from the public that we should accept them," Chow said. "I dare not say the new measures are without loopholes, but I believe they are workable in general. We have to put it into practice anyway, as some people out there are waiting to give birth." Leung, who last week announced the "zero quota" for mainland couples in private hospitals next year, welcomed the new measures. The Mainland-Hong Kong Families Rights Association also welcomed the measures but expressed concerns about the cost. Association spokesman Tsang Koon-wing said he hoped private hospitals would refer to the public ward charge of HK$39,000 when setting a price for these couples. Deliveries at private hospitals in the city can cost up to HK$100,000 or more. But the Private Hospital Association said it could not guarantee the price of an obstetric bed could be brought down to the public ward level as it was a marketing decision. Baptist Hospital in Kowloon Tong and Union Hospital in Tai Wai both said they would charge this group of deliveries a market price. The four documents that the government requires Hong Kong-mainland couples to present for a booking are a marriage certificate, husband's identity card, a declaration form by the husband and an authorisation form signed by the couple for the relevant government departments to check the documents. Private hospitals have asked the government to clarify whether they will be responsible for verifying the documents provided by cross-border couples. Chow said the legal burden to prove their identities and relationship should rest with the pregnant mainland women and their Hong Kong spouses. "In order to avoid impostors, the Department of Health will conduct random checks. Any suspected cases will be referred to the law enforcement agencies," he said. "For marriage certificates issued in the mainland, they will be required to produce a document verified by a mainland notary public."

Hong Kong on Thursday suspended imports of poultry products, including eggs and frozen meat, from China’s northeastern Liaoning province for 21 days after the authorities there confirmed an outbreak of H5N1 bird flu. Hong Kong imported about 28,000 tonnes of frozen poultry and 103 million poultry eggs from Liaoning last year. “The outbreak in Dalian city was among chickens,” said a government spokesman, who had no further details. The H5N1 virus mainly affects birds, but occasionally jumps to people. Experts fear that it may mutate into a form that could spread easily among humans, who have no natural immunity against it. There have been 24 human cases of H5N1 confirmed globally so far this year, compared with 62 in all of last year. Of the 24 patients in Bangladesh, Cambodia, China, Egypt, Indonesia and Vietnam, 15 died. In most of these cases, the victims came into direct contact with infected birds, mostly chickens. The virus is especially abundant in the faeces and respiratory secretions of affected birds.

Gyancain Norbu speaks at opening ceremony of the Third World Buddhist Forum in Hung Hom on Thursday. Buddhist solutions can ease world problems, Panchen Lama says - The Panchen Lama cited Buddhism and “inner science” as solutions to the problems created by the “expanding greed” of humanity, in a speech at the World Buddhist Forum on Thursday morning. “The ecology going out of balance, the environment deteriorating, frequent hazards, the spread of diseases and endless war are seriously harming the natural cycle of the current and future lives of all living things,” he told the forum in Hung Hom. Gyancain Norbu, recognised by Beijing as the 11th Panchen Lama of Tibetan Buddhism, spoke to more than 4,000 monks and followers at the forum. “The world today only focuses on external technology but ignores inner science,” the Panchen Lama said. “We should combine inner science and the development of external technology to achieve world peace, the harmony of the society … and development of civilisation.” On stage with him was a holy relic, believed by some followers to be a 2,500-year-old skull bone of the Buddha. The public can view the relic until Monday. The Panchen Lama is on his first visit outside the mainland. He is the highest-ranking lama after the exiled Dalai Lama, who disagrees with Beijing on the identity of the Panchen Lama.

Lawmakers have approved controversial legislation requiring Hong Kong-listed companies and their senior executives to disclose price-sensitive information in a timely manner or face a fine of up to HK$8 million. The change comes after almost 10 years of debate about tougher penalties for failing to disclose information that is likely to affect share prices, such as takeover and merger news, a substantial change in financial results or sudden loss of assets. The new regulation is aimed at enhancing market transparency and matching international jurisdictions such as Britain and the European Union, which have also added civil liabilities for those breaching disclosure rules. It comes as the securities watchdog is beefing up investor protection with the threat of jail terms and hefty fines for listing sponsors who fail to carry out proper due diligence on dodgy companies. The Legislative Council yesterday approved the new provisions in the Securities and Futures Ordinance, which allow the Securities and Futures Commission to refer non-disclosure cases to a Market Misconduct Tribunal for a hearing. The tribunal will rule on whether any listed companies and their senior officials failed to disclose price-sensitive information in a "reasonably practicable" time to the public. The tribunal, to be chaired by a judge and two lay members, can impose a range of penalties including a maximum fine of HK$8 million. Directors may face a ban for a maximum of five years, or be forced to attend corporate governance classes. The change, which comes into effect in January, will add teeth to current regulations which allow only the Hong Kong stock exchange to reprimand those who break listing rules on non-disclosure. But the legislation is a watered-down version of the government's initial reform attempt in 2003 which proposed making non-disclosure a criminal offence carrying a jail term of 10 years and a fine of HK$10 million. But after two rounds of consultations in 2003 and 2004, the plan was shelved after stiff opposition from the business sector, which considered the criminal sanctions too tough. The government proposed the change again in 2010 but this time without criminal sanctions. Secretary for Financial Services and the Treasury Chan Ka-keung said it was "a good first step forward for a reform plan to establish a continuous disclosure culture in the local market and to assure investors can get more corporate information in a timely manner". Mike Wong Ming-wai, chief executive of The Chamber of Hong Kong Listed Companies, said members backed the legislation because civil liability was better than a criminal sanction. Brian Fung Wei-lung, chairman of the Hong Kong Securities Association, said: "The new law will hopefully help to enhance corporate governance and restore the confidence of investors in the Hong Kong market."

To mark Buddha's birthday on Saturday a 2,500-year-old relic, believed to be part of his skull, arrived in the city yesterday for a Grand Blessing Ceremony at the Hong Kong Coliseum. It will be on show until Monday. Organisers expect around 300,000 people to visit the relic, which is making its first trip out of the mainland since it was discovered in Nanjing in 2008. Bone relic from Buddha arrives from mainland - Skull fragment followers believe came from religion's founder goes on six-day display at the Coliseum - By coincidence or a miracle, a patch of the leaden skies covering Hong Kong cleared at the airport yesterday as a plane carrying a 2,500-year-old Buddhist relic landed, raising the spirits of followers who gathered to greet it. The bone fragment, believed to be part of the Buddha's skull, making its first trip out of the mainland since it was discovered in Nanjing in 2008, will be on show at the Coliseum until Monday. The organiser, the Hong Kong Buddhist Association, expects 30,000 people to visit the relic during the six-day exhibition, to mark the Buddha's birthday on Saturday. It is also one of the events being held to mark the anniversary of the handover. More than 20 Kung Fu monks protected the bone - enshrined in a pagoda of gold, silver and other metal weighing hundreds of kilograms - while hundreds of other monks and followers travelled with the relic on the Dragonair flight. The association said it could not find any insurance for the relic as "it was invaluable". The relic, believed by some followers to be a parietal bone of the Buddha, was discovered in 2008 in a crypt of the ruins of Changgan Temple, built in the Song dynasty (960-1279), and two years ago was placed in the Nanjing Qixia Temple. The relic was driven to the Coliseum after an hour of ceremonies and flower offerings on the airport apron. Thousands of people waited outside the Coliseum as the relic arrived in a truck painted gold. Some said they saw "Buddhist lights" as the vehicle drove near. Long-term believer Wong Oi-wah, 66, said she was very happy that the relic was in Hong Kong. "I saw rosy lights as it arrived at the Coliseum. That was very magical." She also visited the Buddha's tooth in 1999 and finger in 2004 when they were in the city. Another ceremony at the Coliseum was held in the evening, attended by Gyancain Norbu, the Beijingrecognised 11th Panchen Lama of Tibetan Buddhism, Secretary for Home Affairs Tsang Tak-sing and venerable monks. The Panchen Lama, also making his first trip out of the mainland, will give a speech today at the Third World Buddhist Forum. On his first trip out of the mainland, he is the highest-ranking lama after the exiled Dalai Lama, who disagrees with Beijing on his identity.

Wo Hing General Store - Charles Phan, chef and owner of Wo Hing General Store, which serves southern Chinese fare in San Francisco's Mission District. Charles Phan has owned the Mission District building that once housed the Slanted Door, his well-known modern Vietnamese restaurant, since shortly after moving the eatery to downtown San Francisco a decade ago. Initially, he thought he could remodel the place and bring the Slanted Door back, but the economics didn't work. For a while, he used it to store old stoves, and for six months Levi's operated a workshop there. In October, Mr. Phan opened Wo Hing General Store in his Mission District building, offering the Vietnamese chef's take on southern Chinese food. "Not everyone is going to like it, but this is the type of Chinese food that I like to eat," he says, comparing the menu to his personal music playlist. One traditional dish that is a favorite of his but was sometimes returned by diners, for instance, was a boiled-chicken item. While it isn't currently on the menu, other southern Chinese dishes he likes, such as $13 steamed ground pork with salted fish, aren't going anywhere. Wo Hing also serves more upscale items, like $18 beef bavette with asparagus. But Mr. Phan, who grew up in the Mission District, says a "more affordable, more edgy" restaurant is most appropriate for the location. The restaurant has already become a staple for Linda Woo, co-founder of Rumicode.com, a nearby start-up. "It's perfect for a celebration," she says, adding that she particularly likes the fish. Wo Hing General Store is located at 584 Valencia St. in San Francisco and serves lunch between 11:30 a.m. and 5:30 p.m.

Hong Kong pop star Anthony Wong kept his revelation for the end of the concert. Then, before thousands of fans, lit by a single pool of spotlight, Mr. Wong put an end to years of public speculation. “People don’t need to guess whether or not I’m a tongzhi [Chinese slang for homosexual] anymore,” he said on the last night of his concert series at the Hong Kong Coliseum earlier this week. “I’m saying, I’m gay. I’m a homosexual. G-A-Y.” Whoops and cheers from the crowd greeted the announcement by the singer and producer, who followed his announcement with a roguish jab at the city’s paparazzi. “I’m sorry, members of the media. For the next 20 years, I’ll keep singing songs, but you don’t need to ask me this question any longer,” he declared. Mr. Wong’s announcement might not have shocked Hong Kong’s entertainment industry, which has long speculated about the singer’s sexual orientation, but the boldness of his announcement was still unusual. Mr. Wong, who first gained popularity in the 80s as a music icon as part of the duo Tat Ming Pair, is only the second high-profile Hong Kong performer to publicly come out, says Waiwai Yeo of the Women Coalition of Hong Kong, a nonprofit gay-rights organization. The first, says Ms. Yeo, was Cantopop giant Leslie Cheung, the beloved singer who featured in hit films such as “Farewell My Concubine” but struggled with depression for years. In 2003, Mr. Cheung jumped to his death from the 24th floor of Hong Kong’s Mandarin Oriental Hotel. “It’s been nine years we’ve seen a singer announce publicly that he’s openly gay or openly bisexual,” says Ms. Yeo. “So Mr. Wong’s announcement is a good sign.” The pop star’s latest move is especially encouraging, says Ms. Yeo, given how shuttered the city’s attitudes have traditionally been toward gays and lesbians. In 2005, for example, a government survey of over 2,000 telephone respondents found that 39% believed homosexuality “contradicts the morals of the community.” When the WCHK was founded nearly a decade ago, at the time, she says, “We didn’t even have the courage to support a Pride Parade.” China Real Time has more.

 China*:  Apr 28 2012 Share

The luxury retailer says China is its largest market, where it is on track to clinch at least US$300m in sales in its fiscal year to June. United States luxury retailer Coach aims to ramp up sales on the mainland by steadily expanding its stores and other distribution channels in lower-tier cities. Lew Frankfort, chairman and chief executive, said the New York-based firm was on track to secure at least US$300 million in sales across the mainland, Hong Kong, Taiwan and Macau in its fiscal year to June. Sales surged 60 per cent in the quarter to March from the same period last year. "China is our largest geographic opportunity given the size of the market and the rate of growth," Frankfort said. "We added five new locations [last quarter], all on the mainland." Coach now has 85 stores in China - 12 in Hong Kong, three in Macau and 70 on the mainland. Ten more stores are slated to be open in the quarter to June. The first US-incorporated company to list on Hong Kong's stock exchange last year, Coach posted a 16 per cent increase in global net earnings for the nine months to March to US$787 million, from US$678 million in the same period of its last fiscal year. The firm attributed the better performance to the growth of its channel distribution. Victor Luis, president of Coach Retail International, said the sales increase in China had been driven by the opening of new stores, which have been performing better than expected. "We're now at 32 cities across China, which is still a very small portion of the 120 or so cities that have a population of 1 million or more," Luis said. "All but one of the locations that we will open this [fiscal fourth] quarter would be in tier two and tier three cities. Longer term ... the vast majority of tier two and tier three cities will be the drivers [of growth]." The multi-channel distribution strategy that Coach was implementing in China involves the opening of flagship stores, retail stores within shopping malls, department stores and factory outlets, Luis said. "Factory outlet malls will undoubtedly be a massive opportunity [in the] long term within the China market," he said. 

China’s sovereign rating outlook remains positive, supported by favourable medium-term growth prospects and strong government debt dynamics, Moody’s Investors Service said in a report on Thursday. The ratings agency made no change to its Aa3 foreign and local currency bond ratings in the report, but said Beijing must retain tight control over local government finances and make reforms in the financial system to ensure rapid and stable economic growth for the rest of the decade. “Rapid economic growth, coupled with low deficits and debt of the central government have provided ample fiscal headroom to manage contingent risks in local government finances, or in the banking system,” Moody’s said in a statement accompanying the report. Moody’s said it expected China’s real economic growth rate to ease to a range of 7.5 per cent to 8.5 per cent in 2012 and 2013 from the more heady 10.3 per cent pace of the last decade. Economists polled by Reuters earlier this month expected the economy to grow 8.4 per cent this year. After a sluggish patch in the first quarter, growth is expected to rebound and steadily tick up to reach 8.7 per cent by April-June 2013. Moody’s also said China’s trade and financial exposures to the continuing problems in the euro zone were moderate to low. The report said China’s large scale provided stability against shocks and offsets institutional weaknesses associated with the relatively low per capita income level in the world’s second-biggest economy. But it cautioned that institutional strength was moderate in comparison with most other highly rated sovereigns and that more needed to be done to develop transparency. “Political, economic, and financial event risks, which could prompt an abrupt, multi-notch downgrade, are considered as low and manageable, but not unimaginable,” the Moody’s statement said. China took a milestone step in turning the yuan into a global currency this month by doubling the size of its trading band against the dollar to 1 per cent, pushing through a crucial reform to further liberalise its financial markets. China’s cabinet has also approved a pilot project in the coastal city of Wenzhou that could form the cornerstone of national financial sector reforms, with a plan to create a clutch of new institutions to bring private sector funds into China’s state controlled banking system. Sources in close, direct contact with the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC) told Reuters last week that reforms are ready to be rushed out over the next 12 months to boost two-way capital flows, drive diversification of business finance and accelerate corporate currency hedging. Premier Wen Jiabao last month staked his political legacy on reform to rebalance the economy at China’s annual meeting of parliament.

Former US ambassador to China Jon Huntsman says the Communist Party leadership's handling of the Bo Xilai scandal suggests growing transparency within the party. Huntsman (pictured) also said that Vice-President Xi Jinping , heir apparent to party general secretary Hu Jintao , had to find solutions to flaws in China's political system, otherwise problems such as endemic corruption would bring down the ruling party. Asked by Christiane Amanpour on her CNN International programme about the public vilification of Bo, Huntsman said it was "a sign of growing transparency within the party, which is a good thing". He added: "I think we need to reflect on the idea that, some years ago, we never would have seen this. "I think there's always a lot of tussling behind the velvet curtain, so to speak. But it's never seen by the rest of the world. "This has been very public and very high profile, and I think that's largely due to greater transparency now, in China and within the party." He said corruption was widespread in China, citing reports that there are probably 100,000 uprisings in the country each year, usually sparked by local corruption cases. "If there's one thing that will bring the party down, it will be corruption," he said. When asked how corruption could be a problem in tightly controlled China, Huntsman replied: "This gets right to the heart of the credibility of the party." Huntsman said he believed that social media and blogs would change the mainland media landscape. "When they [the communist leaders] look at a country with 600 million internet users and 90 million bloggers, this is something they never had to deal with before," he said. Huntsman said Xi would have to deal with those "seeking to reform the domestic lay of the land". He said: "Politically, those who are seeking greater human rights and religious tolerance, those who want an expression of acceptance for the role of the internet in society - he's going to have to deal with all of these in 2014 and 2015."

The resignation on China Everbright International deputy chairman Bo Xiyong, the older brother of fallen former Chongqing party boss Bo Xilai, may have represented yet another unwelcome blow to the Bo family, but it appears to have cheered investors. Bloomberg News Shares in Hong Kong-listed China Everbright closed up a full 8.2% on Thursday, the same day Mr. Bo’s departure was announced. Like other Chongqing-related shares such as Chongqing Rural Commercial Bank, China Everbright shares have been choppy recently and had fallen from early March since the Bo Xilai scandal broke out. The resignation is likely to be taken by investors as removing an overhang. As WSJ reports today, Bo Xiyong had been on the board of China Everbright since 2003, exercising stock options worth a total of $5.2 million in 2010 and 2011. Bo Xiyong resigned “for the best interest of the company and its shareholders,” according to a company statement, which adds that Bo Xiyong’s family matters “have no relationship with the normal business and operations of the company, and have not affected and will not affect the normal business and operations of the company and its subsidiaries.”

For Apple, China Is Middle Kingdom - Sales of Apple iPhones and iPads in greater China are skyrocketing, with five times as many iPhones sold in the latest quarter as a year earlier. How far will China take Apple? The WSJ's Deborah Kan speaks to Dow Jones' Yun-Hee Kim. Not long ago, Asia Pacific was all but a footnote in the financial statements of technology juggernaut Apple Inc. But no more. Apple's sales in the fast-growing region, fueled largely by China, more than doubled and represented 26% of its $39.2 billion in sales for the first three months of the year. Asia Pacific came within striking distance of becoming Apple's largest revenue source in the fiscal second quarter. The company took in $10.2 billion in sales for the region for the first three months of the year, compared with $13.2 billion for the Americas, long its biggest source of revenue. Apple breaks out Asia Pacific separately from Japan, where sales nearly doubled to $2.6 billion. It's a dramatic transformation considering Apple didn't include Asia Pacific in its geographic breakdown until it reported results for the three months ended December 2009. That's the quarter when Apple released the iPhone in China, more than two years after the U.S. debut. Apple has also yet to ship its new iPad in mainland China, selling 11.8 million of the tablets globally in the latest quarter. To be sure, the Cupertino, Calif., company's brand has long resonated outside the U.S. In the past few years Apple has opened up its own stores overseas and added retail partners. The introduction of its last iPhone drew such a large crowd at one of its Beijing locations that police had to seal off the store. But the swift growth in Asia underscores how Apple has become a truly global brand. Overall, international sales accounted for 64% of the quarter's revenue, its highest-ever share for the company. "The iPhone is driving international expansion at a different pace than other products" at Apple, said Mike Walkley, a research analyst at investment bank Canaccord Genuity. IPhone sales in mainland China increased fivefold from the year-ago period, Apple disclosed Tuesday. Overall revenue for greater China, which includes Taiwan and Hong Kong, more than tripled. Apple attributed the China growth to the launch there of its latest iPhone in February and the addition of China Telecom as a carrier in March. China Unicom offers the iPhone but China's—and the world's—largest wireless carrier, China Mobile, still doesn't. China has the most mobile-phone subscribers in the world, with just over one billion. Apple Chief Executive Tim Cook called the results "mind-boggling," on a conference call with analysts after the report. "There is a lot of headroom here in our view." Mr. Cook made a trip to China in March to meet with government officials and suppliers. He said Tuesday Apple is seeing the "halo effect" of iPhone sales catalyzing demand for other products in the region. The number of Macs sold in greater China, still very small, was up 60% from the year-earlier. Analysts, who remain bullish on the stock, say there are other factors at play—including the fact that the iPhone is one of the first Apple products that can be easily customized in other languages because a touch-screen eliminates the need to change keyboards. Apple "has a huge app and content ecosystem in China and frankly its full touch interface is allowing localized software customization for language," says Peter Misek, an analyst with Jefferies & Co. He said Chinese consumers' affinity for luxury brands is another factor. The picture is a contrast to the U.S., where the market is more mature. Apple doesn't disclose iPhone sales for the region. But the two major U.S. wireless carriers that sell the iPhone during both periods—AT&T Inc. and Verizon Wireless—reported that activations of the device were up more modestly than some international markets from the year-ago quarter. AT&T said activations increased to 4.3 million from 3.6 million a year earlier. Verizon Wireless, which started selling the iPhone halfway through last year's quarter, said activations increased to 3.2 million from 2.2 million. (Sprint Nextel Corp. also offers the iPhone, but didn't start selling it until the 4S model launched in October.) Investors, spooked by signs of a possible iPhone slowdown in the U.S., shed the stock in the days up to Apple's earnings report. But surging international iPhone sales—and analysts' hunch they will cause shoppers to buy other Apple devices like iPads—caused investors to renew their exuberance for Apple shares.

Regulator refutes WTO rare-earth investigation - Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology, holds up a picture of a "disorderly" rare-earths mine. China supplies more than 90 percent of those materials sold in the international market. China's recent steps to regulate the rare-earth industry are in line with World Trade Organization rules and are meant to protect the environment, the country's top industry regulator said on Wednesday. China is now the subject of a WTO investigation into allegations that it has set strict controls on exports of rare-earth metals, 17 elements used in a variety of technologies. On March 13, the United States, the European Union and Japan complained to the WTO that China's rare-earths regulations were harming competing industries in their countries. "China will respond in this case," said Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology. "All these measures, such as export quota controls, are meant to diminish environmental risks that have resulted from the disorderly development of the rare-earth industry." Zhu said not regulating the industry will only bring more harm to the environment. China exports more rare earths than any other economy in the world, supplying more than 90 percent of those materials sold in the international market. That's even though it currently has about 30 percent of world reserves of rare earths, a proportion that has dropped greatly from just two years ago, when it held 50 percent. According to US Congressional Research Service's mineral commodity summaries, the US held about 12 percent of world rare-earth reserves in 2010. "China isn't manipulating the prices of rare earths, and only half of its (export) quota was met last year," he said. Zhang Anwen, Chinese Society of Rare Earths deputy secretary, said other countries' requests are "unreasonable", and the commodities' increasing prices reflect market conditions. Zhang said he hopes the prices will eventually take into account the possibility of environmental pollution. Zhu said China's regulations, which include production caps, export quotas and stricter emission standards, were adopted after a full consideration was made regarding "the ability of the environment to ensure effective supplies of rare-earth metals". According to the Ministry of Industry and Information Technology, processing one metric ton of rare earths produces about seven tons of strong acid. "The recovery rate for rare earths is less than 50 percent," Zhu said. "In some illegal mines, the rate is as low as 20 percent. So if we can't control and manage illegal activities, there will be significant damage to plant life and underground water supplies." China is ready to cooperate with other countries in recycling rare-earth metals and in researching and developing mining technology and expertise, Zhu added.

Chinese American basketball player Jeremy Lin, who topped the list of the Time 100 Most Influential People in the World for 2012, attended the Time 100 Gala in New York City on Tuesday evening. This year 54 international names from 37 countries are on the Time 100 list – the first time they outweighed the American figures. 

Structural shift gaining momentum: AmCham - A worker in Deyang, Sichuan province, inspects a rotor, a key component of a nuclear power generator, that was independently developed by Dongfang Electric Corp. Chinese industries are trying to move up the value chain. Structural changes in China's economy are already apparent and will accelerate, driven by external and internal factors, the American Chamber of Commerce said on Wednesday. The strong commitment of US companies to the Chinese market is subject to China's future policy choices and development path, as well as external risks such as another global economic slowdown, the chamber said in its annual white paper on the State of American Business in China. "The transition to a new economic growth model presents new challenges. A new commitment to deepen market reforms and extend a truly market economy to additional sectors of the economy will ensure more sustainable economic growth," said Ted Dean, AmCham China chairman. Song Hong, a senior researcher at the department of international trade with the Chinese Academy of Social Sciences, said the white paper showed the chief concerns of US companies have shifted from the investment climate to the country's medium-term economic growth path. China's course over the next decade as it seeks a structural shift has become a big concern for the foreign business community. They may think there are some ambiguities and uncertainties, but in fact China has given clear information, Song said. The government is on track to make progress toward a market economy by actively promoting the liberalization of interest rates and further improving the exchange rate mechanism, as well as deepening the reform of State-owned enterprises, he said. "China has no doubts about sticking to opening-up and gradually advancing its reforms in a cautiously optimistic way. A 'shock type' reform, expected by some people, is impossible in China," Song said. Despite the uncertainties, companies remain relatively optimistic about China's market. Most of the surveyed companies expect to grow faster than China's real GDP this year, as they did in 2010 and 2011. In the survey, 76 percent of the companies said they expect their revenue to grow in 2012, and 26 percent expect growth in the range of 11 to 20 percent, compared with the government's 7.5 percent target for GDP growth in 2012. Most economists forecast real GDP growth this year will exceed 8 percent. "The operating environment continues to be strong, especially when compared to the rest of the word," said the report. However, rising costs have made nearly 90 percent of the surveyed companies believe that China is becoming a weaker competitor. Management-level human resources are seen as the leading business challenge and non-management level constraints rank third, while other inputs such as the cost of land, rents, raw materials and transportation are also rising. China is losing its competitiveness in labor costs and that will eventually lead to a structural change in manufacturing and trade, but it's also a positive outcome of ongoing efforts to rebalance the economy, said Song.

Hong Kong*:  Apr 27 2012 Share

Lipton - one of the world's most acclaimed tea brands - has been selling teabags laced with toxic pesticides that are harmful to health, a Greenpeace study claims. Tests conducted in Beijing last month found that all four teabag samples - Yellow Label Tea, Green Tea, Jasmine Tea and Iron Buddha Tea - contained pesticides that exceed the European Union's maximum level of residue. Three samples contained bifenthrin, a pesticide that is not approved by the EU, which the group said may negatively affect male hormone production. The other pesticides detected - and that are banned in tea production by mainland authorities - are methomyl, dicofol and endosulfan, which may affect human fertility, the group said. Greenpeace campaigner Kate Lin Pui-yi said the tested teabags were mainly from Hefei in Anhui province. Lin said it is possible that teabags sold in Hong Kong may have been contaminated by the residue as the tea sold by Lipton locally also comes from Hefei. Lin said the level of bifenthrin found in Green Tea reached 0.05 milligrams per kilogram, while the level of the chemical found in Jasmine Tea and Iron Buddha Tea reached 0.04mg/kg and 0.11 mg/kg, respectively. "The level of bifenthrin found in the teabags is extremely high. If consumers have repeatedly absorbed the chemical by drinking it for a certain period of time, it can cause infertility," Lin said. The group said although Lipton claims to be committed to minimizing the use of toxic agrochemicals, it is apparently still using huge amounts of the pesticides in its tea products. It urged Lipton and other tea companies operating in the mainland to reduce their levels of pesticides and to establish an effective supply chain system to avoid the use of chemicals. However, Lipton said the teabags sold by the company are safe for consumption, adding that it has fully complied with mainland regulations on the use of pesticides. But the tea company did not comment on whether these products are sold in Hong Kong.

Hong Kong remains the leading location in the world for luxury brand outlets, topping the charts for a third year running, global property consultant CB Richard Ellis says. The city also retains its title as the number one Asian location for international retailers across the sector. CBRE's latest report shows that Hong Kong leads the way for luxury and business fashion, with 86 per cent of high-end retailers surveyed present in the city, a rise of 2 per cent from the 2011 survey results. The sustained strong demand for space from international retailers drove up overall prime retail rents in the city by 1.9 per cent from the previous quarter, or 14.3 per cent from a year ago, to an average HK$584 per square foot in the first three months, according to CBRE. Meanwhile, Jones Lang LaSalle said leasing demand had pushed up rents by 4.5 per cent for both prime street shops and premium centres in the first two months, while capital values for prime street shops rose a further 9.7 per cent. But the pace of rental increases is expected to slow, CBRE said, as prospective tenants baulk at paying more. "We expect that sustained demand from international brands for prime retail space will support rents in upcoming months. However, while positive rental growth is expected, I do expect to see the rate of growth decelerating from the heady heights of 2011," said Joe Lin, CBRE's senior director of retail services in Hong Kong. Lin said a slowdown in rental growth suggested Hong Kong may have entered a "more mature phase" in the development of its retail market. "Some international retailers are hesitant about keeping pace with the seemingly constant rise in rents and have shifted to shopping malls. Furthermore, some mid-range retailers are deterred by high rents and do not view Hong Kong as an automatic point of entry for the Asian market," he said. But Jones Lang LaSalle Hong Kong's head of retail, Tom Gaffney, believes the city will remain a key focus and a dominant market for retailers this year and expected to see another year of solid retail sales, rental growth, and transactions. According to the CBRE report, Hong Kong was host - across the retail spectrum - to 40.5 per cent of the international retailers surveyed, retaining its status as Asia's number one retail city - four places ahead of Singapore, but moving down one place to sixth in the global rankings, behind London, Dubai, New York, Moscow and Paris. London topped the rankings in the overall presence of foreign retail outlets, ahead of last year's joint leader Dubai, with 55.5 per cent of international retailers present. CBRE's annual survey - now in its fifth year - has been expanded to map the global footprint of 372 of the world's top retailers across 73 countries to identify trends in global retail expansion at country and city levels covering the vast majority of the world's economy.

Chief executive-elect Leung Chun-ying received more than HK$14 million in donations from a cross section of society - including property developers - in his bid for the city's top job, an aide said yesterday. Leung was the last of the three major candidates to submit his election expense report by yesterday's deadline. Former chief secretary Henry Tang Ying-yen and Democrats chairman Albert Ho Chun-yan filed theirs earlier. The candidates' campaign expenses have yet to be released. The spokeswoman of Leung's former campaign office said HK$11.2 million of the donations was spent - well under the legal limit of HK$13 million. It went towards office rent, advertising and the wages of the campaign staff. She said the donations came from all levels of society - from the grassroots to major companies. "We did not want our donations to be dominated by one particular sector, so we asked wealthy donors and big companies to donate less than HK$1 million each," she said. "We hoped people from all walks of life could get involved in the campaign, and some of our donations did come from the grassroots. We wanted everyone to contribute." Another member of Leung's campaign team said some property developers had donated to Leung despite the lack of support from major developers such as Cheung Kong (SEHK: 0001) chairman Li Ka-shing, who supported Tang. Leung's other known donors include the Shandong Residents' Association in Hong Kong and the alumni of King's College, Leung's high school. Leung's spokeswoman said he planned to donate the surplus to charity. Tang's campaign staff could not be reached for comment. Ho spent nearly HK$1.3 million, about a tenth of which came from donations. Ho and his party contributed most of the money. Frederick Fung Kin-kee, a failed candidate in the pan-democrats' primary, spent about HK$500,000. He raised HK$160,000 from pro-democracy group Power for Democracy and also received donations from his Association for Democracy and People's Livelihood and publishers. New People's Party chairwoman Regina Ip Lau Suk-yee spent HK$100,000 on her bid to join the race, of which HK$96,000 came from her party and the Savantas Policy Institute, a think tank she set up. In the 2007 race, Chief Executive Donald Tsang Yam-kuen spent HK$8.4 million after raising HK$22.1 million. He gave the unspent amount to charity. His rival, Alan Leong Kah-kit, spent HK$4 million and raised HK$3.8 million in donations. Meanwhile, the Democratic Alliance for the Betterment and Progress of Hong Kong will set up a seven-member committee led by National People's Congress deputy Maria Tam Wai-chu to select candidates to put forward for Leung's cabinet.

Three bus companies are expected to replace 700 polluting buses, offer more fare concessions and make space for foldable bicycles after being granted new 10-year franchises by the government. But critics say the renewal conditions do not go far enough in demanding cleaner vehicles and more concessions for elderly passengers and long-distance commuters. The new franchises are for New World First, on Hong Kong Island, some cross-harbour routes and routes from the island to Tseung Kwan O; Long Win, on routes from the airport to the New Territories; and Citybus, for its airport and North Lantau bus network. They will begin when the existing agreements expire in May and July next year. "The renewal was made after a public consultation and rounds of discussion," Secretary for Transport and Housing Eva Cheng said yesterday after the Executive Council approved the renewal. "The government's main consideration was whether the bus companies could provide efficient services." The operators agreed to replace a total of 700 buses with buses meeting the latest Euro V emissions standards by 2016. Many buses in the fleets have reached the end of their expected 17-year life cycle. Cheng said the operators had also committed to letting passengers bring foldable bicycles on board and to incorporating barrier-free access and elderly-friendly features. They will offer an additional 60 fare concession schemes, ranging from 30 cents to HK$24.90, on top of the existing ones, including 27 new discounts for passengers interchanging between different bus routes and 27 new section fares for people travelling shorter distances on long-distance bus routes. Some Hong Kong buses charge a flat fare regardless of the distance travelled. At present, 116 interchange discounts are available and there are section fares for 112 routes. Cheng said the concessions would benefit an extra 8,000 passengers, especially airport workers and residents of Tung Chung, Hong Kong Island and Tseung Kwan O. But Coalition to Monitor Public Transport and Utilities spokesman Richard Tsoi Yiu-cheong said the fare concessions were inadequate. "Obviously the government did not seize the renewal opportunity to make more demands on bus companies to improve their services," he said. "At least they should charge the elderly and the disabled a much lower fee." At present, elderly passengers are charged half price except on weekends, when they pay a flat HK$2 fare. But Tsoi said they should travel free or be charged one or two dollars like their mainland counterparts. Helen Choy Shuk-yi, general manager of the Clean Air Network, said the dirty, old buses would be replaced too slowly. "The government lacks the determination to improve roadside air," she said. Choy said the three companies had 751 buses that were due to be replaced by 2018, meaning the new replacement requirement would only bring forward the replacement date by two years. Martin Turner, of the Cycling Alliance, welcomed the provision for folding bicycles. But he urged the operators to allow cyclists to take the folded bikes on board without having to put them in bags or strap them up. Hung Wing-tat, a transport specialist at Polytechnic University, called for the new administration, which takes office in July, to review the bus fare pricing mechanism and make it more transparent. The three companies welcomed the arrangements.

Wilson Yip with the letter Amoy Gardens residents received from Premier Wen Jiabao. A housing estate badly hit by Sars in 2003 received a pleasant surprise from Beijing yesterday - a hand-written letter signed by Premier Wen Jiabao. esidents at Amoy Gardens in Kwun Tong - which hosted the premier in June 2003 soon after the severe acute respiratory syndrome broke out in the city - said last month that they would be happy to receive him again. Wen responded by sending a letter written in traditional Chinese characters - a form commonly used in Hong Kong but not on the mainland. He wrote of the deep impressions that the city had left on him: "Hongkongers have shown a spirit of unity and [readiness to] help one another in difficult times, while professionals displayed a spirit of selfless sacrifice." Wen was referring to his only visit to Hong Kong as premier, in 2003, when Sars killed 299 people in the city. The health scare emptied hotels and shops, saw millions don surgical masks and caused the quarantine of residents in an entire block at Amoy Gardens as 329 residents were infected and 42 died. On the sidelines of the National People's Congress last month, Wen expressed his wish to revisit the city: "[I want] to see residents of Amoy Gardens and interact with students of the University of Hong Kong." Wilson Yip Hing-kwok, chairman of the Amoy Gardens owner committee, then wrote a letter to Wen on April 8, and Chief Executive-elect Leung Chun-ying passed it to Wen in Beijing. Yip received the reply yesterday from a senior official of the central government's liaison office. In the letter, dated April 15 - only days after he met Leung - Wen said he was very happy to receive Yip's message. "As I read the letter, I thought of Hongkongers, and the memories of my Amoy Gardens visit nine years ago are still vivid," Wen said. He also wished the residents well and prosperity (SEHK: 0803) for Hong Kong. "It was a huge encouragement to the residents and to Hongkongers to receive a handwritten letter from a busy man like the premier," Yip said. In his letter to Wen, he wrote of how much the residents would like the premier to visit again. "Amoy Gardens was like a ghost town. Not only strangers, but even taxi drivers refused to take passengers here," Yip recalled. But Wen did not wear a mask during his visit. "Although it lasted for only 20 minutes, it was the turning point for the residents and others to rebuild confidence in Amoy Gardens." Yip said he had displayed copies of the letter on notice boards on all 19 blocks in the estate.

A young woman who died in a traffic accident has saved the lives of five people and given sight to a sixth. The life-from-death miracles for six families were also thanks to three medical teams who raced against the clock. And there was the family of accident victim Carmen Ho, 31, who gave the go- ahead for their lost loved one's organs to be used for the gift of life. Married but without children, Carmen worked as a manager in a restaurant. She had not signed a donation card, but her husband and parents decided her organs should go to people in need. Her husband, who identified himself simply as Wong, is still recovering from an arm injury suffered in the car crash that claimed his wife this month. He remains grief-stricken, of course, but he puts on a brave face to talk about the family decision. His wife was a keen volunteer in helping the underprivileged, Wong said, and by donating her organs the family has preserved her spirit. The six people whose lives have been transformed are a 43-year-old woman, Chan Sum-yee, who received Carmen's heart; a six-year-old boy and a 60-year-old woman who shared her liver; a man and a woman, both 24, who each got a kidney; and a person who received her corneas. Albert Chan Chi-yan of the University of Hong Kong's surgery department, a member of the liver transplant team, said it was rare for six people to benefit from a single donor. As for the part in which he had a hand, Chan said: "Luckily the size and condition of the donor's liver was suitable for a split liver transplant." It was only the second time that Hong Kong has recorded a two-way transplant of a liver. The last transplant involving a split liver was at Queen Elizabeth Hospital in 2010, though most liver transplants are at Queen Mary Hospital, where HKU medical teams function. Three surgeons went to Princess Margaret Hospital for the exacting job of collecting the liver and taking it back for the two transplants. The heart and kidney transplants were performed at Princess Margaret Hospital. The series of surgeries took a total of 17 hours, with surgeons working from 7am to midnight. The father of the six-year-old liver recipient, Sky, said it is a big relief to know his son's life can be prolonged. The other liver recipient, a Ms Chan, said she was so thankful the donor's family made something positive of Carmen's untimely death by giving life to others. "I know it must have been a tough decision," she said. "They are heroes." She added: "I am blessed to have been given a liver. My life has been reversed and now I can do what I really want to." That includes being around for the approaching birth of a grandson. Doctors report all the patients to be in satisfactory conditions even as they urge people to register as organ donors. The average waiting time for transplant surgery is from five to 10 years and there are 1,800 people on lists. But there are only 4.6 successful donors in every 10 million people. "One third of our patients in urgent need of a heart transplant die while waiting," Chan said. But for a handful of people there is joy, and for the family of a woman who died before her time there is a peace. "Carmen has gone but her spirit is always with us," her mother said.

 China*:  Apr 27 2012 Share

SilkAir, the regional wing of Singapore Airlines, has announced plans to increase services across China. From April 24, SilkAir will launch the first flight from Singapore to Wuhan in central China, which will be operated thrice weekly. It will be SilkAir's seventh destination in China. Flights between Singapore and Changsha will be increased to four times a week from three flights. Two weekly flights will be added to the Singapore-Chongqing route, making it a daily service. As a full-service premium airline, SilkAir currently flies to 38 destinations across 11 countries.

A senior Chinese diplomat said on Wednesday that he hoped moves by the United States to re-engage with Myanmar were not aimed at Beijing, underscoring China’s concerns about influence in its strategically located neighbour and close economic partner. Chinese state-run media and academics have expressed concern that Washington’s renewed interest in slowly democratising Myanmar could be part of US designs to dilute China’s influence there and encircle China with pro-US states. With sanctions long blocking Western investments, China has emerged as Myanmar’s biggest ally, investing in infrastructure, hydropower dams and twin oil-and-gas pipelines to help feed southern China’s growing energy needs. “We certainly have an interest in what is happening in Myanmar as it might affect peace and tranquillity in our own border area,” Chinese Vice Foreign Minister Cui Tiankai said. “As to why the United States chose not to engage Myanmar in the past few decades, but now chooses to, it is up to the United States to explain,” he said. “China has never seen its friendly and co-operative relationship with Myanmar, or any other country, as excluding the interests of the United States, and we hope the United States also approaches this matter in the same spirit.” Derek Mitchell, the special US envoy for Myanmar, said in December during a trip to Beijing that the United States was not looking to undermine China’s stake in Myanmar. The United States, along with the European Union, Japan and other Western countries, have moved to ease sanctions on Myanmar following the new army-backed civilian government’s efforts at pushing ahead with democratic reforms. China has long worried about its ties with Myanmar, with a history of resentment of China among the Burmese population and fierce public opposition to a Chinese-built dam at Myitsone that prompted President Thein Sein to shelve the project in September, a move that stunned Beijing. Fears about China’s influence in Myanmar have been bolstered not only by Washington’s engagement with the country but also the US military’s strategic “pivot” back to Asia.

An astute but ruthless businesswoman, an unhappy wife, a terminal cancer patient - those are just some of the ways that Gu Kailai has been portrayed since the downfall of her husband, former Chongqing party chief Bo Xilai. But if a book she wrote in the late 1990s is anything to go by, Gu was once an idealistic lawyer who believed in the spirit of the law and aspired to raise her country's legal standards. Published in 1998, Uphold Justice in America tells of Gu's experiences while defending several state-owned Chinese companies in an American lawsuit. Since her husband's dismissal from his Chongqing post on March 15, 54-year-old Gu has been at the centre of a scandal that culminated in her being charged with the murder of British businessman Neil Heywood. Bo is also being investigated for "serious breaches of party discipline", which could involve anything from covering up the alleged murder to corruption, allegedly facilitated through companies Gu set up. One of the companies is the Beijing Law office of Horus L.Kai, which she set up in 1995. It later opened branches in Dalian and Zhengzhou , and at one point employed some 28 lawyers. It is the main focus of Uphold Justice in America, as Gu and her team put together their successful 1997 defence of several Dalian businesses against a US federal court order in Alabama that they pay US$14 million in compensation and punitive damages after failing to show up at two court hearings, even though they were victims of a fraud perpetrated by their US counterparts. In a preface to the book, her teacher at Peking University, the late international law professor Wang Tieya, said that when Gu was a student, she showed "strong cultural consciousness" in her studies, and he encouraged her to research the relationship between law and culture. "You once told me that your purpose was not only to reap material benefits, but also to seek spiritual gain," Wang wrote. "I'm pleased to see that your law firm … is not only a business, but also a place to … help the country to reach its goal of rule of law." Gu's book is laden with patriotic sentiment and describes the US judgment as unfair and ignorant of Chinese culture. Gu also cites the O.J.Simpson case to argue that a litigation system that allows a murderer to be let off on a technicality is "an illustration that American law is reaching its end". Elsewhere in the book, however, she compliments the US court system on its fairness. "In China, litigation is about networking. Many clients expect lawyers to invite judges to dinner, and if lawyers don't do it, they say you are useless," Gu lamented. "Very fortunately, this practice has not spread to this southern city in the United States [Montgomery, Alabama]. Very fortunately, none of us here could see the judge when he was not in his robes." Some are unimpressed by the book. Commentator Michael Anti said on Twitter that "it's all boasting, turning a simple case in the US into a big drama", while former Wen Weipo journalist Jiang Weiping, who was jailed during Bo's tenure in Dalian, said Gu wrote the book to "wow and fool the public". Gu never mentions in the book that Bo was mayor of Dalian at the time, but stresses many times that the firm volunteered to take on the case to serve the "motherland" - despite initial opposition from some of the firm's lawyers. She also said the firm was picked by the Dalian authorities because of its mix of Chinese and foreign legal experts. There has been speculation that Gu continued to keep an eye on her business interests in Dalian and later Chongqing, even though she reportedly became a stay-at-home mum more than a decade ago. In 2010, Bo told a press conference during the annual meeting of the National People's Congress that Gu had stepped down at the height of her career for him. Last month he said she closed her law firm and all its branches in order to avoid gossip suggesting that Bo was using Gu to make money. However, according to public records, the law firm changed its name to Angdao and is still operating from the same address in Beijing. Various websites about the firm still list Gu as one of its lawyers. A man at the office, who refused to give his name, said last week that it had not been linked to Gu since 2001.

Overseas hiring procedures may be streamlined, records centralized - A new visa category has been proposed, in a draft law by the top legislature, to streamline the hiring procedures for international talent and to centralize records of foreigners. The second draft on regulating arrivals and departures from China, proposed to lawmakers on Tuesday, envisions a new specific visa for international expertise, in addition to the existing tourist, student and business visa. The move is part of initiatives to attract more talented individuals from overseas, experts said. Authorities have made efforts to attract more expatriate workers across a wide sector of professions. Foreign employees now number about 600,000, according to the 2010 national census. The new policy is, however, being challenged as having failed to address the “crux” of the matter. Cui Aimin, a senior official from the Ministry of Foreign Affairs, doubted the necessity of such a change in his address delivered to the top legislature after the first reading in December. Obstacles in recruiting overseas talent were not due to visa applications, he said. Other factors were involved, he said. A survey released earlier this month of more than 180,000 expatriates living in China indicated that the environment, education, air pollution and traffic congestion, play a role in shaping opinion, according to a magazine affiliated to the State Administration of Foreign Experts Affairs. A system centralizing information about foreigners in the country is likely to be introduced in a move expected to tackle illegal employment. Records under the current system are kept in various places and are difficult to access. Liu Guofu, an expert on immigration law, said the ambiguous division of responsibilities among government agencies makes it difficult to combat illegal employment and overstaying. Liu, from the Beijing Institute of Technology, said, for example, that the human resources administration is unlikely to learn if an overseas graduate takes up employment unless the foreigner applies for a working permit or the employer takes the initiative to file the hiring. China has seen a rocketing number of foreign visitors since opening up in the late 1970s. There were 260 million arrivals and departures in China from January to September in 2011, the ministries of public security and foreign affairs said. In 1980 the figure was only 12.1 million. Beijing, second only to Shanghai in terms of the number of foreigners with a residency permit, was home to nearly 120,000 foreigners by the end of 2011. Under current regulations concerning the arrival and departure of foreigners, the Ministry of Foreign Affairs is responsible for issuing visas, while public security officers and police are tasked with verifying their documents and carrying out routine examination at entry ports. Once foreigners have entered China, information about them will be archived according to their purpose of visit. For instance, records of overseas students are kept with the Ministry of Education, and those of foreign employees are kept with the Ministry of Human Resources and Social Security, State Administration of Foreign Experts Affairs or other related agencies. Zhang Bailin, deputy director of the Law Committee of the National People’s Congress, explained the necessity of improved efficiency to legislators during their bimonthly session, which opened on Tuesday. Kevin, an overseas student from the University of International Business and Economics, who declined to give his full name, admitted he was “unsure” about whether working part-time with a student visa was illegal. Kevin is currently interning, and being paid, at a Beijing-based public affairs company. “Investigating overstaying and employment relies on public tip-offs,” said Zhao Yu, a professor with the Chinese People’s Public Security University. People do not report overstaying or illegal employment in their neighborhood unless it has infringed upon their rights, he said. Beijing’s Public Security Bureau’s arrival and departure department has reported a total of 13,000 cases of illegal entry, overstaying and employment since 2008. It noted that there are many students in the city staying illegally with a tourist or expired visa.

Hong Kong*:  Apr 26 2012 Share

Banks are charging almost 2 percentage points less for yuan-denominated loans in Hong Kong than in China as the nation moves toward full convertibility of its currency. Sinotruk (Hong Kong), Volkswagen's Chinese truck-making affiliate, and China Guangdong Nuclear Power Holding Corp led five companies borrowing 5.5 billion yuan (HK$ 6.7 billion) of so-called dim sum loans in the past six months, according to Bloomberg data. That compares with 800 million yuan in two loans arranged in the previous 12 months. Standard Chartered's one-year interbank offered rate for yuan was last at 3.2 per cent. That's 193 basis points less than the 5.13 per cent for the one-year Shanghai interbank offered rate and less than half of the central bank's best lending rate. The increase in lending from almost nothing underscores the growing holdings of China's currency outside of the mainland as the world's second-largest economy takes steps to make the yuan more available for global trade and investment. Hong Kong is setting up tools and mechanisms to cement its role as the primary offshore market for trading and providing credit in the currency. "This will be the year when dim sum loans really start to pick up," Wilson Wan, the Hong Kong-based head of the leveraged and structured finance division at BOCI Asia, said. "Banks are more willing to lend yuan now that they have more confidence pricing transactions." Hong Kong's Treasury Markets Association increased the number of individual banks' yuan lending rates it publishes on its website to eight, from three, this month as the city moves closer to creating a rate for lenders to price loans in the currency. The lack of a reference rate has been one of the biggest inhibitors to growth of the loan market, according to the Asia-Pacific Loan Market Association (APLMA). The association has a daily display of the interbank interest rates from Bank of China (Hong Kong), Bank of Communications (SEHK: 3328), Bank of East Asia (SEHK: 0023), Bank of Tokyo-Mitsubishi UFJ, HSBC Holdings (SEHK: 0005, announcements, news) , Industrial & Commercial Bank of China Asia, JPMorgan Chase & Co and Standard Chartered. Banks report their rates in various maturities, from overnight to 12 months. "Now that there are eight banks providing rates to the TMA that's a very significant step forward," said John Corrin, the APLMA's Hong Kong-based chairman. "However there needs to be one reference rate established over which to price loans in order for the market to really develop, and more international banks need to get involved." The gap between offshore yuan lending rates and the currency's cost in Shanghai widened to 1.93 percentage points from 1.79 percentage points at the start of the year.

Dr Chow Pak-chin says the medical sector should be a priority for Leung Chun-yin's gvoernment. The city’s private hospitals have gone astray and must return to their original purpose – serving Hongkongers – according to a leader of the medical community. Dr Chow Pak-chin, an adviser on medical issues to the recent election campaign of chief executive-elect Leung Chun-ying, said in a radio interview that he believed the core job of the local medical sector is to serve local people first. Serving non-residents and making profits should come only if hospitals have leftover resources. “We can say that some private hospitals are not abiding by their reason for existing, so much so that Hong Kong citizens cannot get the service they deserve,” said Chow, an eye doctor and vice-president of the Medical Association. “This has harmed our people.” The problem is not limited to private hospitals. Even public hospitals are running out of beds and operating rooms, hindering access by Hongkongers in need of medical help, he said. The first priority for the new government, Chow said, would be to inject more resources into both the private and public medical sectors in the right balance. “We need to draw up policies for the development of private hospitals, for them to co-ordinate with the public sector, and to help Hong Kong people. We need to look at private and public hospitals as a whole.” Chow acknowledged Leung’s recent proposal to ban mainlanders from giving birth in private hospitals if their husbands are not Hongkongers. “We must stop the bleeding first, and then we can do other things and check-ups … [just like] how we treat a wounded person.” Leung had not approached him about joining the new administration’s cabinet, Chow said. He would have to weigh his own abilities before accepting any offer, he said.

Hong Kong’s three franchised bus operators have had their contracts renewed for another 10 years, Secretary for Transport and Housing Eva Cheng said on Tuesday. Cheng told reporters the Executive Council on Tuesday had approved the renewals by New World First Bus, Citybus and Long Win Bus Company after considering their commitment to improve service quality. This included a switch to more eco-friendly buses, fare concessions, route rearrangement to increase efficiency, and installing features to help access for elderly and disabled people, Cheng said. New World First Bus mainly covers Hong Kong Island; Long Win buses operate between the New Territories and North Lantau; and Citybus routes ply from urban areas and Tseung Kwan O to North Lantau. The three companies’ current contracts would expire between May and July next year. Cheng said their commitment to move to more eco-friendly vehicles was the most important factor for wining the new contracts. She said the three operators would together replace 700 old buses, or 70 per cent of their fleet, with newer models. She said the fare concessions would come in the forms of section fare and interchange discounts and range from 30 cents to HK$24.9 per ride. They were expected to benefit 8,000 passengers in Tung Chung, the Chek Lap Kok airport, Tseung Kwan O and Hong Kong Island East, Cheng said.

Chow Chung-kong was named the new head of the Hong Kong stock exchange (HKEx) on Tuesday. The former head of MTR Corporation was chosen to replace Ronald Arculli as its next chairman. The Hong Kong stock exchange has chosen the ex-chief of the MTR Corporation (SEHK: 0066), Chow Chung-kong, as its next chairman. Chow was elected to succeed Ronald Arculli at the helm of Hong Kong Exchanges and Clearing (SEHK: 0388) during a board meeting on Tuesday. Chow was widely considered the front-runner for the position, so the news comes as little surprise. The appointment is subject to the approval of Chief Executive Donald Tsang Yam-kuen. Chow, 61, told reporters on Tuesday the city’s stock exchange must strengthen its position in the face of increasing competition and a complex global financial situation. He was appointed to the HKEx board about two weeks ago. Chow retired from the MTR at the end of 2011 after serving for eight years as its chief executive. Those years saw notable challenges at the government-controlled rail operator, including service delays, arson attacks and electrical problems, as well as the merger with the century-old Kowloon-Canton Railway Corporation (KCRC).

Hong Kong Movie Industry Takes on YouTube - The cast and crew of the movie ‘A Simple Life’ celebrate onstage after the film won the Best Picture award at the 31st Hong Kong Film Awards on April 15, 2012. When it comes to copyright infringements, America’s traditionally pointed its finger at Asia, especially China. But this time, the finger-wagging is going the other way. This week, Hong Kong’s movie industry made no secret of its outrage over how the city’s movies—long one of its proudest cultural exports—are the subject of widespread piracy on YouTube, the U.S. video sharing website. According to a Hong Kong Motion Picture Industry Association member survey, clips from over 200 Hong Kong movies have been found on the popular video-streaming site, including some new releases that are still being screened in local theaters. More than half of these movies were available in full-length form on YouTube, says Brian Chung, MPIA’s CEO and a former screenwriter—though others were split into consecutive clips, which in one case had over 100 installments. Popular hits available online included Hong Kong Film Award winner A Simple Life, as well as romantic comedy Love in the Buff (both are still in theaters), as well as various flicks starring Bruce Lee, Hong Kong’s homegrown martial-arts actor. Collectively, such clips garnered views in excess of over 40 million. “Our members are so angry about this,” says Mr. Chung, adding that each view could be a potential movie ticket sale loss. These losses come at a time when Hong Kong’s traditionally vibrant movie industry is already faltering. While its auteurs left their cultural stamp across generations of moviegoers during their heyday in the 80s, the industry has since slumped as viewers have gravitated toward Hollywood and the production of regional rivals, including South Korea and Japan. From 2000-2006 alone, the number of films produced in Hong Kong dropped by over 40%. Media Asia Films, which produced Love in the Buff, says YouTube’s system for taking down videos is too slow and unresponsive. “We tried to click the infringement icon on YouTube,” says Regina Li, senior administrative officer for the company’s legal department. “We clicked it many times.” By the time YouTube took down the full-length version of the film that a user had posted online, the pirated film had already been viewed over 180,000 times, said Ms. Li. The film production company had to wait days for the video to come down, they said, and were asked to provide documentation to prove that Media Asia Films was in fact the copyright’s holder. “YouTube’s logic is not reasonable,” says Mr. Chung. “A user can upload anything with no filter, but the copyright owner needs to provide much proof and documentation to get it taken down.” He applauded the decision of a German court last week, which ruled that sites such as YouTube can be held liable if they don’t place controls over the content uploaded to their site, or fail to act once copyright infringements are reported. The court also ruled that YouTube (which is owned by Google) should install filtering software to prevent future uploads of unauthorized content. Calls to the Google office in Hong Kong rang unanswered and emails to the communications and marketing departments were not returned. In response to MPIA’s concerns, a Google spokesperson said that the company takes copyright issues “very seriously” and that YouTube has “strong measures to deter infringement and a fast and efficient notice-and-takedown process.” As well, the spokesperson added, “Our community guidelines and on-site messaging make it clear that users must own material or have permission from copyright holders to upload.” Mr. Chung says that MPIA has asked Hong Kong’s government to continue to follow up on the issue with YouTube. Meanwhile across the border, a group of Chinese writers is suing Apple for copyright violations, claiming that the company has allowed users to download pirated version of their books through its App Store. The writers, among them wunderkind racecar driver and novelist Han Han, are demanding compensation of $1.9 million from the company.

 China*:  Apr 26 2012 Share

Apple risks losing the right to use the iPad trademark in the mainland, a senior official suggested on Tuesday, as a court in Guangdong province sought to mediate a settlement between the US technology giant and a Shenzhen company. Yan Xiaohong, deputy director of the National Copyright Administration, said in Beijing that the government regarded Shenzhen Proview Technology as the rightful owner of the trademark for the popular tablet computers. His remarks could add to pressure on Apple to find a solution to the stand-off. Yan’s comments followed news that the Guangdong High Court is seeking to arbitrate a settlement in the case. In late February, the court began hearing Apple’s appeal against a lower court ruling that favoured Proview in the trademark dispute. “The dispute between Apple and Shenzhen Proview concerning the iPad trademark is going through the judicial process,” Yan said. But he added that “according to our government’s laws, Shenzhen Proview is still the lawful representative and user of the trademark”. Beijing has sought to showcase its determination to protect trademarks and other intellectual property, but with hundreds of thousands employed in the assembly of Apple’s iPhones and iPads, it is unlikely to want to disrupt the company’s production and marketing on the mainland. Ma Dongxiao, a lawyer for Proview said the company had expected all along to settle with Apple, with the key sticking point being the amount of money involved. “It is likely that we will settle out of court. The Guangdong High Court is helping to arrange it and the court also expects to do so,” Ma said. Court officials said they were not authorised to comment on the issue to foreign media. “Given the wide implications of this case, we need to wait to see the final ruling of the court, which will decide the ownership rights for the trademark,” Yan said. “We will proceed with the case in a prudent manner.” He said commercial authorities that had received complaints about Apple’s use of the iPad trademark were collecting evidence. “Once the ruling emerges we will handle the case according to the evidence we have,” he said. Chinese courts often try to mediate agreements out of court. But it is unclear whether Apple is open to that option. Proview, a financially troubled maker of computer displays and LED lights, says it registered the iPad trademark more than a decade ago. Apple says Proview sold it worldwide rights to the iPad trademark in 2009, though the registration was never transferred for the mainland. Proview’s other worldwide trademarks for the iPad name were owned by another subsidiary of the Proview Group, Taiwan-based Proview Electronics. But the mainland trademark was registered by Shenzhen Proview. An Apple spokeswoman, Carolyn Wu, said the company had no new comment on the possibility of a settlement with Proview. In a statement, Apple reiterated its earlier insistence that it would never “knowingly abuse someone else’s trademarks”. The statement adds that Proview “still owe a lot of people a lot of money; they are now unfairly trying to get more from Apple for a trademark we already paid for”.

Xie Yalong, the former head of the China Football Association (CFA), is pictured in this file picture from a press conference in Beijing, in February 2005. Xie stood trial in the city of Dandong, Liaoning province on Tuesday, Xinhua said, becoming the highest-ranking former soccer official to face justice. The former head of China’s scandal-plagued soccer league and other top officials from the game went on trial on Tuesday as an effort to stamp-out rampant corruption in the game reached a climax. Xie Yalong, former chief of the Chinese Football Association (CFA), stood trial in the city of Dandong in the northeastern province of Liaoning on Tuesday, Xinhua news agency said, becoming the highest-ranking former soccer official to face justice. His successor at the CFA, Nan Yong, was to face trial a day later in a court in the city of Tieling, also in Liaoning, for accepting bribes. Dozens of league and club officials and referees have been ensnared for their parts in a match-fixing and gambling scandal exposed two years ago, which has rocked Chinese soccer by lifting the lid on deep-rooted corruption. The exposure of widespread betting on games, match-fixing, and crooked referees combined with poor performances by China’s national squad to make football a laughing stock among increasingly indifferent fans in the mainland. Xinhua said the court in Dandong also began the trials of Wei Shaohui, former manager of the Chinese national soccer team, and Li Dongsheng, former head of the CFA’s referee committee. Meanwhile, the court in Tieling will also try four former Chinese internationals – Shen Si, Qi Hong, Jiang Jin and Li Ming – on Wednesday, the news agency added. A staffer at the court in Dandong who declined to be identified confirmed Xie’s trial started on Tuesday but said he did not know when a verdict would be delivered. Calls to the court in Tieling went unanswered. A CFA spokesman declined comment. A court in February sentenced two top former CFA officials to more than a decade in jail each. The CFA’s ex-deputy chief Yang Yimin was convicted of accepting bribes worth 1.25 million yuan (HK$1.53 million) from about 20 clubs to fix fitness test results and sentenced to 10 and a half years, state media said. Zhang Jianqiang, the former director of the association’s referee committee, received a 12-year jail term for taking bribes worth a total of 2.73 million yuan on 24 occasions, reports said.

Chinese Premier Wen Jiabao has steered clear of direct comments on Europe's debt crisis as he tours the region, but he has highlighted longstanding trade concerns in a subtle reminder of what Beijing wants in return for helping to bail out the euro zone. In the middle of an eight-day, four-nation visit, Mr. Wen has spoken only generally about the European economy, while managing obliquely to remind his hosts that China wants Europe to grant China the status of full market economy, lift a ban on weapon sales and ease curbs on high-tech exports to the country. The tour so far has been low key, as is often the case with Chinese leaders. Starting his trip Friday in Iceland, Mr. Wen commended the Nordic country's efforts to boost its economy after a banking collapse brought it to its knees early in the global crisis. In Germany on the second leg of his visit, he said Europe's debt woe has brought difficulties to the region but also give the continent the opportunity to strengthen its unity. Opening a trade fair Monday in Germany's Hanover, Mr. Wen noted that the European Union is China's largest trading partner, saying a recovery in Europe will benefit China. He called for China and Germany to boost annual bilateral trade to $280 billion by 2015 from last year's $169 billion. And he included a gentle barb: China places equal emphasis on imports and exports and is willing to import more from Germany, Mr. Wen said in a speech, adding that he hopes "Germany would vigorously urge the European Union to relax curbs on high-tech exports to China." Europe's restrictions on exports to China are a longstanding irritant for Beijing. In December Vice Foreign Minister Fu Ying said while China has been a "positive and healthy participant" in international efforts to aid Europe, the region in turn should "show sincerity" on issues that are hindering the development of China-Europe relations, notably the weapons embargo. German Chancellor Angela Merkel, speaking alongside Mr. Wen, said it is important for both countries to push for open markets, fair competition and protection of intellectual property. She added that Mr. Wen has made important strides to protect intellectual property in China—a recurring sore point for China's trade partners. There is plenty that Mr. Wen and his hosts—he goes to Poland Wednesday with a large business delegation in tow—could be discussing in private about the euro-zone crisis. China has given Europe a helping hand, actively buying Spanish, Greek and Hungarian bonds, and making huge investments in ports and railways in Greece. Beijing pledged over the weekend to join in boosting the International Monetary Fund's crisis-lending capacity, although it hasn't specified how much it money it will pump in.

Cameron may work on Chinese film - Titanic director James Cameron and his wife, Suzy Amis, walk the red carpet at the Second Beijing International Film Festival. James Cameron - the director of box office smashes Titanic and Avatar, who is known for his cutting-edge special effects - may soon work on a 3-D Chinese film. Cameron told a news conference at the Second Beijing International Film Festival on Monday that his company would probably join the crew of The Art of War, a 3-D Chinese film based on the classic book about military strategies. "We are still in discussions, but have agreed on the principles that we will provide certain service to ensure the quality of 3-D," he said. The film's director, Hu Bo, approached him a year ago and sought opportunities for his company to provide 3-D camera and technology for the first epic 3-D film in China. "There is no signed agreement now, but we are very excited about the possibilities to work with Chinese companies, especially when China as a market has been expanding so rapidly," Cameron said. China has become the second-largest box office contributor outside North America for many Hollywood blockbusters, including Cameron's Avatar, which grossed 1.3 billion yuan ($210 million) in the country, about 8 percent of the film's global box office revenue. His Titanic 3-D has raked in more than 500 million yuan in two weeks in Chinese theaters. Adding to the boom is a deal made earlier this year during Vice-President Xi Jinping's visit to the United States, which raised the foreign films' box office share in China to 25 percent, a jump from the original 13 percent. And 14 more foreign films (above the current 20), mainly IMAX and 3-D productions, will be released in Chinese theaters. Cameron gave a lecture to students of the Beijing Film Academy, and will talk about 3-D technology in the making of Titanic. His traveling companions to Beijing include James Gianopulos, chairman of Fox Filmed Entertainment, John Landau, his work partner and producer for 18 years, and Wendi Deng, wife of News Corporation chairman and CEO Rupert Murdoch. They will talk about international co-productions at a forum today with Michael C. Ellis, president and managing director of the Asia-Pacific Region for the Motion Picture Association of America, and Han Sanping, chairman of China Film Group. The director is open to further involvement in the Chinese film industry. "The government is clearly creating incentives for co-productions," he said. "But there are requirements that need to be met, such as the approval of scripts. We need to weigh those factors very carefully." 

Hong Kong*:  Apr 25 2012 Share

Chief Executive Donald Tsang Yam-kuen has given an assurance that a middle-class housing scheme that he set up will go ahead despite the change of government. Tsang fended off worries yesterday, a day after a newspaper reported that My Home Purchase Plan, a rent-or-buy programme that he commissioned the Housing Society to operate in 2010, might be aborted after chief executive-elect Leung Chun-ying takes over in July. The government has yet to sign a memorandum with the society for the project, designed as a relief measure for would-be homeowners who earn up to HK$40,000 a month. Under the scheme, applicants will be able to rent the flats for up to five years after which they can use half the total rent paid towards a down payment on a flat in the same project or elsewhere. "I have not heard Mr Leung say anything bad about My Home Purchase Plan. We share a common goal - to serve the public," Tsang said after a news awards ceremony. "Our plan has not changed at all. The first batch of the flats will have been built in 2014 and they will be open for pre-lease by the end of this year. The scheme runs as scheduled." Tsang stressed that he maintained good contacts with Leung and that they met at least once a week. "I am very confident that there will be a seamless transition. I believe that is the concern of all Hong Kong people," he said. Leung said in his housing platform that Tsang's scheme, to deliver a total of 5,000 flats in five districts, was small and fell short of the needs of the middle class. He proposed seeking other sites to build another type of housing for the group. A spokeswoman for the chief executive-elect's office said it would not "comment on the policies of the incumbent administration". Michael Choi Ngai-min, who helped Leung draft his platform said: "Although we did not much discuss My Home Purchase Plan when we wrote the platform, no one ever said it should be aborted." The Housing Society has repeatedly expressed dissatisfaction with the scheme. Chairman Yeung Ka-sing has said it would bring financial uncertainties to the society, mostly because a "ceiling sale price" would be guaranteed for tenants as they moved in, regardless of any rise in property prices during the tenancy. Yeung also called for resurrecting the scrapped Sandwich Class Housing Scheme, which was a simpler programme that delivered subsidised homes directly for sale. A society spokesman said yesterday that it had "committed" to the first My Home project in Tsing Yi and construction work had started. "The memorandum has not been signed because we have not yet reached a consensus with the government, especially on financial arrangements," he said. It is understood that the Lands Department wants the society to pay an additional premium for the sitealthough the society had already paid a premium for a scrapped "flats-for-sale" scheme about 10 years ago. The society is negotiating the amount payable and the way to pay it - whether in a lump sum or as each flat is sold.

"Never say never" is one of the first rules of politics. And it may well apply to Fanny Law Fan Chiu-fun, the former campaign director for chief executive-elect Leung Chun-ying. After hunting for a month, Leung eventually announced last week that Law would head his transition office, even though she said during the campaign that she would not be part of his team after the election. Law has said she will only fill the post until June 30, but that leaves open the question of who will become Leung's future chief of staff. Law's appointment is controversial for several reasons. As Leung's campaign director she was criticised by opposition groups for saddling him with "negative equity" due to her high-handed manner in pushing education reform when she was permanent secretary for education and manpower from 2002 to 2006. Both Leung and Law repeatedly assured the public when she was campaign director that she would not join Leung's cabinet if Leung won the election. When asked about her apparent U-turn, Law replied: "I take up this job after considering the situation as a whole. After all, my term will end by June 30," which is before Leung takes office. What is "the situation as a whole"? Leung has been frank enough to admit that he was able to find no one more suitable than Law. Law shares his vision for Hong Kong. But also, it would be difficult to find anyone who would want to give up a decent full-time job to sign a contract of less than three months. And Leung realises only too well that he lacks administrative experience, or, to use his own words, is "not up to standard", and this could cost him in achieving a smooth transition. Law was a civil servant for more than three decades and she was the director of the first chief executive-elect office back in early 1997 for Tung Chee-hwa. She knows the bureaucracy well and any troubles the new administration may encounter in the transition of power. One immediate difficulty will be for Leung to expand his team as he said he would in his platform. He wants to create two department deputies: a deputy chief secretary and a deputy secretary of finance. Leung also said he would set up a Culture Bureau in an attempt to boost Hong Kong's cultural sector. In addition, he wants to split the Commerce and Economic Development Bureau into a Commerce and Tourism Bureau and an IT Bureau. This will make a total of 14 bureaus instead of the current 12. Ideally, Leung would like his full team in place by July 1, when he and his team will be accepting appointments from visiting state leaders, most notably President Hu Jintao , in the grand hall of the Convention and Exhibition Centre in Wan Chai. But accomplishing that will be easier said than done. The current chief executive, Donald Tsang Yam-kuen, gave Leung some tips when Tsang returned last week from a trip overseas. "First, [Leung] needs to report to the central government for the proposed restructuring; second, submit the proposal to the Legislative Council and Executive Council; third, submit draft bills for necessary amendments of the relevant ordinance; and fourth, apply for new headcounts and funding from Legco". While expressing a willingness to co-operate with Leung on all "procedural issues", Tsang left the most thorny task to Leung, saying: "The chief executive-designate and his team will explain to lawmakers, media and the public on their reasons behind the restructuring … It is not appropriate for me or my principal officials to comment on this." Tsang's comments again triggered speculation about his reluctance to co-ordinate with Leung over transition matters. But, to be fair, he cannot be expected to explain the new chief executive's plan to lawmakers on Leung's behalf. So Leung and Law must be well prepared for the tough job of lobbying lawmakers, without whose endorsement any restructuring will be empty talk. The pan-democratic camp has already sent out a warning signal, reminding Leung to hold a public consultation before coming to them for funding. They argue that there is no hurry to have the new deputies and bureau chiefs sworn in on July 1. But for Leung, a full team is of special importance to him in the July 1 handover ceremony. This Friday, Legco will discuss whether a special committee should be set up to deal with Leung's proposals. To make matters worse, if Leung fails to persuade lawmakers to accept his proposals before July 1, he has to wait till late September, when the next Legco's term will begin. Since it will take months for lawmakers to review and pass his proposals, Leung may not have his full team formed when he delivers his maiden policy address in October. Clearly, dealing with the always fractious lawmakers is completely different from his swift and successful decision to oppose the Food and Health Bureau's negotiations over future quotas for pregnant mainlanders to give birth in the city. Leung is well aware of the traditional wisdom that "everything is hard in the beginning" and he definitely does not want to have a major setback before even taking up the top job. Fanny Law's appointment comes just in time. Whether she can persuade lawmakers to adopt Leung's proposals is unclear, but she is someone who knows well the tricks and secrets of legislative procedure. On Sunday, Law reiterated that she would start enjoying her retirement after July 1, and Leung said he already had someone in mind to be his future office director. But who knows what will happen in two months' time? So, better never say never again.

Clockwise from left, Post photographers Cheng Kok-yin, Felix Wong, and Sam Tsang; business reporter Denise Tsang; special projects editor Cliff Buddle; and reporters Cheung Chi-fai, Olga Wong, Simpson Cheung, Jennifer Ngo and Colleen Lee Yun-yan with their awards after the ceremony. The Post won six prizes in the annual awards. Chief Executive Donald Tsang Yam-kuen told journalists at an awards ceremony yesterday that negative reports of his links with tycoons had spurred him to improve himself. Tsang spoke as he officiated at the presentation of the Hong Kong News Award 2011, in which the South China Morning Post (SEHK: 0583) claimed six prizes. The revelation in February that Tsang had accepted luxury travel on yachts and a private jet ride from tycoons, whom he reimbursed with the cost of an economy-class ticket, and a bargain deal to rent a luxury penthouse in Shenzhen, since abandoned, led to claims of a conflict of interest and a first-ever motion to impeach a chief executive, due to be discussed by the Legislative Council next month. Tsang said any political figure would find such criticism hard to deal with, but he had reflected deeply on the incident and it had reminded him of the public's high expectations of politicians. While the media's questions had been embarrassing and he had struggled to control his emotions at times, he appreciated reporters were only doing their duty. ''On many occasions, friends from the media saw me scowling. On the one hand, I felt miserable. On the other hand, if you used other means to ask questions, maybe I could speak my mind more freely in answering your questions.'' He made a joke of his troubles when the hosts handed him souvenirs of the event, saying that he would be accepting benefits again. The Post received six prizes in the awards. Senior news reporter Cheung Chi-fai's ''Secret Land Deals'' was the second runner-up in the best scoop category, while senior business reporter Denise Tsang won the first runner-up prize for best business writing in English for her article ''Getting Rich on Low Pay''. Cheung highlighted land-use abuse by Wong Chuk Yeung villagers in Sai Kung, who sold their ''rights'' to build small houses to developers. Tsang travelled to Cambodia and Thailand to see how companies are faring after moving operations from Guangdong to lower their costs. She interviewed Hong Kong manufacturers, labourers, labour unions and trade associations about the growing trend of relocating labor-intensive manufacturing from the Pearl River Delta into emerging markets as a result of soaring wages. The collective efforts of the editorial department won second runner-up honours in the news reporting category for their coverage of the Fa Yuen Street blaze, the city's deadliest in 15 years, last November. The top prize in the features photography category went to Sam Tsang's ''Cloud Cover''. The top honour in sports photography went to K.Y. Cheng's ''Brothers in Arms'', which captured Frederico Oliveira of Portugal being tackled by New Zealand's Declan O'Donnell at last year's Hong Kong Sevens. Felix Wong was given a merit in the same section for ''Rough and Tumble'', taken at the Hong Kong rugby championship grand final. The awards, organised by the Newspaper Society, attracted a record 523 entries. Sixty-five prizes were awarded to 15 newspapers.

A team of Hong Kong scientists will join the nation's first lunar project by developing a device to recover samples for the journey back to earth. Polytechnic University yesterday signed a contract with the China Academy of Space Technology on the research and development of a "surface sampling and packing system" for the third and final phase of Chang'e, the nation's first lunar exploration programme, Xinhua reported. The device will be used to collect samples of lunar rock in a mission expected to be completed in 2017. Beijing has adopted Hong Kong as a trade and financial centre, but has long neglected the city's scientific talent and resources, say mainland space experts. In recent years Hong Kong researchers' ability to develop sophisticated devices for space missions has been recognised, and Beijing is likely to give them wider access to the nation's space projects. Professor Yung Kai-leung, associate head of the university's department of industrial and systems engineering, will lead the research. Yung has helped produce sophisticated tools for previous space missions, including the development of a Mars rock corer for the European Space Agency's 2003 Mars Express Mission; forceps for Russia's Mir Space Station; and a soil preparation system for Phobos-Grunt, Russia's ill-fated expedition last year to one of the moons of Mars. Beijing divided the Chang'e project into three phases - orbiting, landing and returning - over two decades starting from 2003. The first phase has been completed and the second is expected to start next year. Yung could not be reached for comment yesterday, but the university said he was recently appointed as a member of the lunar project's expert panel. A senior satellite expert with China Aerospace Science and Technology Corporation yesterday said the collaboration with Hong Kong scientists would bring technological and political benefits. Most Hong Kong scientists received excellent education and training from top universities in the West, and their ideas would almost certainly be of value to China's space projects, the expert said. But political reasons were also part of Beijing's consideration, said the expert. "When Hong Kong residents see a Chinese lunar rover on television, they can point at it and say: 'Look, that part is made in Hong Kong. Stronger involvement brings stronger unification."

The Hong Kong Exchanges and Clearing (0388) has won shareholders' approval to issue more shares when the board sees fit, paving the way for its acquisition of the London Metals Exchange. he resolution to grant the board the right to issue up to 10 percent of its existing share capital, up from 5 percent, took 95 percent of the votes cast. About 4.6 percent of votes went against the resolution. Based on yesterday's market capitalization of HK$138 billion, the company can now tap up to HK$13.8 billion from the market. The local bourse operator is seen as a frontrunner to acquire LME, the world's benchmark metals market. Other potential buyers, which include some of the largest exchange operators in the world - CME Group, ICE and NYSE Euronext - are to submit their final bids by early next month. HKEx is also seeking loans of as much as US$3 billion (HK$23.4 billion) for acquiring LME, according to Reuters. But chairman Ronald Arculli yesterday again refused to comment on a buyout. In his last annual general meeting as chairman, he rejected shareholders' questions on whether the exchange should reduce dividend payouts in order to boost its cash positions rather than seek to issue more shares. He said cutting dividends may spark an even larger debate, and stressed the bourse will issue shares only when necessary. Morgan Stanley has slashed the bourse's target price to HK$100 from HK$110 as daily trading volume remained weak. HKEx chief executive Charles Li Xiaojia admitted the extension of trading hours, which he had personally promoted, "was not necessarily conducive to boosting trading volumes." Arculli said the next chairman will face many challenges but he did not comment on whether newly appointed director Chow Chung-kong will succeed him. Arculli has been appointed a director and will remain a member of the board. HKEx shares fell 0.9 percent to HK$127.70 yesterday.

One of Britain's most senior education officials has expressed concern that the country's tough new immigration rules for foreign students may deter applicants. Leszek Borysiewicz (pictured), the vice chancellor of the University of Cambridge, said he was worried that the new rules might portray Britain as unwelcoming to overseas students. "It gives us a real cause for concern if very bright students from overseas go elsewhere and didn't look at Cambridge as an opportunity for them," he said. The new rules now require foreign students to have a stronger command of English to enter Britain. This means applicants must attain at least the "upper intermediate" (B2) level of English in the Common European Framework of Reference for Languages - a step-up from the previous requirement of attaining the 'lower intermediate' (B1) level. Students must also complete their studies in Britain within a time limit, and job-hunting after graduation is now forbidden. They may only work in Britain if a job offer is made before they graduate. "We will be working closely with the Home Office to make sure that the high-quality students who have been successful in fierce competition can study in Cambridge," said Borysiewicz, who was in Hong Kong earlier this month to attend the first conference for Cambridge alumni outside of Britain. He also received an honorary degree from the University of Hong Kong for his contribution to medical research and higher education. British immigration officers now have the authority to deny entry to foreign students who cannot communicate in English without an interpreter. The tightening of Britain's immigration rules is aimed at resolving the problem of foreign students who seek employment after their study visa expires. "Britain always prides itself on taking in many people who enrich the population of the UK, but some of these new rules set a different tone," Borysiewicz said. "The fact that you have to go through this bureaucracy may make somebody feel they may not want to come to the UK." Nevertheless, the new rules have not dampened Hongkongers' interest in studying at Cambridge, which saw a rise in the number of such applications. This year, 489 Hongkongers applied to Cambridge, with 90 receiving offers. Last year, 367 Hongkongers applied, with 65 receiving offers. On rumours that Cambridge would be privatised, Borysiewicz denied the speculation, saying the university had no plans to end its reliance on government assistance. Starting in September, Cambridge students from Britain and the European Union will begin paying £9,000 (HK$92,300) per academic year - the new tuition fee cap for British universities. Currently, British universities can only levy £3,000 per academic year at most for British and EU students. Tuition fees for foreign students remain unchanged at £13,000 to £31,000 per academic year, depending on subject choice. Borysiewicz said the new tuition cap of £9,000 was "a double-edged sword" that "alleviates the higher costs of education", but "may deter students from a poorer socioeconomic background from applying". But he would ensure that applicants were reviewed in an impartial manner and that Cambridge would do its best to help pay for applicants' tuition fees if the individual could meet the academic standards. The application rate to Cambridge has risen by 2 per cent this year, contrary to the national trend in Britain. "To me, it's not just about applying to Cambridge. It's about applying to universities in general," said Borysiewicz. "All of us at Cambridge believe it is very good to have the largest number of students experience a university education in the United Kingdom." There are 1,830 Cambridge alumni in Hong Kong, the seventh highest number in the world.

The appointment of Leung Chun-ying’s aides continued to make news on Monday when it emerged that a mainlander had joined the chief executive-elect’s office, sparking criticism from lawmakers. Chen Ran, one of Leung’s aides during the recent election campaign, has joined the office as a project officer and will hold the post until the end of June, when Leung’s administration takes power, the Office of the Chief Executive-elect said on Monday. Confirming a report in the local media, it acknowledged that Chen was not a permanent Hong Kong resident. It did not comment on the suggestion in an Apple Daily report that Chen was a former member of the Communist Youth League of China, a youth arm of the Community Party. Labour Party chairman Lee Cheuk-yan said allowing a mainlander to take up a political position undermined the principle of “one country, two systems”. New People’s Party chairwoman Regina Ip Lau Shuk-yee said it dealt a blow to the civil service system and set a bad precedent. “Some civil servants’ groups have told me that a position in public office should be filled by a Hong Kong permanent resident,” she said. “Though this time it involves one person only, there is a possibility more similar appointments will follow in future.” The chief executive-elect office has applied to the Civil Service Bureau to get Chen’s appointment approved, it said, on the grounds that it was a short-term position which called for a candidate familiar with Leung’s policy platform. Chen’s controversial appointment follows that of Fanny Law Fan Chiu-fun to manage the chief executive-elect’s office. Critics accused Law, a key strategist in Leung’s campaign, of reversing her earlier vow not to rejoin the public service.

Young Wine Fails to Sell - A lot of six bottles from Domaine de la Romanée-Conti, each from a different year starting in 1996 to 2001, sold for HK$726,000 at a Christie’s auction last weekend. The auction, held Saturday in Hong Kong, was only 74% sold, reflecting the choppy market for the world’s most coveted wines. Earlier in the month, Sotheby’s sold all of its wines at another Hong Kong event. Christie’s results contrast with last year’s record-breaking sellout events, but these days, the market is fickle. On Saturday, Château Lafite Rothschild and Château Latour wines went unsold, though Bordeaux wines in rare, large-format bottles, as well as several Burgundy bottles, remained sought-after items. Since mid-2011, the fine wine boom, which was largely driven by demand from Asian buyers, has started to fizzle. The Liv-Ex 50 Fine Wine Index, which follows the top Bordeaux first-growth wines, is down 23% since its peak in June. Christie’s tried to put a positive spin on the event, saying that there’s still demand for top bottles. There was “gratifying interest” from mainland Chinese buyers, “my sense is that the focus has shifted from young wines to more mature vintages,” said Charles Curtis, the auctioneer’s head of wine in Asia. The auction’s biggest sale was a 56-bottle collection of La Tâche Domaine de la Romanée-Conti that included one bottle per year from 1951 to 2008, excluding 1968. It went for 1.2 million Hong Kong dollars (US$155,000), on the low end of Christie’s earlier estimates.

Hong Kong's Securities and Futures Commission revoked the listing-sponsor license of a local brokerage firm for its alleged failings as underwriter of a 2009 share offering, in the commission's boldest move yet to ramp up oversight of new company listings. The SFC on Sunday accused Mega Capital (Asia) Co., a unit of Taiwan financial conglomerate Mega Financial Holding Co., of inadequate and substandard due-diligence work as it prepared the listing of Taiwan-based clothing maker Hontex International Holdings Co. It also slapped Mega Capital with a fine of 42 million Hong Kong dollars (US$5.4 million), the biggest financial penalty ever imposed by the securities watchdog. Mega Capital has also helped underwrite several smaller Taiwan-related IPOs in Hong Kong. Mega Capital's law firm, Baker & McKenzie, declined to comment Monday. The SFC said Sunday that Mega Capital has denied any wrongdoing. The SFC's revocation of Mega Capital's listing-sponsor license means the brokerage firm will be allowed to continue to deal in securities but won't be permitted to advise companies on IPOs. Just months after Hontex's listing in December 2009, the SFC sought court approval to freeze the company's assets and to recover nearly US$130 million raised by Hontex, which the regulator alleged provided investors with false or misleading information. The legal case over a potential return of funds is continuing. Hontex has since said in a stock-exchange disclosure that some statements in its listing prospectus were unreliable, without elaborating. Hontex couldn't immediately be reached for comment Sunday night. Trading in Hontex shares has been suspended since March 2010. The shares were down 4.2% from their IPO price at the time of the suspension. The SFC has been pushing for investment banks and brokerage firms that underwrite initial public offerings in Hong Kong to make sure that companies seeking listings produce reliable and accurate data. Last year, the SFC conducted an inspection of 17 IPO underwriters and said it uncovered various problems, including inadequate internal systems and controls over sponsor work and sloppy due-diligence work. The SFC didn't identify the 17 underwriters that were inspected. Hong Kong was the world's top venue in 2011 for new listings. , as measured by amount of money raised, its third straight year as No. 1. Companies listing in Hong Kong raised about US$36 billion last year. The SFC set up guidelines governing IPO sponsorship that took effect in 2007, requiring IPO sponsors to have sufficient resources and capacity to perform their duties and also conduct annual assessments of their work. The commission alleged Sunday that Mega Capital failed to act independently as sponsor of Hontex's Hong Kong listing, saying that Hontex had arranged and was present in all interviews between the brokerage firm and the company's suppliers and customers. "Mega Capital's failure in discharging its sponsor's duties prejudiced the regulatory assessment of Hontex's suitability for listing and jeopardized the interests of the investing public," said Mark Steward, the SFC's head of enforcement. The SFC's decision to ban Mega Capital from its underwriting roles comes just days after the commission announced plans to consult the public over new regulations for listing sponsors. A person familiar with the situation said Friday that the SFC hopes to strengthen guidelines covering the conduct of listing sponsors, which operate under licenses granted by the commission, and examine the responsibilities sponsors take on in local IPOs. In addition, the SFC is also considering making underwriters legally liable for the accuracy and completeness of listing prospectuses, the person said. Imposing legal liability, however, would require revisions to the Securities and Futures Ordinance—the SFC's main legal tool to combat market misconduct—as well as other company laws in Hong Kong, a process that could take several years to complete. The person said the changes could potentially face additional delays because the current legislature's term will end later this year, with a new group to be elected in September. Lawyers say it makes sense for Hong Kong to follow countries like the U.S. in having tougher rules regulating investment banks and brokerage firms. "In the U.S., underwriters do have civil liabilities if there's any misleading listing information," said a Hong Kong-based partner at an international law firm. The most severe enforcement action at present is for the SFC to revoke licenses of the underwriters, and it also has the power to impose fines. "This is very different from forcing them to compensate investors for their losses," the lawyer said. To be sure, bankers and analysts say Hong Kong already has strict vetting rules for new share listings. For example, listing applications must be approved by both the Hong Kong stock exchange and the SFC, a so-called dual-filing regime that is unique to this international financial center and is in part aimed at maintaining the quality of listing candidates.

 China*:  Apr 25 2012 Share

China and the United States will hold the fourth round of their Strategic and Economic Dialogue (S&ED) from May 3 to 4 in Beijing, Foreign Ministry spokesman Liu Weimin said Monday. Liu made the announcement during a routine press briefing. Vice Premier Wang Qishan and State Councilor Dai Bingguo, special representatives of President Hu Jintao, will co-chair the dialogue with U.S. Secretary of State Hillary Clinton and Secretary of Treasury Timothy Geithner, special representatives of U.S. President Barack Obama. Liu said both sides will use their meeting to further implement the consensus of both leaders, advance the construction of their bilateral cooperative partnership, deepen communication and coordination on macroeconomic policies and major issues in the world economy, boost economic and trade cooperation and enhance communication on international and regional affairs. The S&ED was created in 2009 to help both nations manage their bilateral relations and promote communication.

China’s factories posted their best performance this year as a measure of new business rose from multi-month lows, a private sector purchasing managers survey showed on Monday, though overall activity still contracted for a sixth successive month. Readings for output and export orders also perked up as the HSBC Flash Purchasing Managers Index (PMI) painted a picture of a stabilising factory sector and supported the view that China’s growth rate bottomed out in the first quarter of the year. “The index pointed to a slower pace of deterioration than in March, largely reflecting slower rates of decline of manufacturing production and new orders,” said Markit Economic Research, which publishes the index. The overall index, the earliest indicator of China’s industrial activity, recovered slightly to 49.1 in April from a final reading of 48.3 in March, but still below the 50 level -- signifying contracting economic activity. It was the strongest flash, or preliminary, readout for four months, and if confirmed would also mark a four-month peak for the final reading. The HSBC manufacturing PMI index has not been consistently above 50 since June last year, although it is far above readings in the low-40s struck during the depth of the global financial crisis in late 2008 and early 2009. The new orders sub-index, which carries the heaviest weighting of the five components making up the overall PMI, bounced to 48.9 from the four-month low seen on the March flash index. It was just behind the reading for the output index, which also failed to rebound past the 50 mark. “We believe this reinforces our view that economic growth bottomed in Q1,” Zhang Zhiwei, chief China economist at Nomura in Hong Kong, said in a note to clients. “Nonetheless, the flash PMI remains below 50, which indicates a rather moderate recovery. We still expect monetary and fiscal policy to be loosened in Q2.” An index reading of 50 marks the line between expansion and contraction of activity, according to the methodology of the survey compiled by British-based Markit. HSBC, the survey’s sponsor, believes a reading of 48 signals a level of industrial output consistent with economic growth above 8 per cent. Market reaction was muted, with Asian equities paring losses slightly but remaining down on the day, while the Australian dollar, sensitive to data from the country’s biggest single export market, briefly ticked up. The uptick in the index indicates an acceleration of manufacturing activity compared with lows at the beginning of this year, helped by new export orders. That sub-index signalled a very slight contraction as it delivered its strongest reading since January. “This suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown,” HSBC’s China chief economist, Qu Hongbin, wrote in a statement accompanying the release of the survey. China’s official PMI hit an 11-month high of 53.1 in March and saw an uptick in exports and new orders . That survey includes more state-owned firms in its results, while Markit captures more credit-constrained private firms in its survey. The two surveys also have differing methodologies for seasonal adjustment. Some analysts say the official survey has a better track record of flagging economic turning points. China’s annual rate of GDP growth slowed to 8.1 per cent in the first three months of this year, down from Q4 last year’s 8.9 per cent. That was below consensus forecasts but above the most bearish investor calls, leading many analysts to believe that the downswing in the world’s second-biggest economy may have bottomed out. The consensus view is that the risk of a hard economic landing for China has now largely passed. Still, China continues to struggle with overcapacity in most manufacturing sectors, including steel, plastics and textiles, thanks to manufacturers’ strategy of expanding as rapidly as possible to maintain market share as well as their need to produce as much as possible to maintain cash flow. The survey noted that, while new orders appeared to be stabilising, backlogs of work had not risen. Meanwhile, the employment index rose only marginally from a three-year low in March. That could push China’s leadership to deliver on the policy easing that is being priced into markets to avoid the possibility of social unrest. Economists in a Reuters poll last week forecast that China would cut the level of cash the country’s big banks must hold as reserves – the required reserve ratio (RRR) – by 150 basis points by the end of the year to keep money supply and credit growth steady to cushion an economy on track for its slowest full year of growth in a decade. The purge of popular politician Bo Xilai, who headed the giant inland city of Chongqing, raises concern that a power struggle at China’s highest leadership levels risks seeing dissatisfaction among the people break out into the open.

Chancellor Angela Merkel and Premier Wen Jiabao at the opening the Hannover Messe (trade fair), in Germany on Sunday. The global financial crisis is not over and technical innovation and investment will be the key to sustaining what remains a “tortuous” recovery, Premier Wen Jiabao said on Sunday during a visit to Germany. Wen also said China, the world’s biggest exporter and second largest economy, would press on with reforms aimed at creating better legal protection for foreign investors – a major concern for the growing number of German firms active in the country. “Currently, the international financial crisis is not over and the global economic recovery is difficult and tortuous,” Wen said at the Hanover trade fair, which was also attended by German Chancellor Angela Merkel. More investment in the real economy and technical innovation will be the most powerful drivers of global recovery, he said. China’s annual economic growth slowed to 8.1 per cent in the first quarter of this year from 8.9 per cent in the previous three months – the fifth consecutive quarter of slowdown. “The reason why the global economy cannot walk out of the shadow of the [financial] crisis is also related to the lack of new growth points in the real economy,” Wen said, adding that China and Germany had fared better than most during the crisis due to their strong manufacturing bases. “[The two countries] will surely have an ever more important role to play in innovation and development of worldwide industry,” he said. Merkel, whose country has faced criticism over its insistence on reducing debts even during a time of poor growth in much of the developed world, said Germany wanted to strike a good balance between fiscal discipline and fostering growth. “We must succeed with both because responsibility rests with Germany too for a sensible global economic development,” she said. Merkel praised China’s huge stimulus package launched during the financial crisis, saying it contributed to Germany’s own export-led recovery. Germany has also welcomed China’s pledge last week to contribute towards new funding for the International Monetary Fund meant to protect the global economy from the euro zone debt crisis. The economies of China and Germany – the world’s second biggest exporter – are increasingly intertwined, with bilateral trade jumping to 130 billion euros in 2010 from 94 billion in 2009. Germany produces the machines and equipment that China’s companies need to manufacture their goods, many of which in turn end up back in Germany. China is also a giant market for high quality products made in Germany such as cars and electrical goods. The main Chinese exports to Germany are electrical goods, toys, and textiles. On Monday, Wen was expected to sign a deal with German carmaker Volkswagen for the building of a new factory in the western province of Xinjiang. “China’s national policy of opening up [its economy] to the outside world will not change,” Wen said in Hanover, adding that Chinese firms were also looking to increase their own investments overseas, including in Germany. Wen repeated Beijing’s pledge to improve its legal framework and protection of intellectual property and give equal treatment to foreign companies in government procurement. China will create a “fairer and more stable transparent and predictable environment” for foreign investors, said Wen, whose tour of northern Europe began in Iceland. Many Chinese academics are beating the drum for deepening economic reforms and steps to tame state-owned conglomerates, which strengthened their domination of key sectors after Beijing’s 4 trillion yuan (HK$4.89 trillion) stimulus package launched in 2008. Free market reforms, launched by former leader Deng Xiaoping in 1978 and underpinned by China’s entry into the World Trade Organisation in 2001, are starting to lose steam, they say. About 500 Chinese exhibitors are taking part this year’s Hanover trade fair, in which China has the status of “partner” country and which is expected to draw around 200,000 visitors in coming days.

Chinese-American actress Joan Chen speaks at the Committee of 100 annual conference held on Thursday and Friday in Pasadena, California. A new US-China survey finds that "despite growing mistrust, citizens from both nations acknowledge the need for improved political and business cooperation and diplomacy." The Committee of 100 (C-100), a national non-partisan, non-profit Chinese-American cultural-exchange advocacy organization, released the results of the survey on Friday at its annual conference in Pasadena, California. A majority of Americans and Chinese agree that: China will have leading influence in the Asia-Pacific region 20 years from now; China will have the most influence over the global economy in the next 20 years; and the US will remain the world's leading superpower during the next 20 years. "We will use this study to advocate for constructive relationship-building between the peoples of the US and China, and to further promote education, diplomacy and leadership development," said Dominic Ng, C-100 chairman and chairman and CEO of Southern California-based East West Bank. Favorable opinion has increased among all US respondent groups since 2007, particularly among business leaders, from 54 percent to 72 percent. Unfavorable opinion decreased significantly in the US since 2007 across all groups: public from 45 percent to 37 percent, opinion leaders from 43 percent to 35 percent, and business leaders from 41 percent to 27 percent. On the China side, while favorable opinion among the general public has held steady since 2007 at around 60 percent, unfavorable opinion has increased slightly by 4.6 percent. Favorable opinion among opinion and business leaders remains more than 90 percent, although the level decreased slightly by 3.8 percent among business leaders since 2007. Both US and China business and opinion leaders misestimated the general public's opinion of each other. US leaders said about 20 percent of the US public views China favorably. In fact, 55 percent of the public reports favorable views of China. Business leaders in China said about 82 percent of the public holds favorable views of the US. However, the survey found about 59 percent of the public reports favorable views of the US. Regarding initial thoughts toward each other, culture, history, food and the Great Wall are the first things that come to the mind for the American public. And, war and the military are the first thoughts that come to mind for the Chinese public, which is consistent with a survey that C-100 conducted in 2007. Approximately two-thirds of leaders from the US report improved opinions about China after visiting the country, but about 28 percent of the Chinese public who visited the US reports less favorable impressions. The survey revealed mistrust between the two countries. More than 50 percent of the Americans surveyed said the US should trust China "little" or "not at all", while more than 50 percent of Chinese think the US is not trustworthy. The survey was conducted by Harris Interactive in the US and Horizon Research Consultancy Group in China.

A worker preparing an outdoor advertising board in Nanjing, Jiangsu province. China's advertising market is growing rapidly, but the main players remain foreign firms. Multinational agencies are winning the battle for the biggest advertisers - Tony Fan, 35, the owner of a Beijing-based advertising agency, had been talking the whole day with his business partners about the company's latest failed bid, which was won by a multinational advertising company. "Instead of feeling depressed, I'm honored to have the chance to compete with large international companies," he said. His company, IBrand Solution (Beijing) Ltd, founded in 2006, is a small one with fewer than 10 employees and an annual profit of only several million yuan. Its clients range from international non-governmental organizations to regional consumer goods companies. Some multinational advertising corporations are in de facto control of China's advertising market due to their advanced management, rich experience, adequate funding and high-end professionals. Since the opening-up of the Chinese market at the end of 1970s, the rapid development and potential of the nation's advertising market attracted the attention of members of the American Association of Advertising Agencies, known as 4A enterprises, which were eager to enter China in the 1990s. Statistics show domestic advertising agencies generated revenue of 94.04 billion yuan ($14.94 billion) in 2010, which accounts for only 40.18 percent of China's total advertising turnover, up 10.7 percent year-on-year, lower than the average growth of the industry. At the same time, there were only three domestic advertising companies among the top 10 advertising agencies by annual revenue in 2010 - Charm Communications Inc, Guangdong Advertising Co Ltd and AVIC Culture Co Ltd. Data from the China Advertising Association shows that the top 10 advertising agencies realized revenue of 36.4 billion yuan in 2010, accounting for 39 percent of advertising agencies' total turnover, rising 4 percentage points from the year before. More clients and high quality resources have been attracted to large advertising companies, especially multinationals. "Multinational advertising agencies have more adequate finance, more advanced technology and management and more talents, posing a threat to domestic agencies," said Professor Huang Shengmin, dean of the Advertising School at Communication University of China. With a globally unified working system and specific analytical tools, Ogilvy & Mather Advertising, one of the largest marketing communication companies in the world, possesses not only a global service network but has also accumulated large amounts of professional knowledge, Shenan Chuang, CEO of Ogilvy & Mather Greater China, told China Daily in an exclusive interview. "Compared with young Chinese advertising agencies, foreign advertising conglomerates understand the market economy and marketing management more deeply and comprehensively," said Dang He, chairman and chief executive of Charm Communications Inc. The State Council released the plan on culture industry revitalization on Sept 26, 2009, the first time that China announced clearly and definitely that it would boost the development of the culture industry, such as advertising, comics and animation. As a result, advertising became a strategically important industry that the nation was going to foster. The following year, four Chinese advertising companies were listed. This "was a sign that late-starting Chinese advertising companies were beginning to compete in the capital market and continue to strengthen in the coming years", said Qiao Jun, a professor at the School of Journalism and Communication at Nanjing University. Statistics show that the number of advertising agencies in China reached 243,000 in 2010, with total revenue of 234.05 billion yuan in the year and 1.48 million employees. China is already the world's second-largest advertising market, Chairman of International Advertising Association Alan Rutherford said at the International Advertising Festival held in Changsha in May 2011.

Hong Kong*:  Apr 24 2012 Share

The bulldozers begin to smash pools in which the abalone were reared. A Hong Kong businessman has filed a lawsuit against a developer and a county government in Guangdong claiming an army of workers and bulldozers forcibly entered his massive abalone farm and destroyed it. Yip Wah-ching says his farm in Raoping county, Chaozhou , about 400 kilometres east of Hong Kong, is now being turned into a cargo port, leaving him 80 million yuan (HK$98 million) out of pocket, according to the suit, filed with the Intermediate People's Court in Chaozhou on April 11. Yip claims the eviction and demolition, which came amid an unresolved dispute over how he should be compensated and relocated, was a blatant violation of national laws. Yip, who also holds a British passport, had been registering the developments with the central government's liaison office in Hong Kong since June last year and now plans to seek help from the British consulates in Hong Kong and Guangzhou to follow up the case. Yip said he started the abalone farm in the mid-1990s and invested hundreds of millions of yuan over the years in producing the delicacy, a type of marine mollusc. He entered into two separate agreements with the Zhelin town government in Raoping to occupy two sites for 20 years from 1997 and 2007. He claims the farm, at roughly 70,000 square metres - as big as the exhibition space at AsiaWorld-Expo - had been one of the biggest ventures of its kind on the mainland and its abalone could be found on the menu of restaurants in major cities throughout China. However, in 2009, the county announced a land resumption plan for port development, and in January last year the provincial government endorsed the plan. In September, the county authorities issued an ultimatum to the farm to vacate the site, though no agreement on compensation had been reached. Meanwhile, the farm had been forced to stop operating after its seawater supply was cut off back in February last year. Yip said the county authorities, after initially ignoring his request for compensation, late last year offered 10 million yuan for the depreciated property and assets of the farm. That amount, Yip said, was far less than the 200 million yuan compensation he sought - already reduced from the 770 million yuan he had originally demanded - for past investments, lost business and relocation and other expenses. "We have been operating there for 15 years but were eliminated in just one day," he said. "I wonder how investments and private assets on the mainland can be properly protected if such violence and disregard of the law can be tolerated." Yip, who is the former village representative of Lin Ma Hang in the New Territories, said the whole process was so ugly he had to publicise it as a warning to overseas investors. He accused local officials of colluding with the port developer as the public security bureau turned a blind eye to the illegal eviction. Yip said he had engaged a Shanghai financial consultant to list his farm on the Hong Kong stock exchange this year. A spokesman for the Chaozhou city government said it was not aware of Yip's claims and would not comment on individual cases. The Raoping county government could not be reached for comment, and a spokesman for Zhelin town government did not return calls. But an assistant to the spokesman for Zhelin said in a text message: "We are unable to release any information on the subject matter at this stage … We'll take the matter to county government before making a decision."

Chief executive-elect Leung Chun-ying talks to the media during a thank-you party in Tsim Sha Tsui yesterday as two of the people who ran his victorious campaign – Fanny Law Fan Chiu-fu and Barry Cheung Chun-yuen – chat in the background. Law has since become head of the Chief Executive-Elect's Office, but Leung says she will not be part of his administration when he takes over in July. Former chief graft-buster Fanny Law Fan Chiu-fun will not join Leung Chun-ying's administration when he takes office, the chief executive-elect has assured Hongkongers. Law, head of the chief executive-elect's office and former director of Leung's campaign office, drew heavy flak from teachers for the education reforms launched while she was permanent secretary for education and manpower and for her alleged interference in academic freedom. She last served the government as commissioner at the Independent Commission Against Corruption. Two days after appointing Law to head his office until June 30, Leung dismissed worries that Law might become the director of the Chief Executive's Office from July. "Mrs Law will not assume any position in the government that begins on July 1. I know there is speculation she will become the director of the Chief Executive's Office. I can tell you that someone else will be the director of the Chief Executive's Office," Leung said on the sidelines of a thank-you party he threw for his supporters in the election. But he declined to name the person who would be the director. Law, meanwhile, said she would not become a political appointee but would not say if she might join the Executive Council. Yesterday's gathering in Tsim Sha Tsui was studded with political heavyweights such as David Akers-Jones, a colonial era chief secretary, and members of the business elite, including New World Development chairman Henry Cheng Kar-shun. "I am not up to standard and I will do my best," Leung told about 700 supporters. "As I am not up to standard, I need you all to continue to give me advice and support and I need the co-operation of the whole of society." Meanwhile, Henry Cheng, who changed sides at the last minute to back Leung in last month's chief executive race, fended off suggestions that property developers would be unlikely to make "exorbitant profits" under Leung's administration. His remarks came five days after Hang Lung Properties (SEHK: 0101) chairman Ronnie Chan Chichung said property developers would be able to "make money but might not make exorbitant profits" from July. "I don't believe that C.Y. will make the property market collapse," Cheng said. Former Arts Development Council chairman Ma Fung-kwok, rumoured to be a potential candidate to head a proposed Culture Bureau, said he was interested in serving in any post related to culture but had yet to be invited to join the Leung administration. Ma said he was considering contesting the Legislative Council seat for the sports, performing arts, culture and publication sector. Facing a protest by members of the League of Social Democrats outside the hall of the Tsim Sha Tsui District Kaifong Welfare Association, Leung accepted their petition accusing him of lacking integrity and criticising his decision to hire Law to assist him again.

The government is making progress on its pledge two years ago to ensure women hold at least 30 per cent of posts on each advisory board and statutory body - but on some influential committees women remain few and far between. Women make up 1,814 of the 5,850 non-official members appointed to government advisory bodies, or 31 per cent, but some boards lag. The Town Planning Board - responsible for key decisions on development - has just six women members out of 29. Just three of the 13 members of the Airport Authority are women, while just two sit on the 18-member board of the Urban Renewal Authority. Despite the system's failings, the new chairwoman of the Women's Commission, Stella Lau Kun Lai-kuen, says the target should continue to be raised. "Overall, women's participation in advisory and statutory bodies is on an increasing trend," Lau, who took up her post in January, said. The commission believes appointments should be made on merit and that while there is no shortage of capable women, equality remains a work in progress. Lau said various factors, such as the dominance of men in certain industries, meant the rate of women's participation remained low in some areas. But, "in view of the long-term goal of achieving a balanced participation, we consider it necessary to raise the benchmark progressively, taking into account the actual circumstances of different [bodies]", she said. The government first set a benchmark of 25 per cent in 2004 and raised it to 30 per cent in 2010. A spokeswoman for the Development Bureau said that while the Town Planning Board did not meet the 30 per cent benchmark, "we consider that it is more important to appoint the right candidates". "Nonetheless, for the following term, we will try to identify more suitable female members for appointment," the spokeswoman said. Lau said the commission was trying to encourage more women to participate and had written to women's associations and professional institutions. The letters advised the organisations to let their female members know they could submit their résumés to the central personality index system from which interested candidates were selected to serve on boards. At a recent forum on the issue, former chief secretary Anson Chan Fang On-sang said mandatory quotas for women on the boards of listed companies were necessary to improve sexual equality in the workplace. "Quotas may be necessary for the time being - to change the culture and change public perception of what women can and should do. It's important to build up that critical mass [of women] who are in top positions," Chan said. But Claudette Christian, co-chairwoman of the board and a partner at law firm Hogan Lovells, said quotas did more harm than good as they allowed companies to shirk the duty of genuinely investing in women. Boards would end up recruiting "token women" to simply fill the quotas, Christian said.

The Hong Kong teenager who struck virtual gold overnight with his visual tribute to Apple founder Steve Jobs last year has done it again - this time being tapped by another iconic brand. Since 20-year-old Jonathan Mak Long (pictured) became an internet sensation in October for his twist on the Apple logo, international marketing companies have beaten a path to his door. And in February, the second-year Polytechnic University design student received a request most designers could only dream of: design a Coca-Cola ad with the simple theme of "sharing a Coke". The offer came after he was approached by Graham Fink, chief creative officer at ad firm Ogilvy & Mather China. "I was already quite excited when the chief met me, but I didn't imagine the first job would be Coke," Mak said. The result is a design that merges the iconic ribbon feature of the Coca-Cola logo with a pair of arms exchanging a bottle. "I like the viewer to have this 'aha!' moment, where it's fun and a puzzle to figure out," Mak said. "In general, when I do logo design, which combines imagery, I tend to sketch a lot. But for both Apple and Coke, there was a very clear idea in my head, so the execution was quick." The design is similar to Mak's tribute to Jobs - a black-and-white artwork placing Jobs' silhouette as the "bite" in the Apple logo - made shortly after the IT firm founder died of pancreatic cancer at age 56. But Mak said he did not want to be pigeon-holed into a particular style. "It does seem like I'm continuing this trend of two puns of an iconic brand, but I don't want to be limited by that," he said. "I don't want to be a victim of my own success. I like minimalism and simplicity, but I want to expand my repertoire." Mak's Coke design debuted on posters at several bus stops in Shanghai this month. "There is the possibility that the poster might be introduced [to] Hong Kong," Mak said, adding this would delight his parents.Mak said he felt a lot of pressure to deliver something as arresting as his Apple logo, though he was not directly employed by Coca-Cola. He could not disclose the amount he was paid for the design. Last month, Mak began a six-month exchange programme at the Kölne International School of Design in Cologne, Germany. Marking his second time in Europe, Mak said he enjoyed learning a new language and meeting the local design community.

Chief executive-elect Leung Chun-ying failed to see eye to eye with some Legco select committee members at yesterday’s hearing. Lawmakers criticised chief executive-elect Leung Chun-ying yesterday for putting forward his own conclusions in an inquiry into his alleged conflict of interest in a 2001 arts-hub design contest. Speaking at the final meeting of a Legislative Council select committee, Leung repeatedly declared his innocence, prompting dissent from lawmakers. The committee has spent two months examining claims that Leung failed to declare a link between his company, DTZ, and an entrant in the contest. "With the many documents disclosed for the inquiry in the past month, I feel I now have a clearer understanding of the truth," Leung said. "There was no conspiracy or transfer of benefits in the whole thing, which happened 10 years ago." But panel members Lee Wing-tat of the Democratic Party and Wong Yuk-man of People Power rejected Leung's views, saying he, as the subject of the investigation, should not draw a conclusion by selectively citing evidence favourable to himself. The committee will spend the next month, behind closed doors, weighing testimony by Leung and others before delivering its final report to Legco in June. Leung has argued that a DTZ colleague working in a different department had given a group that joined the contest free advice on land prices. Before being a judge in the contest, Leung ticked a box on a conflict-of-interest declaration form to say that he held no directorships, even as he was a director of general practice at surveyors firm DTZ. A Malaysian entry, marked for an honourable mention, was later disqualified as it named DTZ as its property adviser. Andrew Cheng Kar-foo, vice-chairman of the panel conducting the inquiry, cited contradictions in Leung's statements on the identity of a DTZ colleague Leung said had searched company records for any conflict of interest. Leung changed this person's description from "senior-ranked person" to a lower-ranking employee whose name he could not remember yesterday. Meanwhile, former secretary for planning and lands Gordon Siu Kwing-chue testified that he invited Leung to be a juror, and "clearly" told Leung that his relatives and colleagues would not be able to submit an entry. Siu said entrants had the final responsibility to check for conflict of interest. He also said: "The jurors knew the contestants' name only when they opened the envelopes after voting. They had reasons to be unaware [of a conflict of interest]." Security was tight for Leung's first Legco meeting since he was elected last month. Reporters complained that the Legco secretariat cordoned off a lift lobby as Leung left the hearing - a move not taken with chief executive Donald Tsang Yam-kuen.

Hong Kong's burgeoning French community today turns its attentions to its homeland, with thousands expected to vote in the country's presidential election. Four polling stations have been set up to cater for the 6,280 French voters in the city, out of a population of more than 10,000 expatriates registered at the French consulate. The race pits President Nicolas Sarkozy against Socialist rival Francois Hollande, who has a small lead in the polls, and eight other candidates all vying for a place in a run-off poll involving the top two candidates. Around one million of the two million French people living abroad are eligible to vote and, with the race expected to be close, they could have a decisive impact on the poll. Opinion polls give Sarkozy and Hollande about 27 per cent of the vote each. But the two mainstream candidates are threatened from both sides of the spectrum: Marine Le Pen, from the extreme-right National Front, is expected to gather 17 per cent of the votes, while Jean-Luc Melenchon, representing the radical left, could get up to 14 per cent, polls say. For Adrien Choux, living thousands of kilometres away from one's mother country is no reason not to take an active part in its political life. "It is very important to vote," he said. "French people living overseas may not experience politics as much as our fellow countrymen, but we are still ambassadors for our country." Polling stations have been set up at the French International School in Happy Valley for residents of Hong Kong Island, in Kowloon and on Lamma Island. A station at the consulate in Admiralty will serve those from other outlying islands, the New Territories and Macau. In 2007, the French community of Hong Kong - which for the most part works in banking, luxury goods and other private-sector professions - favoured Sarkozy. According to the consulate, 77 per cent chose him over the Socialist Segolene Royal. The number of French people living in Hong Kong has risen by 60 per cent since 2008, and the city now has Asia's largest French community, put at 15,000 by the consulate.

Emergency procedures at one of Hong Kong's newest luxury hotels were criticised by angry guests forced to flee their rooms in the middle of the night as a fire raged on the building's rooftop. They asked why alarms sounded only on certain floors and sprinklers were not activated, and criticised how staff handled the evacuation. More than 300 terrified guests spilled out of the 828-room, five-star Harbour Grand Hong Kong in North Point just after 3am yesterday as firefighters battled a fierce fire on the roof that sent flaming debris cascading onto a street below. No one was injured, but one person was taken to Ruttonjee Hospital "feeling unwell'' and later released. Guests complained that they were told they might have to pay the full rate of up to HK$3,000 for the night. The Harbour Plaza Hotels property in Oil Street - opened in June 2009 - is part of the business empire of Asia's richest man, Li Ka-shing. Fire chiefs are still investigating the cause of the blaze on the roof, although there was speculation that water may have caused a short circuit in a big LED advertising display. Hotel bosses said some guests may not have heard the alarms because the system sounds warnings only on floors directly hit by a fire. But German businessman Roland Stumpf, who was asleep on the 40th floor of the 41-storey building, said he only realised there was a fire when flames started coming through the ceiling. He heard no alarm. "I looked out of the window and it was like fireworks were being set off, with flames and sparks flying through the air. No alarm went off and I had to quickly grab my suitcase and get down the stairs," he said. Stumpf, 60, said he was shocked that no staff came to his room to warn him of the danger. Gift importers Pasi Sivonen, 43, and Nina Rantanen, 36, from Finland, were on the 26th floor. "The biggest problem was that you couldn't hear the fire alarm so no one knew what was going on," Sivonen said. "But when I saw the flames outside my window it was clear something was badly wrong. The evacuation was very disorganised." British tourist Julia Watson, 38, was also on the 26th floor and said the alarm sounded more like a mobile phone. "Hearing other people leave their rooms was all that alerted some people to the fire," she said. A 200-strong international group, in the city for a World Peace Prayer Ceremony in Victoria Park, was also caught in the chaos. The event has been cancelled because of the fire. Sa Dingding, a famous singer of folk songs from the mainland, was part of the group, and was staying on the 23rd floor. "I was terrified the glass would shatter and that I would faint from the smoke," she said. "You could see sparks flying past the window." She said sprinklers were not activated. Lo Kok-keung, a mechanical engineer at Polytechnic University, said the huge rooftop LED advertising screen may have short-circuited. Anthony Lam Chun-man, former director of fire services, said the hotel should have made broadcasts to urge guests to evacuate the hotel. But he believes the hotel's fire alarm procedure was correct. A Fire Services spokesman said initial investigations found that the alarm system was functioning properly and that the hotel, jointly owned by Li's companies Hutchison Whampoa (SEHK: 0013) and Cheung Kong (SEHK: 0001), met all fire regulations. Investigations are continuing.

 China*:  Apr 24 2012 Share

Guan Dongyuan, president of Embraer China, poses with the Legacy 650 bought by movie star Jackie Chan. It is now known as the JC Jet. International private jet manufacturers are setting up assembly lines in China, hoping to emulate the success enjoyed by foreign carmakers that began operations on the mainland over a decade ago. Riding on the publicity it attracted when martial arts star Jackie Chan bought an Embraer private jet in February, the Sao Paulo-based private jet manufacturer has decided to assemble its US$28 million Legacy 650 jet in Harbin. It is converting an assembly line previously used to roll out its 50-seat Embraer ECJ-145 in a joint venture with Aviation Industry Corporation of China (AVIC) in the north-east province. Guan Dongyuan, president of Embraer China, said once the conversion was completed by the end of next year he expected five L650s to be produced in the Harbin plant each year. Orders for the private jet now stood at 17, compared with 22 in total for all Embraer's jet on the mainland, said Guan. He said the L650 had become even more of a hot ticket since Jackie Chan had bought one and it had become known as the "JC Jet". At a static display staged during a business aviation conference in Shanghai last month, the JC Jet proved the most popular among the 28 aircraft on show, as excited visitors queued to explore the cabin of the movie star's private jet. Wichita-based Cessna, the largest general aviation manufacturer in the world, also signed a framework of agreement with AVIC last month to build two medium-size private jets, the Citation Sovereignty and Latitude, in a joint venture in Chengdu. "We would like to promote interest in private jets in this part of the world and stimulate demand by setting up a secondary production line here," said Michael Shih, Cessna vice-president for China strategy and business development. "Since China has little experience in general and business aviation it needs help to develop the infrastructure, whether it is in operations or manufacturing." AVIC commenced talks last year with all eight major private jet makers in the world aimed at forming joint-venture partnerships. It came as a surprise to the industry, however, when it picked Embraer and Cessna as partners, since the two are known for producing small- to medium-sized private jets, while the large-cabin Gulfstream 450 and G550 private jets are the best sellers on the mainland. Savannah-based Gulfstream, which has a 48 per cent of market share of the 109 private jets operated on the mainland, has yet to decide whether to build its planes in the country. "Mainland buyers used to be obsessed with large aircraft due to trophy-buying reasons when the market started to boom three years ago," said David Tang, chief legal consultant for Minsheng Financial Leasing, which has also ordered more than 100 private jets. "Now buyers are more reasonable, instead of buying for the sake of matching others." Larry Flynn, president of Gulfstream Aerospace, said since the aircraft maker's Savannah production line was undergoing a US$500 million expansion it did not need to set up a line in China at present. Cessna's Shih said the preliminary agreement between Cessna and AVIC envisaged an "over-arching" co-operation. For three decades Beijing had focused on expanding commercial aviation aimed at moving the masses and this had given rise to an "inverted pyramid" in the development of the industry, said Shih. Now it has to widen that focus to provide a foundation for all kinds of aviation and the co-operation between AVIC and Cessna would include training of pilots and mechanics, as well as establishing maintenance facilities. Shih said Cessna would also partner with AVIC to develop a large-cabin private jet in the future.

The Lamborghini Urus concept SUV at a Volkswagen event in Beijing Sunday. More Chinese consumers are choosing upscale vehicles. For years bare-bones compact cars have dominated China's roads, but now more and more consumers here are opting for more-upscale vehicles—and that is opening the door for global auto makers to bolster profits in the growing market. Relative to the China auto industry's massive size, most car companies don't earn nearly as much money in China as they do in countries where buyers demand pricier cars and sport-utility vehicles. Profits also are slimmer because foreign auto makers must team with a Chinese company to do business in the country, thus splitting any earnings. General Motors Co., GM -1.71% for instance, sold more cars in China than in the U.S. last year. It earned $1.5 billion from its Chinese joint ventures, compared with a $7.2 billion profit in North America. To be sure, the fast-expanding Asian market, and China in particular, has delivered much of the industry's volume growth in recent years. Most auto makers say margins in the region are strong as well: Cars sell cheaply, but low-end models are also less expensive to build and labor costs are less than in Europe and the U.S. But in a market that is expected to grow to as much as 30 million vehicle sales by 2020, from 18.5 million last year, auto companies see opportunity in boosting the sticker prices on new cars and trucks. That dynamic is changing as Chinese consumers amass more wealth and begin to demand cars more like the ones on U.S. and European roads, with additional options, space and safety features. The new wave of offerings will be on display this week at the Beijing auto show, where many auto makers will exhibit luxury cars, larger sedans and SUVs. "We expect our profitability to be more balanced than it is," Kevin Wale, GM's China chief, said during an interview on Sunday. On Sunday, Ford Motor Co. said it will bring new SUVs to the Chinese market: the Kuga, a Chinese version of the company's Escape compact SUV; the small EcoSport; and the larger Explorer. Italy's Fiat SpA, F.MI -2.09% known primarily for small vehicles in Europe, plans to re-enter the China market with a new midsize sedan. GM, which is bringing new Cadillac vehicles to China, will use the show to display the premium brand's luxury Marquis model. Mr. Wale said GM expects margins to grow as it moves toward higher-end cars. Cadillac is still a minor player in the lucrative Chinese luxury market, where cars such as the Mercedes S-Class from Germany's Daimler AG can sell for more than $200,000, a price that includes China's tax on luxury imports. Squeezing more profits out of China won't be easy. Competition is intense and growing as more auto makers rush to cash in on China's expanding vehicle market. Mr. Wale said sales growth is likely to be a bigger driver of profitability than a richer mix of vehicles. Demand for pricier vehicles, he said, "is not a silver bullet that will lead to an explosion in profitability." Though Chinese consumers are being drawn to more-upscale vehicles, their preferences are still far different than those of U.S. or European consumers. The SUVs now on sale in China are small, such as the CRV from Japan's Honda Motor Co., and there is virtually no market for the big pickup trucks and SUVs that drive profits at Detroit's auto makers in the U.S. At a Ford dealership outside of Shanghai, the most popular model by far is the Focus compact car. Hu Jun, a salesman at the store, said the Focus, which costs about $16,000, often appeals to young families or couples buying their first car. Shoppers buzzed around the Focus and a smaller Fiesta on Saturday, while a lone Ford Edge SUV—costing about $57,000—drew no interest. The salesman said he is eager for Ford to put its smaller SUVs in stores, and Ford expects those vehicles to hold more appeal to consumers on a budget. Huang Yi, chairman of Zhongsheng Group Holdings Ltd., one of China's largest auto retailers, said he sees the ultracheap, high-volume cars that once defined China's market as a shrinking segment. Though luxury cars are still a small part of the market—about 9%—they are becoming more popular, along with midsize and large vehicles, he said.

Widespread government overspending on vanity-driven construction projects in regions hit by the massive Sichuan earthquake in 2008 has been found by state auditors, who also exposed new quality problems at rebuilt schools. But unlike previously, the National Audit Office did not give details in this year's annual report on quake reconstruction about how much funding was misappropriated or how many people, if any, were penalised for their misconduct. Instead, the report, posted on the office's website on Friday, basically repeated Beijing's line that three years of reconstruction, which ended last year, had been a complete success, without major corruption scandals or financial irregularities. Analysts, saying that mainland authorities appeared keen to put behind them bitter memories of the magnitude-8 earthquake, which claimed more than 87,000 lives, called the new report a politically motivated failure to examine a long list of outstanding problems in reconstruction which have yet to be addressed. The rebuilding process has been overshadowed by allegations of embezzlement, controversy over the construction quality of newly built homes and classrooms and the complaints of thousands of distraught parents who say they have suffered intimidation or persecution for seeking justice for their children killed when schools collapsed in the quake. Only the issue of building quality was touched upon in the new audit report, and only briefly. It listed dozens of problems concerning the construction of 11 schools and vocational colleges in Sichuan, Gansu and Shaanxi provinces. Leaks and other quality problems were found in student dormitories, classrooms and the playground in a primary school in Guangyuan city, Sichuan, while students at another primary school in the quake-devastated Beichuan county were exposed to risks of electric shock because of poor design, the report said. While many schools were hit by funding shortages in rebuilding, the report also uncovered a number of government agencies that spent extravagantly in building their offices and other vanity projects, such as gardens and squares. In Santai county, Sichuan, offices for grass-roots cadres were more than six times the size stipulated by the central government, while two township governments in Zhongjiang county, Sichuan, were found to have built squares and gardens totalling more than 10,000 square metres. However, according to a statement, Xu Aisheng, a senior official with the National Audit Office, insisted that after having reviewed nearly 28,000 rebuilding projects with a total investment of 768 billion yuan since 2008, none of the problems exposed so far was of major public concern. By contrast, Xu's office admitted a year ago that embezzlement and misuse of 188 million yuan had been discovered in 36 reconstruction projects, which followed another embarrassing acknowledgment in 2010 that some 5.8 billion yuan in reconstruction funds was misused. Beijing-based political observer Hu Xingdou criticised the auditing watchdog for paying lip service to Beijing's anti-corruption drive, because of its lack of independence as a ministry under the State Council and its record of defending the government against corruption allegations. "The rather rosy picture portrayed by the National Audit Office is apparently aimed at playing down widespread concerns over the use of rebuilding funds and the quality of schools and homes, deemed as threats to social stability," Hu said.

When summer weather comes around, an unexpected sight can be seen on the streets of Suzhou, Jiangsu province: an ice cream truck driving down the streets. Turner Sparks, a 29-year-old American and the CEO of Mister Softee China, operates the company's ice cream trucks a few times a month, and he loves to see the reactions of his customers. Turner Sparks operates ice cream truck on the streets of Suzhou, Jiangsu province. "It's cool, they'll just see me and sometimes people will try to order in English," said Sparks of his Chinese customers. "Usually the biggest reaction comes from other foreigners - when they see me on the trucks you can see on their faces that it's just not computing at all." Originally from California, Sparks moved to China in 2005 to teach English after graduating with a journalism degree. In his mind it was a one-year deal, but a year later Sparks was hired by a Chinese friend to work for his cellphone manufacturing company. During his extended time in China, Sparks kept in touch with his college friend Alex Conway. Conway, the grandson of the founder of Mister Softee, was looking for business opportunities in China at the time. Soon Conway's family business was on its way to China with Sparks at the helm. After acquiring the rights to the brand in 2006, Sparks embarked on a domestic journey to find equipment suppliers and a supply chain for his ice cream. After finding trucks, ice cream-making equipment and a dairy supplier, Sparks' next big challenge was to find out if there was a market for Mister Softee in China. "When we started, a lot of people were telling us that Chinese people don't drink milk so you'll have trouble selling ice cream," said Sparks. "It really hasn't been the case. It might be a generation thing because our consumers are kids, college students, and it really tops out at people who are 35-45 year olds who bring their kids. We have a younger demographic." Initially Sparks gave out loads of freebies to test out his flavors and to pinpoint his market. "We had a party in Suzhou to test and we basically advertised free ice cream in a park," said Sparks. "We set up a big tent, some games and an ice cream-eating competition." "I was worried parents didn't want their kids to do it, but all the parents were in the front row going 'jia you jia you' [come on]. This one kid was clearly not feeling good but his parents kept pushing him on." Convinced there was indeed a market for ice cream in Suzhou, Sparks set to build an iconic Mister Softee truck, and to set up a shop. The store proved to be a valuable learning experience. Sparks retells opening day, where within the time frame of an hour, his store was already 400 yuan ($63) in the red. "Our first customer came in with a 100 yuan note, and she asked for one ice cream cone which is 6 yuan, we gave her the cone and the 94 yuan change," said Sparks. "Then another person came in and another. It was like four people in a row with 100 yuan notes buying single cones and after they all left we realized all the bills were fake." Despite that initial set back, the store soon grew vigorously, and today eight trucks equipped with industrial ice cream machines are on the roll in the Suzhou area. "I'm pretty happy talking to people," said Sparks. "Sometimes you'll have a line of 10 people and the person will want to talk for a couple of minutes, and I have to say, I'm kind of busy I'll talk to you later."

Du Xiping (right), deputy commander of China's Beihai Fleet, greets an officer of Russia's Pacific Fleet during a welcome ceremony at a naval base in Qingdao, Shandong province, on Saturday. A China-Russia joint maritime drill is scheduled April 22 to 27 on the Yellow Sea. 

Many high-end stores have started marketing to traveling Chinese shoppers. Montblanc features the pianist Lang Lang in a brochure. Over five days in January, a group of visitors to New York was treated to a private concert with the pianist Lang Lang at the Montblanc store, cocktails and a fashion show attended by the designers Oscar de la Renta and Diane Von Furstenberg, and a tour of Estee Lauder's original office. They were not celebrities. They were not government officials. They were Chinese tourists with a lot of money. Though luxury brands started opening stores in Beijing and Shanghai years ago, Chinese shoppers still spend more on luxury products abroad than they do at home, according to the consulting firm Frost & Sullivan. Because of China's taxes, luxury products are about a third cheaper elsewhere. European luxury stores have been catering to Chinese tourists for years. Now high-end retailers in the United States are pulling out their Mandarin phrase books and trying to convince Chinese visitors that Americans can do luxury, too. "What started as a trickle has now become a flow," said Ben Macklowe, the vice president of the antiques store Macklowe Gallery. "There's been prosperity across so much of Asia that you're starting to see it much more in the profile of the tourist on Madison Avenue." A record number of Chinese visited the United States last year - nearly 1.1 million, according to the Commerce Department. The number of visitors is expected to almost double by 2014, according to the US Travel Association. Chinese visitors spend about $6,000 each on every visit here, versus the $4,000 that visitors from other countries spend on average, the association says. Luxury purchases are surging in part because American stores carry a broader range of products than their counterparts in China, said Julia Zhu, consulting director for Frost & Sullivan. Tiffany, which made almost a quarter of its United States revenue last year from foreign tourists, has added Mandarin-speaking sales people to its major stores, as has Burberry, where more than half of sales at its flagship stores are to tourists. Despite having more than 100 stores in China, Montblanc is going after Chinese shoppers on vacation abroad. "Yes, we are in the major cities, but when you travel, you're in the mood to enjoy and experience the moment," said Jan-Patrick Schmitz, chief executive of Montblanc North America. "We certainly will do more and more marketing toward them." Retailers in the United States have to overcome an idea that luxury cannot come from the United States. "The European brands, they see prestige, history, heritage," said Sunny Wong, group managing director of Trinity, a company that owns and operates high-end European retail brands in China. American brands, by contrast, are seen as "contemporary, lifestyle" rather than pure luxury, he said. Mr. Macklowe recently met with Chinese tour operators. "You have to tailor your message for the crowd, and for this crowd it was, 'These are very exclusive things, these are very authentic things, these are very high-end things that you can recommend to your clients without reservation,'" he said. "We tried to give them a sense that what we do only exists in one place on earth."

Hong Kong*:  Apr 23 2012 Share

Awfully successful at franchising - Regina Sam has turned her passion for cakes and focus on quality into success harnessing brands she believes in - Former banker and MBA holder Regina Sam is steadily expanding her food and beverage business, thanks to her decision to tap well-known franchise brands such as Awfully Chocolate and New York Fries. "Sell what you love and the money will follow" may sound like what one reads in a business management book, but this advice has guided the success of young Hong Kong entrepreneur Regina Sam. The 32-year-old franchisee of Awfully Chocolate, a Singaporean cake business, brought the brand to Hong Kong in 2008. Sam became hooked after tasting its signature chocolate sponge cake at an Awfully Chocolate store in Shanghai. She later became the exclusive franchisee in the city after fending off two other rivals who applied for it. "At first, I didn't think about setting up my own business," said Sam, who was an account manager at the Royal Bank of Canada in Vancouver for four years before returning in 2004 to Hong Kong, where she earned a Master of Business Administration (MBA) degree at the University of Hong Kong. "My sister was working in Shanghai in 2006 where there is an Awfully Chocolate store. Whenever I visited her, I would buy a cake. We became friends with the franchisee in Shanghai, who suggested we bring the brand to Hong Kong," she said. "I think I was chosen by the franchisor because I love the cake so much." To start her cake business, she initially invested about HK$2.6 million to pay expenses such as royalties, rent, and renovations. She managed to break even in six months, and has now expanded the business to four stores selling a total of 200 large chocolate cakes a day. Besides being the sub-franchisee of another brand, New York Fries, in Hong Kong and Macau, Sam decided to launch her own brand Cheesess last year. It sells different types of cheesecakes at three locations in Hong Kong. Despite being open for less than a year, Sam has already received enquiries from potential franchisees for her cheesecake brand. She is considering opening three more Awfully Chocolate stores, in Kowloon Tong, Sha Tin and Kwun Tong, and plans to renew the brand's franchise agreement when it expires next year. Sam also works as managing director and vice-president at her father's firm, Great Time, one of the largest wine and food distributors in Macau. Here are her thoughts on franchising and how it pays to have a mentor in your corner.

 China*:  Apr 23 2012 Share

Chinese Premier Wen Jiabao (L) meets with Icelandic Prime Minister Johanna Sigurdardottir in Reykjavik, Iceland, April 20, 2012. Visiting Chinese Premier Wen Jiabao and his Icelandic counterpart Johanna Sigurdardottir met here Friday and agreed to carry out close consultations on Arctic affairs. China, Wen said, is ready to conduct pragmatic cooperation with Iceland in the fields of polar regions, oceans, environment and shipping, and to promote peace, stability and sustainable development in the Arctic region. Sigurdardottir said Iceland backs China to be an observer of the Arctic Council, supports China's participation in the peaceful exploration in the region, and is willing to further boost cooperation with China. Established in 1996, the Arctic Council includes the five Nordic countries, namely Denmark, Finland, Iceland, Norway and Sweden, as well as Canada, Russia and the United States, plus representatives of six indigenous peoples' organizations in the Arctic. In addition, China and Iceland also vowed to enhance bilateral cooperation in geothermal energy and related scientific research. Meanwhile, Beijing will speed up negotiation with Reykjavik on a bilateral trade agreement with the aim of realizing free trade next year, Wen said, pledging to expand mutual investment and ensure success of major cooperation projects.

Xuzhou Construction Machinery Group (XCMG) has agreed to acquire a major stake in Schwing, the second largest concrete pump manufacturer in Germany, Schwing announced on Thursday. XCMG chairman Wang Min did not reveal the exact amount of the acquisition, but said in a subsequent announcement that Schwing's German management team will keep their positions after the purchase, expected to be completed in the next two weeks. The Schwing announcement came one day after SANY Heavy Industry Co Ltd completed the acquisition of the top German pump maker Putzmeister Holding GmbH for 324 million euros ($425.6 milliion). Once XCMG's acquisition of Scwhing is completed, the three largest concrete pump manufacturers in Europe will have all been acquired by Chinese companies. Changsha Zoomlion Heavy Industry Science and Technology Development Co Ltd acquired Italy's formwork and concrete handling specialist CIFA, the second largest company of its kind in Europe, in 2008. About half of the 105.3 billion yuan market value of the concrete machinery industry was generated by SANY and Zoomlion in 2011, while XCMG only contributed some 1.97 billion yuan. The concrete machinery industry had a profit margin of some 30 percent last year, overtaking all other construction machinery related industries.

Wuyutai, established in 1887, is famous for its high-quality tea. A sales assistant at a Ruifuxiang store in Beijing. Ruifuxiang, a time-honored Chinese silk shop, also sells ready-to-wear clothes, giving more choices to customers. New products give vitality to time-honored brands - Laozihao, which means time-honored brand in Chinese, is an honor granted by the Ministry of Commerce to enterprises whose brands have stood the test of time and are widely recognized. In other words, these are old companies. Most critics say they are dying off, being swallowed up in competition with multinational firms. But a handful of brands in China, which have recognized that their days are numbered if they don't innovate and refashion their image, have clawed back to life in the past few years. China has recognized 1,000 companies as time-honored brands, such as Tongrentang, a maker of traditional Chinese medicine, and Quanjude, a chain of restaurants that specialize in Peking duck. Most have stayed the course through the decades. Take Wuyutai for example. The tea company, established in 1887, won over a much younger customer base by introducing maccha green tea ice cream three years ago. On a recent afternoon, a long line of young people were waiting to buy Wuyutai ice cream in Beijing's Wangfujing Street, a busy and hectic shopping area. Sun Danwei, Wuyutai's general manager, said sales of the ice cream can be as much as 20,000 yuan ($3,170) in one Wuyutai store on a typical Saturday. Soon after the success of the ice cream, Wuyutai introduced tea-flavored chewing gum and tea mooncakes through the help of institutes including Zhejiang University and the Chinese Academy of Agricultural Sciences. The company is also designing tea-related health and beauty products. "Most of China's time-honored brands are endangered. But it is good to see some of them, or more exactly very few of them, are at least seeking a breakthrough by reevaluating and meeting the demands of the ever-changing market," said Kang Yan, vice-president of the China division of Roland Berger Strategy Consultants, a major consultancy in Europe. The story of the decay of time-honored brands in China is nearly as old as the brands themselves. After the launch of the nation's reform and opening-up policies in the late 1970s, which ushered in a lowering of hurdles for foreign imports, some indigenous brands merged with transnational companies by setting up joint ventures. For the most part, however, local enterprises were on their own in the battle to maintain their brands. Slowly, companies new to China began pushing out these time-honored brands. But through new products, fresh marketing strategies and improved management, several of China's legendary brands have withstood the test of time. "Time-honored brands are not necessarily old-fashioned. People usually see the old brand Coca-Cola as modern because it has such a dynamic and trendy image," Kang said. The transformation of these time-honored brands mostly began through an expansion in the range of their products. New products have become a growth point for aging enterprises. One time-honored brand, Wangzhihe, established in 1669, has found success by doing just this. After hundreds of years of selling fermented bean curd, the company earned more than 100 million yuan in 2011 from sales of cooking wine. Wangzhihe's cooking wine is a mixture of rice wine and spices, such as pepper and anise seed, as well as ginger. The company's cooking wine is currently one of the top choices for Chinese customers because of its brand power and unique flavor. Chen Hongxuan, Wangzhihe's general manger, said the choice to focus on wine was a natural one. "It is quite common for a Chinese family that cooks once a day to use a bottle of wine a month because it is almost a must for cooking," Chen said. "But not every family would buy the fermented bean curd." Wangzhihe makes nearly 100 different types of sauces, including sesame oil, soy sauce and sweetened bean paste. Its newest product is a refined fermented bean curd with a lower salt content that is tailored for elderly customers. Through its wider range of products, the company is aiming to generate 800 million yuan in sales this year. Most time-honored brands experienced decades of being operated jointly by the State and private owners since the 1950s, but were left without the shelter of the government after the launch of reform and opening-up. "That's when we got the first stimulation to rely on ourselves, and were determined to reshape our brand," Chen said. The brand is registered in 41 countries around the world, which Chen said has helped in boosting sales overseas. Wangzhihe began exporting its goods in 2001. Most of its overseas consumers are Chinese who live abroad, but more than 90 percent of Wangzhihe's sales take place in the Chinese mainland. But "another reason why we've maintained double-digit growth since 2000", Chen said, is because the company has evolved how it produces its goods. Wangzhihe opened its first factory in 2000, and now has manufacturing plants in nine provinces. It soon will have its own design facilities to create new products. "Wangzhihe has its own advantages," Kang said. With its own manufacturing plants and design facilities, Wangzhihe can build upon its distribution network. Another example of a Chinese brand that has altered its business model is the silk shop Ruifuxiang. The shop was founded by Meng Luochuan - a descendent of the Chinese thinker Mencius - in 1893 in Beijing. By the beginning of the 20th century, it had grown to become the biggest silk and cloth shop in the capital. But instead of simply providing fabric, the Ruifuxiang store in Qianmen, another shopping street in Beijing, provides a number of choices, including silk scarves, silk quilts, pajamas and qipao, a tight-fitting women's dress. "People are more likely to buy ready-to-wear clothes, so we sell half fabrics and half finished goods," said Wang Qiang, Ruifuxiang's sales and marketing manager. "In order to maintain our tradition and target high-end customers, we have not quit selling cloth, so we provide new services like tailoring accordingly. After all, Ruifuxiang started off by selling fabric." The brand's silk quilts are particularly hot items for Chinese customers, who buy them as gifts for newlyweds. Tailoring, Wang said, is the company's way of being innovative and also preserving its tradition. Ruifuxiang had 106 chain stores around China in 1927, but none of these remained after the "cultural revolution" (1966-76). "The chains used to be called lianhao in Chinese tradition, and each chain store was a duplication of the original one with the same standard of commodities and service," said Sun Danwei from Wuyutai, which currently has more than 260 chain stores across China. When Wuyutai started to adopt the chain-store model in 1997, competitors reacted with indifference. "But we still decided to have chain stores when I saw more customers coming from afar to buy our tea. That was not only out of consideration for their convenience, but also in order to reshape ourselves into a well-known brand," Sun said. Wuyutai expects to have more than 300 chain stores by the end of this year. For years it has opened chain stores at an annual rate of 50 and a ratio of one chain store to five franchisees. The company's total revenue in 2009 was 540 million yuan and 590 million yuan in 2010. Wuyutai achieved 20 percent year-on-year growth in 2011, Sun said. The biggest challenge for the chain-store model is the management of those outlets. To this end, Sun invited Chinese IT giant Lenovo to develop a management information system in 2001. Pushing and expanding existing business models has been key to the success of several of these time-honored brands. "Time-honored brands live longer than others mostly because of their pursuit of and insistence on certain core values," Kang said. Many founders of China's time-honored brands were scholarly businessmen during the feudal era. Since Confucianism had a great influence, they believed in integrity and honesty. Unlike Western brands, China's time-honored brands did not have a constant market for growth. Wars and the "cultural revolution" brought the economy to a standstill, Kang said. But through it all, some brands have survived. "That means quality is the soul of a company. China is developing at a high speed and it is a fast-paced era. If a brand, not only a time-honored brand, wants to become a global brand, it has to be persistent and resolved in pursuing quality," Kang said. "But quality does not mean luxury. Sam Walton's Wal-Mart is not a luxury brand. Even a sewing needle can have the best quality among needles at the same price."

Hong Kong*:  Apr 22 2012 Share

More than 20,000 cross-border smugglers took a hit in the pocket yesterday when Shenzhen customs began subjecting travellers who cross the borders with Hong Kong and Macau more than once a day to more thorough inspection. In Shenzhen's busiest Luohu checkpoint, dozens of suspected smugglers were required to line up at a special immigration counter and have their luggage checked. Their 5,000 yuan (HK$6,139) duty-free quota was forfeited after the first visit and they were not allowed to carry in cigarettes or alcohol. The moves are intended to crack down on rampant smuggling from Hong Kong, where goods are less taxed, more widely available and perceived as being of higher quality. Authorities said frequent travellers would not be able to simply evade the inspection by using different checkpoints, as their entries will be recorded and shared among the four participating Shenzhen checkpoints: Luohu, Huanggang, Shenzhen Bay and Shatoujiao. A mainland couple of "ant smugglers" in their 50s - so named because they transport relatively small quantities of contraband - said the measure would cut their income in half. "Before I could travel back and forth to Hong Kong three times in an afternoon, carrying baby formula, cosmetics and cigarettes," the husband said. "We now require clients to buy themselves in Sheung Shui and we'll carry the products through the customs if the total amount is higher than his or her duty-free quota. "It'll be the clients' loss if the products are seized by authorities. We don't want to risk our money." Wang Zhi, Shenzhen customs' anti-smuggling bureau chief, said the new measure aims to crack down on the estimated 20,000 ant smugglers between Hong Kong and Shenzhen, who carry huge quantities of popular items such as baby formula or iPhones and iPads into the mainland. China News Service reported yesterday that the price of iPhones and iPads in Shenzhen's smuggling hub Huaqiangbei has soared as retailers feared for their supply. According to China Business News, Huaqiangbei distributed more than 50 per cent of the country's iPhones and iPads and one out every 10 mobile phones sold in China is smuggled from Hong Kong or overseas. Last week, Shenzhen and Guangzhou customs announced they seized an online shop that colluded with 10 ant-smuggling gangs last year to transport some 100,000 electronic devices worth 500 million yuan into the mainland. Shenzhen customs arrested 104 suspects in Shenzhen, Beijing, Guangzhou and Chengdu last month. Together with the crackdown, the General Administration of Customs also started on Sunday to impose a new tariff on travellers who seek to bring merchandise worth more than 5,000 yuan into the mainland, with luxury goods, such as cosmetics and wine, to be taxed at 50 per cent. Last year, an estimated 40 billion yuan in tax-free products were taken into the mainland at a time of high inflation and high domestic-consumption taxes at 17 per cent.

HK artisan Wallace Chan shows off his HK$200 million cicada-shaped brooch. France's oldest decorative and fine arts fair, the Biennale des Antiquaires, is planning to create a mini version in Hong Kong as the thriving art market in Asia, notably in China, is the world's biggest. The biennale is also strengthening its Asian connection by inviting Hong Kong's Wallace Chan Sai-ying to be the first Asian jeweller to exhibit at the Paris fair in September. Christian Deydier, president of fair organisers and art dealers association Syndicat National des Antiquaires (SNA), said plans were being considered to hold a small fair in Hong Kong featuring about 20 dealers. He said another option would be to show five or six rooms by different designers, each featuring pieces from various exhibitors. Chan said it had always been his dream to showcase his works at the Paris fair, which sets stringent entry criteria for exhibitors. He hoped his presence would introduce Chinese jewellery and its philosophy to the world. A native of Fujian , Chan was a sculptor before turning to jewellery when he mastered techniques of using titanium in his sculptural jewellery. His works are sought after by notable collectors, and he designed the wedding ring of Canto-pop star Faye Wong. Chan said he would take about 50 pieces to the Paris fair, including his HK$200 million Stilled Life, a brooch in the shape of a cicada made of jadeite, yellow diamonds and other gems to portray the philosophy of Zen, which in Cantonese and Putonghua is pronounced the same as "cicada". "Chinese culture has high regard for the cicada, which represents wisdom and enlightenment," said Chan, who believes that craftsmanship is indispensible in any artistic creation. Deydier said that no decision on the format of the Hong Kong show had been made. SNA was also planning to launch a mini fair in Istanbul, Turkey. If the plan goes through, Biennale des Antiquaires' mini-version will be an addition to Hong Kong's thriving art market that is attracting more international galleries to the city and includes a number of art fairs and auctions throughout the year. But Deydier said that the mainland was not the only attraction of locating a fair in Hong Kong. Collectors from elsewhere in the region including Southeast Asia and Taiwan are also among the target audience. China's booming art market has drawn the attention of Western dealers of antiques and fine art in the past year. At last year's Fine Art Asia, a number of dealers of Western antique furniture exhibited in Hong Kong for the first time in the hope of finding a new market. Deydier said some "nouveau riche" mainland buyers seemed to be more interested in setting auction records rather than caring about what they were buying. But that was not the right attitude, he said. "You have to like it. Art is not for investment. It's something that you have to live with," he said. He said art dealers must have integrity. He said works from SNA dealers came with a 25-year guarantee. If there was a fault with the piece, buyers could get a refund right away.

The city can expect to see three railway projects, all in the New Territories, starting from 2020 under a proposal set to underpin the next stage of rail development. All three are likely to require huge subsidies due to the dispersed populations and low-density housing in the areas they serve, officials warn. Two of the lines are domestic: a northern link, which will connect Kam Sheung Road and the Lok Ma Chau border checkpoint, and a Tuen Mun to Tsuen Wan link. The third is a cross-border connection between the Hong Kong and Shenzhen airports. This will include two spur lines that extend to the West Rail and Tung Chung lines in order to maximise patronage. The proposal comes as the New Territories' residential population is expected to jump 40 per cent by 2031, compared with 10 per cent in urban areas, due to new developments in Hung Shui Kiu, Kwu Tung North and Fanling. The Transport and Housing Bureau launched a three-month public consultation yesterday to seek Hongkongers' views on whether they prefer road-based transport to railways in these areas. Railway lines are costlier and loss-making, as they have to be built across vast tracts of land that serve low-density populations. The link connecting Chek Lap Kok airport and Shenzhen's Baoan airport via Qianhai appears to hold the greatest economic value, a transport expert says, pointing to the extensions to the West Rail and Tung Chung lines. The Northern Link will complete a loop connecting the West and East rail lines, while the Tuen Mun-Tsuen Wan Link will provide more direct access between the two areas. However, the third link could be particularly challenging, as it would pass through a lot of countryside with steep terrain and few developments. Professor Hung Wing-tat, a veteran transport analyst at Polytechnic University, called it the least effective among the three proposed projects. "This link will divert passengers who now use the West Rail to travel between Tuen Mun and Tsuen Wan, which means it will generate little new traffic," Hung said. "Areas along the link, such as Siu Lam and Tsing Lung Tau, are largely countryside land. Not only will it fail to create much traffic, but it could also spark controversy [over environmental issues]." The link, however, would provide a third connection point between the cross-border airport railway and the MTR via the Tsuen Wan line. The airport link - which Hung hailed as the most economically crucial - was first proposed in 2007 but was shelved amid doubts about its financial viability. Academics and lawmakers also questioned if the line would harm the competitiveness of Chek Lap Kok by directing local passengers to Shenzhen for mainland flights. In 2009, the project was estimated to cost at least HK$50 billion.

What happened to the sun? This was Wan Chai at 11am yesterday when a storm turned day to night and soaked anyone unlucky enough to be stuck outside. The Observatory issued the thunderstorm warning and amber rainstorm warning and recorded 4,977 lightning strikes between 10am and noon. The Airport Authority said the thunder and heavy rain caused 295 flights to be delayed and four to be diverted.

Hong Kong tycoons Joseph Lau Luen-hung and Steven Lo Kit-sing - named on Monday in a high-profile corruption case in Macau - are involved in another investigation in the city, a court revealed yesterday. It named Lo as a suspect in the case. The revelation came on the third day of the latest corruption case involving former secretary for transport and public works Ao Man-long, who was jailed for 28-1/2 years in 2009. Lo is appearing as a witness in the case in the Macau Court of Final Appeal before Judge Sam Hou-fai. Lau was also expected to give testimony in the case, but the prosecution decided not to summon him "because he is involved in another case", without giving further details. It was understood that no formal charges have been laid against either tycoon so far. A preliminary hearing will be held to decide whether the authorities will press charges. The Macau court would not reveal details about the other case, but Lo said outside court that "it's about the same thing [as today's hearing]". Ao is accused of having received at least HK$20 million and 7.3 million patacas of bribes in six government projects as he faces six fresh counts of taking bribes and three counts of money laundering. One of the projects was the tendering of five plots of land opposite Macau airport, in which Ao was said to have received the HK$20 million bribe. The bid was won by international property consultancy Jones Lang LaSalle. It was submitted on behalf of Moon Ocean, a Macau firm now owned by Lau. The court heard yesterday that Moon Ocean was fully owned by Lo when the 1.37 billion patacas bid was submitted in June 2005. It was later sold to Lau for HK$1.6 billion. Lo confirmed in court that Lau's Chinese Estates (SEHK: 0127) had deposited HK$20 million into the account of another company owned by Lo, Eastern Base. Lo said he was borrowing from Lau for the project's expenses at that time, and the HK$20 million was part of the HK$700 million to HK$800 million loan. Lo said he was "very keen" to develop the land, while Lau was not as active, although Chinese Estates carried out site research soon after it knew of the possible tender. He said the HK$20 million was to pay a construction company owned by Ho Meng-fai, now a fugitive, for work on the five plots of land. But Ho told him to pay his supplier Ecoline directly. Ecoline is thought to have been controlled by Ao. Lo denied the money was a bribe and said it was only a "preliminary payment" to Ho's company. Lo said he had met Ao in Macau once or twice at Ho's invitation. The court also heard that Lau and Lo knew of the government's plan to sell the plots of land as early as late 2004 through Jones Lang LaSalle's agent Tony Lo Hing-hung, although the three companies - Jones Lang LaSalle, CB Richard Ellis and STDM-Vigers joint venture - were only formally informed of the tender 10 days before the deadline on June 28. The hearing will continue on Monday. A spokesman for Chinese Estates could not be reached for comment yesterday.

 China*:  Apr 22 2012 Share

Chinese Premier Wen Jiabao arrived here Friday, kicking off a two-day official visit to Iceland, which is the first official visit by a Chinese premier to the island nation.

Quality control at a Nissan and Dongfeng joint venture factory in Xiangyang, Hubei province. Nissan's luxury brand Infiniti is setting up a production base in China through its joint-venture partner Dongfeng. The long-awaited indigenisation of Infiniti will help raise sales significantly. Nissan did not unveil the details of the arrangement, however. In a statement yesterday, the Japanese carmaker only said the two Infiniti models would be produced on the mainland by 2014. The announcement came after Dongfeng admitted last month it was in talks with Volvo for a new partnership on trucks and vans, while Nissan would give up its current partnership with Dongfeng on commercial vehicles for a tie-up on passenger cars. Dongfeng would also help Infiniti and Renault, which has a long-term partnership with Nissan, to manufacture in China. Infiniti, which exported only 1,000 vehicles to China when it entered the market in 2007, saw sales reach 19,075 last year. Making the car in China is expected to boost sales to 100,000 in four years, a fifth of the sales target worldwide by 2016. The location of the production facility has yet to be revealed but it is widely expected to be at Dongfeng's plant in Xiangyang, Hubei. According to an environmental assessment by the Dalian Environmental Protection Bureau, however, Dongfeng has already submitted an application to build a 5.04 billion yuan (HK$6.18 billion) factory in Dalian, with an annual capacity of 240,000 passenger cars. Nissan will launch a new version of its mid-size Infiniti M35 hybrid sedan at the Beijing Auto Show on Monday while Renault is expected to announce details of its plans. For years, foreign luxury automakers have set up production lines on the mainland to avoid the high import tax and cut costs. Jaguar Land Rover and Chery recently set up a joint venture. Land Rover chief executive Ralf Speth said the company will invest up to £100 million in a new factory that could produce up to 150,000 vehicles in the first three years.

Zhang Ji, a wealthy Shanghai-based businessman, is eyeing some 18th- and 19th-century Western paintings for sale in the Netherlands, at the world's largest arts and antiques fair. But Zhang, who owns a cable- and wire-making factory, is wary because he suspects that the artworks' prices might have been set higher, with Chinese buyers in mind rather than Western ones. "Now the whole world looks up to China," says Zhang, one of around 100 potential buyers and collectors who last month were invited to the European Fine Art Fair (Tefaf), an annual event held in the southern Dutch city of Maastricht for the past 25 years. "The dealers want to sell the artworks to the Chinese, and I have a feeling that they might command a higher price if they sell the works to us than to a regular Western collector because they know that we are rich," he said. This year Tefaf extended a warm welcome to buyers from China, who now account for most of the world's buyers of arts and antiques. According to a study commissioned by the European Fine Art Foundation, which organised the fair, China has overtaken the United States for the first time, with a global share of 30 per cent based on auction and dealer sales last year. The US share dropped by five percentage points to 29 per cent, coming in second, with Britain ranking third at 22 per cent. In October, many Western dealers tried to find buyers at the Fine Art Asia exhibit held in Hong Kong, but Tefaf decided to use a more direct approach by inviting potential new clients to Maastricht after organisers hosted two introductory events - one in Beijing and another in Shanghai - last year. That should be no surprise after Forbes reported that the number of US-dollar billionaires in China stood at 84. Another survey, conducted by Boston Consulting Group, placed the the number of millionaire households at more than one million, surging by 31 per cent to 1.11 million in 2010, the world's third-highest after 5.22 million in the US and 1.53 million in Japan. That is a lot of money looking for somewhere to go, and the art market is becoming ever more appealing. The study also found that the global art market was up by 7 per cent from 2010 to €46.1 billion (HK$469 billion) last year, a 63 per cent increase from the downturn in 2009. The combined value for art auctions sales on the mainland, Hong Kong, Macau and Taiwan totalled €9.8 billion, 42 per cent of the global share. A number of spectacular sales were made, such as 20th century Chinese painter Qi Baishi's Eagle Standing on Pine Tree fetching 425.5 million yuan (HK$522 million) at China Guardian Auctions last May. "There's a lack of other options for investing: the bond market is still underdeveloped, the currency is not highly convertible and the property market has gone through the roof. Art becomes a valid way to store value," says Clare McAndrew, of the Ireland-based consulting firm Arts Economics, who prepared the European Fine Art Foundation survey. McAndrew also observes that mainland buyers are at the point of developing a more refined taste in art and luxury collectibles. "[Western] contemporary art will be an accessing point [for Chinese buyers], but more dealers are telling me that they are looking for works that have a historical footprint, not just contemporary trophy pieces." In Maastricht last month, the Chinese entourage, whose tour was co-organised by Tefaf and the Chinese Collectors Club, made a low-key appearance at the fair, tactfully arriving on the third day to avoid the busiest times and the heaviest media presence. The fair traditionally attracts old money, with wealthy Westerners descending on Maastricht in their private jets to be wooed, after the opening by Queen Beatrix of the Netherlands, by 265 dealers from 19 countries. This year, Tefaf attracted 72,000 visitors, 44 per cent of whom were international ones, according to the organisers, with a "marked increase" in guests from Hong Kong, the mainland, Singapore and Russia. At a reception on the fourth day of the fair known as "China Night", Zhang - the Shanghai-based businessman - and other members of the entourage found themselves among many friendly Europeans who spoke perfect Putonghua as they elbowed their way through the crowd in search of potential new clients for their galleries. Such unusual friendliness, however, alarmed Zhang. "The Chinese art market is huge, and we are like primary school children to them," he says. "But I'm telling my friends to be cautious. Don't let them take advantage of us. We are not fools." Louie Huang, a well-travelled Shanghai property businessman, was considering buying a 270-year-old European antique clock. "It's beautiful," said the 30-year-old, who visited the fair for the first time with his father. "It still functions and plays music. More importantly, its value will go up." Huang declined to name the asking price, but said it could become the first Western piece in his family's collection of Chinese artworks. He said his family had started collecting only five years ago, and that he inherited the interest from his father. "It's great to see these artworks, but we don't have the knowledge. [Like in the case of] the clock ... I need to study it further before making my decision," Huang said. Despite their caution, the delegation spent US$10 million at the fair, half of it in the first few days, according to the organisers. Many curious mainlanders were spotted inquiring about a range of European antiques and works of art, including Object of the Fair, a pair of monumental marble sculptures portraying a lion and horse, along with a lion and bull. The sculptures are attributed to the workshop of 18th-century Italian sculptor Giovanni Battista Foggini, and offered for sale by the London-based dealers Tomasso Brothers. And it was not just the invited buyers who were spending. One Beijing reporter covering the fair reportedly bought a Chinese antique bowl for €10,000. Mogul Dong Rongting, who runs Shanghai's famed Dynasty restaurant and hotel, splashed €3 million on a 10-carat diamond at jeweller Graff. "For diamonds, you don't need to know the stories behind them. All you need is a certificate," says Dong. But fine art is a completely different story. Dong says that after acquiring material wealth, people will seek spiritual wealth. "That means we look at arts and culture, and it's not just Chinese art. Now we begin to look at European art," says Dong, a veteran collector who has been acquiring classical Chinese calligraphy and paintings for more than two decades. But like other members of the mainland entourage, he too was circumspect. "Buying an antique piece is not like buying a Louis Vuitton bag. You need in-depth communication with the dealer," Dong said. "But it feels that Western dealers don't know about our focus and what we are looking for." China's art market is rife with counterfeits, as state news agency Xinhua has reported, and buyers growing up in such a culture cannot help but be more demanding and sceptical. "We need very clear understanding of a piece's history and provenance. We want all details to be documented, including when it was exhibited, at which museums, the literature references. I can't trust you just because you claim to be an experienced dealer," Dong says. "Art collecting isn't something that you can do only because you are rich - you need to learn about the art yourself. At the end of the day, art is not shares. You can't sell them back into the market any time, because if you buy a fake piece, that's it." While the Chinese learned a thing or two from their experience at the art fair, the dealers at Tefaf in turn learned much from them. Belgian dealer Fleur Camilli van Kranendonk Duffels said the Chinese buyers knew exactly what they liked and this gauge on tastes would inform her choices for antiques to sell at Fine Art Asia, in Hong Kong in October. "We could see the Chinese would react to our kind of jewellery, which is all European jewellery. We want to try new possibilities, especially [in a] new market. We shouldn't only restrict ourselves to Europe but we should expand to Asia," she said. Across the exhibition hall, London-based art dealer Robert Bowman sold a €350,000 work called Maternite by the Russian sculptor Ossip Zadkine, to a Hong Kong collector he met at Fine Art Asia last year. He said that three weeks after the October art fair in Hong Kong, he sold an Auguste Rodin sculpture to a Singapore-based Chinese collector for US$1.8 million. "It's wonderful that we are starting to sell to Chinese clients," Bowman says. But he understands that business cannot be done overnight, and that relationship-building plays an important part. "If they are spending £200,000 [HK$2.5 million] to £300,000 [on an art piece], I think they want to know more about you. They would come to your gallery, see your stand at Tefaf. Just loving it is one thing, but building a relationship with the dealer is important," says Bowman, who will be returning to Hong Kong in October. He does, however, have reservations about appraisal of Western art by buyers from the mainland. "There's definitely a desire to learn, but perhaps if you are based in Hong Kong, there's a greater chance to [be exposed] to European art," says Bowman.

Hong Kong*:  Apr 21 2012 Share

Asia's No 3 insurer AIA Group on Friday said the value of its new business rose 27 per cent in the first quarter, boosted by strong growth in China. The insurer’s value of new business, or VONB, rose to US$232 million in the three months ended Feb. 29, this year, it said in a filing with the Hong Kong Stock Exchange. VONB is a measure of the present value of future business. AIA’s margin on that business rose 6.9 percentage points to 42.1 per cent from 35.2 per cent a year earlier.

China Mobile Hong Kong launches the new service with a comparison of 4G (left) and 3G network speeds. A lack of handsets is hampering 4G development in Hong Kong. Roaming charges are expected to fall after China Mobile (SEHK: 0941, announcements, news) Hong Kong launches a cross-border data sharing service next week, which will make it cheaper to access services locked behind Beijing's internet firewall. China Mobile, the second operator to offer 4G services after CSL, will intensify competition among next generation mobile-phone services in Hong Kong as subscribers to its 4G service can get cheaper access to news portals or social networks such as Facebook and Twitter, which are banned on the mainland. Although existing roaming services can still overcome the firewall, users face steep charges. Many Hong Kong mobile users tend to switch off their data roaming option and use Wi-fi services offered by mainland operators, but this risks attracting official surveillance. China Mobile had lowered the costs for internet users wanting to keep the flexibility and ease of using their Hong Kong mobile service on the mainland, said Tiger Lin Zhenhui, the chairman of the company, yesterday. China Mobile has also cut roaming charges on voice services between the mainland and Hong Kong to 65 HK cents per minute, from at least HK$7. The cut takes effect on April 25, when the new 4G roaming service is launched. The company is targeting the 500,000 frequent travellers between Hong Kong and the mainland. It already claims more than 20 per cent of the Hong Kong market. However, China Mobile said it would enable customers to use its mainland parent's 2.75G network, easing data transmission, which can be slower when accessed with a more advanced 3G mobile phone. Meanwhile, the development of 4G services in the city is still lagging the United States, Japan and South Korea because of the limited supply of handsets. CSL and HTC launched the first 4G handset two months ago. CSL has yet to disclose the number of 4G subscribers but said total subscribers for all services stood at 3.16 million at the end of last year. That compares with 14 million subscribers in the city, according to the Office of the Telecommunications Authority, which means users may own more than one line. Lin said that 10 4G handsets would be available by the end of this year. China Mobile's 4G monthly fees are similar to those under the 3G plan: HK$88 for 200 megabytes of downloads; HK$148 for 400MB and HK$218 for unlimited data. Analysts said the new 4G mobile data services were seen as a trial run for its 4G network on the mainland. Miao Wei, the head of the Ministry of Industry and Information Technology, said last month that it would take three to four years for the mainland to upgrade its telecommunications base stations before granting 4G licences to operators.

The woman who directed Leung Chun-ying’s successful election campaign will now help him prepare to take power – and reshape the cabinet – as head of the chief executive-elect’s office. Fanny Law Fan Chiu-fan was appointed to the post on Friday – her top priority will be reshaping the cabinet. A government spokesman said Law would be responsible for supervising the Chief Executive-elect’s Office and liaising with political and community groups before the next government starts. Her appointment takes effect immediately and will end on June 30, the spokesman said. Law served as the head of the Independent Commission Against Corruption and permanent secretary for education, before managing Leung’s campaign. She is no stranger to helping a Hong Kong leader-in-waiting, having held the same position for Tung Chee-hwa as he prepared to become chief executive in 1997. Law told local radio her main task now is to help implement a cabinet restructuring suggested by Leung. In his policy platform, Leung called for two new aides to be hired – one for the chief secretary and one for the financial secretary – to take charge of population policies and innovative industries. The Commerce and Economic Development Bureau is to be split into a Commerce and Tourism Bureau and an Information and Technology Bureau, while a new Cultural Bureau will be established. Law said it was vital to the next government’s work to have a full cabinet team ready by July 1. “The restructuring has to be completed as early as possible, because only with it in place can [we] decide on a list of names for the cabinet,” she said. Law said she had no intention of serving in the next government. Instead, she has plans to travel abroad.

China’s second largest brokerage Haitong Securities raised US$1.68 billion in an initial public offering in Hong Kong, the world’s biggest IPO this year, a report said on Friday. Dow Jones Newswires quoted unnamed sources familiar with the raising as saying the Shanghai-listed brokerage sold 1.23 billion shares at HK$10.60 each, the bottom of the indicative price range. The firm will list on the Hong Kong stock exchange on April 27. Haitong Securities revised up the low end of its price range from HK$10.48 to HK$10.60 due to strong demand from investors. The IPO is expected to test investor sentiment following last year’s stock market volatility and the euro zone debt crisis, which prompted several firms to cancel or postpone listings, including Haitong. Hong Kong overtook New York in 2009 to become the world’s top IPO market, as a slew of companies turned to the Asian financial hub to tap the mainland’s explosive growth and cash-rich investors.

A new “demand-led” program for redeveloping run-down buildings has selected its first three sites, the Urban Renewal Authority said on Friday. The three old buildings – one in Tai Kok Tsui and two in Sham Shui Po – met the program’s criteria including the support of at least 67 per cent of owners, URA chairman Barry Cheung Chun-yuen said. The URA will arrange meetings with the owners soon and make them a redevelopment offer. At that stage, at least 80 per cent of owners must agree before the project can proceed. There are 226 property interests involved in the three sites that have been accepted, and they are home to around 290 households. Seventeen submissions have failed to meet the scheme’s criteria. A site must have a floor area of at least 400 square metres and be in “poor condition”. The URA said last year that applications would be judged on the condition of the buildings and potential impact of a scheme on the local area, rather than on profitability. It has received 25 applications under the plan, to date.

Edward Yau warns that further delay to incineration plans might put Hong Kong in a similar situation to the Italian city of Naples. Lawmakers opposing the government's waste incineration plans owed the public an explanation on why a city facing a mounting waste crisis must wait longer for a solution - and should offer their practical alternatives - the environment minister says. In an exclusive interview with the South China Morning Post (SEHK: 0583), Edward Yau Tang-wah said the waste issue deserved rational and objective discussion but had been politicised as major political parties expressed reservations about it. But he refrained from saying if chief executive-elect Leung Chun-ying had meddled in his waste policy after Leung announced a "zero" quota for mainland mothers giving birth in Hong Kong private hospitals from next year. Both policies have implications for the transition of the old and new administrations and legislatures. Yau said those politicians who delayed or disapproved of his plans should explain to the public why they would need to put up with more landfilling of waste equivalent to seven Exchange Square towers a year. "Will waiting a few more months solve the problem?" he asked. "Why do we have to wait? Is it just because of a single remark by the chief executive-elect? Is it because of the election? Or is it due to the fact Hong Kong has not achieved the highest recycling rate in the world … society deserves a reason why we have to wait." Yau said the city could not afford any further delay, as the quest for waste solutions had started more than a decade ago and there had been intensive discussion already. He also said he had never heard of instructions from the chief executive-elect to halt the projects. He would not say if he had met Leung on the issue, but stressed that Leung's platform focused on waste reduction, as the current policy did, and did not exclude incineration. "It is a task of necessity no matter who is in charge," said Yau, adding that he "hoped and was confident" that the next administration would respect the fact. He warned that further delays might put Hong Kong in a similar situation to the Italian city of Naples, where insufficient waste facilities resulted in rubbish being dumped in the streets. "The longer we put it off, the longer we have to ask what method will we adopt, the more likely we will be of living the example of what Naples faced," he said. While the government was willing to give more in-depth explanations for the need for the facilities, site selection for the incinerator and its waste reduction policies, Yau said lawmakers should explain to the public why they must wait for the government's multi-pronged waste solution that includes incineration, landfill and recycling. Yau admitted he had no contingency plan if the funding request for the HK$15 billion incineration project at Shek Kwu Chau was blocked. "Do we really have a plan B, when there is already a three-pronged strategy? Perhaps the plan B is just waiting to see the landfill becoming full. Everyone opposing our plan should ask themselves what is their plan B." Yau said there was no magic wand for the situation as relying solely on waste reduction was unrealistic. Even Germany, whose recycling rate was now more than 60 per cent, still relied on incineration. He said the limited capacity of the first incinerator meant only 17 per cent of the city's waste would be burnt, with the remainder needing other forms of disposal, including landfill. He also believed it was impractical to build the incinerator after waste charging was introduced. Yau felt encouraged that more than half of the people in a public consultation on charging supported the idea, but did not commit himself to a road map or timetable on it, only agreeing to take the issue further. He refused to say if he had been approached to stay in the next government or if he had any interest in doing so.

Legislators are split over a private member's bill submitted by Economic Synergy lawmaker Jeffrey Lam Kin-fung aimed at curbing the influx of mainland mothers giving birth in Hong Kong. But even supporters of the proposal say that tackling the issue should be the administration's duty, not lawmakers', given that private bills rarely get off the ground. Lam's legislative proposal, submitted to the Department of Justice, seeks to clarify a condition in the Immigration Ordinance that at least one parent of any child born in Hong Kong must be a permanent resident in order for the child to be granted right of abode. "Approval from the Department of Justice will ensure all wordings satisfy the three qualifications listed in the Basic Law," said Lam, referring to Article 74 of the mini-constitution, which says private bills can only be tabled if they "do not relate to public expenditure, political structure or the operation of the government". The pro-business lawmaker will also have to submit the proposal to Legislative Council president Tsang Yok-sing and seek written consent from the chief executive, Donald Tsang Yam-kuen, whom Lam has already tried to lobby. "The chief executive said he needs further study of my bill," said Lam. If successfully tabled, the bill will need to secure majority support from both functional and geographical lawmakers. Pro-government parties signalled support for the bill if it can be successfully tabled. But Liberal Party chairwoman Miriam Lau Kin-yee said if Tsang could approve Lam's initiative, the government should introduce the change itself. "We support any proposal that can alleviate the mainland babies problem," Lau said. "But if the chief executive approves the private bill based on the strict conditions in the Basic Law, he is in a better position to seek the change himself." Since a landmark Court of Final Appeal ruling in the case of Chong Fung-yuen in 2001, babies born in Hong Kong have been entitled to the right of abode regardless of their parents' immigration status. Legal experts say any change to the Immigration Ordinance that overturned that ruling would be unconstitutional. Democratic Alliance for the Betterment and Progress of Hong Kong lawmaker Ip Kwok-him said: "We will consider supporting Lam's bill, but the final decision depends on the bill's wording." But Democratic Party chairman Albert Ho Chun-yan, a solicitor, said such a proposal would be "beyond the legislative competence" of Legco. "The legislature does not have the power to initiate any change that challenges the decision of the judiciary," he said. While chief executive-elect Leung Chun-ying has announced a "zero-quota" policy on private hospitals admitting pregnant mainlanders, Lam said: "A free society should not restrict private activities." If Lam fails to table his bill before the current Legco term ends in July, it will have to start from scratch in the new Legco term starting in October.

Bankers and brokers may be jailed if they fail to ensure the accuracy of listing prospectuses produced by companies they are sponsoring to join the stock market. Allocating criminal liability for such misdeeds is part of the Securities and Futures Commission's plan to improve market quality in light of recent scandals that have tarnished the image of the local bourse. Two sources acquainted with details told the South China Morning Post (SEHK: 0583) that the SFC is expected to propose in a consultation paper that sponsors follow tougher due diligence requirements and should face harsher penalties if they fail to check misleading information in listing prospectuses. This may result in the executives of banks or brokerages facing jail terms and firms paying huge fines. The regulation of investment banks and brokerages, which act as sponsors to listing firms, has come under the spotlight after several instances of companies getting into financial trouble shortly after listing. The plan, however, is set to face stiff opposition from sponsors and the stock exchange, which relies on income from new listings. Investors support the SFC plan as a way of improving market transparency and investor protection. The SFC would consult the market on reforming regulation of listing sponsors, said SFC chairman Eddy Fong yesterday, declining to give more details. Both former SFC chief executive Martin Wheatley and current chief executive Ashley Alder support the reforms. Fabric maker Hontex International was suspended from trading after only 64 days after the SFC found it had misleading information in its 2009 listing prospectus. In the past two months, the Financial Reporting Council has put 13 companies on watch lists, including some newly-listed firms that are alleged to have accounting problems. At present, criminal liability does not attach to sponsors for allowing misleading information in listing prospectuses. Current penalties include a public reprimand, licence suspension or a small fine. "The Hong Kong listing regime includes penalties that are too light for sponsors," said Steve Vickers, chief executive of Steve Vickers Associates, a Hong Kong risk consultancy. "In Singapore, the penalties are much tougher and sponsors who fail in their duties face criminal liability. The SFC is doing the right thing as the recent scandals of listed companies have damaged the image of the Hong Kong market.'' Vickers said that sponsors should appoint independent investigative firms to check the accuracy of information provided by companies. Andrew Lam Hung-yun, director of accounting firm BDO, said the SFC may ask listing sponsors to carry out more due diligence, such as checking information with the tax bureau or checking on valuation reports and accounting statements. "Overall, sponsors are expected to do more and to face tougher penalties. This may drive some players away from the IPO market." Sally Wong , chief executive of the Hong Kong Investment Funds Association, welcomed the move to enhance investor protection. "Sponsors play a very important role in the due diligence process," she said. "A regime that can ensure the proper discharge of the gate-keeping role is pivotal not only to protect investors, but also to maintain Hong Kong's reputation as a world-class listing hub."

China Mobile Hong Kong Company Limited (CMHK), the wholly-owned subsidiary of China Mobile Limited announced Thursday the launch of their next generation of 4G LTE (Long Term Evolution) mobile data services as well as a new Hong Kong-Mainland cross-border data sharing plan. According to CMHK, the new 4G service, available from next Wednesday, uses LTE technology to provide users with high-speed data transfers which are 50 times faster than 3G networks, by delivering a maximum download speed of 100 Mbps and a maximum upload speed of 35 Mbps. Meanwhile, CMHK also plans to scale up its 4G LTE coverage to a level on par with its current network, while indoor coverage will be up to 80 percent by the end of 2012. The cross-border data sharing plan, which is the first of its kind in Hong Kong, offers users the convenience and flexibility of a single number and data price plan in Hong Kong and when roaming in Chinese mainland. CMHK Chairman Tiger Lin Zhenhui said, broadband demand for accessing the Internet "anytime and anywhere" is facing tremendous growth, corresponding with the global explosion of data. In the view of this trend, 3G networks have already lagged behind the data demand of this generation. 4G LTE is a next generation mobile communications technology developed to cater high-speed mobile internet. He added, LTE is now replacing 3G as the next generation mobile communications technology on a global scale. The commercial use of 4G in Hong Kong will further enhance its leading position in the field of Information Technology applications. Director and Chief Executive Officer of CMHK, Sean Lee, expressed optimistic about the development of 4G LTE technology. He said, more and more operators are turning their eyes to 4G LTE. He also said, mobile device makers indicate that up to 20 4G smartphone and tablet produce will be launched in 2012, which is a key reason to believe that 4G will be picking up faster than 3G. As to diversified services, Lee believed that integrated communications services for Hong Kong and the Chinese mainland are a major trend, which is why they offer the new cross-border sharing plan. In addition, CMHK will set a VIP Lounge at Hong Kong International Airport form June this year, which can provide travelers with a range of roaming services and support, including technical support for roaming services, device rentals and roaming pre-paid cards.

 China*:  Apr 21 2012 Share

The Panchen Lama, recognised by Beijing, will attend a Buddhism event in Hong Kong next week as the city celebrates Buddha's birthday and prepares for the 15th anniversary of the handover. Gyaincain Norbu, 22, said to be the 11th Panchen Lama of Tibetan Buddhism, will give a speech at the Third World Buddhist Forum, says Jiang Jianyong, deputy director of the state administration of religious affairs. The Panchen Lama is the highest-ranking lama after the Dalai Lama, who disagrees with Beijing on the identity of the Panchen Lama. The opening ceremony and the keynote speech of the event, which will run from April 25 to 27, will take place at the Hong Kong Coliseum in Hung Hom on April 26. Singers Faye Wong and Andy Lau will perform there. The forum is expected to draw more than 1,000 monks and scholars from more than 50 countries and regions. A 2,500-year-old relic believed to be the Buddha's parietal bone will be displayed at the coliseum from April 25 to 29. As part of the city's handover anniversary celebrations, the public will have a chance to get up close to two mainland warships that escorted Hong Kong vessels through pirate-infested waters off Somalia when they visit the city next month. Missile destroyer Haikou and missile frigate Yuncheng will berth at the People's Liberation Army barracks on Stonecutters Island from April 30 for five days. The government yesterday said it invited the ships to make the fourth port call by PLA navy vessels in the 15 years since the handover.

Bo Guagua walks to his residence in Cambridge, Massachusetts. he US Department of State broke its silence yesterday on the whereabouts of the son of disgraced Chongqing party chief Bo Xilai, denying that the Harvard student had been taken away by American law enforcement officers. Department spokesman Mark Toner made the remarks after speculation that Bo Guagua might seek asylum following the downfall of his father, who has been accused of violating party discipline, and his mother, Gu Kailai, under investigation following the murder of British citizen Neil Heywood. "As far as we know, there's nothing to those reports," Toner told a daily press briefing. "He remains at school at Harvard." Bo Xilai's downfall, after former aide Wang Lijun went to the US consulate in Chengdu on February 6 to apply for political asylum, has triggered extraordinary international attention. The New York Times reported on Wednesday that Wang was in an agitated state that day, and took with him documents detailing accusations against Bo Xilai and Gu, but did not leave the documents behind. Wang was not granted asylum after a frantic debate that reached the White House, but the State Department shielded him from arrest by police officers loyal to Bo and ensured he could make his accusations in Beijing, the report said. Toner did not shed much light on what happened inside the Chengdu consulate, saying he could not comment on the credibility of the media reports, but added that Wang was in the consulate on February 6 and 7 before leaving of his own volition. There have been conflicting reports on the whereabouts of Bo Guagua, who is studying for a master's degree in public policy at Harvard Kennedy School, since an investigation of his father was announced on April 10. Xinhua reported that day that Gu and the younger Bo once enjoyed a good relationship with Heywood, but had come into conflict over economic interests. The Daily Telegraph in London reported last week that Bo Guagua had been taken away by US law enforcement officers from his residence at Harvard on Thursday last week. There has also been speculation that he returned to Beijing some time ago. The Harvard Kennedy School did not respond to inquiries about whether he had asked for deferment of study, or other help. Meanwhile, Chongqing officials have denied online speculation that the municipality's propaganda chief, He Shizhong, has been removed. "This is just false information. I just had a working meeting with He," Wen Tianping, deputy director of the city's press office, said yesterday.

A high-speed train in Beijing. Plans for super-fast trains have been ridiculed because rail lines cannot carry trains safely beyond 385km/h. Mainland authorities have revealed plans to develop a "super-high-speed train" that can reach speeds of 500km/h or more. Rail experts were surprised by the news, with some calling the plan "ridiculous". The Ministry of Science and Technology on Wednesday released a five-year plan on high-speed train research and development, stressing the need to address issues of speed, safety, energy efficiency and developing export markets. But perhaps most shocking was that making the trains faster topped the ministry's to-do list. "Continuously increasing train speeds … meets the demand of our country's high-speed-rail development strategy," the document said. Mainland researchers were asked to study and develop a "super-high-speed train system" in "super-high-speed conditions". And to start with, they will be given an experimental train that was built last year with a top speed of 500km/h. The ministry did not reveal the cost of the project. On safety - undoubtedly the public's top concern after a number of high-speed-rail accidents last year - the ministry plans to develop various technologies such as an "intelligent" train-control system that automatically detects problems, diagnoses them and decides how to solve them. Wang Mengshu, deputy chief engineer of China Railway (SEHK: 0390) Tunnel Group and a drafter of the country's high-speed-rail blueprint, said yesterday that he opposed plans for a super-high-speed train. The mainland's high-speed rails were built for trains operating at 350km/h, the professor said. "The Ministry of Science and Technology has made a ridiculous decision," Wang said. "We can guarantee safety up to 385km/h, but rails that will sustain the grind and impact of super-high-speed trains, with speeds over 400km/h, have never been built and will never be. "Instead of endlessly increasing speed, the limited manpower and resources should be invested in studies that improve safety and quality." Professor Zhao Jian, an economist with Beijing Jiaotong University and an outspoken opponent of the rapid expansion of the high-speed-rail network, said super-high-speed trains would not be economical, even if they overcame hardware hurdles, including safe rails. "It would be as uneconomical as making a jumbo jet fly at sea level," Zhao said. The ministry did not respond to a South China Morning Post (SEHK: 0583, announcements, news) request yesterday for more details of the project, but in the document it cited scientific and technological benefits in justifying the development of a super-high-speed train. The super-high-speed technology would also place a higher benchmark on the quality of hardware and software, thus providing a greater margin of safety on lower speed systems, the document said. "An overseas buyer might be impressed, reasoning that if we can make a train run safely at 500km/h, we can make it run very safely at 300km/h," Zhao said. "So the only benefit of super-high-speed trains that I can think of is marketing." China set an ambitious goal during the financial crisis in 2008, setting the total length of the nation's high-speed rail network at 16,000 kilometres by 2020. But last year's disaster in Wenzhou Zhejiang province that killed 40 people and severely damaged the public perception of China's high-speed rail technology forced authorities to lower the trains' operating speeds from 350km/h to 300km/h.

A 30-year-old millionaire once labeled one of China's richest women was spared the death penalty, as China's highest court ruled on a case that shone a spotlight on gaps in the nation's justice and financial systems and drew sympathetic comments from Premier Wen Jiabao. Wu Ying—who turned a single nail salon into a regional conglomerate—was sentenced to death in 2009 after being convicted of swindling 11 investors out of 380 million yuan ($60.3 million). But China's Supreme People's Court, which must approve all death sentences in China, on Friday said it declined to approve the sentence and referred the case back to the high court in the Chinese province of Zhejiang. "The Supreme People's Court feels that the amount of funds involved in the case is huge, and a great deal of damage was caused to victims, and at the same time seriously affected the government's financial management," it said in a statement. But "on an overall assessment of the case, the death sentence may be stayed." "This is good news. This is what we've been hoping for," said Zhang Yanfeng, Ms. Wu's attorney. Her death sentence drew an outpouring of protests from China's online community, which questioned its severity for a financial crime. It also drew attention to holes in the Chinese financial system, where smaller businesses often struggle for funding even as giant state-owned enterprises enjoy cheap credit from China's biggest banks. At a press conference in March, Mr. Wen, the premier, told reporters that the Supreme Court was "taking an extremely cautious attitude toward the Wu Ying case." But he also said her case "reflects how the development of informal finance has still not adapted to the development of our economy and society."

Twenty-one Chinese couples take part in a group wedding ceremony held in Beijing on October 6, 2011. China’s gender balance is strongly skewed, with a sex ratio of 108 men to 100 women. Gaze at men while leaning forward at a 45-degree angle and avoid showing excitement at all costs. That’s the first step to luring a would-be husband, according to a new Hong Kong reality TV show, Bride Wannabes—a show that has the city simultaneously outraged and addicted. The premise is simple: a group of five women mostly in their 30s put themselves in the hands of love and life coaches to for six months, with the hopes of boosting their marriage prospects. Along the way, with a documentary film crew in tow, they go to cosmetic surgery clinics, get makeup tips, learn what length of an SMS message will keep a man tantalized and finesse their ability to keep their mouth shut. “When you don’t speak, you look like Central, but when you speak you look like Mongkok,” one woman is told. For those not familiar with the city, Central is a sophisticated business district, whereas Mongkok is a dense, chaotic neighborhood on the other side of the harbor. Academics and scholars are up in arms over how the drama endorses some stultifying ideas about femininity. A Facebook page, “Say no to Bride Wannabes,” has already generated well over 2,300 “likes” since it was created a week ago. Still, Hong Kongers have stayed glued to their TV sets. The show claims a nightly 1.7 million viewers—suggesting that nearly 25% of the city’s population can’t get enough of Gobby, Mandy, Suki, Florence and Bonnie’s antics. There’s a reason why the show has struck such a chord. Hong Kong’s demographics means a lot of potentially lonely female hearts: women outnumber men 10 to 9, according to 2010 UN statistics. The number of single, unmarried women in Hong Kong has been on the rise: between 1996 and 2009, the number of such women jumped by nearly 50%. “Hong Kong is facing a great sense of crisis among both men and women,” says Susanne Choi, whose research at the Chinese University of Hong Kong focuses on marriage trends. As the status of women has risen, she says, both men and women are struggling to readjust to new norms. Even as their education and job status has improved, she says, many ideas of traditional feminine roles at home and in the workplace have stayed the same. “And if they choose not to conform to these ideas,” she says, “they face a lot of pressure.” The show’s Chinese title, “Blossomed Women Ready for Combat,” is a play on how “盛女,” or “blossomed woman,” can also work as a pun on the phrase “剩女,” or leftover woman—a term used to describe a woman typically over age 28, often well-educated and financially independent, who hasn’t yet married. Though the term may have originated in Hong Kong, says Ms. Choi, it’s since spread to the mainland, where the number of single, college-educated, financially independent women has been on the rise. In Shanghai for example, the number of unmarried women between ages 20 and 50 has experienced what the nationalist tabloid Global Times calls “ominous growth,” to the point that today, there are over half a million of them. (Unlike Hong Kong, the gender ratio on the mainland is heavily skewed with a glut of men: 108 men per 100 women, according to the UN.) The 10-episode series ends tonight, however TVB, the show’s producer, has already floated the idea of a sequel—one focused on men—much to its critics’ disgust. “After watching this show, narcissistic materialistic girls will become even more narcissistic and materialistic, and those who aren’t will be brainwashed to become that way,” wrote one critic on the “Say no to Bride Wannabes” Facebook page. Still, perhaps the best indictment of the show comes from one of the show’s hopefuls, Mandy. She’s already quit the program, saying she’s better off finding someone by herself.

Thai Prime Minister Yingluck Shinawatra plants trees as she visits a Thai-owned enterprise in Beijing, April 19, 2012. Yingluck and Li Haifeng, director general of the Overseas Chinese Affairs Office of the State Council, planted the trees in the Forest for Friendship between China and Thailand. Yingluck was accompanied by her husband and son, who helped plant one of the trees. Yingluck prayed in front the trees and said she hoped that "the friendship between Thailand and China can last for a long time". The pine forest, a symbol for friendship, was first planted by Thai Princess Sirindhorn in 2001, when she visited the Reignwood Pine Valley in Changping district in Beijing, a resort run by a Thai-Chinese entrepreneur. Former Thai prime minister Thaksin Shinawatra - Yingluck's elder brother - and other Thai officials have also planted trees in the forest. Yingluck took pictures of the pines planted by Prince Sirindhorn and her brother Thaksin. "The activity showed Yingluck's special charisma and affinity as a female nation chief," said Zhang Xuegang, an expert on Thai studies with the China Institutes of Contemporary International Relations. The pine trees are a symbol of Yingluck's goodwill toward Sino-Thai relations, Zhang added. After planting the trees, the prime minister rode a high-speed train to Tianjin on the Beijing-Tianjin Intercity Railway. Yingluck on Tuesday signed a cooperation agreement with China during a meeting with Chinese Premier Wen Jiabao that included rail construction, and met with business representatives from Chinese railway construction companies. According to Thai Tourism Minister of Commerce Boonsong Teriyapirom, China Railway Group has expressed interest in the Bangkok-Chiang Mai high-speed rail project, one of the four major high-speed rail projects on the Thai government's agenda. Zhang Gaoli, Party chief of the Tianjin Municipal Committee of the Communist Party of China, held talks with Yingluck and called for more cooperation between Tianjin and Thailand. "Tianjin has great potential for development," Yingluck was quoted as saying when meeting with the secretary. Thailand will further promote pragmatic cooperation with the port city and push the ties between the two countries to a higher level, she added. The prime minister also visited the Tianjin Planning Exhibition Hall, before leaving for Japan.

Hong Kong*:  Apr 20 2012 Share

HSBC Holdings (0005), Europe's largest lender by market value, will be the first European bank to list an international yuan- denominated bond in London as the capital seeks to become a hub that trades the currency. The bank set the size of the offering of three-year notes at 2 billion yuan (HK$2.46 billion), a person familiar with the offering said yesterday. They will be priced to yield 3 percent after the price guidance for the deal was revised from 3 percent to 3.25 percent. The bond attracted orders of more than 3.25 billion yuan, allowing HSBC to raise the issue size from 1 billion yuan to 2 billion yuan. "It represents another step in London's development as a premier international trading center for the renminbi and is an early sign of the huge potential that this market represents," chief executive officer Stuart Gulliver said yesterday. London is seeking to become a hub for yuan trade and investment. Institutions in Britain have more than 109 billion yuan of customer and interbank deposits in London, according to a policy paper by research firm Bourse Consult that was released yesterday. Chancellor of the Exchequer George Osborne said he hopes to see Chinese companies issuing bonds and products in London. The British Treasury and Hong Kong Monetary Authority agreed in January to provide a forum for banks to look at clearing and settlement systems, market liquidity and the development of new yuan products. The city has 26 percent of the offshore yuan market, Osborne said. The market grew 80 percent last year and most of the business is conducted in Hong Kong, he said. "We are not prepared to let anyone steal a march on us when it comes to new products and new markets." Osborne said. "In the coming decades it is China that will act as a powerhouse of the world economy." China designated Hong Kong as an offshore center for yuan trading after allowing trade settlements using the currency in 2009. The HKMA announced that it plans to lengthen yuan trading by five hours by June, allowing London-based institutions to expand their share of yuan trading outside China. 

Investors should stay away from property stocks for the five years when Leung Chun-ying will be calling the shots as chief executive, brokerage house CLSA warned yesterday. But two top property tycoons rushed to defend Leung, saying Hong Kong's new leader would "never be that stupid" to let such a vital sector collapse. In a report titled "New Chief, New era," CLSA regional head of property research Nicole Wong Yim said Leung's leadership would bring the curtain down on "an unusual period for Hong Kong property market." The period, lasting about 10 years, was marked by sharp hikes in property prices as the government's land supply failed to keep pace with demand, Wong wrote in a note issued yesterday. With Leung taking the helm on July 1, the brokerage expects the pace of home price gains to slow drastically. "With a pro-supply government and more proactive policies against price rises, we expect residential price growth to halve," she wrote. CLSA tips an average 2.6 percent annual growth in home prices between 2010 and 2020. But Hang Lung Property (0101) chairman Ronnie Chan Chi-chung noted: "Whoever destroys the property market will not end up doing well. Stable development is what the market needs." Hopewell Holdings (0054) chairman Gordon Wu Ying-sheung concurred. "Leung will definitely not allow the property market to collapse because he would have to fix it afterwards," said Wu. Chan had earlier in the week said that developers are unlikely to earn big bucks after Leung assumes office. CLSA yesterday also turned bearish on most local property stocks. But one of three firms the brokerage remains bullish on was Chan's Hang Lung property. They other two are Wharf (0020) and Singapore-listed Hongkong Land. When asked about CLSA's bearish views, Chan replied: "Isn't it the opportunity to buy when others don't buy? I don't know. I don't buy stocks." But generally speaking, optimism prevailed in the property sector yesterday. The Urban Renewal Authority received eight bids for an 18,000-square- foot project on Peel and Graham streets. The site is expected to fetch between HK$1.53 billion and HK$1.91 billion, or HK$8,000 to HK$10,000 per buildable square foot. CLSA also expects government policies to boost home supply this year. Units available for presale will amount to 21,897 - up 19 percent from the annual average in 2006-2011. Office rents may also decline by 15 percent on the financial sector slowdown. Retail rents will see steady growth of 5 to 10 percent up to 2015 as more mainland shoppers continue to visit.

The character "peace" is stamped on each bun at the Kwok Kam Kee Cake Shop in preparation for the Cheung Chau Bun Festival. Organisers are expecting a bumper crowd of 70,000 people at this year's Cheung Chau Bun Festival - 20,000 more than last year. "This year, the festival falls on a weekend, so that will certainly bring more people out," said Ho Lai-on, director of the Hong Kong Cheung Chau Bun Festival Committee. But that has some locals worried about overcrowding. Shop owner Charlotte Tang said the crowds could even deter some visitors. "There's about 30,000 people living here. Adding 70,000 would make it unbearably crowded. It might even put people off coming," she said. The festival on April 28 is the first since it was listed last year by the Ministry of Culture as part of the nation's "intangible cultural heritage". Thousands of people flock to the island each year to see contestants scramble up an 18-metre tower to snatch buns - with those located higher up worth more points. Bamboo towers were used in the festival until a collapse in 1978 led to the end of the scramble. It was revived in 2005 using metal towers. The final will be held at midnight on April 29 - and there will be more tickets available to see it this year. Some 1,650 tickets will be given out at 10pm on April 28, up from 1,500 last year, with entry at 10.30pm. And there will, of course, be buns. One of the two official bakeries will start making the traditional white buns, stamped with the word "peace", this weekend. Owner Kwok Kam-chuen was forced to close his bakery last year because he ran out of room. The buns were traditionally left outside for visitors to see them get their "peace" stamps. But last year, food and hygiene officials required all bun preparation to be done indoors and he did not have the space. This year, Kwok has converted his storage space for the buns. A carnival would be held on Cheung Chau this Sunday from noon to 6pm, including a play on the history of the bun festival, Ho said. On festival weekend, the government and police will have special crowd control arrangements in place, while there will be extra ferry and bus services.

Professor John Wong, former head of surgery at the University of Hong Kong medical faculty, leaves the District Court in Wan Chai after he has been sentenced to perform 240 hours of community service for misconduct in public office and false accounting. A former head of surgery at the University of Hong Kong was sentenced to perform 240 hours of community service on Thursday after being convicted of misconduct and false accounting involving more than HK$3 million. District Court Judge Susana D’Almada Remedios said in sentencing that a defendant in a similar case would normally be jailed, but she decided to spare Professor John Wong after considering his prestige in the medical sector and his contribution to the community. Remedios noted that Wong, 71, had been under pressure since his arrest and amid media attention to his case. Wong was found to have used university funds to pay his domestic helper and failed to report theft by a subordinate. Remedios earlier described Wong, who has personal wealth of HK$150 million, as a man of “unblemished character” who might be considered less likely to commit a crime. But she said that as a university employee and a person in public office, he had a duty to protect the funds of the Skilled Development Centre and its Advanced Trauma Life Support course, and not allow them to be misused. Wong was convicted of directing HK$731,347, from two bank accounts belonging to the centre, to the salary and other employment-related expenses of a domestic helper-cum-driver. Wong was also found guilty of failing to tell the university that a subordinate, June Chan Sau-hung – who was jailed for 22 months in 2010 – had stolen more than HK$2.6 million from the centre’s bank accounts between 2004 and 2006. Wong had pleaded not guilty to all charges.

James Tien Pei-chun of the Liberal Party will decide whether to contest September’s election depending on the outcome of opinion polls, he said during a radio interview on Thursday morning. He might run for a Legislative Council seat if the survey shows weak support for the party’s second-tier hopefuls and stronger support for him, said Tien, a former lawmaker and honourary chairman of the Liberals. Speaking after appearing on the RTHK programme, Tien described Beijing’s active hand in the city’s governance. Over the past two to three years, the central government’s liaison office has often helped the city administration lobby lawmakers to support policy initiatives, he said. He expressed hopes that the next government, under Leung Chun-ying, would no longer need this sort of aid from the liaison office. Such lobbying work should be left solely to officials like undersecretaries and political assistants, he said. Earlier, on the programme, Tien said he would decide whether and in which constituency to contest the Legco election by considering the results of a public opinion poll the party has slated for July or August. “If it finds that the second-tier hopefuls have a slim chance to win while I may win, I will consider running,” Tien said. The party’s deputy chairwoman, Selina Chow Liang Shuk-yee, maintained that she was personally not interested in contesting direct elections again, but would consider the party’s views on the question. It “not very likely”, she said, that her party fellows would join – or would be invited to join – the Executive Council under Leung’s administration. Meanwhile, lawmaker Lam Tai-fai, a friend of defeated chief executive candidate Henry Tang Ying-yen, told RTHK on Thursday morning that Tang could continue to serve society by working in political circles or holding public office. But it all depended on what Tang – currently on vacation in the United States – wanted to do, he said. Lam added that he wanted someone to help unite all lawmakers from the commerce and financial sectors. Asked about Tang’s suitability for that job, Lam said he might not be the right person.

Ashley Alder, chief executive of Securities and Futures Commission. Hong Kong's financial market watchdog is launching a public consultation process that seeks to toughen rules for banks sponsoring initial public offerings, including holding them liable for faulty deal documents. Hong Kong’s financial market watchdog is launching a public consultation process in the next couple of weeks that seeks to toughen rules for banks sponsoring initial public offerings, including holding them liable for faulty deal documents. Such a move would spark fierce opposition from foreign investment banks, who have long stood by the assertion that sophisticated fraud is nearly impossible to detect. According to sources with direct knowledge of the matter, the Securities and Futures Commission (SFC) is set to issue a two-part consultation paper, with one section proposing to toughen the code of conduct for IPO sponsors and the second making them liable for the contents of listing prospectuses. “The focus is likely to be on due-diligence practices and liability, in case sponsors do not execute their work up to a required standard,” said Bonnie Chan, a partner at law firm Davis Polk & Wardwell and former head of Hong Kong Exchange’s IPO transactions department, who has not seen the consultation paper. The initiative follows a string of scandals at mainland companies that went public, only to then face accusations – and in some cases proof – of fraud shortly after listing. Investment banks that often serve as sponsors of the IPOs hoped the issue would fade or, at worst, involve a few tweaks to existing disclosure rules. Sponsors – usually banks or smaller corporate finance houses – prepare a company’s listing documents and perform due-diligence to ensure they comply with Hong Kong’s listing rules. Liability could leave investment banks, and possibly some of their employees, open to massive legal cases and fines, force them to abandon sponsorship of IPOs and leave that to less-experienced local banks and firms. That means banks and other sponsors are likely to lobby hard against prospectus liability, arguing there’s only so much they can do to prevent a fraudulent company executive from misleading investors. In some other countries, banks are subject to greater accountability in IPO deals. In the United States, for instance, banks underwriting an IPO can be held liable for misleading statements in a listing prospectus if it’s proved they were negligent in their due-diligence. The SFC proposed regulation similar to the planned one in 2005 but didn’t proceed with the move following widespread opposition from the finance industry. But since the last consultation, the Hong Kong market, which was the world’s biggest for IPOs in 2009 and 2010 when US$89 billion was raised there, according to consultancy PricewaterhouseCoopers, has been hit by a number of scandals at companies soon after they listed. Chinese textiles maker Hontex had its shares suspended in early 2010, just three months after it listed, when the SFC alleged its IPO prospectus “materially overstated” its financial position. The SFC said last year that an inspection of IPO sponsors found a series of deficiencies in their work, including inadequate due-diligence and questionable disclosures to the Hong Kong Stock Exchange. In the light of this, many in the legal industry doubt that investment banks will be able to stave off tougher rules a second time round. “I would be surprised if there’s much scope to roll back what’s in this paper. I expect even the soft consultation has been mainly just a courtesy to the industry,” said one Hong Kong lawyer, who declined to be named given the sensitivity of his relationship with the SFC. An SFC spokesman said the regulator had no comment to make on the consultation paper. The new proposals mean sponsors, especially the big name US and European investment banks, are likely to be more selective about the work they take on, despite Hong Kong’s IPO market currently going through a slow period. “The Hong Kong market is likely to further segment as the Chinese [mainland] banks assert their presence more in that space,” said Hayden Flinn, a partner at law firm King & Wood Mallesons in Hong Kong. This consultation will be one of the first big initiatives undertaken by the SFC since chief executive Ashley Alder took the helm in October. When he took on the role, Alder said he supported bringing in new regulation for IPO sponsors. Tighter regulations are likely to get investor backing, coming at a time when there is a strong focus on the quality of some Hong Kong-listed companies after a number of problems cropped up at the end of this year’s company reporting season. “By sponsoring a listing, a firm should be taking all reasonable steps to verify the contents of a company’s prospectus, particularly the parts for which other advisers are not liable,” said David Webb, an activist investor who runs his own governance website. “If a sponsor is negligent in carrying out due-diligence then it should be held liable to investors for that,” he said. Last month, Deloitte resigned as auditor of Daqing Dairy Holdings and clothing manufacturer Boshiwa International, with both companies now having special investigations into possible financial irregularities. Several other companies, including Ausnutria Dairy and Ports Design (SEHK: 0589), have had their shares suspended after they missed the deadline for filing their annual reports due to their auditors saying they needed more time to complete the work. Those incidents, coupled with any new regulation, are likely to make big-name banks doubly careful about who to take on as clients. “Everyone will be taking a step back and revisiting whether it makes economic sense to even pursue those deals,” said Davis Polk’s Chan.

Chief Executive Donald Tsang Yam-kuen denied his government was a “lame duck”, saying it played a role in shaping his successor’s “zero” quota on mainlanders giving birth at private hospitals. His remarks on Thursday morning came after the blunt declaration by chief executive-elect Leung Chun-ying that the quota for private hospitals to accept pregnant mainlanders should be “zero” next year. Mainland mothers who still manage to give birth in Hong Kong would “very likely” not gain permanent residency for their children. Tsang said Leung’s “zero” quota, announced on Monday, was reached during discussions between the incoming and outgoing administrations. ”Policies before July 1 are my government’s matter. Those after July 1 are decided by Mr Leung. The ones overlapping July 1 should be discussed by both administrations,” said Tsang at the airport on Thursday morning, after returning from official visits to New Zealand, Chile and Brazil. “My government [is not] a lame duck,” he said. Leung’s comments raised questions about whether the current government had been fully informed about them – especially Secretary for Food and Health Dr York Chow Yat-ngok, who had been expected to reduce the quota from 31,000. On Wednesday Chow rejected the suggestion that he had “knelt down” to Leung on the issue. Tsang said there was no transition problem between his administration and Leung’s. “I have the same target with Leung in ensuring a smooth transition of the two administrations. It is of the utmost priority for my government,” said Tsang. “We maintain constant communication.” With the Legislative Council set to debate a vote of no confidence against Tsang, over his acceptance of entertainment from tycoon friends, the chief executive said he would “listen humbly to the citizens’ and lawmakers’ views”.

 

Tai Tong Lychee Valley in Yuen Long has unlawfully occupied government land for 18 years, offering attractions including a zoo and children's playground. Visitors are charged a fee of HK$70. The Audit Commission has slammed the Lands Department for dragging its heels and allowing a rural strongman to unlawfully occupy a swathe of government land where a business has been run for 18 years. The case of Leung Fuk-yuen using 5,000 square metres of land for a recreational park is just one of many examples of the department's failure to act on illegal use of unleased government land that it manages, the Director of Audit's report released yesterday said. Leung is chairman of the Shap Pat Heung Rural Committee. "Cases of prolonged, unlawful occupation of government land may be seen as a result of the Lands Department's lack of determination in taking enforcement action on land matters," the report said. "[Such cases] also set undesirable examples and undermine the department's reputation." The site being illegally occupied was not disclosed in the report, but a source familiar with the investigation named it as Tai Tong Lychee Valley, a commercial recreational facility in Tai Lam Country Park, Yuen Long. Leung is one of two directors. He is also a key member of the Heung Yee Kuk rural affairs body and a vocal opponent of the government's crackdown on illegal structures in village houses in the New Territories. The park was much bigger in 1993, when it was first noted by the department, with its fruit trees taking up 8.2 hectares of government land. Over the years, the department has conducted 25 site inspections and issued 12 warning letters - yet the business still exists. It now covers 12,397 square metres, of which 4,672 square metres is government land. Its facilities include areas for ox-cart rides, horse riding, war games and a zoo. Until recently it also had a canteen, barbecue site and bat cave, but these are now closed. Visitors are charged an admission fee of HK$70. Schools visit the park for day trips. The commission said the operator had removed some unauthorised structures whenever it received a department notice - only to replace them with new illegal additions soon after. Leung could not be reached for comment yesterday but a Tai Tong Lychee Valley spokesman said the park "would continue operating". According to the report, the department has complied with the auditor's call for swift action to end the unlawful occupation, and the operator has agreed to demolish the illegal structures within two months. The auditor described is as a serious case of inefficiency by a department whose priority is land resumption for infrastructure and housing development, instead of enforcement against illegal land use. It blamed lenient penalties for the abuses. Of the 21 convictions from 2008 to 2011, the total fines imposed amounted to just HK$81,900, with the maximum HK$10,000 imposed in only two cases. The commission called for a review of the strategy on managing unallocated government land, since such sites make up 29 per cent of the city's total land area. The number of suspected cases of land misuse reported to the department rose 15 per cent last year from 2008, to 8,406. As of December, 494 of the cases listed as "high priority" had missed the four-month completion target. Four cases have been outstanding for more than a decade. Secretary for Development Carrie Lam Cheng Yuet-ngor agreed the department should take prompt action, but said it "has to prioritise its work among competing tasks and claims, taking into account the implications for the public". "Government sites are spread all over the New Territories and this has made it impracticable for the department to patrol them regularly." The department had set up a team for the New Territories with 39 officers handling land control, she said.

A prominent Heung Yee Kuk member has admitted that a commercial leisure park he owns has unlawfully occupied a large swath of government land for 18 years without him paying a cent. But Leung Fuk-yuen, a key figure in resistance to a government crackdown on illegal additions to village houses, said he was not directly involved as his brothers managed the park in Tai Tong Lychee Valley, which uses part of Tai Lam Country Park. "But I'll comply with whatever the government wants, such as removing unauthorized structures," said Leung, who is chairman of Shap Pat Heung Rural Committee and a Yuen Long district councillor. He would not say if he was aware he breached land laws when planting fruit trees and setting up toilets, storage containers, wooden sheds and animal shelters two decades ago. According to government watchdog the Audit Commission, the leisure park occupies 12,400 square meters, with 4,670 of it government land. Director of Audit Benjamin Tang Kwok-bun blames the Lands Department for lax enforcement and for failing to act on the case for 18 years. He said the district land officer in Yuen Long became aware of the park's illegal spread in the mid- 1990s, with enforcement action carried out for the first time to clear the structures in 1995. But the leisure park held its ground despite the department conducting 25 site inspections and issuing 12 warning letters - and it is still in operation. Most structures have now been dismantled, Leung claims, though some like the animal shelters remain. Visitors to the park pay HK$150 for a package that includes horse-riding activities, a buffet lunch and chances to feed sheep and goats as well. Leung said he had applied eight times for short- term tenancy licenses to "regularize" the structures. But these were rejected by the District Land Office. Officers said they could not issue a license for a commercial operator on government land. The office is now processing another application from Leung. But officers say they will act if he fails to demolish illegal structures within two months. The maximum penalty for an illegal occupation like this is a HK$10,000 fine and six months in jail. The auditor wants a comprehensive review of the management of unleased and unallocated government land. For it was also found that 70 percent of the Lands Department's 494 "urgent" control cases - that means they are a public hazard - exceeded a four-month resolution target. Four cases were even unresolved after more than 10 years. Tang also criticized the penalties for unlawful occupation offenses, saying they were not tough enough for a deterrent effect. And a lack of regular checks by the Lands Department had allowed many cases to escape detection for many years, he added. Word from the Lands Department was that its officials accept the criticisms and will "strive to effect policy changes" to resolve "serious issues about land control and unwarranted structures."

 China*:  Apr 20 2012 Share

The wife of disgraced former Chongqing chief Bo Xilai is suffering from bone cancer and has only a short time to live. According to a source in Beijing, that may explain the sudden change in the character of Gu Kailai, 53, who is accused of murdering British businessman Neil Heywood. Gu's character changed so much that she was accused of "promiscuity" and flirting around "since her illness," the source said, adding that this raises the question whether Beijing will execute her even if she is found guilty of murder. "She doesn't have much longer to live ... maybe a year or two," the source said. British news reports claim Gu and Heywood, 41, had an affair and met in a shabby "love nest" at a flat on the south coast of England. He was even spotted pinching her bottom as they walked up stairs. In another development, Xinhua News Agency said in a commentary entitled "Criminal case shall not be interpreted as political struggle," that the accusations against Bo, 62, and his wife are criminal offenses. According to the Daily Mail, Heywood shared a 250,000 (HK$3.1 million) Bournemouth seafront flat with Gu, who has been named the chief suspect in the Briton's death. He was found dead in a hotel room in Chongqing in November. Gu's playboy son Bo Guagua, 24, is believed to have also occasionally stayed at the flat in Keystone House, which was listed as Gu's address in official records.Gu first arrived in Britain in 2001 to set up a business in nearby Poole, the paper said. Chongqing scholar Wang Kang told The Times that there was a definite romantic attachment between Heywood and Gu. He alleged that Gu, a lawyer, was denied any normal passion from her husband, who also wanted her to set aside her career ambitions. An early theory put forward concerning Heywood's death suggested he was killed after Bo found out about the affair. Bo rose from being mayor of the port city of Dalian to governor of Liaoning province before serving as commerce minister from 2004 to 2007. In 2007, he secured a place on the Politburo and became the top official in Chongqing. In a scandal that has rocked the mainland, Bo has been removed from his powerful position as the Communist Party boss of Chongqing. Heywood, who had known the Bo family for more than a decade, was said to have confided in a friend about the alleged affair with Gu, saying it had left his life under threat. Regarding their apparent love nest, another source told the Mail: "He stayed in the first room on the right." Mainland websites are full of rumors that the pair were having an affair. It is said Heywood later called off the relationship for unknown reasons. Sources suggest that Gu - who has bee arrested - was becoming increasingly paranoid. Another claim is that Heywood was poisoned after threatening to expose a plan by Gu to move money abroad. It was the first time a specific motive has been given for Heywood's death - which ended Bo's hopes of emerging as a top central leader and threw off balance the party's looming leadership succession. According to the allegations, Gu asked Heywood late last year to move a large sum of money abroad and she became outraged when he demanded a larger cut of the money than she had expected.

Regulators in the mainland have started licensing domestic funds to create new yuan-denominated exchange-traded funds (ETFs) for sale in Hong Kong, hoping to attract fresh investors to use yuan they have accumulated offshore to invest in mainland markets. Within two weeks of announcing a 50 billion yuan (HK$61.4 billion) increase in the quotas for the Renminbi Qualified Institutional Investor (RQFII) programme, China’s market regulator has already issued licenses for the Hong Kong subsidiaries of some domestic fund management companies to create new funds, according to sources and media reports. The speed with which Beijing is ramping up approval of fresh quotas shows its determination to stimulate interest among overseas investors for putting their offshore yuan into the mainland market. The initial batch of funds on offer, which were limited largely to buying Chinese bonds, have faced challenges attracting demand in Hong Kong. “We know that the fundraising has been mediocre,” said Winnie Deng, an analyst at Z-Ben Advisors covering the offshore yuan fund market. She said that of the 21 fund companies granted a portion of the original 20 billion yuan (US$3.2 billion) in RQFII quotas, only China Asset Management Company (China AMC), Harvest Fund Management and E Fund Management have publicly claimed to have met their fundraising targets. The fresh 50 billion yuan in quotas is meant to be used for investment in Chinese equities through passive index-linked ETF products, industry sources say. Shanghai media have reported that between four and seven fund companies have already received approval from the China Securities Regulatory Commission (CSRC) to create new ETF products that will be denominated in offshore yuan (CNH) but will trade on the Hong Kong stock exchange. A source at one fund said the CSRC had given approval to create an index-linked ETF but said that permission from the Hong Kong Securities and Futures Commission (SFC) was still pending. The source said the CSRC had not yet specified how much of the new quota the fund would receive. The 21st Century Business Herald, a prominent financial newspaper, quoted an anonymous fund manager as naming four companies as having received approval to launch index-tracking ETFs: Harvest Fund, China AMC, E Fund Management and CSOP Asset Management. The report said the funds would track the CSI100 index , the CSI300 index, the FTSE Xinhua China A50 index, and the MSCI China A Index but did not specify which fund would track which index. The four funds did not respond to requests for comment. The first round of RQFII fund approvals issued in January was also initially limited to four funds but quickly expanded to 21. But it is unlikely that all 21 of the original funds will receive shares of the new quota. For one, the Hong Kong Securities and Futures Commission has published strict criteria specifying that applicants seeking to launch new ETFs in Hong Kong must have prior experience operating ETFs in the mainland. Renault Kam, director of GF Asset Management, said that while his firm launched a bond-based RQFII fund in March, his team is still considering whether to try for an ETF license. “We have a security house background. The fund management houses will have an easier time. We don’t have any ETF products at the moment,” Kam told said. Chi Lo, CEO of Hong Kong-based HFT Investment Management, said, on the sidelines of an industry conference on Wednesday, that there would also be many technical and regulatory issues to be sorted out. “We are talking about a Hong Kong firm buying into A shares listed in China, but then the ETF will be listed in Hong Kong. So there’s a lot of back- and middle-office issues, compliance, regulatory, foreign exchange issues ... There is some major work ahead,” Lo said. The decision to add ETFs to the RQFII portfolio is probably due in part to concerns about the lukewarm reception afforded to the current batch of RQFII products, which are required to invest 80 per cent of their portfolio in fixed-income products. Deng at Z-Ben Advisors attributed that mostly to the lack of differentiation among the various funds on offer and their distribution channels. “There is very little distinction between offerings … [and] about 80 per cent of them use Bank of China Hong Kong to handle their distribution,” she said. This time around it appears the CSRC is ensuring that each fund house has something unique to sell by granting funds monopoly rights over a given index. “What we understand is, there will be one index per manager,” said a source at one of the funds. But Lo of HFT said that the shortage of indexes poses a challenge for the next wave of applicants: “You’ve only got two or three key indices for Chinese A shares.” “The challenge for the firms that want to get into the ETFs is, if they can’t get into these big indices, what are they going to do? Can they do a fund of funds? Create a synthetic index that outperforms the major indices yet at the same time is still A shares? It depends on the creativity of the firms.”

The mainland tycoon behind a failed venture to develop a resort in Iceland yesterday urged Beijing to fight for private firms' interests ahead of Premier Wen Jiabao's trip to the island. Iceland last year denied a request by Huang Nubo - the founder of private property company Zhongkun Group - to buy a 300 square kilometre swathe of land in the northern part of the island for a tourist resort. "My greatest hope is that the Chinese commerce ministry will explain who private companies are and fight for our interests," Huang (pictured) told reporters at a conference in Shanghai yesterday. He did not make any reference to Wen's upcoming visit to Europe - which starts tomorrow and will take him to Iceland, Sweden, Poland and Germany - but the issue of Chinese companies operating overseas may come up during the trip. Increasing Chinese investment in Europe - hit by a sovereign debt crisis - has caused concern, although Wen earlier this year sought to allay fears, saying Beijing did not have the intention to "buy Europe". Some Icelandic observers had suggested Huang's purchase could help China get a foothold in the Arctic region for much sought-after energy resources and shipping lanes, despite the tycoon insisting it was purely for tourism. Icelandic authorities, meanwhile, said approval would have set an unwelcome precedent given the size of the land plot, which is partly owned by the government. "This was just a tourism investment. I didn't expect so many issues … There are many problems that haven't been solved, like understanding each other's culture," Huang said. He added that he may explore other business ventures involving Iceland, such as importing seafood from the island into China. Huang said he was also interested in developing resorts aimed at Chinese tourists in other European countries. "In the face of failure, we need patience," he said.

Chinese Vice-President Xi Jinping (R) shakes hands with Thai Prime Minister Yingluck Shinawatra during a meeting in Beijing, capital of China, April 18, 2012. 

New policy to facilitate processing may boost American economy - The United States, hoping to rev up its economy through greater travel from China, is on the way to meeting President Barack Obama's 2012 goal of a 40 percent boost in the processing of visas from the country. US consular officials in China issued more than 453,000 visas in the current fiscal year's first half (October-March) compared with 310,000 during the first six months of fiscal 2011, a 46 percent increase, the State Department disclosed Wednesday. As part of its "Jobs Diplomacy" agenda, the department has been stepping up visa processing because travelers are an important economic engine for the US. Earlier this year, Obama called for a national strategy to make the US the world's top travel and tourism destination, to generate jobs and revitalize the still-recovering economy. More than 1 million American jobs could be created over the next decade if the US increases its share of the international travel market, officials estimate. Among other initiatives, the State Department has cut the average waiting time to five days for Chinese applicants seeking an interview for a US visa. The department is also considering the addition of visa-issuance services in Wuhan. To further streamline processing, the department recently dispatched its first group of "consular adjudicators" to consulates in China to help regular Foreign Service employees. The new hires undergo similarly rigorous security screening as the more traditional diplomats but are recruited based on their Mandarin-language skills. The Chinese mainland is on its way to becoming the leading source of cross-border tourism in the world, according to a report last week by the National Tourism Administration and Chi na Tourism Academy. Mainland tourists made 70 million trips to foreign countries, as well as to Hong Kong, Macao and Taiwan last year, up 22 percent from 2010. Jiang Yiyi, director of China Tourism Academy's International Tourism Development Institute and one of the main compilers of the report, said that figure was 1.2 times the number of US citizens who traveled abroad in 2011. "US visas application was really inconvenient in China, particularly for those who do not live in Beijing and Shanghai," Zhao Jie, 28, who has lived in New Orleans since 2008, told China Daily on Wednesday. "My friends used to waste their flight tickets back home in other cities because the visa application interview got delayed in Beijing," she said. "Americans should not only take Chinese tourists' money but also furnish more convenient and comfortable conditions to win over Chinese tourists' hearts," said Cao Xi, a 28-year-old Beijing resident who chose the US for her honeymoon destination three years ago. "I would like to visit the US again to celebrate our marriage anniversary this year if the visa application could be much easier," she said. The State Department initiatives also include Brazil. US consular officials in that country issued more than 555,000 visas in the first half of fiscal 2012, a 59 percent increase from the same period a year earlier.

Hong Kong*:  Apr 19 2012 Share

Chief executive-elect Leung Chun-ying's declared intention to ban pregnant mainlanders from giving birth in Hong Kong has provoked outrage and defiance north of the border, with agencies who arrange cross-border births advising their clients to disregard his warning. "Don't listen to him [Leung]. There's no actual regulation by the Hong Kong government that bars mainlanders from giving birth in Hong Kong's private hospitals," said a staff member at HKSBB, an agency in Shenzhen that helps mainland mothers-to-be give birth outside the mainland. "It's still easy to book a bed in a Hong Kong private hospital if you are not more than six weeks' pregnant. But you must pre-book as soon as possible. If booking late, it will be harder," she said. "If Hong Kong finally bars you from giving birth there, we can help you deliver in the United States or other countries." She said many couples had called yesterday and were concerned about Leung's statement but she had advised them that "Leung is Leung and Hong Kong is Hong Kong", and that he did not have the authority to change the law overnight. She nevertheless believed that the number of mainland mothers wanting to have their babies delivered in the US would rise after Leung's speech. "Obtaining a visa overseas is a priority for mainland couples. Why not turn to the US? Hong Kong is not the only choice." Fees for arranging pregnant mainlanders to give birth in Hong Kong have risen dramatically in the past year, with Shenzhen-based agencies charging around 200,000 yuan (HK$245,000) for services that include helping clients to clear customs, arranging accommodation, receiving care and obtaining proper birth documents. Some mainland parents feared that Leung's stance would increase discrimination against mainlanders born in Hong Kong. "None of us can believe what we heard. How can Leung make such an arbitrary statement? He's not even officially Hong Kong's chief executive yet," said William Zhou, a founder of hkbbclub.com a forum representing mainlanders who have had or plan to have children in Hong Kong. Set up in 2010, it now has almost 20,000 members. "We sense from what Leung said that Hong Kong will no longer be a society that places rule of law at the top of its priorities," Zhou said. "It took years, between 1999 and 2002, for Hong Kong authorities to decide that mainland babies who were born in Hong Kong had the right of abode, regardless of the parents' immigration status. "Now, overnight, Leung has made a final decision on a controversial issue, without consulting parents, the Hong Kong people or the Court of Final Appeal. It's total one-party rule, as imposed by mainland authorities, with no democracy, no human rights." Zhou said that, unlike a decade or two ago when most pregnant mainlanders coming to Hong Kong were illegal immigrants looking for a better life and social benefits, most of those today were from the affluent middle class and were attracted by the city's top-class medical facilities and the prospect of a Hong Kong passport for their child. Li Quan, a Shenzhen housewife who sent her child to study in Hong Kong, said she feared Leung's statement would only encourage more of the prejudice she claimed was directed at her seven-year-old daughter at school in Hong Kong. "Her classmate once sneered at her, saying she 'was not Miss Hong Kong'. I'm afraid that, after yesterday, more Hong Kong children will be tempted to pay such insults to my daughter. That would be very hurtful to a young child."

Banning private birth tourism will only damage Hong Kong - Most mainland mothers who give birth in Hong Kong pay for the service, and government population projections will be too high if they don't keep coming - Leung Chun-ying wants to ban mainland mothers from giving birth in Hong Kong's private hospitals. He really hasn't thought this one through. On Monday, the incoming chief executive said he would forbid mainland mothers who were not married to Hong Kong residents from giving birth in the city's private hospitals next year. It's clear enough why he said it. He knows people are upset at all the recent stories about hordes of pregnant mainlanders overrunning Hong Kong's maternity wards and crowding out local mothers. And he thinks banning mainland mothers will be a popular solution to the problem. As usual with matters like this, it pays to start by looking at the numbers. As the first chart below shows, there has indeed been an explosion in the number of mainland mothers giving birth in Hong Kong. From fewer than 8,000 in 2001, the number of babies born to mainlanders shot up to more than 43,000 last year, almost half of all children born in Hong Kong. But dig deeper and the stories about mainlanders swamping facilities meant for locals look less than convincing. For one thing, relatively few mainland women give birth in Hong Kong's public hospitals. Despite all the stories about mainlanders overwhelming the city's health services by turning up in labour at accident-and-emergency departments, there were only 1,656 cases of emergency-room deliveries by non-residents last year - just 0.07 per cent of accident-and-emergency department admissions. According to government figures, a further 8,800 or so mainland mothers booked public maternity beds in advance. Of those, roughly one third were married to Hong Kong permanent residents. That leaves just 6,000 birth tourists from the mainland who gave birth in the obstetric units of public hospitals. That's a sizable number, but it's only a small proportion of last year's 47,000 public hospital births, the vast majority of which were to local women. In any case, the number will fall this year, after the government allotted just 3,400 public hospital places to mainland mothers. So if public obstetric units are struggling to cope, it's not altogether fair to blame mainlanders. In fact, the blame lies more with the Hong Kong government. As the first chart shows, over the ten years to 2004 the number of babies born each year to Hong Kong residents followed a steadily declining trajectory, falling by some 25,000. Assuming this trend would continue, the government responded by closing down the obstetric units of some public hospitals. But the trend reversed, and last year, Hongkongers gave birth to more babies than at any time since 1997. As a result, the pressure on public facilities today owes more to government cutbacks than to birth tourists from the mainland. That's because, unlike locals, the vast majority of mainland mothers pay top dollar to give birth in the city's private hospitals. Of the 48,000 babies born last year in private hospitals, 70 per cent were born to mainland mothers. As a result, if C.Y. bans mainlanders from giving birth in private hospitals next year, he will condemn those beds to remaining empty and those expensive facilities to going deeply underutilised. That would be singularly pointless, but there is also another reason Leung might want to reconsider his ban: the Hong Kong government's plans for the future - including its home-building scheme - rely on those babies. The government expects Hong Kong's population to climb by almost 2 million over the next three decades, to reach 8.9 million by 2039. But its projections assume an average birth rate of 93,000 a year, just short of last year's total, as well as net immigration of almost 30,000 a year. As the second chart shows, a ban on mainland birth tourists could reduce the city's population growth by almost one million. And if the net immigration rate remains constant, population growth will fall by nearly 1.5 million compared with the government's forecast. If C.Y. contemplates the effects of such a big shortfall on the city's economy - and its property prices - perhaps he will be moved to reconsider his ban.

Buns being prepared at the Kwok Kam Kee Cake Shop for the upcoming Bun Festival in Cheung Chau. Organisers are expecting a bumper crowd of 70,000 people at this year’s Cheung Chau Bun Festival – 20,000 more than last year. “This year, the festival falls on a weekend, so that will certainly bring more people out,” said Ho Lai-on, director of the Hong Kong Cheung Chau Bun Festival Committee. But that’s got some locals worried about overcrowding. Shop owner Charlotte Tang says the crowds could even deter some visitors. “There’s about 30,000 people living here. Adding 70,000 would make it unbearably crowded. It might even put people off coming,” she said. The festival on April 28 is the first since it was listed last year by the Ministry of Culture as part of the nation’s “intangible cultural heritage”. Thousands of people flock to the island each year to see contestants scramble up an 18-metre tower to snatch buns – with those located higher up worth more points. Bamboo towers were used in the festival until a collapse in 1978 led to its abrupt end until 2005, when metal towers were introduced. The final will be held at midnight on April 29 – and there will be more tickets available to see it this year. Some 1,650 tickets will be given out at 10pm on April 28, with entry at 10.30pm, up from 1,500 last year. And there will, of course, be buns. One of the two official bakeries will start making the traditional white buns, stamped with the word “peace”, this weekend. Owner Kwok Kam-chuen was forced to close his bakery last year because he ran out of room. The buns were traditionally left outside for visitors to see them get their “peace” stamps. But last year, food and hygiene authorities required all bun preparation to be done indoors and he didn’t have the space. This year, Kwok has converted his storage space for the buns. A carnival will be held on Cheung Chau this Sunday from noon to 6pm, including a play that will tell the history of the bun festival, Ho said. On festival weekend, the government and police will have special crowd control arrangements in place, while there will be extra ferry and bus services.

A new authority to oversee a "revolution" on Hong Kong's waterfront could be one of the first projects for the next administration. The suggestion comes from Nicholas Brooke, head of the current harbour watchdog, who is also a key supporter of chief executive-elect Leung Chun-ying, having nominated him in the recent election. The chairman of the Harbour Commission said the new body should be given more powers to transform the waterfront into a global landmark. "It will be a revolution. Hong Kong has a world-class harbour, but not a world-class waterfront," said Brooke, a veteran surveyor who also heads the Science and Technology Parks Corporation. He said all public land fronting Victoria Harbour should be vested in the new authority, which would then seek proposals from businesses or consortiums for refurbishment projects. Brooke said Leung had been informed of the ideas and he believed the new chief executive would support a more powerful management model for the harbour areas. Activists battling the harbour's reclamation have been calling for such an authority for years. But officials dismissed the idea as "premature" until last year, when development minister Carrie Lam Cheng Yuet-ngor backed the idea of having an authority and asked the Harbour Commission to look into it. About 70 per cent of the 73-kilometre Victoria Harbour waterfront is owned by the government. But it is controlled by different government departments, which critics say has resulted in uninspiring designs and a dearth of activities for the public. Brooke, expressing his personal views in an interview, said the new authority would offer constortiums long leases to help attract investment and innovation. "The proposals should allow more recreation on the water and dining facilities on land," he said. "Tenders won't be asked for huge land premiums, but will share risks and revenues with the authority." The authority would be self-financing after an injection of seed capital that could run into billions of dollars. The existing commission, with membership broadened to include all sections of society, would stay on as an adviser. Brooke also proposed putting major development nodes such as Kai Tak and Kwun Tong, and newly reclaimed areas in Central, Wan Chai and Causeway Bay, under the authority's control. This would including vacated markets and underused piers. Brooke does not propose that the new authority be able to take back private property on the waterfront and approve land use, as an equivalent body can do in Singapore. "Resuming private property could be controversial and [approving land use] would encroach on the role of the Town Planning Board," Brooke said. Lee Wing-tat of the Democratic Party, a lawmaker monitoring waterfront management, supported the idea of forming a harbour authority. But he said that whether the private sector or authority managed waterfront areas, freedom of expression should be respected and people allowed to petition and protest.

HSBC Holdings PLC is marketing a potential yuan-denominated bond that would be listed in London as it seeks to expand the market for so-called "dim sum" bonds in Europe and become the leader of a new market. The London-based bank held conference calls with investors in Hong Kong, Singapore and the U.K. on Tuesday to gauge interest for such a deal, according to a person familiar with the situation. Dim-sum bonds have been the Chinese government's most visible effort to allow its currency to trade outside the country. As part of the effort to expand the market's investor base beyond Asia, the proposed bond may join a handful of yuan deals already listed on the London Stock Exchange, which is striving to become an offshore hub for the Chinese currency, another person said. The majority of dim-sum investors so far are in Hong Kong, which since mid-2010 has been designated by Beijing as a laboratory for yuan liberalization. Last year, the dim-sum bond market tripled in size in its first full year of existence to $16.8 billion, according to Hong Kong Monetary Authority data. But bankers and issuers have been ramping up their marketing efforts in London, which is becoming increasingly aggressive in seeking to gain yuan business. HSBC, the most active underwriter of "dim sum" bonds overall, and Royal Bank of Scotland Group PLC, for instance, have formed teams dedicated to developing their offshore yuan services in London. Earlier this year, Britain and Hong Kong set up a forum to discuss working more closely in the areas of yuan trade clearing and settlement. Hong Kong is also extending the operating hours of its yuan payments systems, making it easier for yuan transactions to be settled in London. While HSBC's China unit issued three billion yuan ($476 million) in offshore yuan bonds in 2009, this would be the first to be issued by the group and is another sign of its own efforts to expand its position in the market, the second person said. Issue size and other terms have yet to be determined. HSBC, rated Aa2 by Moody's Investors Service and double-A-minus by Standard & Poor's, may issue the self-arranged bond in a "Reg S" format, which is normally offered to global investors outside the U.S., he said.

 China*:  Apr 19 2012 Share

China’s movie market has surpassed that of Japan in the first months of 2012. China Set to Overtake Japan as World’s No. 2 Movie Market - Popcorn companies take note: After ceding its spot as the world’s second-largest economy in 2010, Japan looks set to be surpassed by China in another area — movie watching. Japan’s $2.3 billion movie market outpaced China’s by around $300 million in 2011, according to the Motion Picture Association of America, but separate figures covering the early months of this year have China ahead. In the first eight weeks of 2012 the total gross in China was $426 million compared to $259 million in Japan, according to market researcher Pacific Bridge Pictures. Robert Cain, a partner at Pacific Bridge, says that China’s movie market has grown more than 30% per year over the last decade as rising incomes have fueled demand for movie-going, and there are now over 10,000 theaters in the country, compared with less than 3,400 in Japan. China’s love affair with the silver screen shows no sign of ending anytime soon: the country will surpass the U.S. as the world’s biggest movie market “probably around the end of this decade,” Mr. Cain told Japan Real Time. Much of the growth is being supported by China’s domestic movie industry, with four out of the top ten films of last year made locally. “Flowers of War,” a wartime drama starring Hollywood actor Christian Bale, brought in over $70 million to become the highest grossing Chinese film of last year, even though it was released in December.

Visitors examine health products at the Jinan Drugs and Health Products Fair in Shandong province on May 17, 2011. China's health products market is projected to be the largest globally in 2015. Middle class quest for better life helps fuel sector's growth - China will use more health products than the United States in 2015, making it the largest market for such products in the world. That's what Meng Dongping, vice-president of the China Chamber of Commerce for Import & Export of Medicines & Health Products, said recently. In the meantime, the industry will remain one of the most active in China in foreign trade, measured by both imports and exports, she said. Various Chinese and overseas corporations have moved to meet the demand arising from the country's young middle class, which is becoming increasingly aware of the importance of good health. The value of the health products and services sector in China is expected to reach 450 billion yuan (more than $70 billion) in 2015. Last year, more than 260 billion yuan in health foods alone were sold in the country, according to the National Development and Reform Commission's Public Nutrition and Development Center. Meng's forecast, no matter how optimistic it may be, looks modest when it is compared with one made by the China Investment Consulting Co Ltd, which said China won't have to wait until 2015 to use more health products than the US. It will become the largest market for those products this year, the company said. Why the difference in forecasts? One reason is that various means of measuring the country's use of health products are in use, each of which looks at different data. Most of them come with no clear definitions of what products and services they take account of and what they don't. But every one of them results in measures that are in the billions in yuan. One common definition places health products into three groups: products that are made from medicinal herbs and produced according to the principles of traditional Chinese medicine, nutritional supplements made from natural resources and biological extracts made in accordance with the tenets of biology. In addition, the sale of health improvement devices and services also generates billions of yuan a year; the market research company China Investment Consulting Co Ltd puts the figure at 300 billion yuan a year. Of the health products in the three groups, those that fall into the first are the most popular, Meng said. They are both natural and, because of their long history, familiar to most customers, she explained. Meng said China's large market is attractive to many overseas companies, a fact reflected in the recent rapid increase in the country's imports. In 2011, China imported health products worth $145 million, up 62.28 percent from a year earlier. "Although the amount is still far from being large enough to match the size of the population, the speed of the increase has been impressive," she said. She said the most popular health products in China are calcium supplements, fish oil, lecithin, spirulina and compound vitamins. As international suppliers are swarming into the China market, Chinese companies are also exploring opportunities to expand overseas. And as more people have become worried about the possible side effects that might come from using chemical compound supplements, they have begun to look with favor on herbal and traditional Chinese therapies, Meng said. She said she expects to see more of those products exported in coming years. Last year, $206 million in Chinese health products and services were exported, a number that was up by 114.96 percent from 2010. The majority of them went to North America, the European Union, Japan and South Korea. The accelerating pace in the export of those products stands in marked contrast to what has happened to other Chinese goods, many of which are being affected by a weakening demand from overseas. Still, Meng expects to see more exports of natural food and herbs, healthcare supplements and traditional Chinese medical equipment, as well as services such as massages and acupuncture. Guo Fanli, an analyst with China Investment Consulting, said a flood of overseas health products into the Chinese market, especially into large cities, is bound to elicit a reaction from domestic companies. A group of Chinese pharmaceutical companies, makers of traditional Chinese medicines in particular, have been quick to respond. Guo said the industry will maintain a double-digit percentage compound growth rate every year over the next five years. Meanwhile, the sale of "products made in accordance with traditional Chinese principles of medical care" will increase at an even faster pace, possibly by up to 30 percent a year, he said. The Beijing-based Tongrentang, a traditional Chinese medicine producer with more than 300 years of history, has seen its healthcare branch's sales revenue go from 180 million yuan in 2003, when it was first opened, to 5.6 billion yuan in 2011. During the five years from 2011 to 2015, the company's "development strategy" calls for further developing that healthcare branch, said Mei Qun, company general manager. Meanwhile, the Beijing-based Besunyen Holdings Co Ltd, a health food producer with 11 years of history, has a specialty in producing detox tea and narrow tea bags, which it says have therapeutic functions. Besunyen was listed on the Hong Kong Stock Exchange in October 2010. In 2011, citing rising costs, it reported a sales decline of 3.9 percent year-on-year to 840 million yuan from 874 million yuan in 2010. It had a net loss of 40.88 million yuan in 2011, compared with a net profit of 59.66 million yuan in 2010. Among international companies, Amway, a direct seller, has staked out a lead position in the market for healthcare products. Of its 21 billion yuan in sales in 2010, as much as 60 percent came from products such as its Nutrilite health supplements and the international drugmaker Pfizer Inc's Centrum vitamin supplements. With China's per capita GDP now exceeding $4,000, the country is ready for a new wave of wealth accrual, Gan Chee Eng, CEO for Amway greater China, said recently. Gan said only 25 percent of Chinese have used health products, and that the country's market for health products contains huge opportunities.

The rise in China's holdings of US Treasury bonds in February was a result of concerns over the eurozone, but the nation's stance on diversifying foreign exchange reserves hasn't changed, experts said. According to the monthly Treasury International Capital report on the US agency's website, posted on Monday, China lifted its position in US Treasury securities in February by $12.7 billion, or 1.1 percent, to $1.18 trillion. According to the report, foreign investors were net buyers in February of US long-term financial assets. But the buying pace slowed to $10.1 billion during the month, compared with net purchases of $102.4 billion in January. Japan, the second-largest foreign holder of US Treasuries, has been increasing purchases aggressively. Its holdings rose for the eighth consecutive month in February, expanding $13.1 billion to a record $1.1 trillion, as the Asian nation sought to curb the yen's appreciation against the dollar. The gain in China's holdings was the second monthly rise in a row, after an overall reduction of $163 billion in the second half of 2011. The increase in US Treasury holdings came as China's trade surplus continues to shrink this year, having an overall quarterly trade surplus of just $900 million. Mei Xinyu, a senior researcher at the Ministry of Commerce, said the $12.7 billion increase in US Treasury holdings should not be considered as a net increment but a "reconstruction" of the foreign reserves that involved shifting some investment in euro-denominated debt to US Treasuries. Mei said the repayment ability of the issuers of the euro-denominated bonds will be in line with economic growth in the eurozone, which, judging from current conditions, will be a risky business if large-scale holdings are involved. "The US, on the other hand, has a much better decision-making capability and efficiency as a single nation," he said. The borrowing costs of major European economies such as Spain and Italy touched new highs this week as the euro crisis reignited, driving investors to seek a safe haven such as US Treasuries. In comparison, the US economy showed positive signals such as faster-than-expected growth in retail sales and the lowest unemployment rate in three years. The adjustment suggested that the US is in a better position than Europe, Mei said, adding that China's overall increase in euro-denominated assets was more a result of direct investment by companies, rather than the government's foreign exchange investment portfolio. However, the move does not signal an alteration of China's strategy for diversifying its foreign exchange reserves, Mei said. According to data from the People's Bank of China, the balance of the country's foreign exchange reserve account rebounded to $3.3 trillion after a $20.6 billion decrease in the last quarter of 2011. The figure was up $260.3 billion, or 8.5 percent, year-on-year and up $123.9 billion quarter-on-quarter, which was interpreted by analysts as an appreciation of the non-dollar assets, which accounted for about one-third of the portfolio. China also bought 651 billion yen ($8.1 billion) of short-term Japanese bonds in February, the largest purchase since May 2010. Yi Gang, head of the State Administration of Foreign Exchange, said in a recent forum that China's adequate foreign exchange reserves have been beneficial in helping the country withstand the impact of the global financial crisis. "But it's not a 'the more, the better' situation in foreign exchange reserve management, as we compare the marginal cost and marginal efficiency," Yi said.

Lv Wei commands a Special Weapons and Tactics (SWAT) team of policewomen during tactical training, April 17, 2012. The 28-year-old former civilian policewoman successfully competed for captaincy of the female squadron of the SWAT team in Jingdezhen, East China's Jiangxi province. Lv started to learn Wushu at 9 years old, which laid the foundation for her future career. She has led the team in strength, tactic and cartridge training since 2011.

The United States decided Tuesday that it would not impose antidumping duties (AD) or countervailing duties (CVD) against imports of steel wheels from China. The US International Trade Commission (USITC) made a final determination that "a US industry is not materially injured or threatened with injury by reason of imports of certain steel wheels from China that the US Commerce Department has determined are subsidized and sold in the United States at less than fair value." As a result of the USITC's negative determination, no AD or CVD orders will be issued on these products from China. The US Commerce Department last month claimed that these products had been sold in the United States at dumping margins ranging from 44.96 percent to 193.54 percent, and they also had received countervailable subsidies between 25.66 percent and 38.32 percent. In 2011, imports of steel wheels from China were valued at an estimated 84.2 million US dollars, according to the Commerce Department.

Hong Kong*:  Apr 18 2012 Share

A row has broken out over a popular reality show that has as stars a batch of "blossomed women" - females aged over 30 - ready and willing to change their looks and their livestyles to find love. Outraged by the TVB show, psychiatrists and scholars have come together to say the broadcaster should help protect society by pulling the plug on Bride Wannabes immediately and pledging not to produce more shows like it. They launched a Facebook group called "Say No To Bride Wannabes," which has close to 2,000 "likes." But that's not how TVB is thinking, said deputy controller of external affairs Tsang Sing-ming. Rather than stopping the show, TVB plans to add to the desperate women with a male version. Literally translated, the title reads as "Blossomed Women," with characters that play on the fact there are more women than men in Hong Kong. The 10-episode show began on Monday of last week and the finale will be on Friday. The five single thirtysomething women have undergone a series of makeovers by stylists and a life coach so that they can find a partner. But that means the program teaches people to become fakes in order to attract men, argue some of its detractors. A member of the Facebook group, psychiatrist Tsang Fan-kwong, said he has never come across the theories being pumped out by the show. One calls for a woman to look at a man from a 45-degree angle and not to show excitement no matter what he says or promises. Tsang asked: "Why 45 degrees? Why not 35 degrees? Any angle is good enough as long as the conversation is conducted naturally. Those `professionals' on the show are merely making silly suggestions to earn money. They are shaming themselves." A market fish hawker could offer better advice than the life coaches, he added with a snort. Tsang said he also fears for the five participating women as netizens are likely to dig into their backgrounds to make fun of them. Ho Chi-kwan, a former social science associate professor at the Polytechnic University, said the show is also flawed as it teaches women to behave in the same way to attract men. It is more of an advertising package than a reality show, she added. For there appeared to be 23 commercial operators - dating companies, beauty salons and restaurants - in the first five shows. But Tsang Sing-ming's thoughts are on more of the same. TVB has had requests from viewers for a male version, he said, though nothing is finalized. "Hong Kong is a place with the freedom of speech," he said, and "while we receive criticism we also receive applause." The Communications Authority had received 41 complaints against the show by last night.

Dah Sing Bank has been valued at a 37 per cent discount to its net assets. The 65-year-old bank trades at 0.63 times book value. As Hong Kong establishes itself as a hub for offshore trade and investment in the yuan, the city's family-owned banks can be acquired at some of the lowest valuations since the global financial crisis. Chong Hing Bank (SEHK: 1111) is trading at the lowest price-book multiple since the aftermath of Lehman Brothers' collapse, while Dah Sing (SEHK: 0440) Banking is valued at a 37 per cent discount to its net assets, according to calculations. With competition pushing Chong Hing, Dah Sing and Wing Hang Bank (SEHK: 0302) down an average of 28 per cent in the past year, the prices of Hong Kong banks are "attractive" for a takeover, according to Mike Smith, the chief executive of Australia & New Zealand Banking. Suitors could be lured to Hong Kong's financial firms as Beijing's promotion of the yuan overseas increased opportunities to finance trade and investment in the currency, Aberdeen Asset Management said. Banks in the city, which is home to the world's fastest growing population of wealthy individuals, hold 566 billion yuan (HK$695.6 billion) in deposits and handled 92 per cent of the trade settled in yuan last year. With smaller banks lacking the scale to stay competitive, family owners may be motivated to sell, according to Kim Eng Securities. "It's a good time to buy Hong Kong family-run banks now as the valuation of these lenders has come down a lot," said Ivan Li, an analyst with Kim Eng. "Foreign banks like ANZ are interested in Hong Kong banks because they are interested in China. If Chinese banks want to boost their share in the offshore yuan market, acquiring a Hong Kong bank would be a sensible way." Chong Hing is "open to all possibilities as long as they are beneficial to our shareholders, but we don't confirm any proposals for the time being", according to an e-mailed reply to questions. Dah Sing and Wing Hang declined to comment on the possibility of a sale. Chong Hing's shares closed up 2.66 per cent at HK$13.88 yesterday. Wing Hang gained as much as 1.5 per cent and was up 0.83 per cent at HK$79.25, while Dah Sing rose 1.3 per cent to HK$7.82. The benchmark Hang Seng Index declined 0.44 per cent. The banks, which trace their roots as far back as 1937, are competing in a market dominated by three larger rivals. HSBC, BOC Hong Kong (SEHK: 2388) and Standard Chartered hold a combined market share of about half of domestic loans in Hong Kong, according to Moody's Investors Service. Eleven other banks tracked by the rating company hold a further 23 per cent between them, a recent report showed. Near-zero interest rates, matching those set by the United States Federal Reserve because the Hong Kong dollar is pegged to the US dollar, were already hurting profits, and "the highly competitive environment in Hong Kong has resulted in weak pricing power", Sanford C. Bernstein analysts wrote in a report this month. That might not deter buyers who are interested in the banks because of Hong Kong's role as a gateway into and out of China, said Lewis Wan, the chief investment officer at Pride Investments. "Hong Kong banks have a unique role to foreign banks and Chinese lenders," Wan said. "The buyers see Hong Kong as a stepping stone into China or a gateway to the global market." Still, the competition has weighed on share prices. Chong Hing, founded in 1948 and partly owned by the Liu family, has lost 33 per cent in the past year, leaving it valued at about US$760 million at the end of last week. At 0.86 times book value, the shares are trading at their lowest multiple since May 2009, when global equity markets were just beginning to recover from the Lehman bankruptcy and the worst financial crisis since the Depression, according to data. Dah Sing, down 38 per cent in the past year, ended last week with a market value of US$1.2 billion. Backed by the Wong family, the 65-year-old bank trades at 0.63 times book value, in line with what it fetched in May 2009, the data shows. Wing Hang, the largest and most profitable of the three banks, has fared better, falling 11 per cent in the past year and ending last week with a market value of US$3 billion. At 1.39 times book value, shares of the 75-year-old bank are also trading near their level at the start of May 2009. Wing Hang, founded by Fung Yiu-king in 1937, is now run by his son Patrick Fung. The three largest Hong Kong-based lenders by market value, family-owned Bank of East Asia (SEHK: 0023), HSBC-backed Hang Seng Bank (SEHK: 0011) and BOC (SEHK: 3988) Hong Kong fetch an average 1.87 times book value, the data shows.

Secretary for Development Carrie Lam Cheng Yuet-ngor said on Tuesday afternoon there would be no amnesty for New Territories’ villagers, who continue to keep illegal structures in their homes. Lam said the enforcement action was necessary to uphold the rule of law and compromising with New Territories villagers could undermine similar crackdowns in urban areas. Former Lands Department Patrick Lau Lai-chiu earlier proposed that errant homeowners pay a fee or levy – rather than be forced to demolish their illegal structures. But Carrie Lam said she disagreed. She said on Tuesday the government would proceed with its crackdown – which targets houses that exceed the three-storey limits.

Hospital staff attend to new born babies in the nursery ward of the Union Hospital in Hong Kong - Not yet in office, Hong Kong’s next top leader is already tackling one of the city’s most controversial issues—he wants mainland mothers to stay home. In the strongest policy position he’s assumed since he was chosen to lead the Chinese territory, Leung Chun-ying declared that starting next year, “zero” mothers from the mainland would be permitted to give birth in private Hong Kong hospitals, unless they have a Hong Kong husband. The issue of thousands of mothers crossing the border to give birth to their children—threatening to strain the local health-care system—has alarmed a public already irate over the millions of mainlanders visiting to purchase luxury goods, sight-see and pour money into real estate, whose presence is crowding the city and pushing property prices up. Tensions flared between local residents and Beijing earlier this year when a group of Hong Kongers pooled their money to fund a set of newspaper ads that called mainlanders “locusts,” after a videotaped spat sparked by the sight of a mainlander slurping noodles on one of Hong Kong’s spotless subway cars (where it’s forbidden to consume food) went viral. In the days following that incident, a professor from one of Beijing’s most prestigious universities went on to condemn Hong Kongers’ attitudes toward mainlanders in less-than-politic terms, calling Hong Kongers “bastards” and “dogs.” More recently, fierce protests have flooded the streets as Hong Kongers have criticized Beijing’s attempts to influence its political system. Mr. Leung’s public approval ratings hovered around 35% at the time that he was picked on March 25 by a narrow election committee of 1,200 members. His latest statements come in marked contrast to those of current incumbent Donald Tsang, whose government is allowing private hospitals to accommodate as many as 31,000 mainland mothers this year. “[Mr. Leung] wants to show that he’s a leader who’s decisive, who’s concerned and who can deliver,” said Joseph Cheng, political scientist at the City University of Hong Kong. “And certainly this is a very controversial issue that has attracted a lot of attention.” On the heated question of whether babies born to mainland mothers should be granted the right to abode in Hong Kong, Mr. Leung—who takes office in July—declared that he wanted to send mainland mothers a message. Starting in 2013, he said, “I can’t guarantee that children they birth in Hong Kong will have the right to permanent residency.” He added that he had been consulting with legal experts and academics on the matter. In 2010, babies born to mainland mothers accounted for 40% of all births in Hong Kong. Most of these mothers—drawn both by better health care and the chance of securing the right to live in Hong Kong for their child—gave birth in private hospitals, where it can cost as much as HK$80,000, or US$10,300, to do so. (The number of non-local women permitted to give birth in the city’s public hospitals was capped at 3,400 this year.) To resolve the issue of “visitors from the north” coming to give birth in Hong Kong, support from across the border will be key, Mr. Cheng told China Real Time. “Understanding what the Chinese authorities want is important, as is getting cooperation from [neighboring province] Guangdong,” he says, noting that Mr. Leung’s announcement comes on the heels of his visit last week to Beijing, where he received his formal appointment from Premier Wen Jiabao. “He’s a very sophisticated politician,” said Mr. Cheng. “I do believe he’s done his homework.”

Chief Executive-elect Leung Chun-ying yesterday stunned the private medical sector by declaring a "zero quota" for pregnant mainland women whose husbands are nonresidents, starting from next year. Leung also warned the mothers-to- be there will be no guarantee their children born in Hong Kong will have the right of abode. His remarks directly contradict the current government plan to cut the quota of mainland women giving birth in private hospitals from 31,000 this year to 20,000-25,000 in 2013. Veteran analyst James Sung Lap- kung at City University believes Leung got Beijing's blessing to shut the maternity ward door on those planning to give birth before making his announcement. However, Hong Kong Private Hospitals Association chairman Alan Lau Kwok-lam warned that Leung's harsh policy may force some private hospitals to close down. The move also casts doubt on the future of health minister York Chow Yat- ngok. Outlining his plan for when he takes office in July, Leung said that from next year private hospitals should not accept bookings from pregnant mainland women whose husbands are not Hong Kong residents. "Before we have fully realized the impact on the Hong Kong health-care system, the provision of services by local maternity and child-care centers, as well as the provision of local education and other social services [because of mainland mothers giving birth locally], the quota for private hospitals to accept those mothers to give birth should be suspended from 2013," Leung said. "It means that the quota will be zero." Leung said allowing these mothers to give birth in the territory will neither help boost local health-care industries nor resolve the problem of an aging population. "If those mainland mothers plan to give birth in Hong Kong in 2013, I can't guarantee their children born here will enjoy permanent residency." He will check to see if there are other legal means to deny the right of abode to children born to mainland mothers apart from seeking an interpretation of the Basic Law. Leung also rejected accusations that his plans interfere with the governance of the present administration. Responding to Leung's remarks, a spokeswoman for Chow said the government is still studying the issue with private hospitals. She added that Chow understands and respects Leung's views on the issue. But Lau warned Leung's plan will severely affect some private hospitals. Currently, the quota for private hospitals to accept booking from mainland mothers is 31,000. Lau said they may lose around 28,000 bookings annually from women whose husbands are not residents if Leung proceeds with his plan, greatly affecting revenue. Yu Kai-man, head of obstetrics and gynaecology at the private Union Hospital, said that if it is stopped from admitting mainland mothers, it will shift maternity beds to other wards and provide other services instead. Cheung Tak-hong, head of obstetric services at the public Prince of Wales Hospital, welcomed Leung's move. Cheung said the plan is even more aggressive than its proposal to further cut the quota for private hospitals. Tsang Koon-wing, organizer of the Mainland-Hong Kong Families Rights Association, thinks Leung's move will help resolve the problem of mainland women gate-crashing public hospitals to give birth.

 China*:  Apr 18 2012 Share

U.S. makers of small aircraft increasingly are teaming up with Chinese companies, deciding that the need to ply the growing market outweighs the risk that their partners will become rivals. In the last few months, business-plane makers Cessna Aircraft Co. and Hawker Beechcraft Corp. have discussed joint ventures in the country. Industry supplier Honeywell International Inc. signed several initial agreements last year. Non-U.S. companies are moving in, too: Brazil's Embraer SA last month said it would consider transforming a Chinese joint-venture plant for small commercial jets to turn out executive planes. China has grown more attractive as the industry otherwise has shrunk. Honeywell in October estimated that 600 to 650 new business jets would be delivered industrywide last year, down from 732 in 2010 because of global economic weakness. Cessna, a unit of Textron Inc., expects China to become the world's No. 2 business-aircraft market, after the U.S., within roughly 15 years. "Everyone's jockeying for position now, trying to figure out…'Who do I partner with? How do I get the right access?' " says Briand Greer, Asian-Pacific president of Honeywell Aerospace. Cessna last month signed an agreement with a unit of state-controlled Aviation Industry Corp. of China to establish a joint venture in the western city of Chengdu, where Cessna plans to build midsize business jets and codevelop a larger jet. The Wichita, Kan., company also reached an agreement with AVIC, as the Chinese company is known, for broader cooperation on general aviation, a category that excludes military and commercial aircraft. "If you have the ability to produce local content in the market, it gives you the ability to understand your customers better, to react quicker," says Cessna Chief Executive Scott Ernest. Shawn Vick, an executive vice president at Wichita-based Hawker Beechcraft, said at a recent news briefing in Shanghai that his company had "entertained discussions with four separate entities for joint-venture activities inside China." Labor costs also are part of China's lure. "Our competitors in Brazil or in Switzerland can charge lower labor rates than we can in the U.S. and labor is a big component of building the airplane," says Sean McGeough, Hawker Beechcraft's president for Europe, the Mideast, Africa and Asia-Pacific. The aircraft maker, suffering from a long slump in demand for business jets and uncertainty over military spending, recently hired a turnaround specialist and bankruptcy counsel. Honeywell, based in Morristown, N.J., reached five agreements last year with Chinese aerospace companies, including one for the development of a general-aviation cockpit. Honeywell also makes aircraft engines and other aerospace products. China's business and general-aviation sector is in its infancy. Honeywell's Mr. Greer estimates that the country has about 1,000 business and general-aviation aircraft, compared with roughly 225,000 in the U.S. But industry experts expect China's number to rise with the country's wealth and as Beijing relaxes aviation regulations. Setting up joint ventures, which generally are required by Beijing for foreign companies establishing significant operations in the country, can be troublesome. Such partnerships have given a technological lift to Chinese companies in other industries, such as automobiles. Aerospace executives say they need to keep up the pace of technological development to stay ahead of would-be Chinese rivals. "The only way you can really stay away ahead of the [intellectual-property] curve here is you continue to innovate faster than the things you're bringing to market," Mr. Greer says. Cessna's Mr. Ernest says Volkswagen AG's Audi unit and General Motors Co. have succeeded in navigating such shoals."It's not any different from what Audi's done or what GM's done," he says, referring to his company's joint-venture plans. The competitive threat from China also is rising as the country builds its own ability to take on global aerospace rivals. Last June, an AVIC unit acquired Minnesota-based private-aircraft maker Cirrus Industries Inc., giving the Chinese company access to a line of light propeller aircraft and a small jet under development. Outside of business and general aviation, state-owned Commercial Aircraft Corp. of China is developing a regional jet to compete with planes made by Embraer and Canada's Bombardier Inc. Comac, as the Chinese company is known, also is developing a single-aisle commercial jetliner that could compete with Boeing Co.'s line and the A320 family from the Airbus unit of European Aeronautic Defence & Space Co. Despite such challenges, foreign companies still are looking at deals. Gulfstream Aerospace Corp. President Larry Flynn says his company has "not in the least ruled out China for manufacturing capabilities." Gulfstream, a unit of General Dynamics Corp., GD +0.78% currently focuses its investment in China on building up maintenance, repair and overhaul capacity.

Chinese exporters at the nation's largest trade fair said profit margins are becoming thinner due to increased costs and shrinking overseas demand. Profit in the first quarter "dropped by 6 or 7 percent from a year earlier", Liu Wen, marketing manager of Hunan Chenzhou Grain and Oil Machinery Co Ltd, said at the spring session of the Canton Fair, which opened in Guangzhou on Sunday. Liu Fujin, sales director of Guangdong Vanward New Electric Co Ltd, said the company's profit margin declined by 3 percent year-on-year in the first quarter, putting the heater exporter under a great deal of pressure. Sluggish demand in traditional markets such as the United States and the European Union mainly accounted for the company's woes, Liu said. "Orders from the US and the EU are becoming smaller and the delivery period is shorter than before," he added. Rising costs had intensified competition among Chinese exporters and squeezed their profit margins, Liu said. "Labor costs grew by more than 10 percent this year compared with 2010, while the cost of raw materials rose 8 percent during the same period. "We did increase our export price, but that did not make up for rising costs. A big increase in our export price will drive customers to other suppliers in the global market," he said. Export growth slowed to 7.6 percent in the first quarter of this year, according to data from the General Administration of Customs. Wang Haifeng, director of international economics at the Institute for International Economic Research, a think tank under the National Development and Reform Commission, said that "thinner profit margins for Chinese exporters are a natural phenomenon of China's industrial upgrading and show that Chinese exports are shifting from low-end to high-end. "As China transforms its industries, traditional or labor-intensive ones will see their profits from exports become thinner mainly because of the sluggish overseas market and intense domestic competition," he said. Chinese exports remain competitive in the global market since exporters in emerging economies including India, Vietnam and Brazil are also seeing their profits shrink, Wang said. "There is still much room for Chinese exporters to expand their profits in the future if they can enhance their core competitiveness, such as increasing investment in research and development, and building up their own brands and sales networks." Ding Pinggui, head of the overseas division of Guangdong Macro Gas Appliance Co Ltd, said that the company's exports would grow by 50 percent this year because the company has a technology advantage in developing heaters. "Even low-end Chinese exporters still see good prospects for profits in the coming three to five years compared with their peers in Vietnam or India owing to lower labor costs and better infrastructure in China," Wang said. Adna Rivero, purchasing executive of Mexican company Santual, said despite the price of oil tools growing by 5 to 10 percent in the Chinese market, she still came to the fair because prices were lower than in other markets.

Thai leader highlights Beijing's constructive influence on economy - Thailand is keen to play a coordinating role between China and the Association of Southeast Asian Nations, Thai Prime Minister Yingluck Shinawatra said. Calling China "a responsible and constructive partner of ASEAN", Yingluck said Bangkok is "committed to continuing the good progress and momentum achieved between ASEAN and China so far". The prime minister made the remarks in a written interview with China Daily ahead of her April 17 to 19 visit to China. Yingluck's comments were viewed positively by analysts amid rising tension over territorial disputes on the South China Sea. Chinese patrol ships last week blocked a Philippine attempt to arrest Chinese fishermen near Huangyan Island. The Philippines claims sovereignty over the island which is Chinese territory. "Thailand has no maritime disputes with China and is expected to adopt a neutral stance on this issue," said Zhang Xuegang, an expert on Southeast Asian studies with the China Institutes of Contemporary International Relations. "As a coordinator, it may help solve disputes between China and some ASEAN countries." Yingluck praised China's role in promoting the regional economy. China "has enabled the region to focus on economic and social development", despite the ongoing global financial crisis. "Indeed, China is an engine of growth that can help spur the development of the entire region. This was most clearly seen in China's vital role in helping Asia recover from the global financial crisis in 2009," Yingluck said. This will be Yingluck's first state visit to China since she took office last year. She will meet Premier Wen Jiabao and sign agreements covering agriculture and economic cooperation. They will include a memorandum of understanding on economic cooperation over a five-year period and China's purchase of Thai agricultural products, said Guan Mu, China's ambassador to Thailand. Thailand's purchase of Chinese computer technology and Sino-Thai cooperation on high-speed rail are topics that Yingluck will discuss with Chinese officials, the ambassador said. Thailand will enhance cooperation with China "to generate greater benefits for our two countries as well as peace, stability and socioeconomic prosperity in the region and beyond", Yingluck said. She said Sino-Thai relations are close and cordial. China is Thailand's second-largest trading partner. Trade has increased from $24 million in 1975 to $64.74 billion in 2011. The tourist industry in both countries has benefited hugely from the close ties. In 2011, Chinese tourists to Thailand reached 1.76 million, a 60 percent increase year-on-year. Thailand was the first ASEAN country to establish a strategic cooperative partnership and to hold joint military exercises with China. Both countries have held three such exercises and have focused on fighting terrorism. "Sino-Thai cooperation is expected to serve as an example for China's ties with other ASEAN nations," said Su Hao, an expert on Southeast Asian studies at China Foreign Affairs University.

Thai Prime Minister Yingluck Shinawatra is leading a 100-strong business delegation to China for high-level talks aimed at shoring up ties. The official Xinhua News Agency says Yingluck is scheduled to meet with Premier Wen Jiabao on Tuesday for discussions expected to touch on high-speed rail and other infrastructure development projects. Shinawatra was due to meet with President Hu Jintao on Wednesday. China is Thailand’s largest export market and second-largest source of imports. Bilateral trade hit US$64.7 billion last year, according to Chinese statistics. Political ties are cordial. Thailand joined with China, Myanmar, and Laos last year in conducting joint security patrols on the Mekong River following attacks on shipping.

Hong Kong*:  Apr 17 2012 Share

One of the trains built for the line by Changchun Railway Vehicles from a design by French firm MBD Design. Driverless trains like those serving Disneyland will transport passengers along the new South Island line when it opens in 2015. The MTR Corp announcement yesterday came with details of services on the 7km line from Admiralty to South Horizons via Ocean Park, Wong Chuk Hang and Lei Tung. Chief architect Wilfred Yeung Sze-wai said the fully automatic operation was possible because the line was separate from the rest of the rail network and had its own trains and signalling system. The design of the trains would be slightly different from those on other lines, with features that "show the characteristics of the area", the corporation said. For example, bubble-like lighting would give "the feeling of being close to the ocean". The HK$12.4 billion line will be underground except for the section between the Aberdeen Tunnel toll plaza and Ap Lei Chau, which will be on a viaduct. The trip will take about 11 minutes compared to up to 45 minutes by road during rush hour. The trains were ordered from Chinese manufacturer Changchun Railway Vehicles, a subsidiary of state-owned China CNR Corporation, but the design is by MBD Design, a French firm that also designed new trams in Hong Kong. Each train will be able to carry 700 passengers in three cars, with a total capacity of about 20,000 passengers an hour in one direction, the company estimates. Despite the shorter trains, service frequency will be similar to that of other MTR lines, which generally use eight-car trains. The line's signalling system, which controls the trains, will be made by French manufacturer Alstom. The Democratic Party has expressed worries about the safety of the system and the trains because of previous accidents involving the companies, for example the deadly crash between two high-speed trains in Wenzhou in July last year. But Yeung said: "The operation is well proven to be a mature technology that is safe and reliable. Passengers can be confident in our service." If the train service is disrupted, it will be repaired automatically by the system. Staff members can also control the system remotely from the central control centre. The operation can also be mobilised remotely when there is a sudden need to increase service frequency, for instance, when there is a typhoon and people have to commute at irregular times. Though there will be no driver, MTR staff members will be on board to answer questions or help travellers when they need it. The Disneyland Resort line was the first railway in Hong Kong to use a fully automatic operation when it began operating in 2005.

"King of Shoes" Patrick Tang Kim-kwan started a court fight yesterday to recover ownership of four properties he bought for his ex-mistress. Tang, 69, was said to be "sad and embarrassed" by Karen Lee Chi-ting's fling with former Mr Hong Kong and TV actor Francois Huynh, also known as Wong Cheung-fat, that sparked a media frenzy in 2009. "If she had another man, she should be supported by that man," Tang's lawyer Chan Kam-chuen cited the businessman as saying. Tang, head of the shoe-trading empire ATG Sourcing and who has an estimated fortune of HK$2 billion, asked the Court of First Instance to declare that Lee, 42, was no longer a joint owner of a flat at Marina Cove, Sai Kung. He claimed that because she was "unfaithful", she had breached the conditions of her half-ownership. Tang is also claiming the proceeds from the sale of a property in Metro Harbour View, West Kowloon, and the ownership of two others - in Royal Peninsula, Hung Hom, and Cheuk Nang Centre, Tsim Sha Tsui. But he is not trying to recover HK$3.1 million of jewellery and HK$4.2 million in cash he also gave Lee. The court heard he had a "physical relationship" with Lee just 10 days after they met in 2002. But Tang, a World Outstanding Chinese Award recipient, had a tangled love life, juggling a wife and two mistresses. The court heard he arranged for both Lee and his other mistress, Bessie Lau, to attend his son's wedding banquet, believing that no one would know of their relationship to him. Tang and Lee, who have an eight-year-old daughter, ended their seven-year relationship after the scandal over her affair with Huynh, which lasted only about six months. Tang argues that the funds he provided for Lee to buy the properties were in fact loans and Lee was holding the properties in trust. But Lee argues that Tang was "madly in love with her" and the properties were among gifts he showered upon her. Tang gave her a monthly allowance of HK$50,000 to cover living expenses and paid the mortgages, the court heard. Chan said his client did not have a long-term plan for his relationship with Lee. Tang was said to be aware of the age difference between them and was concerned that Lee was with him only for his money. Tang was also wary of Lee's financially unsound family background. The court heard that Lee's father had been jailed, her brother was bankrupt and that Lee had been unemployed for a long time. Tang seldom stayed at Lee's residence overnight. When asked by Lee's lawyer why he didn't feel awkward when arranging his mistresses to attend his son's grand wedding banquet in 2002, Tang said: "If you are talking about underground girlfriends, it was a secret and no one knew them." Tang would use Lee's initials KL when he recorded his cheque payments to her so his wife did not discover his extra-marital affair. The hearing continues before Deputy High Court Judge Anthony Houghton.

In politics, the presence or absence of a notable person can be significant - and perhaps even foretell the future. This happened during chief-executive-designate Leung Chun-ying's recent visit to Beijing. Liao Hui , the long-time Hong Kong expert within the mainland's top leadership, was absent from Leung's meeting with Premier Wen Jiabao . This triggered speculation that this once-influential former director of the Hong Kong and Macau Affairs (HKMA) Office was shunted aside because of his support for defeated chief executive candidate Henry Tang Ying-yen. A week later, former Hong Kong chief executive Tung Chee-hwa, a Leung supporter and perhaps Beijing's most trusted expert on Sino-US relations, gave a speech on China's economic development to a group of American military cadets at West Point, the US Army's elite military academy. The two incidents are not related, but they aroused interest because both Liao and Tung are closely connected with Hong Kong and both are second generation members of prominent families. Liao is the son of the late vice-chairman of the National People's Congress, Liao Chengzhi , and grandson of Liao Zhongkai, a close friend of Sun Yat-sen. Tung is the son of shipping tycoon Tung Chao-yung, also known as the Onassis of the Orient. Now it seems that Liao, aged 70, may soon retire completely. His decade-long influence on Beijing's thinking and policymaking about Hong Kong is seen as fading away. Tung, who turns 75, is playing a more active role as China's special envoy on Sino-US relations, due to his and his family's strong ties in US political and economic circles. Tung was seen accompanying Vice-President Xi Jinping , who is also in charge of Hong Kong affairs, during Xi's visit to the US in February, just when Hong Kong's election fight was at its most fierce. Tung's close relations with Xi raised speculation about who Beijing would support because Tung was widely believed to be one of Leung's key behind-the-scenes backers. But Liao is still the deputy head of the HKMA working group under the party's Central Committee headed by Xi. Thus Xi and Liao both attended President Hu Jintao's meeting with Leung. Beijing's major decisions on Hong Kong are usually made by this working group as a whole, and executed by the HKMA Office and the central government's liaison office in Hong Kong. Liao has been a close aide to Hu, Wen and Xi on Hong Kong matters. Liao strongly believed that the stability of Hong Kong relied on keeping the interests of the business community intact to best preserve the city's capitalist system. This rationale may be correct, but public perception soured as many perceived collusion between the government and business and as the wealth gap between rich and poor widened. Beijing had to rethink its traditional business-oriented polices as these issues emerged in the bitter chief executive election. The fact that Leung was picked rather than the tycoon-backed Tang may reflect Beijing's reconsideration. It's unclear who Xi's future trusted adviser on Hong Kong affairs will be. Liao is reaching retirement age, and some analysts predict that this will spell the end of the era that emphasised the needs of the business community. Tung will clearly remain influential, not in Hong Kong affairs but in Sino-US relations. His close relations with Xi go back to the 1990s when Xi was based in Fujian , the province closest to Taiwan. Xi was first a municipal head, then promoted to governor and then provincial party secretary. Tung frequently shared with Xi his experience in dealing with Hong Kong and Taiwanese investors. Tung resigned as Hong Kong's chief executive in 2005 after the severe acute respiratory syndrome outbreak and a massive rally against the government's poor performance. Yet he is remembered as a person with principles, though his performance was controversial. There seems no reason for Tung to throw himself back into the heated kitchen of Hong Kong politics when he has a more important role to play in the international arena. However, Tung does want Hong Kong to remain a first-class world city, not downgraded to just another city in China. With Liao's retirement and Tung busy with Sino-US relations, gone are the days when Beijing's Hong Kong policymakers could be influenced by a single individual. The future leadership will look at the city's overall needs rather than certain specific Hong Kong experts in decision making - a situation that is likely to strengthen Leung's hand.

Two-thirds of top civil servants will reach retirement age in the next decade, raising fears that they will be replaced by inexperienced staff and prompting calls by lawmakers for the compulsory retirement age of 60 to be raised. While the problem will be most felt among directorate-level civil servants, separate figures show that almost 20 per cent of the 170,000-strong civil service is expected to retire between 2016 and 2021. "Many directorate-grade officials will retire in the coming five to 10 years," Denise Yue, secretary for the civil service, told a panel of lawmakers yesterday. Lawmakers fear that the quality of government services will suffer if inexperienced staff take senior positions, while Labour Party chairman Lee Cheuk-yan urged the government to raise the retirement age, a move backed by civil service unions. But Yue rejected the call. "What I've heard from civil service groups is that they are more concerned about the slow promotion for experienced staff rather than the succession problem," Yue said, adding that the government was prepared for the retirements. A document presented to the Legislative Council panel on public service shows that almost 70 per cent of directorate grade officials are aged between 50 and 59. Only about 25 per cent are aged between 40 and 49. Yue said the government had promoted many young local administrative officers to directorate grade before the handover in 1997, many of whom were approaching the mandatory retirement age of 60. But former secretary for the civil service Joseph Wong Wing-ping said the retirement age was increasingly outdated, as most 60-year-olds were still in good health. Many other countries had increased or eliminated the retirement age. "The government should be flexible and offer a few years' extension of service to those who show good performance, in the same way the judiciary system works", Wong said. The judiciary, which also faces a potential staffing crisis as many judges approach retirement, allows judges to continue for a limited time at the chief executive's discretion. While some lower-level civil servants object to raising the retirement age because they fear their promotion prospects will be harmed, Wong said their concerns should not sway government policy as the succession issue was a matter of public interest. Leung Chau-ting, chairman of the Federation of Civil Service Unions, also said the retirement age should be increased to 65, with staff retaining the option of retiring at 60. The panel was told that nearly 35,000 civil servants were expected to retire between 2016 and 2021 - compared to fewer than 20,000 who retired between 2006 and last year. Yue said the structure of the bureaucracy had been expanded in the 1980s, and it was therefore no surprise that a large number of civil servants would be reaching retirement age in the coming decade. But she said departments could cope with the retirements by improving the training of junior staff. "To spread out the number, only about 7,000 civil servants will be retiring every year [between 2016 and 2021] and the government can handle that," Yue said. Leung, however, said action was needed sooner. But Wong was sceptical about the prospects of the government finding a solution before it leaves office at the end of June. "It will leave it to the next government to solve the pressing problem," he said. "Let's hope [chief executive-designate] Leung Chun-ying is braced to take on reforms."

Andy Lau, left, and Deanie Ip celebrate winning the best-actor and best-actress awards for ‘A Simple Life’ at the 31st Hong Kong Film Awards on April 15. The poignant art-house drama “A Simple Life” swept up the top prizes at the 31st Hong Kong Film Awards on Sunday night, with best-director winner Ann Hui giving an emotional acceptance speech as she thanked the city that continues to be a source of inspiration for her films. “This is my chance to thank Hong Kong, because I might not win this award again,” Ms. Hui said. “I grew up here, I received my education here. … I want to work hard for this city in the future.” “A Simple Life,” based on a true story about a middle-aged man who looks after his family’s life-long servant after she suffers a stroke, also took home awards for best film, best screenplay, best actor for Andy Lau and best actress for Deanie Ip. For Ms. Ip, the win completed a sweep of best-actress trophies, including at last month’s Asian Film Awards and Taiwan’s Golden Horse Awards in November. Her first best-actress award for the film came during its world premiere at last year’s Venice Film Festival, where she beat out Oscar-winning actresses Jodie Foster and Kate Winslet, among others. Both Ms. Ip and Ms. Hui are in their mid-60s, and they hinted in their separate acceptance speeches on Sunday that their wins could very well be their last opportunity for such recognition. Still, both have made clear that they will continue making movies. The five awards for “A Simple Life” served as vindication for small-budget Hong Kong movies, which have struggled in recent years to find an audience amid the growing number of blockbusters from mainland China and Taiwan. The sentimental favorite beat out four big-budget rivals for best film, including 3-D martial-arts action movie “Flying Swords of Dragon Gate,” swashbuckling adventure “Let the Bullets Fly,” morality fable “Life Without Principle” and crime thriller “Overheard 2.” Mr. Lau, who has produced a number of money-losing Cantonese-language movies over the years in an effort to support the industry that made him a star, was happy to note in his acceptance speech that his financial investment finally paid off. “A Simple Life” has been a box-office success in both Hong Kong and China. But it wasn’t the only movie to walk away with five awards on Sunday night. Director Tsui Hark’s “Flying Swords of Dragon Gate” was the other big winner, picking up five awards including best action choreography and four other technical awards.

A waiter lights a candle at the Hullett House in Hong Kong, which this weekend recreated the Titanic’s last meal to mark the disaster’s 100th anniversary. The 100-year anniversary of the Titanic sinking has captivated China, with diners spending freely to recreate the gastronomic feasts that were served on board, and millions flocking to see the new 3D version of James Cameron’s film. One restaurant in Hong Kong even offered diners the chance to drink champagne salvaged from the ocean floor over a decade ago from the ship’s original stocks of Heidsieck & Co Monopole Gout Americain. The Hullett House—a luxury hotel housed in the city’s historic Marine Police Quarters—charged HK$15,000 (US$1,933) a seat for the same meal that First Class passengers consumed before the disaster, featuring French oysters, consommé olga with fresh scallops, and Waldorf pudding. In Beijing and Tianjin, the Marriott hotels held Titanic-themed fundraisers that encouraged guests to dress in period clothing as they dined and bid on auction items including limited-edition handbags, Davidoff cigars and more. Proceeds went to benefit the medical charity Operation Smile. Meanwhile, Titanic nostalgia has also inspired millions of Chinese to hit the cinema, with the Chinese re-release of the 3D version of James Cameron’s Titanic collecting $58 million in just one weekend. So far, China has been the highest-grossing foreign market for the film’s re-release. Still, plenty of hopeful movie-goers have expressed disdain for how mainland censors chose to jettison scenes featuring the 3D versions of Kate Winslet’s bared anatomy. China wasn’t alone in marking the Titanic’s sinking through lavish culinary spreads. Diners from New York to Texas also paid steep prices to dine like the Titanic’s doomed passengers, with some paying up to $12,000 to be served by waiters dressed in historically accurate attire while enjoying menus garnished by truffles from France and salmon from Scotland. Other countries also marked the anniversary around the world, including new museum openings and the London performance of a “Titanic Requiem” newly co-composed by a member of the 70s disco band the Bee Gees.

 China*:  Apr 17 2012 Share

Foreign investors have been selling down their shareholdings in mainland banks including ICBC because of tighter regulations. Goldman Sachs' move to sell shares of Industrial and Commercial Bank of China (SEHK: 1398) to Singaporean sovereign wealth fund Temasek yesterday could be followed by gradual divestment of its remaining stake worth about US$3 billion in the coming years, analysts say. Goldman sold US$2.5 billion, or about 40 per cent of its H-share holding, through a block trade at HK$5.05 per share. About US$2.3 billion of the shares went to Temasek. Goldman posted a loss in Asia last year, partly because of its stock-market losses in ICBC, said a source, adding that the Wall Street bank "has no plans to sell anymore ICBC shares in the immediate future". Goldman said in its annual report its investment in ICBC posted a US$517 million pre-tax loss last year. This is the fourth time the US firm has sold shares in China's largest bank since 2009. The latest sale cuts its holding to less than five billion shares, or 5 per cent. Temasek yesterday said it bought 3.55 billion ICBC H shares from Goldman, lifting its interest in the bank to about 5.3 per cent of H shares, or 1.3 per cent of the total share base. Goldman could continue to sell down its ICBC stake to preserve capital, said Jim Antos, a senior analyst at Mizuho Securities. Goldman bought its shares in ICBC at HK$3.07 each during the lender's initial public offering. At yesterday's close of HK$5.17, the latest sale would mean a profit of 68 per cent, Antos said. He said that in the aftermath of the financial crisis, Goldman changed its legal and regulatory status from a broker dealer to a bank holding company, which makes it liable for a capital charge on its investments in financial companies. Selling bank stocks eases that expense. Stanley Li, an analyst at Mirae Asset Securities, said Goldman's sale of ICBC shares was likely to continue under Volker's Rule, introduced after the financial crisis to control the risks associated with the financial sector. The rule restricts Goldman's ability to bet its own money by restricting proprietary trading. Temasek has been increasing its holdings in Chinese lenders in the past year as Western banks shed non-core assets to either boost capital or restructure business. Temasek bought 4.4 billion shares of China Construction Bank (SEHK: 0939) after Bank of America sold about 5 per cent of its holdings in August last year. It also bought 97.11 million shares of Bank of China in August, lifting its stake to 7.07 per cent. ICBC closed 0.77 per cent lower yesterday, after rising to HK$5.21 in the previous two trading days. Analysts said the trend of foreign banks trimming their stakes in Chinese banks could continue because of tighter regulations both on the mainland and abroad. Citibank recently sold all its investment in Shanghai Pudong Development Bank. The sell-downs mark a departure from the days when foreign and Chinese banks were eager to develop so-called win-win deals in "strategic partnerships" in the early 2000s. Xia Bin, a former central bank adviser, recently questioned the notion of such strategic partnerships. "They will move their money out of China when they're struggling - regardless of whether they have a strategic partnership or not [with Chinese banks]," Xia said.

Zhenghe, the training vessel of the Chinese People's Liberation Army navy embarked on a round-the-world voyage on Monday from Dalian, Northeast China's Liaoning province. A training vessel of the Chinese People's Liberation Army navy embarked on a round-the-world voyage on Monday from Dalian, Northeast China's Liaoning province. This is the first single-ship circumnavigation conducted by a Chinese training vessel. According to the commander, Liao Shining, deputy chief of staff of the PLA navy, the vessel Zhenghe has 308 military personnel aboard, including 110 cadets from Dalian Naval Academy. Over the next five months, they will journey more than 30,000 nautical miles (55,560 km) and visit 11 countries, including Vietnam, Malaysia, India, Italy, Spain and Canada. Military cadets from 13 other countries will be invited aboard the vessel for part of the voyage to live and train with their Chinese counterparts, Liao said. Wu Shengli, commander of the PLA navy, encouraged the officers, cadets, and sailors to carry out their "harmonious mission". "You are entrusted with the mission of promoting friendship between China and other countries and their navies," Wu said to the crew before the vessel set sail. Wu said this is an innovative mission to improve the training of naval cadets. The vessel, named after the great Chinese navigator Zheng He (1371-1433), is the PLA navy's first domestically designed and built oceangoing training ship. Since it was commissioned in 1987, the Zhenghe has visited more than 30 countries, and sailed 280,000 nautical miles. This is the PLA navy's second round-the-world voyage. The first was undertaken by the guided missile destroyer Qingdao and supply ship Taicang in 2002. Those vessels visited 10 countries in 132 days.

Hong Kong*:  Apr 16 2012 Share

Fewer than 60 percent of the 36 pro-establishment lawmakers attended what was dubbed a "reconciliation dinner" last night but Chief Executive-elect Leung Chun-ying said this did not mean differences could not be bridged. A total of 21 lawmakers attended the dinner at the Chinese General Chamber of Commerce. They included those who had openly backed Leung's rival, Henry Tang Ying-yen. Among the notable absentees were Tang's core supporters - David Li Kwok-po and Lam Tai-fai - as well as Liberal Party chairwoman Miriam Lau Kin-yee, Philip Wong Yu-hong, Abraham Shek Lai-him and Chim Pui-chung. Liberal vice chairman Vincent Fang Kang was the only representative of the party whose leaders had cast blank ballots rather than vote for Leung after losing faith in Tang. On the other hand, Tang supporter and Economic Synergy legislator Jeffrey Lam Kin-fung was present. Lam and Democratic Alliance for the Betterment and Progress of Hong Kong chairman Tam Yiu-chung sat next to Leung at a long table during the dinner, which lasted for about two hours. Legislative Council president Jasper Tsang Yok-sing said he was not invited as he needs to maintain an impartial role in the legislature. Speaking after the dinner, Leung said 16 lawmakers had raised various opinions on the government's social and economic policies. Leung disagreed with suggestions that the lawmakers who did not attend were not willing to pursue reconciliation and unity after the scandal-filled chief executive election. Leung said he will phone and exchange views with those who did not attend, adding he will host another dinner for pro-establishment lawmakers next month. Meanwhile, Leung stressed that he had not yet discussed with serving ministers their future roles in the government. Miriam Lau said she saw no need for so-called reconciliation meetings as there was no conflict between the Liberal Party and Leung, and hence there was nothing to reconcile. However, Lam felt Leung had made a good start by taking the initiative to communicate with pro-establishment lawmakers. For his part, Tsang felt that differences were deep-rooted and that it would be unrealistic to expect fences to be mended by a single dinner. "I do not expect a dinner to mend cracks, but that doesn't mean we should do nothing." Tsang disclosed that some ministers were willing to stay on for only half the next administrative term should they be invited to stay.

Police chief Andy Tsang Wai-hung has admitted that his officers may lack the skills to handle the media during protests. It was a rare admission by the hardline police commissioner, and came nine days after the Journalists Association complained that police restricted reporters' coverage of protests outside the central government's liaison office by limiting them to a press zone far from the rally. "Perhaps the officers lack skills in handling the media … We are learning from the experience and hope to improve arrangements in the future," Tsang said yesterday. "The balance between keeping order and making it convenient for reporters is not easy to achieve," he added, admitting that his officers could have been more flexible in handling journalists at the liaison office protest. He promised to keep speaking to the Journalists Association. Tsang's latest stance stands in stark contrast to his previous responses to complaints against the police. In August, he told a Legislative Council meeting that an officer was instinctively reacting to a "black shadow" rushing towards him when he blocked a television camera during Vice-Premier Li Keqiang's visit to the University of Hong Kong. Then in February, Tsang denied his officers had overstepped security arrangements agreed with the university for Li's visit, although an HKU review committee concluded the police had used "unjustifiable and unreasonable force" on protesters. The HKU row was preceded by an anti-budget protest in March last year, during which police pepper spray hit an eight-year-old boy. When Tsang was asked to say sorry to the boy, he refused and said it would be akin to an Arabian Nights fantasy "if [somebody] maintaining law and discipline needs to apologise". The rally saw 113 arrests. James To Kun-sun, chairman of the Legco security panel, said although Tsang had "conceded a little bit" in his comments on the media curbs at the liaison office, it was still unacceptable as he had not admitted the actions were wrong. To said he would not take Tsang's response as a good sign. "If the move is wrong, the police should stop doing it totally, instead of saying they would improve," he said. It was "hard to believe" that the officers lacked media skills, he said. "Protests outside the liaison office are very common. The officers must have been well trained and familiar with media arrangements."

Selina Chow testifies at Legco. She said that Leung, as someone in public service, had no excuse not to declare his business ties. Jurors who served in a 2001 arts hub design contest alongside Leung Chun-ying are split over whether the chief executive-elect did wrong, with one expressing surprise at Leung's failure to declare an interest in one of the entries and others saying it was an oversight. Selina Chow Liang Shuk-yee, one of the judges, said it was unbelievable that Leung failed to declare his business interests before voting on anonymous entries. Chow and others were testifying at the fifth hearing of a Legislative Council panel that was examining Leung's role as a judge in the West Kowloon Reclamation Concept Plan Competition. Leung had ticked a box on a conflict-of-interest reporting form to say he held no directorships, when he was a director of property consultancy firm DTZ. A Malaysian entry, marked for an honourable mention, was later disqualified as it named DTZ as property adviser. "The rest of us [jurors] were very surprised and could not understand why that happened. If you are in the public service, you often deal with matters of declaration of interests," said Liang, the former deputy chairwoman of the Liberal Party, which did not support Leung in the chief-executive poll. She disagreed with Leung's earlier remark that he had no potential conflict of interest because his colleague did not charge any fee when providing land-value data to the Malaysian entrant. "Money is absolutely not the only thing that amounts to interests. Winning the competition could bring extended benefits," she said. Another juror, Professor Chang Hsin-kang, told the panel that he felt it was only an oversight on Leung's part. Nicholas Brooke, another juror and a Leung nominator in the election, said only a limited number of qualified consultants were available locally and internationally, and many of them had technically and geographically diverse practices. This made verification over conflicts of interests "a real challenge". It might have been better if names of consultants were provided earlier - and separately from the entries - to the competition organiser to verify that no inadvertent conflict of interest existed with jurors, Brooke said. The hearing will continue on Saturday, with Leung and former secretary for planning and lands Gordon Siu Kwing-chue due to testify. The controversy came to light in January, when the government issued a statement about Leung's role in the event.

Stephen Davies, curator of the Titanic 100th anniversary exhibition at the Maritime Museum in Stanley, says some stories may not be true, but they are good. Hong Kong, a city with its own rich maritime history, has a special link to the ill-fated Titanic, which sank 100 years ago today. Eight sailors from Hong Kong were aboard the vessel when she hit an iceberg and went down in the North Atlantic ocean on her maiden voyage. Six out of this group survived the tragedy that claimed more than 1,500 lives, yet little is known about them. Originally thought to be stowaways, the men were, in fact, travelling on a single third-class ticket. Ticket number 1601 had cost them 56 pounds, nine shillings and 11 pence. It was reportedly a twist of fate that saw the "Chinamen", as they were called at the turn of the century, on board the Titanic. The men were employed by the Donaldson Line, either as seamen or firemen working in the boiler rooms. They were due to start work on another ship, but because of coal shortages in England at the time, their vessel was not sailing. So their employer told them to board the Titanic bound for New York, where they would help crew another ship. The story of their survival forms a key narrative in an exhibition at the Maritime Museum in Stanley that will run until June 3. The exhibition is the culmination of months of research by museum staff. The Chinamen's story is like many Titanic tales; the facts have been blurred over decades and exact details are difficult to trace, adding to the myth and legend of the ship. What is known about the Chinese sailors is that they were most likely recruited in Hong Kong. Some say they may have come from Hainan , while others believe they hailed from the coastal city of Taishan in Guangdong province. In Lee Meredith's book Titanic Names, A Complete List of the Passengers and Crew, the eight are listed as: Lee Bing, 32; Fong Lang, 26; Ling Hee, 24; Chang Chip, 32; Ali Lam, 37; Lee Ling, 28; Choong Foo; and Len Lam. "Since they were all quartered together near the bow of the ship, had a common language and had some experience at sea, they probably took the first opportunity to get into any available lifeboat," the book says. Four of the Chinese survivors hid in collapsible lifeboat C and were not seen until the boat was lowered to the sea. Another managed to get onto lifeboat number 13, while the sixth was picked up by lifeboat number 14. That man was apparently Fong, who reportedly tied himself to a door. He was spotted floating in the icy waters by passengers on lifeboat 14 and dragged aboard. The story goes that the passengers rubbed the man to warm him up, and after a few minutes, he took over the oars from a sailor who was struggling to row the boat to safety. "We don't know how true the story is, but it's a great one," said Dr Stephen Davies, former director of the Maritime Museum and current research fellow with the Maritime Heritage Resource Centre. Hong Kong-born Nancy Kwan, a Titanic enthusiast who now lives in the United States, was surprised to see the Chinese names in Meredith's book. "When I discovered Chinese names on the list, I was shocked. It's like running into your own neighbours on a trip," Kwan said. "But at the same time, it hits me deep down inside to see our own people on that ship. I wish there were more information on them, but when I tried researching online to find any of their descendants, I found none." Kwan said tracing the men's roots was difficult, as the spelling of their Chinese names could well be wrong. Her interest in the Titanic started in 1985 with the discovery of the wreck by an expedition led by marine geologist Robert Ballard and oceanographer Jean-Louis Michel. "The story of the Titanic is both beautiful and tragic because it is humanity portrayed at its best and worst," she said. A few days after the Titanic sank, the six Chinese survivors landed in New York on Thursday April 18 aboard the Carpathia, the first ship to arrive at the scene of the disaster. Under the US Chinese Exclusion Act, the men were transferred to a British steamship and sent to Cuba, with just US$25 in their pockets. What happened after this is unclear, though they did manage to submit claims against British shipping firm the White Star Line for lost luggage that included blankets, shirts, boots, a cape, jackets and suits. Stacilee Ford, an associate professor in cultural studies at the University of Hong Kong, said the Titanic tragedy continued to capture attention because, in part, it was a shared bonding experience. "This is a moment of global communion and there are not many moments like that," she said. "It's a micro and a macro story because you had such a range of people on the ship and these clear demarcations crumbled the moment the ship sank." The Titanic was billed as the "practically unsinkable" ship, one of three flagship vessels built by the White Star Line to compete with its rival, the Cunard Line. Before it began its maiden voyage across the Atlantic, considerable hype was built up around the luxury liner: it was the most luxurious, biggest, grandest and fastest ship of its time. The ship, with its four distinct funnels and powered by steam turbines, was meant to symbolise the British Empire's ship building expertise. It had nine decks, was about 270 metres long and just under 54 metres high. It could carry 2,450 passengers, but by the time it left Cobh, Ireland, it was carrying a total of 2,224 passengers and crew. At 11.40pm on Sunday April 14, 1912, the ship hit an iceberg despite a last-minute attempt to avoid it. Over the next two hours it flooded, with more than 600 tonnes of water per minute surging into five of 16 compartments along 30 per cent of the ship's length. More than 1,500 people - including the ship's designer and captain - died in the icy waters, by drowning or freezing to death, while 710 survived; women and children were given priority. A British inquiry into the disaster heard that the ship carried only 20 lifeboats, enough for 1,178 people, despite having room for 32. Some lifeboats were said to have left the site of the wreck with seats empty. Ford said for many Hongkongers, the 1997 film, Titanic, directed by James Cameron was the catalyst for their interest in the story of the ship. The element of class struggles combined with a romance captured the attention of the city, she said, drawing comparisons between the Titanic and Hong Kong. "Hong Kong is a port city and a multicultural city, a place of flow, and there's this notion that people are separated by social and cultural differences but inhabit the same space," she said. Ford added that a lavish one-off HK$15,000 per head Titanic-themed dinner hosted last night at a Tsim Sha Tsui hotel was a "very Hong Kong thing to do". Today, at 1pm US time, auction house Bonhams will put 87 Titanic-related items up for sale in New York, among them original newspaper clippings about the disaster, a dinner menu from the ship, and a ticket to the Titanic launch in 1911. For University of Hong Kong cultural studies expert Kendall Johnson, "the Titanic represented a microcosm of society, reflecting the class dynamics at the time". The disaster reflected "the hubris of the entire endeavour" and seemed to foreshadow the first world war. "How was it that such a sumptuously appointed space was not able to rescue people in the face of a disaster?" he asked. "It's a cautionary tale. Perhaps we are about to hit an iceberg ourselves." He feels the legacy of the Titanic owes much to people being able to find a personal connection to the disaster. "Wherever you are, whatever country you are in, people have got a slightly different version of the story," Kendall said.

Two old rolls of Agfa film from long before the digital age at the photography exhibition being held at Studio Kim Tak in Jordan. Shoe designer Carter Ma Guowei is a fan of old-style photography who is saddened to see film being pushed into the sunset by digital cameras. He has collected 500 rolls of rare film from all over the world in the past two years, including the first China-made film and a 126-year-old roll of Kodak film. Now his moment has come, with a film photography exhibition that will run until May 20 in Jordan. Ma, 27, from Guangzhou, has selected 250 antique rolls of film for the Golden Bygone Years exhibition at Studio Kim Tak. What began as a hobby for Ma has turned into a conservation campaign. "I would trawl through websites like eBay and Taobao to find these film rolls, and middle-aged fans are always pleasantly surprised to see a young fan like myself," said Ma. "They have donated treasured items to me with the hope I can pass on this history to future generations." Wong Ting-man, a film collector who also contributed to the exhibition, was recognised by the World Records Academy last May for owning the largest collection of instant cameras in the world - 1,042 cameras worth a total of US$130,000. Instant cameras, widely known as Polaroids, produce a finished photo. Both Wong and Ma recognise film, or analogue, photography is a dying art form. Although Ma does not own a digital camera, he admits using his phone to take photos and using a digital camera at work. "It is inevitable that analogue photography is dying out because it is no longer used professionally, nor should it be. Digital photography - I admit - is infinitely more convenient," said Wong. One of his items on display is high-quality Polaroid infrared film rumoured to have been produced for the American military for taking pictures at night. "It's perfect for secrecy because only one copy of an instant photo exists, with no negatives, so there can be no duplication," he said. Several vintage film rolls are from the mainland, including one produced during the Cultural Revolution - its red and yellow box is emblazoned with a Maoist political slogan. Also on display is a glass plate - used before film was invented - of a landscape taken in the Qing dynasty. Ma welcomed the new trend for taking smartphone photos with the Instagram application, which applies a vintage filter to images. He said: "I encourage young people who enjoy Instagram to give analogue photography a try." Studio Kim Tak's address is 6/F, 328-342 Nathan Road, Jordan.

Clockwise from top left: looks by Dorian Ho, available at Harvey Nichols; a just married couple looks for a location for a photo shoot; Carolina Herrera's spring 2012 bridal collection; a creation from Kanchan Couture Bridal; Vera Wang breaks the rules with black wedding gowns; Stéphane Rolland's bridal gown for spring, comprising 45 metres of draped red jersey. Last year was one for famous weddings, with the two Kates (Middleton and Moss) headlining, and it has set off several trends in modern bridal dresses that will be making an appearance as spring nuptials take over this year. Many are forgoing the big, starched, white princess dresses for less conventional options. Left: Yolanda Choy of Central Weddings & Occasions. Right: designer Noel Chu. We are seeing a growing interest in vintage styles, as well as ready-to-wear trends of the season spilling over into bridal. The lace, sheers, pastels and peplums you've seen all over spring-summer runways and on high streets are being incorporated into wedding gowns for fashion-forward brides. "The peplum trend is classic 1940s. It's very flattering as it exaggerates the curves for many different body shapes. It achieves both clean tailoring and delicate detailing for a feminine silhouette," says Noel Chu, a Hong Kong designer who has been in the trade for over a decade and has her own eponymous brand. And contrary to traditionalist thinking that a bride should only wear white, touches of colour have also been going strong for bridal gowns this season. "Along with the traditional white, Oscar de la Renta's 2013 collection will encompass the most beautiful shades of ivory, bone and ecru," says Cecile Chen, co-founder of Trinity Bridal, a specialist store that sells luxury designer labels. While rentals used to dominate the market, Hong Kong brides are now more inclined to buy their own gowns. "More brides definitely want to own their dresses," says Yolanda Choy, whose Central Weddings & Occasions opened six years ago in The Landmark, Central. The shop stocks top brands such as Vera Wang, Monique Lhuillier and Amsale. "Brides today are more sophisticated and they are willing to invest in a quality gown that's unique to them. It's the most important gown of their lifetime after all," Choy says. Hong Kong, being a city that melts and fuses different cultures, has this mix reflected in its wedding customs, says Chinese wedding monthly Darizi's executive editor Leanne Wong. It's not uncommon for the bride to change outfits four or five times, often going from Western white wedding dresses to red qipao and slinky evening gowns. "Brides usually march in the banquet in a white gown but after that, they'd rarely go for another pure white evening dress as the elderly would not like it much," says Wong. Most Hong Kong brides have at least one second change of gown for their wedding reception and celebratory banquet, and coloured wedding gowns and elegant cocktail attire are becoming favourite options. "Their white gown won't easily get upstaged, but when it comes to the second dress, they want to avoid wearing the same number as the guests," says Choy. There might also be something of a revolution going on at the high end of the bridal fashion scale. Vera Wang's bold use of black in her autumn-winter 2012/13 collection at New York's bridal fashion week has marked a turning tide. "It's really getting the designers and brides talking about ideas around it," says Chu. "They might not go as far as black, but they are definitely more open to using some colour." "Purple, red and gold are popular choices for wedding gowns, for the auspicious colours," adds Darizi's Wong. "They can also match the colourful decorations of their wedding venue. If the dress is not sharp and big enough, the bride will be less eye-catching, especially with the petite figures of Asian women." Jessica Lee of Trinity Bridal agrees. "One of our Oscar de la Renta bridal gowns in chic red is a popular second gown for our brides." Carolyn Chow of Central Weddings & Occasions noted a budding trend of romantic draping to create a constructed, three-dimensional silhouette as seen on the runways of Vera Wang and Amsale. Parisian couturier Stéphane Rolland embraced the trend with a show-stopping red gown that weighed 50kg. It took two men to carry its four-metre-long train. Meanwhile, Alexander McQueen's Sarah Burton sent models down the runway wrapped in strands of pearls and an explosion of petal ruffles. Also taking femininity to a whole new level was the use of slits and corsets, both creating the illusion of a well-balanced proportion for different body shapes - think Carrie Bradshaw's edgy, Victorian gown by Vivienne Westwood, which accentuates her slim waist. Versatility is also something the modern bride takes into consideration. Both Chu and wedding dress designer Kanchan Panjabi of Kanchan Couture have noticed a growing popularity for multifunctional gowns among local brides. "I get a lot of requests to create gowns with detachable trains or skirts," says Panjabi. "They can then easily change into different styles for different parts of their weddings." Chu once even created a dress that could be transformed into at least five different looks. For a church wedding, she suggests a matching capelet, as it's both trendy and practical. As destination weddings in exotic resorts and pre-wedding photo shoots overseas become increasingly common here, designers and boutique owners have noticed a corresponding shift in demand. While Panjabi has made lighter, simpler dresses for beach weddings, Chu has gone a few steps further to create bridal bathing suits. "I actually got the idea from a client who is having her big day in Bali. There certainly was a big wow factor walking down the aisle in a white bathing suit." When it comes to finding the perfect gown, Choy says she advises her customers to enter the boutique with an open mind. "They might have flipped the pages of wedding magazines but the gowns were worn by models, not real people," she says. "Some girls come in with their mind fixed on a dress of a certain brand and leave the shop with an entirely different one." It's also down to knowledgeable buyers and consultants to help them find that perfect dress, which will largely depend on the shape and individual style of the bride. "Style varies on different body shapes. Popular for slim brides who want to show off their figures are trumpet, mermaid or sheath. A-lines with sweetheart necklines are more versatile," says Lee. Designer Panjabi says that an empire waistline is good for petite figures, as it creates the illusion of longer legs. "I wouldn't recommend ruffles or a lot of detailing, as they could get lost in the dress," she says. For voluptuous figures, Chu says the key is to accentuate the waist line. "It's important to find their waist and hug in at the right places. A high-waisted dress might make them look pregnant," she says. Brides conscious of showing too much of their shoulders and upper arms can consider a lace edge veil, along with beaded cap sleeves, Chu says. She also offers personal touches to groomswear, offering a bow tie made out of a piece of fabric from the wedding dress or matching regalia for the couple's parents. Staying on trend might top a fashion-forward bride's dress priority list, but some stylish brides are looking towards vintage choices for alternatives. "More Hong Kong brides have started to appreciate vintage dresses, as they are truly one of a kind," says Salina Lam, owner of Satis Factory Vintage Emporium, a boutique that has sold vintage dresses - some of which date back to the 1920s - sourced from Europe and the US since 2001. Vintage styles aren't necessarily the typical "long sleeves, high collar and high waist" but can be quite diverse, says Lam. "Styles vary from different times. One classic style is a la Grace Kelly and Audrey Hepburn - hugging in at the waist with a bell-shaped skirt. But the 1970s dresses feature poet sleeves that close at the elbow." Marrying in a dress that's older than herself might have been unthinkable for many local brides in the old days, but Lam said the forward-thinking pack have started to appreciate the value of a timeless piece. "The vintages we offer were usually only worn by one bride, compared to a rented dress, which may have been worn by many," says Lam. "These were passed on as family heirlooms and many appreciate the style as well as the sentiment." Be it vintage or straight off the catwalks, there are plenty of choices for a modern bride that go beyond the traditional white gown.

Hong Kong's foreign assets of the exchange fund in March increased HK$5.0 billion ($644 million) to HK$2,245.1 billion, the Hong Kong Monetary Authority said here Friday. The Monetary Base, comprising Certificates of Indebtedness, Government issued currency notes and coins in circulation, the Aggregate Balance and Exchange Fund Bills and Notes issued, amounted to HK$1,085.8 billion. Claims on the private sector in Hong Kong amounted to HK$123.1 billion. Foreign liabilities, representing fees payable to the exchange fund's external managers, amounted to HK$200 million.

 China*:  Apr 16 2012 Share

The sisters of Gu Kailai , who is suspected of murdering Briton Neil Heywood, controlled a web of businesses from Beijing to Hong Kong to the Caribbean worth at least US$126 million, regulatory and corporate filings show. Gu, 53, the wife of disgraced Chongqing party boss Bo Xilai , is the youngest of five daughters of a People's Liberation Army general. She rose from a butcher's assistant during the 1966-1976 Cultural Revolution to become a lawyer who argued cases in the United States. Her sisters focused on business rather than politics. Gu Wangjiang , 64, the oldest, is a Hong Kong resident who owns US$114 million in shares of a printing company in eastern China, according to a Shenzhen exchange filing. Wangjiang and her sister, Gu Wangning, serve as directors of several other companies, including some that Hong Kong company registry records trace to the British Virgin Islands. They have also made millions selling Hong Kong real estate. Another sister, Gu Zhengxie, 62, was a top official at one of the country's biggest state-owned companies. Their wealth - and the fact they put some assets offshore, where ownership is harder to trace - illustrate how the politically connected thrive on the mainland. Gu Wangjiang is chairman of publicly traded Tungkong Security Printing, based in Jinan , Shandong province. It in turn controls a chain of other companies across China linked to her Hong Kong holding company, Hongkong Hitoro Holdings, according to a September 2010 share prospectus that also says Wangjiang is a Hong Kong national. Hitoro's Chinese characters mean "much happiness coming". Hitoro's 37,827,385 shares in Tungkong, which also counts government bureaus and state-owned companies as customers, were worth 720.2 million yuan (HK$885 million) at the close of trading in Shenzhen on Friday. Efforts to reach Wangjiang and Wangning were unsuccessful. In 1992, Hitoro paid HK$13.3 million for a luxury 16th-floor apartment at Parkview Crescent in Tai Tam. Gu Wangjiang sold it for HK$88 million early last year, land registry documents show. The buyer was Topwell Rich, a Hong Kong company owned by British Virgin Islands-based Ampere Management, land registry records show. Hitoro's controlling shareholder, Infomatic Resources, shares the same post office box address in the offshore jurisdiction, according to a November 21 filing with the companies registry. So does the owner of Hangang Worldwide, a Hong Kong-based company affiliated with a Chinese steelmaker for which Gu Wangning also acts as a director, a February 8 filing shows. Gu Wangjiang, known as Kuk Mong-kong in Hong Kong, has held directorships of at least nine companies in Hong Kong over the course of more than two decades, Hong Kong registry and bond documents show. Gu Zhengxie, the second-oldest sister, became a Communist Party member and rose to become the deputy party secretary of Beijing-based China National Machinery Industry, a centrally administered state-owned company with assets of 139.2 billion yuan, according to its latest bond prospectus. The conglomerate makes everything from power grids to tractors. The final sister, Gu Dan , is married to Li Xiaoxue, until last year the top discipline official at the China Securities Regulatory Commission, according to a report on the official website of Zuoquan county in Shanxi province, the home province of both the Gu and Li families.

Chilean companies can better access the Chinese market with the help of Hong Kong, said Chile's Consul in Hong Kong Mario Ignacio Artaza said Friday. Artaza is currently back in Santiago to facilitate ongoing visit to Chile of Donald Tsang, chief executive of the Hone Kong Special Administrative Region (HKSAR) of China. The consul sees the visit as part of Hong Kong's strategy to enhance its cooperation with "the emerging markets of America's subcontinent," adding that the region is an "offshore" market for the Chinese currency Renminbi, or yuan, in its internationalization process. "Chile is an open economy with a free and secure market based on rules, and Hong Kong appears in our radar as an interesting and intelligent option within this equation of success in our interaction with Asia Pacific," said Artaza. The consul believed the Renminbi will occupy a very important position in the world economy in the future. "There is no doubt that the Chinese currency will soon occupy a role, as other foreign currencies, as the US dollar or the euro, on the condition that it fulfills all the requirements of convertibility," he said. The Chilean consul also said his country is analyzing "the potentiality of Hong Kong's stock market, which is a very interesting source to collect capital for Chilean and Latin American companies that seek to use this capital to maximize their business in China." Chile is also mulling entering the metal exchange market, because in Hong Kong, there is a platform for future gold transactions, which will be extended to silver, iron and copper. During Tsang's visit, a second round of negotiations on a free trade agreement (FTA) between the HKSAR and Chile is underway in the country's capital. "An FTA between Chile and Hong Kong requires necessarily a more powerful interaction through the flow of tourists and business agents...and that is why an agreement on air services is being considered," said Artaza. According to Hong Kong's figures, trade between Chile and Hong Kong exceeded $850 million last year. If signed, the Chile-Hong Kong FTA would be the first such agreement reached between Hong Kong and a Latin American country. "We believe this agreement can trigger or be an important factor to attract funds from China, via Hong Kong, toward Chile, and vice versa," said Artaza.

ZTE Corp launches its Blade smartphone that runs on the Android system in Bangkok, Thailand, on Jan 16. Chinese smartphone makers are facing an increasing risk of becoming embroiled in intellectual property disputes, according to an industry white paper released on Friday. China's smartphone industry is at risk of becoming embroiled in intellectual property disputes since many of the most important patents are held by international companies such as Google Inc and Microsoft Corp, according to a White Paper issued on Friday. The Mobile Terminal White Paper, issued by the China Academy of Telecommunication Research, a branch under the Ministry of Industry and Information Technology, said China shipped more than 110 million smartphones in 2011, a figure larger than the combined number of smartphones that were shipped in China in the past several years. The country is the world's largest production base for mobile devices, it said. In 2011, China produced 1.13 billion mobile devices, including mobile phones and tablet computers. Those made up about 70 percent of the devices that were shipped globally. Domestic brands, such as ZTE Corp, Huawei Technologies Co Ltd and Lenovo Group Ltd, made significant progress in producing mobile phones, especially mid-to low-end mobile phones. ZTE's mobile device business contributed 31.3 percent, or 26.93 billion yuan ($4.3 billion), of its total revenue in 2011. Domestic phone makers have gradually squeezed their overseas counterparts' market share. In 2005, international mobile phone makers occupied more than half of the Chinese market. But in 2011, China shipped 455 million mobile phones, among which domestic brands made up 72 percent. Telecom experts have warned Chinese companies that they may be hit with charges of violating intellectual property rights. Most smartphone patents held by domestic makers have to do with designs or physical forms and few are related to the central technologies. Xu Zhiyuan, senior engineer at the China Academy of Telecommunication Research, said international mobile companies often invest heavily in acquiring patents in the hopes of curbing competition through the use of patent lawsuits. "In the mobile device industry, there are patent lawsuits everywhere," Xu said. "The disputes surrounding Google's Android mobile operating system are one of the current topics of discussion." Though Chinese telecom carriers, as well as some Internet companies such as Baidu Inc and Alibaba Group, have developed their own mobile operating systems, their combined market share lags far behind the share enjoyed by the three most prominent international operating systems - Apple's iOS, Google's Android and Microsoft's Windows Phone. In the fourth quarter of last year, more than 68 percent of the smartphones sold in China ran on the Android operating system, according to a report by the research firm Analysys International. Nokia's Symbian operating system holds a market share of 18.7 percent and Apple's iOS has a 5.7 percent share. "As more Chinese mobile phones pour into the global market, it is much more likely that international rivals will use intellectual property rights as a weapon in competition," Xu said. "Chinese companies should watch out."

Kuka, Europe's largest maker of industrial robots, is creating a regional hub in China to tap surging sales in the world's most populous country, where rising wages are lifting demand for automated factory gear. The German company will boost assembly capacity in China to 5,000 units this year, from less than 1,000 two years ago, chief executive Till Reuter said. China would become a centre for procurement, production of components and assembly for the entire Asian region, while research, development, and most production would remain in Germany, he said. "China alone bought 15,000 robots last year, and we expect that number to rise to about 20,000 this year," Reuter said. A company target for an operating margin of 10 per cent at the robot unit "is within reach", after standing at 9 per cent in the fourth quarter, he said. Rising wages, a push for quality, and demands for faster production are prompting China's manufacturing industry to buy more robots. That is helping European companies including Kuka and ABB return lagging businesses into profit centres. Kuka's robots have become twice as profitable as the company's larger systems unit, and ABB turned its robot unit around in 2010. At Kuka, robotics revenue jumped 84 per cent between 2009 and last year, as customers including Volkswagen and Daimler made purchases for new factories and China became the world's largest car market. The company had record order intake, sales, and operating profit last year. While demand from China so far was driven by car production, Kuka now seeks more business with customers in other industries. Manufacturers of semiconductors, electronic devices, food products and beverages are among the largest buyers of industrial robots, according to the International Federation of Robotics. Beijing has targeted an annual minimum wage rise of 13 per cent for the five-year period up until 2015.

Tyre maker Continental put €185 million in a factory in Heifei, which saw a 16 per cent rise in foreign investment to US$1.8 billion last year. Do not talk to Tobias Kerle about the mainland's slowing growth, the general manager of tyre maker Continental's 12-month-old factory in the city of Hefei is too busy planning to double output. "We've been ramping up the plant at a speed more than double what we knew before," said Kerle at the factory in the capital of Anhui province. "Five years ago this city had small roads. They've been bulldozing things left and right, putting in flyovers, a new subway and an airport." As rising wages and costs sap growth in the coastal centres that led to the mainland's three-decade export boom, Hefei's 15.4 per cent growth last year puts it in the vanguard of a new tier of inland powerhouses. Cities including Wuhan, Zhengzhou and Wuhu are drawing capital and factories from the east and abroad as firms such as Continental, the world's fourth-largest tyre maker, and Unilever, the world's No2 consumer-products maker, bet they will underpin the mainland's next decade of growth. "Cities in central China and even some in the west are becoming a new driving force for China's economy," said Zeng Xiwen, vice-president for North Asia at Unilever in Shanghai. "Hefei's got all the attributes investors need: land, energy and labour resources, rich education, ports nearby, talented workers and a huge consumer market on its doorstep." Unilever has shifted seven factories to Hefei from Shanghai and plans to make the city its largest global production centre. At least 25 more of the world's 500 biggest firms have factories in the city. That has helped give Hefei a growth rate almost 70 per cent higher than the 9.2 per cent average for the mainland and almost double the 8.2 per cent in Shanghai. While Premier Wen Jiabao has set a national growth target of 7.5 per cent this year, Hefei is aiming for 15 per cent. Chongqing expects 13.5 per cent, while Henan's provincial capital Zhengzhou, Changsha in Hunan and Chengdu in Sichuan all forecast growth of 12 per cent or higher. "Forget about national GDP," said Ben Simpfendorfer, founder of Hong Kong-based consulting firm Silk Road Associates. "It's time to focus on the inland city clusters that will drive China's future growth." Successfully shifting manufacturing inland could more than double the mainland's share of global exports to 23 per cent in a decade, said Zhang Zhiwei, chief China economist at Nomura. That would give more time to reduce the economy's dependence on investment, which investors in a Bloomberg poll forecast could cut growth to less than 5 per cent by 2016. Firms moving to Hefei from Shanghai can lower costs while still retaining access to the coast via the nearby Yangtze River, new highways, and a rail link that cuts the journey time to Shanghai to as little as two hours and 23 minutes. Unilever's move slashed production costs by at least 25 per cent and was necessary because coastal locations in Shanghai, Zhejiang and Jiangsu provinces are "struggling with lack of energy, labour and land resources", said Zeng. "You get cheap labour, you get cheap land and then you use the highway and the high-speed train and you can easily shift exports to Europe, the United States and Japan," said Huang Haizhou, chief strategist for China International Capital. Hefei's 5.7 million population is bigger than Singapore's while the surrounding province is home to almost 60 million, more than Spain. About half of the mainland's economic output and more than 40 per cent of its consumer market are within 500 kilometres of Hefei, says consulting firm KPMG. The city's appeal helped foreign investment rise 16 per cent last year to US$1.8 billion while overall investment, mostly from eastern coastal areas, surged 30 per cent to 170.3 billion yuan (HK$209 billion), says the Hefei Investment Promotion Bureau. Exports leapt 34 per cent to US$7.82 billion, exceeding nationwide growth of 20.3 per cent. Hefei's economy, about the size of Ecuador's at US$57 billion last year, was expected to double by 2015, said bureau director Sun Lianghong. Provincial governments inland were hungrier for foreign investment than Beijing or wealthy provinces such as Jiangsu, said Joerg Wuttke, former president of the European Union Chamber of Commerce on the mainland. "Whatever you do in these cities, you get the attention of the leaders, and leaders' attention does matter in China," he said. In the summer of 2007, Continental was about to select the city of Wuhu, 88.5 kilometres north of Hefei, for its first mainland factory after it researched sites in about 10 cities, said Kerle. "Hefei wasn't on our list," he said. "In terms of education for expat kids and living conditions we ranked it relatively lowly." Then a delegation from the Hefei city government approached the Continental team at the airport and persuaded them to reconsider, said Kerle. A year later the firm began construction of a plant to make 4 million tyres a year for an investment of €185 million (HK$1.9 billion). "The number one strength of Hefei was its government," said Kerle. "They were really trying to understand what we need in order to trigger our decisions and help us understand the local government and navigate through the regulatory process."

Hong Kong*:  Apr 15 2012 Share

The government set out its long-awaited tendering conditions for two new private hospitals yesterday, drawing criticism from patients' representatives and prospective investors. The move is part of a plan to expand private medical services to improve the balance between public and private medical services. Yesterday's invitation to tender involves two sites for private hospitals, in Tai Po and Wong Chuk Hang, Aberdeen, which will contain at least 300 beds each. Under yesterday's unprecedented terms, half the new beds must be reserved for Hong Kong residents and obstetric services are capped at 20 per cent of all capacity. On top of that, 30 per cent of all services must be made available at a standard package price that covers all costs, from surgery and medicine to meals. No such restrictions have been placed on private hospital construction in the city's history. The restrictions were slightly more lenient than suggested earlier by Secretary for Food and Health Dr York Chow Yat-ngok, who initially said 70 per cent of the beds would be reserved for Hongkongers to cope with the increasing demand for medical services. He defended the government's terms yesterday. "The 50 per cent of the hospital beds reserved for local patients is only the basic requirement," he said. "If the organisation can promise to reserve a higher proportion for local people, they can gain higher marks in the bidding process. The new way of bidding is to ensure a part of the service is being retained for Hongkongers, in order to tackle the problems created by an ageing population." One patients' group and a lawmaker said the government should have set stricter conditions to guarantee better care for Hongkongers. "The 50 per cent proportion comes in even lower than expected - it is disappointing," said Tim Pang Hung-cheong, of the Patients' Rights Association. He expects the current medical staff shortage at public hospitals to worsen as a result. "The public hospitals may take the greatest hit, as the new private hospitals will definitely seek experienced doctors and nurses from the public clinics. "If the manpower in the industry cannot keep up with the pace of development, how can the quality of the service - especially the public service - be guaranteed?" he said. "It is unfair that local resources, including land and manpower, are being used on non-local patients." Lawmaker Dr Leung Ka-lau, from the medical sector, said the government's restrictions would make no real difference to the shortages, as most private hospitals already reserve more then 50 per cent of their beds for local people. Some hospital operators called the restrictions strict and unfair. Former legislator Bernard Chan, who is interested in bidding for the site in Aberdeen, said it was difficult for a private hospital to provide 30 per cent of its services at a package price, especially for high-risk cases in which there are unpredictable factors and complications. He said he needed time to calculate the business implications of the requirements before submitting a tender. "The land price will ultimately affect the decision on whether to invest or not," Chan said. The Aberdeen location, with around 27,500 square metres, seems to be the more popular location with hospital operators. Union Hospital has expressed an interest in bidding. The Tai Po site - almost double the size of that in Wong Chuk Hang, at 54,851 square metres - has drawn interest from Chinese University, which wants to develop a teaching and training hospital for its medical students. The two sites are among four locations the government has earmarked for private hospital development. The other two are in Tung Chung and Tseung Kwan O. The plan to set aside four sites for new private hospitals was announced in the 2008 policy address, when Chief Executive Donald Tsang Yam-kuen called the medical sector one of the six pillar industries that would sustain Hong Kong's long-term growth. The construction of new private hospitals would "consolidate and enhance Hong Kong's position as a prime medical centre in the region". According to the tender terms, only 30 per cent of a bid can cover the price of the land, and the remaining 70 per cent must relate to facilities and services to be offered. The invitation to tender will close on July 27.

It was Goddess of the Sea Tin Hau's birthday yesterday. To celebrate, these participants in the annual Shap Pat Heung parade in Yuen Long dressed up as characters from the famous classical Chinese novel Water Margin. The three-hour Tin Hau Festival parade, which features lion dances and elaborate floral wreaths, had double cause to celebrate, as it was also its 50th anniversary.

 China*:  Apr 15 2012 Share

Russian Foreign Minister Sergei Lavrov (C) stands with his Chinese counterpart Yang Jiechi (L) and Indian counterpart S.M. Krishna during their meeting in Moscow April 13, 2012. Foreign ministers of Russia, China and India on Friday urged all concerned parties to show maximum restraint over the failed satellite launch by the Democratic People's Republic of Korea (DPRK). "We are convinced that the responses to the challenge need to be only in diplomatic and political ways," Russian Foreign Minister Sergei Lavrov told a joint news briefing after meeting with China's Yang Jiechi and India's S. M. Krishna. The three countries, Lavrov said, also jointly called for a sooner resumption of the six-party talks over the nuclear issue of the Korean Peninsula. "We call on all parties to show maximum responsibility and restraint and to make efforts for a resumption of the six-party talks," Lavrov said. He also said that a new sanction against the DPRK is not a good solution to defuse the tensions on the Korean Peninsula. "We do not believe in new sanctions. They will not help resolve the situation," Lavrov said, promising that Russia would work with its partners in the six-party talks to continue facilitating the normalization of the situation in the region. Answering a question from Xinhua, Yang called on all concerned parties to remain calm and demonstrate restraint over the DPRK's launch. China hopes that all relevant parties could keep in contact over the situation on the Korean Peninsula and make efforts to maintain the stability and peace in the region, Yang said. He also called on the parties to restore dialogues, promote mutual understanding and facilitate the resumption of the six-party talks. Meanwhile, a spokesperson of the Indian Ministry of External Affairs said in New Delhi that the DPRK's launch "violates United Nations Security Council Resolution 1874 and adversely impacts peace and stability in the Korean peninsula." "India calls on DPRK not to undertake actions in violation of UNSC resolutions," the spokesperson said. The DPRK launched the Kwangmyongsong-3 satellite on Friday morning, but the earth observation satellite failed to enter its preset orbit, the country's official KCNA news agency said, adding that scientists, technicians and experts are looking into the cause of the failure.

Hong Kong*:  Apr 14 2012 Share

Heung Yee Kuk chairman Lau Wong-fat at the last meeting of the body in Kowloon Tong before its office moves to Sha Tin. Leung Chun-ying faces the first test of his ability to unify the city. Rural kingpin Lau Wong-fat has called for an amnesty on illegal structures in the New Territories in order to achieve reconciliation. That creates a dilemma for the chief executive-elect, given that he was much tougher on illegal structures during the election campaign than loser Henry Tang Ying-yen. Heung Yee Kuk chairman Lau urged the incoming administration to accept all additions to village houses so that Leung could achieve the reconciliation he has been calling for. Lau was speaking for the first time since the Development Bureau began a crackdown on illegal structures in the New Territories on April 1. "The government should tolerate illegal structures that don't pose an immediate danger. An amnesty would be a good way to create unity and reconciliation," Lau said. "If the New Territories sees the first blood, I won't congratulate him [Leung]. We want a soft landing [approach to solving the illegal-structures problem]." Flanked by Lew Mon-hung, a high-profile supporter of Leung who also advocated an amnesty, Lau said villagers wanted "a balance between sentiment, reasoning and law". "[The order] cannot be law, reasoning and sentiment … we won't be able to argue our case on legal grounds." The kuk originally supported Tang in the election, but backed Leung in the March 25 poll. While Leung has not made a firm proposal to settle the issue, he is known for his tough stance on illegal structures, in contrast with Tang's tolerance of them. Leung said in January: "We should act in accordance with the law. There is only one set of laws in Hong Kong. We cannot say there is a set of laws on Hong Kong [Island] and Kowloon, and another in the New Territories." Under a 1972 policy, every male indigenous villager in the New Territories is granted the right to build a small house at the age of 18. Meanwhile, in a survey Leung scored just 2.72 out of 5 for his ability to "resolve conflicts and unify Hongkongers". Some 1,143 people responded to a poll by the Democratic Alliance for the Betterment and Progress of Hong Kong. He scored highest - 2.98 out of 5 - on the question of trust in him to maintain a clean government. His predecessor Tung Chee-hwa believes Leung can take the city forward. "He's got compassion and is a very competent person. He will be a good leader," Tung said in a television interview. Tung, seen as a Leung supporter, said the election had been open, fair and "hotly contested". Leung sought a reconciliation within the Beijing-loyalist camp on Thursday when he had dinner with 21 pro-government lawmakers. Tang supporter Jeffrey Lam Kin-fung, of Economic Synergy, said he had asked Leung at the dinner if he might take revenge against those who did not back him in the election. According to Lam, Leung smiled and said: 'I know you are kidding … In this age, how could revenge still exist?'"

The block on Peak Road. A structure on the roof of David Li's penthouse could reportedly be as big as 1,000 square feet. Finance-sector lawmaker David Li Kwok-po has vowed to remove a rooftop structure on premises on The Peak should it prove to be illegal. Li, who is also chairman and chief executive of the Bank of East Asia (SEHK: 0023), said he had not noticed the structure previously as he had not lived in the penthouse - in Altadena House, 27 Barker Road - since it was bought a few years ago. He was responding to news reports yesterday that alleged the structure could be as large as 1,000 square feet. "If there is any illegal structure, I will remove it," he said. A spokeswoman for the Buildings Department said officers would examine the approved building plan of Li's flat and inspect the site. Li is the latest in a string of serving and former government officials and lawmakers, including former chief secretary Henry Tang Ying-yen, to have been suspected of having, or found to have, unauthorised structures on their properties. Li was chairman of Tang's office for the chief executive election race. Asked if the rooftop structure was illegal, Li told i-Cable (SEHK: 1097): "How would I know? It was not me who asked someone to design [and build] it." He did not say who commissioned the work. "I bought it several years ago and renovation is in progress. I haven't moved in," he said. The rooftop was surrounded by scaffolding yesterday. Reports said Li bought the duplex for HK$106 million in December 2008. He applied in 2009 to install a lift connecting the main floor, mezzanine level and roof, and received approval from the department, a report said. It is unclear whether Li sought approval for building on the roof. Last year, Chief Executive Donald Tsang Yam-kuen was found to have an unauthorised glass-enclosed balcony at a flat on MacDonnell Road in Mid-Levels. He has since rectified the problem. Other public figures similarly caught out include Secretary for Education Michael Suen Ming-yeung and Dr Kitty Poon Kit, undersecretary for the environment. The row reached a peak in February with the revelation that Tang had unauthorised structures at a Kowloon Tong family home. They included a 2,090 sq ft basement, glass windows at the bottom of a swimming pool and a footbridge that linked the home, at 7 York Road, to the adjacent house, 5A, which he also owned. The department is investigating the case.

Walking through the streets of Hong Kong with its endless rows of jeweler stores packed full of Chinese shoppers, it may seem like the bling business is sparkling. Chow Tai Fook Jewellery Group Ltd., controlled by Hong Kong billionaire Cheng Yu-tung, made waves through a US$2.8 billion initial public offering last December, educating investors all over the world of the insatiable Chinese appetite for gold. But after hitting its record high in late January, Chow Tai Fook’s share price has come down by around 21%. Its rival, Luk Fook Holdings (International) Ltd., is down 16% year-to-date. The stocks have been pummeled by slowing growth in Hong Kong retail sales for the December to February period. In January, retail sales in Hong Kong rose 14.9% year-on-year – which, for an economy heavily reliant by discretionary spending by visitors from across the border, just didn’t quite cut it. As a comparison, December’s year-on-year increase was 23.5%. Seasonal factors played a role. Brokerage UOB KayHian said in a note that the proximity of the Lunar New Year this year to Christmas slowed visitor arrivals to Hong Kong. An exceptionally cold January also delayed the traveling plans of some visitors. But Citigroup sees signs of a recovery in retail sales in March. Figures for the month will be released in the next few days. CIMB believes a slowdown is only natural, after the spectacular run jewelers enjoyed over the past two years, and that there are no grounds to think Chinese people’s appetite for jewelry is abating.

Hong Kong's most influential information and communications technology bodies have closed ranks to speed up the development of "cloud computing" in the city, which hopes to keep pace with massive initiatives on the mainland. The "Hong Kong Cloud Standards Alliance" was formed yesterday. Its mission is to collaborate on government efforts to foster industry standards, policies, research and development, and a relevant legal structure, for the operation of cloud computing services. Cloud computing enables companies and consumers to buy, lease, sell or distribute over the internet, as well as over private networks, a vast range of software at lower cost. "Cloud" refers to the internet, which is depicted in that form in computer network diagrams. "Many companies still have doubts about cloud-based services as standards, such as inter-operability and legal framework, as well as governance policies, are yet to be established," said Stephen Lau Ka-men, president of the not-for-profit Hong Kong Computer Society (HKCS). The cloud alliance also includes the Communications Association of Hong Kong, the China/Hong Kong chapter of the Information Systems Audit and Control Association, the Hong Kong Software Industry Association, the Hong Kong Science and Technology Parks, and Hong Kong Cyberport Management. The Hong Kong government has been promoting the city as a regional data centre hub to entice cloud service providers. Google last August unveiled a US$300 million investment to build a new data centre here. The National Development and Reform Commission, the mainland's economic agency, last November disbursed 660 million yuan (HK$810 million) to five cities - Beijing, Shanghai, Shenzhen, Hangzhou and Wuxi - involved in cloud computing pilots. Research firm IDC estimated that spending on cloud computing services could produce US$1.1 trillion in new business revenue worldwide from 2011 to 2015.

Pro-Beijing lawmakers raised a glass to chief executive-elect Leung Chun-ying when they met for their so-called reconciliation dinner - but many members of the camp were conspicuous by their absence. Only 21 of the 36 pro-Beijing lawmakers attended last night's dinner, organised by Democratic Alliance for the Betterment and Progress of Hong Kong chairman Tam Yiu-chung amid rifts in the camp after the bitterly fought chief executive election. Leung hoped the meal would bolster communications, saying he spoke and listened to the lawmakers. "This wasn't exactly a reconciliation meeting," Leung said after the meal. "I hope to maintain close contacts with the lawmakers." He invited those who had attended to another dinner next month. Tam said he was not disappointed by the turnout as regular monthly dinners for pro-Beijing lawmakers normally attract only 20 people. He said he did not think the absence of the 15 legislators was a deliberate snub to anyone at the dinner. Tam said Leung had passed on his personal e-mail address to those present to ease communications. Economic Synergy lawmaker Jeffrey Lam Kin-fung, a supporter of Leung's defeated rival Henry Tang Ying-yen, said there had been a frank exchange of views on issues including the minimum wage. He hoped to learn more about the make-up of Leung's cabinet at the next dinner. Other Tang supporters stayed away, however. Chim Pui-chung, legislator for the financial services functional constituency, declined his invitation because of the "swaying stance" of some attendees. "It is sad to be a puppet, and being a puppet with swaying stance is even worse," Chim said. David Li Kwok-po, who ran Tang's campaign office, and Lam Tai-fai, a close acquaintance of the former chief secretary, also stayed away, as did Abraham Razack and Timothy Fok Tsun-ting. Vincent Fang Kang was the only representative of the Liberal Party, whose leaders vowed to cast blank ballots rather than vote for Leung after losing faith in Tang. Liberal Party chairwoman Miriam Lau Kin-yee, said she was attending another meeting last night and saw no need to reconcile. She was seen eating with a party colleague at a Café de Coral restaurant around the time her fellow lawmakers were toasting Leung with red wine at the Chinese General Chamber of Commerce.

The head of the Housing Society has called on chief executive-elect Leung Chun-ying's administration to resurrect the "sandwich class" housing scheme after it takes office on July 1. In an exclusive interview, society chairman Yeung Ka-sing said the urgency of the housing shortage meant there was no time to waste in building affordable homes for those whose income is too high to qualify for low-cost housing but too low to buy a home in the red-hot property market. "Land supply is limited. We don't have a perfect market and the government must intervene," said Yeung, who supported Leung's campaign to become chief executive. "The new government should take the opportunity to review our housing policy. Any new housing scheme should be easy to communicate, understand and administer," he said, referring to a plan devised by incumbent chief executive Donald Tsang Yam-kuen. A rent-or-buy scheme for the middle-class that Tsang commissioned the society in 2010 to deliver, called the "My Home Purchase Plan", had not been easy to understand or administer, he said. It would also create financial uncertainties for the society, a non-profit organisation and the second-largest provider of subsidised housing after the Housing Authority. A better option, according to Yeung, would be to revive the Sandwich Class Housing Scheme, run by the society until 2002, when the government shut down most subsidised housing schemes following the financial crisis. "The scheme proved to be a popular product, familiar to Hong Kong people. Buyers only needed to make a small down payment with our guarantee for mortgage." Sandwich class homes could be built on some of the 20 low-cost rental estates that the society currently manages, Yeung said. After enough flats had been built to rehouse affected tenants, the surplus plot ratio on these sites could be used for other types of homes. Yue Kwong Chuen in Aberdeen is understood to be among the estates being considered for such a move. Launched in 1993, the sandwich class scheme provided 8,920 homes for sale to families whose household income exceeded HK$30,000 a month, with a cap of up to HK$60,000 depending on circumstances. These families' incomes exceeded the limit for Housing Authority's Home Ownership Scheme, but many were unable to afford the down payment required to buy a home in the private sector. While past homes in the scheme were sold at a 20 to 40 per cent discount, Yeung said future homes "must be priced with reference to buyers' mortgage repayment ability instead of discounting the market price, as it can be very high." A study on housing demand would be necessary to determine how many such flats should be built, he added. Since the government said in 2002 that it would no longer grant land to the society to build low-cost rental homes, the society has been criticised for having a confusing role, especially when it recently promoted two luxury housing projects for the elderly. Wong Leung-sing, an associate research director at Centaline Property, warned against a return to the scheme. "Officials say they have problems finding land for building public rental homes. Why does the society not use its extra plot ratio for those rental homes for the lower income group instead?" he asked.

The chief executive of Hong Kong Special Administrative Region Donald Tsang encouraged Chile's resources sector to consider listing in Hong Kong while visiting Santiago to promote Hong Kong's renminbi business. "In each of the past three years, Hong Kong has led the world in terms of funds raised through initial public offerings. While our nation is a major consumer of mining commodities, Chile is a major exporter. It is a promising combination," he said addressing the Santiago business community at a dinner hosted by Standard Chartered Bank Chile Thursday local time. On his arrival earlier that day, Tsang met with Chile's Minister of Finance Felipe Larrain and Vice Minister of Economy, Development and Tourism Tomas Flores. He then gave a speech at the United Nations Economic Commission for Latin America and the Caribbean, on Hong Kong's role in China's development. In the next two days, Tsang will meet Chile's Vice President Rodrigo Hinzpeter, Central Bank Governor Rodrigo Vergara and leaders of the country's National Congress. He will also meet local business community leaders before visiting Brazil Sunday local time. Chile was Hong Kong's fourth largest trading partner in Latin America, with an average annual growth of 12.4 percent in bilateral trade from 2007 to 2011. Last year, HK$6.13 billion ($790 million) worth of goods between Chile and the Chinese mainland were routed through Hong Kong.

 China*:  Apr 14 2012 Share

British students perform in front of the promotion board for the GREAT Campaign, an event initiated by the UK government, in Shanghai, on Wednesday. The United Kingdom is reviewing its visa policies to make it easier for Chinese tourists to travel to the country as part of a worldwide marketing campaign to encourage tourists, business leaders and students to come to Britain. "We're looking at our entire visa policy to see whether we can make it easier for people who do want to visit UK as tourists to benefit from a more streamlined and quick process," said Jeremy Hunt, the UK's secretary of state for culture, Olympics, media and sport. "We made substantial improvements last year and we'll continue to review whether we can do better," Hunt said at a news conference on Wednesday in Shanghai for the launch of the UK's GREAT Campaign. China has seen a rapid increase in outbound travel in recent years and Chinese tourists are spending handsomely during their overseas trips. Figures from the China National Tourism Administration showed that Chinese people made 70.25 million visits to other countries or regions last year, making the country the largest source of outbound tourists in Asia. But according to Hunt, the number of Chinese tourists to the UK stands at around 120,000 a year, a small share of the approximately 3 million Chinese traveling to Europe every year. "I think that is pitifully low," said Hunt, who meanwhile underscored the challenge of deterring those aiming to immigrate to the country illegally. "Britain is a popular destination for tourists but also a popular destination for people who say they will come as tourists but are actually coming to live and work in the UK. We have the responsibility to secure the borders of the UK to make sure people who come to the UK are people coming for legitimate reasons." As such, a strict visa policy as well as complicated processes and materials for visa application imposed by the country has turned many away, including potential tourists, Chinese travel agencies said. "For example, the country asked Chinese applicants for tourism visas to show original copies of important credentials, such as a certificate of property ownership and a household registration book, and leave them at the visa center for three to four weeks. Many of our customers are reluctant to do that," said Gu Cang, an assistant manager at SAL Tour, a Shanghai-based travel agency. Also, the UK, unlike other European Union countries, requires fingerprint screening for tourism applicants, he added. But it seems the UK has realized the power of Chinese tourists who, according to the nonprofit organization World Luxury Association, spent a record $7.2 billion on luxury goods overseas in January alone, mostly during the Spring Festival holiday. "We understand the importance of the Chinese market," Hunt said. "We want to say to the Chinese who have been to Britain: Come back again, we'd love to see you and make you feel welcome. To the many millions in China who have not been to Britain, we would love you to come on holiday." In Shanghai, the first of the two stops in China to promote the campaign, the UK also invited some Chinese who do business and study in the country. An area that the UK wants to highlight in 2012 is the potential of more British companies as business partners to China, Hunt said. "In particular we want to focus on the creative, digital and technology industries." Last year, British Prime Minister David Cameron initiated the British government's GREAT Campaign, inviting visitors worldwide to take a fresh look at everything the UK can offer in 2012. The goal for the three-year global campaign is to attract 4.6 million visitors to the country in the next four years. It is estimated the additional visitors will spend 2.3 billion pounds and create nearly 60,000 new employment opportunities.

China's retail sales grew 14.8 percent year-on-year to 4.9319 trillion yuan ($783.03 billion) in the first quarter of this year, the National Bureau of Statistics (NBS) said Friday.

China already shows signs of shifting policy toward supporting growth. Above, a shipyard in Taizhou, China, that has seen a slowdown in orders. China's first-quarter economic growth slowed to a lower-than-expected 8.1%, the lowest since the first quarter of 2009, as a slowdown in exports and real-estate investment complicated China's efforts to guide its economy to a soft landing. China's growth was still above the 7.5% target set by the government, and its economy remains a bright spot in a world economy looking for drivers. China's resilient growth and strong public finances stand in contrast to the U.S. and Europe, where unemployment remains elevated and high public debt limits the scope for a stimulus. But the 8.1% figure—compared with expectations of 8.3% growth according to economist surveys—is a marked slowdown from 8.9% in the fourth quarter of 2011. The release of the growth figure, by China's National Bureau of Statistics on Friday morning in Beijing, comes as China already shows signs of moving policy more toward supporting growth, continuing its shift away from taming inflation. Song Yu, China economist at Goldman Sachs, said the growth rate was disappointing. "Growth in the first two months was weak. We had some loosening of monetary and fiscal policy in March but it wasn't enough to save the quarterly number," he said. Still, an increase in the contribution of consumption to growth provided a positive counterpoint. onsumption contributed 76% to GDP growth in the first quarter, up sharply from 51.6% in 2011. The share from investment—including infrastructure, real estate and other big projects—fell to 33.4% from 54.2%. Those numbers suggest that attempts to rebalance growth away from dependence on capital spending and toward a bigger role for consumption may already be showing results. Markets in Shanghai and Hong Kong were mildly positive Friday morning, in part reflecting the belief that the government could move more aggressively to ease policy by boosting lending. The Shanghai Composite Index was up 0.2%, while Hong Kong's Hang Seng Index was up 1.5%. First-quarter performance is of concern to foreign companies and economies dependent on supplying China with raw materials. Residential property sales were down 15.5% year-to-year in the first quarter, as the government's efforts to tame high house prices took a toll. Weak demand threatens a further deceleration in the housing construction that is China's main domestic driver of growth. A spokesman for China Vanke Co., China's biggest real estate developer by revenue, said the company would adopt a cautious approach to investment. "When it comes to new projects we will be following the principle that it is better to miss an opportunity than to make a mistake," the spokesman said. Companies dependent on real-estate construction are feeling the effects. Last month, an executive from mining giant BHP Billiton BHP -1.34% said China's demand for iron ore, used in steelmaking, is flattening out, which hurt markets. The Australian dollar, which fell 5% in March, has continued to slide in April, partly on fears of reduced Chinese commodity demand. Even a moderate slowdown in China's growth will leave some sectors facing an overcapacity problem.

Mourners attend a candlelit vigil at the University of Southern California in Los Angeles on Wednesday for two Chinese students who were killed in what may have been a bungled carjacking. More than 1,000 people attended a vigil on Wednesday night at the University of Southern California campus to mourn two Chinese students who were shot dead in what seemed like a bungled carjacking around 1 am on Wednesday. Experts called for enhanced protection of Chinese students overseas as China has become the largest source of foreign students in the US. The victims, Wu Ying and Qu Ming, were both graduate students at the electronic engineering department. They were killed in a neighborhood northwest of the campus. David Carlisle, in charge of the university's department of public safety, told the Beijing-based People's Daily website that Qu, the male victim, was talking in the car with Wu outside her residence when the attack happened. The killer fired from outside the car. Despite his wounds, Qu was able to stumble onto the porch of Wu's residence and call for help before collapsing, Carlisle said. Both victims were born in 1988. According to Carlisle, a witness driving by saw a man dash into a dark-colored vehicle after the shooting. Another witness saw two men running from the scene. The witnesses, however, failed to describe the suspect or suspects or provide details of the car and visibility may have been impaired as it was raining. Sources from the Los Angeles Police Department told the media that both victims suffered head wounds. Hong Kong-based Phoenix TV quoted a source at the Chinese consulate in Los Angeles as saying that Wu was from Central China's Hunan province while Qu was from Northeast China's Jilin province. China sends more students to study in other countries than any other nation and the university has more international students than any other US university. About 19 percent of the 38,000 students are from other countries, and about 2,500 come from China. Alan Liu, a graduate student at the mechanical engineering department of the university, told China Daily that he and Wu attended the same aircraft design class. Liu said Wu was soft-spoken, had a gentle personality and was a diligent student. Both were on their way home after studying until midnight at the library. "Our community is saddened and outraged by this callous and senseless act," the university said in a statement. "Our hearts and prayers go out to the victims' families and friends and all who knew them at the university. The university is reaching out to those affected, offering counseling and support." Leon Li, vice-president of the Chinese Students and Scholars Association at the university, said that the association will try to comfort friends and colleagues of the victims. The association is also trying to contact the victims' family members in China both to offer comfort and arrange a memorial service. The association plans to organize a safety seminar for students. Six people have been killed in the area this year, police said. Last year, 21 people were killed. According to a report released by the US-based Institute of International Education, China sent more than 157,000 students to US universities last year, more than any other country. The agency also said Chinese students account for 21.8 percent of international students in the US. They contribute more than $21 billion to the US economy. The USC tops US institutions for hosting the largest number of students from China. Xia Liping, deputy dean of the department of diplomacy with China Foreign Affairs University, said that there may be an impression overseas that Chinese people are wealthy and this could contribute to increased risk.

The flood of Chinese students entering universities in the United States is not just improving the students' education and increasing international understanding; it is helping the universities balance their budgets. Education and training ranks fifth on the list of US services for export, bringing in more than $21 billion a year, according to the commercial services division of the US Department of Commerce. International students benefit not only the host universities, but also local economies, as students pay for room and board, books and supplies, transportation, health insurance, and support for accompanying family members, according to a recent report by the Institute of International Education. Almost 70 percent of all international students' primary funding, including tuition, comes from sources outside of the US, according to the report. In November, an estimated 158,000 Chinese students were enrolled in US schools, or about 22 percent of the overall international student population. One prominent example is the University of Washington, where 18 percent of this semester's freshmen come from overseas, mostly from China, the New York Times reported in February. The overseas students pay three times as much as their in-state counterparts. "Is there any advantage to our taking a kid from California versus a kid from China? You'd have to convince me, because the world isn't divided the way it used to be," said the university's president Michael K. Young, according to the report. The average expenditure of a Chinese student paying the full cost of the education is 300,000 to 400,000 yuan ($47,550 to $63,400) per year, or more than 1 million yuan ($158,000) for four years' study, according to one Chinese consultant. "The tuition and living costs vary from state to state. But generally, Chinese parents deposit at least 500,000 yuan a year into their child's bank account, to ensure that they are able to live comfortably," said Liu Haishan, a consultant at the Shanghai office of the New Oriental Vision Consulting Company. Since US universities rarely grant scholarships to undergraduates, the parents have to "either be rich, or just wait to send their children to US universities for a doctoral program with a considerable amount of scholarship", Liu said.Wang Jing, a 49-year-old mother in Beijing, is one of many parents who empty their pockets to pay for study abroad. "I had been regretting that I did not have enough money to pay for my daughter to study as an undergraduate in the US, which had been her dream," Wang said. Since the program Wang's daughter has enrolled in rarely grants scholarships, Wang and her husband made up their minds to set aside 700,000 yuan until their daughter returns. Liu Sai, another mother in Beijing, has enrolled her daughter in an international class at the Beijing National Day School for the past two years. According to Liu, students in her daughter's class don't plan to take the national college entrance exams. Instead, they prepare to study in foreign universities. "The lectures are totally different from regular high school classes. The textbooks are all written in English, and students select the courses they are interested in," Liu said. The school charges from 80,000 to 90,000 yuan a year. Including travel, the annual cost is nearly 160,000 yuan. Adding undergraduate and postgraduate tuition, Liu figures her daughter's education will cost around 1.5 million yuan ($237,000). "Unlike many parents, I am not hoping to regain the money in three or five years by pushing my daughter to find a well-paid job," she said. At the University of Wisconsin-Madison, 33.3 percent of international students are Chinese. "If you break the numbers down between undergraduate and graduate, you find 40 percent of our international undergraduate population are Chinese, and 29 percent of our international graduate population are Chinese," said Emilie Dickson, International Admissions Manager at the Office of Admissions and Recruitment. The university maintains a roster of high school counselors at Chinese high schools and sends periodic e-mails with admissions updates. Also, university staff visits "as many high schools as they can," Dickson said. As the demand surges, more and more public schools are opening special classes for students who are determined to study abroad.

Hong Kong*:  Apr 13 2012 Share

Chile and China's special administrative region of Hong Kong Wednesday began a second round of negotiations to draft a Free Trade Agreement aimed at boosting bilateral trade. The meeting in Chile's capital of Santiago coincided with the visit of Hong Kong Chief Executive Donald Tsang, who is scheduled to meet with Chilean officials and private sector representatives from Thursday to Sunday. Rodrigo Contreras, chief of the Chilean delegation, said that "Hong Kong is an attractive market for Chilean exporters, because traditionally it has been the entrance and departure gate of the People's Republic of China." Contreras said Hong Kong's population has a high living standard, with a per capita Gross Domestic Product of 34,393 U.S. dollars in 2011, which represents ample export opportunities for value added Chilean goods, especially from the agricultural sector. Hong Kong is also on the leading edge in many commercial aspects and the agreement would allow Chile to learn important lessons in exporting, Contreras said. The fact that Hong Kong has similar consumption patterns to western countries, for historical reasons, facilitates trade with Chile, he added. Additionally, the agreement might help Chile to obtain preferential treatment in Hong Kong's services industry and access to public sector purchases. In 2011, Chile exported 314 million dollars' worth of goods to Hong Kong and imported 30 million dollars, representing a surplus balance of trade of 284 million dollars. Hong Kong is a special administrative region of China, recovered in 1997 after more than 100 years as a British colony.

The victorious CityU team of Bara Harprabdeep Singh (left), Ng Kar-yan, Chan Yin-wai, Chow Yat-sau, Jason Lau Chirk-yen and Kirpalani Lavesh Prakash beat 91 colleges. City University law students have triumphed over 91 other teams at an international commercial arbitration competition held in the city. They crossed swords with representatives of the universities of Harvard, Houston, Fordham and La Trobe to come out top in a four-day Willem C. Vis (East) moot last month. Mooting is the oral presentation of a legal issue or problem against an opposing counsel in simulated court. One member of the five-man CityU winning team is studying a master's degree in arbitration. "I'm interested in arbitration because there's a greater flexibility to decide the means to resolve disputes," said Jason Lau Chirk-yen, who joined CityU after finishing his undergraduate law studies at the University of Hong Kong. Three of his teammates are studying the Bachelor of Laws degree, while the remaining one is a Juris Doctor student. Teams argued over a hypothetical controversy arising from a supplier's failure to deliver equipment for the manufacture of a ship, acting for the claimant and respondent every alternate day. The students based their arguments on a UN convention in the debate, which ended on March 25. Congratulating the winners yesterday, CityU's dean of the school of law, Professor Wang Guiguo, said the championship proved the capabilities of his students amid fierce competition from two local institutions - HKU and Chinese University - that also offer legal studies. "What's most important is students' confidence," Wang said. "When faced with students from Oxford or Cambridge, [our] students' concrete knowledge base matters most."

Dr Pi Li will be the arts hub's curator - Hong Kong's freedom of speech and of the press are among the reasons mainland China's top curator has decided to make it his new home this summer. Renowned scholar Pi Li, who will start work in July as a senior curator at the West Kowloon Cultural District's M+ museum, says such freedoms are vital for arts development. "They are the values of human civilisation, the foundation for the discussion of contemporary art," Pi told the South China Morning Post (SEHK: 0583) by phone from Beijing. "Otherwise there's no point even if you have a lot of cash to build a lot of museums." It was announced last month that Pi would join M+, working with executive director Lars Nittve. The museum, focusing on 20th and 21st century visual culture, is due to open in 2017. Pi will concentrate on contemporary Chinese art, an area that will be an important focus for M+, Nittve said at the museum's public forum at the Science Museum last night. The Swede said the director of Beijing Design Week, American-born Eric Chan, would be the museum's design and architecture curator, while a further five staff were being recruited. He hopes the team, half of whom are from Hong Kong, will come from varied backgrounds. A "Mobile M+" pop-up exhibition will take place in Yau Ma Tei to coincide with next month's ART HK international art fair, Nittve added. It will feature work by six local artists. A well-known figure in the contemporary Chinese art world, Pi has a PhD in art theory from the Central Academy of Fine Arts, where he is executive director of the art administration department. He lectures on curatorial studies and writes about contemporary Chinese art for publications in China and overseas and has curated exhibitions worldwide. The mainland is experiencing a museum boom and by 2009 it had 3,020 museums, with about 100 new ones being built every year. But Pi said he chose Hong Kong because the city's liberal and open environment would be the most suitable in China for his study of contemporary Chinese art. "It offers a more neutral perspective, and because of a more open environment … I feel that more can be discussed," the 38-year-old Wuhan native said. When the government calculated its HK$21.6 billion endowment for the arts hub in 2008, the total cost of M+ was estimated to be HK$4.7 billion. The budget to build its collection will be HK$1.7 billion. The museum is planning five non-commercial pavilions to allow outside groups to host exhibitions, Nittve says. The first will open in 2014. As the Post has reported, the hub overall is facing a budget shortfall of up to HK$16.4 billion, but Pi said he was not too worried about feeling the pinch. "It can always be resolved," he said. "Other than spending money on buying, many [artworks] can be acquired through donation, which will be very important in the future." Nittve said last night the museum had been in talks with collectors from home and abroad in an attempt to get them to donate works. He hopes to have news later this year. Co-ownership of collections could also help. "It's not uncommon for museums to share ownership of particular works of art," Pi said. The surging prices of artworks and limited budgets have prompted museums to co-ordinate their acquisition of expensive pieces. Pi added that museums should always take the lead to discover new works before their prices took off. Another mission he hopes to achieve will be bridging the gap between contemporary "Chinese art" and "Hong Kong art", which has often been left out of the discourse, despite the handover 15 years ago. "It's very unfair to divide Hong Kong from Chinese art," said Pi. "I hope to work with local Hong Kong artists and build up this platform showcasing local and international art." Pi revealed that discussions over the position at M+ began in the second half of last year, but it took him no time to make the decision, even though he will have to leave his position at the academy and Boers-Li Gallery, which he founded. He said his ownership interest in the gallery would be held in a blind trust. Pi has one last job to do for the gallery - attend ART HK. He will be moving to his new home in June, and the most pressing task is flat-hunting. "It's very expensive," he said. "[But] the culture is very different and I like the open and liberal attitude. I'm very looking forward to moving to Hong Kong." An architectural competition will be launched for M+ at the end of the summer.

Canto-pop singer Eason Chan Yik-shun says he's looking forward to becoming the first Asian star to perform at London's O2 Arena, but he admits that the prospect of singing at a venue that has staged some of the world's biggest concerts made him nervous. "It's a world of uncertainties, you know?" the 37-year-old said of the London leg of the Duo Eason Chan tour at the massive entertainment complex on the banks of the River Thames. The 20,000-capacity venue, Britain's second largest, has hosted the likes of Paul McCartney, The Rolling Stones and the late Whitney Houston, and will also host basketball and gymnastics at this summer's Olympics. But the uncertainty was swept away when the 10,000 tickets were snapped up in just 20 minutes - reportedly selling faster than Lady Gaga's gig there. The promoter had to allot 6,000 more. "I love touring and I'm really grateful that I have enough songs to tour, not just in China. I can actually go around the world with all these Chinese songs," he said. Affectionately known as "god of songs", the third Canto-pop singer to earn the coveted nickname after Sam Hui Koon-kit and Jacky Cheung Hok-yau, Chan moved to Britain for his secondary education right after graduating from primary school. He studied architecture and music at Kingston University. He returned to Hong Kong in 1995 and took part in TVB (SEHK: 0511)'s New Talent Singing Awards, earning the title as well as a record deal. Chan's current tour has him performing 57 concerts in 35 cities and nine countries. For an artist who has collected countless awards and honours over his 17 years in the business, he says that what drives him most now is the thrill of performing and connecting with the fans. For the O2 concert, Chan will perform a mix of Mandarin and Cantonese songs, as well as English songs. As for the English songs, Chan said he might select some covers, perhaps from U2, Coldplay or the Beatles. After London, Chan will return to China, where he will wind up his tour in mid-July. "I'm really looking forward to the whole trip," he said.

Leung Chun-ying at his meeting with President Hu Jintao. President Hu Jintao pinned high hopes yesterday on chief executive-elect Leung Chun-ying's visions of governance and urged unity in the city after a divisive election. Hu, along with Hong Kong and Macau Affairs Office former director Liao Hui and other officials in charge of the city's affairs, told Hong Kong's leader-in-waiting to unite various sectors of the community for the sake of the city. He spoke a day after Premier Wen Jiabao called for a clean government and unity in society. "In the chief executive election, the platforms and visions of governance you raised were widely recognised in Hong Kong society and won the support of most of the Election Committee members," Hu told Leung in Zhongnanhai, Beijing's leadership compound. "The new chief executive will have huge responsibility and honourable missions. The central government has high expectations of you, and so do the masses in Hong Kong. "We hope and believe that you and the new SAR government will certainly unite Hongkongers from different sectors so that the people can live in harmony and work together with one heart for a better future." Leung received his official appointment from Wen on Tuesday. Beijing's call for reconciliation had earlier come from Wang Guangya , director of the Hong Kong and Macau Affairs Office under the State Council, who urged Hongkongers on Monday to rally behind Leung. Hu asked Leung to boost economic development, improve livelihoods, advance democracy and foster harmony to ensure "long-term prosperity (SEHK: 0803, announcements, news) and stability", exhortations similar to his comments to Donald Tsang Yam-kuen in Beijing five years ago when he was re-elected Hong Kong's chief executive. Hu pledged that the central government would continue to honour the principle of "one country, two systems" - Hongkongers administering Hong Kong with a high degree of autonomy. Liao, a deputy head of the Communist Party's leading group on Hong Kong and Macau affairs, had reportedly supported Leung's rival, Henry Tang Ying-yen. He was absent from the ceremony officiated by Wen on Tuesday, raising speculation as to whether he has lost his political clout. But Liao was at Hu's meeting with Leung yesterday. He was also present when Tsang met state leaders on a December duty visit. City University political analyst James Sung Lap-kung said Hu's remarks reflected Beijing's continued concerns over Leung's ability to reconcile detractors within the pro-establishment camp after the divisive campaign, and to gain support from the city's businessmen, professional groups and civil servants. President Hu Jintao urged Leung Chun-ying to open up new development fronts to ensure long-term prosperity and stability for Hong Kong. Meeting with the chief executive-designate at the Zhongnanhai government compound in Beijing, Hu reiterated that Leung should also work to unite various social sectors and improve people's livelihoods. He noted that Leung's election platform and ideology had received the support of various social sectors and a majority of Election Committee members and added: "As a new chief executive, you will undertake a heavy responsibility and a glorious mission. The central government has placed high hopes in you, and the majority of Hong Kong citizens also have high expectations. "I hope and believe that you and the next SAR administration will unite the various social sectors in common effort, work together with one heart and follow the past and herald the future," Hu told Leung. He also called on the incoming leader to do his best to "further boost economic development, improve citizens' livelihoods, push for democracy and foster harmony to open up new fronts for maintaining Hong Kong's prosperity and stability in the long term." Hu said Beijing will continue to uphold the "one country, two systems" principle that gives the SAR a "high degree of autonomy" and support Leung and his administration in governing in accordance with the Basic Law. For his part, Leung pledged to dedicate himself to uniting different sectors and creating a better future for the SAR. Leung said his discussions with state leaders mainly involved the formation of his Cabinet, such as the principles on which nominations will be based, but stressed he did not come up with any names. Leung also reiterated he has no immediate plans to relaunch a public consultation on Basic Law Article 23 since there are more pressing issues to be resolved, such as improving people's livelihoods. Regarding housing, Leung stressed the need to increase supply but said the government should not push down prices to ensure affordability. Meanwhile, in an interview with Xinhua News Agency, Leung described himself as close to both business and the grassroots. He said businesses have contributed greatly to the SAR's prosperity and therefore "we should meet their needs for enterprise development." Improving people's livelihood will help build a stable and harmonious society, which is essential for an ideal business environment, he emphasized, adding: "The interests of business people is consistent with the interests of the whole of society. Only stable and harmonious circumstances can guarantee sustainable growth." In Hong Kong, former Executive Council member Bernard Charnwut Chan said the business community will work with Leung since it shares his vision for the economy, but rejected reports that he has been invited to serve as Exco convener. Chan said he will not consider the post at this stage to avoid any conflict of interest as his company plans to bid to build a private hospital at Wong Chuk Hang, but may do so once the bidding process is over. 國家主席胡錦濤於4月11日在中南海會見了香港特別行政區第四任行政長官梁振英。胡錦濤表示,梁振英在是次特首競選中,提出的政綱和治港理念得到香港社會的廣泛認可,並贏得多數選委會委員支持。他希望,梁振英能夠團結香港各界人士和衷共濟,全面開拓香港長期繁榮穩定新局面。梁振英則表示,一定不會辜負中央寄予的厚望,為香港社會打造更美好的明天。胡錦濤昨日下午在中南海會見梁振英。梁振英進入會客室時,胡總已經在會客室內等候,梁振英走上前與胡總握手,二人握手時間近10秒鐘。政綱理念廣獲認同 責任重大使命光榮 胡錦濤對梁振英說,很高興和你見面,首先我要對你順利當選,並被中央政府任命為香港特別行政區第四任行政長官表示祝賀。 他說,在這次行政長官的選舉中,梁振英提出的競選政綱和治港理念,得到了香港社會的廣泛認可,贏得了多數選委會委員的支持。胡總語重心長地對梁振英說:「作為香港特別行政區新一任行政長官,你責任重大,使命光榮。中央對你寄予厚望,香港的廣大市民也充滿期待。」 胡錦濤續說,中央相信梁振英和新一屆特區政府,一定能夠團結帶領香港各界人士,和衷共濟、同心協力、繼往開來,努力發展經濟、改善民生、推進民主、促進和諧,共同開創香港長期繁榮穩定的新局面,為「一國兩制」在香港的成功實踐做出更大貢獻。中央支持特區施政 對港未來充滿信心 他並強調,中央將堅定不移地貫徹「一國兩制」、「港人治港」、高度自治的方針,嚴格按照基本法辦事,全力支持梁振英和特區政府依法施政,並對香港的美好未來充滿信心。 梁振英首先對胡總的寄語和中央對他的支持和信任表示感謝,並表示香港目前「機遇和挑戰並存」,他會團結各界別、各階層人士,為未來齊心奮鬥,發揮香港優勢,實現穩步前進:「香港特區長期以來得到中央的支持,15年來得到一定的發展。接下來,我一定會領導我的團隊,帶領香港向前發展,不會辜負中央和胡錦濤主席對我的期望,我會團結各界各階層人士,為香港社會打造更美好的明天。」 國家副主席習近平,國務委員劉延東,中共中央書記處書記、中央辦公廳主任令計劃,全國政協副主席廖暉,國務院港澳辦主任王光亞,中聯辦主任彭清華等參加了會見。治港四要務, 發展經濟, 改善民生, 推進民主, 促進和諧.

Wellcome, which runs this store in Causeway Bay, and ParknShop were the targets of the study. Lawmakers have accused the two leading supermarket chains of colluding on prices, after a study found that the cost of products went up and down at the same time at both ParknShop and Wellcome. The Federation of Trade Unions study found that the price of two of the eight products it monitored rose and fell at both supermarkets together and stayed at the same level for at least 14 days. While one legal expert said the fact the prices were the same was not enough to prove collusion, a lawmaker said the study showed the urgency of passing the long-awaited competition bill. "The [competition] law will offer a legal framework for investigation of price collusion," labour sector legislator Pan Pey-chyou said yesterday. "The court will make a fair judgment." The study monitored eight products - including toilet paper, rice, Coca-Cola, canned food and seasoning - from February to last month across five districts: Wong Tai Sin, Tsuen Wan, Sham Shui Po, Sai Wan and Ap Lei Chau. It found the prices of seven items remained the same at both two supermarkets on at least five days of the 16-day sampling period. Both supermarkets made cost adjustments on the same days on Amoy light soy sauce and Vita lemon tea. They lowered the price of the soy sauce to HK$10.50 from HK$12.50 on February 29 and raised it to the original level two days later. As for the lemon tea, they raised its price to HK$14.90 from HK$14.50 on February 24 and restored it to the lower price a week later. FTU lawmaker Wong Kwok-hing said the study pointed to price collusion, an activity prohibited under the proposed competition bill, which was being considered by the Legislative Council. "They [the supermarkets] control the market through price collusion. It leaves consumers without a choice," he said. The government's policy of minimal intervention in the market no longer served the interests of shoppers, he said, as the two big supermarkets knocked out competitors and charged more for products than small grocery stores. Five out of the eight products examined in the study were more costly in supermarkets than in other shops. But Thomas Cheng, an assistant law professor at the University of Hong Kong, said the study could be evidence of competition, rather than collusion. "It is legal for supermarkets to send their staff to monitor the prices of a competitor and it constitutes competition between the two," Cheng said. Only if the two companies agreed a deal on prices or told each other when they were changing prices would their activities be in breach of the proposed law, he said. A Consumer Council spokesman said evidence of communication between the two supermarkets would be needed to reach the conclusion that they were colluding. Spokesmen for ParknShop and Wellcome rejected any suggestion of collusion. "We cannot stop competitors checking our prices and making adjustments accordingly," a ParknShop spokesman said. "Doing price checks is a common practice." A Wellcome spokesman said the price changes were evidence of vigorous competition. The competition bill would see a statutory commission created to investigate anti-competitive conduct and provide a level playing field.

Hong Kong may take a step back from its renowned attachment to the free market, embracing government intervention when necessary, the chief executive-elect said yesterday in Beijing. Leung Chun-ying struck the interventionist note in an interview with Xinhua, saying: "It will be impossible to maintain the city's prosperity (SEHK: 0803) and stability if the new government is indifferent to changes in the external environment." The government should intervene to prevent market failure and keep property prices at a level affordable to the public, he said, adding: "My idea is pro-business as well as pro-grass roots. "The government proposed the 'big market, small government' principle five years ago, but it has not yet got rid of the thinking that has excessively relied on a market-oriented [economy]," he said. "Therefore, I propose prudent adjustments … in maintaining fair competition, in helping Hong Kong's enterprises embrace opportunities arising from the development of the mainland and Asian economies." Leung's campaign motto was "seeking change while preserving stability", but his platform raised fears among the city's business sectors that his reforms might be so rapid that they upset stability. However, President Hu Jintao praised Leung in Beijing yesterday, saying that the chief executive-elect's platform had received wide support from the Election Committee. Leung said his policy priorities in the first few months in office would be implementing the measures promised under Cepa, the free-trade Closer Economic Partnership Arrangement; the national five-year plan; and the 36 economy-boosting measures announced by Vice-Premier Li Keqiang during his visit to Hong Kong last year. "I am deliberating on how to better handle the relationship between the central government and Hong Kong, as well as the relationships between Hong Kong and other mainland cities," Leung said. In Beijing last night, Leung met 80 Hongkongers working on the mainland, and heard their views about life across the border. Professor Francis Lui Ting-ming, head of the economics department at the University of Science and Technology, said he did not expect Leung's administration to deviate significantly from the "positive non-intervention" approach adopted by the Hong Kong government in recent decades. "I don't think Leung will introduce industrial policies and pick winners that would receive incentives from the government, similar to what the South Korean and Taiwanese governments have been doing in the past few decades," he said. Raymond So Wai-man, dean of the business school at Hang Seng Management College, said he expected the government to take a more proactive role in developing the economy.

 China*:  Apr 13 2012 Share

Rating agency Fitch reaffirmed China's foreign currency rating at A+ with a stable outlook on Wednesday. "Fitch expects more debt to migrate onto China's sovereign balance sheet as the economy works through the aftermath of the credit surge of 2009-2011, primarily impacting the local currency rating, which remains on negative outlook," Andrew Colquhoun, head of Asia-Pacific Sovereigns at Fitch, said. "The ratings balance China's strong narrowly-defined sovereign finances against broader contingent liabilities and structural weaknesses including unresolved problems in the banking system," he added. According to the agency, China's key rating strength is its strong on-balance-sheet public finances. China's sovereign net foreign asset position at end-2011 was worth 44 percent of GDP, the second-strongest in the A range, underpinned by the world's highest reserves stockpile of 3.2 trillion U.S. dollars. Explicit sovereign debt remains modest, however. Central government debt was only 17.5 percent of GDP at end-2011, while fiscal deposits were worth 5.5 percent of GDP. Fiscal deposits exceed sovereign debt maturities which are projected to be about 2 percent of GDP this year. The total amount of credit in China's economy rose rapidly amid credit-fuelled stimulus and its aftermath in 2009-2011. Banking system assets rose to 238 percent of GDP by end-2011, from 204 percent at end-2008. In a statement, Fitch said it had concerns that the banking system will face rising loan impairments over the medium term following this credit surge. This could impact the supply of credit to the broader economy, affecting growth, or lead to a requirement for sovereign financial support to the system, the agency said. China's ratings benefit from a record of strong economic growth stretching back to 1991. However, the outlook for 2012 is more moderate. Fitch projects China's GDP growth at 8 percent in 2012 and 2013, below the 2007-2011 average of 10.5 percent, as the economy works off excesses in the real estate sector and policy is gradually eased to keep a lid on inflation and house prices. "The unwinding property market poses some risk of a so-called hard landing, although Fitch believes the authorities' scope for policy flexibility inclines against such a negative outcome," said Colquhoun.

The mainland's economy likely grew at its slowest pace in nearly three years between January and March, at just 8.3 per cent. Slow growth is delaying some IPOs in Hong Kong. Planned listings of several heavyweight mainland companies in Hong Kong are likely to be delayed by the mainland's volatile stock markets and slowing economic growth, according to UBS. David Chin, head of investment banking in Asia for UBS, said yesterday that listed mainland companies seeking to list H-shares were constrained by faltering A-share prices. Under listing rules, H-share listings cannot be at a discount of more than 15 per cent to the A-share price. The listings include Haitong Securities, which last year delayed plans to raise US$1.5 billion. Sany Heavy Industry and XCMG Construction, which in the first quarter shelved plans to raise US$3.3 billion and US1.2 billion respectively, also had A-share listings. Even those willing to issue at a low price might still find it hard to compete with existing stocks in the market. Initial public offerings (IPOs) were less attractive than placements from existing companies listed in Hong Kong. "There is ample cash in the market, and there is investment appetite," said Chin, who has just raised US$1.4 billion for Hong Kong-listed Kunlun Energy through a share placement. "However, investors are more comfortable with listed companies, because they have track records and offer the shares at a discount. With IPOs, investors are more wary … they need to be convinced." Chin expected more fund-raisings from listed mainland financial institutions. The most recent sizeable fund-raisings included the US$1.4 billion H-share placement by China Minsheng Bank. Other placement exercises in the pipeline include China Merchants Bank (SEHK: 3968), which has received approval from the China Securities Regulatory Commission to issue A/H shares rights up to US$5.55 billion. Mainland financial institutions which are expected to list in Hong Kong in the first half of this year include China Everbright (SEHK: 0165) Bank, insurance company PICC (SEHK: 2328), and Haitong Securities. On the other hand, the overhang of slower economic growth on the mainland would continue to drag on the listing timetable of companies in the construction sector, including Sany Heavy and XCMG, Chin said. New listings would also have to compete with the increased appetite for bond issuance. Chin said investors were still interested in high-yield bonds, even speculative grade bonds from mainland property developers.

At a breeding center in Thousand Island Lake in East China's Zhejiang province, workers transfer sturgeon from one submerged cage to several to provide more growing room. The workers transport the sturgeon in a boat built around a large water-filled cage. With the exception of feeding the valuable fish, this is the most important work at the center. April 8 was a red-letter day for conservationists. More than 1,200 farmed Chinese sturgeon were released into the Yangtze River to increase the numbers of this rare species in the wild. One of more than 20 species, the Chinese sturgeon, or acipenser sinensis, is unique to China and has existed for more than 140 million years. It enjoys protected status and it is illegal to breed or trade it privately, let alone have one on your dining table. However, other types of sturgeon don't enjoy such revered status in China. They are cultivated commercially for their eggs, which are known as "roe" and can be processed into caviar, one of the most valuable foodstuffs in the world. Caviar bearing the label "A Product of China" has been available since 2006. The international trade in sturgeon-related products once relied overwhelmingly on fish from the Caspian Sea, the world's largest lake, and accounted for about 93 percent of the global caviar trade in 2003, according to data released by the Convention on International Trade in Endangered Species of Wild Fauna and Flora. However, overfishing, rampant poaching and environmental damage have sharply reduced the numbers of sturgeon in the Caspian in recent decades, forcing devotees to look elsewhere for their favorite dish. "Ninety nine percent of the caviar traded in the global market now comes from farmed sturgeon," said Ni Hao, founder of Lindys Foodservice Consultant and former executive chef at the China division of Unilever's food solutions department. Insiders say that China accounts for nearly 20 percent of the sturgeon in the global market, despite its relatively brief breeding history of less than 15 years, and the country's produce can now be found in Europe, the US and Japan. It's become a stable supplier of high-end brands such as "Petrossian" of France and can also be found in the first-class cabins of international airlines. Although China is a relative newcomer to the world of caviar production, the prices of the product culled from certain types of sturgeon are higher than those of many foreign counterparts because, unlike the majority of rivals, sturgeon in China are mainly raised in natural waters rather than the recycled variety prevalent in fish farms, leading to larger fish and bigger eggs. "Water is a very important factor in determining the quality of caviar," said Ni. "It may taste too earthy if the water used is not of high enough quality. Larger eggs normally mean higher prices," said the 39-year-old expert. Sturgeon thrive best in water temperatures ranging between 15 C and 23 C. But the boom areas of the Chinese industry are mainly located south of the Yangtze River, such as Thousand Island Lake in Zhejiang province and Yichang in Hubei province, where air temperatures can easily top 35 C in the summer. At Thousand Island Lake, for example, the highest water temperature in summer is 33 C, far too high for at least two species raised there, the Siberian and Amur sturgeon, which require a temperature of 22 C. The surface area of the lake is 573 million square meters, and so the fish are held in underwater cages - covering around 40,000 sq m - to ensure that they can be captured easily. Each year, as summer approaches and temperatures soar, workers at the center transfer the sturgeon from the submarine cages to a "summer resort" pool, excavated on an island in the lake. Cooler water, taken from a depth of 15 meters and averaging around 16 C, is continuously pumped into the pool. The sturgeon usually spend around three months in the resort. "We start transferring the fish in early June so they will survive the hottest period between July and September," said Gong Liang, deputy director of the center. He said the transference of the fish is the most labor-intensive part of his job, standing in water under a sweltering sun several hours a day for a month, netting sturgeon that can easily weigh more than 100 kilograms. "It's really strenuous labor," said Gong, "But the good news is that we take a monthlong vacation once it's completed." In 1997, researchers at the Chinese Academy of Fishery Sciences began to import tens of millions of fertilized eggs from Siberia. The same year saw the start of a program to breed wild sturgeon in the Heilongjiang River in northeast China. "The breeding project there was aimed at preserving the species," said Wang Bin, a former researcher at the academy, who was in charge of developing the method of cultivation and promoting it throughout the country. Wang said rivers are the best places for wild sturgeon, which require a course as long as 1,000 kilometers to spawn, with the foods available in the river and the stimulation provided by the current playing an important role in the spawning process. "But, it (Northeast China) is not an ideal place to farm sturgeon, because they are kept within a restricted area," he said. "Moreover, it takes around two or three years before a sturgeon grows to more than 1 kg. In the south, the time required is just one year." In 1999, when the breeding process first began to spread in China, sturgeon cost more than 200 yuan ($32) per kg in the markets, and more than 1,000 yuan in upmarket eateries. The average house price in Beijing at that time was just around 3,000 yuan per sq m. However, by 2003, when an increasing number of people began to enter the industry, the price dropped to about 40 yuan per kg. Wang saw a second chance for the industry after he investigated overseas and realized that sturgeon eggs were far more valuable than the flesh. So he left the academy in 2003 and immersed himself in the industry. Now he is the general manager of Hangzhou Qiandao Xunlong Sci-Tech Co, one of the first Chinese companies to export caviar. But the process of producing the eggs is difficult and extends further than simply raising the fish. Sturgeon don't attain full maturity until they are 7, or sometimes even 15 years old, so simply keeping them alive for such an extended period is a task fraught with difficulty and cost, not to mention the advanced technologies and long experience required to distinguish gender and extract the eggs. "The best time to extract the eggs is during the first 11 weeks of the sturgeon's stage 4 maturity," Wang said. "This is very difficult to master. The eggs are not rich enough if extracted earlier, but they wither if taken later." It's essential that the eggs undergo 16 different processes within 15 minutes of extraction to ensure the best flavor, he said. Unlike their Western counterparts, Chinese caviar producers operate a model that includes independent fishermen, plus breeding and processing centers, and the use of companies that sell the eggs. Fang Xinming, a 38-year-old fisherman at Thousand Island Lake, was among dozens of fishermen that helped enterprises to breed sturgeon at an early stage in their development. In November, he bought 20,000 newly hatched sturgeon weighing about 0.1 kg each. In around three years, when the fish weigh more than 10 kg each, a processing company will buy them and continue raising them in large cages in a lake. Fang started breeding sturgeon in 2009, when he bought just 5,000 because of concerns about the high level of investment and his limited knowledge of the fish. But now he has no concerns at all and expects to make a profit of 2 million yuan in two years. "I've talked my two brothers into raising sturgeon this year," said Fang. "Most people are still looking on. Their eyes will pop out when they see me making all that money. What other kind of fish can bring you a profit of 1 million yuan in a year?" Currently, there are three main companies involved in the production of caviar in China, and all have high hopes. Hangzhou Qiandao Xunlong at Thousand Island Lake started test runs at its new processing plant in Quzhou, Zhejiang province this month. When fully operational, the factory will be the largest in Asia with a processing capability of 35 metric tons a year. Tianxia Sturgeon (Group) in Hubei province started construction of the World Sturgeon Industrial Park in Wuhan, capital of Hubei province, in 2009, scheduled for completion in 2014, with planned investment of 1.3 billion yuan. The third company, Yunnan Amuer Sturgeon Aquaculture, attracted a large shareholder in May, and is aiming to become a first-class caviar brand in 10 years. "The high technology threshold and the long wait before one sees a profit have prevented many people from entering the industry," said Wang Bin. "I see that as a good thing for the industry - it doesn't offer quick money, but it will grow slowly and steadily."

A system to settle cross-border yuan payments and boost the convertibility of the currency will be set up, central bank officials said on Wednesday. The move will promote the international use of the yuan, analysts said. The China International Payment System will be established in one or two years. It will make yuan clearance safer and more efficient for cross-border trade and investment settled in the currency, said Li Bo, head of the central bank's second monetary policy department, at a news briefing in Beijing. The system will help gradually make the currency convertible and will facilitate wider use of the yuan in cross-border settlements, Li said. Currently cross-border yuan clearance is conducted through the Hong Kong and Macao branches of Bank of China, or agency banks of overseas participants. While demand for cross-border renminbi settlement is increasing, transaction costs in the current payment system are higher than those conducted in other major currencies, such as the US dollar, analysts said. "The new system will link domestic and overseas participants directly, and support different languages including Chinese and English. What's more, the working hours will be extended to 17 or 18 from the current eight to nine hours to cover yuan settlement demand from different time zones," said Li Yue, director of the payment and settlement department at the People's Bank of China. "The rising international use of the renminbi is one of the most exciting developments in global trade and finance," said Stuart Fraser, chairman of the policy and resources committee at the City of London corporation. "Any measures which can help facilitate cross-border transactions and increase efficiency and security are a very welcome development," Fraser said. A more efficient and safe cross-border payment system is critical to ensure that the huge number of transactions are made with minimal delays, said Ma Jun, chief economist for Greater China at Deutsche Bank. The system will provide more specialized cross-border payments and clearing services for offshore banks and will operate in daylight hours for most time zones, he said. "If well designed, the percentage of cross-border transactions that do not require manual intervention can also be substantially enhanced, saving time and costs for clients." Under the new system, most smaller foreign banks will use member banks as a correspondent bank, Ma said. Li said that the system will adopt global standards, and probably use the international messaging service, the Society for Worldwide Interbank Financial Telecommunication, commonly known as SWIFT.

Hong Kong*:  Apr 12 2012 Share

Premier Wen Jiabao has urged Chief Executive-elect Leung Chun-ying to serve as a clean political leader and to set an example by running a corruption-free government while continuing to unite the people of Hong Kong. Speaking in Beijing yesterday after a ceremony to formally appoint Leung as next chief executive from July 1, Wen said: "It is crucial for a political leader to be clean. "As such, Hong Kong will see efficient governance and people's relations will become more harmonious. It will also help to win the hearts of the people and promote a new political landscape." His call for a clean leader comes amid the recent allegations against Chief Executive Donald Tsang Yam-kuen and former chief secretary Rafael Hui Si-yan, along with Sun Hung Kai Properties joint chairmen Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen. The Independent Commission Against Corruption is investigating claims Tsang accepted invitations from tycoons to travel on their luxury yachts and private jets for personal trips. Tsang also failed to declare his interest in renting a Shenzhen penthouse from East Pacific (Holdings) chairman Wong Cho-bau, who was a principal investor in Digital Broadcasting Corp, which has been awarded a license. "I believe that you [Leung] will make your best efforts and will not let down the expectations and trust of all Hong Kong people," Wen told Leung at the Zhongnanhai leaders' compound in Beijing. Wen also quoted from the Analects of Confucius, saying "a person in the political field should act with integrity. If he sets a good example, would others dare not to follow?" Wen said Leung and his team must narrow differences while pursuing unity. "It is necessary for [the next SAR administration] to unite the people from various sectors and fully develop Hong Kongers' spirit of eagerness, and foster closer exchanges among people from different sectors and eliminate divergence and dilemna," Wen said. Quoting military strategist Zhuge Liang, Wen said Leung can draw on collective wisdom and benefit from it. Liang was a philosopher during the Three Kingdoms period after the Han dynasty. Wen said Leung will carry a heavy burden as the next five years will be crucial in terms of economic development, improving people's livelihood and promoting democracy. Responding to Wen's remarks, Leung said cleanliness is one of Hong Kong's core values and vowed his administration will run a clean government. Leung said he is willing to abide by the regulations governing the conduct and integrity of civil servants. He said the next five years offer opportunities as well as challenges, and he will work toward uniting different sectors to resolve Hong Kong's deep-rooted conflicts. In the morning, Leung held nearly two hours of talks with Hong Kong and Macao Affairs Office director Wang Guangya. On the second day of his four-day official visit, Leung visited the State Council's Hong Kong and Macao Affairs Office before meeting Wen. Leung said he discussed with Wang his work on forming his cabinet but did not name particular candidates. Leung is expected to meet President Hu Jintao and other state leaders during the trip. He will return tomorrow. 寶昨日在北京中南海紫光閣,向候任行政長官梁振英頒授國務院令,任命他為香港特別行政區第四任行政長官。溫家寶對特區新領導班子提出兩大期許,包括堅持要團結各界、共同發展,以及為政者要清廉,凝聚人心,開拓施政新局面。溫又指出,未來五年是香港發展經濟、改善民生、推進民主十分關鍵的時期,相信梁振英不會辜負全體港人的期望和信任及中央對他的厚望。 總理溫家寶在中南海紫光閣歡迎梁振英和夫人唐青儀。頒授儀式開始,由國務院秘書長馬凱宣讀國務院令:「任命梁振英為中華人民共和國香港特別行政區第四任行政長官,於二○一二年七月一日就職。」 梁振英從國務院總理溫家寶手上接過任命書後便合照留念。國務院副總理王岐山、國務院委員劉延東、港澳辦主任王光亞、中聯辦主任彭清華等官員出席儀式。 溫家寶隨後對梁振英表示,他接過的不單是任命書:「剛才你接過的任命書,我以為你接的是一副沉甸甸的責任。未來五年是香港發展經濟、改善民生、推進民主十分關鍵的時期。」 溫家寶表示,完成這些任務,對梁振英和未來特區班子有兩點期望,第一是團結各界人士:「團結香港各界人士,充分發揮全體港人的積極性,加強同各界人士交流,消除分歧和矛盾,集眾思,廣眾意。就是說,只有團結,才能夠凝聚共識,形成力量,齊心協力,共謀發展。」 第二就是清廉:「政者,正也,子帥以正,孰敢不正。就是說,為政者要清廉,做人要清廉,那麼整個香港就可以出現一種政通人和的局面,就會凝聚大家的人心,開拓施政的新局面。」他相信,梁振英會努力,不辜負全體港人的期望和信任,盡忠職守,不辜負中央對他的厚望。 梁振英回應指,感到自己責任重大,未來會繼續努力發揮本港優勢,讓發展穩固前進。對於溫總特別提到為政者要清廉,梁振英指清廉是本港長期以來的核心價值之一,他會努力堅持。對於近日發生包括他本人在內的前任和現任高官涉嫌利益輸送事件,梁振英會後指,自己於競選期間一直表示,現時適用於公務員的利益收受指引可擴展至特首,他未來會努力保持政府團隊清廉;至於與港澳辦主任王光亞會面的內容,梁振英表示沒有談及組班人選問題,但被問到有否談及政府架構重姐問題時,梁則未有回應。 據新華社報道溫總在約一個小時的會面中,強調中央一直不遺餘力支持香港發展,今後也會根據需要及時推出相應的政策措施,進一步加強兩地的交流合作。 三月二十五日行政長官選舉結束後三天,總理溫家寶主持國務院全體會議,任命梁振英為香港第四任行政長官,並簽署國務院令,七月一日就職。 梁振英今日會展開第三天訪京行程,下午會再到中南海,與國家主席胡錦濤會面,晚上則會拜訪駐京辦及與本港在京商會及團體會晤,明天便會啟程回港。

Ritchy Leong in her ground-floor Verde shop, which she won for 15 months rent-free in Telok Real Estate Partners' competition. Hong Kong-based Telok Real Estate Partners plans to spend a projected HK$1 billion over the next three years building up to 20 small- to medium-sized residential projects in Macau. After the successful launch in 2010 of its second residential project, Verde, to address the housing needs of younger homebuyers, the boutique closed-end opportunistic investment fund aims to become a more aggressive player in the mass home market. "The fund has bought a 2,000 square foot development site and negotiation for another similar-sized plot is to be completed," said Telok partner Philip Pang. Each of the development projects involves building 30 or more flats of between 400 and 600 square feet in size, and requiring a total investment of about HK$50 million. "Over the next three years we hope to build 10 to 20 such mass residential projects," Pang said. In 2009, the fund spent about HK$88 million to build the seven-storey Verde, a single residential block with 68 one- and two-bedroom flats between 424 and 1,150 square feet in size. Current secondary market prices at Verde are HK$4,000 per square foot, up 48 per cent from the price of HK$2,700 per square foot when the flats were launched in 2009, Pang said. The success of the development was due to the rapid economic growth in Macau, he said, which had been fuelled by the transformation of the former Portuguese enclave into Asia's gaming and entertainment holiday destination. The jobs created to support the gaming and tourism sector had in turn brought new-found wealth to Macau households. For instance, it was now common to see a couple working in a casino and earning a combined household income of HK$30,000 a month. "And with such an income they can afford to buy homes of HK$3 million or so each," Pang said. To build its brand among these new homebuyers, Telok organised a creative entrepreneur contest in Macau in August last year to rejuvenate six ground-floor shops on Rua da Erva, the street on which Verde is located. Two winners of the contest would receive 15-month rent-free periods in two of the six shops to help start up their business. Macau resident Ritchy Leong, 26, and three of her partners proposed using one of the shops to offer Japanese lifestyle products such as kitchen sets, tableware and home improvement items. Their proposal won the contest and became the first such store in Macau. The prize of a rent-free period provided by the developer had enabled the partners to bring forward their plan to start the business by one year, Leong said. "The monthly rental for a 600 square foot store will be HK$20,000 to HK$30,000 a month. Without a rent-free period it would have taken us another year to save enough start-up capital," she said. Within two weeks of the store opening, the partners had already met their sales target for the first three months, Leong said.

Cheung Kong (SEHK: 0001) plans to drop its auditor, Deloitte Touche Tohmatsu, which has been checking its books since the property company was listed in 1972, to streamline its auditing. PricewaterhouseCoopers, which audits associate Hutchison Whampoa (SEHK: 0013), will replace Deloitte. Deputy managing director Edmond Ip Tak-chuen yesterday said the decision was intended to improve efficiency, consistency and more timely reporting. Ip (pictured) said while the audit of Cheung Kong was relatively straightforward, the work at Hutchison was more complex. "Considering the substantial asset base of Hutchison Whampoa as well as the significant scale and diversity of its global businesses which span 53 countries, appointing PricewaterhouseCoopers for Cheung Kong would be the logical choice," he said. The proposal to appoint PwC will need the approval of shareholders at the annual general meeting on May 25. Kwan Wong Tan & Fong, which merged with Deloitte in 1997, has audited Cheung Kong for four decades. Ip said changing an auditor was "a big issue", but because of regulatory demands it had to implement the change. "For the past couple of years, the stock exchange and shareholders wanted us to report financial results as soon as possible. As the accounting principles and standards applicable to Cheung Kong and Hutchison Whampoa have become increasingly complex in recent years ... we have decided that Cheung Kong and Hutchison Whampoa should use the same auditor," he said. Hutchison is a major contributor to Cheung Kong's profits. Deloitte is also the auditor of Sun Hung Kai Properties (SEHK: 0016), whose joint chairmen were recently arrested by the Independent Commission Against Corruption. They are out on bail and have not been charged with any offence. Ip stressed that Cheung Kong was happy with Deloitte's services, and the accountant would continue to act as auditor for other group-related companies including Cheung Kong Infrastructure (SEHK: 1038), CK Life Sciences, Hui Xian Reit, Fortune Reit and Prosperity (SEHK: 0803, announcements, news) Reit. Deloitte yesterday declined to comment on the change.

Ho Hung Kee pays a monthly rent of HK$125,000. A 1,000 square foot noodle shop that has survived in Hong Kong's cutthroat restaurant market for 38 years and boasts a Michelin star is in the news - but not for its lunchboxes. Just a year after being sold for HK$100 million, the long, narrow shop space that houses Ho Hung Kee is up for sale again and could fetch nearly twice the price. The street-level shop at 2 Sharp Street East in Causeway Bay, the world's second-most expensive street for retailers, is now valued at around HK$180 million - including its 600 sq ft cockloft. The Ho family, who have operated Ho Hung Kee since 1946, bought the shop for HK$350,000 in 1974, but decided to cash in on rocketing retail property prices, and last year sold the shop to an investor for HK$100 million on a two-year lease-back. Property consultants said the wonton noodle restaurant currently pays about HK$125,000 a month in rent, and the lease is due to expire in mid-2013. Not counting utilities, salaries and food costs, that means Ho Hung Kee needs to sell 126 of its HK$33 bowls of wonton noodles a day, seven days a week, to cover the monthly rent payment. Isaac Wai, a senior marketing manager at Ricacorp Properties said a 400 sq ft shop selling T-shirts at 9 Sharp Street East, opposite Ho Hung Kee, is paying HK$170,000 a month, while another at 7 Sharp Street East is being offered for lease at HK$200,000 a month. "The shop could definitely pay HK$250,000 in rent a month, and if it changes hands at a higher price, it's logical for the new owner to raise the rent when its lease is due for renewal," he said. It is unclear how the property sale will affect the noodle shop, still run by the Ho family, according to a woman who identified herself as the owner. "It's too early to say," she said. "We'll continue with business as usual because our lease hasn't expired yet." But she also said it would be tough to survive if the landlord raised the rent significantly. "We only charge HK$33 for a bowl of wonton noodles. But thanks to our loyal customers, our business is still strong at the moment." The family plans to open a new shop in the soon-to-be opened Hysan (SEHK: 0014) Place in Causeway Bay, she said. Yesterday, the property's owner appointed Colliers International to offer the shop for sale. Pierre Wong Tsz-wa, chief executive of commercial property agency Midland IC & I, said the owner wanted to cash in on the retail boom. "Due to tight supply, retail shops in Causeway Bay have fetched jaw-dropping prices," said Wong, who estimated that the shop, with its proximity to Times Square, could fetch as much as HK$180 million. Helen Mak, director of retail services at Colliers International Hong Kong, said two recent transactions in nearby Lee Garden Road had generated more than HK$200,000 per square foot. "Space is scarce, so retail properties in the district are being snapped up the minute they come on the market because investors see the potentially high returns," she said. The monthly rent for Ho Hung Kee in the current market could go as high as HK$350,000, she said.

The petrified remains of the baby mammoth are removed from a crate yesterday in Chai Wan. The body will be exhibited until May 10. Mammoth mummy makes Hong Kong debut - Lyuba, 42,000-year-old calf preserved in Siberian permafrost, goes on display tomorrow at IFC Mall. Five men lifted Lyuba from her storage box. Hands sheathed in white gloves, they gingerly raised the 42,000-year-old remains of the woolly mammoth calf at a storage facility in Chai Wan yesterday. "She feels hard, not soft at all," said Thomas Yuen, the managing director of Michelle Art Services, who is more used to handling works of art than mummified corpses. Lyuba's grey hide is wrinkled and bare, stripped of the shaggy fur that characterised the extinct species. The tip of her trunk is forever curled. This is how she lay for millennia, pickled in silt and water and frozen solid under the permafrost, deep in the Siberian Arctic. Then, in 2007, a reindeer herder from the Nenet indigenous people found her - the best-preserved baby woolly mammoth specimen ever found. She now finds herself in Hong Kong and, from tomorrow, in IFC Mall in Central. "We're trying to bring art and culture to the people," said Peter Cook, director at the Globecreative marketing firm. The company worked with the International Finance Centre to stage the exhibition "I love Lyuba: Baby Mammoth of the Ice Age". The exhibition runs from tomorrow to May 10 on IFC's podium level. "Ever since we read about her in National Geographic, we've been wanting to bring her here," said Karen Chang, another director at Globecreative. "It's taken months of negotiations [with the Russian government]." Lyuba will be joined by a 17-metre-high mammoth skeleton, skulls of other extinct Ice Age mammals and costumes of the Nenet people who found her. Experts estimate woolly mammoths went extinct around 4,000 years ago. "Woolly mammoths lived all over the world - in Europe, Asia, North America - but only those in Russia were preserved well because we have permafrost," said Galina Karzanova, research collaborator at Russia's Shemanovsky Museum, which is lending Lyuba to Hong Kong. Lyuba herself was a healthy, one-month-old calf who probably drowned, sucked in by a muddy bank that ultimately preserved her. Her preservation has helped scientists learn more about her species, and how they lived, by examining her stomach contents and the growth patterns on her tusks. "She ate her mother's poo to help her digestion, like many modern elephants do," Karzanova said. Cook said: "We encourage people to come and learn about vanishing species, and the importance of conservation. The next to go might be lions, tigers and elephants."

Rafael Hui arrives at the ICAC yesterday. It is understood he and the Kwok brothers are to report back to the commission next month. Anti-corruption agents have sought fresh legal advice from the Department of Justice after extending the bail of billionaire property moguls the Kwok brothers and Hong Kong's former number two official, who are at the centre of the city's biggest-ever graft investigation. Top government prosecutors are studying the investigation case file handed to them by the Independent Commission Against Corruption, in what informed sources are describing as "an extremely complex case''. The Department of Justice, which the South China Morning Post (SEHK: 0583) understands has been considering the details of the ICAC investigation on and off over a lengthy period, will decide whether or not the three men - who have not been charged - should be prosecuted. Almost two weeks after their arrests on March 29, Thomas Kwok Ping-kwong, 60, and former chief secretary Rafael Hui Si-yan, 64, returned to the commission's North Point headquarters yesterday morning and were granted an extended period of bail. It is understood that Thomas Kwok's brother Raymond Kwok Ping-luen, 58, with whom he heads Sun Hung Kai Properties (SEHK: 0016) and who was also on bail following his arrest on March 29, reported back to the ICAC last Thursday. It is unclear why the younger Kwok, whose bail was also extended, did so separately. A spokesman for the commission would only confirm that two people related to the March 29 arrests had their bail extended yesterday and another had reported back earlier. It is understood that the three have been told to report back to the anti-graft agency late next month. The high-profile trio are being investigated over allegations of bribery and misconduct in public office, and are the most powerful figures to have been targeted by the ICAC in its 37-year history. Their arrests came 10 days after that of Sun Hung Kai Properties executive director Thomas Chan Kui-yuen, and followed that of four other, so far unidentified, individuals. Chan and the other four have also been released on bail, and none has been charged. In a rare move on the night of the arrests, Secretary for Justice Wong Yan-lung announced that he would delegate authority to the director of public prosecutions, Kevin Zervos, to decide whether a prosecution was warranted. Wong made the decision after satisfying himself that Zervos "has no connection with the persons involved in the case", and "to avoid any possible perception of bias or improper influence''. Barrister Stephen Char Shik-ngor, a former ICAC investigator, said one of the reasons for extending the bail term was that the commission needed more time to read the documents it seized in the operation.

Hong Kong Financial Secretary John Tsang said Tuesday he has appointed Chow Chung-kong, the former head of Hong Kong rail operator MTR Corp., as a director of bourse operator Hong Kong Exchanges & Clearing Ltd. Mr. Tsang also appointed Timothy Freshwater, former vice chairman of Goldman Sachs (Asia) LLC, as a board director of Hong Kong Exchanges. Messrs. Chow and Freshwater have been appointed for two-year terms starting April 23. "Mr Chow and Mr Freshwater are well-respected figures in the business community and financial services sector, with excellent record of public service," Mr. Tsang said in a statement. Mr. Chow is also likely to succeed Ronald Arculli as the chairman of HKEx when board members elect a new chairman at a meeting later this month, said a person familiar with the matter. Mr. Chow, who retired from MTRC at the end of 2011 after eight years at the government-controlled rail operator, oversaw MTRC's HK$4.25 billion (US$547.3 million) merger with commuter and intercity rail operator Kowloon Canton Railway Corp. in December 2007. He was also heavily involved in helping expand the company's footprint in markets in China, Europe and Australia in the face of a saturated home market. Mr. Arculli is best known for spearheading HKEx's efforts to market itself globally as a prime listing destination, particularly to companies in emerging markets who have natural resources or consumer businesses who may benefit from having a shareholder base close to China.

 China*:  Apr 12 2012 Share

China's crude-oil imports jumped to near-record levels in March, bolstering the belief among some energy analysts that the country is again hoarding oil for its strategic reserves. If the predictions prove accurate, China's growing thirst for oil could underpin already-high crude prices and push the country's oil imports above market expectations. On Tuesday, China said its oil imports reached 5.57 million barrels a day in March, the third-highest month on record and a rise of 8.7% from the year-ago month. For the quarter, China's crude imports rose 11% from the year-ago quarter, a much stronger pace than full-year 2011's increase of 6%, the China's General Administration of Customs said. Analysts have been watching China's import data climb higher over recent months. The wave of imports, added to domestic production, has exceeded the amount of crude the country's refineries can process, analysts said. Moreover, China has been increasing its oil purchases even though prices have soared, a rare occurrence for a country that usually steps out of the market when prices are high. The market's conclusion: After a three-year hiatus, China is filling up its strategic petroleum reserves. "[China] is in the process of gradually filling the reserves" before reaching the goal of having 90 days of supply, said Zhang Guobao, former director of the National Energy Administration, China's top energy agency, in a March interview with China Securities Times, a state-run newspaper. At present, China's total oil stocks, both strategic and commercial, are enough to cover about 40 days, Liu Tienan, director of the energy agency, said at a conference last week. By comparison, the U.S.'s strategic and commercial stockpiles can cover the country's needs for more than 90 days. China has brought new storage facilities online in recent months, said market observers and the International Energy Agency, another sign of a potential strategic reserve buildup. Also, China's desire for energy security is becoming stronger amid turmoil in the Middle East, they said. The added demand could amount to 50 million barrels this year, said Kang Wu, a senior fellow who follows China's energy policies at East-West Center, a Honolulu think tank. That could underpin crude-oil prices, Mr. Wu said. Brent crude has gained 12% this year, but prices fell on Tuesday amid concerns about China's slowing demand. March imports were 6.4% lower than February's record of 5.95 million barrels a day. Brent crude declined 2.3%, to settle at $119.88 a barrel on ICE Futures U.S. Mr. Wu estimates China's crude-oil imports will average 5.77 million barrels a day in 2012, up 13% from a year ago. Of that, about 150,000 barrels a day could find their way into storage. Chinese officials have said that the country had completed filling four storage sites in 2009, the first phase of a three-part process. Those four sites can hold 103 million barrels of oil. But it is unclear how many more barrels the country has added since then. More storage facilities are likely to become operational later this year and early next year, indicating the recent demand "is probably just the tip of the iceberg," said Paul Ting, president of Paul Ting Energy Vision LLC, an independent energy consulting firm. China's effort to build up its strategic reserves is going to have a long-lasting effect on oil prices, Mr. Ting said. Historically, countries' need to hoard to ensure energy security is what has moved prices over longer periods, he said.Beijing's move comes as concerns rise over Iran's nuclear ambitions. Iran supplied 11% of China's total imports in 2011, giving it an incentive to ensure it has enough oil in reserve if any global embargo against Iranian oil goes into effect. A European Union embargo on Iranian crude exports is set to take full effect this summer. The urgency also was highlighted by the International Energy Agency, which represents the interests of industrialized oil consumers and coordinates strategic oil stocks held by its members. In its latest monthly report, the agency said China and other emerging markets have less oil on tap to provide for domestic demand than Western counterparts. In its second phase, two more storage sites became operational in Dushanzi and Lanzhou, in the Western part of the country, late last year, each of which can hold 18.9 million barrels. Six more are expected to come online by early next year, adding another 131 million barrels, observers said. "Right now, there's a need to buy more simply because many storage projects are completed," Mr. Wu said. China's oil demand is expected to increase 6% this year, to 9.9 million barrels a day, according to the IEA. China doesn't disclose its strategic stocks on a regular basis. Government officials have said that the lack of information is designed to deter speculators and to avoid sending prices higher. The increased purchases of oil could suggest that China believes prices could be headed higher. "Prices may seem high, but they can go even higher later," Mr. Zhang, the former director of the National Energy Administration, was quoted as saying in the March interview. Apart from the strategic reserves, China also keeps commercial stocks of about 200 million barrels, held by national oil companies in the form of both crude and oil products, analysts said. Some of China's recent imports also might reflect a rush to replenish commercial stocks after big drawdowns last year. Analysts from investment bank China International Capital Corp. estimated that 10.6 million barrels of oil had flowed into storage, both strategic and commercial, in February, but "a very large portion" probably went into the strategic reserves. China already has laid out its plan for a third phase of its strategic-reserves program. That eventually would expand capacity to more than 500 million barrels by 2020, according to China Oil, Gas & Petrochemicals, a newsletter published by state-controlled Xinhua news agency.

Samsung Electronics Co, Asia's largest consumer electronics maker, announced on Tuesday it will open a memory chip factory valued at $7 billion in Xi'an, Shaanxi province, its largest ever overseas investment. The move signals Samsung's expansion in the Chinese market, and is the largest foreign investment by value in western China. The Samsung NAND flash factory in the capital city of Shaanxi province is expected to become operational at the end of 2013, with a monthly output of 100,000 units of chips. NAND flash is a type of memory widely used in smartphones and tablet computers. The Xi'an plant will also be the company's second-largest memory chip production base worldwide. China is now Samsung's largest overseas market. So far, the South Korean electronics maker has 23 companies and 155 sites in China. Nationwide, Samsung has three semiconductor bases. "The new factory shows our commitment to the Chinese market, and we will continue to step up our efforts here," said Kim Young-ha, president of Samsung in China. China is the largest market for NAND flash memory. Statistics from the market technology research provider Gartner showed China's NAND flash consumption accounted for half of the global market, reaching $29 billion. And by 2015, the nation's consumption is expected to rise to 55 percent of the global total. China is now South Korea's largest trade partner and a major destination for South Korean companies. Samsung's investment comes as a slew of foreign companies are relocating their factories to the western region from the coastal areas in East China due to rising labor costs. While exports slide, "China aims to expand domestic consumption in the next five years, and Samsung's move signals its confidence in China's policy", said Wang Chao, deputy minister of commerce. And it is also "in line with the nation's strategy to develop the western region". Last year, foreign direct investment in western China grew 28.24 percent year-on-year to $11.57 billion, compared with an increase of 10 percent nationally over the same period, according to the Ministry of Commerce. Ford Motor Co said earlier this month that it will increase the annual capacity at its factory in the southwestern city of Chongqing by 350,000 units to 950,000 vehicles by 2014, together with joint venture partner Chang'an Automobile Group Co. Late last year, the central government launched a new version of industrial guidelines on FDI in China, in which the authorities encourage foreign companies to invest in western and central regions. The guidelines also called for increased investment in high-tech, strategic emerging industries, research and development, and services. Samsung's move is expected to spark a new wave of investment by foreign companies in China's western region. "There will be a positive ripple effect from the Samsung case. We are confident foreign investment will grow in western regions," said Zhao Hongzhuan, member of the standing committee of the Xi'an Municipal Committee of the Communist Party of China.

The mainland's two largest ports - Shanghai and Shenzhen - saw container throughput volumes rise 3.5 per cent last month, about half the combined increase in the value of the country's foreign trade. But there was double-digit growth in the volume of bulk goods such as coal and soyabeans. Shanghai International Port, which controls the world's largest container port, said box volumes rose to 2.73 million teu last month, up from 2.64 million teu a year earlier. Bulk cargo volumes climbed 11.2 per cent to 44.79 million tonnes, compared with 40.28 million tonnes in March last year. The Shenzhen Ports Association said container throughput increased to 1.77 million teu at terminals including Yantian, Shekou and Chiwan, from 1.71 million teu in March last year. The volume of bulk cargo increased 11.9 per cent to 19.12 million tonnes from 17.09 million tonnes a year earlier. The increase in Shanghai's container volumes followed a 3.6 per cent rise in the first two months of this year. Port officials have forecast 4 per cent growth in box throughput to 33 million teu this year as global economic woes take their toll on trade. By comparison, Shenzhen saw container volumes drop 1.4 per cent to 3.33 million teu for January and February. Container volumes at Hong Kong slipped 0.3 per cent to 3.62 million teu in the first two months of this year, according to estimates from the Port Development Council. Hong Kong's figures for last month will be released on April 18. Commenting on the figures, Sunny Ho Lap-kee, an executive director of the Hong Kong Shippers' Council, said: "The market is weak. We are not seeing a strong recovery. There is a weak and slow recovery in the United States. There are weaker prospects for Asia … and no improvement in the European market." "Our analysis suggests that China's imports are increasingly linked to domestic demand," the Australian and New Zealand Bank said yesterday. If the shift in China's trade structure continued, "import growth this year will likely reach 15 to 18 per cent this year".

China unexpectedly returned to a trade surplus last month as exports grew more quickly than expected and import growth eased from a 13-month high. After a deficit of US$31.48 billion in February, trade figures for last month showed a surplus of US$5.35 billion. For the first three months of this year, the total trade surplus stood at US$670 million, the General Administration of Customs said on its website yesterday. Some analysts said the March data showed the global economy might have passed its low point in the current cycle and was lifting overseas orders, just in time to compensate for a slowdown in domestic demand. Exports rose 8.9 per cent from a year earlier last month, compared with 6.9 per cent in January to February. Inbound shipments increased 5.3 per cent, down from 7.9 per cent in the first two months. In the first quarter, China's imports and exports expanded 7.3 per cent from a year ago, the slowest pace since the fourth quarter of 2009. Qu Hongbin, chief economist for China at HSBC, said exports had been growing slightly more quickly than expected, and imports were below expectations. Yu Song, an economist with Goldman Sachs, said although the level of year-on-year export growth was only up slightly compared with the January to February level, the implied sequential growth was strong, reflecting rising global demand. Liao Qun, chief economist with the China Banking Group for Citic Bank International, also said the latest trade numbers suggested the external environment was improving, but the rebound would be constrained by uncertainties. "We expect export growth to be around 10 per cent for the whole of 2012." The government's target for the year is 10 per cent growth. Yesterday's data, along with a rebound in March inflation reported on Monday, may push officials to exercise caution in loosening monetary policy. The trade figures are among a string of indicators the market is watching for clues about the health of China's economy. The National Bureau of Statistics is set to release gross domestic product data on Friday, and many institutions have said they expected a sixth consecutive quarter of slowing growth. Zhang Xiaoqiang, the deputy director of the National Development and Reform Commission, this month said first-quarter growth could be around 8.4 per cent, after 8.9 per cent in the preceding quarter and a 9.1 per cent expansion in the quarter before that. "The export figure would reduce the concerns of senior policymakers about growth," Song said, adding that it was still a worry. "Therefore, we continue to expect policymakers to lean towards the loose side when it comes to actual policy implementation in the coming months. The underlying message is that domestic demand is still slowing." Qu said he expected the central bank to cut the reserve-requirement ratio in "coming weeks". Mainland shares ended higher yesterday as the weak March import-growth data raised fears over the country's economic outlook and boosted investors' expectations of further easing measures. The Shanghai Composite Index ended up 0.9 per cent, or 20.08 points, at 2305.86. The Shenzhen Composite Index gained 0.9 per cent, or 8.51 points, to 924.28. In his trip to southern manufacturing regions last week, Premier Wen Jiabao pledged to initiate measures including export-tax rebates to aid exporters hit by rising costs and weak demand.

Zhu Zhenlin spent 15,000 yuan ($2,378) and developed his own solar-powered car, which can run for 70 kilometers. The 19-year-old is a student at Xiangshan Technical School in East China's Ningbo city. The automatic transmission solar car is 3.2 meters long, 1.4 meters wide and 1.4 meters high, well equipped with accelerator, brake, steering wheel, steering lights and rearview mirrors. The car is covered by 22 solar panels on the roof, hood and trunk to collect the solar power, which is stored in six 12-volt storage batteries in the trunk. 

Hong Kong*:  Apr 11 2012 Share

Ken Yeung Kwok-mung wants Beijing Ule E-Commerce to be the mainland's main infrastructure network for online retailers. China Post and Tom Group (SEHK: 2383) , the media conglomerate controlled by Li Ka-shing, aim to soon turn their joint venture into the mainland's pre-eminent e-commerce infrastructure services provider for online retailers. "We are offering a unique value proposition to a lot of merchants," Tom chief executive Ken Yeung Kwok-mung said. "We're providing the entire infrastructure - e-commerce system, online and off-line store integration, distribution and logistics, as well as marketing and promotion - so that more merchants can participate in the mainland's growing online retail market." Beijing Ule E-Commerce, the venture that Tom and China Post set up in 2010, is working with two undisclosed major brands in pilot tests of what Yeung described as the firm's all-encompassing "e-commerce infrastructure-as-a-service" offering. "With the resources of China Post, Ule is capable of becoming the ultimate service provider for all e-commerce players on the mainland," Yeung said. The mainland postal service has a network of 46,000 post office s, 150,000 postal workers, 36,000 Postal Savings Bank branches, 56,000 delivery vehicles and 17 aircraft. Tom is providing the information-technology system that runs Ule's e-commerce, which online merchants can plug into like a utility. "We have a cloud-computing platform that a merchant can connect to over the internet and instantly set up an online retail operation," Yeung said. "It is like you're hooked up with a pipe that delivers everything you need to serve customers online." He added that Ule will also work with merchants who want a "customised solution" to differentiate their operation from other vendors. By comparison, other prominent e-commerce players on the mainland are scrambling to develop their own logistics infrastructure. E-commerce giant Alibaba unveiled plans last year to invest as much as 30 billion yuan (HK$ 36.76 billion) in building a network of warehouses across the mainland to expedite the delivery of goods by the online merchants it serves. The Hangzhou-based firm, which controls Hong Kong-listed Alibaba.com (SEHK: 1688, announcements, news) and the three Taobao online shopping platforms, has started developing infrastructure close to large population centres in the Beijing/Tianjin area, the Yangtze River Delta and the Pearl River Delta regions. The initial facilities to be built over the next five to seven years will have a total storage space of three million square metres, or the equivalent of 356 soccer pitches. Alibaba chairman Jack Ma Yun said last year that everyone involved in the mainland's e-commerce sector "needs to work together to accomplish" the goal of faster delivery of goods. The firm estimated that a logistics network capable of handling the storage, transport and delivery requirements of the mainland's online merchants would need a capital outlay of more than 100 billion yuan. Both Taobao's online retail operation and Alibaba.com's business-to-business e-commerce service currently rely on multiple logistics service providers to serve customers on the mainland and in other markets. Yeung said the breadth and depth of Ule's resources allows the venture to not only help merchants reach existing online shoppers on the mainland, but tap into the majority of domestic consumers who are yet to buy goods online. Online analysis firm iResearch estimated that online shopping revenue on the mainland reached 773.56 billion yuan last year, up 67.8 per cent from 2010. It said there were 187 million online shoppers on the mainland last year, compared with the market's more than 500 million internet users.

Chief Executive Donald Tsang Yam-kuen last night spoke for the first time about the high-profile ICAC arrest of his former right-hand man Rafael Hui Si-yan along with two property tycoons, saying his administration would spare no effort in fighting graft. Tsang (pictured), who himself is involved in an ICAC conflict-of-interest investigation, also vowed that the Independent Commission Against Corruption would conduct its work without fear or favor. "The government has never spared any effort in combating corruption. And we will carry on doing so," he said in his first comments on the March 29 arrests. "The ICAC will investigate any case with impartiality and fairness, however high the social status of a person or however senior the ranking of a government official." Tsang spoke shortly before departing for an 11-day visit to New Zealand, Chile and Brazil during which he will seek to advance Hong Kong's economic and trade ties. "I hope the public would not doubt the government's determination in combating corruption," he said, but declined to comment on the progress of the investigation. Hui was the No2 man in the Tsang administration between mid-2005 and mid-2007. "In the past 30-odd years, a clean government and a clean society have become deep-rooted values of our society," Tsang said. "[That was why] Hong Kong's economy could take off so quickly." On a call by Wang Guangya , director of the Hong Kong and Macau Affairs Office, for residents to get behind chief executive-elect Leung Chun-ying, Tsang said: "After an election, like all governments, Hong Kong would like to have stable economic development and a stable and harmonious political environment. I believe Mr Leung will work hard on this." Tsang's term ends on June 30.

A day at government headquarters in Tamar starts with Hong Kong's Chief Executive and his cabinet engaged in the "morning prayer" - a quick discussion of the major points of the day's agenda. It's a long tradition, inherited from British rule. Not far away, in the old government house where the Office of the Chief Executive-elect is located, the day may start with the city's next leader, Leung Chun-ying, thinking of who will be at his "morning prayer" session when he moves into Tamar on July 1. The guessing game started as soon as he was elected. Leung has been tight-lipped, saying he would not bring up the issue on his trip to Beijing, and adding only that he would invite those who "share the same vision with me". At this stage, his top priority is his three top aides, the chief secretary, the financial secretary and the secretary of justice. The chief secretary is the most senior official. According to the official description of the duties of the chief secretary, he or she "plays a key role in policy formulation and implementation … covers specific priority areas for the CE's policy agenda, and is responsible for forging a closer and more effective working relationship with the Legislative Council." One job for the future chief secretary (CS) is legislation for the introduction in 2017 of universal suffrage. But the job can include almost anything. When Donald Tsang Yam-kuen was the CS under Tung Chee-hwa, he headed Team Clean after the Sars outbreak in 2003. But the CS is still the city's number two job. Unfortunately, the current CS, Stephen Lam Sui-lung, though smart and loyal, has failed to boost his popularity, because of the difficult jobs assigned to him, such as constitutional reform. Many believe that Leung is unlikely to keep him, instead inviting Carrie Lam Cheng Yuet-ngor, the current Secretary of Development, who is highly regarded by the public. Another possible candidate is lawmaker Regina Ip Lau Suk-yee, former Secretary of Security, who is well-known for her tough style in promoting the national security law back in 2003. Leung's campaign director, Barry Cheung Chun-yuen, hinted over the weekend: "I would be disappointed if Mrs Lam would not stay behind [with Leung]". Lam may stay, but the question is, will she be the future CS or will she be given an equally, or even more important, position - that of financial secretary? The financial secretary (FS) is a more "powerful" post, in that the CE and the FS need to be partners in policy. Tsang and his FS, John Tsang Chun-wah, have been dubbed "true brothers". The FS's role is more specific in its official description, which is "to assist the CE in overseeing policy formulation and implementation in financial, monetary, economic, trade, and employment matters … Exercises control over the Exchange Fund … is also in charge of the government budget." No wonder in Hong Kong people address the FS as "Grandpa of Fortune". Hongkongers are practical enough to know that whoever has the money has the say. A retired senior official told the South China Morning Post: "To maintain efficient governance, the CE and the FS should be truly of one mind and share the same vision," suggesting that Lam, who has the full trust of Leung, could be a better candidate as FS than CS. The third top aide Leung has to ponder is the Secretary of Justice. Called the attorney general during colonial times, the Secretary of Justice (SJ) is the principal legal adviser to the CE and all government bodies. The first post-1997 SJ was Elsie Leung Oi-sie, a Beijing loyalist and a well-respected Basic Law expert. The incumbent SJ, Wong Yan Lung, has little political experience but is well-regarded. However, despite the wishes of many, Wong is determined to leave after this term. Leung's pick will be a real test for him and Beijing. Possible names include a Hong Kong deputy to the National People's Congress, Martin Liao Cheung-kong, a well-known barrister. The 47-year-old Jat Sew-tong is another tip. Jat, a prominent barrister, heads a number of public organisations, such as the Independent Police Complains Council. Alan Hoo, chairman of the Basic Law Institute, and active in attempts to stop the influx of mainland pregnant women, is seen as a "dark horse". The Chinese saying "See the light and die", meaning something revealed prematurely will fail, may explain the silence of Leung so far. Meanwhile, after the scandal-plagued election campaign, the political wags say that whoever wants to join the government must be "whiter than white", not only themselves, but for three generations! This sounds daunting, but it is good test to see how politically savvy Hong Kong's future leadership will be. It is only natural that Leung's line-up will not be revealed until very close to his starting day at Tamar. After all, Beijing, who is to appoint all officials, needs time to discuss the candidates with Leung. Some give and take is expected on both sides.

High volatility in global equity markets dried up demand for local listings, which raised 40percent less capital in the first quarter from the same period a year back. But leading global markets have fared worse in new listings. Eighteen small- to mid-sized companies went public in the three months to March, raising HK$9.74 billion. In contrast, a dozen new listings raised HK$16.4 billion in the same period of 2011, including mega-listings China Hongqiao Group (1378) and Far East Horizon (3360), which raised more than HK$5 billion each. Initial public offerings in the United States and China plunged 55percent and 67percent respectively in the three months to March. According to Ernst & Young, 157 new listings raised HK$111 billion globally - down by 69percent. Hong Kong, the top IPO market globally from 2009 to 2011, had a poor start this year. Three new listings - Sunshine Oilsands (2012), Xiwang Special Steel (1266) and Kinetic Mines and Energy (1277) - accounted for more than 70percent of the total amount raised in Hong Kong. By Thursday, eight of 17 floats - excluding Swire Properties (1972), which listed by introduction - traded below their offer prices. Meanwhile, Jiangnan Group opens its retail book a week today. The Jiangsu-based firm makes wires and cables and its customers include China Petroleum and Chemical Corporation (0386). Jiangnan also supplies power cables to a state-owned company in South Africa, which made up 6.1percent of total revenue last year. By pricing each share between HK$1.42 and HK$2.05, the company aims to raise up to HK$788.8 million. About half the proceeds will be for expanding high-margin cable products and upgrading existing facilities. And three new production lines go on stream in the first half of 2013. Another 20percent of funds will be used to build a factory in South Africa, with construction starting in the second half. Subscription for one board lot of 2,000 shares costs HK$4,141.33, including fees. Trading is due to start on April 20 under the ticker 1366.

Thousands of SmarTone Telecommunications customers were left dumbfounded yesterday morning when one of its network terminals was hit by a technical glitch. The telecom operator is investigating the cause of the breakdown, which occurred in its Central and Western district terminal. Customers in Central, Kowloon and the New Territories reported being unable to access the internet via their smartphones for several hours. Those living in Central and the southern parts of Hong Kong Island also reported that their mobile phones had no connection signal for a couple of hours before noon. Some subscribers in Sha Tin said they were unable to receive phone calls from family members and friends from around 10am onwards although they were able to make calls. Users slammed the telecom operator for failing to immediately inform them of the service disruption. They said that the breakdown caused them a lot of inconvenience. SmarTone said its back-up power supply system was swiftly activated. However, the backup terminal later had a malfunction, affecting users of its network in some districts across the territory, including a few MTR stations in Kowloon. SmarTone said services resumed at around 1pm after its emergency crew fixed the problem. During the breakdown, some users, fearful that the breakdown may be linked to their subscription agreements, tried in vain to reach the operator's staff via its 24-hour hotline to check. One subscriber, surnamed Ma, said that he was forced to make a trip to the operator's branch in Tsuen Wan after his smartphone was unable to receive any incoming calls around noon. "During the breakdown [in service], I was unable to receive any phone calls from my family. "This caused me great inconvenience," Ma said. Another, surnamed Wong, said her mobile phone could not receive any calls while she was in Central around 11am. The Office of the Telecommunications Authority has expressed concern about the service disruption. The authority has ordered the telecom operator to submit an investigation report as soon as possible. SmarTone apologized to its customers for the inconvenience. It vowed a comprehensive investigation into the incident will be undertaken. 

The chief executive said his government is determined to crack down on corruption and an investigation into recent high-profile arrests will be "fair and independent." In his first comments on the arrests of former chief secretary Rafael Hui Si- yan and Sun Hung Kai Properties' joint chairmen Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen by the Independent Commission Against Corruption, Donald Tsang Yam-kuen, pictured right, yesterday said: "Whether those involved in alleged corruption cases enjoy a high social status or hold a senior position in government, the ICAC will conduct an investigation that is impartial, fair and independent." Tsang, speaking ahead of an official visit to New Zealand, Chile and Brazil, said: "Over the past 30 years, a clean government and a clean society have become one of our core values, which is deep-rooted in Hong Kong. The booming of Hong Kong's economy is also based on the pillar of cleanliness." Hui was released on bail of HK$500,000 while the Kwok brothers each paid HK$2 million in bail. It is the ICAC's biggest probe to date and Hui is the highest-ranking ex-government official to be arrested in its history. Hui lives in a flat at SHKP- developed The Leighton Hill. A source told The Standard earlier Hui had occupied the flat for free for several months in 2003 and then paid a below- market rate when that became known. He was an SHKP consultant before rejoining the government in 2005. Tsang, meanwhile, commenting on Hong Kong and Macao Affairs Office director Wang Guangya's remarks on reconciliation, said all parties and the government share the same aspirations that the political environment can remain harmonious. Wang also said Hong Kong may have to legislate to control the influx of pregnant mainlanders. He also said the SAR is obliged to legislate on Article 23 anti-subversion laws though there is no time constraint.

Beijing's top man on Hong Kong affairs, Wang Guangya, called on Monday for reconciliation and unity after the chief executive poll, the first time a mainland official has commented on the scandal-ridden election since it ended on March 25. Wang, director of the Hong Kong and Macau Affairs Office, made the comments on Monday morning in Beijing as he met a 160-member delegation from the Hong Kong Federation of Trade Unions, hours before chief executive elect Leung Chun-ying’s duty visit to the capital. He acknowledged that there had been “complications and setbacks” during the election but in the end Leung Chun-ying was successfully elected after the first round of voting, which he said showed Hong Kong people’s “recognition, trust and hope” for Leung. “As there were multiple candidates, there were different groups and individuals voicing their support ... This is normal in an election,” Wang said. “Now that the election is over, everyone should look forward, and put aside their differences.”“[Everyone] should help foster reconciliation and unity in Hong Kong, and help the new chief executive and the next government to better govern Hong Kong.” He said he particularly agreed with Leung’s response after his election, that there was not “Tang’s camp” or “Leung’s camp” any more, but only “a Hong Kong camp”. “In Mandarin the word for ‘camp’ (ying) and ‘win’ are pronounced the same,” Wang said. “I believe that with every one in Hong Kong showing their Hong Kong spirit, Hong Kong will definitely win.” Leung said before departing for Beijing that he would continue to strive for reconciliation, and would recruit to his administration “any talent willing to work for Hong Kong.” Wang and the FTU also talked about the need for the training of more political talents in Hong Kong, the security-law provision in Article 23 of the Basic Law and the issue of mainland mothers giving birth in Hong Kong issue. FTU president Cheng Yiu-tong said that, on the issue of the controversial national security legislation, Wang made it clear that the law must be enacted, but it was up to this and the next government of Hong Kong to build a consensus as to how and when this should be done and there was no timetable. On mainland mothers, Cheng said Wang stressed that administrative measures were not a long-term solution and the issue had to be resolved through the law. Cheng said the union group had scheduled this trip to Beijing a long time ago and it was a coincidence they were the first Hong Kong group to be received by Wang yesterday. The FTU supported Leung during the election.

The government's subvention for the English Schools Foundation is expected to stay in place for at least another year, despite the lack of progress in a review of funding arrangements for the body. ESF chief executive Heather Du Quesnay says she is optimistic the annual contribution of HK$283.4 million will remain, despite suggestions last year it would be phased out. The foundation, which runs 21 schools, is preparing to work out next year's fees based on the assumption government support will continue. The subvention has long been contentious. While the ESF wants government support to be increased after being frozen for a decade, the government hinted when it launched the review of funding arrangements that phasing the subvention out was one option being considered. "We will have to decide on the tuition by the end of May. I don't think we are going to hear from the government before we set the fees," Du Quesnay said. "That means we will just have to look at the environment, the teachers' pay, the support staff pay and make a decision. I don't think there is any way that there could be a change in the subvention for the next school year; it's too late." She expects any change in the subvention to take effect from the 2013-2014 school year at the earliest. Another reason for Du Quesnay's optimism is the support shown by lawmakers on the Legislative Council's education panel, as well as that of chief executive-elect Leung Chun-ying. "We know Leung said he would like to see the subvention stay," she said. Tuition fees at ESF schools rose by 2.8 per cent for this academic year. Du Quesnay pledged to fight against any reduction in the subvention, saying: "Education officials keep telling us that there is no chance we will be getting any more subvention. But we will keep on fighting, because we know at the end of the day, it's our parents who suffer if the subvention is reduced, because it affects their fees." The Education Bureau is due to report its decision to the Legco panel later in the year, though no firm date has been set. Secretary for Education Michael Suen Ming-yeung has said the funding issue was "a problem arising from a historical legacy" from the colonial era. The colonial government created the ESF in 1967 to provide what the foundation calls "a seamless, affordable English language education". A bureau spokesman said the review was based on the position of the ESF in the education system as a whole and would take into account the arrangements for schools that operate in a similar fashion in terms of governance and oversight mechanisms, admission policy, curriculum and student mix. "We would also factor into our consideration the demand for English-medium education by the expatriate community and some local families, as well as any possible niche and uniqueness of the ESF vis-à-vis other private international schools in meeting the learning needs of students," the spokesman added. The ESF is also lobbying for funding to meet the growing demand for places at its Jockey Club Sarah Roe School, which caters for students with special educational needs. The school has a waiting list of 55. "We would like to have an extra class as soon as possible," Du Quesnay said. "There are students who really need the most care and support, and it's really important to give them a chance."

 China*:  Apr 11 2012 Share

Jiangnan, the third-largest supplier of electric wires and cables in the mainland by sales, plans to raise up to HK$789 million from an initial public offering in Hong Kong despite the recent dull market conditions. Raymond Yeung, ANZ's Greater China region senior economist, said many enterprises were reluctant to go public because "the external economy has been unstable and unclear in the first quarter," making market sentiment difficult for raising a satisfying amount of funds. "In the second quarter, the market will not pick up much," Yeung said. He expected more IPOs to take place in the latter half of this year "when the macro economic situation improves and the stock market rebounds". The Jiangsu-based company manufactures power cables, wires and cables for electrical equipment, as well as bare wires. The sales of power cable made up two thirds of its turnover in 2011. Raw metals, namely copper and aluminium, makes up 80 per cent of the firm's cost. Average copper prices have increased to 68,400 yuan a tonne in 2011 from 42,000 yuan a tonne in 2009. The company's chairman, Rui Fubin, said the price fluctuations of raw materials will not have an impact on the gross profit rate, as the pricing of products will be linked to their cost. The company will offer 384.8 million shares beginning today at a price between HK$1.42 and HK$2.05. The shares will start trading on April 20. Jiangsu said HK$180 million, or about one third of the proceeds from the offering, will be used to expand production facilities for high and ultra-high voltage cables with rated voltages of 220 to 500kV. The company's chief financial officer, Chan Man Kiu, said: "The gross profit rate of this high-end product is higher than traditional products." Jiangsu will use 25 per cent of the proceeds to set up production facilities for products for which it forecasts strong demand, including aluminium alloy. It will use 20 per cent of the funds to build manufacturing capacity in South Africa. Though ranked the third largest supplier in the country, Jiangnan has only 1.4 per cent of a highly fragmented market. It said 16 per cent of the proceeds will be used to upgrade existing production facilities and the rest kept for acquisitions. China is the biggest market for Jiangnan, but sales contributions from overseas have grown to 8.7 per cent last year from 2.3 per cent in 2009. The company's revenue in 2011 was 4.93 billion yuan, up from 3.67 billion yuan a year earlier.

Turkish Prime Minister Recep Tayyip Erdogan inspects an honour guard in Beijing. Wen, Erdogan focus on trade, N-plants First visit to China in 27 years by a Turkish prime minister a sign of Ankara's look-east policy, but nations far apart on big issues. China and Turkey pledged yesterday to deepen co-operation in trade and nuclear energy development, as Turkish Prime Minister Recep Tayyip Erdogan arrived in Beijing for talks to boost business and political ties. Erdogan's visit - the first to China in 27 years by a Turkish leader, following a February trip to Turkey by Vice-President Xi Jinping - came despite the two countries' differences over the deadly crackdown in Syria and over Beijing's handling of Uygurs in the restive Xinjiang autonomous region. Sino-Turkish ties were plagued in 2009 after violence erupted in Xinjiang, as the Uygurs there share linguistic and religious links with Turks. Erdogan described Beijing's handling of the riots as "genocide". Erdogan earlier spent a day in Urumqi , Xinjiang's capital, meeting regional party chief Zhang Chunxian. Premier Wen Jiabao , who hosted a welcoming ceremony for Erdogan at the Great Hall of the People yesterday, said both sides showed "mutual understanding and support in issues related to sovereignty and territorial integrity". "It is our common wish to continue deepening the friendship and co-operation between China and Turkey," Wen said in his talks with Erdogan. Wen also noted that Erdogan was the first Turkish prime minister to visit Xinjiang. Wen added that the two sides should deepen co-operation in nuclear energy, aviation and hi-tech development, and cultural exchanges. Turkish Deputy Prime Minister Ali Babacan told the South China Morning Post (SEHK: 0583, announcements, news) earlier that Turkey wanted to complete three nuclear plants before 2023, and that Ankara was in talks with China, South Korea and Japan to build two of the plants. Babacan said Turkey was ready to strengthen its strategic relationship with Beijing and was not worried about upsetting its traditional allies - the US and Europe. Xiao Xian, vice-president of the Chinese Association for Middle East Studies, said Turkey has long focused its diplomatic efforts on strengthening ties with countries in the Middle East and South Asia, as well as Russia and the US, but Ankara has looked to East Asia in recent years following the economic boom in the region. "China was not an important player in Turkey's diplomacy," he said. "But Ankara seeks deepening co-operation with Beijing as it acknowledges the economic development of China. Li Guofu, director of the Centre for Middle East Studies at the China Institute of International Studies, said Sino-Turkish ties have been affected by political and economic instability in Turkey, as well as Xinjiang. "But both China and Turkey have improved their economies in recent years, and the two countries share a lot of common interests," he said. The countries attempted to downplay problems in Xinjiang during Xi's February trip, with Xi saying he appreciated Ankara's stance that Xinjiang was an inalienable part of China, as well as Ankara's measures to oppose anyone in Turkey undermining China's sovereignty. Analysts say Xinjiang is unlikely to have a significant impact on ties. "Turkey has a clear stance on Xinjiang, and this helps in building a good foundation for bilateral ties," Li said.

In a fresh sign of official displeasure with the nation's state-run banking system, China's bank regulator has warned lenders they will be "severely punished" for charging excessive fees. In a notice on its website dated Friday, the China Banking Regulatory Commission said it began an investigation into bank fees on April 1, adding that banks that are found to be charging high fees for routine services will be punished. It didn't elaborate on how it defines high fees or what the punishment would be. The probe is Beijing's latest attempt to quell growing discontent over China's state-run banks, which fuel the nation's state-managed economy with cheap funds. Chinese Premier Wen Jiabao last week said that China's state-controlled banks are a "monopoly" that must be broken up, in an unusually blunt appeal for a shake-up of the lending industry in the world's second-largest economy. Public ire already has risen over the caps Beijing places on the rates banks pay depositors, providing the lenders with a source of cheap funds but hurting the value of customers' deposits as inflation rises. Banks also have come under criticism for not offering sufficient funding for small and medium-size businesses as China's economic growth slows. In recent months, customers have increasingly complained about banking fees, including for matters as minor as changing an Internet password. The probe follows draft rules drawn up by three regulatory bodies in February aimed at stopping commercial banks from charging excessive fees but which haven't yet taken effect. China's biggest banks have said they will comply with any new measures. "We'll resolutely abide by the orders of the regulator," said an official in the media department at Industrial & Commercial Bank of China Ltd. Zhou Wei, spokesman for Bank of Ningbo, a smaller bank in the eastern province of Zhejiang, said the move disclosed Friday will benefit customers. "It's a welcome move. It will stabilize fees at different tiers of banks and will ultimately lead to more equally spread service charges in the banking industry," he said. Fees have come under particular scrutiny as banks report another year of strong profits. ICBC, China's biggest bank in terms of assets, said last month that net fee and commission income, such as from credit cards and sales of wealth-management products, climbed 39% to 101.55 billion yuan ($16.1 billion) in 2011. According to rules drafted by the central bank, the state planning agency and the CBRC in February, bank subsidiaries wouldn't be allowed to set their own charges and all service fees must be decided at the head office. Banks are also asked to give three months' notice for any increase in service fees, according to a statement on the website of the People's Bank of China, China's central bank.

A PepsiCo Inc bottling plant in Kunming, Yunnan province. The US beverage company transferred its stake in its Chinese bottling operations to Tingyi Holding Corp in exchange for a 5-percent indirect equity interest in Tingyi's drink subsidiary. PepsiCo Inc is putting more effort into marketing, research and development and food development in China after it swapped its holdings in its bottling operations in China for a stake in a leading Chinese drink maker, Indra Nooyi, company CEO, said. At the end of March, PepsiCo and Tingyi Holding Corp announced the formation of a strategic alliance in China. As a result, Tingyi's beverage subsidiary has become PepsiCo's franchise bottler in China. "The strength of both companies will help make the products available for Chinese consumers in an affordable way," Nooyi told China Daily at the Boao Forum for Asia Annual Conference 2012. In the agreement, PepsiCo is to retain control of the branding and marketing in the drink business while Tingyi is to oversee manufacturing, sales and distribution in China, Nooyi said. The US beverage and food company transferred its stake in its Chinese bottling operations to Tingyi. In exchange, PepsiCo received a 5-percent indirect equity interest in Tingyi's drink subsidiary. PepsiCo also has an option to raise the proportion of its holding to 20 percent by 2015. Nooyi said her team has spent a lot of time becoming familiar with Wei Ing-chou, Tingyi chairman. "In this case, the cultural fit is very good," Nooyi said. Tim Minges, chairman of PepsiCo Investment (China) Ltd, said the deal merely changed the ownership of the equity interest in the local bottling operations and that nothing else will be changed. "We guarantee the jobs and give all employees a two-years' guarantee," he said. Analysts said Tingyi, also known as "Master Kong" in China, could help PepsiCo better position itself in the fast-growing Chinese market, and again an edge over its long-term competitor Coca-Cola Co. Coca-Cola's sales were up by 13 percent in China last year. It opened its 42nd bottling plant in China on Thursday. PepsiCo has 23 bottling plants in China with another under construction. Minges said the company's soft drink business also enjoyed "solid double-digit" growth in 2011. PepsiCo announced plans in 2010 to invest $2.5 billion in its China business over the next few years. The partnership with Tingyi is part of that, Minges said. "The bigger story here is that while we do beverages with Tingyi, we can continue to concentrate on the food industry," Nooyi said. PepsiCo also plans to open its largest research and development center in Asia and a pilot plant in Shanghai later this year, executives said. It will employ over 100 scientists and will work toward developing new food and beverage products for both China and the rest of Asia, said Minges. Innovation will help it bring such goods to market faster, he said. "Today, if we have a sample, we have to send it to Chicago," he said. "And they send the sample and we test it. In the future, we can make and test the food downstairs." Both China and India rank among the top five countries for PepsiCo globally in their potential for growth, Nooyi said. The Chinese market for food and beverages will continue to grow by double-digit rates every year for the next five to 10 years, the company predicted. The biggest difficulty for companies such as PepsiCo will be to keep up with the pace of growth in China, said Nooyi, adding a priority for the company will be to build a supply chain in China.

China’s Commerce Ministry said Australia’s ban on China technology giant Huawei from bidding to help build a nationwide high-speed internet network was “unjust”. Australian media have reported that the decision was prompted by Australian intelligence officials who cited hacking attacks traced to China, but the government has not made public its reasons. China’s Commerce Ministry spokesman Shen Danyang said in a statement late on Friday that Australia should not exclude Huawei Technologies from participating in a fair competition in the name of security. Huawei has provided broadband network equipment and services for many countries and has operated in Australia for nearly a decade, Shen said. Nearly 90 per cent of Huawei Australia’s employees are Australian, the statement said. The ban highlights concern about a spate of hacking attempts aimed at Western companies and the role of mainland equipment providers, which are expanding abroad. Australian Trade Minister Craig Emerson said earlier in the week that the government had acted on advice in the national interest late last year when it told Huawei it was barred from bidding for work on the 36 billion Australian dollar (US$38 billion) fibre-optic network. China’s demand for iron ore and other minerals has driven an Australian economic boom, but Canberra is uneasy about Beijing’s rising military spending and growing assertiveness in Asia.

China on Monday urged Syria to honour its ceasefire commitment, after Damascus said it wanted guarantees from armed rebels before it pulled back its troops from protest hubs. The Syrian army was scheduled to withdraw from protest cities on Tuesday under a peace deal brokered by former UN chief Kofi Annan, with a complete end to fighting set for 48 hours later. But the Damascus regime has since said it would only carry out its side of the bargain if rebels first handed over written guarantees to stop fighting, a demand rejected by rebel army chief Colonel Riyadh al-Asaad. Chinese foreign ministry spokesman Liu Weimin called on both sides in the bloody, year-long conflict to honour their commitments, and said the international community should “be patient” and give Annan more time. “China urges the Syrian government and parties concerned in Syria to seize the important opportunities, to honour their commitment of ceasefire and withdrawal of troops,” said Liu at a regular briefing. “We hope that the parties concerned will co-operate with the mediation efforts of special envoy Annan. Of course, the issue of Syria is very complicated and it takes time to mediate the issue.” China gave its seal of approval to the Annan deal late last month after drawing international criticism for vetoing two UN Security Council resolutions on the crisis in Syria. Annan’s plan calls for a commitment to stop all armed violence, a daily two-hour humanitarian ceasefire and media access to all areas affected by the fighting in Syria, which has killed almost 10,000 people. It also calls for an inclusive Syrian-led political process, a right to demonstrate, and the release of people detained arbitrarily. The UN Security Council formally endorsed the deadline for a ceasefire on Thursday, but Damascus said a day later that the number of “terrorist acts” has risen since the deal was agreed with Annan, the UN and Arab League envoy. France denounced the fresh Syrian demands as “unacceptable” and on Sunday Annan urged the government in Damascus to respect its commitments on troop withdrawals, calling a recent escalation in violence “unacceptable.” “This is a time when we must all urgently work towards a full cessation of hostilities, providing the space for humanitarian access and creating the conditions for a political process,” Annan said in a statement.

An aerial view shows Pagasa (Hope) Island, which belongs to the disputed Spratly group of islands, in the South China Sea located off the coast of western Philippines in this July 20, 2011 file photo. A Chinese general warned the Philippines that it was facing its “last chance” to resolve simmering territorial disputes in the potentially resource-rich South China Sea, a rhetorical uptick in what has emerged as the region’s hottest potential military flashpoint. Luo Yuan, a Chinese major general known for his hawkish views, in a commentary published Monday in the popular Global Times newspaper, accused the Philippines of hijacking a recent ASEAN summit and said Manila’s continuing provocations were bound to fail. “The biggest miscalculation of the Philippines is that it has misestimated the strength and willpower of China to defend its territorial integrity,” Gen. Luo wrote (in Chinese). Gen. Luo’s comments, appearing in a tabloid published by the Communist Party mouthpiece People’s Daily, demonstrate a growing impatience within at least some parts of the People’s Liberation Army and the ruling Communist Party over disputes in the South China Sea, which are claimed in whole or part by China, the Philippines, Vietnam, Malaysia, Taiwan and Brunei. Nonetheless, Mr. Luo’s remarks don’t necessarily reflect wider government thinking. While Beijing hasn’t ceded its claims of complete sovereignty over the sea, it continues to seek diplomatic resolutions with other claimants. Mr. Luo’s hawkish stance is somewhat odd coming at a time when China already faces military and diplomatic pressure over escalating tensions in neighboring North Korea as well as in relation to Iran, a key Middle East ally. The Philippines and Vietnam have emerged as the most aggressive opponents of China’s claims over the South China Sea, and allege Chinese naval vessels have harassed their oil-exploration ships there. The sea is thought to hold large oil and natural gas reserves, though exploration has been hamstrung by ongoing territorial disputes. China National Offshore Oil Corp. last year said it was opening bidding to help develop 19 blocks in the South China Sea. Vietnam subsequently lodged a protest. At last week’s ASEAN summit, southeast Asian leaders struggled to find common ground on how to deal with disputes in the South China Sea. The Philippines urged leaders to draft an ASEAN “code of conduct” for resolving sea disputes. A unified “code of conduct” would help smaller southeast Asian states present a stronger front in negotiating with regional powerhouse China. Vietnam backed the Philippines’ proposal, but it remains unclear whether calls to draft a joint code were supported by Cambodia, an ally of China in the region. China has long said it opposes what it calls attempts to “internationalize” territorial disputes in the China Sea, and says it wants to resolve conflicts with claimants on a bilateral basis.

China's inflation rebounded slightly in March after logging an extremely low growth in February, backing lingering uncertainty regarding the country's ability to contain price rises. China's consumer price index (CPI), a main gauge of inflation, expanded 3.6 percent year-on-year in March, the National Bureau of Statistics (NBS) said Monday. The growth represents a climb from the 3.2-percent rate registered in February, the lowest pace in 20 months. Food prices, which account for nearly one-third of the weighting in the calculation of China's CPI, increased 7.5 percent last month from one year earlier. The rebound comes as the public fret over vegetable and fuel price hikes that have triggered a fresh wave of inflation concerns. Statistics from the Ministry of Commerce showed that the wholesale prices of 18 staple vegetables rose for four consecutive weeks from February, posting an increase of 9.7 percent by early March. But analysts attributed the surge to inclement weather and held that the trend is likely to be stemmed as the weather gradually warms up. Meanwhile, oil price hikes have had only a minor impact on CPI growth as oil only plays a small part in the calculation, said Tang Jianwei, senior analyst at the Bank of Communications. He said short-term factors will not alter the downward trend of China's inflation for the whole year. The Chinese government is aiming to keep CPI increases to around 4 percent. The country's CPI climbed 3.8 percent in the first quarter compared with the previous year.

Hong Kong*:  Apr 10 2012 Share

UBS gave up details on 4,450 clients to the United States. The world's tax havens are being forced to clean up their acts. As regulators clamp down on money flows around the globe, governments - even those that prided themselves on the strength of their secrecy laws, like Switzerland - are facing pressure to share banking information and change their policies. Now, private banks and wealth managers are scrambling to convert so-called black money - assets that have not been disclosed - into accounts that are above board. The shift may provide opportunities for the industry. As more funds become legitimate, analysts say financial institutions will be able to sell extra wealth management products and enter markets that had previously been off limits. "There's much less black money now than three years ago," said Jean Schaffner, head of the Luxembourg tax practice of Allen & Overy. "It's in the banks' interests for clients to come forward with their money." For decades, Western governments tolerated offshore tax havens, places where the wealthy could park millions away from the gaze of their domestic authorities. Switzerland, in particular, developed a reputation as a place where the wealthy could rely on secrecy laws. But the tide began to turn in 2008, particularly after the financial crisis prompted many governments to act in concert. US authorities began pursuing UBS, the largest Swiss bank, saying it had helped thousands to hide money from the Internal Revenue Service. UBS later settled with the Justice Department, turning over details of 4,450 client accounts and paying a fine of US$780 million in exchange for a deferred prosecution agreement. Other banks, including Credit Suisse and Julius Baer, have been ensnared by the broad investigation. Global regulators followed with their own crackdown. For years, the Organisation for Economic Co-operation and Development had tried to rein in offshore financial centres that did not meet certain requirements, such as failing to share tax information with other countries. In 2009, the OECD compiled a blacklist for the Group of 20, which comprises the world's largest economies, exerting pressure on nations to be more forthcoming. To get off the list, several countries and regions, including Andorra, Costa Rica, the British Virgin Islands, Liechtenstein and Monaco, have since agreed to adopt international standards. "People were defrauding countries because no one was sharing information with each other," said Pascal Saint-Amans, director of the centre for tax policy at the OECD in Paris. As Switzerland and other countries tightened their financial controls, many people initially flocked to other tax havens like Singapore and Hong Kong, which still offer some of the world's most secret accounts. But these places, too, are facing new pressures. Several European allies reached a deal with the US in February to help enforce the Foreign Account Tax Compliance Act, which requires that virtually every financial institution in the world report accounts held by Americans. Many wealthy clients, who previously had not worried about revealing all their international assets to home authorities, are taking advantage of tax amnesty programmes in countries like the US and Britain. The global push against tax havens has been a boon for government coffers. Spanish authorities discovered a Swiss bank account opened in the 1930s by the father of Emilio Botin, a billionaire Spanish banker and chairman of Banco Santander. In 2010, Botin and other family members paid €200 million (HK$2 billion) in taxes to avoid tax evasion charges. So far, countries have collected about US$18.7 billion in additional taxes from more than 100,000 wealthy individuals, says the OECD.

Cheung Kong (Holdings) residential project Festival City II will be followed by a profitable Festival City III this year. Property developer Cheung Kong (Holdings) (SEHK: 0001) might be a beneficiary of the corruption cloud hanging over senior executives of rival developer Sun Hung Kai Properties (SEHK: 0016). Property funds mandated to invest only in property stocks may be switching their Sun Hung Kai Properties holdings into Cheung Kong shares to avoid potential litigation in the wake of the arrest and questioning of the two executives by Hong Kong's anti-graft body, say analysts. Shares in Sun Hung Kai Properties plunged 13 per cent on March 30, one day after the arrests of its joint chairmen - Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen - were announced by the Independent Commission Against Corruption. The two were released on bail after being questioned, and have not yet been charged with any offence. However, not all fund movements could be ascribed to the corruption probe into Sun Hung Kai Properties, now under way. Analysts said Cheung Kong, which is expected to launch 5,125 units this year, also offered stronger fundamentals than other developers and was therefore more attractive to investors. Investment bank Morgan Stanley said in its latest research report that Cheung Kong had the most flats available in its sales pipeline. By comparison Sun Hung Kai Properties would launch 2,294 units this year with Sino Land selling 3,628 units and Henderson Land (SEHK: 0012) 2,231. "Litigation risks will force property funds to reduce or cut their holdings in Sun Hung Kai Properties and shift to other comparable property stocks," said Phillip Capital Management fund manager Li Kwok-suen. One alternative is New World Development, whose prospects were brightened when the company's chairman, Henry Cheng Kar-shun, threw his weight behind Leung Chun-ying in his campaign to become chief executive, said Li. "The company may have better prospects after changing sides to back Leung," he said. Another option was Cheung Kong, which was comparable in size to Sun Hung Kai Properties. JP Morgan, which downgraded Sun Hung Kai Properties following the arrests, said in an April 2 research report that other developers that were free of litigation risks, offered more attractive risk-reward returns. Jeff Yau, a property analyst at DBS Group Research, said daily operations at Sun Hung Kai Properties were unlikely to be affected, but the pace of new investments may slow. He agreed that property funds might be shifting from Sun Hung Kai Properties to Cheung Kong because of the ICAC probe. "We picked Cheung Kong because of its profit growth momentum," said Yau, who noted that the developer would book substantial profits this year from developments such as Festival City III. Morgan Stanley has a share price target of HK$128 for Cheung Kong, implying potential for a 25.6 per cent rise from last Thursday's closing of HK$101.9. The company pointed out that Cheung Kong had more than 5,000 units to sell in 2012, the highest among developers, and should therefore benefit most from positive momentum of the property market in the near term.

Lisa Cheng Lai-sho, Kwok Ka-ming (centre) and Cheung Man-cheung in training for Cheung Chau's annual bun scrambling event. Cheung Chau native and four-time champion Kwok Ka-ming is steeling himself to regain the "bun-scrambling king" title as one of the city's cultural highlights approaches. The Cheung Chau Bun Festival was last year listed by the Ministry of Culture as part of the nation's "intangible cultural heritage", and thousands flock to the island each year to see contestants scramble up an 18-metre tower to snatch buns. Traditionally bamboo towers were used, but a collapse in 1978 led to its abrupt end until 2005 when metal towers were introduced. Kwok, a 30-year-old firefighter, failed to make the contest last year after a slip in qualifying, and must reach the top of the tower in nine seconds when this year's qualifiers take place next week. With the annual festival on April 28, many of the 209 people vying to qualify for the final next Sunday had their first go on the towers yesterday. For Kwok, who has spent the past year building up his back muscles for the event, there is local pride at stake. "I'm a native who grew up in Cheung Chau, so the festival is especially meaningful to me," Kwok said, pointing out that none of last year's 12 finalists were from the island. While qualifying is all about speed, the final, in which points are awarded for picking buns at different heights, demands strategy. "I'll climb to the top and get the buns bearing nine points first, then go back down to the three-point ones after they're all taken," Kwok said. There are 54 female participants this year, of whom three will make the final. "It's great to see more girls participating in the event," last year's women's champion Lisa Cheng Lai-sho, 26, said. A rock climber since the age of 12, Cheng said only around 10 women took part when she first participated in 2007. The oldest climber, Lau Hin-yeung, 63, is taking part for the first time. "I just wanted to try something new," he said, but his first climb proved more difficult than he had imagined. "I was nervous. It's difficult to place my feet in the gaps." Meanwhile, fans of the buns will have no problem filling their appetite, after they ran short last year. The Food and Environmental Hygiene Department is issuing temporary licences to bakeries, allowing them to set up tables outside their shops where buns can be stamped with a message of peace. The festival's two official bakeries cut production last year after the department banned stamping buns outdoors. Kwok Yu-chuen, who runs the Grand Plaza Cake Shop, said his customers were limited to four buns each last year, but that there would be no limits this year. And it will be business as usual at Kwok Kam Kee Cake Shop, which stayed closed last year. As well as the bun scrambling, highlights of the festival will include a parade of floats, poking fun at celebrities and politicians. Some 70,000 people are expected to attend - 10,000 more than last year.

Chief executive-elect Leung Chun-ying gets into his limousine at the old government offices in Central yesterday - he heads to Beijing today. At least four lawmakers who supported Henry Tang Ying-yen in the chief executive election will not attend a so-called reconciliation dinner with chief executive-elect Leung Chun-ying this week. The dinner, co-ordinated by Tam Yiu-chung, chairman of the proBeijing Democratic Alliance for the Betterment and Progress of Hong Kong, will be held on Thursday and all pro-establishment legislators have been invited. Financial services sector lawmaker Chim Pui-chung, a Tang supporter, said he would not attend Thursday's dinner. "It's meaningless for me to attend the dinner as I disagree with some of them [lawmakers]," he said. "I am not desperate for a close relationship with CY [Leung], as I am not seeking any title or position [in the government]." Lam Tai-fai, a close friend of Tang, will be at another meeting. Philip Wong Yu-hong and Abraham Razack will not attend because they will be out of town, Tam says. Leung leaves for Beijing today and will return on Thursday morning. During his stay, Leung will be formally appointed chief executive by Premier Wen Jiabao. He is also expected to be received by President Hu Jintao and Vice-President Xi Jinping and meet other senior mainland officials to discuss closer co-operation between the mainland and Hong Kong. There was also speculation that Leung might discuss with state leaders the possible ministers in the new line-up of his government, but he has denied this. The Liberal Party's Tommy Cheung Yu-yan says he has not decided whether to attend Thursday's dinner yet and his party's chairwoman Miriam Lau Kin-yee will attend for only an hour because of another appointment. Cheung said: "I don't need to maintain a relationship with Leung by attending the dinner. I'll have other channels." Lau, who nominated Tang but cast a blank ballot in last month's election after public support for Tang collapsed, said: "If the chief executive is working for the best [interests] of Hongkongers, we will support him. There is nothing needing to be reconciled. "I did not support Leung during the election, but he is elected now and it's my responsibility to raise my constituencies' concerns to the incoming chief executive." A leading political observer says the snub shows the depth of ill-feeling after the bitterly fought chief executive poll, but he does expect the pro-Tang faction in the Legislative Council to co-operate with the new leader when he takes office in July. "It takes time to heal," said Dr Chung Kim-wah, an assistant professor of applied social sciences at Polytechnic University. "The rift brought about by the chief executive election between the two factions in the pro-establishment camp is too big. "But it is unlikely to degenerate into a situation where the anti-CY faction in the Legislative Council will say 'No' to whatever Leung does. "Politics is politics. They will learn to make compromise and co-operate with the new leader." The banquet was dubbed a "reconciliation dinner" between Leung and Tang supporters in the legislature after the two leading candidates became embroiled in scandals during the bitter campaign. But Tam denied the dinner would be an attempt to mend relationships. He insisted: "Pro-establishment lawmakers come together for a dinner regularly. It will be a normal gathering which allows us to communicate with the chief executive-elect."

Moses Cheng Mo-chi's roles as chairman of the two advisory committees that vet public servants' and ministers' applications to take up work after leaving government aren't his only public duties. In fact Cheng, 62, a solicitor by profession, is well known for the litany of positions he holds or has held in the public sector. Among these, he is chairman of the Education Commission and a former chairman of the court of Baptist University. Cheng has headed the two advisory panels since 2009, the same year he began serving as chairman of the Ma Wan Park Advisory Committee, to which he was jointly nominated by the government and the developer of the HK$700 million project, Sun Hung Kai Properties (SEHK: 0016). SHKP is the focus of corruption allegations after the company's co-chairmen, brothers Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, were arrested by the Independent Commission Against Corruption, along with former chief secretary Rafael Hui Si-yan, late last month. Cheng's latest government appointment was in January, to a steering committee conducting a strategic review of health-care manpower planning and professional development. He had been tipped to replace Ronald Arculli as chairman of Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) , but it was announced in February that he would quit the stock exchange board this month after serving as a government-appointed director for six years. The government generally does not appoint anyone to a public body for longer than six years. Cheng, who served one term, from 1991 to 1995, as an appointed member of the Legislative Council, supported Henry Tang Ying-yen in his failed campaign for chief executive this year. He received his law degree from the University of Hong Kong and became a senior partner of law firm P. C. Woo in 1994.

These homeless puppies found last month have been rescued by Protection of Animals Lantau South after nearly meeting their end. The SPCA has come under fire from animal rescuers after it was found a group of puppies that had been guaranteed a foster home ended up at a government kennel, where they would have faced certain death. The Society for the Prevention of Cruelty to Animals says its resources are overwhelmed by the many abandoned animals and it was forced by space constraints to give up the pups to the Agriculture, Fisheries and Conservation Department. "I don't know how the SPCA can consider themselves a non-kill organisation," said Okka Scherer of Protection of Animals Lantau South (Pals), which has since taken in the young canines. The five mongrels were given name cards, injections and de-worming tablets at an SPCA clinic in Mui Wo on March 20 and then sent to the society's Wan Chai branch to be re-homed, with assurances that they would be safe. But days later, the society sent four of the puppies on to a kennel in Pok Fu Lam. Scherer saw the dogs and recalled she had heard about the discovery of five pups on Lantau. She took the brood and visited restaurant manager Julie Nunn, whose family got the puppies from a man around the Buddha statue on Ngong Ping. "She drove them over and asked me, 'Are these the puppies you found?'" Nunn said. "I was so shocked. I had offered to foster the puppies if there was no space." The society said it was inundated with animals that day, with 20 other puppies coming in before those from Mui Wo arrived, straining the already limited space in the kennels. "In a perfect world, we would've loved to have said 'Julie gets a call' … but that day it was the perfect storm," SPCA executive director Sandy Macalister said. "We'll work very hard to make sure something like this doesn't happen again." Nunn said the SPCA should make sure rescuers are told if the animals they bring in will not be kept. The SPCA has a no-kill policy for healthy animals, but those it cannot keep are sent to the Agriculture Department, where they are euthanised if not removed by any of the 11 authorised animal groups in four days. The society sent 924 dogs last year and put to sleep 1,138 others that were sick or injured. "Most people don't realise the SPCA does this," said teacher Kamy Yeung, 26, who fosters several animals in her Kwun Tong flat.

 China*:  Apr 10 2012 Share

A man walks past a poster for the film Wrath of the Titans. The mainland's booming movie industry is attracting interest from Hollywood heavyweights as they chase bigger box-office returns to offset tighter margins at home. Films with Asian and especially Chinese themes are becoming more prominent after Hollywood hit a 16-year low in movie ticket sales last year. Some of its biggest studios are setting up shop on the mainland. DreamWorks Animation is setting up a base there, and Legendary Studios, which was behind the wildly successful Batman series as well as Clash of the Titans, is also developing a venture. Keanu Reeves is making his directorial debut with Man of Tai Chi, now filming on the mainland and in Hong Kong. "It's a hugely interesting time now," said executive producer Tracey Trench, whose projects have included Just Married and Ever After. "The United States is still the biggest market. Within the next 10 years, we are not going to be the biggest marketplace; everything is going to change," she told a forum at the Hong Kong International Film and Television Market (Filmart) last month. The mainland's film industry continues to break new ground and set new records, collecting an estimated 13.1 billion yuan (HK$16.13 billion) last year - a jump of about 30 per cent from 2010. Roughly 2,500 more cinema screens are expected to be unveiled across the mainland this year, its market now the third-largest behind Japan and the US. By contrast, the Motion Picture Association says box office takings in the US and Canada grew only 6.3 per cent from 2007 to US$10.2 billion last year, while Asia-Pacific takings grew 38 per cent to US$9 billion. Zhang Yimou's The Flowers of War, starring Christian Bale, was the mainland's biggest box office smash of the past 12 months. It collected about US$90 million there while picking up a nomination for best foreign language film at the Golden Globes awards in the US. Hollywood is increasingly giving a Chinese angle to its output. "There are so many stories that you can tell, and right now China is hot, so many people want to know more," said screenwriter Glenn Berger, who wrote the popular 2008 animated Hollywood comedy Kung Fu Panda and its 2011 sequel. The original film told the story of Po, an oversized and unfit panda who dreams of becoming a martial arts hero. But Berger said the movie was never really about China or kung fu. "We were just trying to tell a classic underdog story, not particularly a Chinese story," he said. "But it was very well received in the Chinese market, because they thought it was very respectful of Chinese culture." Kung Fu Panda raked in an estimated US$630 million, with US$26 million from the mainland alone. Filmart is Asia's major entertainment industry market and one of the world's top three events of its kind. This year, it attracted a record 648 exhibitors and more than 5,700 buyers, up 14 per cent from last year. The US pavilion had more than 40 exhibitors, or about 25 per cent more than last year. Industry veterans say Chinese audiences are particularly drawn to movies that include Chinese references or elements of Chinese culture. "People want to feel connected," said Chinese-American writer Rita Hsiao, who wrote the screenplay for Toy Story 2 and the 1998 animated musical Mulan, a story about a legendary Chinese girl warrior. "If you have that universal message and it's interesting, everybody everywhere can connect with it." One of the main obstacles for foreign filmmakers wanting to crack the mainland market is a law limiting the number of international films that can be screened there to just 20 a year. It forces studios to co-produce films with local partners or risk having their films blocked at the border. But all the pandas in the world won't guarantee a hit in China. "It has to succeed on all the fundamentals of a movie, not just because it is shot in China," Berger said.

As US animation titans such as DreamWorks set up business in mainland China, a local studio is hoping the fortunes of a plucky goat will take the battle for box office supremacy straight to its big rivals. Imagi - a company that almost went bankrupt after the dismal failure of its take on the Japanese television series Astro Boy in 2009 - is home to the crown jewel of China's animation industry: Pleasant Goat and Big Big Wolf. Based on the antics of a goat called Pleasant and his valiant bid to thwart a scheming wolf, the franchise has produced four films in the past four years, taking a combined domestic box office haul of 548 million yuan (HK$672 million). In terms of animated films screening on the mainland, that amount has only been bettered by DreamWorks' Kung Fu Panda franchise, whose two films have commanded takings of 744 million yuan since the original's release in 2008. "We welcome competition, we are looking forward to it," said Soh Szu Wei, executive director of Hong Kong-based Imagi International, which owns the Pleasant Goat franchise that has also been spun-off into a television series. "We have broken away from the locals. We are now competing with the internationals." The mainland box office expanded by around 30 per cent last year, meaning it accounted for an estimated 13 billion yuan in takings, third in the world behind Japan and first-placed United States and closing fast. That potential has encouraged DreamWorks to set up its own Chinese operation. In February, the company announced a Shanghai-based partnership with China Media Capital, Shanghai Media Group and Shanghai Alliance Investment. The venture would "engage in the development and production of high-quality original Chinese animated and live action content", said a DreamWorks statement. DreamWorks Animation's chief executive, Jeffrey Katzenberg, described it as "a first-of-its-kind enterprise to locally conceive, produce and distribute high-quality creative content and family entertainment experiences - not only for the people of China but also for related export markets". It hopes to get its Shanghai studio up and running by the final quarter of this year, with the first productions slated for release in 2016. The Hollywood giant could not have chosen a better setting for its Chinese operations, said Hong Kong-based film historian Jacob Wong. "China has a glorious history of animation, especially the Shanghai film studios in the 1960s, but it has been a while since they have had a major success," said Wong, who programmed the Animation Unlimited segment of this year's Hong Kong International Film festival. "In those days, the shorts they made were reminiscent of classic Chinese water-ink paintings and they really were beautiful. These days, Chinese studios are doing the animation process and post-production for a lot of people; they are mostly concentrating on the technical side of things." While few studios are making feature films, "films such as Legend of a Rabbit may be a sign of things to come," he added. Released last year and bearing a striking similarity to Kung Fu Panda, Legend of a Rabbit was a flop at the domestic box office, returning only an estimated US$1.5 million of its rumoured US$12 million budget.

The central government has pledged to combat fake and shoddy products by monitoring local governments' efforts to counteract them as part of their annual achievement appraisals. Following a string of food safety and piracy scandals, the State Council has announced plans to build up incentive mechanisms designed to tackle infringements of intellectual copyright and counterfeit products. Analysts said the crackdown on pirated goods comes after mounting international pressure. The central government's focus will be on food, pharmaceuticals, cosmetics, farming materials, construction materials, electrical and mechanical products and automobile parts, and on efforts to protect copyright, trademarks and patents in various industries. Infringements of intellectual property rights (IPR) and the preponderance of fake goods are a major challenge for the central government and an embarrassment for Beijing internationally. Analysts also said these counterfeit products were a threat to social stability. China was on a priority watch list included in last year's annual review of IPR protection and enforcement by the Office of the United States Trade Representative. Professor Wang Yukai, from the Chinese Academy of Governance, said that the clampdown was not about window-dressing, but involved a serious intent and effort to tackle issues relevant to people's well-being and happiness. "It's the first time it will be part of local governments' performance appraisals and it will be one of the criteria for the promotion of cadres," he said. The central government has pledged to tackle infringement issues before. In December, it told all government departments at or above municipal level to use only genuine and authorised computer software by the end of this year. It also enforced a national crackdown, from October 2010 to June last year, on more than 1,200 manufacturers involved in making more than one billion yuan (HK$1.2 billion) worth of fake products. Wang, acknowledged, however, that copyright infringement and counterfeit products were still rampant and that a long-term strategy would be required. A work team headed by Vice-Premier Wang Qishan has been set up to implement a national campaign and ensure that measures are adhered to. Li Shunde, director of law and IPR at the Chinese Academy of Sciences' postgraduate school, said governments had enormous administrative powers and that as long as all levels of administration on the mainland took the drive against copyright infringement seriously it can be successful. "It's not a show staged for foreign countries, but a necessity on the way to achieving the goals set out during the 12th Five-year plan," Li said.

Foreign Minister Yang Jiechi (center), his Japanese counterpart Koichiro Gemba (right) and ROK Foreign Minister Kim Sung-hwan pose for photographers before meeting on Sunday in Ningbo, East China's Zhejiang province. Foreign ministers from China, Japan and the Republic of Korea vowed on Sunday to do their best to cool tensions as Pyongyang prepares a satellite launch. The move was welcomed by Chinese experts who said that the vow seemed to indicate that Tokyo and Seoul are unwilling to resort to military force in response to the launch. "We ask Pyongyang to show restraint," Japanese Foreign Minister Koichiro Gemba told reporters at a joint news conference after a two-hour meeting with his counterparts from Beijing and Seoul. "The three countries will exert the utmost diplomatic effort. I think this agreement is an important achievement," he said. The three foreign ministers met in the port city of Ningbo, Zhejiang province, to, among other things, prepare for the meeting of leaders of the three East Asian neighbors in China later this year. Foreign Minister Yang Jiechi said Beijing is "concerned" about the launch. "China strongly encourages everyone involved to remain calm and reasonable," Yang said. "These issues need to be worked out in a diplomatic and peaceful manner. It is in the common interest to maintain peace and stability on the Korean Peninsula and realize long-term peace and stability in northeastern Asia."

Top diplomats of China, Japan and the Republic of Korea will tell the public how much their governments cherish cooperation among the three neighbors on Sunday in a high-profile launching ceremony for a single website designated for trilateral cooperation. Foreign Minister Yang Jiechi and his counterparts, Koichiro Gemba from Tokyo and Kim Sung-hwan from Seoul, will show light moments rarely seen in their usually serious diplomatic talks for the new website of the secretariat for cooperation among the three East Asian countries, established last year in Seoul, according to a senior Chinese diplomat. Qin Gang, spokesman of the Foreign Ministry, also told reporters that Shin Bong-kil, the Trilateral Cooperation Secretariat's secretary-general, will make his debut at the regular meeting for top diplomats of the three countries on Sunday. He will deliver a report on the work of the secretariat in the past months to the three ministers, Qin said. The three ministers arrived in Ningbo, the second largest city in East China's Zhejiang province, on Saturday. After tense bilateral meetings on Saturday afternoon, they will have their trilateral talks on Sunday, and then meet reporters together. With heated talks about tensions on the Korean Peninsula brought by Pyongyang's mid-April rocket launch plan dominating media reports about the trilateral meeting, Qin said the Sunday talks will take a long-term view on regional cooperation, mainly focusing on tangible cooperation among the three and preparing for the fifth trilateral summit in China this year, reportedly scheduled in May. Yang Jian, deputy director-general of the Foreign Ministry's Department of Asian Affairs, said in an interview on the eve of the meeting that under the background of "an unpredictable global economy, developing European debt crisis and turmoil in West Asia and North Africa", joint efforts among the three East Asian nations bears special significance for global economy. She said now the three countries have established an impressive communication network covering 17 ministerial meetings and more than 50 working-level dialogue platforms. Trilateral trade volume was nearly $700 billion in 2011, according to the senior diplomat. Now China has become the largest trading partner of both Japan and the Republic of Korea.

Hong Kong*:  Apr 9 2012 Share

Chief Executive Donald Tsang (left) with then chief secretary Rafael Hui, who is on ICAC bail. The arrest by the ICAC of former chief secretary Rafael Hui Si-yan 10 days ago rocked the city's administration to its foundations and raised questions about its monitoring of public servants who take up jobs in the private sector. Hui, chief secretary between 2005 and 2007, was arrested with Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, brothers and co-chairmen of Sun Hung Kai Properties (SEHK: 0016) (SHKP), one of the city's biggest landlords, for whom he worked as an external consultant. The arrests were made as part of an unprecedented investigation into allegations of bribery and misconduct in public office. In the past decade Hui, 64, has worked for the government, a public body and big business. He rose through the civil service ranks from 1971, starting as a junior education officer and ending his career in 2000 as secretary for financial services. After that, he headed the Mandatory Provident Fund Schemes Authority. Before rejoining the administration in 2005, he ran his own political consultancy business and was on the board of SHKP subsidiary Kowloon Motor Bus. His arrest has prompted questions about adherence to the guiding principle that senior officials - whether civil servants or political appointees - who leave government service should not take employment that is in conflict with the public interest or that may embarrass the government. Under the current system the political appointees - ministers, their deputies and assistants - are required to consult a five-member Advisory Committee on Post-office Employment for Former Chief Executives and Politically Appointed Officials before accepting employment during their first year out of office, but any advice given is non-binding. Directorate-grade civil servants are subject to stricter monitoring - a "sanitisation period" of six to 12 months during which no paid work is allowed, followed by a "control period" of up to two years - three years for permanent secretaries. During the control period, they have to apply for approval from a different body, the Advisory Committee on Post-service Employment of Civil Servants, before they can take up a job in the private sector. Both committees are headed by Moses Cheng Mo-chi, a solicitor, though the members are different. Critics say the system is flawed. "Political appointees are part of the public servants' system, so it is unreasonable that they are put under a more relaxed system," said Leung Chau-ting, chief executive of the Federation of Civil Service Unions. "The whole system should be reviewed to abolish the double standard guiding the political appointees and the civil servants." Former secretary for security Regina Ip Lau Suk-yee has also called the current surveillance of political appointees "very loose". Civic Party legislator Ronny Tong Ka-wah notes that lawmakers have called for a revision of the rules guiding political appointees' activities after they leave government "but the government refused to accept their recommendations". Others say the need for surveillance and vigilance against conflicts of interest must be balanced against the need to attract the right talent for the right job. "Despite Rafael Hui's case, the control regime guiding political appointees has to maintain flexibility," former civil service minister Joseph Wong Wing-ping said, referring to the so-called "revolving door" between the private and public sectors. The practice is widespread around the world, and includes movements between academia and the private sector, but is often a source of controversy in the United States, Britain and other parts of Europe, with legislation in place to prevent officials unfairly benefiting from their government service. Apart from Cheng's two committees, there is no established policy on the "revolving door" in Hong Kong. The closest thing to it was Chief Executive Donald Tsang Yam-kuen announcement in his policy address in 2010 that senior officials could return to former careers in the private sector when their terms in the government came to an end. "It is also understandable to place civil servants under tighter control as this is supposed to be a lifelong career," Wong said. "And it illustrates that political appointees are seen necessarily to have greater power than civil servants. [But] the Secretary for Development may have similar powers to the Director of Lands." The issue received urgent attention after the saga of Leung Chin-man, the former permanent secretary for housing who sparked heated controversy when he was appointed deputy managing director of New World China Land (SEHK: 0917) in 2008, only 18 months after his retirement. As a civil servant, Leung played a key role in the cut-price sale of new harbourfront government flats to a joint venture involving New World. As a result of the controversy, he held the New World China job for only two weeks, stepping down hours after Tsang ordered a review of the Civil Service Bureau's decision to allow him to take the position. Leung, who had also headed the Buildings Department, was caught up in another controversy - over a bonus land grant to Henderson Land (SEHK: 0012) for its Grand Promenade development in Sai Wan Ho, which allowed it to earn an extra HK$3.2 billion and cost the government HK$115 million. As a result of the Leung affair, in September the bureau imposed 30 new restrictions on post-service jobs, including setting up an online register to publish all approved applications for public scrutiny. So Ping-chi, vice-chairman of the Senior Government Officers Association, says excessive monitoring of post-retirement employment will deter talented individuals from joining the government. "A better way to improve it is to put stronger emphasis on moral standards in the selection of senior officials, and to impose a heavier penalty according to the law," So said. "If the control is too harsh, no talents would be willing to take up political appointments." The government has had difficulty in finding talent from within the civil service team and outside to fill ministerial seats. When former commerce chief Rita Lau Ng Wai-lan resigned in April last year for health reasons, the government appointed her deputy, Greg So Kam-leung, after a three-month search for a replacement. The delay is believed to have been the result of the failure to find a top civil servant willing to give up a permanent job for a political seat with only one year's service left. Among the first batch of undersecretaries and political assistants appointed in 2008 were people who gave up well-paid positions, including undersecretary for home affairs Florence Hui Hiu-fai, then Standard Chartered Bank's head of business planning and development in Northeast Asia, and undersecretary for financial services and the treasury Julia Leung Fung-yee, then executive director of the Monetary Authority. In 2009, permanent secretary for education and manpower Fanny Law Fan Chiu-fun was barred from taking a job with the charity group Tung Wah Group of Hospitals after the government ruled she could not take up education-related work until 2011 because of a potential conflict, as she had been involved in education reforms. The ban was believed to have been linked to the row over Leung Chin-man. Supporters argued Law could have contributed immensely to the community through the Tung Wah post and that the charity group did not provide educational services for profit, so there would have been no conflict of interest. Under the existing regulations, permission is not needed if the post-service work is with non-profit-making organisations and is unpaid. The business sector remains a popular choice for appointees. Among notable appointments in this area, former financial secretary Antony Leung Kam-chung is now chairman for Greater China of private equity group Blackstone and former secretary for commerce and economic development Frederick Ma Si-hang became chairman and non-executive director of China Strategic Holdings more than a year after he stepped down in 2008, citing health reasons. Ma was reportedly offered HK$3.5 million a year, putting him among the city's highest-paid non-executive directors at that time. Other controversial appointments include that of former police commissioner Tsang Yam-pui, younger brother of the chief executive, who was made an executive director of New World Service Holdings, a unit of New World Development, about six months after leaving the force in December 2003. Donald Tsang was pulled into controversy in 2007 when a Gammon-Hip Hing joint venture was picked to build the new government complex at Admiralty. Hip Hing Construction is a member of New World Service Holdings. Patrick Chun Ping-fai, who retired as Marine Department assistant director in 2010, reportedly joined casino magnate Stanley Ho Hung-sun's Shun Tak (SEHK: 0242, announcements, news) -China Travel Ship Management before obtaining formal government approval. Chun openly criticised the administration for dragging its feet in screening his application and said he was a victim of its excessive caution in the wake of the Leung Chin-man affair.

Beijing's latest financial industry reform allowing some mainland residents to directly invest abroad through a pilot programme signals good news for Hong Kong's stock and property markets but may also bring new challenges for Leung Chun-ying, the city's next chief executive. The milestone plan announced last week allows local residents in the small but wealthy city of Wenzhou in the east to make direct investments abroad - an effort that is also seen helping the country ease growing pressure to manage its more than US$3 trillion foreign exchange reserves. Beijing did not mention any specific destination in the announcement for such investments from Wenzhou, but analysts say Hong Kong, rather than New York or London, will become rich mainlanders' first choice for investments under the new rules. "The property market in Hong Kong is likely to be the first to benefit because it is already a market that mainlanders are very familiar with and it is also very close to the mainland geographically," said Hu Yifan, chief economist at Haitong International Securities. "If you look back into the past decades, you will find Wenzhou people are interested in investing in two things - property and mining - and they like speculation in the markets," Hu said. Wenzhou is considered the birthplace of the mainland's private economy. Many Wenzhou businessmen are well known for their international trade and export all kinds of products - from sofas to soap - to places like Italy and Iraq. They made money initially from exports and then aggressively invested their wealth in properties. But the inflow of funds could exacerbate Hong Kong people's complaints about high property prices in the city. Newly elected chief executive Leung pledged to his supporters that he would help cool off a potential asset bubble and create more affordable apartments for local residents. Meanwhile, the benchmark Hang Seng Index has recovered slowly from the 2008 global financial crisis. Some investors and government officials have been concerned about a possible capital outflow of the stock market amid economic slowdown on the mainland and the worsening debt crisis in Europe, with a negative impact on Hong Kong's export business. Liu Ligang, chief economist for Greater China at Australian bank ANZ, believed the new investment rules for Wenzhou residents would bring in fresh capital inflow in both the equity and housing markets in Hong Kong. Currently, Wenzhou holds US$56 billion in bank deposits and about US$190 billion in housing stock, according to Liu's research. "If just 5 per cent of these holdings flow to the Hong Kong market, it will deliver a significant boost to Hong Kong's equity and housing market," said Liu. The new investment rules for Wenzhou could be expanded nationwide if the pilot programme can make a smooth start, analysts say. Shanghai and Tianjin, two of the mainland's richest cities, have also lobbied the central government for similar policy support.

Chief executive-elect Leung Chun-ying will fly to Beijing tomorrow for his first official visit to the capital, two weeks after he won the city's top job, to accept his formal letter of appointment. Leung will receive from Premier Wen Jiabao the document appointing him to the job from July 1. It is understood he will also meet President Hu Jintao and Vice-President Xi Jinping during the trip. Leung will spend three nights in Beijing - giving him one day longer than incumbent Donald Tsang Yam-kuen was accorded when he received his letter of appointment in 2007. While Leung is in Beijing, Tsang will also be away. Having barely had time to unpack his bags following a six-day holiday abroad, the chief executive is off to New Zealand, Chile and Brazil on an 11-day trip to enhance trade exchanges and promote business opportunities for the city. Leung leaves for Beijing tomorrow afternoon and will return on Thursday morning. A spokeswoman for the chief executive-elect's office declined to reveal details of the visit. But Leung told Cable TV yesterday that he would not discuss his new team with the state leaders. "I would not raise that with the central government until I have more complete and concrete ideas," he said. It is understood Leung will meet officials from the People's Bank of China, the Ministry of Commerce and the State Council's Hong Kong and Macau Affairs Office. He told RTHK he would convey to state leaders views he collected last week from representatives of 11 professional groups about implementing the Closer Economic Partnership Arrangement, Hong Kong's free-trade deal with the mainland. "I will reflect their opinions to the state leaders, and see how we can better utilise the support of the nation and make contributions to the mainland," Leung said. Medical Association president Dr Choi Kin said he expected Leung to facilitate the implementation of Cepa, allowing local doctors to practise on the mainland. On Friday, Leung met legal experts to discuss efforts to stem the influx of mainlanders giving birth in Hong Kong. He said he would raise the issue in Beijing if time permitted. Veteran China watcher Johnny Lau Yui-siu said Leung was striving to boost his popularity by demonstrating his leadership and taking part actively in policy discussions.

 China*:  Apr 9 2012 Share

The crew of a hijacked mainland cargo ship were yesterday praised for their bravery and quick thinking in helping thwart a hijacking by Somali pirates off the southern coast of Iran. The Iranian Navy rescued all 28 crew late on Friday, less than nine hours after the Panamanian-registered Xianghuamen, owned by the Nanjing Ocean Shipping Company, was seized 20 nautical miles south of the Iranian port of Chabahar. The crew were able to disconnect the ship's power supply before the AK-47-wielding hijackers overran the ship, preventing it from being taken away. The ship's captain and five crew later evaded their captors and slipped overboard, swimming about two nautical miles to the Iranian Navy ship where they raised the alarm, China National Radio said. "China's ambassador in Tehran, Yu Hongyang, has been in touch with the crew and congratulated them on their safe rescue on behalf of the central committee of the China Communist Party, the State Council and the Ministry of Foreign Affairs," the Chinese embassy said in Tehran. The Xianghuamen sailed from Shanghai with a cargo of steel and unspecified equipment. After unloading some of its cargo in Singapore, it was bound for Port Khomeini when it was hijacked by the nine Somali pirates in the Gulf of Oman. Yu told Xinhua that the pirates approached the ship in several speedboats while firing their guns. "The pirates used their own ladders to climb aboard and take the 28 crew hostage," Yu said. On hearing of the attack, the Chinese embassy immediately asked Iran for military assistance, while contacting the ships' owner for the crew manifest, Yu said. Iranian warships were dispatched and located the freighter that afternoon. Two warships trailed the freighter, which the pirates initially had ordered to head for Somalia, Yu said. "The Chinese crew were very brave and clever," Yu said. "They disabled the ship's engine when the pirates were not looking and it began drifting without power on the tide." In a phone interview with China National Radio, the captain of the Xianghuamen, who was not named, recounted how the bravery of some crew members had saved their lives. "I talked with the chief mate and chief engineers. We agreed that we couldn't let the pirates take the ship to Somalia, as it would take a long time for us and the ship to be rescued. There we might even be killed," he said. "So we cut off the contingent power and the ship stopped." The captain said the pirates became enraged and beat some of the crew, but no one was badly hurt. Later, the captain and five crew members slipped overboard and swam to the Iran warship to tell them what was happening. When the warship then sent an armed boarding party, the pirates abandoned their plan to seize the ship and jumped overboard. The Iranians captured them and took them to the warship, the captain said. The crew were "emotionally stable" and were able to talk to their families via satellite phone, the captain said. Mu Ling, chairman of Nanjing Ocean Shipping, said yesterday that the company would award each crew member US$10,000 for their bravery in outwitting the pirates and saving the ship, China News Service said.

China's Finance Minister Xie Xuren (left) with Japan's Jun Azumi - Japan and China will seek co-ordination on supporting the International Monetary Fund's effort to contain Europe's debt crisis, Japanese Finance Minister Jun Azumi said. "Rather than make decisions independently, we've agreed to consult each other very closely" on financial contributions to the IMF, Azumi said yesterday, after meeting with Chinese Finance Minister Xie Xuren in Tokyo. The finance ministers of Asia's two largest economies met before the Group of 20 countries gathering later this month in Washington. One topic at the G20 meeting will be increasing co-operation with the IMF. The fund needs more resources to shield the global economy from threats of strains on Europe's financial system, rising oil prices and high unemployment, managing director Christine Lagarde said last week. Before Azumi and Xie met, Tomoko Fujii, a senior foreign-exchange strategist at Bank of America Merrill Lynch in Tokyo, said: "It won't probably be smooth for G20 nations to hammer out details for their contributions to the IMF." "It's important for Japan to check China's intention on this, while China probably wants to increase its political influence if it puts up money." The IMF asked in January for as much as US$500 billion in additional lending resources. Member countries have been reluctant to pitch until European nations did more to help themselves. The US has refused to increase its contribution to the fund. European finance ministers decided on March 30 that €500 billion (HK$5.2 trillion) in fresh money would be added to the €300 billion already committed to create an €800 billion defence against the two-year-old turmoil. Euro-area finance chiefs insisted that they've fulfilled their side of the bargain. "The firewall European nations presented in March isn't convincing enough to give momentum to discussions for other countries' financial contributions to the IMF," Fujii said. Concerns about Europe's debt crisis were rekindled last week as Spain's borrowing costs surged on concern that the country's public debt will expand and the region's fourth-largest economy may ask for a bailout. Yields on Spain's 10-year bonds rose to a four-month high. "Europe's crisis hasn't ended" even as the situation improves from last year, Azumi said yesterday. "This still needs careful monitoring and we can't yet become optimistic." Japan and China had yet to decide on co-operation with the IMF, and would continue discussions on this until the G20 meeting, Azumi said. The nations agreed to strengthen and expand Asia's regional currency swap agreement, sharing a view that "there is a need for Japan and China to co-operate to prevent crisis in Asia," he said. Possible G20 support for the global economy could be similar to a G20 decision in April 2009 to triple the fund's resources as part of plan to avoid global economic recession.

Hong Kong*:  Apr 8 2012 Share

Nature lovers will be able to find and identify trees in country parks more easily with a mobile application launched by the government. The app, developed by the Agriculture, Fisheries and Conservation Department, features 96 trees and other plant species planted along Hong Kong's 16 "tree walks". It also shows which species are flowering in a particular month and where they can be found. Country parks ranger services officer Dr Judy Wan Hon-chi said the department hoped this "country park tree walks" app would make outings more interesting and promote tree conservation. "People can do research before walking the trails, or they may decide to go and visit a tree after learning about it from the app," she said. Developed after a year of information gathering and use of data from the department's plant library, the app includes photographs of the trees' appearance, leaves, flower and fruit and other botanical information. Using GPS, the app tells users whether any of the trees are within a 400-metre radius. About 200 locations have so far been recorded. The app also includes other features such as maps, transport guides to the tree walks, and weather information. The free app is available for iPhone, iPad, Android, Windows Mobile 7 systems and mobile websites, with English and Chinese versions. It is the fourth mobile app launched by the department. The previous ones provided information on hiking trails, geoparks and the wetland park. The 16 tree walks in Hong Kong were set up by the conservation department in 1995 in country parks to educate the public on trees and conservation with display boards introducing different types. It decided to make that information available via the app. It has also been training volunteer guides for the walks. Meanwhile, the department will be holding four tree-planting sessions in country parks for the public this month and next. Seedlings and planting tools will be provided on a first come, first served basis.

Jamie Dimon says in his 38-page letter there are hundreds of rules, many of which are uncoordinated and inconsistent with each other. Jamie Dimon, chairman and chief executive of JPMorgan Chase, used his annual letter to shareholders to rail against "contrived" and confusing financial rules that he said may stymie lending. US and international officials "made the recovery worse than it otherwise would have been," Dimon wrote in the letter released on Wednesday. They almost botched the US debt-ceiling vote, constrained bank leverage "at precisely the wrong time" and adopted bad and uncoordinated policy, he wrote. Dimon defended a banking industry that has been besieged by new rules and public contempt after lax mortgage lending contributed to the worst economic slump since the Great Depression. He championed the use of derivatives and the right of banks to lobby lawmakers, and hailed the US economy and corporations as engines of job growth. "We have hundreds of rules, many of which are uncoordinated and inconsistent with each other," Dimon said in the 38-page letter, his longest since becoming CEO in December 2005. "Complexity and confusion should have been alleviated, not compounded." Dimon called a cap on debit-card transaction fees, a provision of the Dodd-Frank Act, "price-fixing by the government that will have the unfortunate consequence of leaving millions of Americans unbanked." Stricter capital rules would make it "prohibitively more expensive" for banks to lend to consumers with subprime credit scores, about 40 per cent of all Americans, he said. "Jamie has taken on this mantle of defending this entire industry," said Michael Driscoll, who worked for Dimon as a trader at the Smith Barney brokerage and is now visiting professor at Adelphi University in Garden City, New York. "He's combative by nature. And like a lot of these alpha dogs, when he's backed into a corner, he's going to bark back." Dimon said he agreed with the intent of most of the financial reforms passed by Congress, including giving regulators authority to unwind failing firms and a say on some executive-pay issues. "But the result of the financial reform has not been intelligent design," he wrote. "Simplicity, clarity and speed would be better for the system and better for the economy." Dimon said big businesses tended to not get enough credit for creating jobs in the US. "We often read that small business is the primary driver of new jobs - this is both incorrect and overly simplistic," he wrote. Large corporations generally were more stable and resilient in a recession and companies with more than 500 employees accounted for 51 per cent of all jobs, he wrote. Most of the "bad actors" responsible for the financial crisis had gone, Dimon wrote in the letter. The remaining banks were stronger than they were four years ago and did not deserve to be portrayed in the same light. "The frustration with - and hostility toward - our industry continues," he wrote. "In the face of many difficult challenges, JPMorgan Chase is trying to do its part. We have not retrenched. Just the opposite - we have stepped up." He also defended the use of derivatives, saying clients had a "large need" for them and that such tools helped investors, banks, airlines and farmers to mitigate risk. Dimon gave some reason for hope. US housing was starting to rebound, fuelled by growth in population and jobs, he said.

Prices of second-hand flats on Hong Kong Island have hit a record high, bolstered by improved sentiment and limited supply. But some analysts predict the steady climb may not continue. The Centa-City Leading Index, a weekly measure of home prices from Centaline Property Agency, shows home prices on Hong Kong Island edged up 1.37 per cent week on week to 112.3 during the week of March 26. It surpassed the previous peak of 111.88 in the week of June 5, 2011. The index is based on a complex formula that takes into account different areas of the city and different flat sizes. The index uses July 1997 as the base period, when its value was equal to 100. Patrick Tsang, sales director of Centaline, gave an example of how rapidly prices had risen. He said the average price of flats at Taikoo Shing in Quarry Bay - a popular housing estate on Hong Kong Island - had climbed to HK$10,400 per square foot at the end of March from HK$9,500 per sq ft at the year end of last year. Wong Leung-sing, Centaline's senior associate research director, said property prices had surged over the last few months partly because the European Central Bank had pumped more than €1 trillion (HK$10.14 trillion) into the banking system. "People do not want to hold cash, and some richer Hongkongers have switched to buying property, which can better preserve their wealth," Wong said. Noting that demand for property in Hong Kong has been strong, he expects the overall index, which includes transaction prices for the entire city, including Kowloon and the New Territories, to reach its highest point by the end of this month. Nicole Wong Yim, regional head of property research at brokerage CLSA, said that in the past decade, the number of households earning more than HK$40,000 a month had jumped at a faster pace than the supply of new flats. "Hong Kong Island is home to more people in the middle- and high-income groups, so it's not surprising that prices hit a record high first," Wong said. "But looking forward, I don't think home prices will climb too quickly," she cautioned, "as the new government may dish out more proactive measures to at least maintain sufficient land supply." Jeff Yau, a property analyst at DBS Group Research, said the data reflects the market activity a few weeks ago, but the market is slowing down at the moment. "We expect a modest decline of 5 to 10 per cent in home prices this year, in the wake of slower economic growth in the city," he said.

HK is best place in world to get fully connected - Hong Kong has scored a global record in connectivity, with mobile phone subscriptions nearly double that of the city's population. Residents also enjoy the cheapest mobile phone tariffs in the world, at as little as 2 US cents per minute, according to a report by the Geneva-based World Economic Forum on information technology. Bangladesh is second, paying 3 US cents a minute. "Hong Kong delivers a consistent performance," the report said. Among 142 places studied, the city came first in mobile network coverage, international internet bandwidth, cellphone subscriptions and affordability of mobile charges. The city had 195.6 subscriptions per 100 people, the report said. It was also the fastest in internet bandwidth, offering 776.6 kbps per user. Overall, it was the 13th most network-ready place in the world, scoring 5.46 out of 7, a drop from 12th last year. The score took into account factors such as the political, regulatory and business environments. Sweden was at the top, scoring 5.94, followed by Singapore and Finland. South Korea, Taiwan, Britain and the United States also ranked higher than the city. China came in at 51 and Haiti was placed last. However, the city's economy was not driven by innovative industry like in South Korea and Taiwan, it said. Hong Kong ranked low in terms of its capacity for innovation, effectiveness of its law-making bodies and software piracy rate. Charles Mok, founding chairman of the Internet Society Hong Kong Chapter, agreed the city should do better in technology innovation and effectiveness of law-making bodies. He said the copyright amendment bill had been discussed since 2005 but had yet to be passed. He said the government and society as a whole failed to emphasise innovation. "We are not quite keen on making breakthroughs in technology. If you compare us with Korea and even China, their technology may be more advanced. This is our weakness."

Customs official Ngan Hing-cheung with one of the fake Jeremy Lin tops found at Chek Lap Kok airport en route to the United States. Customs officers at Hong Kong airport had only discovered one consignment of fake Jeremy Lin basketball jerseys by the time news broke this week that the Asian-American basketball sensation was injured. That's despite the availability of the unauthorised tops in the city's markets. Now officers believe the announcement that the New York Knicks star needed surgery on his left knee and would be out of action for the next six weeks will put paid to further attempts to smuggle fake Lin merchandise for now. The 170 counterfeit Lin jerseys were found at Chek Lap Kok airport en route from the mainland to the United States soon after the sudden emergence of "Linsanity" in February, said Ngan Hing-cheung, acting group head at customs' airport command. "In the US, they have all gone out of stock. Even if you manage to buy one, it will cost you nearly HK$1,000," he added. Ngan said that both the fake tops and the packaging were poor quality. "These jerseys would cost only HK$50 to HK$60 at the Ladies' Market," he added. Since February's haul, the airport customs officials have failed to find any more knock-off Lin jerseys. "Maybe we need to wait for his next round of winning games," said Ngan. The Customs and Excise Department said there were 615 seizures of restricted goods at the airport last year, down from 753 in 2010. The value of goods seized rose to about HK$230 million from HK$200 million and 252 people were arrested. Drugs accounted for half of the seizures. On one occasion, officers seized 3kg of cocaine concealed inside seven or eight big hollowed-out screws used in ships. The illicit cargo was being carried by an African travelling from Doha to Hong Kong. Ngan said X-rays showed the screws were uneven in density. "We tried various means to open the screws. But they were well welded," he said. "We used heavy tools to drill a hole at the bottom of the screws and found there were drugs." Seizures of tobacco increased from 5,600kg in 2010 to 8,600kg last year, mostly bound for Britain. Some was concealed inside dolls. Ngan attributed the rise to a growing popularity of hand-rolled cigarettes. Last year, officers also seized 250kg of chewing tobacco, which is popular among South Asians in Hong Kong. That was down from 770kg in 2010. Other restricted goods seized at the airport included weapons, endangered animals and plants, counterfeit drugs, rhino horns and ivory.

The government has made two key changes to its competition bill, hoping to remove the final political hurdles to its passage in the legislature by July. The long-awaited law aims to curb anti-competitive behaviour and provide a level playing field for companies. It distinguishes between "non-serious" practices - such as restrictions on advertising - and serious misconduct such as price-fixing and bid-rigging. Yesterday's concessions lifted two key thresholds, in an effort to prevent harming small and medium-sized businesses caught in non-serious offences. It raised the turnover threshold from HK$11 million to HK$40 million: companies with less than HK$40 million in annual turnover will be exempt from rules on the abuse of "substantial market power", which comes under the heading of non-serious offences. It also raised a second threshold - when more than one company is involved - on their combined turnover from HK$100 million to HK$200 million. There are no exemptions for serious offences. Yesterday's changes marked the second concession to the draft bill originally tabled to the Legislative Council in July 2010. The government made six concessions to the business lobby in October of last year, responding to complaints that the bill's terms were too severe and would harm small businesses. Those concessions drew criticism from supporters of the original draft - particularly pan-democratic lawmakers - who said they had weakened the bill. Both groups responded in a more moderate way to yesterday's proposals, conceding the need to get the bill passed by July. If not, the legislative process would have to be restarted under a new administration. Jimmy Ng Wing-ka, vice-president of the Chinese Manufacturers' Association, said the chamber had not yet studied the new figures, conceding it would be unrealistic to demand much higher thresholds. "We welcome the government's attitude in responding to businesses' concerns," said Ng. "But we have to further study the effects of the two new arrangements in protecting small firms. After all, a factory reaching the maximum HK$40 million in annual turnover can earn only HK$1.2 million - a 3 per cent profit margin is considered very good for many industries." Some business lobbies, such as the Federation of Hong Kong Industries, had sought a turnover threshold of HK$500 million. The HK$40 million figure was based on the average turnover of SMEs recorded by the Census and Statistics Department from 2006 to 2010, excluding companies with five or fewer employees. The original HK$11 million threshold came from the average turnover of all SMEs from 2005 to 2009. Democratic Party vice-chairwoman Emily Lau Wai-hing said there was public support for passing the bill despite the concessions. Thomas Cheng Kin-hon, chairman of the Consumer Council's working group on the bill, said the "most important goal is to pass the law, for which the city has been waiting for years".

The Bar Association is fighting a bid by the government to hire a top British lawyer to represent it in a legal battle over the estate of late tycoon Nina Wang Kung Yu-sum. It did not say why it would contest the Department of Justice's application to hire David Perry, a Queen's Counsel, but top lawyers say it may be because the association thinks there is enough talent in Hong Kong to prosecute the case against fung shui master Tony Chan Chun-chuen. Chan lost a long-running battle for Wang's estate - estimated to be worth HK$50 billion - but, in the latest twist to the saga, he is seeking to halt a criminal case against him for forging the former Chinachem chairwoman's will. Chan, 52, is charged with one count each of forgery and of using a false instrument in relation to a will purportedly made by Wang, who died of cancer in April 2007, aged 69. Her estate went to the Chinachem Charitable Foundation. A preliminary hearing in the case is due to take place on May 14. Chan's legal team claims the document has been materially altered by chemicals used in forensic tests by authorities, making it impossible for his experts to conduct their own tests. A Department of Justice spokeswoman said yesterday it had applied to the High Court for the admission of Perry. Perry acted as prosecutor in the high-profile retrial of American Nancy Kissel on charges of murdering her banker husband, which ended in her conviction. "An application has been made to the High Court for approval, admission and enrolment of [Perry] as a barrister of the court for the purposes of appearing for the [government] at the preliminary inquiry, the trial and the ancillary hearings … in relation to the criminal proceedings against Chan," the spokeswoman said. She did not say why Perry was chosen. The Bar Association said it would contest Perry's admission at a hearing on Thursday before Chief Judge of the High Court Mr Justice Andrew Cheung Kui-nung. It said it could give no further details on its reasons for fighting the application as the matter was sub judice. Senior barrister and legislator Audrey Eu Yuet-mee believes the association objected because it thinks there is no shortage of local lawyers capable of handling the case. Alan Leong Kah-kit, also a senior counsel and legislator, said the association would normally take a view on an application to admit overseas counsel for a case that does not require particular expertise. Leong said grounds for an overseas lawyer could include involvement of a well-known character in a case which could embarrass top local counsel.

Jimmy Lai pictured at a media conference in the Kowloon Shangri-La Hotel in November. Lai, a pioneer of animated news, plans to sell his Taiwan business after allegedly suffering huge losses on the operation's TV branch, a report said Friday. Hong Kong media mogul Jimmy Lai, a pioneer of animated news, plans to sell his Taiwan business after allegedly suffering huge losses on the operation’s TV branch, a report said on Friday. The chairman of Hong Kong-listed Next Media (SEHK: 0282) has entrusted an unnamed investment bank with selling the business, which also includes Apple Daily newspaper and Next magazine, for US$500 million, Taipei-based China Times reported. Lai, a vocal critic of Beijing, expanded his media empire to the island in 2001, with the launch of Taiwanese editions of the weekly Next magazine and the Apple Daily. Both have been commercial successes. However, his venture into the island’s saturated television market in the middle of last year with several channels featuring news and entertainment appeared to be a failure, the report said. Initially Lai planned to get rid of the money-losing television division only, but he was advised to sell the whole company to attract buyers, the report quoted unnamed sources as saying. There are more than 100 cable TV channels in Taiwan, including six 24-hour news stations. Lai had accused Taiwan’s government of trying to rein in the island’s once-vibrant media when it repeatedly rejected his application for a news channel, citing the group’s sensational reporting style. Last year, Lai was given the green light to set up the news station after he promised to leave sex and violence out of his trademark animated news. The news station alone currently employs about 400 people. Next Media did not return calls seeking comments on the report.

Orient Overseas Container Line has signed a deal with the Port of Long Beach to lease the Californian port's Middle Harbour container terminal for 40 years in what is the biggest port agreement in United States history. The Tung family-controlled shipping firm will pay a total of US$4.6 billion to rent the 121.6 hectare box terminal until 2052. The pact was signed about two and a half months after the port's harbour commissioners gave preliminary approval for OOCL to lease the Middle Harbour facility after 12 months of talks. Stanley Shen, OOCL's investor relations expert, said Middle Harbour was "an exclusive terminal for us and Grand Alliance partners". These comprise German container line Hapag-Lloyd and Japan's Nippon Yusen Kaisha. He said it was likely the three container line partners would deploy ultra-large containerships of more than 10,000 teu (20-foot equivalent unit) on transpacific services to serve the new terminal. "We are planning for the future," he said yesterday. The 12,562 teu containership, MSC Fabiola, operated by rival container line Mediterranean Shipping, became the largest ship to call at a North American port when she docked at Long Beach on March 16. Ultra-large containerships offer economies of scale, reduced fuel consumption and improved environmental performance compared with smaller vessels, but many North American ports, except Long Beach, have restrictions on the size of ship they can handle. A ceremonial ground breaking will be held at Long Beach next month, although construction work on the project, which is being funded by the port, is already well under way. The terminal will be capable of handling 3 million teu a year, equivalent to about half of the 6.1 million teu Long Beach handled last year. The port is spending US$1.2 billion to merge two existing container terminals, one of which is operated by OOCL subsidiary Long Beach Container Terminal, into the single Middle Harbour terminal. Construction, which will be completed in 2020, involves the formation of 1.4 kilometres of new wharves, rail facilities and 37 container-storage areas. OOCL will invest US$500 million to equip the facility with more environmentally-friendly equipment including electric powered cranes to replace diesel cranes. The facility will have shoreside power to enable ships to plug in to the local network and switch off their engines while berthed. Christopher Lytle, Port of Long Beach executive director, said: "I can't overstate the significance of this agreement. It is the largest and most far-reaching terminal lease ever at the Port of Long Beach."

 China*:  Apr 8 2012 Share

Nanjing University signs deal with UC Berkeley - Hong Yinxing (right), chancellor and professor of economics with Nanjing University, signs a campus-wide exchange agreement with Professor Robert Birgeneau (left), also chancellor of UC Berkeley on April 5. The first stop of his one-week North American tour, Hong said his delegation of leading faculty aims at promoting Nanjing University as an outstanding high-learning institution, and fostering more academic and people-to-people exchanges with American and Canadian counterparts. They will leave for Johns Hopkins University in Washington DC on April 7, stop in New York City, and conclude their trip at the University of Waterloo in Canada.

Mainland authorities said holidaymakers would be allowed to travel to the disputed Paracel Islands in the South China Sea by end of this year, in a plan that could add another irritant to Beijing's maritime tensions with Vietnam and other neighbours. China News Service reported yesterday that island tourists would take the cruise ship Coconut Princess from Haikou or Sanya in Hainan , the southernmost island-province that is close to the disputed islands. It also reported that only Yongxing island - at two square kilometres, the largest among Paracel Islands' 22 islets - is scheduled to open for tourists within the year. The Paracel Islands, a military zone, have been off-limits for decades, and they lack necessary tourism infrastructure. The semi-official newswire also said Wang Zhifa , deputy director of the National Administration of Tourism, told the annual parliamentary sessions last month that the agency was working with Hainan authorities to expand tourist activities on the islands. The plan "will help us to protect our frontiers and demonstrate the existence of our sovereignty", he said. However, yesterday, a staff member with the tourism administration told People's Daily that the national travel authorities "don't have the relevant information on this yet" and they're looking into the media reports. Deng Xiaogang, a vice mayor of Haikou, said Hainan was working on a detailed plan to open up Paracel Islands to tourism, China National Radio reported on Wednesday. But the website of the People's Daily later cited Deng as saying he had never spoken to the media about this issue. "[I] don't understand anything about tourism in the Paracels," he told the People's Daily. Foreign Ministry spokesman Hong Lei, when asked about the possibility of promoting tourism in the Paracels, repeated the government's view that the islands' sovereignty indisputably belonged to Beijing. The Paracels - known as Hoang Sa Islands to Vietnam - have been controlled by Beijing since 1974. But they are also claimed by Vietnam, which has long asked Beijing to respect its sovereignty and end practices such as recent military drills and sailboat races that could threaten peace and stability in the South China Sea. Last month, tensions rose after Beijing said it had detained 21 Vietnamese, accusing them of illegally fishing around the Paracel Islands. Hanoi countered that the fishermen had been detained in its waters and demanded their immediate release. Professor Ni Lexiong , a military affairs expert at Shanghai University of Political Science and Law, said the tourism plan for the Paracel Islands could raise public awareness on the mainland of the islands' sovereignty. "Surely there'll be mainland tourists going there as long as authorities open up the islands, despite the lack of necessary fresh water or tourism infrastructure such as hotels and restaurants. It can be a day trip or tourists can camp in tents." In fact, developing the Paracel Islands has been on Beijing's agenda as early as late 2009, in a blueprint to transform the resort province Hainan into an "international tourism island" that has been endorsed by the State Council. Although the Paracel Islands have been labelled by mainland media as the "Chinese Maldives", very few holidaymakers have visited the islands. There is only one ship travelling between Hainan's Wenchang city and Yongxing island every 20 days, sending drinking water, vegetables and daily supplies. The remote islands did not have mobile phone or internet services until last year.

The People's Daily has heaped lavish praise on Shanghai's steady development under the city's party boss, Yu Zhengsheng - praise that political analysts see as a boost for the princeling's chances of being promoted in the autumn leadership shake-up. The front-page splash of the Communist Party mouthpiece yesterday - an obvious endorsement of Yu's political achievements in the mainland's financial hub since he took over the post from predecessor Xi Jinping shortly after the last National Party Congress five years ago - comes at a sensitive time. Key questions remain unanswered surrounding last month's sacking of Chongqing party boss Bo Xilai , which has unleashed a political tsunami on the mainland, including Beijing's final say on the so-called Chongqing model - Bo's controversial theory of development advocating a redistribution of wealth and social justice. Bo's removal has widely been seen as a major setback for conservative leftists, whose comeback in recent years was widely viewed as a threat to Beijing's reform and opening up. Although the 7,100-word article, headlined "Shanghai strives for success in transformation and development", made no mention of the now notorious Chongqing model, reminiscent of the Maoist era, analysts noted that Shanghai and Yu were praised primarily for sticking to the policies of the top leadership. "Shanghai, which has always been at the forefront of reform and opening up, has yet again held aloft the banners of deepening reform and opening its doors wider to the outside world," the piece said. Yu was also cited in the story as promising that Shanghai would take the lead nationally to transform its economy, which features high energy consumption, heavy pollution and an overreliance on investment, housing and labour-intensive sectors. "This is the hope of the party central and the most essential task for Shanghai," he said. The article then went into lengthy detail, elaborating on the municipal government's achievements over the past five years, focusing on how Yu and Mayor Han Zheng sought to achieve unity in thinking among local cadres on key development issues such as public welfare, conservation and balancing the pace of development. Analysts said that Yu, who turns 67 this month, was apparently favoured by the top leadership because of his relatively low profile compared with the maverick Bo, 63, who seldom hid his ambition of grabbing a top seat on the ultra-powerful Politburo Standing Committee. Although analysts said it was too early to tell if Yu could be elevated to the nine-member-strong Politburo Standing Committee, they agreed that the party newspaper's praise was unusual and politically significant for the rising star. They also noted that Vice-President Xi received similar high-profile praise from the newspaper for his work in a six-month tenure, weeks before he was promoted from the Shanghai post. Beijing-based political analyst Hu Xingdou said the article was a clear indicator that Yu's chances of elevation had increased. "It is fairly possible that those who have chances to win a seat on the top leadership will receive praise in similar fashion," he said. Beijing-based historian Zhang Lifan said the lavish praise for Yu could also be seen as praise for Xi, who should also be given credit for Shanghai's achievements. But both analysts said it was too early to say if the article was a rebuttal of Bo's Chongqing model. "Beijing has yet to give its verdict on Bo and his Chongqing model. They have been simply left in the cold at the moment, and the party apparently wants to foster an image of unity and harmony," Hu said. Veteran China watcher Johnny Lau Yui-siu also cautioned that the significance of the article should not be overstated. "Although the article sings the praises of Yu, it could also represent an official verdict on Yu before his possible imminent retirement," Lau said. He noted that the party newspaper, which had been used as platforms by various party factions, presented conflicting viewpoints from time to time. In January, it ran a front page article praising Bo's efforts to pursue the path of "common prosperity (SEHK: 0803)", a socialist approach to redistributing social wealth.

Beijing has given rare details of what is says are the links between militant groups in Xinjiang and a neighbouring country, most probably in China’s close ally Pakistan, as the Ministry of Public Security unveiled a list of six suspects wanted by the authorities. The ministry published the names of the suspects, all apparently ethnic Uygurs, on its website (www.mps.gov.cn) late on Thursday, along with their photographs and an outline of their alleged crimes. All six had spent time in what the ministry called “a certain south Asian country” – a likely reference to Pakistan – where they were trained to carry out terror attacks and incite militants in the mainland to carry out suicide bombings and knife attacks. The ministry said Nuermaimaiti Maimaitimin had been given a 10-year jail term in 1999 in the unnamed south Asian country, but had escaped in 2006 and had proceeded to send a comrade back to Xinjiang, where he masterminded an attack last year. “The ministry hoped that foreign governments and their law enforcing departments would help to arrest the six and hand them over to Chinese authorities,” the official Xinhua news agency added. China has blamed incidents of violence in Xinjiang, home to the Turkic-speaking Muslim Uygur people, on Islamic separatists who want to establish an independent state of East Turkestan. Some Chinese officials have blamed attacks on Muslim militants trained in Pakistan, though the Foreign Ministry has refrained from public criticism of the neighbour and ally. The Chinese Foreign Ministry did not immediately answer faxed questions about where the six suspects allegedly operated. Both Chinese and Pakistani officials have said that the militants based in western China have ties to the Pakistani Taliban and other militants in northwestern Pakistani regions along the Afghan border. Officials in Kashgar, a city in south Xinjiang, said a stabbing attack there in late July was orchestrated by members of the separatist East Turkestan Islamic Movement who trained in Pakistan before returning to China. Exiled Uygur groups and human rights activists say China overstates the threat posed by militants in Xinjiang, which sits astride south and central Asia. Xinhua said the East Turkestan Islamic Movement was “the most direct and real safety threat that China faces”. Pakistan and China have long been allies but Pakistan has leaned closer to China as its relationship with the United States, Islamabad’s main donor, has become more strained. China sees Xinjiang as a bulwark against the predominantly Muslim countries of central Asia. The region, with a sixth of the country’s land mass, is also rich in natural resources, including oil, coal and gas. The Uygur people account for just over 40 per cent of the region’s 21 million population. Many chafe at government controls on their culture and religion.

Chocolates in the shape of Easter bunnies are displayed at a store in Berlin, Germany, April 5, 2012. People shopped around to prepare for the Easter holiday on April 8.

Yu Lizhong (second from right), president of East China Normal University, attends the opening ceremony for the debut of New York University Shanghai on March 28, 2011. Yu will assume the post of president of NYU Shanghai. The country's first Sino-US higher education institute - New York University Shanghai - will start to admit undergraduate students in 2013, sources from the university said on Thursday. The university was co-established by New York University in the United States and East China Normal University, and was approved by the Ministry of Education in early 2011. According to the enrollment plan, about 300 undergraduate students will be selected from across the world in the autumn semester of 2013, with Chinese students making up 51 percent of the intake. Applicants from the Chinese mainland will be selected on their national college entrance exams, and international students will be selected through NYU's global system. Yu Lizhong, president of East China Normal University, will assume the post of president of New York University Shanghai. Jeffrey Sean Lehman, former president of Cornell University and current chancellor and founding dean of the Peking University's school of transnational law, will be the deputy president and chief executive officer of the new university. The NYU Shanghai campus, located in the Pudong Lujiazui financial area, is still under construction and not due for completion until 2014, so the first 300 undergraduates will study at the East China Normal University campus. NYU Shanghai will offer a full range of academic courses, all taught in English. It will launch seven majors for undergraduates in 2013 - natural sciences, math, engineering, life science, finance, economics and arts. In a bid to improve students' global perspectives, students at NYU Shanghai will be able to apply to study for up to three semesters at other NYU international sites. The tuition fees at NYU Shanghai and enrollment procedures will be released later this year. "This is an important advance in developing China's higher education and boosting its internationalization," said Yu Lizhong.

Hong Kong*:  Apr 7 2012 Share

An artist's rendering of an architecture centre beneath a flyover in Sheung Wan. An architects’ group intend to build a centre under a flyover in Sheung Wan to show how Hong Kong can make better use of urban areas. The Hong Kong Architecture Centre, a non-profit institution set up by prominent architects in 2006, was asked by Secretary for Development Carrie Lam Cheng Yuet-ngor to make use of a “leftover urban space” when applying for a heritage building to house their centre. “The secretary said that we architects should exercise creativity and use a place that others cannot use,” said Dr Chan Lai-kiu, vice-chairwoman of the centre and an award-winning architect. The former centre in Peel Street was closed due to re-development by the Urban Renewal Authority. Their search identified a traffic island underneath a flyover at the junction of Connaught Road and Rumsey Street. This is large enough to provide a gross floor area of 700 square metres. The proposed building, a round, low-rise block with an accessible rooftop, is set to be a highlight in the shadow of the flyover. “Architecture centres in cities like Chicago and Amsterdam are interesting tourist spots,” said Chan. “We hope our centre will become a new attraction and demonstrate how Hong Kong architects make clever use of wasted urban areas,” Chan, who is also design and project director of Hysan (SEHK: 0014), added. Exhibitions and talks to enhance architectural appreciation among the public will be held at the centre, which will also provide guided tours. The project, now awaiting Town Planning Board approval, is expected to be completed in 2015.

It would be a loss to Hong Kong if development minister Carrie Lam Cheng Yuet-ngor does not serve in the next government, a key campaigner for Leung Chun-ying said on Thursday. Urban Renewal Authority chairman Barry Cheung Chun-yuen, who chaired Leung’s campaign office, hailed the secretary for development as ambitious and brave. Cheung told Commercial Radio Lam should be in the next administration. “Definitely ... I hope the new government will have a team of capable officials to serve the people.” His remarks follow rumours that Lam was Leung’s first choice for chief secretary. “Secretary Lam is a very outstanding official. If she is not in the cabinet in the new government, it will be disappointing,” Cheung added. Pressed to say whether he was helping Leung form the next cabinet, Cheung said: “I don’t want to comment.” He also declined to comment on whether it would be regrettable if unpopular Chief Secretary Stephen Lam Sui-lung quit after June. Cheung expressed confidence Leung would find a suitable candidate for financial secretary, saying there were many experienced, outstanding people to choose from. Meanwhile, Liberal Party deputy chairwoman Selina Chow Liang Shuk-yee said she was not worried Leung might take revenge on the party for not supporting him in the March 25 election. Speaking after appearing on Commercial Radio separately from Cheung, Chow said a chief executive had to be able to communicate with people from different backgrounds. She and the public would closely monitor whether Leung recruited people based on their talents or their close relationships with him. On the radio programme, Chow said her party had opted not to support Leung because they feared his leadership style might cause disharmony. She declined to say whether she believed defeated rival Henry Tang Ying-yen’s claim that Leung had suggested in the Executive Council that a hard line should be taken on protesters against the national security legislation and that the licence period of Commercial Radio be shortened. Chow said if the legislation under Article 23 of the Basic Law was revived, it might “bring certain consequences”. Asked whether Leung had supported the legislation in the Executive Council before Liberal James Tien Pei-chun resigned from the Exco in protest, Chow said “a considerable number” of councillors had supported the proposed law.

The unprecedented arrests of two billionaire real-estate tycoons and a former top official on suspicion of bribery last week have helped to untap public anger over the tight relationship between powerful developers and the Hong Kong government. At the crux of the discontent is the sense that government—through favorable policies—has coddled real-estate developers and helped send property prices sky-high. While such concerns have persisted for years, public resentment intensified when the city's leader last month admitted to riding on luxury yachts and private jets owned by local tycoons, sparking thousands to take to the streets in protest. Illustrating such tension, a March opinion poll by the University of Hong Kong found that as many as 36% of Hong Kong residents polled generally didn't trust the government, figures not seen since the city was hit with the SARS epidemic in 2003 when the government's handling of the crisis was questioned. In this densely populated city of seven million, almost half of Hong Kongers today live in some form of public housing, which generally receives some subsidization. The private housing market, meanwhile, has been dominated by family-run developers. These companies helped shape Hong Kong's skyline, control many sectors including ferries and mobile-phone networks, and have been seen for decades as all-powerful. That changed with the arrests last week of brothers Thomas Kwok and Raymond Kwok and former No. 2 Hong Kong official Rafael Hui, in the city's biggest corruption scandal in recent memory. Though charges haven't been filed against the Kwoks, shares of the their property titan, Sun Hung Kai Properties Ltd., 0016.HK -0.31% have slid some 13% since the arrests. Raymond Kwok on Tuesday denied any wrongdoing and said he believed his brother was innocent as well. The Kwoks and Mr. Hui, who have been released on bail, couldn't be reached to comment Wednesday, while the spokeswoman at Sun Hung Kai and the spokesman from the Independent Commission Against Corruption declined to comment. Thomas Chan, a longtime executive director at Sun Hung Kai, was arrested by the antigraft agency the week before the Kwoks' arrest. Mr. Chan, who also wasn't charged and was released on bail, couldn't be reached to comment. The Kwoks' arrests came just days after the city's elite chose as its next leader Leung Chun-ying, a former cabinet head whose more populist rhetoric has unnerved some of the developers. The man Mr. Leung will succeed on July 1, career civil servant Donald Tsang, has come under fire for not doing enough to relieve pressure for ordinary families crammed into tiny, private apartments while paying high rents. Public outrage has grown as the gap between Hong Kong's rich and poor expanded to become the widest in Asia. Opposition lawmakers argue that government policies have been skewed to favor the city's tycoons. They point to the administration's hesitation to restart a subsidized homeownership plan—even as housing prices surpassed the last property bubble in 1997—as one of the policies that favor developers. Bowing to public pressure, the government late last year said it would consider relaunching the program. From 2000 to 2010, government spending on public housing shrank by 57%, mainly from suspension of the subsidized-homeownership plan, a government spokeswoman said. This shift benefited the property industry, for it no longer had to compete with government-subsidized sales, according to Leo Goodstadt, who was the Hong Kong government's chief policy adviser from 1989 to 1997. From 2000 to 2010, the price of private apartments in Hong Kong rose almost 70%. Following Mr. Tsang's disclosure that he took rides on private jets and yachts belonging to big businessmen, thousands of people marched to demand his early resignation, while the city's antigraft agency launched an inquiry into the favors Mr. Tsang may have accepted from local businessmen. Mr. Tsang has denied wrongdoing. Close government-business ties were an issue before the British colony returned to Chinese control in 1997. But back then, political observers say, many high-level colonial officials typically retired back to the U.K., so revolving-door conflicts weren't as big a concern. For much of Mr. Tsang's tenure, regular land auctions in Hong Kong had been suspended, so that sites were auctioned only if developer bids hit a high enough threshold to trigger a sale, shrinking the number of new apartments available. The land-auction suspension was enacted in response to a weak property market, but critics say the government wasn't quick enough to reverse the measures when the market improved. Developers also have been allowed to advertise what critics say are inflated square-footage of apartments in which all so-called usable space—including elevators and common areas—is factored in to an apartment's square footage. The government more recently announced measures to cap such practices, but developers are still permitted to inflate figures by up to 10%. With residents coping with exorbitant rental prices, property developers have emerged as lightning rods for public anger. Mr. Goodstadt said the real issue is about "government policy and its failure to provide competition through its own public housing properties." The city's real estate developers won't likely face much change anytime soon, according to Stan Wong, a professor at the Chinese University of Hong Kong, whose research has shown that politically connected companies in Hong Kong have better levels of performance, as measured by return on equity and market-to-book ratio. Analysts point to the next chief executive's relative distance from the city's tycoons as a possible source for change in his five-year term. Mr. Leung "doesn't owe the tycoons any favors, that's for sure," said David Webb, a shareholder activist and former director at the Hong Kong Stock Exchange.

 China*:  Apr 7 2012 Share

US auto giant General Motors said on Thursday that its China sales set a record for March, despite an overall slowdown in the world's biggest car market. The company, the world’s biggest automaker by sales, sold 257,944 vehicles in March, up more than 10 per cent from the same month last year, and its highest total for the month, according to a company statement. Strong March sales – helped by demand for the Buick brand – brought total sales for the first quarter to 745,152 vehicles, which is also a quarterly record, it said. “GM has maintained our growth in our largest market this year, despite an overall industry slowdown,” Kevin Wale, president of GM China Group, was quoted as saying. China’s overall auto sales have slowed after the government rolled back sales incentives and some cities imposed tough restrictions on car numbers to ease chronic traffic congestion and pollution. Nationwide sales rose just 2.5 per cent to 18.51 million units last year, compared with an annual increase of more than 32 per cent in 2010. The China Association of Automobile Manufacturers has yet to release auto sales figures for March. In February, China’s total vehicles sales surged 24.5 per cent to 1.57 million units but were probably boosted by seasonal factors. Analysts say domestic consumers favour foreign brands over their local rivals for name recognition and a perception of higher quality. GM sold more than 2.5 million vehicles in China last year. As the world’s largest auto market, China has become increasingly important to foreign players, like GM and Germany’s Volkswagen. Separately, Ford said on Thursday it would introduce four new vehicles to the China market this month, as part of previously announced plans to bring 15 new vehicles to the country by 2015.

A heated discussion has been raging in cyberspace on the mainland about the US ambassador's shunning of a five-star hotel in favour of a cheaper one when he went to a conference in Hainan province this week. Gary Locke, who is known to be low-key and frugal, is back in the mainland media limelight after reportedly saying he could not afford the official hotel for the Boao Forum for Asia, which ended on Tuesday. A reporter with Southern Television Guangdong said on her weibo microblog on Tuesday that Locke did not choose the five-star Sofitel, where other senior government officials were staying, because "it's too expensive", citing an aide to the envoy. The Sofitel's room rates were three times the rate the US government allows for official visits, the aide was quoted as saying. Locke ended up in a four-star hotel nearby, where the most expensive suite costs 940 yuan (HK$1,159) a night. By last night, the reporter's original tweet had been reposted nearly 17,000 times. Tens of thousands of mainlanders, including some celebrities, have joined the online discussion on Locke's lodging in Hainan. The majority of the online opinions, especially comments on major news portals such as Sina and Sohu, gave credit to Locke for his frugal behaviour, especially as seen against many mainland government officials' wasteful lifestyle. But a small number of internet users questioned his intention. They said Locke was just putting on "another show" in an effort to impress people after famously flying economy class, trying to buy a coffee at Starbucks with a coupon and carrying his own luggage. An anonymous online commentator from Luoyang , Shaanxi province , wrote on Sina weibo that Locke made mainland officials look dirty and ugly. "A US official disciplines himself in a foreign country, while our officials indulge themselves under the nose of disciplinary watchdogs," he wrote. "No wonder the prices of expensive wines, cigarettes and teas can be pushed up endlessly in our wonderful land." Pan Shiyi , a mainland property tycoon, voiced his support for Locke. "I sent the tweet to ambassador Locke, and he confirmed it with a yes," Pan wrote on his weibo, backing the authenticity of the Guangdong reporter's original tweet. Li Kaifu, president of Innovation Works and former chief of Google China, rebuffed speculation that it was just a piece of public showmanship. He posted on his weibo a link to the US Department of State's travel budget page. "US$181 for Haikou , US$258 for Beijing and only US$71 for Lijiang . So ambassador Locke is only abiding by the law in a relatively rigorous and refined system," Li wrote. The tweet was reposted over 11,000 times. But blogger Nan Musang wrote that Locke was putting on a charade. "The rule in the US is that the lodging cost for a conference can be reimbursed even if it exceeds the budget," he wrote. "When Locke served as the US secretary of commerce, his staff were reportedly travelling frequently by first class and staying in luxury hotels," Nan said.

China plans to let tourists visit the disputed Paracel Islands in the South China Sea, according to official comments reported on Thursday that could add another irritant to Beijing’s maritime tensions with Vietnam and other neighbours. China and Vietnam maintain rival claims across swathes of the South China Sea, including the Paracel Islands. Called the Xisha islands in Putonghua, they are a cluster of close to 40 islets, outcrops and reefs controlled by Beijing. That dispute and a mosaic of other conflicting claims have pitted China against Vietnam, Brunei, Malaysia, the Philippines, and Taiwan. The proposed opening of the Paracel Islands to tourism could add to the long-standing friction, which has drawn the United States into pressing Beijing over the issue. “The broad plan is being worked on, and a specific one is also being worked on, and we hope that within the year we’ll be able to open maritime tourism to the Paracel Islands,” said Deng Xiaogang, a deputy head of tourism for Hainan, the closest Chinese province to the disputed islands. Deng’s comments were first reported by state radio on Wednesday and later widely reported by Chinese media. Wang Zhifa, a deputy head of China’s national tourism authority, said in March that “developing tourism in the Paracel Islands will help us to protect our frontiers and demonstrate the existence of our sovereignty”, said the news report. Last month, China and Vietnam quarrelled after Beijing said it had detained 21 Vietnamese for illegal fishing around the disputed islands but Vietnam said the fishermen had been detained in its waters and demanded their immediate release. Tension rose in the region in the past two years over concern that China is becoming more assertive in its claim to the seas, believed to be rich in oil and gas and straddling shipping lanes between East Asia and Europe and the Middle East. The stakes have risen over the past year as the United States has refocused military attention on Asia and strengthened its ties with the Philippines and Australia. The Philippines claimed progress on Wednesday in persuading southeast Asian leaders to present a united front to China over disputes in the South China Sea after a leaders’ summit of the Association of South East Asian Nations (Asean). China has insisted on handling the disputes on a one-on-one basis rather than multilaterally, a strategy some critics have described as “divide and conquer”. China says its sovereignty is indisputable and historically based.

China called on Thursday for all sanctions on Myanmar to be lifted following Nobel Peace Prize laureate Aung San Suu Kyi’s by-election victory at the weekend, a poll result it said it hoped would be good for the country’s stability. “The result was broadly affirmed domestically and by the international community,” said Foreign Ministry spokesman Hong Lei, in China’s first official comment on Sunday’s elections, which yielded a landslide victory for Suu Kyi’s party. “China hopes that this by-election will be conducive to pushing Myanmar’s political reconciliation process and Myanmar’s stability and development,” Hong told a regular news briefing. While sanctions have blocked Western investments, China has become Myanmar’s biggest ally, investing in infrastructure, hydropower dams and twin oil-and-gas pipelines to help feed southern China’s growing energy needs. “China has noted that some Western countries have said they will lift sanctions on Myanmar. China has had a consistent stance on this issue. We welcome moves by these countries to lift sanctions on Myanmar and call on all parties to fully lift sanctions on Myanmar as soon as possible.” The United States said on Wednesday it was ready to relax some sanctions on Myanmar to recognise its fledgling democratic transition, including a ban on US companies investing in or offering financial services to the country. The European Union may also lift some sanctions, but will maintain pressure for the release of remaining political prisoners, British Foreign Secretary William Hague said. Beijing has long been Myanmar’s closest partner, but relations have been strained since the former Burma suspended building a Chinese-funded dam in September. Washington’s moves to re-engage with the once-isolated country are likely to complicate ties further. US Secretary of State Hillary Clinton met Suu Kyi in December as Myanmar’s new civilian government pledged to forge ahead with political reforms and re-engage with the world community. Clinton’s trip followed a decision by US President Barack Obama to open the door to stronger links, saying he saw the potential for progress in a country until recently seen as a reclusive military dictatorship firmly aligned with China. China has counted on Myanmar as a bulwark against what Beijing sees as US attempts to surround China. That reliance could be threatened now Washington has begun contacts with a Myanmar which is embarking on tentative political liberalisation. Suu Kyi has tried to reassure China – a strong backer of the military regime which locked her up – that she does not consider Beijing an enemy, making remarks to that effect almost immediately upon being released from house arrest in 2010.

China’s Ultra-Rich Fly Into Sanya - The southern Chinese city of Sanya plays host to the Hainan Rendez-Vous yacht and jet show, April 5 to 8. A battle is unfolding in the South China Sea: the fight to win the pocketbooks of China’s richest citizens. Over the next four days, 300 of China’s wealthiest are being flown in on private jets by makers such as Boeing and Cessna, as an unprecedented number of companies pile onto Hainan Island. The occasion? The annual Hainan Rendez-Vous yacht and jet show in Sanya, southern China’s travel hotspot for the ultra-wealthy. Against a landscape of BMWs and ocean bay, the yacht companies are showing off their splashiest toys: boats selling for US$1 million to US$100 million and more. Everything — from the parties to the price tags — is getting bigger in Sanya’s Visun Marina, where 200 companies are rolling out the red carpet and displaying superyachts measuring more than 35 meters in length. All of them have courted the local media in the hopes of spreading the news about their lavish luxury goods, undoubtedly the most expensive category of the luxury industry. It will take a lot of attention to build what is still a tiny market. China’s yacht owners make up a mere fraction of the 2.7 million high-net-worth individuals whose assets are more than 6 million yuan (nearly a US$1 million) and the 63,500 people who have assets worth more than 100 million yuan (nearly US$16 million), according to Shanghai-based wealth research firm Hurun Report. Only 100 Chinese nationals own yachts measuring around 12 to 18 meters, according to Hurun. In 2006, when the U.S. had a comparable number of millionaires, there were around 7,000 American yacht owners. Yacht companies believe the tide is about to turn.

A model demonstrates a bicycle studded with crystal rhinestones at a department store in Wenzhou, Zhejiang on April 1. 

New policies could curb China's fast-growing market in online overseas purchasing, industry participants said. Over the past decade, many Chinese living overseas have taken advantage of policy loopholes by selling and shipping goods that would cost far more in China. The government has decided to close those loopholes using new policies that take effect on April 15. The policies, issued on March 28 by the General Administration of Customs, include new duty procedures for imported products and restrictions on collaboration between domestic postal and logistics companies and overseas ones, which are the main channels for overseas purchases. "For sure, the good era has gone," said a woman surnamed Su, an online overseas purchasing agent specializing in items from The Body Shop, the UK beauty chain. The Shanghai native started her online business in 2006 while studying computer science and working as a part-time sales representative for the brand in the UK. She subsequently returned to her hometown and abandoned the technology sector, instead working for herself and selling thousands of bottles of shampoo a month. "I am not about to lift the price of all my products right now, as what I am selling now was shipped here months ago. I can't tell what will happen next, but price hikes will definitely be the last choice, because they will scare away many customers," said Su. While the future is uncertain for small and medium-sized online purchasing agents, some foreign logistics companies that rely heavily on shipping to Chinese shoppers are cutting back or suspending some operations. USZCN.com, a logistics company in the United States that is tailored for Chinese online shoppers, put a notice on its website saying it was suspending new member registrations for 25 days. Other bigger players like China United Logistics and Transparcel have been more cautious in shipping goods and pre-charging tax on duty-paid prices. According to a report by the China e-Business Research Center, the overseas purchasing market in China reached 24 billion yuan ($3.8 billion) last year and is likely to double this year. "Value-for-money products, appreciation of the yuan and goods aplenty are the three major things that attract domestic shoppers," said Mo Daiqing, one of the leading researchers of the report. "But with the new policies, the market is sure to hit a snag with squeezed profit margins and confused customers," said Mo. Though Mo agreed that the new rules might help "clean up the chaotic market", she said the new policies will also drive many participants out of the fiercely competitive business. The report said that among all items, cosmetics and skincare products, milk powder and handbags and suitcases were the three goods most frequently purchased overseas through online agencies. More than half of the imported milk powder came into China through just this type of online buying, the report said.

Bullet train stewardesses put on new uniforms - Stewardesses dressed in new uniforms pose for photos next to a bullet train, which is bound for Nanjing, in East China's Shanghai municipality, April 4, 2012, the last day of the national public holiday around the Qingming Festival.

Hong Kong*:  Apr 6 2012 Share

Leung Chun-ying visited two powerful former supporters of his main opponent as chief executive yesterday and was told by one: if he wants support, be sincere and open and remember that the rule of man, as distinct from the rule of law, has no place in Hong Kong. In conciliatory mode after a bruising and scandal-filled election campaign, the chief executive-elect met Rita Fan Hsu Lai-tai, once tipped as a contender for the top job, at her office after calling at the home of 94-year-old former Executive Council convenor Chung Sze-yuen. Both supported Leung's rival, Henry Tang Ying-yen. The meetings came as speculation over the make-up of Leung's cabinet continued to swirl, with several possible contenders for positions saying they had yet to be invited and one - Financial Secretary John Tsang Chun-wah - saying he was "thinking about it". After their 45-minute meeting Fan, a member of the National People's Congress Standing Committee, said: "If [Leung's] government works for Hong Kong people earnestly, sincerely and honestly, I think everyone would support it." The former Legislative Council president added: "[Hongkongers'] common hope is that freedom of expression and of speech currently enjoyed can remain unchanged. "In a nutshell, I believe ... what is paramount is rule of law, not rule of man." Vowing to meet both people who had supported and opposed him, Leung said he had called on "two old friends" to seek advice. Fan described it differently. She said: "We've known each other for many years ... Of course, I ought to treat our chief executive-elect in a courteous fashion." She reiterated that a "big reconciliation" in the pro-establishment camp could not be achieved merely by words, and said she did not see that she had any responsibility to help bring one about. Earlier, Leung met members of 11 professional groups and asked them for a "wish list" he could take to Beijing when he visits the capital to be formally appointed. Professionals such as doctors, lawyers, architects and engineers have had their qualifications recognised on the mainland under the Closer Economic Partnership Arrangement for nine years, but have complained of numerous obstacles preventing them from doing business there. Several of those at the meeting, including Wong and Medical Association vice-president Dr Chow Pak-chin, said they had not been invited to join Leung's government. On Commercial Radio earlier, former Hospital Authority director Ko Wing-man said the same. Permanent secretary for commerce and industry Andrew Wong Ho-yuen arrived at Leung's office immediately after the professionals' meeting, sparking speculation that he might have discussed a government role, but Leung said they had only talked about Cepa. Asked whether he would stay or quit after June 30, finance chief Tsang only said briefly that he was "still thinking", without dropping further hints. Meanwhile, 20 pan-democratic legislators have invited Leung for a meeting this month to discuss whether the city would introduce universal suffrage for the chief executive election in 2017 and enact national security legislation under Article 23 of the Basic Law.

Financial Secretary John Tsang Chun-wah (pictured) has seemingly backtracked from his view that conflict-of-interest claims against Chief Executive-elect Leung Chun-ying are a "serious" matter. "I did not feel it was serious. Neither did I feel it was not serious," Tsang said yesterday at the fourth hearing of the Legislative Council panel investigating Leung's role as a judge in the 2001 West Kowloon arts hub design contest. He was asked repeatedly to use an adjective to describe the matter. "I don't feel there's a need to say it is serious or not. Something happened, and I just dealt with it efficiently," said Tsang, who oversaw the contest as the secretary for planning and land. Yesterday's hearing also heard that the judging panel's chairman and a British member, who had a business relationship with competition winner Norman Foster, had refused to give evidence. At the first hearing last month, Civic Party lawmaker Tanya Chan asked Tsang whether Leung's failure to declare that his firm had been named as a property adviser to one of the competitors was a serious matter. Tsang replied: "It was a fact." He yesterday said the "fact" he was referring to was that Leung had ticked a box on a conflict-of-interest reporting form to say he held no directorships, when Leung was a director of property broker DTZ. At last month's hearing, Tsang said he had "resolved" the issue of Leung's conflict of interest at the time. Eric Johnson, a former civil servant who had worked under Tsang, told the panel that Tsang "treated [the conflict of interest] as a serious matter". In February 2002, minutes before the judging panel announced the results, Tsang phoned Leung to ask why the entry led by Malaysian architect Ken Yeang had named DTZ as a property adviser. Yeang's proposal, which was to have received an honourable mention, was disqualified. Leung has denied any wrongdoing and said a DTZ director had given advice on land values to Yeang's team without his knowledge. Yesterday's hearing also heard from Bosco Fung Chee-keung, the former director of planning. Fung chaired a technical panel that advised the competition's judges on the selection of Peter Rogers, a director of British developer Stanhope, as a member of the judging panel. Fung said Rogers, whose firm was involved in two deals with Foster, had been recommended by Jacob Rothschild, the chairman of the judging panel. Rothschild, like Foster, is a British peer. It remains unclear whether Rogers knew that Foster was among the entrants. Rothschild and Rogers have both turned down invitations to testify before the Legco panel. The Legco panel will meet again on April 14, when it will hear from four local members of the judging panel.

The shutdown of the Lantau attraction in January 26 stranded 800 passengers in mid-air as temperatures fell to 3 Celsius. Inadequate monitoring of the troubled Ngong Ping 360 cable car meant engineers missed two chances to spot problems which led to a system failure that left 800 passengers stranded in mid-air, an investigation report has revealed. The Lantau attraction has been closed since the incident on January 25, when vibrations triggered a sensor on the bullwheel, which winds cable, bringing the system to a halt. Service should resume tomorrow after an inspection by the Electrical and Mechanical Services Department. The attraction's managing director, Wilson Shao Shing-ming, said the cable car, which has suffered a string of technical problems since opening in 2006, was now "more reliable" - but he stopped short of promising there would be no more shutdowns. According to the department's report, released yesterday, monitoring engineers first noted rising vibration in bullwheel bearings on December 16. But they decided it was not serious enough to halt operations. Wear and tear on the bearings and the lining of the bullwheel, possibly caused by inadequate lubrication, led to more vibration. Two days before the breakdown, a routine measurement of the lining of the bullwheel found that "three out of a total of 12 measurement points marginally exceeded the wear limit". Engineers had planned to replace the lining within two weeks, in accordance with guidelines. "The current interval of vibration monitoring is not able to ensure early identification of defects on the bearings and their timely replacement," the report said. The failure at Lunar New Year, which occurred as temperatures plunged to 3 degrees Celsius, was the fourth technical fault in two months. Professor Lo Kwok-keung, of Polytechnic University's department of mechanical engineering, said the bearings should have been repaired after the December test. "If they had been, the passengers wouldn't have been stranded," he said. The operator has improved vibration monitoring and will "capture data on an ongoing basis", which will be studied every two weeks, the report said. It previously analysed vibrations only every four months. It will also improve handling of the lubricant it uses, as excess water in the lubricant was one possible cause of the wear and tear. Engineers have previously blamed heavy usage for the problems that have dogged the system. After an empty cable car plunged to the ground in 2007, experts said the system should be in operation for no more than 250 hours per month to allow time for maintenance.

 China*:  Apr 6 2012 Share

China’s mighty television industry came out in force at this week’s MIPTV entertainment trade show on the French Riviera as the country boosts its links with Western broadcasters. Sending its largest ever delegation to the show, which ran from Sunday to Wednesday, China indicated its willingness to increase television tie-ups around the world by inking co-production deals with big-hitting broadcasters. The 200-strong delegation lent a distinct Asian flavour to the event in Cannes, with the martial arts school of Henan Province staging a display of high kicks and moves at the weekend. BBC Worldwide announced at the show that it had signed its first co-production deals with CCTV-9, the documentary arm of China’s state broadcaster CCTV, for two new science series from the British broadcaster. The channel will air the series Wonders of Life, which examines the story of life through physics, at the end of this year, and Generation Earth” a study of the most ambitious engineering projects in history, in Spring next year. France Televisions also signed a memorandum of understanding on Tuesday, which opens the door for co-productions with CCTV-9 as well as other forms of co-operation, the French public broadcaster’s chairman Remy Pflimlin said. “With the world’s public audiovisual landscapes changing faster and faster, it is more important than ever that we work together on common strategies to maintain first-rate public services,” France Televisions said in a statement. The China Central TV (CCTV) documentary channel has a peak daily audience of 94 million people at home, 200 per cent growth in viewer numbers and 25 million subscribers to its international service. Luo Ming, editor-in-chief and vice-president at CCTV, who headed up the Chinese delegation, said his aim was to reach 200 hours of original factual output a year. “And this can only be achieved by working with the best local and international partners,” he was quoted as saying in a special MIPTV publication on China. At a panel discussion on Monday entitled CCTV-9: Meet The Decision Makers, Luo told participants the broadcaster wanted to “deepen this friendship with old partners and create opportunities for new friends.” Speaking last week at the two-day MIPTV documentary event preceding the main show, CCTV-9’s managing director Liu Wen said the channel aimed to be “a bridge between China and the rest of the world”. “We believe documentary is the best way to introduce Chinese culture to the world,” Liu said.

Boost for yuan's globalisation - Limit on foreign investment in mainland bonds and shares raised threefold to US$91b as next step in making yuan an investment currency - Beijing has almost tripled the amount foreign investors can put into mainland securities in a bid to speed up the internationalisation of the yuan and boost the A-share market. The increase of almost HK$450 billion in investment quota marks a further opening of its capital markets. The China Securities Regulatory Commission said yesterday on its website that it would increase the limit for investments under the US dollar-denominated Qualified Foreign Institutional Investor scheme by US$50 billion to bring the total to US$80 billion. The quota for investments under the yuan-denominated Qualified Foreign Institutional Investor scheme will rise by 50 billion yuan (HK$61.4 billion), to a total of 70 billion yuan. Quota under the US dollar-denominated scheme, introduced in 2002, is granted mainly to large international investment firms; the scheme denominated in China's currency and introduced only in December, allows mainland firms' Hong Kong subsidiaries to invest off-shore yuan funds in the mainland. The securities regulator announced the quota increases hours after Dai Xianglong, chairman of the National Social Security Fund (NSSF), the mainland's near two trillion yuan pension fund, said at an international forum that China would speed up the globalisation of the yuan by expanding a scheme that allows foreign investors to invest in the domestic market. Brokers said the new quota would boost the market for A shares - issued by mainland stock markets and denominated in yuan - when stock exchanges reopen after today's holiday. Dai said it was "prime time to accelerate" currency reform on the back of improvements in Europe. "The storm is over in the euro zone, but the sky is not yet clear," he said at the Boao Forum in Hainan. The managing director of the International Monetary Fund, Christine Lagarde, had said recently there was no reason the yuan could not be an international currency, Dai noted. He said globalising the yuan should be done through market forces rather than through international alliances. For example, to make the yuan a global currency for trade settlement, the first offshore settlement centre was set up in Hong Kong, he said, and another centre would be set up in London. Dai also said most of the nearly two trillion yuan in the NSSF was invested in fixed-income products, with about 20 per cent of the fund invested in equities. He said stock investments were volatile, with the NSSF generating an average 18 per cent annual return on equity investments in the nine years to 2010. However, the return on equities was just 0.85 per cent last year, when it recorded a 300 million yuan loss. Dai said the NSSF would take a similar approach in managing Guangdong's 100 billion yuan pension fund, with most of the money invested in fixed- income products, he said. The State Council last month mandated the NSSF to manage the Guangdong fund in what economists have described as a breakthrough in efforts to improve the governance of local pension funds. Beijing wants to centralise control of Guangdong's pension fund as a test, and may expand the idea to other provinces. Louis Tse Ming-kwong, a director of VC Brokerage, said the substantial increase in QFII quotas was a good move. But for the yuan to become an international currency, further reforms were needed to encourage people to use it for investment. "Yuan internationalisation still has a long way to go,'' Tse said.

China's central bank Gov. Zhou Xiaochuan warned that the global economy hasn't yet escaped the financial crisis, while cautioning the U.S. to take "more responsibility" for its monetary easing. There are "new elements that could bring the global economy back into recession," the central bank chief said in a panel discussion Tuesday at the Boao Forum in the southern island province of Hainan, without elaborating on what the elements are. Mr. Zhou expressed support for U.S. efforts to boost growth by injecting liquidity into its economy, but indicated Chinese concern with what is known as quantitative easing. In that operation, the Federal Reserve buys bonds with the aim of bringing down interest rates and so making it easier for companies to borrow and invest, thereby creating jobs. "We agree very much that to overcome a very serious financial crisis, the U.S. needs to inject liquidity," Mr. Zhou said. "We understand that quantitative easing is one possible choice." But it is very difficult to control the flow of liquidity, he added, and while it is hoped that money injected into the U.S. economy will stay there, "inevitably, some emerging economies will suffer too much capital inflow." China and other emerging economies fear the complicating effect that excessive liquidity could have on their battles against inflation. Mr. Zhou said that unlike other central banks, the Federal Reserve has a global impact when it acts because the dollar is the world's main reserve currency. "So the U.S. must have more responsibility to consider not just the U.S. economy but the global economy," Mr. Zhou said. While he said he understands the need for the U.S. to lower interest rates to promote growth, he added: "it's a trade-off." Mr. Zhou also said that relaxation of China's rules on outbound investment by enterprises and individuals is "the direction of policy reform," but that investors' lack of offshore experience, including unfamiliarity with overseas legal systems, means the process of opening will take time. "We will encourage them to do this," he added. Following his comment in late March that China should accelerate the establishment of a deposit-insurance system, Mr. Zhou said conditions would have been ripe for such a system's establishment if not for the financial crisis. Central bank Vice Gov. Hu Xiaolian said in March that deposit insurance is a precondition for interest-rate liberalization, because it would help keep the banking system on a stable footing despite more intense competition. Bank of Israel Gov. Stanley Fischer, in an interview with The Wall Street Journal, applauded the Chinese central bank's efforts to spur economic growth with the tools available to it. The People's Bank of China, which unlike many central banks isn't an independent body—reports to China's State Council, the nation's cabinet—has sought in recent months to support the economy by reducing the amount of money banks must set aside as reserves. The PBOC can't use another tool, interest-rate reductions, without approval of the state council and the Communist Party's Politburo. "They have used the tools effectively," Mr. Fischer said, referring to the reserve-ratio cuts.

China became the world's No 1 beer producer and consumer last year, with its annual output reaching 48.99 million kiloliters. Euromonitor predicts the country's beer market will be worth 457.9 billion yuan by 2014. As bottles of premier beer continue to fly off the shelves in China, from family eateries to trendy night spots, industry insiders say its happy hour all year round for brewers. The country is already the largest producer and consumer of beer. Last year it had an output of about 48.99 million kiloliters, a 9.3 percent increase on 2010 and the eighth consecutive year of growth. Yet, more importantly, the Chinese masses are increasingly filling their glasses with pricey premium brands, including Carlsberg, Budweiser, Bud Light, Heineken and Skol. The sector may have made up just 10 percent of overall sales in 2011 (a rise of 20 percent on the previous year), but it contributed almost 50 percent of total profit. Euromonitor, the British-based research firm, predicts the value of China's beer industry will reach 457.9 billion yuan ($72.68 billion) by 2014, compared with 305.3 billion yuan in 2009. "China consumes around 43.8 million kiloliters of beer every year," roughly one-fourth of the world's total, according to Stephen Maher, chief executive officer of Carlsberg China. However, the market has some unique traits, he explained: "Research shows Chinese tend to drink beer more often at restaurants, bars and other entertainment venues, and they like to consume large volumes over a short period of time. "It (the market) is a challenge and an opportunity, as we have to be constantly on our toes and come up with new brands that can connect with the aspirations of consumers," he said. Carlsberg, a Danish brewer, has gained lots of local insight during its time in the market, such as the fact that people on the Chinese mainland prefer less bitter flavors, which is different from those in Hong Kong or Malaysia. "We launched Carlsberg Chill and Carlsberg Light exclusively for customers in China," Maher said. "These beers are ideal for Chinese drinkers, unlike our flagship 'green label' brand, which is a classical European beer with a higher bitterness level. "Chill is positioned for those seeking entertainment, and Light is for enjoyable moments. Both have well complemented our strategy of creating tailor-made beer products for Chinese consumers," he said, adding: "Connecting with consumers is core to Carlsberg's success." Carlsberg has also benefited a great deal from its partnership with Chinese brands, including Wusu, Dali, Shancheng and Xixia. The company owns more than 30 breweries in 11 provinces and autonomous regions, and in particular has been gaining a strong position in western regions of China since the early 2000s. "Local brands and partners have helped establish a firm base for Carlsberg and provided better consumer insight," Maher said, adding that his company intends to nurture people's loyalty to products by retaining local brands and flavors. In addition, Belgium-based brewer Anheuser-Busch InBev launched in November began producing its high-end brand Stella Artois in China, said John Hsu, its president of BU North Business. The company also makes Beck's, Budweiser, Corona and Harbin in China. Wang Renrong, vice-president in Asia-Pacific for AB InBev, said he believes the Chinese market will contribute 30 to 50 percent to the growth potential of the world's beer industry in the next few years. He also said China has been one of AB InBev's most important markets, accounting for 12 to 13 percent of its total business. "We hope the figure will be bigger, as we see huge potential here," Wang added. Stella Artois retails at 40 yuan for a 330-milliliter bottle in the market, while most beers are priced under 10 yuan.

Actors present a traditional Chinese lion dance at Zhouwangcheng Square in Luoyang, Central China's Henan province, on April 2 to warm up for the 30th Luoyang Peony Culture Festival, which begins on Thursday.

Hong Kong*:  Apr 5 2012 Share

Sun Hung Kai Properties Joint Vice-Chairmen and Managing Directors, Raymond Kwok Ping Luen, centre, and Thomas Kwok Ping Kwong speak to the media outside the Sung Hung Kai building in Wanchai on Tuesday. The billionaire Kwok brothers, co-chairmen of property developer Sun Hung Kai Properties (SEHK: 0016), denied any wrongdoing and insisted it was business as usual on Tuesday, in their first public appearance since their arrest by the ICAC on suspicion of corruption. Raymond and Thomas Kwok were arrested last week by the Independent Commission Against Corruption in the agency’s biggest investigation since it was set up in 1974 to root out graft in the government and police. “I can tell you definitely that I personally do not do anything wrong and I believe that Thomas Kwok has done nothing wrong,” Raymond Kwok told reporters as the pair faced the media at the company’s headquarters in Wan Chai. The brothers, worth US$18.3 billion according to Forbes magazine, said the investigation would not affect business decisions at Asia’s largest property developer, and that sales and development plans would go ahead as scheduled. The company owns some of the former British colony’s largest properties, including its tallest building, the International Commerce Centre that houses Morgan Stanley and the Ritz-Carlton hotel. The arrests last Thursday of the two brothers, along with Rafael Hui, a former leading official in the Hong Kong government, came days after the election of Beijing-loyalist Leung Chun-ying as the city’s next leader, pledged to address soaring property prices. The Hong Kong public has been increasingly aggrieved at the perceived cosy ties between government and big business, and some observers have interpreted the arrests as a first move in an attempt to rein in the power of the monied elite. The brothers and Hui were released on bail and have not been charged with any offence. But last week’s event dented investor confidence and nearly US$5 billion in Sun Hung Kai’s market value was wiped out when trading in the company’s shares resumed on Friday. On Tuesday the stock rose about 2 per cent to around HK$96.25, still well below HK$111.10 when the company halted trading in its shares last Thursday. The benchmark Hong Kong share index closed up 1.3 per cent. Sun Hung Kai is a family-run conglomerate, founded by the Kwok’s father, and owns phone, trash and bus businesses in Hong Kong. In the past few weeks, Sun Hung Kai Properties has also disclosed that Thomas Chan Kui-yuen, in charge of project planning and land acquisitions, had been arrested for suspected bribery. The Kwok family had a public feud in 2008 that ended with elder brother Walter being ousted as chairman. Thomas and Raymond, backed by their mother, claimed Walter was mentally unfit to run the business, claims Walter has denied. Walter Kwok alleged in a 2008 writ trying to prevent his removal that he had concerns about the way the company was being run, including doubts about a land acquisition in Hong Kong’s rural New Territories, the way the firm granted construction contracts and questions about a lease at their tallest building, the International Commerce Centre on the Kowloon peninsula.

Former Hospital Authority director Dr Ko Wing-man on Tuesday rejected speculation he had been asked to return to head the organisation he left in unhappy circumstances eight years ago. Ko, an orthopaedic specialist now in private practice and a nominator of chief executive-elect Leung Chun-ying, said he had never been “formally invited” to join the next government. Ko also said he had never formally advised Leung on health policy. The doctor left the authority as its one-time director for professional services and public affairs in 2004 after a Legislative Council report criticised its handing of the 2003 Sars outbreak. On Tuesday, Ko also denied rumours Leung had invited him to become secretary for food and health. But he said on Commercial Radio he would seriously consider any offer to join the new government. “As I have been frequently asked [by the media] recently, I may say I will consider the offer seriously if it happened … as I do not want to say ‘no comment’,” Ko explained. The current authority chairman Anthony Wu Ting-yuk is to step down in November. Health Secretary York Chow Yat-ngok’s term expires with that of the present government. Earlier, Margaret Leung Ko May-yee, vice-chairwoman and chief executive officer of Hang Seng Bank (SEHK: 0011, announcements, news) , and Barry Cheung Chun-yuen, chairman of the Urban Renewal Authority, also rejected rumours they had been invited to join the new government. They “had not been asked,” they said. Discussing his relationship with the new chief executive-elect, Ko Wing-man said: “I supported Mr Leung as an individual elector of the Election Committee as I appreciate his ability. I was never in Mr Leung’s campaign team nor took part in any of his work. I never gave him any advice on his medical platform nor did I refer him to anyone.” He described his relationship with Leung as a “friendship between two gentlemen”. Ko also said he and Leung “did discuss and express views about our own role in the city on some occasions a long time ago”. Ko ran the authority during the Sars outbreak, filling in for authority chief executive William Ho Shiu-wei, who contracted the disease. Ko recalled how Leung had supported him after he quit as director along with then chairman Leong Che-hung. He also said he did not agree that Leung had been “conspiring” for years to become chief executive. “Mr Leung is someone who has long been observing problems in society and thinking about what to do to improve Hong Kong’s future. I appreciate him for this.”

Shipping lines voluntarily using costly low-sulphur fuel to reduce air pollution in Hong Kong will finally get government help to offset their higher fuel bills. But soaring fuel costs and a lack of government action to force all shipping firms to use low-sulphur fuel in Hong Kong may see some operators switch back to oil with a higher sulphur content. Chan Ming-yau, general manager of the Marine Department's ship safety branch, said shipping lines that were signatories to the Fair Winds Charter would start to receive a rebate on port charges in June or July. The Marine Department and Environmental Protection Department are finalising details of how the scheme will be implemented, but these issues should be resolved quickly and the first payments made in two or three months, he said. Under the scheme, which will cost the government HK$260 million over three years, shipping companies using low-sulphur fuel will be entitled to a 50 per cent cut in port and light dues charged on ocean-going vessels while berthed in Hong Kong. The scheme was included in the financial secretary's budget proposals approved by legislators last Thursday. Seventeen global shipping giants, including Cosco Container Lines, Orient Overseas Container Line, Maersk and CMA CGM, signed the Fair Winds Charter in October 2010 to voluntarily switch to fuel with a sulphur content of 0.5 per cent or less while berthed in Hong Kong. The sulphur content of normal marine fuel is between 2.8 and 4.5 per cent. The two-year charter was launched by the shipping industry in January last year to give time for the government, in co-operation with authorities in the Pearl River Delta, to introduce laws outlawing the use of fuel with a high sulphur content. But while lawmakers support the plan and officials from the Environmental Protection Department have been in discussions with their counterparts in Guangdong, there has been little progress. This is despite the government saying vessels had become "one of the major local air pollution sources ... and the second largest sulphur dioxide and nitrogen oxide emitter after power plants" in a briefing paper to legislators. Veronica Booth, senior project manager at Civic Exchange, said the fact the subsidy was for three years gave a rough indication when government thought regulations on ship pollution could be introduced. Civic Exchange is a public-policy think tank that helped to draw up the charter with the Hong Kong Liner Shipping Association. Senior shipping executives said the cut in port dues covered between 30 and 50 per cent of the extra cost of switching to low-sulphur fuel but the higher cost of the fuel put them at a competitive disadvantage with non-signatory carriers. Roberto Giannetta, secretary of the liner shipping association, said the higher price of low-sulphur fuel cost each shipping line an extra US$600,000 to US$800,000 a year. "In an environment where lines have suffered a dismal financial year and still are seeing many services running at below profit-levels, all shipping lines must look at cost-cutting measures. The prospect of them voluntarily agreeing to an add-on extra cost, even if it is only 50 to 70 per cent of the true fuel switch cost, is going to be a tough decision," he said. Tim Smith, Maersk Line chief executive for north Asia, said: "It's good the government has recognised the issue and put some money on the table. But I'm worried that at this level the subsidy won't be enough to encourage those lines that don't switch to do so. We may see some existing charter members drop out after expiration of the original two-year commitment at the end of 2012." Michael Britton, general manager for Asia at Hamburg Süd, said: "We'd certainly like to see it continue, but it is a challenge to continue to do so."

Raymond Kwok, left, and Thomas Kwok, chairmen and managing directors of Sun Hung Kai Properties, walk towards a press conference in Hong Kong on Tuesday. Sun Hung Kai Properties Ltd.'s co-chairman Raymond Kwok on Tuesday said he's innocent of any wrongdoing after he was arrested by the city's antigraft body last week as part of an investigation into bribery allegations. He added that he believes his brother Thomas Kwok, the company's other co-chairman, has done nothing wrong either. "I can firmly say that I have done nothing wrong, and I also believe that Thomas Kwok did nothing wrong. I really hope that this investigation can prove my innocence." Raymond Kwok, the youngest of late Sun Hung Kai founder Kwok Tak-seng's three sons, told a packed crowd of reporters at the company's headquarters. In their first public comments since their arrests, the brothers affirmed that the developer's operations are running normally and its development projects in neither Hong Kong nor China will be affected by the investigation of the Independent Commission Against Corruption. The two brothers were arrested Thursday, but were released on bail and both have returned to work. The investigation is continuing, and no one has been charged. 新鴻基地產聯席主席郭炳江和郭炳聯涉貪污,上周四遭廉署拘捕後獲准保釋候查,二人昨早上乘私家車返回位於灣仔的新鴻基中心,其中弟弟郭炳聯更是連續第三天返回新鴻基總部上班,二人均沒有回應在門外守候記者的提問。今日下午,郭炳聯與郭炳江一起會見記者,他們表示不能透露調查的內容,但多謝許多朋友的 SMS 慰問和多謝同事的支持,和新地一切如常,所有計劃會如常進行。另外,郭炳聯表示他沒有做錯事,相信兄長郭炳江也無做錯,相信廉署調查完畢後可證明他們清白。 

 China*:  Apr 5 2012 Share

A revised version of China’s non-Manufacturing Purchasing Managers’ Index (PMI) that is seasonally adjusted showed the services sector grew last month to extend a healthy pace of expansion seen this year, with the index hitting 58 in March. The China Federation of Logistics and Purchasing said on Tuesday the revised services PMI rose in March from February’s 57.3 and January’s 55.7. The growth trend in the revised services PMI is markedly better than the original series, which was not seasonally adjusted and had shown the index falling to 48.4 in February from January’s 52.9. A PMI reading below 50 indicates contracting activity while a reading above 50 shows expansion. The new export orders sub-index also showed a healthy pace of expansion, rising to 53.5 in March from February’s 52.7 and January’s 52.2. The Federation did not explain why it decided to revise the services PMI, except to say it has collected enough data to allow it to seasonally adjust the series. Growth in the services sector comes days after China’s big factories were shown to be surprisingly busy in March as new orders lifted the official manufacturing PMI in March to an unexpected 11-month high of 53.1. But analysts cautioned not to read too much into the figure as it was helped by a predictable bump as winter ends. A separate survey that showed credit-constrained small factories struggling also suggested the economy is still losing steam. The services PMI index is intended to provide a snapshot of conditions in the services sector, which accounts for less than 45 per cent of China’s economy, a much smaller share than in developed countries. China’s economy faces formidable headwinds as exports falter due to weakening demand in the United States and Europe, alongside a downturn in the once red-hot property sector in response to tightening steps by Beijing.

China's central bank Gov. Zhou Xiaochuan warned that the global economy hasn't yet escaped the financial crisis, while cautioning the U.S. to take "more responsibility" for its monetary easing. There are "new elements that could bring the global economy back into recession," the central bank chief said in a panel discussion Tuesday at the Boao Forum in the southern island province of Hainan, without elaborating on what the elements are. Mr. Zhou expressed support for U.S. efforts to boost growth by injecting liquidity into its economy, but indicated Chinese concern with what is known as quantitative easing. In that operation, the Federal Reserve buys bonds with the aim of bringing down interest rates and so making it easier for companies to borrow and invest, thereby creating jobs. "We agree very much that to overcome a very serious financial crisis, the U.S. needs to inject liquidity," Mr. Zhou said. "We understand that quantitative easing is one possible choice." But it is very difficult to control the flow of liquidity, he added, and while it is hoped that money injected into the U.S. economy will stay there, "inevitably, some emerging economies will suffer too much capital inflow." China and other emerging economies fear the complicating effect that excessive liquidity could have on their battles against inflation. Mr. Zhou said that unlike other central banks, the Federal Reserve has a global impact when it acts because the dollar is the world's main reserve currency. "So the U.S. must have more responsibility to consider not just the U.S. economy but the global economy," Mr. Zhou said. While he said he understands the need for the U.S. to lower interest rates to promote growth, he added: "it's a trade-off." Mr. Zhou also said that relaxation of China's rules on outbound investment by enterprises and individuals is "the direction of policy reform," but that investors' lack of offshore experience, including unfamiliarity with overseas legal systems, means the process of opening will take time. "We will encourage them to do this," he added. Following his comment in late March that China should accelerate the establishment of a deposit-insurance system, Mr. Zhou said conditions would have been ripe for such a system's establishment if not for the financial crisis. Central bank Vice Gov. Hu Xiaolian said in March that deposit insurance is a precondition for interest-rate liberalization, because it would help keep the banking system on a stable footing despite more intense competition. Bank of Israel Gov. Stanley Fischer, in an interview with The Wall Street Journal, applauded the Chinese central bank's efforts to spur economic growth with the tools available to it. The People's Bank of China, which unlike many central banks isn't an independent body—it reports to China's State Council, the nation's cabinet—has sought in recent months to support the economy by reducing the amount of money banks must set aside as reserves. The PBOC can't use another tool, interest-rate reductions, without approval of the state council and the Communist Party's Politburo. "They have used the tools effectively," Mr. Fischer said, referring to the reserve-ratio cuts.

Starbucks Corp expects China to become its second-biggest retail market measured by the number of its stores by 2014, following just behind the United States in that regard, said a company executive. John Culver, president of Starbucks China and Asia Pacific, said the coffee chain is planning to move faster into smaller cities in the second largest economy in the world. China now is the fifth-largest market for the Seattle-based Starbucks, following the US, Canada, the United Kingdom and Japan in that regard. Starbucks will go from having shops in 48 Chinese cities, as it now does, to having them in more than 70 cities by the end of 2015, Culver said at the Boao Forum for Asia, which took place in Hainan province on Sunday and Monday. The company plans to have 1,500 stores in the country by 2015. Starbucks made new forays into 13 Chinese cities during its 2011 fiscal year, which ended in September. The company now operates more than 570 stores in China, according to a statement from the company, which celebrated the opening in October of its 500th store in China in Beijing. The value of sales of China's coffee shop market is forecast to increase by 55 percent to reach 4.5 billion yuan ($714 million) in 2015, up from 2.9 billion yuan last year, data from the London-based research firm Euromonitor International show. In 2010, Starbucks held the largest share of China's coffee shop market, occupying 66.3 percent of it, according to Euromonitor. Whitbread Plc, owner of the Costa Coffee chain, meanwhile had an 8.9 percent share of it and McDonald's Corp had an 8-percent share, according to Euromonitor. "While we have an ambitious plan to accelerate our pace of growth, we will make sure we are growing the brand in a holistic way," Culver said. Starbucks has good reasons to bet on China. According to its latest earnings results for the quarter ended in December, the company's comparable store sales at Asian Starbucks, including those in China, increased by 20 percent year-on-year. In the same period, such sales increased at only a 2 percent rate in Europe and by less than a double-digit percentage in American markets. Culver said Starbucks will maintain its growth rate in China, declining to provide specific figures. To meet its goal in China, he said, the company will continue to rapidly expand in large cities such as Beijing, Shanghai, Guangzhou, as well as in Shenzhen, making its stores more convenient for consumers. Wuhan, Chengdu and other slightly smaller cities are also places where the company wants a larger presence. In February, Starbucks raised the price of some of its products in China by up to 3 yuan in tandem with an increase in its operations costs, its first such increase since 2007. "Over the last year and half, coffee cost continues to accelerate," Culver said. "As part of that, we've evaluated prices strategies." He said the price hikes haven't affected the company's business in the country. Culver also said Starbucks will open a Farmer Support Center in Pu'er, Yunnan province, in the second half of the year to help improve the quality and yields of coffee beans harvested in the province. That project comes after the company announced plans in February to set up a joint venture with the Yunnan-based coffee operator Ai Ni Group. That venture, in which Starbucks will hold the controlling 51 percent interest while its partner will hold the remaining 49 percent, is to supply high quality Yunnan coffee to Starbucks' stores both in China and the rest of the world.

As the one-year anniversary of the opening of the first duty-free store in South China's resort city of Sanya draws near, officials said more stores are in the pipeline and a rebate cap on purchases is likely to be lifted. China launched the duty-free policy trial last year in the tropical island province of Hainan, which allows tourists to spend up to 5,000 yuan ($754) on imported commodities without paying taxes. Wang Wei, director of the department of social development for the National Development and Reform Commission, told China Daily the rebate cap on commodities may be lifted. "The policy has just been carried out for one year. The rebate cap will definitely be increased in the long run, but it takes time to do the assessment," Wang said on the sidelines of the Boao Forum for Asia 2012. Tan Li, vice-governor of Hainan province, said the duty-free policy is the most valuable and influential part of the government's preferential policies to boost Hainan as an international tourism island. Since the opening of the duty-free stores in Sanya on April 20 and at Meilan Airport in late December, total sales of duty-free commodities have reached 1.6 billion yuan, Tan said at a news conference on Sunday. Experts said the sales figures are equivalent to the revenue of a large shopping center in Beijing. Tan also said the visa-free entry policy has greatly boosted tourism in Hainan. Tourists groups from 26 countries can enjoy visa-free access to Hainan with a maximum stay of 15 days. These 26 countries include Finland, Denmark, Norway, Ukraine, Kazakhstan, Japan, Singapore, Malaysia, Thailand, South Korea, the Philippines, Indonesia, Germany, Austria, Italy, Russia, Switzerland, Sweden, Spain, the Netherlands, the United States, Canada, Australia, New Zealand, the United Kingdom and France. The minimum size requirement of tour groups from Russia, Germany and South Korea has been reduced from five to two people, and the maximum stay for visitors from the three countries has been extended to 21 days. In 2011, about 90 percent of the province's foreign tourists used the visa-free access, he said. Tan also launched an aggressive 10-year plan for Li An, a small town under the Lingshui autonomous county, in the southeastern corner of Hainan. The plan includes the construction of a large duty-free shopping mall, a sea world, private museums and cultural industries. As a pilot zone for the international tourism island, Li An will leverage a host of trial policies for duty-free shopping, sport lotteries, forest tourism and offshore finance, Tan said. With an estimated total investment of 50 billion yuan in the coming five years, the small town will become a popular place for investment, said Tan. On Sunday, the NDRC's International Cooperation Center released China's regional index for openness, which ranked Hainan 9th among China's 31 provinces and municipalities. Wei Jianguo, secretary-general of China Center for International Economic Exchanges, said Hainan should make full use of its unique position as an international tourism island.

Greater engagement with Asia will play a key strategic role in China's opening-up policy, Vice-Premier Li Keqiang said on Monday. Promoting growth will provide sound and sustainable development for the region, Li said at the opening ceremony of the annual meeting of the Boao Forum for Asia. As the largest market for Asian imports and an important source of investment, China will expand cooperation in a range of sectors, such as emerging industries, infrastructure, finance and technology, Li said. "Openness has been vital to Asia's fast growth in the past and it will continue to be crucial for the area's further development," he said. China will work with countries to push forward the establishment of regional cooperation mechanisms such as bilateral and multilateral free trade zones, Li said. More than 2,000 officials, business and academic leaders from around the world attended the event with the theme of "Asia in the Changing World: Moving Toward Sound and Sustainable Development". "The world has turned its spotlight on Asia against the backdrop of the lingering recession,'' Zhang Yansheng, director of the Institute for International Economic Research under the National Development and Reform Commission, told China Daily. The tide of globalization has faded to some extent because of the recession, and regionalization has been more emphasized, he said. This is highlighted by the fact that the world is paying more attention to emerging economies such as China and India, he said. Setting up free trade areas with other Asian countries and optimizing the existing mechanisms should be a major focus for China, Zhang said. China and other Asian countries share a sound basis of collaboration such as the cooperation channels between China and the Association of Southeast Asian Nations. Also, China is negotiating with the Republic of Korea and Japan to create a free trade area. "These mechanisms are competing with each other but the winner will be the one that brings the most benefits to the area. The US-dominated Trans-Pacific Partnership might bring least benefit to Asian countries, as its key purpose is to gain a slice of the pie of the area's rapid growth," Zhang said. In his speech, Vice-Premier Li also said that the country's fundamentals remain good and he is confident in its ability to maintain long-term, stable and relatively fast economic growth. "The fundamentals of the Chinese economy remain good and the momentum of economic growth has not changed. We will be able to maintain steady and relatively fast development in the long term," he said. PepsiCo chief executive officer Indra Nooyi, who is attending the forum, said the speech delivered a "very encouraging and clear" message. It's very impressive that Li stressed China's desire to cooperate and that it wants a win-win scenario with other countries, she said. Lu Ting, chief China economist of Bank of America Merrill Lynch, said he was cautiously optimistic about China's economic growth. Rising labor and energy costs will slow down growth but it will still remain at 8.6 percent in 2012, Lu said. In terms of economic balancing, Liu Mingkang, former chairman of China Banking Regulatory Commission, said China needs to change its growth model by expanding consumption and exploring development potential in smaller cities. William Rhodes, senior adviser of Citigroup, said as the European Union's largest trading partner, the eurozone debt crisis would continue to have an impact on China's economy, but "even more important is China stimulating its domestic market", he said. "Li's speech has demonstrated China's next key step, which is to prioritize deeper engagement with other Asian nations," said Qu Xing, director of the China Institute of International Studies. Qu said both the EU and the US have encountered structural problems in their economies. In contrast, Asia has shown rather high resistance, Qu said. Pang Zhongying, an international relations professor at Renmin University of China, said in a meeting linked to the forum that Li's speech suggests China has to respond to possible economic challenges. Li mentioned that the Shanghai Cooperation Organization should work together on economic issues and emphasized collaboration among China, Japan and the Republic of Korea. This indicates China's new outlook on how to promote regional integration within Asia, Pang said. China has entered a crucial stage in reforming the economy and will continue to strive to achieve breakthroughs in key areas, including taxes, finance, prices and income distribution, Li said.

Hong Kong*:  Apr 4 2012 Share

Leung Chung-ying's administration could experience a crisis soon after he takes office on July 1 if a row over illegal structures in the New Territories is not resolved quickly. Villagers who have illegal extra floors on their homes could start receiving demolition orders in late June. And rural committees have declared that they will not cooperate with a scheme to register less serious infractions. Secretary for Development Carrie Lam Cheng Yuet-ngor warned that those who do not sign up will be targeted once the scheme expires in September. "The scheme has been welcomed by some village representatives and rural committee chairmen as well as Heung Yee Kuk members," she said, pointing out that there would not be enforcement action once villagers have registered illegal additions to homes so long as they are not dangerous. The Buildings Department started sending letters yesterday to tell people to register. But all 27 rural committees in the New Territories decided on Sunday to ignore the scheme. Sheung Shui committee chairman Hau Chi-keung yesterday criticized officials for not saying how soon demolitions could be required. And Kuk vice chairman Cheung Hok-ming repeated a pledge to offer legal help to those who receive demolition orders. The Kuk has also talked of seeking a judicial review if there are no exemptions to the height limit on old houses. The Buildings Department has the most complaints about illegal structures from Tung Tau Wai and Fuk Hing Tsuen in Yuen Long among nine villages initially targeted. According to regulations, a village house that exceeds the three-story standard and has glass enclosures that cover more than half a rooftop are serious breaches that must be resolved quickly. Lesser breaches will be tolerated for a few years.

Chief Executive-designate Leung Chun-ying has embarked on a series of meetings with leading business figures as part of a reconciliation process with supporters of rival Henry Tang Ying-yen. Among those he met yesterday were HSBC Asia- Pacific chief executive Peter Wong Tung-shun and Hong Kong General Chamber of Commerce chairman Anthony Wu Ting-yuk. Leung also met with representatives from the Chinese Manufacturers Association of Hong Kong, the Federation of Hong Kong Industries, the Chinese General Chamber of Commerce and the Hong Kong Chinese Importers and Exporters Association. "Whether those people [businessmen who sit on the Election Commitee that chooses the chief executive] nominated me or not in the chief executive election, I will serve them and hold myself accountable to them," he said. Leung added that his attempt to reach out to those who did not support him in the election showed that "there is definitely no grudge." For his part, Wu said the chambers brought up implementation issues over the Closer Economic Partnership Arrangement with the mainland as well as the nation's 12th five-year plan for economic and social development during the meeting with Leung. Wu also said the General Chamber of Commerce would, of course, support the next administration's moves to develop the SAR. Chinese Manufacturers Association president Sze Wing-wai denied reports that the business sector has a poor working relationship with Leung, pointing out that his body had invited Leung to explain his political manifesto during the election. Leung also met Bank of East Asia deputy chief executive Adrian Li Man-kiu. Leung said the meetings would help him understand the sectors' needs. Commenting on Sunday's rally, Leung said he believed police handled protesters in a proper manner, and expressed faith in their judgment. At one point during the protest, officers used pepper spray on protesters after a scuffle broke out. Organizers estimated 15,000 people took part in the demonstration to condemn what they said was Beijing's interference in the election. The police put the turnout at 5,300. Leung has promised to listen to different views and uphold "one country, two systems." Speaking on RTHK, Eric Lai Yan-ho of the Civil Human Rights Front - one of the rally organizers - criticized the police for using heavy-handed tactics. Meanwhile, Ng Hong-mun, a former local deputy to the National People's Congress, said he believed Leung's popularity level will rise as he reaches out to various sectors. Leung earlier phoned NPC Standing Committee member Rita Fan Hsu Lai-tai to seek her advice on how to boost Hong Kong's development.

Yuan money markets are expanding in Hong Kong as more banks quote interbank interest rates for the currency, helping widen its use for trade and investment beyond the mainland. JPMorgan Chase, ICBC (Asia), Bank of Communications (SEHK: 3328), Bank of East Asia (SEHK: 0023) and Bank of Tokyo-Mitsubishi UFJ started providing interbank rates for yuan in Hong Kong yesterday, according to Jack Cheung, the chief executive of the Treasury Markets Association. That brings to eight the number of lenders quoting prices. Bank of Tokyo-Mitsubishi and Citigroup completed the first yuan interest-rate swap involving the Hong Kong interbank rate. "It's a breakthrough," said Dariusz Kowalczyk, a strategist at Credit Agricole. "In order for the market to fully develop, you do need a swap curve. This will allow more financial instruments like hedging for dim sum bonds and benchmarks for loans to develop in the offshore yuan market." The need for benchmark lending rates in Hong Kong's offshore centre for yuan is building as companies increasingly turn to the city to obtain financing in the mainland currency. The city's outstanding yuan-denominated loans totalled 30.8 billion yuan (HK$38 billion) at the end of last year, up from 1.8 billion yuan at the start of the year, Hong Kong Monetary Authority data shows. Sales of yuan-denominated bonds in Hong Kong, known as dim sum bonds, almost tripled to 50.7 billion yuan in the first quarter of this year from 18.6 billion yuan a year earlier. Bank of China, Standard Chartered and HSBC have been quoting interbank rates for offshore yuan since January, although there is no official daily fixing as yet. "Our committee is aware of the market expectations and the need for an offshore interbank fixing," Cheung said. "We want to make sure it's a reputable rate before we post it up." Bank of Tokyo-Mitsubishi and Citigroup agreed a one-year interest-rate swap involving 100 million yuan, according to two people with direct knowledge of the matter. Under the terms reached, the Japanese lender will pay 2.45 per cent in exchange for the three-month interbank offered rate, which will be set quarterly. Spokesmen at the banks declined to comment.

Bosses at a new branch of the agnes b. Cafe LPG chain will change menus that use simplified Chinese characters after being accused of discriminating against Hongkongers. The cafe apologised on its Facebook page yesterday after an online outcry over what internet forum users dubbed the "invasion of simplified Chinese" at the new branch in Tseung Kwan O's PopCorn mall. Internet users were angered to see that menus adopted the simplified characters normally used on the mainland, rather than the traditional Chinese used in Hong Kong, for items such as salad and chocolate. The row comes amid months of tension between Hongkongers and those from the mainland. Cafe staff apologised on its Facebook page yesterday, and a company spokeswoman said management had decided to replace the wall menus at all branches, but said the company had been using simplified Chinese since at least 2008. "The Times Square branch - one of the first shops we had - only offered English menus and we received complaints. So we have also included simplified characters at every branch since then. The Tseung Kwan O branch was not the only one," the spokeswoman said. "In light of the complaints, we will replace all our wall menus to include only English and traditional Chinese. Simplified Chinese will be listed alongside the two languages in the printed menus," she said. Traditional Chinese characters are understood by both mainlanders and Hongkongers, Dr Chin Wan-kan, assistant professor of Chinese language at Lingnan University, said. "It is not right Hongkongers should have to accommodate mainlanders [by changing the characters]," he said. Character simplification has been used for centuries, but the mainland started to promote simplified Chinese to improve literacy after the Communist Party came to power. Sai Kung district councillor Gary Fan Kwok-wai says it is unfair to Hongkongers that more shops and restaurants are targeting mainland tourists. "It's disrespectful and discriminatory," he said. One blogger wrote on HK Golden forum: "[The] mall is for mainlanders. The use of simplified Chinese is normal [there], Hong Kong's businessmen have no dignity." Another wrote: "Chinese people should use simplified Chinese". Chin said the complaints were the latest sign of tensions between Hongkongers and visitors from the mainland. An influx of pregnant mainlanders seeking to give birth and claims that Dolce & Gabbana banned locals, but not those from the mainland, from taking photos of its Tsim Sha Tsui store caused protests. The rows led a group of Hongkongers to produce adverts attacking the influx of "locusts", while Peking University professor Kong Qingdong called Hongkongers "dogs".

The female Sichuan golden monkeys, Le Le (left) and Hu Hu, are living next to giant pandas An An and Jia Jia in the park's Sichuan area. With their blue faces and little snub-noses, two golden monkeys are the latest example of China's endangered wildlife to greet visitors to Ocean Park. The pair moved in next to giant pandas An An and Jia Jia at the park's new Sichuan Treasures exhibit, which opened yesterday. The park spent at least HK$10 million on renovating the former panda habitat to serve as home to two-year-old Hu Hu and three-year-old Le Le, who were born and bred at a zoo in Chengdu. "We're one of the first parks to have golden monkeys," Ocean Park chairman Allan Zeman said. "It's an experiment by Chengdu to loan these monkeys to Hong Kong. They'll be watching the acceptance of the people and how they react to the broader conservation message." The drive to bring the monkeys to Hong Kong was led by Jiang Chu, deputy director general of Sichuan's forestry department, who hopes the people of the city will be inspired to work to protect the monkeys. Found around the edges of the Sichuan Basin in Sichuan, Gansu , Hubei and Shaanxi provinces, golden monkeys are being squeezed by logging, human settlement and hunters after their meat, bones and fur. Like the giant panda they are listed as endangered. The Primate Research Centre at the University of Wisconsin estimates just 8,000 to 20,000 monkeys remain in the wild. The central government declared the species a national treasure and this year allocated 30 million yuan (HK$36.6 million) to the Shennongjia golden monkey centre in Hubei, Xinhua reported. The monkeys will be on loan to the park for three years, joining a growing number of Chinese animals, including red pandas, alligators, giant salamanders and sturgeon. Zeman says the longevity of the older panda, Jia Jia, is testament to the skill of park staff. At 34, Jia Jia is now the oldest panda in captivity. The monkeys can live for more than 23 years under human care. The Jockey Club has pledged HK$5 million over the next three years for conservation education at the park for 30,000 poor children.

A high-profile anti-graft probe provides chief executive-elect Leung Chun-ying with a chance to wield a new broom that sweeps clean. When US president Franklin Roosevelt came into office during the Depression in the 1930s, he introduced his famous New Deal, with its "3Rs": relief, recovery and reform. While one cannot directly compare Hong Kong today with the United States of that time, chief executive-elect Leung Chun-ying started his own "3Rs" the day after he was elected: reach out to the public, reunite the community and restore people's confidence. Later this week he will go to Beijing to receive his appointment orders from Premier Wen Jiabao . Leung needs to assure Beijing that he will accomplish these 3Rs in the coming three months before being sworn into office on July 1. Then he must carry out a greater mission - reform while maintaining stability. On Sunday, thousands took to the streets to protest at Beijing's alleged meddling in the election. Leung issued a statement reiterating his determination to protect the core values of Hong Kong - the rule of law, democracy and freedom of speech. Nevertheless, his victory was seen as a result of the central government's - especially its liaison office's - efforts behind the scenes. With these allegations and a low popularity rating of about 35 per cent when elected, Leung, who once enjoyed a rating of over 50 per cent, realised how difficult his start would be. That's why he wasted no time in starting his post-election campaign. Fortunately for Leung, he has a golden opportunity. Last Thursday the Independent Commission Against Corruption arrested former chief secretary Rafael Hui Si-yan and two of the Kwok brothers who control the giant Sun Hung Kai Properties (SEHK: 0016). Hongkongers, long proud of their clean government, were stunned, then angry. And they are pinning their hopes on Leung. Radio phone-in programmes over the past few days have been full of callers urging him to restore clean government. Interestingly, a front-page story in the pro-Beijing Ta Kung Pao last Friday quoted sources as saying the "tall man" (Leung is tall), when informed of the case, was shocked and told the present government to "handle it now - don't leave this hot potato to the next government". Leung, who was once the under-dog in the campaign while Beijing initially preferred his rival Henry Tang Ying-yen, knows only too well that popularity counts. That's partly why he has reached out again to meet ordinary people, taking his campaign into a new phase. What surprised many was that during a visit to a private housing estate mainly inhabited by the middle class last week, Leung took the initiative to walk towards a group of protesters, telling them that he had heard their voices against legislating Article 23 of the Basic Law. To Kwan-hang, the leader of the group, told the Post the demonstrators were surprised that Leung approached them that night. According to Leung's aides, regardless of whether the protesters listen to him or not, he wants to foster a new political culture, even though in some people's eyes that is only a "political show". Leung's second "R" is reuniting the community. It's an area of weakness for him. He lacked support from many in the business community and lacked the trust of the civil servants owing to his "tough" management style. That's likely why Leung, in his meeting with eight civil servants' unions on the second day after his election, assured them that "we are in the same boat". Yesterday he met the major chambers of commerce and will lunch in the middle of this month with various pro-establishment parties, including Tang's stronghold, the Liberal Party. Meanwhile, a meeting with pan-democrat legislators is being planned. But it seems Leung's third "R" - restoring people's confidence - is the one that he anticipates will be his greatest challenge. His high-profile visit to the liaison office after he was elected caused great controversy. And being addressed as "comrade" by the official People's Daily website when it introduced him as Hong Kong's future leader triggered a new round of suspicion about his alleged Communist Party membership. (Hong Kong's Basic Law stipulates the chief executive must not be affiliated with any party.) The website blamed its editor for making the mistake and deleted the term "comrade" quickly. Leung called television crews and photographers from major media organisations. Then, standing in the lobby of his office, he signed a statement, co-signed by a Justice of the Peace, giving it legal weight: "I, Leung Chun-ying, declare here again I'm not a Chinese Communist Party member; neither do I have affiliation with any political party." Whether you believe him or not, Hongkongers have seldom seen such a dramatic statement. When Leung meets Wen some time this week, he understands well that he must not step into Zhongnanhai, the headquarters of the party and the State Council, empty-handed. He needs some progress to report, whether it's an increase in his popularity or assurances of co-operation from business and civil servants. Yet this is only the beginning. The moment Beijing decided to pick Leung rather than Tang - who was seen as a symbol of the status quo - Hongkongers began to expect change, whether good or bad. The final "R" for Leung is reform. The question is what and how.

Brooke Lampley, of Christie's, with some of the antique golf clubs and golf balls shown at a preview in the auctioneer's Central office. Rare clubs used by legendary golfers and historic equipment telling the story of the evolution of the game are on display in Hong Kong before they go under the hammer in London. It is the first time auction house Christie's has brought a collection of golf memorabilia to Asia, where the sport is booming. That is especially the case on the mainland, where the number of courses more than trebled from 170 in 2004 to at least 570 in 2009, with hundreds more being developed since. "Golf in itself has become such a global phenomenon ... Asia's appetite for golf made it natural for us to bring the collection here," Matthew Patron, of Christie's, said. About 400 lots will be auctioned in London on May 30, including clubs, balls, paintings, ceramics and books. The art and memorabilia collected by Jaime Ortiz-Patino, the founder of Spain's famous Valderrama Golf Club, are expected to fetch more than £2 million (HK$24.9 million). They are on public display at Wan Chai's Grand Hyatt hotel in an exhibition that ends today. One of the star lots is a club owned by father and son Old and Young Tom Morris, who won eight British Open championships between them. Old Tom Morris is still the oldest ever winner of the competition at 46, while Young Tom became its youngest winner at the age of 17, scoring the event's first hole in one in the same tournament. Sports sector lawmaker Timothy Fok Tsun-ting described the Morrises as "legendary". "Old Tom Morris was a textile worker … he didn't have a ball in the very beginning, and he practised golfing using corks," he said. He added that a game that was once the preserve of the elite had proliferated in recent decades, saying: "The first golf course was built on the mainland in 1984 … Now the number is approaching 800." Golf's profile is expected to rise further when the sport returns to the Olympics in 2016 for the first time since 1904. Other exhibits show the evolution of the sport, first played in 15th century Scotland and involving wooden balls and sticks. In the 17th century, two new pieces of equipment emerged - the "featherie" golf ball and iron-headed clubs. Stuffed with wet goose feathers, the ball was more expensive than a club and could have been responsible for golf's reputation as a sport mainly for the rich.

The Court of Final Appeal ruled on Monday that the government was justified in charging mainland women married to men from Hong Kong, and who give birth in public hospitals, higher fees than it charges local women. At issue was the authority’s decision in 2007 to raise the fees for non-resident women from HK$20,000 to HK$39,000 for pre-booked obstetric services, and to HK$48,000 without a booking. Before 2003, fees for both groups were subsidised at the same level. The woman at the centre of the case, Zeng Lixia, was charged HK$48,000 after she gave birth at Princess Margaret Hospital in December 2007. At the time, she was visiting Hong Kong on a two-way permit – which allows mainlanders to visit for up to 90 days – and was applying for a one-way permit. She has since become a resident. In 2007, Zeng and her father-in-law, Fok Siu-wing, filed the legal challenge. Fok represented his son, who had become mentally incapacitated. They argued that, unlike transient visitors, Zeng had married a Hong Kong resident and had a substantial connection to the city. The policy, they said, unfairly discriminated against her. However, the top court on Monday ruled against them, saying the Hospital Authority and the government were acting within reason when they decided to use a woman’s residency status as the basis for the policy change. In handing down the judgment, Chief Justice Geoffrey Ma Tao-li said that while drawing the line at residence status might not be justifiable in every situation, it was in this case. “These decisions were made as part of the government’s socio-economic responsibilities, and represent the implementation of policies in these areas,” he said. It was “in no part of the court’s role to second-guess” the wisdom of these policies and measures, he said. The fees had not been raised to unreasonably high levels, he said. Charges had been increased to deal with the problems that existed and to a level approximating those at private hospitals, he added. Tsang Koon-wing, an organiser at the Mainland-Hong Kong Family Rights Association, said the group and Fok – with whom he had spoken after the hearing – were disappointed. “With its ruling, the court is giving recognition to the government’s policy changes,” Tsang said. “We think the policy discriminates against the spouses of residents and has led to them being regarded as second-class citizens.” Tsang said Zeng’s case had dealt with the fees public hospitals charge mainland spouses of residents, but not the wider question of mainlanders’ rights to bed spaces in maternity wards, and that the government needed to ensure provision was made for them. “When dealing with the question of bed spaces in maternity wards, the government needs to make a distinction between women who are spouses of residents [and] those who are not,” he said.

Gambling revenue in Macau, the world’s largest casino gaming destination, surged 24.4 per cent in March to 24.99 billion patacas, (US$3.12 billion) government figures showed on Monday. Macau has thrived as an influx of affluent mainland visitors have flocked to the properties of the enclave’s six licensed operators that include Stanley Ho and Las Vegas tycoons Steve Wynn and Sheldon Adelson. Gaming revenue in the former Portuguese colony reached $33.5 billion last year, and has shown robust growth over the past three months, but investors remain cautious that slowing growth and rising bad loans in China will impact the industry.

Chief executive-elect Leung Chun-ying said on Monday his government intended to do more to help Hong Kong firms expand their businesses in the mainland. Leung made the remarks after he met some of the city’s leading bankers for the first time since last Sunday’s chief executive election. Those attending the meeting included HSBC’s Asia-Pacific chief executive Peter Wong Tung-shun, Hang Seng Bank (SEHK: 0011) chief executive Margaret Leung Ko May-yee, Bank of East Asia (SEHK: 0023) deputy chief executive Adrian Li Man- kiu and Bank of China (Hong Kong) chief executive He Guangbei. Leung said the government intended to be more pro-active helping Hong Kong businesses invest in the mainland. “My government and I will do our very best to resolve all these issues,” he said. Peter Wong said Leung had spoken with the bankers about ways to enhance Hong Kong’s position as a financial hub. Wong said they also discussed how to clear hurdles for Hong Kong firms wanting to operate in the mainland under the Closer Economic Partnership Arrangement. The Cepa economic pact gives preferential treatment to Hong Kong companies in China. Leung said he would discuss these issues further when he visits Beijing. He will also meet other business leaders on Monday.

Former ICAC commissioner Fanny Law Fan Chiu-fun said on Monday she had tried to extend the coverage of the Prevention of Bribery Ordinance, but “faced a hindrance”. Law was recalling her tenure from October 2006 to June 2007, under the administration of Donald Tsang Yam-kuen as the chief executive and Rafael Hui Si-yan as the chief secretary – both now facing investigations. “When I wanted to extend the coverage of the Prevention of Bribery Ordinance I faced a hindrance. It upset me a lot,” Fan said on Monday morning. But she stopped short of giving more details and identifying the source of the “hindrance” she faced. Hui was arrested last week over alleged collusion with brothers Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen of the Sun Hung Kai Properties (SEHK: 0016) empire. “This is unprecedented that the top three officials of our administration over the past seven years have breached the rules.” She did not specify the third official but former financial secretary and defeated chief executive candidate Henry Tang Ying-yen could have breached the law by having a 2000-sq ft underground basement in his Kowloon Tong property. “There are certainly problems with the existing system,” Law said. “The system should not be limited to the text of the laws ... we need a higher level of monitoring [government].” Meanwhile, Law did not rule out joining the Executive Council under Leung’s administration. “But I hope I would not have a negative effect on Leung’s government. If there is anyone saying I am a burden to C Y [Leung] I would not take up any job,” she said.

Sylvie Chen, Sotheby's senior director, China and Southeast Asia, gestured in front of '25.06.86,' by Chinese-French artist Zao Wou-Ki, during an auction press preview in Hong Kong. Sotheby's to Launch Hong Kong Gallery - In one of Hong Kong's prime commercial areas, art auction house Sotheby's is launching its own year-round gallery to expand sales at a time when China's appetite for art is booming. Sotheby's is investing $7.2 million to open more than 15,000 square feet in Hong Kong's Admiralty business district in mid-May, which will enable the company to hold more auctions in addition to its current spring and autumn events, said Kevin Ching, chief executive of Sotheby's Asia. Sotheby's picked Hong Kong as a focus, as Chinese law prevents foreign auction houses from holding sales of artifacts on China's mainland. All Eyes on China as Auctions Begin Romanée-Conti Sells for $200,000+ The launch represents the latest attempt by one of the world's largest auction houses to win over China's emerging collectors, who have dominated auction and gallery sales in recent years, elevating China to the world's largest art market after the U.S., according to 2012 data from the European Fine Art Foundation. Of the approximately $11 billion world revenue for fine art in 2011, sales from China accounted for 39%, up from 33% a year earlier, according to French research firm Artprice PRC. Sotheby's is also maneuvering to keep pace with rival Christie's International PLC, which opened its own 15,000-square-foot gallery and salesroom space on the 22nd floor of the Alexandra House in Hong Kong's Central district in May 2010, said Francois Curiel, president of Christie's Asia. Christie's hasn't yet used the space to produce shows like a typical gallery might, but it does use it to conduct mid-season sales of wine. It also uses the space to preview some of its priciest artworks or jewelry pieces before they are sold in its other salesrooms in New York, London and Geneva. Christie's said it's also considering partnerships with universities in China's mainland. In Hong Kong, Christie's offers three-day courses, enrolling 40 students who want to learn about Chinese modern art and the history of ceramics. Earlier this week, the house also hired former publicist Jinqing Caroline Cai to the newly created position of managing director of its Chinese operations, based in Beijing. Both auction houses said their new Hong Kong galleries represent a key part of their plans to broaden the palate of China's art buyers, who are still more interested in Chinese paintings than they are in household Western names like Pablo Picasso. Mr. Ching said Sotheby's gallery will aim to educate Chinese buyers on Western art by first introducing them to Asian artists who already enjoy an international following, like Japanese artist Yayoi Kusama, as well as 19th-century French painters such as Claude Monet, whose Impressionist landscapes are immediately recognizable to collectors everywhere, Mr. Ching said. "As Chinese become more open to the West, the physical and cultural borders will no doubt break down and create a strong potential for the appreciation of Western art," Mr. Ching said, adding that Sotheby's wants to help shape and be part of that growth. Both houses have also recently created Asian advisory boards to nurture tighter ties to major collectors in Asia. Hong Kong supply-chain magnate William Fung and Hong Kong private-equity chief Mary Ma both serve on Christie's advisory board. Pansy Ho, the daughter of Macau gambling tycoon Stanley Ho, serves on Sotheby's international advisory board . China's purchasing power is expected to keep recalibrating the art world's elite rankings. Last year, Chinese collectors bought so much work by scroll painter Zhang Daqian he was named the world's top auction earner in 2011, with $506.7 million in revenue—surpassing auction sales by big Western artists such as Andy Warhol, who earned nearly $325 million, according to Artprice. Overall, purchases by Chinese collectors accounted for roughly a fifth of Christie's global sales in the first half of 2011. Sotheby's sales in Asia rose to nearly $960 million last year, up 47% from 2010. China sales account for 40% to 50% of Asia sales, Mr. Ching said.

A croupier waits for customers at a table. Gaming revenue is expected to surge with the opening of another resort on the Cotai Strip this month. Gaming revenue in Macau, the world's largest casino gaming destination, rose 24.4 per cent to 25 billion patacas last month, according to government figures. "Business in the VIP rooms grew strongly," said Edwin Fan, an analyst at BOC (SEHK: 3988) International. Fan expects another surge in revenue this month, driven by the opening of Sands Cotai Central, a US$4 billion casino, hotel and shopping complex, on April 11. "Gaming revenue will rise 4 to 5 per cent month on month," he said. Fan estimates gaming revenue growth for this year will be about 20 per cent, aided by a stable policy on the mainland. Gaming revenue rose 42 per cent last year to 268 billion patacas, according to Macau's Gaming Inspection and Co-ordination Bureau. Affluent mainland visitors have flocked to the properties of Macau's six licensed casino operators that include Las Vegas tycoons Steve Wynn and Sheldon Adelson, as well as local casino magnate Stanley Ho Hung-sun. Last month's figure was in line with the estimate of Citi, which, in a research note issued last week, said it expected gross gaming revenue to reach 25 billion patacas. Last month's figures represent a 2.9 per cent rise on February. For the first quarter, revenue was 27 per cent year higher than a year ago at 74.3 billion patacas. The Citi report said Ho's SJM was still the biggest player with 27 per cent of the market last month. Galaxy Entertainment (SEHK: 0027) was next with 20.4 per cent, and Sands China was third with 16.1 per cent. Fan said American-style casinos were attractive to many tourists. Sands had said earlier that 90 per cent of their customers were from the mainland. Official numbers in Macau showed passenger traffic in February fell 1.5 per cent year on year to 2.1 million, while 60 per cent of the tourists were from the mainland. Sands said it would open the first phase of its new resort project, Sands Cotai, on April 11. Holiday Inn Macau and Conrad Macau are included in the first phase. The resort will also feature about 200 gaming tables on the mass gaming floor, and about 140 tables in more than 40 private gaming rooms.

 China*:  Apr 4 2012 Share

Oil giant ConocoPhillips and its partner CNOOC will reportedly pay around 305 million yuan (HK$376.28 million) to fishermen in the northern port city of Qinhuangdao over a large spill last year. The US firm and state-owned CNOOC, which jointly developed the offshore Penglai field, have reached an agreement to pay off fishermen affected by the spill last June, the Shanghai Daily reported yesterday. Several groups of fishermen have filed lawsuits against ConocoPhillips, seeking compensation for alleged losses to their livelihoods due to the spill, which triggered a public outcry and critical media coverage. The two firms have previously said they would pay a total of 1 billion yuan in compensation for the spill, which allowed more than 3,000 barrels of oil and oil-based mud - used as a lubricant in drilling - to spill into the sea. ConocoPhillips announced in January that the 1 billion yuan would be paid as compensation to settle both public and private claims of fishermen affected by the spill. It is unclear if the latest compensation is part of that package. The companies and the local government could not be reached for comment yesterday, a public holiday. The newspaper quoted Qinhuangdao officials as saying they were studying how to distribute the money to those affected by the spill. Environmental groups and fishermen have accused ConocoPhillips and CNOOC of initially covering up the spill, saying it was discovered in June but only made public nearly a month later. Both firms deny the allegations. ConocoPhillips said it cooperated with authorities straight away. 

A senior trade official warned yesterday that a US-initiated multilateral free-trade agreement should not be aimed at isolating China, the world's second-largest economy and largest exporter. In November, US President Barack Obama launched an offensive to reassert the United States' economic leadership by attempting to forge the free-trade agreement. However, in its present form, the agreement is considered unacceptable by China. Despite some Chinese officials saying that Beijing was studying the Trans-Pacific Partnership (TPP), academics said the pact was an attempt by Washington to counterbalance Beijing's influence by forcing it to play by US rules. "The TPP should not be exclusive but should be inclusive," Assistant Minister of Commerce Yu Jianhua said during a luncheon session at the Boao Forum for Asia in Hainan province. Yu said there were many bilateral and multilateral free-trade agreements under negotiation in the Asia region, and the TPP was "just one of them". He called on Washington to consult Beijing and regional economies over the pact. "We must exchange views on this. And we should work to handle economic issues [through consultation] with all the countries [in this region], and with the US," Yu told the session, which was also attended by ministers of several members of the Association of Southeast Asian Nations. China should accelerate steps in advancing a free-trade agreement with Asean countries and in promoting integration of Asian economies, Yu said. Obama announced in November that his administration was pursuing a strategy aimed at returning to Asia to maintain the US' leadership in both economic and security arenas in the region. But when asked to comment on Obama's plan, Yu said it should not be called a "back-to-Asia" policy as Washington had not left the region in the past 50 years. When asked to comment on the simmering rivalry between China and the United States, some of the Asean ministers appeared to take a neutral stance. Former Malaysian prime minister Abdullah Badawi said Asean members welcomed the participation of any players in the region. "We have Japan, South Korea, Thailand and China here. And the United States and Australia are also coming, as we have also had the [Asian-Pacific Economic Co-operation] forum," Badawi said. Imron Cotan, Indonesia's ambassador to China, said Asean countries should seek to engage both Washington and Beijing. "The United States and China are two global powers," he said, adding that "China is a reliable nation". In an interview with CCTV on the sidelines of the forum, Singapore's emeritus senior minister Goh Chok Tong said Asean countries would not take sides with either the US or China. "We have our own core interests to look after, and we are all primarily motivated by our own national interests," Goh said, adding that "nobody will want to side with China or the US".

China's Vice-Premier Li Keqiang gives a keynote speech during the opening ceremony of the Boao Forum for Asia Annual Conference 2012 in Hainan Island on Monday. China's top priority is to boost domestic consumption to maintain relatively strong economic growth, at the same time increasing imports from other Asian countries, Vice-Premier Li Keqiang said at the Boao Forum for Asia in Hainan Island on Monday. While some Asian countries face downward pressure on growth and inflationary pressure, China’s economic fundamentals remain good, Li said. China’s government will stick to its policy goal of stabilising economic growth while curbing inflation, Li said. “The fundamentals of the Chinese economy remain good and the momentum of economic growth has not changed. We will be able to maintain steady and relatively fast development in the long term,” Li said in a speech at the opening ceremony of the Forum - “Expanding domestic consumption is our top priority in adjusting the economic structure,” said Li, who is widely expected to succeed Wen Jiabao as premier in a leadership transition that begins later this year. But he sounded a note of caution on the global economy. “The world economy is showing some signs of recovery, but the deep impact from the global financial crisis has not disappeared and Europe’s sovereign debt crisis lingers,” he said. China’s big factories were surprisingly busy in March as a stream of new orders lifted activity to an 11-month high, but credit-constrained smaller manufacturers struggled, suggesting that the economy is still losing steam. Annual economic growth is widely expected to slow to just over 8 per cent in the first quarter from 8.9 per cent in the previous quarter – the fifth consecutive quarter of slower growth. Meanwhile, annual inflation slipped to a 20-month low of 3.2 per cent in February. But policy-makers remain particularly sensitive to high commodity prices, given China’s huge imports of raw materials. But the leaders in Beijing have shown greater tolerance for slower economic growth, putting more emphasis on structural adjustments to ensure the economy can sustain long-term expansion. Premier Wen Jiabao has cut China’s growth targets for this year to an eight-year low of 7.5 per cent and made boosting consumer demand the top priority. During the opening ceremony of the Boao meeting, an Asian version of the World Economic Forum held in Davos, Li also said China would deepen its bilateral and multilateral relations with trading partners and develop more free trade zones. China’s steps to spur domestic demand will help expand its imports from the rest of Asia, Li said, adding that the country will continue to balance its trade over time. On Sunday, Li met with Taiwan’s vice president-elect Wu Den-yih, with sources attending the meeting saying both sides were positive about boosting trade and financial ties, such as currency settlement issues. Li reaffirmed Beijing’s determination to forge ahead with market-oriented economic reforms and opening up to help sustain the country’s economic growth.

A carved jade seal used by the Chinese emperor Jiaqing (1796-1820) was on Saturday sold at auction in France for nearly 700,000 euros, the auction house said. The seal is carved with dragons and four characters in the style of stamps from the Han era signifying “graceful trees providing pleasant shade”, according to the Saint Aubin auction house in the southwestern French city of Toulouse. The 67-square-millimetre seal appeared to be unique, it added. It was sold for 693,950 euros (HK$7.2 million). Also under the hammer was an 1807 letter from Josephine, wife of Napoleon, addressed to the great diplomat and foreign minister Talleyrand in which she confided concerns over her marriage. “I no longer have the courage that I had previously, what little that I still have diminishes every day and I foresee that I will be very unhappy this summer if I must go far from the emperor,” she wrote in the two-page letter that sold for 17,700 euros. Talleyrand had earlier organised a ball in Warsaw at which Napoleon met Maria Walewska with whom he had a liaison.

Chinese men's team celebrate on the podium during the awarding ceremony after the men's final match against Germany at the 2012 World Team Table Tennis Championships in Germany on Sunday. China completed the clean sweep of gold medals at the world team table tennis championship on Sunday as their women beat defending champions Singapore and the men saw off Germany. Both the Chinese teams are defending Olympic champions after claiming gold at Beijing four years ago when the team event made its debut and China’s teams are favourites for gold at the London Games later this year. Overall, China have won 36 gold medals in both the men’s and women’s world team championships since the tournament began in 1926. After their men beat hosts Germany 3-0 in their final, the Chinese dragon roared again as the women took revenge for their defeat two years ago in Moscow with victory over Singapore. “Again we are world champions and that is well-deserved,” said China men’s coach Liu Guoliang, whose team won the title for the sixth time in succession. “The German team is the strongest in Europe, I hope they continue developing.” “We have felt a lot of pressure coming here, Germany is a nation that tests us, so we were even more prepared then for the last tournament in 2010. Every game was very close.” Germany put up a brave fight as their top player Timo Boll came back from 2-0 down to level the first match before losing 3-2 defeat to Zhang Jike. “I’ve never played in front of such a fantastic backdrop. I was very motivated,” said Zhang. Germany’s Dimitrij Ovtcharov was then dismissed 3-0 by Ma Long, but in the third game Patrick Baum took the first game against Wang Hao before falling to a 3-1 defeat. In the women’s final, China’s Ding Ning put her side ahead with a 3-1 win over Feng Tianwei, while compatriot Li Xiaoxia also had few problems in her 3-1 win against Wang Yuegu. It fell to Guo Yue to seal victory and she dominated Li Jiawei with a 3-0 win in straight games. “It was a high-level encounter in front of the passionate German crowd and the atmosphere on the court after the game was amazing,” said Chinese coach Shi Zhi Rao. The world championships are part of the Olympic qualification process with final places to be decided at forthcoming tournaments.

Economic relations benefit both sides - Vice-Premier Li Keqiang (C) with guests and foreign officials at the 2012 Boao Forum for Asia in Boao, Hainan province, on Sunday. Vice-Premier Li Keqiang on Sunday reaffirmed the mainland's goodwill and commitment to peaceful cross-Straits ties and emphasized stronger economic cooperation with Taiwan. Further economic cooperation will help the common development and bring benefit to the people on the two sides, said Li when meeting Wu Den-yih, chief adviser of the Taiwan-based Cross-Straits Common Market Foundation. Li said the mainland opposes "Taiwan independence", recognizes the "1992 consensus" and will continue to implement policies that promote cross-Straits relations. "People from both sides belong to the Chinese nation, and both economies belong to the Chinese economy," Li said, adding that cross-Straits economic cooperation should be deepened to promote common development, which would benefit the people of both sides. Follow-up negotiations on the cross-Straits Economic Cooperation Framework Agreement trade pact, signed in June 2010, should be pushed forward, he added, so as to reach an agreement on investment protection and promotion as quickly as possible. It is reported that a new round of ECFA talks will start next week in Shanghai. During the meeting, Li also called for the establishment of a currency-clearing system between the two sides, hoping to see more cooperation in the fields of banking, securities and insurance. "We encourage and support capable mainland enterprises to invest in Taiwan," Li said, urging that the necessary environment be provided. He promised continued support for Taiwan enterprises, the protection of their legal rights and increased market access in the mainland. "We will continue to listen to opinions from grassroots Taiwan people, such as small- and medium-sized enterprise owners, farmers and fishermen, to get to know their wishes, and address their concerns to improve cross-Straits ties," Li said. In addition to economic engagement, Li also called for increased exchanges in other areas. Li hailed the expansion of Taiwan's individual travel program, saying it will boost mutual understanding and promote local tourism. On Sunday, Taiwan agreed to allow residents from the cities of Tianjin, Chongqing, Nanjing, Hangzhou, Guangzhou, Chengdu, Jinan, Xi'an, Fuzhou and Shenzhen to visit the island as individual tourists. The meeting between Li and Wu took place during the Boao Forum for Asia, an annual conference in Boao, Hainan province. The three-day event began on Sunday. Li will deliver a keynote speech at an official opening ceremony on Monday. Wu said cross-Straits relations have been on the "proper path" of peace and stability over the past four years, adding that it deserves to be treasured and strengthened. Based on the "1992 consensus", Taiwan and the mainland have reached 16 deals and achieved stable development amid an international economic downturn, Wu said. "Cross-Straits peace and stability should be cherished and consolidated by both sides," he said. Wu said he is happy that the meeting with Li resulted in agreements on a series of issues. He expressed hopes the two sides will seek common ground while resolving differences and upholding peace and trust. Analysts say the meeting builds on talks between President Hu Jintao and Vincent C. Siew, who was then-chairman of the Cross-Straits Common Market Foundation, at the Boao Forum in 2008, which provided an opportunity for both sides to reaffirm commitment to peaceful development. On Sunday, Li also held talks with Italian Prime Minister Mario Monti, Kazakh Prime Minister Karim Massimov, Pakistani Prime Minister Yousaf Gillani, Iranian Vice-President Mohammad-Javad Mohammadizadeh, and Thai Deputy Prime Minister Kittiratt Na-Ranong. They are all scheduled to attend the forum's opening ceremony on Monday.

Hong Kong*:  Apr 3 2012 Share

Former chief secretary Rafael Hui Si- yan and Sun Hung Kai Properties (0016) joint chairmen Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen are due to appear in court next week when the Independent Commission Against Corruption is expected to file charges against them. Hui was released on bail of HK$500,000 while the Kwok brothers each paid HK$2 million in bail on Thursday after being arrested by the ICAC. It is the commission's biggest probe so far. A source said the ICAC would be ready to file charges next Tuesday after an investigation of more than a year. Work on the case will continue during the Easter break. To ensure prosecutorial fairness, the Department of Justice has sought the advice of senior counsel Joseph Tse Wah-yuen. Thomas Kwok and Raymond Kwok will be represented by senior counsel Lawrence Lok Ying-kam and Gary Plowman, with legal fees set to be an estimated HK$10 million. Raymond Kwok went to SHKP headquarters in Wan Chai yesterday at 11am and left at 6pm. He also went to the office on Saturday. Chief Secretary Stephen Lam Sui- lung said at the Boao Forum in Hainan that under Hong Kong law, everyone is treated equally. "We recognize that the community has a strong wish to maintain clean governance in Hong Kong and we should do everything we can to preserve this principle." Hui lives in an apartment at the SHKP-developed The Leighton Hill. A source said Hui had occupied the apartment for free for several months in 2003 and then paid a below-market rate when it became known. Hui has allegedly provided land sales information to SHKP related to at least three projects - Yoho Midtown in Yuen Long, the West Kowloon Cultural District and Heung Fan Liu in Tai Wai. He was an SHKP consultant before rejoining the government in 2005. On March 19, the ICAC arrested SHKP executive director Thomas Chan Kui-yuen. SHKP said the Kwoks will continue to undertake and discharge their duties as chairmen and managing directors. On Friday, they wrote to SHKP staff assuring them everything would be fine. The trading of SHKP shares and its affiliates SmarTone Telecommunications (0315) and SUNeVision (8008) was suspended on Thursday morning. When trading resumed on Friday, SHKP plunged 13.14 percent to HK$96.50, losing HK$38.2 billion of its market value.

Late entertainer is still a hit with fans - Leslie Cheung leapt to his death in Central nine years ago, but his popularity lives on, and some admirers travelled from afar to pay their respects. Fans of the late Canto-pop star Leslie Cheung Kwok-wing proved his popularity has not waned as they gathered yesterday to remember him on the ninth anniversary of his death. Dozens of wreaths and bouquets from fans around the world were laid outside the Mandarin Oriental Hotel in Central, where Cheung leapt to his death on April 1, 2003. He was 46. And the legendary superstar seems to have attracted a raft of new young fans. Ma Zijun, 16, came to Hong Kong alone from Zhuhai yesterday morning and immediately went to the hotel to pay respects to Cheung. She stood in front of the wreaths and wept noisily, although she was only a small child when he died. "It's my first time to commemorate him here," she said. "It feels so real. My parents let me come this year because I'm in high school now. They're his fans too, but they couldn't come as they had to work. I grew up listening to his songs, like Monica, and would dance around to them." But she could not explain why she missed Cheung so much. "I think he was a funny guy. I've never watched his live performances but I have his concert VCDs at home," she said. Another young fan came all the way from Nanjing . "I only started to like him last April. I watched his movie The Bride with White Hair and music videos of his songs," said Evian Yang Yiyun, 24, who also came for the first time and laid a bouquet of white flowers outside the hotel. She said she was considering whether to join the other memorial events but she was afraid she might get too upset. Outside the hotel yesterday, fans from Singapore, Korea, Japan, Europe and North America expressed their love for Cheung on the wreaths' cards. One said: "Never forget you, always miss you, still love you, from fans in Korea." Many addressed him as "Gor Gor", an affectionate nickname meaning "older brother" in Cantonese. One local fan said she had suffered several sleepless nights on this ninth anniversary of his death. "I won't say I'm his fan, he's like family to me. I like him more than I like myself," said Joan Lau, 46. "We've been following him for more than 20 years. We watched him grow up and we grew up watching his movies and listening to his songs." She recalled how fans who did not know one another started to gather after Cheung's death and organise memorial and charitable events. "We're motivated by him to do good deeds because that's the kind of person he was," she said. Hong Kong remembered the actor-singer in several ways. A memorial night programme was held in Chater Garden, Central, last night, an exhibition was held at the Avenue of Stars in Tsim Sha Tsui, charity screenings for two of Cheung's movies were held on Saturday, and a tribute area was set up at Madame Tussauds, where fans were allowed to lay flowers around Cheung's wax statue. Famous blogger Han Han yesterday dedicated a post to Cheung, his "idol". It was the first blog post he had written in the past two years, and had already been read by hundreds of thousands of people as of yesterday.

Sunny future for Hong Kong's car-cooling invention - A taxi in Yuen Long is fitted with solar panels, integral to a new air-conditioning system made in Hong Kong. The panels convert solar power into electrical energy. Government and firms are seeing green promise in solar-powered air conditioner, with initial test runs showing it can drive down fuel usage by 30pc. A car air-conditioning system that runs on fuel-saving solar power is slowly gaining traction among firms and the government, with its Hong Kong makers saying the technology is unparalleled in the world. Around 20 vehicles, including taxis and minibuses, have been testing the system jointly developed by private research firm Green Power and Polytechnic University - and one customer has already seen favourable results. A 10-month test done by Swire Coca-Cola, which fitted some of its trucks with solar panels and the special air-conditioning system, concluded that it could cut carbon dioxide emissions by 12 tonnes each year. "We have already been granted the approval [to test it on] a number of different vehicle types already and should be expecting more vehicle types to be [approved] this summer," said Jacky Lau, the vice-president of Green Power, which is based in the Science Park in the New Territories. The Hong Kong government is even selecting a few official cars from its fleet for a trial run of the new system. If approved, the government will join around 10 companies - including Hongkong Electric (SEHK: 0006), the Airport Authority, Polytechnic University and several tour bus and taxi operators - that have already been using the technology. The new system requires vehicles to be retrofitted with solar panels on the roof. These convert the sun's energy into electrical power, which is stored in a tailor-made battery that can be used for back-up power or to power air conditioning with the help of the car's compressor system. The entire assembly is separated from the petrol engine, such that when the vehicle is running or when the engine is switched off, the air conditioner can run independently without burning any fuel. In contrast, conventional air conditioners for cars are powered by the internal combustion engine, which are not as fuel-efficient. Professor Eric Cheng Ka-wai, who led the research at Polytechnic University's electrical engineering department, said minibuses could save about 30 per cent of fuel using the solar-powered system while taxis or private cars could save about 20 per cent. Development began in 2009. A full charge takes about 10 hours, and six to seven hours of charging could provide enough energy for about three hours of air conditioning, Lau says. "If the battery runs out, the air-conditioning system will automatically switch to derive energy from the engine," he said. It also has a device called "maximum power point tracking", which converts all forms of light - including ultraviolet rays, which are emitted by the sun and black-light fluorescent bulbs - into electrical energy. This means charging can be done even on cloudy or rainy days. "Since the vehicle itself has very poor heat insulation, the air-conditioner system for the vehicle requires a large cooling capacity and we have developed the system with outstanding conversion efficiency together with optimal energy control," Lau said. "We have not yet found another company that can achieve similar technology." However, the system is not yet compatible with large buses. Lau said Green Power was currently installing the system on more vehicles and had even received orders from Macau. "So there will be more running on the road in the next two months," he said. "We also expect to see an exponential growth in [orders] in the coming few months, as the summer season is closing up, [based on the] enquiries we are getting now," he said. About 10 more orders have been placed by some local transport operators who wish to test the system on their vehicles, with help from the government's Pilot Green Transport Fund, the executive says. The fund provides subsidies for trials of green and innovative technologies. A spokeswoman for the Environmental Protection Department said they were studying the feasibility and effectiveness of the system in reducing emissions and conserving energy. She said they were looking into its compatibility with various vehicle types, its fuel-saving projections, installation and maintenance costs, and the makers' method in collecting data from pilot tests. While results are pending, the spokeswoman urged public transport operators and private-car owners to test the solar-powered air conditioner. She noted they could apply for funding from the green transport fund, which could cover up to 75 per cent of testing costs. Retrofitting and testing the system costs between HK$40,000 and HK$120,000, depending on the model, and for privately owned cars it would require the approval of the Transport Department. But this steep price tag will be offset by saved fuel, Cheng, the professor, says. Lau, from Green Power, says the innovation comes ahead of a similar system being developed in Europe, the Thermal Systems Integration for Fuel Economy project, set to be rolled out in 2015 and which aims to reduce fuel use by 15 per cent. But a challenge for the Hong Kong researchers is fitting the system to different vehicle designs, which will take time to test. While details of the research are under wraps, Lau says his firm is looking at extending the solar-powered system for use "not only in vehicles but also other mobile machinery, stations or devices".

Demonstrators march towards the central government's liaison office in Central on Sunday to protest against Beijing's involvement in last Sunday's chief executive election. Thousands of people in Hong Kong noisily protested on Sunday against chief executive-elect Leung Chun-ying and decried Beijing’s alleged interference in the election that propelled him to the top job. Holding banners and chanting slogans such as “One person, one vote” and ”Leung step down”, demonstrators marched through central Hong Kong to Beijing’s representative office. About 15,000 people took part in the 90-minute procession, organisers said. Police estimated the crowd at 5,300. It was the first major protest since Leung was chosen a week earlier as the next chief executive by a 1,200-strong election committee packed with pro-Beijing elites. “Beijing blatantly interfered in our election,” said retiree Lam Sum-shing, 69, who was wearing a green army uniform and a mask with Leung’s photo. “I’m wearing this to show he will be a 'yes' man for Beijing. He was not chosen by the seven million Hong Kong people, he’s chosen merely by 689 pro-Beijing elitists,” Lam said. Demonstrators also held up a huge black banner with the Chinese character ”mourning” to highlight what they called “the death of democracy”, and posters saying “The Wolf is here”. That referred to Leung’s nickname, coined for his perceived ruthlessness and cunning. Leung beat former chief secretary Henry Tang Ying-yen in the election. Tang was seen as Beijing’s favoured candidate until a series of gaffes and scandals wrecked his campaign. The government in China then reportedly relayed to election committee members that they should support Leung instead. There were chaotic scenes outside Beijing’s representative office when police sprayed a fire extinguisher at a protester who repeatedly tried to set a Hong Kong flag on fire. Demonstrators also trampled on a wolf-shaped banner. “We don’t want a 'small-circle election', we want equal voting rights,” university student Kelvin Chan said. Opinion polls before the election suggested that many in Hong Kong backed neither Leung nor Tang, but wanted universal suffrage to choose a new leader to replace outgoing chief executive Donald Tsang from July. Leung said in a statement after the rally that he respected the right of the public to express their views. “I will adhere strictly to the principles of ’One country, two systems’, ’Hong Kong people ruling Hong Kong’, and a high degree of autonomy in accordance with the Basic Law,” he said. Beijing has said that at the earliest, the city’s chief executive could be directly elected in 2017 and the legislature by 2020.

 China*:  Apr 3 2012 Share

Starbucks executive John Culver toasts to the company's plans to nearly tripled the number of its mainland stores by 2015. Coffee giant Starbucks aims to widen its range of mainland investments, including an expansion outside of its core business. Starbucks China and Asia-Pacific president John Culver said the company's plans included introducing a new line of premium single-cup coffee and machines, entering the "energy drink" category, and developing its fruit juice stores. "We are ramping up investments in … staffing, training, development and systems," Culver said, without disclosing the cost of these activities. Seattle-based Starbucks, which posted a 16 per cent year-on-year increase in total revenue to US$3.4 billion in its fiscal first quarter ended January 1, has about 10,000 staff on the mainland and directly owns stores in 44 cities. "We're closing in on 600 stores in the coming months," Culver said, adding that Starbucks was "on track" to have 1,500 stores in more than 70 mainland cities by 2015. He said the company also saw "a big opportunity in [mainland] China" for extending its coffee business into mainland consumers' homes and offices. The new Verismo system makes espresso drinks and brewed coffee one cup at a time. Slated for release later this year, Verismo machines, single-cup coffee and milk pods will be sold at some Starbucks stores and specialist retailers in the United States, Canada and selected international markets. "We're working on our rollout plans right now," Culver said. Starbucks estimated the premium single-cup coffee category to be a nearly US$8 billion-a-year global market. Companies competing in this category included Kraft Foods and Nestle, which has heavily promoted its popular Nespresso brand. Starbucks had earlier licensed coffee pods for Kraft's Tassimo coffee-brewing system, but ended that deal last year. Market research firm Euromonitor International said: "Though [coffee] pods have been ubiquitous for a number of years in offices, it was only from 2009 and 2010 when these saw great success in the retail market." Culver said Starbucks, which has more than 17,000 retail stores worldwide, would also build a new campaign on the mainland later this year around its recently launched "Refreshers" low-calorie drinks, which combine green coffee extract with fruit juices, but with no coffee taste. The line allows Starbucks to compete in the rapidly expanding energy drinks market, where Red Bull is still the world's leading brand, selling 4.63 billion cans worldwide last year. The energy drinks market segment was estimated by Starbucks to be worth about US$8 billion last year. Canned ready-to-drink Refreshers will be introduced widely this month in the US through grocery and convenience stores. Made-to-order Refreshers will also be available at Starbucks stores later this year. Culver said Starbucks' acquisition of Evolution Fresh, a maker of premium-priced fruit juice drinks, last November was intended to expand the firm's horizons beyond coffee. "We're going to … look at how we're going to bring it to other parts of the world," Culver said. "Asia represents a big opportunity and I want to move as quickly as possible to try and bring it here."

Wu Den-yih and Li Keqiang meet in Boao yesterday. Taiwan's Vice-President-elect Wu Den-yih sidestepped the controversial "one country, two areas" subject at his meeting with China's Vice-Premier Li Keqiang on the sidelines of the Boao Forum for Asia yesterday, urging both sides to focus on economic issues first. Wu said at the meeting, in a 16-word admonition-style phrase, Beijing and Taipei should shelve differences while prioritising on "improving the livelihoods" of people on both sides of the straits on their agenda. Wu is attending the forum in his capacity as the top adviser to the Cross-Straits Common Market Foundation. Li is widely tipped to become China's premier when the country undergoes a reshuffle of government next March. The contentious "one country, two areas" concept was raised by the honorary chairman of Taiwan's ruling Kuomintang party, Wu Poh-hsiung, during his meeting with President Hu Jintao in Beijing on March 22. Wu Poh-hsiung later said Taiwan's president, Ma Ying-jeou, wanted him to relay the message to Hu. The term has triggered debate among the island's political parties, with pro-independence opposition leaders urging Wu Den-yih to seek clarification from vice-premier Li that the "one country" refers to the "Republic of China" rather than "People's Republic of China". Taiwan's former vice-president Vincent Siew Wan-chang made a similar 16-word proposal to Hu when they met, also in Boao, in a visit after Ma took office in 2008. Analysts believe there is little difference between Wu's and Siew's 16-word admonitions as both KMT leaders called for the two sides to put aside political differences while concentrating on maintaining peace and developing their economies. "They carried similar meaning using different wordings, as the core issue is to put aside political controversy and to focus on developing common economic grounds," said Professor Jin Canrong, associate dean with the school of international studies at Renmin University in Beijing. Jin said the aim of yesterday's Wu-Li meeting was to send a subtle message that top leaders from across the straits can meet, talk and reach consensus on major issues while agreeing to disagree on others. Wu also told Li that KMT's re-election victory in January will boost development of cross-straits relations. Yesterday, the Taipei government announced it would double its quota of independent mainland tourists to allow up to 1,000 visitors a day from April 28. The announcement came less than a year after a ban on solo travel from the mainland was lifted. Taiwan's Mainland Affairs Council said the move would help promote friendship and tourism.

China's eastern economic hub of Shanghai is the most open city in the country for its deep involvement in developing an export-oriented economy, according to a report released by the National Development and Reform Commission (NDRC), China's top economic planner. Beijing and the southern coastal province of Guangdong ranked second and third, respectively, in terms of their degree of openness, which was measured using three primary indices for economic, technological and social development, the report said. The report marked the first time for China to release an openness index for its 31 administrative areas on the Chinese mainland. The move will help identify regional economic differences and serve as a reference for the country's policy choices, said Wei Jianguo, secretary-general of the China Center for International Economic Exchange and former deputy minister of commerce. The southwest province of Guizhou ranked the lowest after Northwest China's Qinghai province and the Tibet autonomous region, the report said. Cao Wenlian, deputy director of the NDRC's Fiscal and Financial Department, said the ranking will help the country's less-open regions to recognize their developmental advantages and encourage them to make more efforts to match their openness ratings with their own economic development levels.

Nuclear bunker opens to tourists - A former underground nuclear base is viewed by tourists in Chongqing Municipality on March 28, 2012. The 816 Nuclear Military Plant, once a highly confidential military site in Chongqing's Fuling District, was China's second nuclear raw material industrial base which can stand an 8.0 magnitude earthquake. More than 60,000 soldiers participated in the construction of the base.

Hong Kong*:  Apr 2 2012 Share

Graft arrest 'an isolated case' - Minister describes the arrest of former chief secretary Rafael Hui in bribery inquiry as an 'individual incident' that will not harm civil service morale - Three days after two of Hong Kong's richest tycoons and a former top government official were arrested on suspicion of corruption by the ICAC, the government has broken its silence on the unprecedented probe, describing it as an "individual incident" that will not affect the morale of the civil service. With the chairmen of property giant Sun Hung Kai, Thomas Kwok Ping-kwong, 60, and his brother Raymond Kwok Ping-luen, 58, along with former chief secretary Rafael Hui Si-yan, 62, all out on bail following their arrest, a senior official yesterday responded to questions on the Independent Commission Against Corruption investigation that has rocked the city. Secretary for constitutional and mainland affairs Raymond Tam Chi-yuen described the arrest of Hui - who masterminded outgoing leader Donald Tsang Yam-kuen's re-election campaign - as "an individual incident". He added: "I do not believe the incident will affect the morale of civil servants." No one has been charged in connection with the probe as yet, but the arrests in connection with allegations of bribery and misconduct in public office have been interpreted by some as an attack on the city's influential property tycoons. It is understood the ICAC's investigation was given fresh impetus by the forced departure of Walter Kwok Ping-sheung, the older brother of the Sun Hung Kai chairmen. As revealed by the South China Morning Post (SEHK: 0583), he spoke to anti-graft agents prior to his brothers' arrests, following a bitter family feud three years ago. In the past, Walter Kwok, who was forced by his siblings to leave the company in 2008, has made unsubstantiated allegations regarding executive director Thomas Chan Kui-yuen, the Sun Hung Kai land acquisition boss who is also on bail after being arrested earlier this month in connection with the same probe. Claims of collusion have intensified the debate over "developer hegemony", in which property developers are accused of maximising their influence by building up land banks and dominating business in various sectors, according to Lawrence Poon Wing-cheung, an estate specialist teaching at the City University. "The arrest will reinforce public discontent against the developer tycoons," he said. "In the past, developers have been known for manoeuvring the grey areas in flat sales. Now they are proved to have offended laws in order to reap more profits." According to Sun Hung Kai, the company has built up a total of 26 million square feet of agricultural land, the second-largest land bank in the New Territories following Henderson Land (SEHK: 0012)'s. Sixty-nine per cent of the gross floor area it is developing is in the New Territories. Yip Siu-chau, a retired schoolteacher living in Mei Foo Sun Chuen, said the arrest corroborated suspicions of collusion. "It wouldn't be made public if the Kwok siblings were not fighting against each other," he said. "I do think there are a lot of bribes happening between the government and the business sector. They were not revealed because investigation is difficult." Yip is a resident affected by a New World Development project. The company stands accused of constructing a high-rise that might block the airflow and sunlight of Mei Foo residents despite not having full ownership of the site. Meanwhile, last night, the Hong Kong Press Photographers Association said a Cable TV cameraman sustained neck injuries when scuffles broke out between reporters and security guards at the entrance to Sun Hung Kai's headquarters in Wan Chai. The fracas erupted when a group of reporters attempted to film a vehicle, believed to be carrying Raymond Kwok Ping-luen, as it entered the headquarters.

HK beats odds with 8th highest life spans in world - Hongkongers - and neighbours in Macau - score high on CIA rankings, despite high-stress environment - Hongkongers now boast one of the highest life expectancy rates in the world, though a move to Macau could add on another two years. In the latest World Factbook annually published by the CIA, Hong Kong came in eighth in the world with an average life expectancy of just over 82 years. The average life span for Hong Kong men was 79 and 85 for women. People living in the European sovereign state of Monaco took pole position in the survey released this month, with an average life span of about 891/2 years, followed by Macau, where residents can expect to live to over 84. Japan came third at just under 84 years. The CIA figures for Hong Kong were slightly lower than the local Census and Statistics Department's figures from last year, which said men could expect to live to 80 and women to 86. Dr Karen Cheung Siu-lan, a social science expert from the University of Hong Kong, said it was a mystery as to why Hongkongers lived so long. "We are living in such a crowded place with polluted air, stressful yet sedentary work style, excessive drinking and a diet with three highs - salt, sugar and oil - but people in Hong Kong still can enjoy a long life," she said. Offering clues as to longevity is Cheung's recent study on healthy Hongkongers aged 100 or near that age. She interviewed more than 150 people born between 1905 and 1915, and took DNA and blood samples. "Based on the preliminary results of the study [on centenarians], upbeat personality is one of the major conducive factors to healthy longevity," Cheung said, adding there were 1,890 centenarians in the city. Other factors behind the trend included affordable and accessible health services, financial stability, healthy diet, regular exercise, and having a good social support base such as with family. The study was supported by the Hong Kong Council of Social Service, 18 elderly-health clinics and the Health Department. Cheung said a key finding was that "most of the cognitively and physically intact centenarians were 'escapers' of fatal and chronic diseases such as cancer, heart and cerebrovascular diseases". "So living healthily and independently to 100 is not impossible today, if we could enhance the protective factors and reduce the risk factors," she said. Separately, Macau University's Chan Kin-sun - a specialist in gerontology, or the study of ageing - said lower work pressure, and a stable social welfare and health care system contributed to longer life spans. The countries with the lowest life expectancy in the CIA survey were Chad, Guinea-Bissau, South Africa, Swaziland and Afghanistan.

Kenneth Poon copied his letter to a DTZ director. New evidence suggests Chief Executive-elect Leung Chun-ying's colleagues may have been aware of his alleged conflict of interest when he served as a judge for an arts hub design competition in 2001. The revelation was made to a Legislative Council inquiry yesterday as it emerged that a key witness, Malaysian architect Ken Yeang, has refused to testify in person or by tele-conferencing. Nor will he write a statement. Yeang's decision undermines the investigation into Leung, who is accused of failing to declare a conflict of interest before voting on anonymous entries for the West Kowloon arts hub. The DTZ property consultancy formerly run by Leung was named in Yeang's scheme as a property adviser. The jury, initially marking the entry for an honourable mention, disqualified it after they found DTZ's name in the scheme. On the third day of hearings yesterday, the council was shown a letter contradicting a statement by Leung's colleague who said he did not know Leung was a juror. The colleague had given information to Yeang's team. The letter was written by Kenneth Poon Kan-young, then director of quantity surveying firm Davis Langdon and Seah, a member of Yeang's team. It was sent to a local architect and copied to a DTZ director who had been invited by Poon to provide data on land valuation. Poon wrote that Leung was a juror, adding: "This has been discussed with DTZ who advised that Mr Leung will make the necessary appropriate declarations and there should be no problem on this matter." And he testified yesterday: "I thought Leung served as a juror in his personal capacity ... I believed the government would have a mechanism to deal with it. Whether it will let him stay in the jury meeting or ask him to leave it, I did not know." He also said he "must have told" someone in DTZ that Leung was a juror, but he could not recall whom, and when. But Chiu Kam-kuen, executive director of DTZ, to whom Poon's letter was copied by fax, testified that he never received the fax. "If I had known [Leung was a juror], I would not have given professional advice because there would be a conflict of interest." Chiu also said Leung did not know DTZ had given advice on an entry until the jury finished voting and the government told Leung about it. Poon's and Chiu's contradictory remarks left lawmakers guessing who was telling the truth. Chiu said DTZ only provided rough land-value estimates for the entrant team on a no-fee basis. But according to documents disclosed yesterday, DTZ wrote a five-page response, commenting on the entry's financial viability. The hearing continues on Tuesday.

Chief executive-elect Leung Chun-ying mingles with the crowds in Sham Shui Po yesterday. It was almost as though the chief executive-elect, Leung Chun-ying, was back on the campaign trail yesterday as he met poor residents of Sham Shui Po to discuss their housing needs a day before thousands are expected to show their displeasure at the city's next leader and Beijing's alleged meddling in the election. Leung took the MTR from Admiralty to Sham Shui Po, a district notorious for cubicle apartments, showing his human side by taking pictures and chatting to passengers. He then met residents of subdivided flats before attending a forum on housing problems organised by the Society for Community Organisation. Residents demanded Leung build more public housing and provide more welfare. Leung said he would canvass support from society to pay extra attention to the hardships faced by the grass roots after he assumes the top job on July 1. "In a small city like Hong Kong, no one can say 'certain kinds of problems have nothing to do with me' and then simply ignore it. We are in the same boat," Leung said. "When we need to find land … to build public housing, it may block some views or affect air ventilation. However, for the benefit of the community, everyone should make a bit of compromise." Residents asked him to return at least once a year and Leung promised to continue community visits. However, one critic said Leung's high-profile public appearances over the past week were unlikely to dampen interest in today's protest. Leung said he would humbly listen to the protesters. "Whether I attend the rally in person depends on the actual situation," he said. The former Executive Council convenor was elected last Sunday after securing 689 of 1,193 Election Committee votes - a much lower winning rate, at 61 per cent, than his predecessors Donald Tsang Yam-kuen and Tung Chee-hwa - and with support of just 35 per cent in the city, according to a poll by the University of Hong Kong. Since Leung was elected, his daily schedule has included meetings with different strata - including nine visits to local communities - and a controversial 90-minute visit to the central government's liaison office in Hong Kong on Monday. He has also met civil servant unions and plans to meet business leaders, who were seen as closer to his election rival Henry Tang Ying-yen, the former chief secretary. Yesterday was the final working day for his election campaign team, and in the evening he attended a dinner with news executives. Of the Sham Shui Po visit, veteran political analyst Johnny Lau Yui-siu said: "It is an obvious gesture in mending his popularity rating, given that he was elected with three- lows [a reference to Leung's low popularity, low support and low credibility]." Gary Fan Kwok-wai, of the Civil Human Rights Front - an organiser of today's rally - felt Leung's charm offensive was unlikely to dissuade people from marching today. "The recent visits are merely gestures - a show to display that he is popular," said Fan. "His visit to the liaison office right after the election makes it look even more suspicious."

 China*:  Apr 2 2012 Share

The two photographs show Shanghai's landmark Lujiazui area before and after lights were turned off to mark Earth Hour, last night. The Oriental Pearl TV Tower and Jin Mao Tower switched off their lights between 8:30pm and 9:30pm.

A scene from the biopicThe Life of Wu Xun, starring actor Zhao Dan (right) as a kind-hearted beggar who establishes free schools. Sixty-one years after being labelled "reactionary propaganda" by Mao Zedong , "the first banned film of New China" went back on the market in DVD format on March 15. Directed by Sun Yu and produced by Kunlun Film Studio in 1950, The Life of Wu Xun is based on the true story of a beggar who spent decades collecting, lending and saving money until he was eventually able to found three free schools for poor children in Shandong province. The six-decade delay in the re-release of the 197-minute black-and-white classic has triggered online curiosity and sparked widespread discussion about its implications, giving momentum to a critical re-evaluation of Mao's purging of intellectuals to establish his absolute authority over Chinese culture and thinking. Dai Qingfang, manager of audio-visual products at Guangdong Senses Culture Communication, said it had released the two-disc DVD to meet demand from customers and film collectors, usually in their 40s or 50s. "We only produced about 500 [copies] at the request of our long-term customers," she said. "We weren't expecting so much attention." Dai said she had never expected the 99 yuan (HK$122) DVD to sell out on some websites or to receive hundreds of reviews on Douban.com a social network site for sharing information on movies, music and books. The central character in The Life of Wu Xun, one-third of which was filmed in 1947, is a compassionate beggar played by Zhao Dan . It was hailed as one of the 10 best films of 1950 and Communist Party leaders Zhou Enlai , Zhu De , and Hu Qiaomu had praised the movie at a screening in Zhongnanhai - the central party headquarters - before public screenings in Beijing, Tianjin and Shanghai in February 1951. But on May 20, 1951, the People's Daily carried an editorial written by Mao headlined "Ought to Emphasise Discussion on The Life of Wu Xun", the first serious attack on film culture on the mainland. Mao lashed out at the film for "fanatically publicising feudal culture" and its "tolerance for slandering the peasant revolutionary". In the film, a peasant calls on Wu to help him kill evil officials and local bullies. Wu replies: "Li Zicheng [a Chinese rebel leader who overthrew the Ming dynasty and ruled China briefly as emperor of the short-lived Shun dynasty] killed many people but failed in the end. [Taiping rebellion leader] Hong Xiuquan became emperor five years ago, but quickly forgot the poor. What's the point of killing people?" In his critique, Mao described Wu Xun as a "reactionary feudalist ruler" and said some authors "deny the right of class struggle by the oppressed". "The compliments paid to this film demonstrate the extent to which thinking in cultural circles is messed up," he said. The real-life Wu soon became known as a "big hooligan, big creditor and big lord" after Mao's wife, Jiang Qing , went to Wu's hometown to gather negative information about him. Analysts said Mao couldn't tolerate the protagonist's advocacy of gradual reform instead of violent peasant revolution. "Wu Xun was originally portrayed as a saint by some intellectuals, something that couldn't be tolerated by Mao who wanted to be seen as the only saint," said Zhang Yaojie, a researcher at the Institute of Chinese Culture. The film gained political importance when the criticism of Wu Xun became a tool for Mao to "rectify deviations" in cultural circles, Zhang said. Mao soon had authorities confiscate the assets of private filmmakers and tried to weed out the "art for art's sake" mindset, favouring films deemed as propaganda tools for the party. The number of mainland films produced plummeted from 23 in 1951 to eight the next year. "Mao held personal grudges against intellectuals because he felt he was ignored when he worked at Peking University," Beijing-based historian Zhang Lifan said. "His criticism of Wu Xun also signalled his suppression of private schooling." Media reports about the new DVD spread rapidly on microblogs, with some recalling how criticism of the film was rekindled during the 1966-1976 Cultural Revolution, when Wu's former home and his tomb were damaged. Staff who worked on the film were also persecuted. Internet users hailed the release of the DVD, saying it would satisfy the curiosity of millions who had heard about it but never seen it. In 1985, the People's Daily reported that then Politburo member Hu Qiaomu - one of the top cadres who praised the film in 1950 - said criticism of the film was "very one-sided, extremely violent" and therefore "not basically correct". Wu Xun's reputation began to be restored in 1986 when the State Council's general administrative office issued a document titled "Response to the Rehabilitation of Wu Xun". In 2005, the film was screened - though not publicly - to mark the 90th anniversary of the birth of lead actor Zhao in Shanghai. Zhao had died in 1980. However, most analysts say the DVD's release does not signal any significant loosening in party censorship, despite internet speculation. "We haven't seen clear relaxation of ideological control," Zhang Lifan, the historian, said. The DVD's cover is printed with the label "for research purposes". But Dai said she did not think the film contained anything sensitive, and their partner publishing house had received state approval to release it. "This film is already very revolutionary," one microblogger wrote. "I really have no clue why it was banned."

Premier Wen Jiabao ushers Italian Prime Minister Mario Monti into Beijing's Great Hall of the People for a ceremony yesterday. Italy and China yesterday vowed to boost trade ties as their leaders met in Beijing ahead of the start of key economic talks at the Boao Forum for Asia tomorrow, local media said. Premier Wen Jiabao told Italy's Mario Monti - the only European leader attending the forum - that both Beijing and Rome should step up trade between small and medium-sized enterprises, and help businesses working in advanced technology and environmental protection, Xinhua reported. Wen also called for more financial co-operation between the two nations and more contact over reform of the international financial system. Monti, a former European commissioner, said the Italian government was working hard to implement fiscal reform. He also said he attached great importance to Chinese investment in Italy. Liu Jiansheng, a research fellow from the European division of the China Institute of International Studies, said Monti's trip could pave the way for Italy's advanced technology and environmental protection businesses to gain a foothold in the mainland market.

Grand suspension bridge opens to traffic - Aizhai Suspension Bridge, over the Jishou-Chadong Expressway, in Central China's Hunan province, opens to traffic on March 31, 2012. Crossing Dehang Grand Canyon, the bridge has a main span of 1,176 meters. As a key section of the expressway, the Aizhai bridge includes the standard two-way four-lane motorway, with a speed limit of 80 kilometers per hour and a base width of 24.5 meters. Cars run on the Aizhai Suspension Bridge, over the Jishou-Chadong Expressway, in Central China's Hunan province, as the bridge opens to traffic on March 31, 2012.

Hu, Cambodian king discuss all-around cooperation - Chinese President Hu Jintao meets with Cambodian King Norodom Sihamoni in Phnom Penh March 31, 2012. Hu said the Cambodian royal family has made special contributions to the development of China-Cambodia ties. The half-century friendship between King-Father Norodom Sihanouk and generations of Chinese leaders has remained strong and is becoming even firmer, said Hu. Carrying on this tradition, King Sihamoni has attached great importance to the development of the friendly and cooperative ties between China and Cambodia, and has made new and important contributions to the promotion of their traditional friendship, Hu said. China cherishes its traditional friendship with Cambodia, and will make all efforts to push forward the China-Cambodian comprehensive strategic partnership to benefit both peoples. King Sihamoni said Hu's visit is of historical importance and will certainly promote the traditional friendship between the two countries and achieve fruitful outcomes. The king said Cambodia has always viewed China as its closest great friend, and the royal family will continue to play a positive role in consolidating and promoting friendly cooperation between the two countries. President Hu said he was glad to see Cambodia's progress in maintaining political stability, reaching ethnic reconciliation, sustaining economic development and achieving a rise in international status. He expected Cambodia to gain further achievements under the leadership of King Sihamoni with the joint efforts of the Cambodian government and its people. Also on Saturday, Hu met Prime Minister Hun Sen and would meet Senate President Chea Sim, and National Assembly President Heng Samrin. The Chinese president arrived in Cambodia on Friday for a state visit.

Hong Kong*:  Apr 1 2012 Share

Legislators have given preliminary approval for a HK$57.3 billion second round of funding to build the MTR's Sha Tin-Central Link - despite complaining that a HK$6.1 billion management fee payable to the rail operator for building the line is too high in view of its profitability and fare increases. The fee is equivalent to 10.5 per cent of the construction cost for the line. The government rejected calls to reduce the fee to 7.5 per cent, saying this would cause delays. Several lawmakers at a meeting yesterday of the Legislative Council's railways subcommittee pointed to the MTR's plan to raise fares by 5.4 per cent in June despite reporting a 22 per cent rise in profits last year 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 asked. Andrew Cheng Kar-foo also called on the government to lower the management fee and consider allocating money for a mechanism to offset the impact on rail users of fares being raised year after year. On his second point, Secretary for Transport and Housing Eva Cheng said the fare-adjustment mechanism would be reviewed later this year. On the first point, she said that, according to a consultant's estimate, cutting the fee 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. [The] 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 due to the complexity of the project. Construction of the 17 kilometre line would mean work at 300 sites and take 10 years, he said, and 100 contracts would be involved. Fees for contract management and site supervision by third parties were not included in construction costs, and would be paid from the MTR's management fee. The project will next be looked into by the public works subcommittee of the Finance Committee on April 18. Despite its name the line, which will have 10 stations, will run from Tai Wai to Hung Hom, with an extension to the East Rail line extending from Hung Hom under 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.

To capture the booming regional art market, auctioneer Sotheby's says it will open a gallery in Hong Kong, its first in Asia, in less than two months. The 15,000 square foot gallery, which is to occupy the entire fifth floor of One Pacific Place in Admiralty, will open on May 19. It will host auctions, exhibitions and private sales, and will include a permanent salon for Sotheby's diamonds. The London auctioneer is the latest big name to join the gallery craze. Over the past two years, international galleries White Cube and Gagosian Gallery have opened their first Asian branches in the city. Kevin Ching, the auction house's chief executive in Asia, said the company wants to expand its business beyond its twice-yearly series of auctions in April and October due to strong growth in the region. "[We have] our own buildings in London and New York," he said. "Setting up a gallery here will move Hong Kong in line with the two art hubs." Since 2001, the company's turnover in Asia has jumped 16-fold and reached a historic high of US$1 billion last year. Asia provided 5 per cent of its global profits in 2004. That surged to 20 per cent a year ago. Smaller auctions will be held regularly at the gallery, as will private sales - an increasingly important strand of business for the auctioneer, Ching said. Worldwide, private sales business went up 65 per cent year-on-year last year, while auctions turnover rose only 14 per cent. Traditionally, mainland clients - who make up about half of all clients in Asia - prefer auctions to private sales, he said. However, there is potential for change as they become more familiar with the art market. The gallery's first public selling exhibition, from May 19 to 31, will feature about 30 works by contemporary Japanese artist Yoyoi Kasuma. Meanwhile, Sotheby's will host its annual spring sale from March 31 to April 4 in the Hong Kong Convention and Exhibition Centre. It will feature more than 3,100 lots, with an estimated value of about HK$1.9 billion. There will also be a public preview of lots to be auctioned in Europe. Pablo Picasso's 1941 portrait of his lover Dora Maar, entitled Femme assise dans un fauteuil, and Andy Warhol's Double will be exhibited until April 3. A 34.98 carat diamond, "Beau Sancy", which was owned by four European royal families, will also be in Hong Kong until April 2.

Leung Chun-ying signs a document saying he does not belong to any political party. Leung plans talk with Tang's business backers - Chief executive-elect's meeting may be attempt to woo HK General Chamber of Commerce and other groups. Chief executive-elect Leung Chun-ying is lining up major business organisations for a meeting next month, in an apparent attempt to mend fences with business leaders who are closer to his election rival, Henry Tang Ying-yen. A leader of one chamber of commerce said Leung had invited its members to a meeting, scheduled after Leung's forthcoming visit to Beijing to accept his appointment as chief executive. "He invited us to meet next month but no details have been confirmed yet," the source said. "He also asked us if we have any opinions on economic development that we want him to [pass on] to the state leaders." The business community has been largely perceived as favouring Tang, who lost Sunday's chief executive election with 285 votes to Leung's 689. Among the major business chambers, the Hong Kong General Chamber of Commerce (HKGCC), the Chinese Manufacturers' Association and the Federation of Hong Kong Industries have been staunch supporters of the ex-chief secretary. The Chinese General Chamber of Commerce, which had given 10 nominations to Tang, made a last-minute change to support Leung. A source in the HKGCC confirmed being approached by Leung for a meeting. Leung continued his district visits for the third straight day - on the eve of tomorrow's protest march against him - and pledged to continue listening to the public's views. "I understand people taking to the street on April 1 must have many demands. I will listen humbly," he said. Leung visited Tai Wai and Sheung Shui in the New Territories yesterday evening. Although brief, his visits drew a lot of attention, and he was surrounded by supporters for the most part. His speeches of thanks for the public's support were often drowned out by cheers. In Tai Wai, Leung received a petition from a resident, who urged a prompt halt to the influx of mainlanders giving birth in Hong Kong - a hot-button issue in recent months. Leung has been criss-crossing through various districts in the past few days. He is expected to visit Sham Shui Po today. Meanwhile, a veteran democrat and high school classmate of Leung gave his input on the incoming leader's qualities. Dr Law Chi-kwong said people who did not know Leung well could mistake him as being crafty, but Law said he would not describe Leung so. But he said Leung should work on his oratory skills, citing Leung's unsatisfactory answer to a question in the press conference after he won. When asked if the mainland liaison office had canvassed support for him, Leung said he did not know "what kind of vote-canvassing activities [the reporter] was talking about".

Clement Kwok at the annual results announcement at The Peninsula, Tsim Sha Tsui. People staying at The Peninsula in Tsim Sha Tsui can expect to pay more after the completion next year of a HK$450 million renovation of the historic hotel. The Peninsula's average daily room rate rose 8 per cent to HK$4,410 in the fourth quarter last year, compared with the fourth quarter of 2010, its owner, Hongkong and Shanghai Hotels (SEHK: 0045), said yesterday. This was higher than one of its main rivals, Mandarin Oriental International, which charged an average of HK$4,037 per room per night at the Landmark Mandarin. Clement Kwok King-man, chief executive of Hongkong and Shanghai Hotels, said the fourth-quarter rate was "very high but not the historic high". He said: "It will definitely be higher after the renovation." Neil Galloway, the firm's chief financial officer, said the hotel would remain open during the upgrading, which started in January. He said room revenue accounted for about 30 per cent of the hotel's total turnover. Between 40 and 50 per cent of the hotel's 300 rooms would be unavailable at any one time while the two-stage renovation is carried out. By comparison, average room occupancy was 81 per cent at the Peninsula in the fourth-quarter. Hongkong and Shanghai Hotels saw net profit fall to HK$2.26 billion last year, down from HK$3 billion in 2010, although this included investment property revaluation surpluses. Stripping out these non-operating items, underlying net profit rose 14 per cent to HK$464 million last year. Revenue climbed 6 per cent to HK$5 billion compared with a year earlier, including HK$3.77 billion contributed by the hotels division. Kwok said: "We think we have done well to get an increase of 14 per cent in underlying earnings. This was better than we hoped for in the aftermath of the Japanese earthquake". He said business at The Peninsula Bangkok was affected by the drop in visitors to Thailand following the flooding in the city in November. He said the group was still looking to expand its hotel network. The Peninsula Paris is due to open late next year, while Kwok said the company "had never made a secret" of wanting to open a hotel in London. It was also looking at Singapore and "more cities in greater China".

Panic selling hits SHKP shares - Property company sees HK$38 billion in market value wiped off in heavy trading as jittery investors dump the stock on worries over ICAC probe. The graft investigation into the joint chairmen of Sun Hung Kai Properties (SEHK: 0016) and a former principal government official wiped HK$38 billion from the company's market value yesterday, as spooked investors feared the case could undermine the leadership of the city's biggest developer. Thomas Kwok Ping-kwong, 60, and his brother Raymond Kwok Ping-luen, 58, and former chief secretary Rafael Hui Si-yan, 64, were released on bail by the Independent Commission Against Corruption late on Thursday, after being detained and questioned over allegations of bribery and misconduct in public office. The brothers were understood to have returned to work yesterday. The arrest of the three men and the raid on SHKP headquarters on Thursday triggered the biggest sell-off of the company's shares in 14 years yesterday. They fell to a low of HK$94 before closing at HK$96.50, down 13.1 per cent. The Hang Seng Index fell 0.26 per cent. Turnover in the stock was HK$11.7 billion, against a daily average of HK$1.7 billion. Moody's Investors Service downgraded to negative from stable the outlook for SHKP's A1 rating. Standard & Poor's placed the company on its watch list with negative implications. The downgrade will raise borrowing costs for its capital-intensive property business. Despite the panic sales, the brothers, whose family controls 42 per cent of the company, appear to have retained the support of the board directors. SHKP yesterday issued a statement after a board meeting saying that the brothers should continue to be the group's joint chairmen and managing directors, but they should abstain from voting in respect of any matter relating to the allegations they face. Analysts believe the immediate impact will be limited but the arrests will cast shadow over the company's future. They will inevitably raise questions about its corporate governance and leadership. Alfred Lau, an analyst at Bocom (SEHK: 3328) International, said the sharp fall in the share price partly reflected a loss of confidence among investors. The brothers issued a statement last night pledging they would continue to work hard as the company's joint chairmen and managing directors. "Don't worry, everything will be normal and fine … we will work together with our colleagues at SHKP and the company's growth will not be slowed because of some temporary turmoil," they said. David Webb, a shareholder activist, said if the ICAC filed charges against the brothers, they would be preoccupied with their defence and might not be suitable to continue their duties as chairmen. He said the eldest brother, Walter Kwok Ping-sheung - who left the company after a fight with his brothers - would be an option to head the company. Walter Kwok declined to comment on Webb's suggestion. He also declined to say if he had spoken to the ICAC about the bribery allegations. Sources told the South China Morning Post (SEHK: 0583, announcements, news) that the ICAC had spoken to Walter Kwok before Thursday's arrests, which followed that of SHKP executive director Thomas Chan Kui-yuen 10 days ago.

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 will slash tariffs on items ranging from energy and raw materials to daily consumer goods and advanced machinery parts in its latest drive to restructure the economy. The State Council said in a statement yesterday that the measures are designed to balance the country's external trade through boosting imports. It did not offer specifics as to the size of the cuts or when they would be made, but said they would be temporary initially. The finance ministry had already lowered to an average of 4.4 per cent temporary import tariffs on more than 700 commodities for this year, including those related to energy, advanced information technologies and public health. China recorded its biggest trade deficit in a decade last month as imports grew much faster than exports amid uncertainties in the global economy. The deficit of US$31.48 billion followed a US$27.28 billion surplus in January. In a State Council meeting presided over by Premier Wen Jiabao on Wednesday, it was decided the mainland should expand its imports to alleviate mounting pressure on natural resources, promote consumer spending and ease friction with trading partners, the statement said. "[The government] will improve the structure of our imports, stabilise imports of commodities, proactively expand the country's import of advanced technologies and equipment, critical parts, energy and raw materials, while expanding consumer goods imports where appropriate," the statement said. Other measures include encouraging imports from free-trade pact partners, encouraging commercial banks to provide trade finance to importers and encouraging insurance firms to provide insurance products and services to facilitate imports. The government said it would encourage policy banks to boost lending for imports of hi-tech products and natural resources. It would also improve clearance and settlement of cross-border yuan transactions. Lu Ting, chief economist with Bank of America Merrill Lynch, said the initiatives would help improve the mainland's trade balance and boost domestic consumption. "To cut the tariff for consumer goods has been a long-discussed topic within the government. Some believe the high tariff rate has pushed local consumers to spend their money overseas, while some insist the import tax should remain at a relatively high level to protect national industries," Lu said. "I think the tariff reduction would be in a mild range initially. It's not very likely to see any drastic changes." He said baby formula may be among possible candidates for a tariff reduction as it was among the daily consumables where price gaps between the mainland and overseas were significant. Citing researchers affiliated with the Ministry of Commerce, Xinhua said meat, dairy products, cosmetics and clothing and apparel were also likely candidates for lower tariffs. Chang Jian, a researcher with Barclays Capital, said slashing the tariff for raw materials in the energy sector would help ease inflationary pressure and stimulate the development of related industries. In his government work report early this month, Wen vowed to accelerate reform of the mainland's economic structure to achieve balanced and sustainable growth.

A person must write 950 Chinese characters to be considered literate. US$136b - cost of illiteracy on mainland - Foundation estimates the annual economic impact on nation as one in five people in world cannot read or write and 100 million children miss school. The social and economic impact of illiteracy costs the mainland US$135.6 billion a year, according to a report released by the World Literacy Foundation this week. The cost to the global economy of the more than 800 million people around the world who do not have the basic reading and writing skills needed to accomplish simple tasks, such as reading a medicine label or filling out a job application, is US$1.19 trillion a year, it reveals. Examining the cost of illiteracy in emerging and developing countries such as China as well as the cost of functional illiteracy in the developed world, the report states that more than one in five people across the globe cannot read or write, and more than 100 million children do not go to school regularly. It assumes that illiteracy costs developed nations 2 per cent of gross domestic product, emerging economies including China 1.2 per cent of GDP, and developing countries 0.5 per cent of GDP. Foundation chief executive Andrew Kay, a co-author of the report, said China needed to do more to make serious inroads into addressing illiteracy. "We need to treat illiteracy as a disease that we are aiming to eradicate," he said. "We need to understand that early intervention can avert a lifetime of hardship, poverty and pain for a child, young person or adult who is struggling to read or write." Statistics from a mainland census in 2010 show the illiteracy rate fell to 4.08 per cent from 6.72 per cent in 2000, but the country still had 54.6 million illiterate people at the end of October 2010. And the mainland needs to further reduce its illiterate population by 11.6 million by 2015 to meet its goal - set in 2000, when the illiterate population stood at 87 million - of halving illiteracy. To facilitate the eradication of illiteracy, the government has set a benchmark - a person should be able to write at least 950 Chinese characters to be considered literate. Xu Rong , of the Beijing Cultural Development Centre for Rural Women, who has been working with illiterate people for more than 10 years, said the key to cutting the level of illiteracy on the mainland was to enforce nine years of compulsory schooling, particularly in far-flung rural areas where school-age children struggled to gain access to basic education because of the closure of grass-roots schools and limited places at rural boarding schools. "Funding is another issue in tackling illiteracy because illiterate adults need to be motivated and rewarded for attending illiteracy eradication classes," Xu said. "And teachers also need to be rewarded, as they usually have full-time day jobs while working extra hours at such classes."

Cambodian students at a Phnom Penh airport hold up portraits of President Hu Jintao and his wife to welcome them on a four-day state visit. This week's summit of the world's five fastest-growing countries saw collective criticism of the West over the slow pace of reforms to global financial governance. Brazil, Russia, India, China and South Africa, known as the BRICS countries, also called for the establishment of a new development bank amid doubts about the group's geopolitical clout. Observers say the group's agreement on setting up the bank will help enable it to gain greater global influence. However, they point to the group's lack of political will, saying that some difficult issues have to be resolved before the bank becomes a reality. President Hu Jintao , who arrived in Cambodia yesterday for a post-summit four-day visit, told a plenary session the BRICS countries should deepen mutual political trust. Having expressed their frustration about the slow pace of reforming the Washington-based International Monetary Fund, the group wants to establish a development bank to finance infrastructure and sustainable development projects in emerging countries. But there has yet to be any details on how the bank should be run. The group has also called on developing countries to find candidates to succeed outgoing World Bank president Robert Zoellick. Rup Narayan Das, a senior fellow at the Institute for Defence Studies and Analyses in New Delhi, said the BRICS countries had established political trust. But he added: "I expect there would be some more details about the development bank. It seems there is a lack of strong political will among the countries." He said the group's lack of political will might be due to the uneven economic development among the members. Zhao Gancheng, a Shanghai-based expert in Indian affairs, expects the group, especially China and India, to be cautious about setting up a development bank. "Various issues will come out, including the proportion of voting rights for each country, how much each country should invest and where the headquarters should be located," said Zhao, adding that he believed the group would resolve these issues. John Kirton, co-director of the BRICS Research Group at the University of Toronto, said setting up such a bank would boost co-operation among the members and China's reputation as a leader of developing countries. "The countries may think that the World Bank is not under their control, so it is better to have a BRICS bank which they can fully control," he said. The group has also agreed to extend loans in local currencies, with analysts saying that the use of the yuan is most likely. Separately, the summit was overshadowed by Tibetan protesters, who complained about the Indian police's heavy-handed security. The BRICS group has not made much progress in changing the global order since its first summit in 2009. Observers point to the competing priorities and lack of mutual trust, especially between India and China. Reports by the Times of India and the Hindustan Times said there were fears that China would gain the most out of the development bank proposal and that the group would be vulnerable to Beijing's manipulation. Professor Brahma Chellaney, from the New Delhi-based Centre for Policy Research, said it remained unclear whether the group would become a cohesive unit with defined goals and if it would be able to change the global order. Some officials have sought to downplay such concerns. Chen Xu, a Foreign Ministry director-general, said the group was still seeking consensus. Indeed, the group's lack of common political will meant they would have difficulties preventing an American nominee from becoming the next World Bank president, according to Kirton and Das. "The BRICS did not act fast enough or act together to find a globally credible candidate for the World Bank," Kirton said.

High-Growth Nations Criticize West - BRICS nations meeting in Delhi have released a draft declaration saying that the actions of central banks in the West are destabilizing their economies. Dow Jones's Paul Hannon and Martin Essex explain why the West might take notice. The Brics group of nations expressed concern Thursday over the West's slow pace at giving developing nations greater control over the International Monetary Fund, and they bashed Western countries' loose monetary policies for causing instability in global financial markets. The leaders of Brazil, Russia, India, China and South Africa, at a summit in New Delhi, outlined modest measures that are part of the group's efforts to restructure a global financial system long controlled by Western nations and to reduce their dependence on exports to the developed world. The measures included an agreement between the Brics nations' development banks to extend credit facilities in local currencies, a move that is aimed at boosting trade among the five countries and reducing over time the bloc's dependency on the U.S. dollar, the world's reserve currency. The Brics nations said they also are asking their finance ministers to study the possibility of setting up their own development bank, an institution that they hope could offer an alternative to the U.S.-dominated World Bank. For now, Brics countries, especially China, continue to rely to a great extent on the U.S. to spur their growth. Big disagreements between Brics members have reduced the body's effectiveness, especially tensions between India and China over territorial disputes and Beijing's massive trade surplus with New Delhi. But the group also captures a dissatisfaction with Western economic leadership, especially amid the current global economic turmoil. The Brics leaders, in a joint declaration, blamed the West for lax monetary policy that the group said had led to "excessive volatility in capital flows and commodity prices," hurting their economies. The Brics nations held their first annual summit three years ago in Russia amid the onset of the global financial crisis. The group, which accounts for 40% of the world's population and a fifth of the global economy, set out to remodel the world's financial architecture amid rising anger over Western dominance of the system at a time of financial meltdown. China, by far the largest economy of the five, would like a greater say at the IMF, and it is pushing for its currency, the renminbi, to play a larger role in global trade, challenging the U.S. dollar and euro. The group also sees trade among its members eventually helping to reduce dependency on exports to the U.S. and Europe—by far their largest growth engine but one that is under pressure due to Western nations' economic problems. Trade among Brics members, growing at 28% annually, stands at $230 billion a year and is expected to touch $500 billion by 2015. The Group of 20 major economies agreed in 2010 to a raft of changes at the IMF to give developing economies a greater say in decision making. But the Brics nations said Thursday they were frustrated by the slow progress. The changes require approval in domestic legislatures, but fewer than half of the IMF's members have signed off. IMF managing director Christine Lagarde in March urged nations to "quickly" implement the changes. The group's declaration said they were "concerned at the slow pace of quota and governance reforms in the IMF." The reforms agreed to in 2010 should be implemented before the IMF and World Bank annual meeting in October, it added. "This dynamic process of reform is necessary to ensure the legitimacy and effectiveness of the fund," the declaration said. The group said it hoped a meeting of the G-20 nations in Mexico in June would address issues of global financial turmoil. And it said it welcomed the candidates from the developing world to take over the helm of the World Bank when its current president, Robert Zoellick, steps down in June. The U.S.'s proposed candidate, Jim Yong Kim, a South Korea-born American physician, is viewed as a shoo-in for the job. The other two candidates are Nigerian Finance Minister Ngozi Okonjo-Iweala and José Antonio Ocampo, a Colombian economist. The new World Bank leader needs to ensure the organization "truly reflects the vision of all its members, including the governance structure that reflects current economic and political reality," the Brics nations said. The leaders also warned that growing tensions between Iran and the West over Tehran's nuclear program, which have driven crude oil prices higher, could derail chances of a global economic recovery. "The situation concerning Iran cannot be allowed to escalate into conflict, the disastrous consequences of which will be in no one's interest," the declaration said. The Brics nations said they recognized Iran's "right to peaceful uses of nuclear energy." Both India and China remain large purchasers of Iranian crude, a fact that puts them at odds with the U.S. as it attempts to squeeze Tehran financially in a bid to get it to give up its alleged nuclear-weapons program. They also expressed their "deep concern" over the situation in Syria and called for an immediate end to violence.

Shanghai Gets Rich As It Gets Old - There’s an old saying: China will get old before it gets rich. Shanghai is turning that adage on its head: The city is both rich and old. One-fourth of Shanghai’s residents were at least 60 years old last year, according to the state-run Xinhua news agency. The proportion of elderly in the population is 1.7-times the national average, the report said, citing local government statistics. Such numbers don’t exactly square with Shanghai’s reputation as modern, frenzied metropolis – and a holiday destination for twenty-something billionaires. Anecdotally, the aging of Shanghai is easy to detect. Its parks are often filled in the early morning with tai-chi practitioners and ballroom dancers. A conversation on a park bench easily turns to medical care, such as a new apartment complex’s proximity to hospitals. Some of the city’s more persistent protesters are pensioners agitating for more government money. And it’s a city that depends for a lot of its swagger on a historical heritage, a colonial past that many of the older residents discuss nostalgically – sometimes very slowly as they try to recall the right word in English. Shanghai authorities speak to their contingency: a pledge last year to launch special television channels and radio broadcasts targeting the elderly, for instance, or a promise in the mayor’s development platform for this year to provide 5,000 more beds for elder care. The government has even promised 1,000 yuan, a birthday cake, flowers and a card for anyone turning 100. (According to the latest numbers, Shanghai had 1,156 centurions at the end of 2011.) The trends have been apparent for years and the reasons are pretty simple, according to a report issued in Shanghai last year that got straight to the point: The eastern city has the lowest birthrate in China (pdf). The demographics threaten to exact an economic cost that isn’t usually highlighted in wealth reports, which tend to focus instead on growing local buying power. According to the Hurun Report and Industrial Bank Co., Shanghai in of itself lags Beijing in numbers of high-net worth individuals, but taken together with its neighboring provinces of Jiangsu and Zhejiang, it would have around a third of the country’s total (pdf). Another recent report says Shanghai is quickly rising among the world cities that matter most to the global wealthy (pdf). The new data on 60-year-olds was published on the eve of China’s grave-sweeping holiday Ching Ming, a day for worshiping ancestors that necessarily conjures up mortality issues and which follows separate Xinhua reports about soaring funeral costs. Shanghai demographics are part of a global story that is playing out especially so in China. It’s an aging world. A recent book says China is currently in a demographic “sweet spot.” The ratio of people working to those they support will shortly top 2.6-to-1, but in the next fifteen years a third of the nation will be retirement age and there will be only 1.5 people of working age for each person being supported, according to the book, “Megacities, Global Security, and the Map of the Future” by P.H. Liotta and James F. Miskel. “This will be disastrous and kill China’s prosperity,” says a press release.

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 tigh