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China President Hu Jintao USA State Visit January 19 - 21 2011

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Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)

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Year of the Dragon - January 23 2012 Dance w/ Firework 

President Obama's Lunar New Year Message - Year of the Dragon

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

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The Hong Kong Advantages under One Country Two Systems - when most of the world want to do business with China, there is only one place that China gives 100% backing - that is Hong Kong. Quoting the former Chief Executive of Hong Kong SAR Honorable Tung Chee-hwa "背靠祖國 - 面向世界" "backed by China and engaged globally". Whether you are an international business wanting to do business with China, or just wanting to get connected with Asia and the rest of the world - Asia's World City: Hong Kong is the right and smart choice.

Thumbnail TED: Martin Jacques Understanding The Rise of China 马丁·雅克:了解中国的崛起 

Hong Kong Education Bureau (click on the links for details) 德育及國民教育指引 Moral and National Education Guidelines

Hong Kong*:  Aug 1 2012 Share

New Secretary for Development and former accounting lawmaker Paul Chan Mo-po meets the media at Chief Executive's office in Tamar on Monday. Accountancy-sector legislator Paul Chan Mau-po was appointed on Monday as the new secretary for development, taking over from Mak Chai-kwong who has been arrested over allegations of abusing a government rent allowance 30 years ago. The government said in a statement that Chan’s appointment had been approved by Beijing on the recommendation of Chief Executive Leung Chun-ying. It also said the central government had dismissed Mak from his job. About an hour before Chan’s appointment was announced, the Legislative Council Secretariat issued a statement saying that he had resigned from Legco on Sunday. Chan, 57, has been tipped to become development secretary since Mak resigned on July 12 after his arrest by the Independent Commission Against Corruption. This happened less than two weeks after Mak was sworn in as bureau chief. Before Mak’s resignation, there had been speculation that Chan would become deputy financial secretary, a position that would be created under Leung’s restructuring plan which has not yet been approved by Legco. Speaking at a press conference on Monday afternoon, Chan said his priority would be working on land planning to cope with increasing demands for residential flats and commercial offices. “Land planning and land supply tops my priority. I understand that it is vital to Hong Kong’s economic development and livelihood to meet the public’s housing needs and the growing demand for offices and hotels,” he said. Other main tasks would be a territory-wide crackdown on illegal structures, a drive to turn East Kowloon into a central business district, as well as building use conversion and urban renewal, he said. Chan will also have to deal with an investigation into his boss Leung Chun-ying over six illegal structures found at his home on The Peak. He pledged to handle it impartially. “There is a set of established guidelines and procedures in the Buildings Department and I will deal with the case impartially,” he said. Chan won the Legco accountancy seat in 2008 with 42 per cent of the ballot. He became a non-official member of the government’s commission on strategic development in 2005, and was president of the Hong Kong Institute of Public Accountants in 2006. Leung said Chan was devoted to serving the public, with many years of experience in various public duties. “He has outstanding leadership and co-ordination abilities. He is also familiar with the operation of the Legislative Council. I am pleased to have him join my political team,” Leung said.

HSBC's first-half profit fell after it took a US$2 billion-hit to cover penalties from a money-laundering scandal in the United States and insurance mis-selling claims. HSBC on Monday said its first-half profit fell after Europe’s biggest bank took a US$2 billion-hit to cover penalties from a money-laundering scandal in the United States and insurance mis-selling claims. Earnings after tax dropped 8.0 per cent to US$8.44 billion (HK$65.47 billion) in the six months to June, compared with the same period last year, the Asia-focused bank said in a results statement. HSBC took a provision of US$700 million to cover fines for failing to apply anti-money laundering rules, apologised again for the scandal and warned the overall cost could be “significantly higher.” The bank said it also set aside US$1.3 billion in the first half to compensate clients in Britain who were mis-sold insurance. The London-based lender said it continued to co-operate with authorities after US lawmakers last month accused it of failing to apply anti-laundering rules, benefiting Iran, terrorists and drug dealers. “It is not possible at this time for HSBC to know the terms on which a resolution of the ongoing investigations could be achieved or the form or timing of any such resolution,” it said. “Based on the facts currently known, HSBC has recognised a provision of US$700 million, which reflects HSBC’s best estimate of the aggregate amount of fines and penalties that are likely to be imposed in connection with these matters. “There is a high degree of uncertainty in making this estimate and it is possible that the amounts when finally determined could be higher, possibly significantly higher.” HSBC was thrown into crisis last month when a US Senate report found that it had allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the United States without adequate controls. Lawmakers said money laundered through HSBC-linked accounts benefited Mexican drug lords and terrorist networks, and skirted US sanctions on Iran. HSBC apologised again on Monday for the crisis which has already sparked the resignation of its head of compliance David Bagley. “We apologise for our past mistakes in relation to anti-money laundering controls and it is a priority for senior management to build on steps already taken to manage risk and ensure compliance more effectively,” chief executive Stuart Gulliver said.

Hong Kong Airlines is struggling to deal with a backlog of stranded passengers and maintain normal flight schedules after ground staff walked out at the weekend. One of the ground staff said the problem began when Typhoon Vicente delayed or caused arrivals and departures to be canceled on Tuesday. She said around 80 ground staff are usually on duty but since the pressure to deal with stranded passengers has been building up, workers have been dwindling until only about 50 showed up on Saturday morning. "That was still enough, but the situation started to worsen and all of them were gone in the afternoon," she said, adding absolutely no one was on duty from around 2pm to 7pm. Ground staff only returned to work after being urged by senior management, she added. On Saturday, 18 flights were delayed for more than an hour and 12 were canceled, stranding hundreds of passengers. Yesterday, 28 flights were delayed for more than an hour and two flights were canceled. Some passengers said they had waited more than 20 hours. More than 100 passengers were seen waiting for their flights at the check-in counter yesterday morning. The number dropped to about 50 in the afternoon. The ground staff said some of them had worked for up to 50 hours straight and were very exhausted. She said some passengers got "crazy" and kept knocking on the door of the office. There was at least one arrest - a 31-year-old woman who poured a soft drink over a male ground staff on Saturday. The ground staff said the walkout was not an industrial action and that workers were just forced to leave because of exhaustion. An airline spokeswoman also rejected claims that they walked out in protest, saying the workers went on sick leave.

Work to expand Canossa Hospital on The Peak. Victoria Peak residents are petitioning the government to make sure the expansion of a private hospital near their homes does not cause traffic jams. But the Transport Department says it does not expect any such problems arising from the work at Canossa Hospital, even though its only access for both entry and exit is from the steep, narrow two-way Old Peak Road. "Traffic jams could delay the movement of emergency vehicles," said Central and Western district councillor Joseph Chan, who is helping the petitioners. "It is not just a matter of inconveniencing local residents." The hospital expansion, which is nearing completion, will create additional facilities for paediatric care, dental care, health check-ups and other outpatient services. The Transport Department did not complete a traffic impact assessment when the expansion project was first approved in 2007, and the current plan includes no measures to alleviate possible traffic pressures. A Transport Department representative said: "Since the expansion will not increase the number of patient beds, we do not expect traffic to increase. Therefore, we did not need to complete a traffic impact assessment. That is our standard procedure." But some residents reject the reasoning behind the department's decision. "It is not logical to think that when hospital operations expand, traffic would not increase," said John Yang, 35. "The government needs to address the traffic problem, which is already especially jammed near the hospital exit on Old Peak Road." Ten residents delivered a petition outlining their concerns about the hospital expansion to the Buildings Department on April 20. It contained several suggestions to reduce traffic pressures after the Canossa Hospital expansion. These included creating a second exit on Robinson Road, creating a roundabout outside the hospital, and increasing shuttle bus services between Central and the hospital to encourage visitors to take public transport. The District Council discussed the petition during a general meeting on May 17, but has not provided a formal response to residents. Chan and his constituents have previously raised concerns about other construction projects on Victoria Peak. "I am very disappointed that the Transport Department is sticking with an internal policy created decades ago when hospitals provided very few outpatient services," he said. The department said that according to the hospital's submission to the Buildings Department, the likely impact on traffic was considered slight as the number of hospital beds would remain unchanged. Also, there was no accident and emergency department and only limited traffic for transfers to other hospitals. The hospital was not required to submit a traffic impact assessment report and no additional vehicle access was deemed necessary.

The secondary home market continues to benefit from the government's proposal to waive land premiums on Home Ownership Scheme flats. Centaline Property saw 32 transactions at 10 major estates over the weekend, two more than one week ago. Cheaper flats such as those at Kingswood Villa in Tin Shui Wai are the most popular, with 10 changing hands in the past two days. Vincent Chan Kwan-hing, chief executive for residential at Midland Realty, said some of those who intended to buy turned to the private market as HOS property prices soared. Secretary for Transport and Housing Anthony Cheung Bing-leung said the government will consider resale restrictions of HOS homes, and releasing the 5,000 quota in batches to reduce the policy's effect on the secondary market. Flats in the primary market are selling well too. The 1,500 flats available at The Beaumount in Tseung Kwan O were all sold, agents said. Developer Cheung Kong Holdings (0001) said the 200-odd unreleased units will be sold when the project is complete. The Riverpark sold three flats, all three-bedroom units at around HK$8,500 per square foot on average. Double Cove flats in Wu Kai Sha will be put on the market for presale in September. Developed by Henderson Land (0012), New World Development (0017) and Peterson Group, the property provides 928 units. Three to four- bedroom units will be released first. Additionally, the number of residential mortgage loans in negative equity plunged 94 percent to five cases for the second quarter from 78 cases last quarter due to rising home prices. Hong Kong Monetary Authority statistics show that the number is the lowest since 2001. The number peaked at 105,697 in 2003 after the outbreak of SARS. The market expects zero cases for the third quarter. Separately, a plot near Tseung Kwan O MTR station received seven tenders from developers, including New World Development (0017) and K Wah International Holdings (0173).

 China*:  Aug 1 2012

China overpowers "black horse" Turkey in women's volleyball event - China made a solid step to the quarterfinals in women's volleyball event of London Games by beating Turkey 3-1 on Monday.

Chinese investment in the United States is expected to hit a record high this year, thanks largely to big-ticket items, according to a report from the Rhodium Group, a New York-based organization that analyzes global trends. Chinese foreign direct investment, or outbound FDI, in the US reached $3.6 billion in the first half of this year, and covered 33 projects, the report said. Of these, 12 were acquisitions and 21 involved green-field investments (the construction of new facilities). The first six months of 2012 saw a record investment for any half year from China. Thilo Hanemann, research director for Rhodium, which monitors Chinese FDI in the US, said that the large-scale investments could make 2012 a record year, beating the $5.7 billion record set in 2010. Ge Shunqi, deputy head of the Institute of International Economics at Nankai University in Tianjin, told China Daily that with the US economy trying to get out of the doldrums, investment from China is particularly welcomed. "Chinese investment in the US offers great potential and will help stabilize growth in the next decade." Sang Baichuan, director of the Institute of International Business at the University of International Business and Economics, believed that a new era was dawning. "After decades of growth, Chinese enterprises are capable of entering the developed US market and China's large foreign reserves will also be of benefit.'' Ge agreed and identified key investment sectors. "Investment in the US will bring differing returns to Chinese enterprises. "Some enterprises will enjoy easier access to the US market and lower costs while others will acquire natural resources as well as high-end technology resources.'' Ge added that "high-end manufacturing and public infrastructure will be the key areas for Chinese investment in the US" as the US embarks on reindustrialization. Major projects targeted by Chinese FDI this year include the $2.5 billion purchase by China Petroleum and Chemical Corp, or Sinopec, of a one-third stake in five shale oil and gas fields across the US from Ohio-based Devon Energy. Copper-tube producer Golden Dragon also broke ground on a $100 million manufacturing facility in Wilcox County, Alabama. The banking sector also saw movement with the acquisition by Industrial & Commercial Bank of China of 80 percent of Bank of East Asia's US operations for $140 million. Two headline-making investments were not included in the report: Dalian Wanda Group's $2.6 billion acquisition of US movie-theater operator AMC Entertainment Holdings and Superior Aviation Beijing Co's $1.8 billion bid for aerospace company Hawker Beechcraft in early July. While Super Aviation is still awaiting approval from US authorities (Hawker remains in federal bankruptcy proceedings in New York), Wanda and AMC announced Wednesday that they received approval from the Committee on Foreign Investment in the US. That, along with clearances from Chinese and other US authorities, mean the deal should close as planned by the end of August, according to Wanda. If the Super Aviation deal is also approved, these investments would push total Chinese FDI in the US beyond $8 billion this year and that does not include projects in the pipeline. While Chinese investors continue to pour money into a range of industries, a few sectors specified in the Rhodium report, including oil and gas, which, led by the Sinopec-Devon deal, accounted for the bulk of Chinese FDI in the US. "The US has rich natural and technological resources. If it's fully open to foreign investors, Chinese investment will see significant growth in these two fields, especially in acquiring technology," Ge said. Trailing oil and gas were aerospace, banking, metals processing and plastics. Alternative and renewable energy recorded the highest number of deals, although these investments were relatively small. Besides big-ticket projects, Rhodium Group pointed to recent positive developments in investment policy, both in the US and China. It cited US President Barack Obama's order to increase visa-issuing capacity in China by up to 40 percent in 2012 and official statements welcoming Chinese participation in US infrastructure development during the May US-China Strategic and Economic Dialogue. While the report said the welcoming tone is a first step, it cautioned that the main challenge businesses will face in pursuing infrastructure projects will be finding the logistical and legal means to participate more directly without sparking national security concerns. Rhodium's Hanemann said there is deep concern in the US over Chinese FDI in the telecom sector, and recent incidents involving ZTE mean such sentiment won't fade anytime soon. The company was recently accused of selling equipment to Iran from US companies Hewlett-Packard Co, Dell Inc, Cisco Systems Inc and Juniper Networks Inc, in violation of US export controls.

The new national emblem for Border Control and Coastal Defence. Beijing will officially launch a national emblem for border control and coastal defence on Wednesday as part of the country's overall effort to strengthen sovereignty claims over the disputed territories. The emblem, unveiled yesterday, bears the national flag, the Great Wall, an anchor, ocean waves, a shield and olive branches with the title "China border control and coastal defence" in Chinese and English. The emblem will be displayed by the State Commission of Border and Coastal Defence at all levels across the country and at its affiliated offices and facilities, the People's Liberation Army Daily reported yesterday. It will also be used in a wide range of activities organised by the commission, including military drills, training and foreign affairs. Organisations and units involved in border defence can also use the emblem in their patrols and law enforcement actions, according to the report. "The emblem is a symbolic representation of the crucially important status of border and coastal defence in our national strategy," the paper quoted a leading official at the commission as saying. The emblem can boost public awareness of border and coastal security and "help boost loyalty and altruism among border officers," the official added. The emblem's official launch is on August 1, the 85th anniversary of the founding of the PLA. The launch comes at a time when Beijing has locked horns with neighbours over territorial disputes, including Japan over the disputed islands in the East China Sea, and the Philippines and Vietnam over the South China Sea. Tensions between China and its neighbors have simmered for several months, prompting some military observers to urge Beijing to take tougher action. Luo Yuan, a retired major general who is considered a hawk, said a passive stand in disputes did not serve China's long-term interest. "The countries that ignored China's core interests have not been punished," Luo told a seminar in Beijing yesterday. "The territorial areas that belong to us will not be returned if we just passively 'wait and see'."

Hong Kong*:  July 31 2012 Share

Chang Wen became a fan of agriculture after working on her friend's farmland. She now spreads the urban organic message. Most people who choose to go back to the land have to leave the city far behind - but for former independent film producer Chang Wen, becoming a farmer was simply a case of wandering upstairs. She launched Project Grow on the roof of an old factory building in To Kwa Wan a year ago as a collaboration between the Film Culture Centre(FCC), which operates from the building and which Chang heads, and a design group called re:ply Workshop, which specialises in upcycling - taking waste materials and turning them into something more valuable. Chang helped revive the FCC last year by getting government funding for the charity. The FCC began holding film nights and educational activities for residents of the working class neighbourhood. The rooftop farm was intended to be a side project, to encourage the viewers to stick around after the credits rolled. "It was initially a way to connect with the folks who come over. They felt like there was a gap between us - we were 'the intellectuals' while they were 'the uneducated'. So I wanted to start something where we can get to know each other in a natural and non-awkward way," Chang said. But the farm took on a life of its own, helped by a growing interest in organic products in the city and concern about a series of food safety scandals emanating from the mainland, both of which have revived interest in farming. While some people switched to buying from the "organic section" in supermarkets, others went further and actually rented agricultural land in the New Territories for some leisure farming, Chang said. Chang's introduction to farming came after a drink-driving conviction that earned her 240 hours of community service. As she helped kindergarten children to the bathroom as her punishment, she "looked at my life and thought - wow I've got to change this, I can't live like this." She fell in love with working on her friend's farm in the New Territories and slowly began to realise that the fast-paced life of a film producer was no longer for her, and she began her drift away from the industry to a farming life. She no longer produces films, although she is still involved in bringing cinema to the masses through the Film Culture Centre. "It gave me peace in my mind," said Chang. The idea of a rooftop farm started when Chang gathered old wooden boards discarded as rubbish both from around the neighbourhood and from her farmer friend. She turned them into boxes and lined them up on the FCC's rooftop, filled them with dirt and seeds, and invited locals to stay and help with the gardening. Its popularity grew just as surely as the 20 types of edible vegetables, gourds and herbs that were planted there, among them maize, Chinese cabbage, bitter gourd, tomatoes and even strawberries, as well as herbs like mint, lemongrass and basil. The farm works with community centres and social workers, providing free farming classes for locals in To Kwa Wan and paid three-month classes for those not from the district. "We don't want to make money off this farm- we hope to educate people and spread the inspiration. The idea is to have them start doing this at home," said Chang. "You don't need a whole piece of farmland to farm. Sometimes, you just need a pot, soil and some seeds, which is completely achievable for those living in an apartment." Chang said the aim was to transform Hong Kong's old urban areas into urban farms - to fill window sills and empty rooftops with independent little patches for growing. Chang isn't the only person growing things on a rooftop. In Ngau Tau Kok, Michael Leung, founder of HK Honey, raises bees on a rooftop and recently started a herb garden and experimental organic farm. Wan Chai bookstore and cafe ACO has composting bins and a herb garden on its roof, and Chang has heard of another rooftop garden taking shape in Aberdeen. "Some of my friends now regularly farm in the New Territories," said Chang. "There are organic farms springing up everywhere." Chang has now been invited to put together an organic section at the farmers' market at Cyberport in Pok Fu Lam when it begins in September, where wooden boxes will also be given out for those interested in planting and harvesting a few seeds. The Agriculture, Fisheries and Conservation Department said the number of farms involved in government organic farming schemes had reached 193 last month, compared to 182 last year and 152 in 2010. There were only 123 farms taking part in the scheme back in 2008. Anyone who acquires a piece of agricultural land can start farming immediately as no licences are required, a department spokesman said. Agricultural structures such as greenhouses, fish ponds and livestock sheds will need approval from the Lands Department, however. "I didn't know [farming] was possible at all," said housewife Lisa Yeung Lai-sha, who joined a class at Project Grow. "I didn't think I could actually grow things at home." Cheng Oi-ling, a housewife with grown-up children, said that her whole family loved the idea of being able to produce their own food for the table. Cheng and Yeung are both part of a group from the Holy Carpenter Church Community Centre in Hung Hom, who are taking classes about organic farming at Project Grow. Apart from actually farming, the group has also been taught how to make all-natural dish washer detergent and pickled vegetables out of rinds and discarded fruit and vegetable parts. Chang said many children who normally wouldn't eat vegetables at home, would actually be willing to eat ones they've picked from the garden themselves. "I think it's important for them to learn and to know that they can eat healthily," said social worker Rita Chan Sin-ki. "Organic food is not just for the rich." Chang added that there had been a misunderstanding about organic food. "Organic food has been marketed as being for rich people, and is sold at higher prices. However, health should not be an exclusive right. Even the poor should be taught what is healthy, and have access to healthy food," Chang said. However, Chang warned that the "organic" label could also be used as a sales ploy. "I think if something is from nature - not genetically engineered - it's organic. It's impossible to be completely sure there are absolutely no chemicals. We can only farm it as naturally as possible," Chang said. But she doesn't mind that there are multiple definitions of "organic", and believes people spend "too much time arguing about it [and] miss the point, which is to eat and live as healthily as possible. "Hongkongers want everything now and fast, but even vegetables need time to grow," she said. "We need to change our mindset, reset our rhythm." According to a government report released in January this year, around 18 square kilometres of land in the city are actively farmed. Most farms are small and produce mainly vegetables, pigs or poultry. Hongkongers consumed about 908 tonnes of rice, 1,790 tonnes of vegetables, 4,710 pigs, 77 head of cattle and 36 tonnes of poultry each day in 2010. While most of the produce is imported, "Hong Kong's primary producers help … satisfy some of the demand" according to Chang. The gross value of local agricultural production stood at HK$615 million in 2010. The value of crop production is at HK$232 million, and consists mostly of vegetables and flowers. Three per cent of the vegetables, 56 per cent of the fresh poultry and 6 per cent of fresh pork consumed in Hong Kong comes from local farms.

Ip Yun-pui poses with her newborn and husband Choi Man-lung. Ip wants to continue breastfeeding, but her office lacks facilities for it. A growing number of Hong Kong mothers feel breast is best for raising their baby - but the city still lags behind its Asian counterparts in terms of policies and facilities to encourage breastfeeding, a new study has found. Of the 94,000 babies born in the city last year, 83.3 per cent were being breastfed by the time they left hospital, up 4.1 percentage points on the year before, according to the local branch of the international Baby-Friendly Hospital Initiative. Doctors say breastfed infants are healthier than those fed on formula and are less likely to become obese, while breastfeeding can also bring mother and child closer together. But the city scores poorly on an international index which compares the environment for breastfeeding in the 81 countries and territories that have signed up for the initiative. It scores just 37 points out of 150 on the scale, although a voluntary code governing formula-milk advertising and efforts to encourage mothers to start breastfeeding within an hour of birth have boosted the score from 27 in the previous study. By contrast, Sri Lanka scored 124 in 2008, while the mainland scored 80.8. "Hong Kong has yet to start any interdepartmental efforts to facilitate breastfeeding," Dr Patricia Ip Lai-sheung, chairman of the initiative in the city, said. "The Labour and Welfare Bureau, for example, should consider extending the maternity leave from 10 weeks to 14 weeks, which is the minimum according to international recommendations." Sri Lanka and the mainland score well for "baby-friendly" hospitals, where free formula is banned and mothers are able to stay with their babies on the wards. Some 80 per cent of Sri Lanka's newborns were breastfed within an hour of birth, against 22 per cent in Hong Kong. A separate poll by the Hospital Authority in March showed that 80.2 per cent of mothers who delivered in public hospitals were breastfeeding upon discharge, but just 73 per cent were still doing so a month later. Not producing enough milk, fatigue and the need to return to work were the main reasons cited for giving up. But Ip says it is unusual for mothers to fail to produce enough milk for health reasons - instead, they need to learn the right pose for feeding. "Mothers lack confidence in themselves," the Hospital Authority's chief nursing executive, Sylvia Fung Yuk-kuen, said. "It is not necessary for mums to wait hours before feeding their babies [in order to build up milk supplies]. Instead, they should breastfeed whenever the baby demands it." Ip Yun-pui, a mother of two, stopped breastfeeding her son, now four, shortly after his birth as the baby cried a lot. "I thought he was hungry. All the others around me suggested I should feed him milk formula," she said. She gave birth to her second child about a month ago, and was told that a baby's tears could be the result of tiredness or a wet diaper rather than hunger. Ip again tried breastfeeding, but will stop when she returns to work, as there are no spare rooms in her office for breastfeeding, she said. "I hope the public and companies can be more supportive," she said.

Thaksin Shinawatra mixes with guests and appears to hand out literature about himself (bottom left) at his party in Tsim Sha Tsui last week. Former Thai Prime Minister Thaksin Shinawatra clearly loves Hong Kong - and no wonder. The former billionaire was in a celebratory mood last week as he marked his 63rd birthday with a party in a Kowloon hotel, flanked by several hundred Thai political backers. But it was also revealed his visits to the city have proved very lucrative, with at least one property deal netting his family HK$18.5 million. Property filings obtained last week confirm that a HK$45 million mansion in prestigious King's Park Hill in Ho Man Tin, owned in the name of Thaksin's daughter Paetongtarn since early 2009, was sold to a Hong Kong private company for HK$63.5 million early last year - earning a return of 41 per cent. At his party, he grinned and stretched out his arms to embrace friends and supporters under the chandeliers of the ballroom in the Mira hotel in Tsim Sha Tsui. And Thaksin praised the role Hong Kong had played in his years on the run after his ousting in a military coup in 2006 and being sentenced to two years' jail on corruption charges in 2008. "This (HK) is the place," he told the Sunday Morning Post (SEHK: 0583, announcements, news) . "I always come to the place where I can meet with my supporters and friends." He added: "Going home is not that serious. You can see that I am here with my friends. I don't care that much." Thaksin said he was "just a tourist" and had not met any Hong Kong or mainland officials on his latest week-long trip to the city. But he held talks with a range of Thai political allies and government officials ahead of a cabinet reshuffle being planned by his younger sister, Prime Minister Yingluck Shinawatra. His visitors in Hong Kong reportedly included national police chief Priewpan Damapong - the brother of his former wife Pojaman - who appeared unconcerned about outstanding warrants for Thaksin's arrest. General Priewpan's visit only intensified speculation in Thailand that Thaksin is calling the political shots, rather than his sister. Deputy Prime Minister Chalerm Yubamrung defended General Priewpan, insisting that he had taken leave and that "Thai laws did not apply in Hong Kong", the Bangkok Post reported. There is no extradition treaty between Hong Kong and Thailand. Thai media reports last week suggested that Dubai-based Thaksin had vowed to return home soon, but on Thursday he said he had no such expectations. "If you really hope for something soon, then time will seem so long, so I don't expect anything." Thaksin denied that that his party's plans to change Thailand's constitution, installed by the military, was part of a strategy to get him home, possibly through an amnesty that could also free his fortune. Yingluck led the Thaksin-allied Puea Thai party to a comfortable victory in last year's election. Thailand's constitutional court ruled earlier this month that the government must seek a national referendum before completely rewriting the document. The purpose of change was not to bring him back or to create further divisions, Thaksin said. It was "to develop Thai politics to move towards a more mature democracy. That is the key". He added: "We're not going to split the country. We are not going to do anything to increase the conflict."

A police insider has rejected a media report that the entertainment district of Lan Kwai Fong has become a hotbed of triad activity, with recent triad-linked arrests in the area put down to a fight rather than gangster activities. A Chinese-language newspaper reported that Lan Kwai Fong, as Hong Kong's favourite entertainment area, had seen an increase in gang activity as triads hired more English-speaking South Asians and Africans to collect "protection" money, sell drugs and solicit sex in the area. But a police source denied the reports and said an increased police presence at weekends was aimed at stopping fights and dealing with people who had drunk too much rather than more serious crimes. "We're just there on Friday and Saturday nights - any time between 3am and 6am - to keep an eye on those coming out of the nightclubs. That's the only reason that we're there," the source said. "None of this has anything to do with organised crime and it's pretty straightforward police work. It may be regarded as an expatriate haunt but the majority of people are local Chinese." Triad-related arrests were made a couple of weeks ago, but they were due to a fight between triad members and revellers in the early hours of the morning rather than gang activity. "This was a one-off incident. To have any triad-related crimes occurring in Lan Kwai Fong is unheard of," the source said. "It's generally to do with people who have had too much alcohol. And it's nowhere near as bad as the antics you'd have to put up with in the likes of London or New York." The source admitted that Lan Kwai Fong was a regular haunt for prostitutes, although prostitution is far more widespread in Wan Chai. He described the bouncers operating at all the entertainment area's bars and clubs as very professional, adding that none of them are controlled by triads. "We work very closely with them and have built up a good rapport. We work well together and have a good relationship," the source said. At weekends a minimum of 10 police officers would be on patrol in the Lan Kwai Fong area. This can increase to 20-30 officers if the police tactical unit is involved in raids on the nightclubs there. But even when such raids are carried out, the intention is to show a police presence and let drinkers know that they are there, rather than because anything illegal is going on. Police officers are generally positioned at the junction of Wellington Street and D'Aguilar Street and outside the 7-Eleven stores. Other officers would be on Wyndham Street, where out-of-service taxis sometimes disrupt traffic.

Uncertainty over the future of the Digital Broadcasting Corporation is likely to claim another victim: a radio station devoted to Hong Kong's migrant workers. The Digital We channel, the city's first multi-ethnic digital radio station, broadcasts programmes in six languages, attracting listeners who have neither the Cantonese nor the English to follow the city's established broadcast media. DBC revealed on Friday that its shareholders were split on the direction of the station's seven digital broadcasting channels, founded last year by former lawmaker and radio host Albert Cheng King-hon. The revelation prompted speculation that the station and its shareholders had come under political pressure. Digital We went on air in March and broadcasts shows round the clock in Urdu, Bahasa Indonesia, Hindi, Nepali, Thai and Tagalog. One show, called Selamat Malam Sobat Migran, targets the city's 133,000 Indonesian residents, the majority of whom are domestic helpers, and helps them with topics ranging from legal advice on their immigration status to health tips, such as which foods to eat at night to help them work and fast all day during Ramadan. The hosts also debate current issues in Hong Kong and Indonesia. Sunarni Malone, who hosts the show, said she did not know anything about the turmoil within DBC . "It will be sad for Hong Kong if we ever have to stop the programmes on Digital We," she said. "We just started and it is going so well. "We speak to the domestic helpers in their own language and they feel closer to us and closer to home." Another Bahasa Indonesian show, Kumpul Bareng, goes out on Sundays from 10pm. The Nepali community can tune in online to Namaste! every Monday and Tuesday at 7pm, while Radyo Migrante caters to the Filipino population. There are no exact audience figures for Digital We's 13 shows. "We rely on Facebook for that," said Eric Lean, the channel's head. The station, based at Cyberport in Pok Fu Lam, has a Facebook page for each show. Kumpul Bareng has 608 "likes," while Nepali Swor, a Sunday show in Nepali, has 1,290. DBC has a free Smartphone application covering all of its seven stations - the rest are broadcast in Cantonese. It has been downloaded more than 200,000 times, according to Lean. "I feel we make a difference," said Milone, who also runs a beauty salon in Causeway Bay. "We always get a positive reaction from the community."

 China*:  July 31 2012

Lenovo will exclusively provide the NFL with laptops and desktops. Lenovo (SEHK: 0992), the world's second-largest supplier of personal computers, this week kicked off one of its most high-profile marketing efforts in the United States by announcing a three-year sponsorship deal with the National Football League (NFL). The Hong Kong-listed computer maker signed up as the exclusive provider of laptops, desktops and workstations for the 32-team American football league, which is the most popular among all the major professional sports associations in the US. "The NFL has been a valued Lenovo customer since 2007, and now we'll work with the league to integrate our products even more into their operations," said David Schmoock, the president of Lenovo North America. "The NFL gives us a tremendous new forum to introduce consumers to our products and brand." Schmoock pointed out that the deal announced on Thursday at Lenovo's US campus in Morrisville, North Carolina, coincided with the company's "tremendous growth in the US market", which is the world's second-largest personal computer market. Market research firm IDC reported earlier this month that Lenovo jumped two spots in the quarter ended June 30 to seize an 8 per cent share and become the US market's No 4 personal computer supplier, behind top domestic brands Hewlett-Packard, Dell and Apple. Lenovo, which was founded in Beijing in 1984, saw its global shipments rise 25.2 per cent in the second quarter to 12.9 million units, up from 10.3 million units a year earlier, to take a 14.9 per cent share worldwide. The company narrowed the gap with industry leader HP, which had a 15.5 per cent market share in the same period. The primary benefits for Lenovo as a major sponsor of the NFL is its right to use all league-owned trademarks in marketing and advertising activities for the next three years. The first sponsorship activities will be at the 2012 NFL Kickoff event in early September. Lenovo will also engage in sponsor programmes with select teams and players, and have a marked presence during the NFL championship game's Super Bowl week. "We are committed to delivering the best game for our fans, and Lenovo will help us in that endeavour," said NFL senior vice-president Keith Turner. Lenovo was a worldwide sponsor for the Beijing 2008 Olympic Games. The company signed a three-year sponsorship deal in 2006 with the National Basketball Association, the world's top professional basketball league.

Guowenjun wins women's 10m air pistol title at London Olympics - Guo Wenjun of China won women's 10m air pistol final at the London 2012 Olympic Games in London, Britain, July 29. Chinese Ye breaks world record and wins women's 400m medley gold - Chinese Ye Shiwen swam a world record of 4:28.43 to win the women's 400m individual medley at the Olympic Games on Saturday.

The record number of Olympic teams clad in clothes bearing Chinese innovations brings a "made-in-China" to "created-in-China" paradigm shift to the London Games. While much ado has been made about the fact that Team USA's uniforms for the London Olympics are made in China, less attention has been given to the record number of foreign teams' uniforms not only manufactured, but also designed, by domestic companies. Leading the pack is home-grown label Peak, which sponsors seven countries that will participate in 20 events in London, a major backer at the Games after Nike and Adidas. Because the design process takes months - it may take up to a year until manufacturing is complete - Peak had to turn away 10 countries that approached it for the 2012 Games. Next up is Li-Ning, named after and founded by the Chinese Olympic champion, which sponsors teams from eight countries and more than 600 individual athletes from 17 countries across the five continents - one for every Olympic ring. Other companies with foreign clients include Adivon, Qiaodan, Erke, 361 and Xtep. A far greater number of domestic companies manufacture uniforms, apparel and merchandise developed at home and abroad. "The phenomenon indicates domestic sportswear companies are rapidly growing and earning a say on the international stage," says Jian Jie, senior sponsorship products manager of Li-Ning's sports resources products department. "It also shows that brand influence becomes increasingly important in the sportswear field and 'made in China' is gradually transforming to 'created in China'. The alliance between a domestic brand and an international brand can internationalize Chinese brands and generate greater access to the partner's market. "The alliance during the Olympics can also increase the exposure of the domestic brand, promote its brand value and further its recognition at home and abroad. Through cooperation with the foreign brands, domestic brands can also improve." Li-Ning's International Legion sponsors Argentina's basketball team; Spain's basketball team; and the badminton teams from Singapore, New Zealand and Australia. The track and field teams from Zimbabwe and Eritrea also wear Li-Ning. The company also made Sweden's ceremonial uniforms. It became China's first sportswear brand to sponsor a foreign Olympic team when it sponsored France in 2000. Liu Xiang, deputy director of Peak's brand management center's PR department, says: "Chinese sportswear brands are gaining influence internationally thanks to an increasingly powerful China and the country's sports achievements. "Brands with rich sponsorship resources and marketing systems like Peak will receive more international attention." Stavros Michaelides, public relations and marketing administrative officer of the Cyprus National Olympic Committee, says the reason the committee went with Peak is simple: "We got a better offer from Peak." The committee's treasurer Damianos Hadjidamianou explains that Cyprus' delegation is small, with 13 athletes and about 100 people in total, including coaches and officials. "That makes it hard for big companies to design our materials," he says. Michaelides explains Cyprus didn't request specific designs for every team but, rather, a generic design for all sports. Hadjidamianou says: "Not only the style but also the quality of Peak's uniforms is superb. The time of delivery is also very prompt. Whenever they say they'll deliver, they do it earlier than they say. That matters a lot to us." He says Cyprus didn't even talk to another sponsor because the committee was more than satisfied with its uniforms for the 2008 Games and other international sports events. The press attache of Team Slovenia Brane Dmitrovic says the committee initiated cooperation with Peak last year and plans to extend it. "Extensive discussions have shown we share common views on the development of sport, we appreciate the same values and we want to provide the best possible conditions for athletes to achieve peak performance, which includes sports equipment," Dmitrovic says. "The collection is a mixture of Slovenian national sports design guidelines and Chinese high-production technology. The design in green, blue and white represents three natural beauties of Slovenia: green - beautiful nature and landscape; blue - sea; and white - snow with mountains. "This combination of colors is very unique and very noticeable. (It) also includes an outline of Mount Triglav - the highest Slovenian mountain."

Part of Poyang Lake, China's largest freshwater lake, has seen its water level exceed the warning level, as flooding on the upper and middle reaches of the Yangtze River has been pushing up the water level of the lake. Part of Poyang Lake, China's largest freshwater lake, has seen its water level exceed the warning level on July 28, 2012. The water level at the lake's Huxingzi Station in Jiangxi province had risen to 19.01 meters as of 8 am Sunday, marking the highest level in the past two years and measuring 0.01 meter above the warning level, said Tan Guoliang, head of the provincial hydrographic bureau. Affected by flooding on the upper and middle reaches of the Yangtze River, the water level of the Jiujiang section of the Yangtze River in Jiangxi province rose to 19.54 meters at 8 am Sunday, over one meter higher than that half a month before, and the water level was continuing to rise, Tan said. Affected by the rise of the Yangtze River and the rainfall that has increased runoff from local rivers in Jiangxi, the water level of Poyang Lake, located on the southern bank of the middle and lower reaches of the Yangtze, has been continuously rising. The provincial flood control and draught relief headquarters have tightened up monitoring efforts on the lake shore and are preparing emergency rescue measures to ensure people's safety. 

Chinese swimming sensation Sun Yang upset defending champion South Korean Park Tae Hwan in men's 400m freestyle to win a historic Olympic swimming gold for China on Saturday. Sun was behind Park in the first 200m, and narrowed the gap in the third 100m. He put on a devastating burst over the last 100m to overtake Park at 3:40.14, setting a new Olympic record. Sun Yang of China celebrates after winning men's swimming 400m Freestyle Final competition at London 2012 Olympic Games in London, Britain, on July 28, 2012. Sun Yang won gold medal in this event. Park posted 3:42.06 to settle for a silver and Peter Vanderkaay from the United States finished 3:44.69 to take a bronze. Sun was the first male Chinese swimmer to claim an Olympic gold. "I felt the pressure because my coach is not in good health, so maybe he has been under more pressure than I am. I want to dedicate this victory to him," said Sun, who starred at last year's Shanghai World Championships as he smashed Grant Hackett's decade-old 1,500m world record . "I have swum my personal best time and I want to use this swim to tell the South Koreans (who were angry after Park was disqualified this morning) something. I want to show that we are good swimmers and we do not need to do anything other than swim in order to win," said a confident Sun. Park was initially disqualified by a judge on the pool deck for a false start in the morning heats, after which South Korean media accused so-called referee conspiracy by a Chinese judge. However, it turned out to be a rumor as no Chinese judge was involved in the event. Later, Park was reinstated in the final after the FINA Jury of Appeal examined the protest lodged by the Korean Swimming Federation and made the decision based on the recommendation of the FINA Technical Swimming Commission. Sun's performance in evening's final underlined his supremacy in the event. Park, who hardly missed the final, said he was disappointed with a silver because he had waited a long time for this race. "I tried my best in the race. I don't want to say that what happened with having been disqualified was bad for my performance, but it was," he said. "I lost the race, but I am glad that it was an Asian who won. It is something we can all be proud of," Park said. The gold medal is one of the most eagerly awaited clashes between Park and Sun. In London, Sun finally succeeded in the revenge after losses to Park in the 400m freestyle at the 2011 Shanghai World Championships and the 2010 Guangzhou Asian Games.

Hong Kong*:  July 30 2012 Share

Chong Yam-ming's factory canteen has seen better days. In the best years, thousands of workers per day called at his 4,400 sq ft canteen tucked inside a factory on Shing Yip Street, Kwun Tong. In the mornings, it was busy with workers eating steamed buns and sipping milk tea; at lunchtime, people came for siu mei (barbecued meat) meals. The queues snaked from the counter around to the stairwell. Monthly revenue sometimes hit HK$2 million, a figure that even now would sound improbable to cha chaan teng owners. "So many people were waiting outside that we eventually decided to hire someone to serve the queue specially," recalls Chong, now 65. That was in the late 1980s - the golden era of Hong Kong's factory canteens and Kwun Tong's industrial area, located at the south end of Kwun Tong Road. Nearly 200,000 workers packed the cluster of factories that churned out everything from garments and plastics to electronics and paper, all for export. But all that is a distant memory. Many of these industries have moved to the mainland or Southeast Asia to capitalise on lower rents and cheaper labour. Gone are the busy assembly lines, buzzing machines, hard-working employees and chimneys emitting clouds of heavy smoke. Factory buildings have given way to glass-and-steel office towers, as post-handover administrations envisioned turning Kwun Tong into a new central business district. That scheme took another step forward with The Link Reit (SEHK: 0823, announcements, news) 's announcement on Wednesday of plans to convert industrial buildings into malls. The industrial area in Kwun Tong - Chinese for "government ponds", a reference to the salt pans that once covered the area - didn't exist until the colonial government reclaimed the land in 1954. The development was spearheaded by both private enterprise and government. An example of the latter is the Housing Authority's now-demolished seven-storey Kwun Tong Factory Estate. Industry is still reflected in the area's auspicious road names - Hung To ("great prospect") and Hoi Yuen ("profit-making"). Most of the factories were small, with fewer than 50 employees, according to a 1972 study by Chinese University. But those good times are over, and more than half of the 100-odd factory canteens in the area folded. Chong closed 11 of his 13 factory canteens, beginning in the late 1990s. He still owns two, although he said he could "barely make any money out of them" as rents and other costs soared. "Times have changed. Factory canteens mirrored the rise and fall of this industrial area," he said. Chong said white-collar workers have told him they are embarrassed to eat in his cafeterias, and gravitate instead towards the more expensive restaurants that have sprouted in the area. The Room, for example, is a Western-style restaurant on Hong To Road where meals cost about HK$100 on average. Its spokesman, a Mr Lui, said the restaurant opened "in the right place at the right time", as offices settled into the area. "However, the demand in Kwun Tong still doesn't compare to that of Central or other business districts," Lui said. "Many restaurants came and went in the past few years." The economic transition in Kwun Tong in the early 2000s also turned the former industrial hub into an artists' commune. The first to arrive were filmmakers like Johnnie To Kei-fung and Andrew Lau Wai-keung, who moved their operations to Kwun Tong. Many of To's recent films were shot in and around the area. And then came the musicians. "We were attracted by the low rent and large spaces here," said Kimi Lam, spokesman for Hidden Agenda, a live house for rock and indie music on the second floor of a factory complex on Tai Yip Street. Another attraction is that bands can play their music as loud as they want, because nobody lives nearby. Lam estimated that in 2010, about 600 bands occupied factory buildings in Kwun Tong and used them as practice rooms. But even their days are numbered, Lam fears, as the government's redevelopment plans have sent rents surging. According to Lam, the rent for their 4,000 sq ft venue was HK$10,000 in 2010. Now it is HK$25,000. "Lots of bands seem to have disappeared, because they have to share practice rooms now," Lam said. While the changes in the industrial zone have been more gradual, those living in Kwun Tong's residential area are facing a more drastic adjustment. Buildings in the once-bustling Yue Man Square will soon be torn down, their thousands of inhabitants making way for a colossal HK$3.9 billion residential and commercial complex on the 570,000 sq ft site. The project began in 2009 and is expected to be completed by 2021. Yuen Chi-yan, who grew up in Kwun Tong, laments the loss of the community. "For me, more than just an industrial area, Kwun Tong is a unique place where people of different political backgrounds, ethnicities and classes co-existed." Yuen and a team of volunteers have been gathering oral histories in Yue Man Square since 2005 by talking to local residents, street vendors and shop owners, then posting their thoughts and photos on the internet. The website has so far attracted nearly 500,000 visitors. Yuen's cherished memories of Kwun Tong include watching old films at the Silver Theatre, first opened by a leftist group in 1963, and watching the Chiu Chow community celebrating the Yu Lan Ghost Festival. Both have become impossible since the theatre closed in 2009 and people have moved out of the area. These are also hard times for the hawkers and small-business owners who have been here for up to 40 years. Leung Kam-hung, the last racing-pigeon vendor in Hong Kong, has been running his stall since 1979. Authorities are now urging him to move to Hong Lok Street in Mong Kok, famous for its bird market. "But they don't allow me to sell racing pigeons any more. I'm in my forties, and I've been selling pigeons all my life. I don't know what else I can do if I'm not allowed to do that." Yuen says the reconstruction project has changed the lives of these hawkers. "They've been doing business here peacefully their whole lives. Now they need to learn to negotiate with government officials. It's a kind of citizenship education for them."

Two more organisations that had planned to bid to build private hospitals on a pair of sites identified by the government withdrew from the tendering process as the deadline passed yesterday. A string of Hong Kong and international investors, including private medical companies and universities, have pulled out of the bidding, blaming restrictions on who they can treat and investment requirements imposed by the government. Chinese University and the private Union Hospital quit the bidding process yesterday. While the government has refused to comment on how many applications it has received for the sites, just three organisations have publically announced their intention to bid. Fortis Healthcare, based in India, which runs the city's 590 Quality Healthcare clinics, is bidding for both sites, at Wong Chuk Hang in Aberdeen and Tai Po, while the University of Hong Kong also wants to build in Wong Chuk Hang. Raffles Medical Group, a Singapore-based company which runs 70 clinics in its home country and three in Hong Kong, revealed last night that it had also submitted a bid for Wong Chuk Hang. The government, which says the new private hospitals are needed to correct an imbalance which sees 90 per cent of patients use public hospitals while the majority of doctors work in the private sector, is insisting that bidders offer at least 300 beds and that Hongkongers will have to make up 50 per cent of patients. No more than 20 per cent of beds must be for obstetrics, an area in which private hospitals have invested heavily because of the influx of mainland women to give birth in the city, which Chief Executive Leung Chun-ying has promised to stamp out. The restrictions have put off the private Union Hospital in Tai Wai, which had expressed an interest in bidding for Wong Chuk Hang. "After a thorough study and evaluation of the tender terms by our team of experts, we found there are too many restrictions. Also, there is a steep slope in the site. The cost of construction will be too high," the hospital said. Chinese University said yesterday that it had decided not to submit a tender as the university was not able to reach an agreement on the bid with its potential partner. Earlier, a leading private hospital, the Hong Kong Sanatorium & Hospital and another potential bidder, Asia Financial Holdings, also decided to pull out. Fortis is pressing ahead with its bid despite the restrictions, said its chief executive, Vishal Bali: "We have been preparing the proposal for 16 months, long before the government opened the tender," he said. The company would provide about 400 beds at each site, Bali said, with an intensive care unit and different specialities offered at each. At least 70 per cent of beds would be set aside for local patients, he said. The company also had no problem with another government requirement, that 30 per cent of services be offered as part of fixed-price packages, so patients would know in advance how much their treatment would cost. More than 30 organisations expressed an interest when the government announced its plans to offer sites for the construction of private hospitals in 2010. Two further sites in Tseung Kwan O and Lantau Island will be put out to tender later. The Secretary for Food and Health, Dr Ko Wing-man, said he has no comment on the response to the tender, and he could not disclose the number of bids received. The winning bidders are expected to be announced early next year.

Members of Hong Kong's Olympic team, led by flag-bearer Sarah Lee Wai-sze, enter the Olympic Stadium during the opening ceremonies of the London 2012 Olympic Games in London on Friday. Lee, a cyclist, is Hong Kong's best hope for a medal in the competition. The queen and James Bond gave the London Olympics a royal entrance like no other Friday in an opening ceremony that rolled to the rock of the Beatles, the Stones and The Who. And the creative genius of Danny Boyle spliced it all together. Brilliant. Cheeky, too. The highlight of the Oscar-winning director’s US$42 million (HK$326 million) show was pure movie magic, using trickery to make it seem that Britain’s beloved 86-year-old Queen Elizabeth II had parachuted into the stadium with the nation’s most famous spy. A short film showed 007 driving up to Buckingham Palace in a black London cab and, pursued by her majesty’s royal dogs — Monty, Willow and Holly, playing themselves — meeting the queen, who played herself. “Good evening, Mr. Bond,” she said. They were shown flying in a helicopter over London landmarks and a waving statue of Winston Churchill — the queen in a salmon-coloured gown, Bond dashing as ever in a black tuxedo — to the stadium and then leaping out into the inky night. At the same moment, real skydivers appeared in the skies over the stadium throbbing to the James Bond soundtrack. And moments after that, the monarch appeared in person, accompanied by her husband Prince Philip. Organisers said it was thought to be the first time the monarch has acted on film. “The queen made herself more accessible than ever before,” Boyle said. In the stadium, Elizabeth stood solemnly while a children’s choir serenaded her with “God Save the Queen,” and members of the Royal Navy, Army and Royal Air Force raised the Union Jack. Much of the opening ceremony was an encyclopedic review of British music history, from a 1918 Broadway standard adopted by the West Ham football team to the Rolling Stones’ “(I Can’t Get No) Satisfaction” to “Bohemian Rhapsody,” by still another Queen. The evening started with fighter jets streaming red, white and blue smoke and roaring over the stadium, packed with a buzzing crowd of 60,000 people, at 8.12pm in London. An explosion of fireworks against the London skyline and Paul McCartney leading a sing-along were to wrap up the three-hour opening ceremony masterminded by one of Britain’s most successful filmmakers. Boyle, the director of “Slumdog Millionaire” and “Trainspotting,” had a ball with his favoured medium, mixing filmed passages with live action in the stadium to hypnotic effect, with 15,000 volunteers taking part in the show. Actor Rowan Atkinson as “Mr. Bean” provided laughs, shown dreaming that he was appearing in “Chariots of Fire,” the inspiring story of a Scotsman and an Englishman at the 1924 Paris Games. There was a high-speed flyover of the Thames, the river that winds like a vein through London and was the gateway for the city’s rise over the centuries as a great global hub of trade and industry. Headlong rushes of movie images took spectators on wondrous, heart-racing voyages through everything British: a cricket match, the London Tube and the roaring, abundant seas that buffet and protect this island nation. Boyle turned the stadium into a throbbing juke box, with a nonstop rock and pop homage to cool Britannia that ensured the show never caught its breath. The throbbing soundtrack included the Sex Pistols’ “Pretty Vacant” and a snippet of its version of “God Save the Queen” — an anti-establishment punk anthem once banned by the BBC. There were The Who’s “My Generation” and other tracks too numerous to mention, but not to dance to. Opening the ceremony, children popped balloons with each number from 10 to 1, leading a countdown that climaxed with Bradley Wiggins, the newly crowned Tour de France champion. Wearing his race-winner’s yellow jersey, Wiggins rang a 23-ton Olympic Bell from the same London foundry that made Big Ben and Philadelphia’s Liberty Bell. Its thunderous chime was a nod to the British tradition of pealing bells to celebrate the end of war and the crowning of kings and queens, and now for the opening of a 17-day festival of sports. The show then shifted to a portrayal of idyllic rural Britain — a place of meadows, farms, sport on village greens, picnics and Winnie-the-Pooh, A.A. Milne’s bear who has delighted generations of British children tucked warmly in bed. But the British ideal — to quote poet William Blake, of “England’s green and pleasant land” — then took a darker, grittier turn. The set was literally torn asunder, the hedgerows and farm fences carried away, as Boyle shifted to the industrial transformation that revolutionised Britain in the 18th and 19th centuries, the foundation for an empire that reshaped world history. Belching chimneys rose where only moments earlier sheep had trod. The Industrial Revolution also produced terrifying weapons, and Boyle built a moment of hush into his show to honour those killed in war. “This is not specific to a country. This is across all countries, and the fallen from all countries are celebrated and remembered,” he explained to reporters ahead of the ceremony. “Because, obviously, one of the penalties of this incredible force of change that happened in a hundred years was the industrialisation of war, and the fallen,” he said. “You know, millions fell.” Olympic organisers separately rejected calls for a moment of silence for 11 Israeli athletes and coaches slain by Palestinian gunmen at the 1972 Munich Olympics. Two of the Israelis’ widows appealed to audience members to stand in silence when International Olympic Committee chief Jacques Rogge rose to speak later at Friday’s ceremony. The Israeli culture and sport minister planned to do just that. The parade of nations featured most of the roughly 10,500 athletes — some planned to stay away to save their strength for competition — marching behind the flags of the 204 nations taking part. Greece had the lead, as the spiritual home of the games, and Team Great Britain was last, as host. Prince William and his wife, Kate, joined in the thunderous applause that greeted the British team, which marched to the David Bowie track “Heroes”. Both Bahrain and Brunei featured female flag-bearers in what has been called the Olympics’ Year of the Woman. For the first time at the games, each national delegation includes women, and a record 45 percent of the athletes are women. Three Saudi women marching behind the men in their delegation flashed victory signs with their fingers. It fell to the queen to declare the games open. Last month, the nation put on a festive Diamond Jubilee — a small test run for the games — to mark her 60 years on the throne, a reign that began shortly after London’s last Olympics, in 1948. The Olympic cauldron was to be lit with a flame that was kindled May 10, at the birthplace of the ancient Olympics in Greece, from a reflection of the sun’s rays off a mirror. Since then, 8,000 torchbearers, mostly unheralded Britons, have carried the flame on a 70-day, 8,000-mile journey from toe to tip of the British Isles, whipping up enthusiasm for a US$14 billion (HK$108.6 billion) Olympics taking place during a severe recession. The identity of the last torchbearer, the one to light the cauldron, was kept secret — remarkable given the intense scrutiny at what have been called the first social media Olympics. Speculation focused on Roger Bannister, the first man to run a four-minute mile, in 1954, and on British Olympic hero Steve Redgrave, among others. In the end, Redgrave carried the torch into the stadium — its final stop after a journey around the country. The five-time rowing gold medalist handed it off to seven teenage athletes, representing Britain’s hopes for the future, who ignited copper “petals” on the ground. The fire spread in a circle and the petals converged to form a large cauldron in the sky. The show’s lighter moments included puppets drawn from British children’s literature — Captain Hook from “Peter Pan”, Cruella de Vil from “101 Dalmations” and Lord Voldemort from J.K. Rowling’s “Harry Potter” series, as well as Mary Poppins. Their appearance had a serious message, too — the importance of literacy. “If you can read and write, you’re free, or you can fight for your freedom,” Boyle said. Boyle’s challenge was daunting: to be as memorable as Beijing’s incredible, money-no-object opening ceremony of 2008, the costliest in Olympic history. “Beijing is something that, in a way, was great to follow,” Boyle said. “You can’t get bigger than Beijing, you know? So that, in a way, kind of liberated us. We thought, ’Great, OK, good, we’ll try and do something different.”’ For the last time as president of the IOC, Rogge was to watch the Olympic flag being raised. He will step down in 2013 after completing the maximum two terms.

Europe's economic troubles are washing up on Hong Kong's shores in the form of a surge in migrants from the continent coming to the city to work. Government figures show there was a nearly 12 per cent increase from 2010 to 2011 in the number of work visas issued to people from seven European Union countries: Spain, Italy, Ireland, Britain, France, Greece and Portugal. The total reached 6,168 last year, up from 5,513 in 2010. The increase in Spanish and Irish people gaining work visas was especially marked. The Spanish figures have doubled since 2008 and the Irish since 2009. Hong Kong has one of the lowest unemployment figures in the world. As of June, the jobless rate was 3.2 per cent, against 10.3 per cent for the European Union as a whole and 24.6 per cent for Spain. Spain's figure, issued yesterday, include 53.27 per cent unemployment for those aged 16 to 24. Visas issued to Spaniards jumped to 189 last year from 96 in 2008, according to the Immigration Department. In the first half of this year, 119 applications were approved. Visas issued to Irish people reached 287 last year, from 143 in 2009. The number of Italian applicants jumped 55 per cent in the same period, while French applicants shot up by 71 per cent. Besides work visas, migrants can also become Hong Kong residents by obtaining an investment visa to set up a business. As a whole, the French community in Hong Kong grew by 60 per cent between 2008 and 2011 and is the biggest in Asia. William Fitchett, 28, is part of the exodus from Spain. He works for a Spanish bank in Hong Kong through a programme of the Spanish Institute for Foreign Trade. Fitchett, who holds a bachelor's degree in economics and a master's degree in international trade, lived in Shanghai for 15 months before moving to Hong Kong in January. He chose Hong Kong because he "likes the city and the company", he said. "Some people are just waiting [for the economy to get better] in Spain. They do master's degree after master's degree," he said, but that was not enough: "They have to move." Fitchett, from Madrid, said an increasing number of young Spaniards were moving to China. "You can earn double or triple wages in Shanghai, because all you can find in Spain is perhaps an internship which pays you 500 euros [HK$4,700]." Although Fitchett recognises that Hong Kong is a better place to live in for a foreigner, he said he would consider moving back to Shanghai because of the less intense job market competition there. Another factor that puts him off Hong Kong is the high rent. He is paying HK$9,200 a month for a 200 sq ft subdivided flat in Wan Chai. Christopher Auckland, regional director of recruitment with the firm Michael Page, said the company had not noticed an increase in applications from Europe, but there was "definitely an increase in people who want to move here". The increased number of applications from Spain "doesn't surprise me, because obviously the Spanish economy is not doing particularly well", Auckland said. "Certainly a lot of people in Europe now want to move to Hong Kong and Asia." Auckland said the surge in expatriates seeking work in the city would create healthy competition in the job market rather than a threat to local people. "Hong Kong has an incredibly competitive job market regardless of expatriates," he said. "There's a strong talent pool here." He said many expats in the city worked in companies based in their home countries and came to the city through internal transfers. Some teach languages in Hong Kong. Expats would tend to stay in Hong Kong for longer periods nowadays, because of the depressed economy in their home countries, Auckland said. Most work visa holders in Hong Kong work as administrators, managers and executives, according to Immigration Department figures. The city's labour laws require an applicant to have a good educational background or possess specific professional skills and there must be a genuine job vacancy. A talent shortage survey released earlier this year by Manpower Group shows 35 per cent of Hong Kong employers have difficulty filling jobs, about the same as the global average of 34 per cent. Employers say the most difficult workers to find are engineers and sales representatives. Hong Kong issued 30,557 visas last year under the general employment policy, which excludes mainlanders, domestic helpers and certain schemes for labourers and graduates.

One of the last traces of old Nathan Road is set to disappear in a few days when a century-old Protestant church in Kowloon demolishes its landmark stone wall, despite a government counterproposal to preserve it. The vicar of St Andrew's Church said he had not received any counterproposals in writing and that the church's architects and engineers had advised that preserving the wall was not technically feasible. Reverend John Menear confirmed construction was underway and the stone wall topped with a balustrade was about to be torn down to make way for a HK$155 million underground development, including an 850-seat auditorium, amphitheatre, coffee shop and book store. Two members of the Antiquities Advisory Board expressed shock that the construction work had started and the wall, which stands almost three metres high, was about to go. Girders have been erected at the front of the site and foundation work for the auditorium has begun. The 1906 church, itself a proposed grade one historic site and the oldest church in Kowloon, sits on raised ground, tucked away behind the wall and hidden from the bustle of Nathan Road by a number of banyan and palm trees. By the end of the project, the church will have a glass and granite front opening straight onto the pavement, with barely a third of the wall remaining. Menear said: "It is true that construction has commenced after four years of careful planning and preparation." He said the two-storey development was necessary to cope with a growing congregation that left the 470-seat church fully packed. "Although we have confirmed from a range of respected heritage experts that the wall is not of any special heritage value, we accept that it may have some visual and emotional value to some people," Menear said. Antiquities board member Tony Lam Chung-wai disagreed that retaining the whole wall was not feasible. "It's a matter of aesthetics and costs," he said. "You can always set it back a bit and protect the wall with retaining structures , although it would be more expensive." Less glass could be used in the new design to keep the solidity of the original landscape, Lam, a conservation architect, suggested. According to its website, the church had only raised HK$69 million as of last week - not even half the project's cost. The church said alternatives to redevelopment had been considered, including using the Tsim Sha Tsui Kai Fong Association Hall next door. But St Andrew's said the décor and facilities were not ideal. The project would give the church "high visibility, taking the church to the community and does not need to fulfil expensive planning permission", according to its website. Ng Cho-nam, one of the members of the antiquities board who had objected to removing the stone wall in two board meetings in 2009 and 2010, said: "The church totally misses the point if they say the stone wall is not of heritage value because it was not a special design. What makes it special is the landscape and location. "The case again shows the limitation of the advisory board ... I need to bid farewell to this last bit of old Nathan Road, where century-old trees are collapsing on one side and a landmark wall is falling on the other." A Development Bureau spokeswoman said the antiquities board had noted that the final decision would rest with the church despite some members' concerns. "The Antiquities and Monuments Office prepared a counterproposal and submitted the documents in April last year for the church's consideration, in which the existing rubble wall can be preserved. However, the church has not given any feedback so far," she said. The present redevelopment plan is the outcome of revisions to proposals put forward between 1994 and 1997, which involved demolishing historic buildings and which the antiquities board did not support. Under the government's counterproposal, the auditorium's main access would be via an elevated garden and the frontage along Nathan Road would be lost. The gross floor area might also have to be reduced, the bureau said.

 China*:  July 30 2012

Yi Siling of China competes in the women's 10m air rifle in a tense contest against Poland's Sylwia Bogacka on Saturday. Yi Siling of China took the honour of claiming the first gold medal of the London Olympics when she won the women’s 10 metre air rifle at the Royal Artillery Barracks on Saturday. Yi finished with a winning total of 502.9. Poland’s Sylwia Bogacka, who led for the first half of the final, claimed silver with a total of 502.2 after a costly shot in the eighth round. Yu Dan of China won bronze with a total of 501.5. Yi, the world number one, smiled in delight as she scooped what is sure to be the first of many golds for China at the London Games. Bogacka finished top of the 56 competitors in qualifying with a 399 mark and started the eight-woman final well before a costly 9.7 shot in the eighth round saw her 0.3 point lead over Yi turn into a 0.7 deficit after the Chinese fired a 10.7. Yi then closed out with further shots of 10.3 and 10.5 to huge cheers from the near 2,000 spectators at the indoor range in south east London. Among those in attendance was International Olympic Committee President Jacques Rogge, who clapped from his seat when Yi was confirmed the winner as Chinese dignitaries around him leapt to their feet in delight.

China-made fireworks light up London Olympics - The Olympic cauldron is seen alight as fireworks are set off during the opening ceremony of the London 2012 Olympic Games at the Olympic Stadium July 27, 2012. Fireworks made in China light up the sky during the opening ceremony of the 2012 London Olympics on Friday night. "All the fireworks to be set off at the London Olympics are from China and three-fourths come from Liuyang city of Central China's Hunan province," said Ye Xinglong, chairman of the supplier Liuyang Apple Fireworks Artist Display Co Ltd. The magnificent fireworks show at the Beijing Olympics resulted in more overseas demand for China-made fireworks, Ye said. As one of the two suppliers to the London Olympics in Liuyang city, Ye's company exported fireworks for the opening ceremony with a value of 2 million yuan ($316,456). The company's annual export volume has reached 100 million yuan, Ye said. Fireworks produced in China are often used at international events. They were set off during the 2008 Beijing Olympics, 2006 Doha Asian Games and 2006 Turin Winter Olympics. 

China is strengthening its efforts to diversify the world's largest foreign exchange reserves and increase returns on its portfolio by investing in a private-equity fund. The State Administration of Foreign Exchange has decided to invest $500 million in a real-estate private-equity fund managed by Blackstone Group LP, the Wall Street Journal reported on Friday, citing anonymous sources. The fund that SAFE has agreed to invest in is the biggest of its kind, as it has attracted more than $12 billion. Blackstone expects the fund to reach $13.3 billion at the final close in the next few months. Both SAFE and Blackstone declined to comment on the issue. The newspaper said SAFE will allocate about 5 percent of the $3.2 trillion foreign reserves to alternative asset classes such as private equity, while investment in government bonds, cash and other liquid assets remains the main trend. The diversification of China's foreign exchange portfolio is vital for the country to maintain the value of its assets, said Zhang Anyuan, a senior analyst at the economic research institute under the National Development and Reform Commission. "It's always welcome that SAFE could set different layers to its investment of foreign reserves, and setting aside such a small proportion for high-return but high-risk investment is necessary," said Chen Daofu, policy research chief of the Financial Research Institute at the State Council's Development Research Center. But given the fact that international financial markets are facing rising pressure due to the current economic situation, liquidity and security should be granted increasing emphasis when authorities are making investment decisions, Chen added. In 2008, the foreign reserve watchdog poured $2.5 billion into a fund managed by the US-based private-equity firm TPG and suffered losses after the fund's subsequent investment in Washington Mutual, the largest US savings-and-loan firm at the time, was wiped out after the lender's closure by the US government, the Wall Street Journal reported. SAFE has constantly reiterated that security is its top priority when making investments using foreign reserves, and it has already taken appropriate measures to offset potential major risks. It has invested most of the reserves in low-yield assets such as government treasury bonds. China is the largest foreign holder of US Treasuries, having invested about a third of its foreign reserves in those bonds. About 20 percent has been invested in euro-denominated assets. The capital raising for Blackstone's Real Estate Partners VII fund will end in February. Its Real Estate Partners VI invested the majority of its capital in business property in the United States, such as shopping mall-owner General Growth Properties Inc and hotel-owner Extended Stay. But some recent figures have raised doubts over future returns. According to the results of a primary mortgage market survey released by Freddie Mac on Friday, fixed mortgage rates continue to reach record lows. The 30-year fixed rate mortgage averaged 3.49 percent, while the 15-year fixed-rate mortgage, a popular choice for those looking to refinance, hit a record low of 2.8 percent. Frank Nothaft, vice-president and chief economist of Freddie Mac, said market concerns over the strength of the economic recovery brought long-term Treasury yields to new lows. "Existing home sales fell to 4.36 million homes (annualized) in June and represented the slowest pace since October 2011. Similarly, new home sales fell in June to their lowest level since January of this year," he said. "Investing in real estate can be interesting for investors who wish to invest in real assets and are shying away from volatile financial markets" said Andre Loesekrug-Pietri, chairman of the Beijing-based European PE company A CAPITAL, adding that local and professional teams are very important as this always require local expertise. Loesekrug-Pietri said the US property market has gone through a long readjustment since the subprime crisis, but as the US economy improves, the conditions may become more attractive in the coming years, both in residential and commercial real estate. According to him, markets such as China, whose macro drivers for growth include urbanization and consumption, should continue to be attractive for real estate investment, in particular for sophisticated investors that can avoid overheated sectors and identify strong value for money in all market categories.

Hong Kong*:  July 29 2012 Share

A slowdown in inbound tourism and the prevailing poor consumption sentiment in Hong Kong will continue to pressure the local sector, Sun Hung Kai Real Estate Agency warned yesterday. The agency - a wholly owned unit of Sun Hung Kai Properties (0016) - operates 19 malls comprising 9.9 million square feet in Hong Kong. It operates 15 shopping centers in the mainland. "Overall, [local] retail sales may stay stable. But the possibility of a slowdown cannot be ruled out," said Maureen Fung Sau- yim, leasing general manager at the agency. Hong Kong retailers usually fare better in the second half over the first six months of the year as that period coincides with the October Golden Week, Mid-Autumn Festival and Christmas. But it is unlikely to be the case this year, said Emmy Leung Yuen-shan, senior promotions manager of leasing at the agency. Combined revenue of the eight major shopping malls owned by SHKP rose 22 percent year-on-year to HK$3.8 billion in the first half. Sales at the eight malls are likely to rise 27 percent to HK$1.65 billion during July- August, Leung estimated. The agency has spent HK$13.3 million for promoting live broadcasts of the London Olympics at its malls with apm in Kwun Tong taking up HK$7.5 million. The agency expects sales at apm to reach HK$600 million during the Games. Fung said the agency will arrange more mainland tour groups to visit apm in September, which could bring in revenues of HK$8 million to HK$10 million.

Comic fans braved the rain on Friday to be the first ones into the annual Ani-Com & Games fair, despite a new ban on the sale of limited-edition items which are usually a big drawcard for early birds. A queue of about 1,000 people, mostly youngsters, had formed outside the Convention and Exhibition Centre in Wan Chai before the fair’s opening at 10am. “I had waited outside the venue since [Tuesday],” said diehard comic lover Tsoi Chi-kin, who was the first to enter the exhibition hall. He spent about HK$1,200 at publisher Jonesky whose best-sellers are comics drawn by renowned local artist Ma Wing-shing. “I’m thrilled that I could buy the comic books I love, and have a picture taken with my idol [Ma],” Tsoi said. The new ban imposed by organisers on the sale of limited-edition figurines is aimed at getting rid of so-called queuing gangs – groups of people paid by speculators to line up for must-have items. Fans keen to get their hands on limited-edition figures now have to pre-order online and then collect the items at the five-day event. Booths such as Jade Dynasty and Hot Toys were packed with customers eager to claim their pre-ordered items. The ban on limited-edition figurines has prompted one of the biggest exhibitors, Gamania, to pull out of this year’s event. The company said the rule would hurt its business and ruin the fair’s atmosphere. Others are considering withdrawing from the next fair. “Obviously, the number of people at the fair has dropped when compared with last year. It’s hard for us to make money out of the fair,” said Sze Ling-ling, general manager of online games company Gameone Group. He said the company would consider whether it was worth showing up next year. Some exhibitors managed to get round the ban by rebranding their limited-edition products. One exhibitor interviewed by Cable TV said: “With ‘limited edition’ not allowed, we can use a different name.” He said his stall offered three editions of figures every year, and fans would have no problem identifying the limited edition when they saw the names of the other editions remain unchanged. Admission is HK$30, and the fair runs until Tuesday.

Kobe Beef Arrives in Hong Kong - From truffles to shark’s fin, Hong Kong loves its luxury foods. Now its diners have another to covet: Kobe beef. Sure, you may have seen the words “Kobe beef” on a restaurant menu or a package of frozen burger patties, but unless you’re in Japan, you haven’t had the real thing (other beef gets marketed as Kobe thanks to lax regulation of the term). Similar to how Champagne and Camembert come from specific regions in France, true Kobe is limited to the Tajima breed of Wagyu beef that’s raised from Hyogo prefecture, around the city of Kobe. Only a handful of designated producers raise the livestock according to strict tradition. The entire production is tiny: Only around 3,000 cows are sent to market each year. Japan said this week that Hong Kong would become just the second overseas location to receive shipments of the prized beef that’s equal parts fat and lean meat. In January, the Kobe producers began exporting to Macau, the first time the beef has been shipped out of Japan, and the ex-Portuguese colony has taken in 51 cows, or about 2,500 kilograms. Hong Kong received seven cows for its first month of sales, and their beef is available at local supermarkets and restaurants. It costs 180 to 635 Hong Kong dollars (US$23-$82) per kilogram, depending on the quality of the cut.

World’s Longest-Living Women Aren’t in Japan Anymore - They live in Hong Kong. Maybe there’s something to bird’s nest soup and lotus paste “longevity” buns, after all. Hong Kong’s female octogenarians can now claim the title of the longest-living people on earth. Though Japanese women have ranked as the world’s longest living for decades, the expected lifespan for Japanese women dipped to 85.9 years in 2011, down from 86.3 the year prior, in part because of the disasters the country suffered last year. Similar declines in lifespan for men were also recorded, Japan’s health ministry reports. Hong Kong may be notorious for its smog and stressful lifestyle, but in 2011, the average lifespan of Hong Kong women was a robust 86.7 years, according to the government. Local experts cite the city’s advanced, extremely affordable healthcare, high levels of activity and healthy diet as factors. “People in Hong Kong are meticulous with their diet nowadays,” says David Dai, a doctor at the public Prince of Wales Hospital, where he’s practiced for 10 years. “We stick to an Asian diet. Vegetables are not a problem, and our eldest don’t [eat] a lot of meat. Food is steamed, or stir-fried. There’s not a lot of grease.” The city’s fish-heavy diet also promotes health, says Dr. Dai, as do the early morning walks and tai-chi routines of its eldest residents. The fact that so many Hong Kong residents are able to afford the services of a domestic helper also likely contributes to locals’ impressive longevity, says Dr. Dai, adding that such attendants in the house can help guard against falls and encourage the elderly to take their medicine on time. Currently, Hong Kong is home to some 300,000 domestic helpers, mostly from the Philippines and Indonesia. For Hong Kong residents, affordability of healthcare is key, analysts say. For example, Dr. Dai says, any treatment at a Hong Kong public hospital costs just HK$120 (US$15.50) a day. And if a retiree visits a public hospital hospital, under the city’s social security assistance scheme, all their treatments are free. “Whatever they need—if it’s a hip fracture, if they need surgery, all their medicine, all this is provided free of charge,” he says. Still, government critics argue the city should do more to help the city’s elderly, some who are forced by Hong Kong’s astronomical housing prices to live in its hot and cramped “cage homes,” which can measure just a few paces. “Longer life is a blessing, but we don’t have any real economic or income protection for the elderly,” says Wong Hung, a professor in the Chinese University of Hong Kong’s social work department, who notes that one-third of the city’s elderly live in poverty. Though the government offers people aged 65 and above HK$1090 (US$140) in a monthly subsidy, a so-called “fruit money” stipend, critics say the sum isn’t enough to allow them to survive. In the mornings, says Mr. Wong, it’s not uncommon to see groups of elderly women hanging around the city’s subway stations to try and collect as many free newspapers from vendors as possible, so they can sell them as recycled paper and eke out a living.

HKEx chief Charles Li stands by the LME position. The Hong Kong stock exchange is acquiring a growing controversy along with its purchase of the London Metal Exchange (LME). Critics say the LME lets warehouses profit by delaying supplies of metals such as aluminium, copper, nickel and zinc. LME regulations allow companies operating warehouses in a global network registered by the exchange to release only a fraction of their inventories each day, much less than is regularly taken in for storage. Clients of the LME, who want to collect material they have bought in the world's biggest marketplace for industrial metals, have to wait in queues to collect metal from a number of storage facilities, all the while paying rent to the warehouses. The warehouse operators blame the delays on logistical bottlenecks - the difficulty of seeking out and shifting metal in the vast storage sheds. But the many critics say these delays are more a tactic to increase rental revenue, distorting markets and creating artificially tight availability in the midst of plentiful supply of metal. They say that while metal producers may be happy with this state of affairs, it is undermining the LME's role as the market of last resort, where industrial users can always find material if needed. "You can understand it from a producer's point of view - they get paid for their metal. But in the long term the tactic is destroying industry," a physical metals trader said. LME shareholders voted convincingly on Wednesday to accept a US$2.2 billion offer by Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) (HKEx) for the 135-year-old British institution, underscoring a global shift in manufacturing to China. HKEx chief executive Charles Li Xiaojia said last month that the LME planned to change the rules to shorten the wait for delivery of metal, the Financial Times reported, describing warehousing as a "very challenging issue". In a later statement clarifying his views, Li said: "Our position is no different from the current LME position." Martin Abbott, chief executive of the LME, has in the past attributed the problem to logistical challenges and low interest rates that make it easy to finance inventories. The strategy of creating queues had been tolerated in aluminium, a metal that is in chronic oversupply and that is also used heavily by banks and trading houses as collateral for financing deals. The storage play is now spreading to other metals that are needed at short notice for industrial use. Traders said a warehouse company owned by commodity trader Glencore was paying incentives to attract nickel to its sheds in the Dutch port of Vlissingen, and charging clients daily rent for metal that was holed up in queues of about a year. Traders also said thousands of tonnes of zinc had been shifting recently in the US city of New Orleans, where months-long queues had also developed as warehouse companies owned by Glencore and investment bank Goldman Sachs battled for metal. Both Glencore and Goldman Sachs declined to comment. While the warehouse tactics are not illegal, critics argue that some of these firms are keeping metal away from industry, and outbidding industrial companies for it. LME stocks data also shows that in zinc, nearly 28,000 tonnes of "warrants", or ownership titles, were "cancelled" or booked to leave LME sheds in New Orleans on a single day, July 3. On June 27, close to 60,000 tonnes were booked to leave the sheds. Traders said these large quantities were unlikely to be for industrial use and appeared to be earmarked merely for movement to other warehouses where they would earn rent. "It's warehouse games. There's not enough demand for a cancellation of that size and I know Pacorini and Metro have been fighting it out [in New Orleans]," a physical metals trader said.

Advertising spending in Hong Kong climbed to a new high in the first half of this year, driven by major campaigns in the cosmetics, pharmaceuticals, entertainment and consumer electronics markets. Media-monitoring firm admanGo estimated that the city's total advertising expenditure from January to June rose 13 per cent to HK$18.78 billion, up from HK$16.56 billion a year earlier, on the back of promotions that largely targeted mainland shoppers. About 90 per cent of all advertising in the first six months of this year went to campaigns on television, in newspapers, magazines and outdoor media. But Jennifer Ma, the director of sales and marketing at admanGo, said paid newspaper advertising was "the only media segment to suffer a year-on-year decline in advertising income" - due primarily to a decrease in spending by the banking and investment services industry. The advertising market share held by paid newspapers fell to 18.72 per cent, down from 21.58 per cent in the first half of last year. The share held by free newspapers, meanwhile, grew to 11.23 per cent, from 9.47 per cent. Expenditure by banking and investment services industry advertisers slipped 3 per cent to HK$1.67 billion in the first half, but other market categories more than made up for that slight tumble. Cosmetics and skin-care industry campaigns rose 26 per cent to HK$1.56 billion. Procter & Gamble led the charge and was Hong Kong's top-spending advertiser in the first half, with a 39 per cent increase to HK$437.65 million as it heavily promoted cosmetics brand SK-II. Spending in the pharmaceuticals and health-care industry grew 12 per cent to HK$1.38 billion. Mainland shoppers' high demand for milk powder led Abbott Laboratories, Mead Johnson and Friso - Hong Kong's three most popular brands - to invest a combined HK$311.6 million in advertising during the first half. The entertainment industry saw spending grow the most at 37 per cent to HK$870 million in the first half. Some of its most high-profile campaigns were for the Marvel superhero movie The Avengers, which cost HK$21.84 million, and the Hong Kong Jockey Club, which spent HK$18.04 million on its horse-racing promotions. Campaigns by Samsung Electronics were up 192 per cent to HK$216.67 million as it invested in smartphone and media tablet promotions, while Canon's spending advanced 164 per cent to HK$148.24 million to support its new digital camera models.

Women in Hong Kong can expect to live longer than anyone else in the world after surpassing their Japanese counterparts for the first time. Figures from last year's census, made available yesterday, put the average life expectancy for a Hong Kong woman at 86.7 years, up from 84.6 a decade ago. By contrast, Japan's health ministry produced figures showing that the average life expectancy for a woman was down to 85.9 years - with the authorities citing last year's earthquake, tsunami and nuclear disaster as a factor, along with a rise in the youth suicide rate. The news is likely to reignite debate about the ageing population in Hong Kong, which still has a low birth rate. Experts warn that the growing number of elderly people will place additional strain on health services. With a low birth rate and better medical treatment, the median age of the city's population has increased by five years in the last decade, from 36.7 to 41.7. There are 1,890 residents over the age of 100. Hong Kong men, meanwhile, have long outlived Japanese men, and life expectancy for the city's men remained steady at 78.4 years. Swiss men live the longest, with the most recent figures, for 2010, showing life expectancy of 80.2 years. Population policy expert Professor Paul Yip Siu-fai said the government should do more to ensure people stay healthy, as "demand for medical services will become bigger" with more old people. Yip also supported the idea of delaying retirement, a policy suggested in the long-delayed report of the government's Steering Committee on Population Policy in May. The report issued yesterday, titled "Women and Men in Hong Kong", also showed that women were narrowing the pay gap. The median monthly salary of women - excluding foreign domestic helpers - was HK$11,000 last year, roughly 85 per cent of the HK$13,000 earned by men. In 2006, women earned a median HK$9,300 a month compared to HK$11,500 for men.

An exhibitor adjusts figurines in preparation for the Ani-Com & Games fair which starts today at the Convention and Exhibition Centre. One of the biggest exhibitors at the annual Ani-Com & Games fair has pulled out in protest at rules banning the sale of limited-edition figurines at the event - costing comic fanatics the chance to meet Taiwanese superstar Jolin Tsai Yi-lin. Online games company Gamania had planned to bring the singer and actress - its celebrity spokeswoman - to the fair, which opens today at the Convention and Exhibition Centre. But new rules, designed by fair organisers to rid the event of "queuing gangs" - groups of people paid by speculators to queue for must-have items - prompted Gamania to pull out. It had been one of the show's biggest exhibitors. "The rules will surely hinder participants from doing their business," said Nikko Lam Kai-ho, a spokesman for the company. He said it would ruin the atmosphere of the fair. The event's chief executive, Leung Chung-poon, had claimed that getting rid of the gangs would improve the event. Fans rushing to get their hands on limited-edition figures have long been a popular feature of the fair, but this year exhibitors will face fines if unruly crowds form around their booths. Lam said: "I think the organiser just wants to shrug off its responsibility to manage the crowd." Companies that still want to sell figurines will have to first take preorders online. But Lam said: "The most attention-grabbing bit of the event is the crowd clustering outside the exhibition centre before the door opens." Sze Ling-ling, general manager of Gameone Group, expects the ban to cause a 15-to-20 per cent drop in sales figures as it would take away the incentive for customers to visit the fair. "If all the figures can be preordered online and claimed elsewhere, why would they bother to visit the event?" she asked. Sze also said that the definition of limited edition had not been made clear by the organiser. To cope with the rules, the online games firm did not reveal the quantity of products it is taking to the fair. "Once we announce the amount, the item will probably be classified as limited edition," she said. "Then we will violate the terms of a contract." Fans queuing to get into the fair had contrasting views on the wisdom of the ban. Diehard comic-lover Tsoi Chi-kin, who was first in line, said: "Over half the people who lined up here last year were hired by speculators. This forced me to come earlier than them." But another fan said the arrangement made the event less attractive. The number of people queuing outside the venue the day before the opening dropped from several hundred last year to fewer then 30 yesterday afternoon - probably because of the absence of queuing gangs. Queuing gangs - paid relatively small sums to stand in line for hours to get their hands on an item that can then be sold for a big profit - have become controversial. Fans of singer Lady Gaga blamed them for rapidly snapping up tickets for her concerts in the city, which were then sold online for many times their face value. The Apple Store in Central sold the latest edition of the iPad only to those who had pre-ordered online in an effort to thwart the professional queuers, although gangs did line up outside other Apple dealers in the city when the gadget went on sale in March. The fair organiser expects 700,000 visitors - compared with 690,000 last year - and it has attracted 170 local and mainland exhibitors. Admission remains unchanged at HK$30 and the fair runs until Tuesday.

A Chung Hwa staff member prepares the new store for opening. It will compete with established comic shops at Sino Centre. A century-old bookstore chain known for its academic and history books is taking aim at the teenage market by opening a comic store. Chung Hwa Book Company will officially open the new shop in Mong Kok next week, offering a collection of 7,000 local, Western and Japanese comics and animated movies. It is a radical departure for the chain, founded on the mainland in 1912 and in Hong Kong in 1927, and comes as it faces growing competition from rivals. "People used to have the impression that only old people would walk into a Chung Hwa store. We would like to revitalise our retail and publication arms by exploring the teenage market," assistant general manager Cherry Chen Chou-ying said. The 1,400 sq ft store near the Pioneer Centre in Nathan Road, known as "Manga Store", is being set up in co-operation with Animate, the largest retailer of comics, animated films and games in Japan. It is the Japanese chain's first venture into Hong Kong, although it has a big store in Taiwan. Taiwanese heavyweight Eslite will establish a foothold in Hong Kong in mid-August, opening a flagship store in Causeway Bay, while local rival Commercial Press will open its renovated store on Yee Wo Street, down the road from Eslite, next week. Two-thirds of the floor space in Chung Hwa's new store will be devoted to comic books, and the remainder to comic-related souvenirs and films, which will be stocked on an upper floor. Two-thirds of the comics will be Japanese manga. Other offerings will include Western products and those by local artists. Chen said the store - which began a trial run on July 16 - offered a bigger manga collection than shops in Sino Centre, the comic stronghold farther along Nathan Road, and had room to organise book-signing activities. "Animate will make sure no parallel imports are sold in the store," Chen said. "All goods will be imported via proper distribution channels." In keeping with the parent chain's character, local educational comics will also be available. In contrast to its Sino Centre counterparts, the store will not sell explicit comics. "We want parents to know not all comics are bad for their children," Chen said. She said the line between teenage and adult comics was sometimes hard to draw. "For continuing series with one or two volumes classified as adult-only, we will check the content and decide if it is OK for teenagers," she explained, noting that local authorities had set high bars against violence and obscenity. Best-sellers such as Dragon Ball and One Piece all have some volumes in the adult category. Chen said comic-selling was a tough business, with profit margins of only about 5 per cent - less than for books. "We just want to give it a go. If it's a success, we could pave the way for the publication of more local comics."

 China*:  July 29 2012

China plans to build an antenna for deep space observation in Argentina's southern Patagonia region. The agreement - between Argentina's space agency and China's agency for the control and tracking of satellites - also defines more general "parameters for establishing earth-based installations," and creates a basis for future cooperation. Argentina's foreign ministry said the antenna is "a project of tremendous importance," which will permit the country "to develop interplanetary exploration activities, to study deep space and celestial bodies, to monitor and control satellites, and to acquire scientific data." It is to be built in Neuquen province. Argentina's space program is one of the most advanced in Latin America. The European Space Agency is also finishing construction of an antenna in the country's central-west Mendoza province. In 2003, China became the third country to use its own equipment to send a person into space.

A worker produces solar module destined for export to Europe at a company in Taizhou city, Zhejiang province. A host of EU solar makers haved called on the European Commission to probe alleged dumping practices by its Chinese rivals, as Beijing warned an investigation could trigger a trade war. EU ProSun, the group of more than 20 European solar companies, called on Brussels to “investigate unfair trade practices by Chinese manufacturers” in a statement on Thursday. The group suspects China of providing its solar players with large loans and other subsidies that allow them to sell their solar cells at prices below their production cost. “Europe has the world’s most advanced and innovative solar industry, but we’ve fallen on hard times and are faced with bankruptcy filings because of these Chinese products sold at rates that are up to 55 per cent below cost production,” EU ProSun President Milan Nitzschke said. The dumping practice referred to by Nitzschke – also vice-president of German cell maker SolarWorld – is banned by the European Union and the World Trade Organisation (WTO) and was at the centre of a recent trade decision. The United States decided in May to slap hefty anti-dumping duties on Chinese solar cell makers, which Beijing blasted as “protectionist”. Now the European solar firms want the EU to follow suit with trade defence measures of its own, as they struggle to keep up with their Asian rivals. According to an International Energy Agency (IEA) ranking, seven of the world’s leading manufacturers of solar modules are Chinese. Industry pioneer Germany, in particular, has felt the strain, with local solar firms going belly up right up to the industry flagship Q-Cells. And in France, fellow veteran Photowatt was acquired by a power utility earlier this year after filing for insolvency. But with EU solar firms sounding the alarm, China’s manufacturers have fired back, calling the dumping allegations “groundless”. Four leading firms in China warned Thursday that a possible EU anti-dumping investigation could trigger a trade war and urged Beijing to step in to protect their interests. They called on the Chinese government to block the case by opening dialogue with the European Union in the Thursday statement. More than 60 per cent of China’s US$35.8-billion-worth solar shipments were exported to the EU last year while the country imported US$7.5 billion of European solar equipments and raw materials, they said. A probe “would trigger a full scale trade war between China and Europe,” they said, adding the country is a big market for European products including cars, aircraft, machines and luxury goods. They added that any move to restrict market access would disrupt global efforts to achieve the goal of saving energy and cutting emissions in the long term. The companies also said the growth of Chinese solar companies actually helped create most of the EU’s current 300,000 jobs in related industries. “Any additional punitive tax will also contribute to the loss of thousands of jobs in the European solar industry,” Suntech Europe President Jerry Strokes told reporters on Wednesday. Suntech Power Holdings, one of the firms spearheading the Chinese offensive, is a global solar leader along with First Solar in the US. In apparent retaliation to the US duties, China last week started a probe into alleged dumping of solar products by US manufacturers as well as alleged US government subsidies for the sector. As for the EU probe, a spokesman for the EU Environment Commissioner said on Thursday the office had yet to receive the complaint, which Nitzschke confirmed they had lodged this week. Once the probe request is recorded, the Commission will have six weeks to make its decision. Germany has already committed to support its solar players in their battle.

Chinese firms make inroads in Brazil - An employee of the telecommunications provider Vivo Participacoes SA with a ZTE Corp tablet. Chinese high-tech companies have invested heavily in Brazil in recent years. ZTE set up an industrial park in Hortolandia, near Sao Paulo, and Huawei Technologies Co has more than 4,000 employees in Brazil. 'Complimentary' economies embrace greater cooperation despite challenges - Eric Zhang, the previous general manager in Brazil of China's largest air conditioner maker Zhuhai Gree Electric Appliances Inc, never worried about customer figures. Rather he was worried about whether his factory would be able to cope with the flood of orders. Zhang was sent to Brazil about four years ago, and returned to China this year. According to him, despite the high price tags, Gree products are popular with Brazilians, especially high-end clients like Brazilian soccer legend Pele. Gree was among the first set of Chinese companies to enter the country in 1998. It decided to make the move because the two countries are in different hemispheres and sales of air conditioners are seasonal. The company is now ranked second in Brazil. It sold 500,000 air conditioners there worth $200 million in 2011. Gree's fast growth is an indication of how Chinese companies have made considerable inroads in Brazil and the overall growth in bilateral trade. In recent years, more and more Chinese manufacturing companies have set up offices in Brazil. A big part of them are technology companies. Chinese high-tech companies - such as telecom equipment makers ZTE Corp and Huawei Technologies Co - have invested heavily in the country in recent years. Huawei has more than 4,000 employees in Brazil, and more than 90 percent are local hires. In the first half of 2011, the company's sales revenue there reached more than $1 billion. ZTE set up an industrial park in Hortolandia, near Sao Paulo. Products from the industrial park will be shipped to other Latin American countries. "The Brazilian market accounts for about 9 percent of ZTE's overseas revenue. The country is crucial for our company's development in Latin America," said Yuan Lei, president of ZTE South America Region. Brazil accounts for more than 40 percent of the Latin American economy, with a market size as big as the United States. Alessandro Teixeira, Brazil's deputy minister of development, industry and foreign trade, said that he predicts that the percentage will increase to 50 percent in the next 10 years, and Brazil's economic role in Latin America will be even more significant. Economic partners - Brazil, the most distant country from China among the BRICS - Brazil, Russia, India, China and South Africa, has emerged as the closest partner to China economically. China has been Brazil's largest trade partner since 2009, a position previously held by the US, as a result of massive exports in the energy and agricultural goods sectors.


London Olympic 2012 - China team - The Olympic torch relay enters its final day on Friday amid signs that Londoners have finally begun to embrace the Games. An estimated three million people will have taken to the streets of the capital to cheer on the Olympic flame in the past week, bringing the total to about 13 million during its 70-day tour of the country. It has travelled to the four corners of the United Kingdom, taking in palaces and cathedrals, mountains and rivers. It has also taken to the skies and the airwaves, featuring in an episode of a popular TV soap opera. But its most high-profile moment will come at the Olympic Park on Friday when it will set alight the cauldron at the opening ceremony, signalling the official launch of the Games. “Are we ready? Are we ready? Yes, we are,” Mayor of London Boris Johnson goaded 60,000 cheering people at a concert in the city’s Hyde Park on the eve of the Games. The torch relay seems to have ignited excitement and a sense of pride among the British public despite their noted cynicism and laconic sense of humour. It has provided a better warm-up to the Games than anyone could have envisaged. The mood has even been lifted among Londoners, regardless of a series of damaging headlines including a botched private security recruitment drive, public transport failures and a diplomatic faux pas with regards to North Korea. “London has taken a long time to get on board, but it has eventually,” Pauline, a 48-year-old IT contractor, said watching the flame outside Buckingham Palace, the official London residence of the monarch. The palace was one of many landmarks which formed a notable backdrop on the flame’s penultimate day on Thursday. Other famous stops in the capital included the 300-year-old domed St Paul’s Cathedral and Downing Street, where Prime Minister David Cameron came out to greet the torchbearers. It was a deliberate policy of organisers to show off the best of Britain in an attempt to lure more visitors, and they were helped by blue skies after a summer of rain. It was a sentiment shared by others. “I want London to look good because it’s my city,” Pauline added. The flame has been carried by 8,000 people, mainly celebrities, athletes and people chosen for their good works, on its 8,000-mile journey which began on May 19 in the most southwesterly point of mainland England. The relay starts its final day at Hampton Court Palace, made famous by Henry VIII, and its winding hedge maze, before being carried down the River Thames on the royal barge Gloriana, used in Queen Elizabeth’s celebrations last month to mark her 60 years’ reign. It will arrive at Tower Bridge at about midday and then reappear later in the evening at the Olympic Park in east London. 

The central mainland city of Changsha is known for heavy machinery and non-ferrous metals. It will recommend 195 projects to investors. Hunan provincial capital Changsha has unveiled an 829.2 billion yuan (HK$1.02 trillion) stimulus package, prompting speculation it could be a model for other local governments to counter the economic slowdown. Changsha announced on Wednesday that it would recommend 195 projects to investors this year to attract a total investment of 829.2 billion yuan, in an attempt to "stabilise economic development", the official China News Service reported. The announcement follows a 3 trillion yuan stimulus package unveiled by Guizhou's provincial government this month, which will focus on eco-tourism infrastructure. Capital of the central Hunan province, Changsha is known for heavy machinery and non-ferrous metal industries. Fixed-asset investment was 351 billion yuan last year, including public and private investment. The city's gross domestic product expanded 12.9 per cent from a year ago to 289.65 billion yuan in the first half. The pace was faster than the 7.8 per cent gross domestic product growth of the entire mainland. The State Council approved a "strategic plan to promote the central region's economy" after Premier Wen Jiabao said earlier this month China would rely mainly on investments to lift its flagging economy. The central region includes six provinces - Hunan, Hubei, Shanxi, Anhui, Henan and Jiangxi - which lag behind the coastal region in economic development but are increasingly more appealing to international investors because of their cheaper land and labour costs. Nomura Securities economist Zhang Zhiwei said the plan "is a rather abstract guideline without headline investment numbers attached, but it opens the door for local government stimulus such as that announced by Changsha". Zhang said even if the sum was spent over five years, the implied annual investment would be 160 billion yuan - or 46 per cent of the city's total fixed-asset investment last year. The investment is to be directed into a range of projects including airport, subway and urban infrastructure facilities, as well as energy-efficient industries, according to the Changsha municipal government. Chen Runer, the Communist Party secretary of Changsha, said it was hoped that banks could "find projects and co-operate effectively" with companies in order to contribute to the city's development, the news service reported. Mizuho Securities economist Shen Jianguang expected more local governments to follow suit. "Following the recent leadership change at the local government level, new officials are eager to implement stimulus measures to boost their track record," he said. "[State Council approval] opens the door for local governments to double their efforts to stimulate the economy." The local government reshuffle is a prelude to the once-in-a-decade top leadership transition this autumn. The economy remains an important factor in appraising officials' performance. Shen expected Jiangsu capital Nanjing and Ningbo in Zhejiang would be among the next cities to unveil stimulus plans. Many economists have warned that over-reliance on infrastructure investment may have similar consequences to those arising from the 4 trillion yuan stimulus brought in to address the 2008 global financial crisis. That resulted in deteriorating solvency of local governments, banks saddled with bad loans and white elephant projects. The International Monetary Fund in a report this week expressed "concerns about the sustainability of such a high level of investment in the context of weak external demand and excess capacity". The fund encouraged Beijing to direct fiscal reforms towards spurring private consumption, including through tax reforms and a stronger social welfare net. Mainland retailers including Suning Appliance and Gome Electrical Appliances (SEHK: 0493) and the big airlines have reported losses or profit declines for the first half of this year, suggesting domestic consumption is losing steam.

Li Lingwei is flanked yesterday by IOC vice president Yu Zaiqing and Hong Kong Games supremo Timothy Fok Tsun-ting. Former badminton world champion Li Lingwei of China never had the chance to compete at the Games during her playing career, but yesterday she won an Olympic "gong" when she was elected a member of the organisation's governing body. At the International Olympic Committee (IOC) committee meeting held at Grosvenor House Hotel in London, she and four other former stars, including former 200m sprint medallist sprinter Frank Fredericks of Namibia, were elected to the IOC. In recognition of her new status, she was presented with an "IOC gold medal" by the body's president Jacques Rogge. She received 83 votes from 94 members. "It is a very special moment and a great honour for me as a retired athlete and coach," said the 48-year-old from Zhejiang province. "You can say it's some sort of compensation for what I missed in my sporting career, which ended without an Olympic gold medal because I retired from sport before badminton was admitted to the Olympic Games in Barcelona in 1992. "I am also delighted to be given the opportunity to serve sport from another platform, a great platform. "There were many quality players from my era but not too many of them have this opportunity. "I am just one of the lucky ones." Members of the IOC represent and promote the interests of the Olympic movement in their respective countries and in the organisations of the Olympic movement in which they serve. They also help select the host city of the Olympic Games (summer and winter) every seven years. The number of IOC member has now been increased from 105 to 110 with this election, which also includes Hong Kong Olympic supremo Timothy Fok Tsun-ting. "Li was a very famous athlete in her younger days and has served sports for many years," said Fok. "She has gained vast popularity in her sport and we are happy to see her join our ranks as an IOC member." Li has been rated among the greatest in the history of women's badminton and was inducted into the Badminton Hall of Fame in 1998. She is one of the most successful players at the world championships, winning three gold medals, two of them in singles and another in the doubles with her partner Han Aiping. Together, they dominated international badminton until Li retired in 1989. Li was one of the five retired athletes who were chosen to hold the Olympic flag and march into the opening ceremony at the 2008 Beijing Olympics. She is currently the deputy director of the Tennis Administration Centre of China.

Chinese Defence Ministry denies it stole United States helicopter secrets - China's Defence Ministry yesterday labelled as "fictitious" a case in which United Technologies admitted selling software in contravention of US export rules that helped Beijing develop its first modern military attack helicopter. United Technologies said last month its two subsidiaries, Pratt & Whitney Canada and Hamilton Sundstrand, agreed to pay more than US$75 million to the US government to settle criminal and administrative charges related to the violations. But the Defence Ministry, in the first official response, denied having anything to do with the incident, insisting its helicopter programme relied purely on local know-how. "To say that China stole US technology in the process of developing helicopter gunships is seriously out of kilter with the facts," spokesman Yang Yujun said in a statement posted on the ministry's website. "China's development of helicopter gunships has all along been done upholding the principles of standing on one's own and independent innovation." "China's helicopter gunships and its engines are all self-developed and produced and we own all the intellectual property rights." US federal prosecutors said United Technologies knew that its export of modified software would allow Beijing to test and develop its new military helicopter, called the Z-10, using 10 engines that had been legally exported as commercial items. They said the company harmed national security while trying to gain access to the mainland's lucrative civilian helicopter market. United Technologies said it accepted responsibility for the violations and deeply regretted they had occurred. Western experts say the Z-10, first delivered to the People's Liberation Army in 2009, is developing into one of the world's most modern and capable combat helicopters. Meanwhile, the top US commander in the Asia-Pacific region said in Hawaii on Wednesday that he's seeing positive signs as he tries to develop relations between the US and Chinese militaries. Admiral Samuel Locklear said China and the PLA had been accepting of his visits since he took the helm at the US Pacific Command in March. The US had also been accepting of Chinese visits, and the dialogue between the two sides has been frank, he said.

Hong Kong*:  July 28 2012 Share

Since the government suggested revitalizing old industrial buildings in 2009, many have been successfully converted for commercial use. Even before then, the apm mall - originally an industrial building called Kowloon East Plaza - has become a landmark in Kwun Tong since it opened in 2005. It is located within Millennium City 5, part of a commercial cluster along Kwun Tong Road owned by Sun Hung Kai Properties (0016). With a gross floor area of more than 600,000 square feet, the mall houses more than 170 shops spread over 11 floors. Another example is MegaBox on Wang Chiu Road in Kowloon Bay, which opened in 2007 as part of Kerry Properties' (0683) Enterprise Square Five shopping and commercial complex in the new industrial area. The 19-story shopping block is the largest shopping center in East Kowloon with a gross floor area of 1.1 million sq ft, housing around 240 shops. Such large malls attract customers and stimulate the office market in their areas, driving up office rentals. Office rentals in Kowloon East rose 33 percent year-on-year in June to HK$27.10 psf.

The Link Real Estate Investment Trust (0823) is set to diversify, buying up industrial buildings and converting them into shopping malls as the outcry over high rents at its existing properties grows louder every day. More than 98 percent of shareholders backed the REIT's diversification strategy at its annual general meeting yesterday. "The Link is in talks to buy some factory buildings. The acquisition will depend on the properties' cost, return and synergy effect to the company," said spokesman Poon Kai-tik, without disclosing details. The REIT - which operates 180 malls and car parks owned by the Housing Authority - is not allowed to buy land. It is known for renovating premises for rent. But shop operators at its malls have been complaining of steep rental hikes. Owning shopping centers outside the realm of the Housing Authority is seen as key to boosting future revenue. More than 40 percent of households in the territory live near a mall owned by The Link. Chief executive George Hongchoy Kwok-lung has said the firm is keen on buying industrial buildings and overseas assets. "The number of local malls, being limited, cannot catch up with consumption growth. Revamping industrial buildings can boost supply," said Hongchoy. Experts worry that The Link's capital needs may soar if it tries to buy factory buildings. "It needs lots of money to buy industrial buildings and even more to renovate them. It can either borrow from banks or increase rents at existing malls," said Terence Chong Tai-leung, executive director at The Chinese University of Hong Kong's Institute of Global Economics and Finance. The Link is in danger of becoming a monopoly as it expands its network and gains more influence, said Chong. "The reason why people rent space in industrial buildings for use as offices or homes is because rates are cheap," said Sze Lai-shan of the Society for Community Organization, adding that rents in industrial estates may increase when The Link starts snapping up buildings. Putting the screws on The Link, a group of protesters demanded the government buy back the 25 percent stake of The Link it previously held. Poon stressed tenants' means are taken into account when considering rental hikes. "We have clear ideas of how much revenue tenants have to put into rents, and we will not raise them too high as we do not want to drive them away," he said, adding that rents at The Link's properties have gone up 7 percent every year on average. Earlier reports have claimed that The Link has leased more than 50 percent of its malls to large chain stores, forcing smaller tenants to leave. "It is so unfair that around 80 percent of small tenants have to shut down their business in these malls because they cannot afford the high rents," one of the protesters said. Poon said the firm is open to the government's buyback proposal. The Link Reit gained 1.5 percent to close at HK$33.25 yesterday.

Rise of HK's 'Fifth Avenue' - Retail rents in the shopping mecca of Central are fast catching up with New York's famous street, with fashion chain H&M a victim of the boom times. Hong Kong's main shopping district is gaining on New York's Fifth Avenue for the title of world's most expensive retail zone as rents rise 35 per cent a year, pushing chains such as H&M out to the cheaper suburbs. Swedish fashion chain Hennes & Mauritz's first store in Asia was a 30,000 square foot flagship in Central, the heart of Hong Kong. But with the lease up for renewal and the rent set to double, the world's second-largest clothing retailer will close the location next year and seek new store space elsewhere. Space has always been at a premium in Hong Kong, like Manhattan, where developers plant high-rises on every available inch. Retail rents in prime shopping areas are rising more rapidly here than in New York, London or Paris. Average annual rent along Queen's Road Central - where H&M's flagship store is located - soared to US$1,831 per sq ft in March, up 35 per cent from a year earlier, data from real estate brokerage Colliers International showed. On Fifth Avenue, average rents rose 23 per cent to US$2,633 per sq ft. Colliers estimates Hong Kong's retail rents will overtake New York's as early as 2014. "Hong Kong rents are going through the roof," said Sally MacDonald, chief executive of Australian handbag and accessories maker Oroton, which had been looking to open a store in Hong Kong but could not find the right fit at the right price. "It's a concern because that's a market that booms and busts and the rents are probably unsustainable." Some companies are still willing to pay for a prime location in Hong Kong, a place to study Chinese buying habits before taking on Beijing's bureaucratic challenges. Zara, owned by Spain's Inditex, is taking over the massive space being vacated by H&M, an unusual case of a direct rival replacing a competitor. It would pay HK$11 million a month, up from HK$5.5 million, said Helen Mak, director of retail services at Colliers. Zara did not immediately return calls seeking comment. H&M spokesman Hacan Andersson confirmed that the Swedish retailer could not reach agreement with its landlord and was closing its Central store next year. "There is no drama in this," Andersson said. "We open and close stores regularly to always have the best business location." Now, some global chains are bypassing Hong Kong and jumping straight into mainland China or starting out in Southeast Asia instead. "In the past, even two years ago, you needed the store in Hong Kong in order to be successful in Shanghai," MacDonald said. "I think already, you can have the store in Shanghai without the store in Hong Kong and be respected." British department-store chain Debenhams has two stores in Malaysia via a local partner and plans to enter Singapore this year. Industry sources say it scoured Hong Kong for years without finding the right place. Debenhams declined to comment. "It is no longer essential to use Hong Kong as a stepping stone," said Simeon Piasecki, former managing director of Marks & Spencer in Asia. "It's not an easy place to get into." Retailers have found one way round the high rents: "pop-up" stores that open for just a few months at a time to test demand. British high-street chain Topshop opened one in May in Shenzhen and would close it next month. Oroton did something similar in Hong Kong from September 2010 to February last year, catching the Christmas and Lunar New Year shopping seasons. The crush for space is good news for landlords such as Wharf Holdings (SEHK: 0004), Swire Properties, Hongkong Land and Sun Hung Kai Properties (SEHK: 0016), which can push up rents even in suburban malls. Landlords in Hong Kong are able to dictate terms, and retailers often take two years to find a location, if they are able to get space at all. "In the beginning they have this great plan, then after several months of planning and meeting landlords, they realise it's not easy to find retail space," Joe Lin, senior director of retail services at property brokerage CBRE, said. Lee Wee Liat, head of property research at BNP Paribas Securities in Hong Kong, expects retail rents for prime shopping mall space to rise 13 per cent this year and another 10 per cent next year. "The core-area rental will continue to grow and become the most expensive in the world," Lee said. Growth would likely taper off in three to five years as more retailers decamped to suburban malls, Lee said. Shop space has seen a flood of speculative interest since the city started a special stamp duty on home purchases in 2010. The average purchase price for retail space on Hong Kong Island shot up 36 per cent last year, government data showed, outpacing the 4.6 per cent rise in rents.

SmarTone Telecommunications (SEHK: 0315) expects to intensify competition in the city's nascent 4G mobile market with the launch of its new high-speed wireless network next month. Chief executive Douglas Li said yesterday that from August 28, SmarTone would offer 4G subscribers the same 3G tariff plans it now provided. The carrier also vowed to deliver "superior network performance" and better indoor coverage, which is made possible by running 4G services on the lower 1.8-gigahertz frequency band. "Our choice [of frequency band] has proven prescient, with a wide range of compatible devices being made available by all the leading smartphone manufacturers," Li said. SmarTone's new infrastructure supports a technology known as frequency division duplex long-term evolution (FDD-LTE). The other recognised 4G network standard, time-division duplex long-term evolution (TDD-LTE), is championed by China Mobile (SEHK: 0941, announcements, news) , the world's biggest wireless network operator. HKT, the telecoms arm of PCCW (SEHK: 0008), and Three Hong Kong, the mobile unit of Hutchison (SEHK: 0013) Telecommunications Hong Kong, both operate their respective 4G FDD-LTE networks on the 2.6GHz band. China Mobile Hong Kong, the mainland carrier's local unit, also runs its FDD-LTE network on the band and will soon build a complementary TDD-LTE network that will run on the 2.3GHz band. CSL, the city's largest wireless operator, runs its 4G FDD-LTE network on both the 1.8GHz and 2.6GHz bands. It was the first mobile carrier in Asia to launch a commercial 4G network, in November 2010. Advanced 4G networks have theoretical web download speeds of up to 100 megabits per second. The fastest 3G networks run at 42Mbps. Macquarie Securities analyst Lisa Soh described SmarTone's entry in the 4G market as "a positive development for Hong Kong's mobile industry since it will add more network capacity" for local subscribers to use. Li said the increase in capacity "means more customers can enjoy a good mobile broadband experience at the same time". Leading LTE network supplier Ericsson, which is building SmarTone's network, has said greater demand for high-speed web access means operators must cope by establishing 4G networks. Shares of SmarTone, a Sun Hung Kai Properties (SEHK: 0016) subsidiary, rose 1.26 per cent yesterday to finish at HK$16.06, the stock's highest close since reaching HK$16.08 on April 25.

Legco president throws his hat in the ring again for post - Tsang Yok-sing says voters have to understand that he won't be speaking out on government policies. Pro-government heavyweight Tsang Yok-sing launched his election campaign yesterday with a clear message for voters - do not vote for him if they want a lawmaker who speaks out on government policies. That is because he will once more seek the president's chair in the legislature. Tsang, a member of the Democratic Alliance for the Betterment and Progress of Hong Kong, is running in the Hong Kong Island constituency. In the coming four years, he said, many controversial issues would be tabled for debate in Legco. "For Legco to run effectively and to fulfil its constitutional role, it needs someone who is familiar with laws and procedures, able to chair Legco's work fairly and justly, with experience and capability to be its president," he said. "I hope this will give voters a clear message. If they believe they must vote for someone who will not contest the president's role - and who will speak out on policies - they should not vote for me." Tsang said his platform also included fighting for "good democracy" for Hong Kong. Also running in the constituency is Wong Kwok-hing, of the Beijing-loyalist Federation of Trade Unions. Tsang would not speculate on whether Wong's bid would split the pro-government support base. Meanwhile, in the New Territories West constituency, Tuen Mun Rural Committee chairman and former Law Society president Junius Ho Kwan-yiu signed up as an independent candidate yesterday. He said he aimed to secure more than 40,000 votes and wanted to win more support from middle-class voters. Meanwhile, uncertainties surrounding the Civic Party's Dutch-born district councillor Paul Zimmerman remained unresolved. It is still unclear as to whether he will contest a so-called super seat functional constituency or gain the backing of his own Civic Party. Civic Party leader Alan Leong Kah-kit said a final decision would be made by Saturday. But the five teams running the party's direct election campaigns in geographic constituencies expressed strong reservations about Zimmerman running in any constituency because of logistics reasons, according to a source in the Civic Party. "Time is running short, and there is a lot of work in preparing [for a campaign]," Leong said before the meeting. The functional constituencies were at the centre of media attention yesterday, as Heung Yee Kuk chairman Lau Wong-fat signed up to contest another term in the kuk functional sector. The incumbent medical sector legislator, Dr Leung Ka-lau, also launched his bid for re-election yesterday, running against former Medical Association president Dr Tse Hung-hing. Meanwhile, the ICAC has so far received nine complaints about the Legco elections. Lily Chung Lai-tuen, a program co-ordinator (elections) with the Independent Commission Against Corruption, said the complaints were mostly about candidates providing food and entertainment illegally. There were about 300 complaints in the 2008 elections.

Joseph Ng scored three As in the Hong Kong Advanced Levels Examinations. He obtained the top grades in chemistry, pure mathematics and physics. A 14-year-old boy has been admitted to the University of Hong Kong to study science, becoming the youngest student ever enrolled at the 101-year-old institution. Joseph Ng Kwok-chung would start a three-year undergraduate course in the science faculty in September, the university said on Thursday. Ng scored three As in the Hong Kong Advanced Levels Examinations intended for students four years older than he was. He obtained the top grades in chemistry, pure mathematics and physics. University officials said Ng would not receive any preferential treatment. He would study the same curriculum as other students. His first year would be a general science curriculum before he could choose a more specific subject in the second year. Also gifted in music, Ng said he was looking forward to the university’s music classes. He also said he wanted to make more friends at school. He has studied at International Christian Quality Music Secondary and Primary School, a school designed for exceptional music students in Diamond Hill. In 2009, he won an award in the Hong Kong (Asia Pacific) Grieg and Bartok Piano Competition.

Investment income of Hong Kong's Exchange Fund, used to back the Hong Kong dollar, fell 18 per cent to HK$38.1 billion (US$4.9 billion) in the first half from a year earlier, the Hong Kong Monetary Authority (HKMA) said on Thursday. “In the second half of this year, the global economy and financial markets will still be facing downside risks brought about by possible continued deterioration of the European sovereign debt crisis,” said Norman Chan Tak-lam, chief executive of the HKMA, the city’s de facto central bank. Chan also warned there would be great risks in the investment environment of global financial markets in the second half of the year. The HKMA is the key manager of the Exchange Fund, which is under the control of the financial secretary and invests in equities, bonds, foreign exchange and other securities and asses.

 China*:  July 28 2012

Guangdong is extending inter-city railway construction to Hengqin Island in Zhuhai city by 2016, which is expected to link to Macau in the future. Trains on the current Guangzhou-Zhuhai railway have been running at about 150km/h since January last year. Passengers leave Guangzhou South station in Panyu and arrive in Zhuhai North station on the city's outskirt in about 40 minutes. With options to stop over at Zhongshan or Jiangmen , the railway has significantly reduced the travelling time of 21/2 hours by car. According to the Guangzhou Daily, a new railway is being planned to cover downtown Zhuhai in Gongbei, Zhuhai airport and the Hengqin special economic zone. An environmental impact assessment report for the railway link from Gongbei to Zhuhai Airport has been approved, and construction is expected to begin by year's end. The line will be extended by 35.3 kilometres and trains will run at 160km/h, according to the paper, which cited unidentified Zhuhai government sources. It is expected to have an hourly carrying capacity of 24,000 people from Gongbei to the airport in just 25 minutes. The current travelling time by road is an hour. The authorities are evaluating the environmental impact of the rail link between Gongbei and Hengqin. The line will be about 17 kilometres long, with seven stops from Zhuhai station to Hengqin's Changlong park. It will be designed to carry trains travelling at 100km/h, according to Guangzhou Daily. Meanwhile, the project will provide Hengqin the option of building an inter-city rail link to Macau in the future, according to media reports. Professor Hung Wing-tat, a transport analyst, said the project would benefit Hong Kong in the future.

China Shifts Course, Lets Yuan Drop - China's central bank is starting to guide the yuan downward against the dollar after two years of trying to boost its value, reflecting concern in Beijing over China's slowing economy—and risking a political fight with the U.S. The People's Bank of China guided the Chinese currency to its weakest level of the year on Wednesday against the U.S. dollar, the third straight day of a push to bring down the yuan's value. Overall, the yuan has fallen 1.1% against the dollar this year after rising 4.7% against the U.S. currency last year. The PBOC didn't respond to requests for comment, and it isn't clear whether the trend will continue in coming days and weeks. A similar steering of the yuan to weaken was seen in early May, which was then followed by a return to the usual practice of seeking to let it remain stable or to strengthen against the dollar. On Thursday morning in China, the PBOC appeared to try to limit the yuan's recent fall. Traders and analysts say the shift in the last few days is aimed at helping exporters cope with slowing sales and reducing the chances of major layoffs ahead of a major—and sensitive—once-a-decade Chinese leadership change set to begin later this year. A cheaper yuan makes Chinese goods less expensive in dollar terms. Premier Wen Jiabao last week warned that "the task of promoting full employment will be very heavy and we must make greater efforts to achieve it." The psychological impact of a weakened yuan "will be strong," said Dariusz Kowalczyk, a Crédit Agricole senior economist based in Hong Kong. "It creates an impression that Beijing is so focused on minimizing risks to growth that it is ignoring any U.S. pressure." The U.S. Treasury declined to comment. But a fall in the yuan is bound to keep it a political issue in the U.S. during an election year. Treasury Undersecretary Lael Brainard said last week that China should "avoid persistent exchange-rate misalignment," although she credited China with making some progress on the currency front. Republican presidential challenger Mitt Romney has said he would name China a "currency violator," a designation that could trigger a confrontation with China. Meanwhile, on Wednesday the International Monetary Fund reiterated its contention that China's currency is "moderately undervalued" against a basket of currencies. The IMF didn't specify the degree of undervaluation in its annual assessment of China's economy, but individuals who track the IMF say the yuan is likely to be judged to be undervalued by less than 10%. China's representative to the IMF, Zhang Tao, said the IMF's characterization "is not consistent with the reality." He said the currency is "roughly in equilibrium," meaning it didn't have to rise much more, if at all. Beijing has its eyes trained on not just the dollar. The European Union is China's No. 2 export market after the U.S., and the yuan has appreciated 5.6% against the euro since January. During that time, the dollar has risen 6.9% against the euro. By reducing the value of the yuan against the dollar, the PBOC slows its rise against the euro. That provides some help to Chinese exporters who are feeling the effects of Europe's continuing debt crisis. "We've seen a sharp drop in demand from Europe," said Xu Peng, an official at Huihong International Group, a state-owned textiles company, which has started to take out trade insurance to guard against potential nonpayment from European clients. The PBOC sets a daily rate, called the parity rate, for the yuan's trade against the dollar in the mainland currency market. The central bank then lets the yuan rise or fall by 1% in daily trading. Monday, the PBOC set the parity rate weaker against the dollar than Friday, according to data provider ChinaScope Financial in Hong Kong. It continued that pattern the next two days. On Thursday morning, the PBOC set the daily rate stronger against the dollar than the previous day. With $3.24 trillion in foreign-exchange reserves, the Chinese government has the wherewithal to assure the continuing steady rise of the yuan. But such a move could be interpreted as a signal money is fleeing China. "Authorities certainly don't want to signal any weakness," said Brookings Institution China scholar Eswar Prasad. "So they will intervene very cautiously."

Made in China 'for the world' - Multinationals establish more research facilities as nation's reputation for R&D and design increases - A Siemens AG magnetic resonance imaging system at a trade show in Beijing in March. For the past five years, nearly 60 percent of China's medical equipment exports have been from multinational companies and Sino-foreign joint ventures. The global giant Siemens Healthcare has just delivered its 1,000th Magnetom Essenza, made in Shenzhen, to Tokushukai, a hospital group in Japan. So far, more than 70 percent of the market-leading imaging devices - one of the German company's most competitive products in the international market - have been exported from the factory to markets around the world. "Created and developed in China, and made by Siemens," said Bernd Ohnesorge, CEO of the MR business unit at Siemens Healthcare, adding that the company's powerful 1.5-tesla magnetic resonance imaging system was globally launched five years ago by Shenzhen Siemens Magnetic Resonance Ltd. The Shenzhen facility is one of Siemens Healthcare MR's three R&D and manufacturing headquarters around the world, the other two being in Erlangen, Germany, and Oxford, in the United Kingdom. The Shenzhen base recently also developed the company's latest MRI system and sent the first products to sites in Germany, Japan and China for clinical trials, according to Ohnesorge. "Our clients are very satisfied with it, and we hope the machine can also be used in China soon with SFDA (State Food and Drug Administration) approval." China has fast become the manufacturing center for a growing list of multinational medical equipment manufacturers, producing sophisticated imaging systems which can compete with anything produced elsewhere in the world. But now it is also growing its reputation as an R&D hub. Multinational medical device providers are exporting products not only made in China, but also designed in China, according to Cai Tianzhi, director of the medical device department of the China Chamber of Commerce for Import and Export of Medicine and Healthcare Products. And he predicts the proportion of China-designed exports will continue to rise. Statistics from the General Administration of Customs show that for the past five years, nearly 60 percent of China's medical equipment exports have been from multinational companies and Sino-foreign joint ventures. The nation's medical equipment exports were worth $15.71 billion last year, an increase of 17.36 percent year-on-year. "We have seen more and more foreign medical device companies setting up R&D facilities in China, or even moving their regional R&D centers to China," added Liu Ximei, an analyst with the research company Forward Business Intelligence Co Ltd. "Their exports are becoming more sophisticated, and more products are being developed in China for global use." The US giant General Electric Co first proposed the idea of doing R&D in emerging economies for the global market in 2009, and its medical offshoot GE Healthcare first tested the water in China. GE Healthcare's imaging market leader, the Brivo CT series, was developed in China in 2010, its small size and affordable price aimed primarily at China's county-level hospitals. Now, besides meeting demand from China's grassroots medical institutes, 70 percent of GE Brivos, with an average unit price of $15,000, are being exported to markets including developed economies such as the United States and Japan. Dai Ying, chief technology officer at GE Healthcare China, said that due to the economic slowdown and public concerns about medical costs, governments and medical institutes in developed economies are paying much greater attention to medical cost reduction. "Their focus is on quality and high efficiency, making products developed for China's grassroots market also suitable for Western clients," he said. According to Ohnesorge, the needs in China are fast becoming those of other markets, even Europe. "Advanced technology with affordable costs, what we call accessible innovation, has really triggered our global strategy. "Easy-to-use, high throughput, high quality, advanced medical imaging - that's something particularly needed in the county-level hospitals in China, but also of importance in medium-sized hospitals in Asia, in Europe, in South America, and even in Germany," he said. Foreign giants now realize that China is no longer just an appealing manufacturing center. Their facilities in the country can combine R&D and production, producing high-quality goods in large numbers, managed by highly-qualified local engineers and workers, Liu said. GE Healthcare established its own innovation center in Chengdu in April - a $500 million investment which serves not only its customers in southwestern, northwestern and central China, but also its US and global network. "Products developed in Chengdu feed into our global supply chain," said Rachel Duan, president and CEO of GE Healthcare China. "We had said we are 'in China, for China'. Now we would like to say we are 'in China, for the world'." GE has completed more than 100 major projects under that "developed in China for the world" umbrella, 10 of them for the medical care sector. GE Healthcare China added around 200 engineers to its R&D team this year, bringing its total workforce to 1,200. Cai from the chamber of commerce said that such investment by foreign companies in R&D in China is now acting as a stimulus to domestic players to upgrade their technology to enhance their chances of export success. This growing commitment to R&D by multinationals has also helped cultivate a burgeoning community of homegrown, quality engineers with a global outlook and international working experience. Cai said employee turnover within the industry is inevitable, but healthy, helping domestic medical equipment makers strengthen their R&D capabilities. Shenzhen-based Mindray Medical International Ltd is now considered China's largest medical equipment manufacturer, and its exporter. Set up in 1991 as a trading company, it is involved in importing medical equipment. It now has 29 local sales and service offices in China, as well as sales and service subsidiaries in Amsterdam, Istanbul, London, Mexico City, Moscow, Mumbai, Sao Paulo, Seattle, Toronto and Vancouver, and its US offshoot is listed on the New York Stock Exchange. With years of close connection with various international firms, the device maker realized that to sustain its long-term development, it needed to develop its own products, according to Liu Jie, its corporate operation officer. The company had been focusing on locally tailored products since the late 1990s, with some success, and its knowledge of local demand and market needs was a valuable resource. "Learning from international big names, we built our own R&D teams with talent from home and abroad and actively targeted overseas markets with our technology and highly flexible products, at affordable prices. It was a formula that worked," Liu said. So far, more than half of Mindray's revenues come from overseas, as it exports products to more than 190 countries and regions. The company's sales revenue hit $880 million last year, a 25 percent year-on-year increase, according to the company's financial report. It has nearly 1,550 R&D employees, accounting for around one-third of its workforce.

China completes its 1st data relay satellite system - China successfully launched the Tianlian I-03 satellite on Wednesday from the Xichang Satellite Launch Center in Sichuan province, completing the country's first data relay satellite network system. The Long March-3C rocket carrying Tianlian I-03 satellite blasts off from the launch pad at the Xichang Satellite Launch Center located in Xichang, Southwest China's Sichuan province, July 25, 2012. The satellite was launched on a Long March-3C carrier rocket at 11:43 pm Beijing Time, according to sources with the center. Developed by the China Academy of Space Technology under the China Aerospace Science and Technology Corporation, the satellite will join its two predecessors to realize global network operation after in-orbit validation and system coordination procedures are carried out. The first data relay satellite, the Tianlian I-01, was launched in April 2008, and the second was launched in July 2011. The third satellite is expected to improve the network's coverage in providing measurement and control services for China's manned spacecraft as well as the planned construction of future space labs and space stations, according to the center. The network will also offer data relay services for the country's medium- and low-Earth orbits as well as measurement and control support for spacecraft launches. The two-satellite network had previously played a key role in assisting in two space docking missions -- an automated one between the Tiangong-1 lab module and the Shenzhou-8 spacecraft in late 2011, and a manual docking between Tiangong-1 and Shenzhou-9 in June. Wednesday's launch marked the 166th mission of China's Long March series of rockets. 

China's direct investment in the United States is expected to hit a record high this year, thanks largely to big-ticket items, according to new research by New York-based Rhodium Group. Total Chinese foreign direct investment, or FDI, in the US reached $3.6 billion in this year's first half, despite a setback in the fourth quarter of 2011. The 33 projects evaluated during the first six months of 2012 -12 acquisitions and 21 greenfield investments (new-facility construction) - have the highest value of any half-year recorded for China. Thilo Hanemann, research director for Rhodium, which monitors Chinese FDI in the US, said the many large-scale investments could make 2012 the richest year on record, surpassing the $5.7 billion record set in 2010. Major projects of Chinese FDI during the half include the $2.5 billion purchase by China Petroleum and Chemical Corp, or Sinopec, of a one-third stake in five shale oil and gas fields across the US from Ohio-based Devon Energy; copper-tube producer Golden Dragon's breaking ground on a $100 million manufacturing facility in Wilcox County, Alabama; and the acquisition by Industrial & Commercial Bank of China Ltd of 80 percent of Bank of East Asia's US operations for $140 million. Two headline-making investments weren't included in Rhodium's first-half report: Dalian Wanda Group's $2.6 billion acquisition of US movie-theater operator AMC Entertainment Holdings Inc and Superior Aviation Beijing Co's $1.8 billion bid for aerospace company Hawker Beechcraft in early July. While Superior Aviation is still awaiting approval from US authorities (Hawker remains in federal bankruptcy proceedings in New York), Wanda and AMC announced on Wednesday that they received approval from the Committee on Foreign Investment in the US. That, along with clearances from Chinese and other US authorities, mean the deal should close as planned by the end of August, according to Wanda. If the Superior Aviation deal is also approved, the pair of investments would push Chinese total FDI in the US beyond $8 billion this year. That doesn't include other projects in the pipeline over the remaining months of 2012. At least 17 US states hosted Chinese investment during the first half, with North Carolina and California hosting the most projects. The biggest acquisitions took place in the gas industry, in Ohio and Massachusetts. While Chinese investors continue to pour money into a range of industries, the few sectors specified in the Rhodium report include oil and gas, which, led by the Sinopec-Devon deal, accounted for the bulk of Chinese FDI in the US. Trailing oil and gas were aerospace, banking, metals processing and plastics. Alternative and renewable energy recorded the highest number of deals, although these investments were relatively small. Besides big-ticket projects, Rhodium Group pointed to recent positive developments in investment policy, both in the US and China. It cited President Obama's order to increase US visa-issuing capacity in China by up to 40 percent in 2012 and official statements welcoming Chinese participation in US infrastructure development during the May US-China Strategic and Economic Dialogue. While the report said the welcoming tone is a first step, it cautioned that the main challenge businesses will face in pursuing infrastructure projects will be finding the logistical and legal means to participate more directly without sparking national security concerns. So far, Chinese investments in telecommunications and information technology, including by electronics companies such as Huawei Technologies Co and ZTE Corp, are most likely to be blocked on national-security grounds. Rhodium's Hanemann said there is tremendous concern in the US over Chinese FDI in the telecom sector, and recent incidents involving ZTE mean such sentiment won't fade anytime soon. The company was recently accused of selling to Iran equipment from US technology companies Hewlett-Packard Co, Dell Inc, Cisco Systems Inc and Juniper Networks Inc, in violation of US export controls. Alex Yong Hao, a New York-based partner of Jun He Law Offices, said 99 percent of Chinese investment in the US arouses no national-security issues but the 1 percent that do tend to raise eyebrows. "It is important to look at the big picture," he said. Hao said the US system is still fair and open and that Chinese companies need to understand the US market and system better. The lawyer said his firm has received an increasing number of inquiries from Chinese investors and some have actually put in money.

Hong Kong*:  July 27 2012 Share

A group of companies controlled by Hong Kong billionaire Li Ka-shing has agreed to buy UK gas company Wales and West Utilities for 645 million pounds (US$1 billion), the latest acquisition by the tycoon that will boost his gas portfolio in Britain. Octogenarian Li has been expanding his business empire by buying into regulated infrastructure and utilities assets in developed countries, especially Britain – which is open to foreign ownership of its infrastructure assets. Blue-chip property developer Cheung Kong (Holdings) (SEHK: 0001) said it had formed a joint venture with Cheung Kong Infrastructure Holdings (SEHK: 1038), Power Assets Holdings and the Li Ka Shing Foundation to buy the company, which is involved in the management of gas transportation assets and gas distribution in Wales and the southwest of England. “We are pleased to have the opportunity to acquire another high-quality asset, which is poised to extend our growth momentum and generate recurring profit contributions similar to that of our other infrastructure projects,” Kam Hing-lam, group managing director of Cheung Kong Infrastructure, told reporters. Wales and West Utilities’ distribution network area supplies 7.4 million customers in an area of 42,000 square kilometres, or almost one-sixth the area of the UK, while the total length of the main gas pipeline is about 35,000 kilometres. The consortium involved in the deal, which is expected to be completed at the end of September subject to European Commission approval, said it agreed to buy the British firm from several investment and fund management companies including Macquarie Global Infrastructure Funds 2 SARL. Wales and West Utilities would add to Li’s assets in Britain, where he agreed to buy utility Northumbrian Water Group last August for 2.41 billion pounds and further cement his reputation as a savvy deal-maker, which has earned him the nickname “superman” in local media. In 2010, Cheung Kong Infrastructure and Li’s other investment arm, Power Asset Holdings, agreed to buy the British electricity distribution networks of France’s EDF, which provide power to London and southeast Britain, for £5.8 billion. The news comes as Cheung Kong Infrastructure, which is controlled by Li’s conglomerate Hutchison Whampoa (SEHK: 0013) Ltd and is leading the consortium, plans a share placement. A term sheet seen by reporters on Tuesday said Cheung Kong Infrastructure planned to raise up to US$307 million. Its shares were suspended on Wednesday morning and a company executive said it was related to a share placement.

Taiwan lifts ban on treated US beef - A bill passed in Taiwan will allow the import of US beef containing minimal traces of ractopamine, a feed additive for creating lean meat. Taiwan’s legislature has passed a bill to lift a ban on US beef that contains small amounts of a growth additive. The bill was passed on Wednesday. It will allow Taiwanese to import US beef containing minimal traces of ractopamine, a feed additive for creating lean meat. Lifting the ban will remove a major irritant in Taiwan-US relations. Despite shifting its recognition from Taipei to Beijing in 1979, the US remains Taiwan’s most important foreign partner. It has been pushing for a removal of the ractopamine ban as a precondition for progress on trade talks. Taiwan hopes to negotiate a set of trade regulations that could herald the signing of a free trade agreement with Washington. But such a measure might anger Beijing, which claims Taiwan as part of its territory.

LME shareholders back sale to HKEx - Hong Kong Exchanges and Clearing Limited in Central. Shareholders at the London Metal Exchange voted in favour of a US$2.2 billion offer by the HKSE on Wednesday. London Metal Exchange (LME) shareholders voted on Wednesday in favour of a US$2.2 billion offer by the Hong Kong stock exchange for the 135-year-old institution, the world’s largest marketplace for materials such as copper, aluminium and zinc. Hong Kong Exchanges and Clearing (SEHK: 0388) Limited (HKEx) and the LME announced on June 15 they had agreed on an acquisition that would give LME members a gateway to China, the world’s biggest metals buyer. “The deal with HKEx, Asia’s leading exchange, will secure the LME’s position as the world’s foremost metals trading venue,” said Martin Abbott, chief executive of the LME. Michael Overlander, chief executive of major LME shareholder and trading house Sucden Financial, said: “This was the end of an era and the start of a new one.” At an extraordinary general meeting early on Wednesday, 64 shareholders voted yes and three voted against, the exchange said, giving a convincing result after some last minute decisions. As of Monday more than one significant shareholder had still been undecided. Some members, particularly industrial users of metals, had feared the £1.4 billion sale would eventually bring an end to the exchange’s low fee system and treasured aspects of futures trading including the open-outcry sessions that continue at the exchange’s premises in London’s Leadenhall Street. “The deal sells itself. No one knows who voted which way, but one can assume from the enormous majority that no significant shareholder voted against,” said Jim Coupland, LME board member and Global Head of Base Metals and Bulk Commodities at Standard Bank. “The exchange evolves over time, this is not the first sea-change that we’ve seen,” he added. The deal will close in the fourth quarter of this year, the LME said in a statement.

Taxi operators given cash help to go electric - Five of the environmentally friendly vehicles to be imported for a two-year trial this year - Four taxi operators will be subsidised by the government to import five electric cabs for a two-year trial this year. The Environmental Protection Department said it had approved a total of HK$11 million to be spent on five electric taxis and two electric buses. The money will come from the HK$300 million Green Transport Fund set up last year. New Territories Taxi Operations Union chairman Chan Shu-sang said he and the other three operators had started negotiations with Italian car company Fiat, asking if it could improve the design of its taxi and give it a trial run in Hong Kong. Chan said electric taxis in Italy could only travel 200 kilometres before recharging. He hoped this capacity could be increased to 280 kilometres so Hong Kong drivers would only need to charge their cabs once in a 10-hour shift. Charging takes about 45 minutes. Chan will receive about HK$2 million to import two taxis, at an estimated cost of HK$1.28 million each - more than five times the HK$240,000 price tag for a traditional cab. "With electric taxis, drivers can save about HK$200 on daily fuel costs," Chan said. He said the government and the Hong Kong Airport Authority had pledged to build four charging facilities in Sha Tin, Yuen Long, Sheung Shui and at the airport at Chek Lap Kok. But he said as the trial had to be confined to the New Territories it was difficult to persuade more operators to join in. "They don't want to be guinea pigs," he said. With the requested design modification and Transport Department approval to ensure safety, Chan said the electric taxis could be operating in Hong Kong in about five months. The operators would have to submit a monthly report on the cars' performance in the two-year trial. Chan said taxi prices could be significantly reduced if the trial were successful and the vehicles could be mass produced. While the government approved a small-scale trial, a larger operator said the threshold set for the subsidised scheme was too high. Hong Kong Taxi and Public Light Bus Association chairman Brandon Tong Yeuk-fung, who is also interested in introducing electric taxis to the city, said he would forgo applying for the subsidy, but his plan to work on a trial with Shenzhen-based carmaker BYD would go ahead. Under the plan to import 45 electric taxis, BYD would pay for the construction of 15 charging facilities and each taxi would cost only HK$400,000. "We cannot provide detailed figures on the taxis' performance to the government. If we could, we would not need to conduct the one-year trial," Tong said. The taxis were being tested by the Transport Department and were expected to be on the city's roads by the end of August. Other car companies keen to share the electric taxi market include Nissan, Mitsubishi and Renault.

Hong Kong vs. Beijing: A Tale of Two Storms - For observers in mainland China, it was a tale of two storms. As typhoon Vicente moved away from Hong Kong—felling trees but leaving the city relatively unscathed—Chinese microbloggers began busily drawing comparisons between the relative lack of damage in the southern Chinese city and the devastation wreaked by weekend rainstorms in Beijing, which killed dozens and prompted a furor over the failure of the city’s sewer and drainage systems. “Hong Kong and Beijing have a huge gap between them,” wrote one user on Sina Corp.’s Weibo microblogging service, who praised Hong Kong’s infrastructure, adding that Hong Kong “rarely floods, even if a typhoon comes.” At least 37 people died in fierce rains that lashed China’s capital city over the weekend, prompting flooding in various neighborhoods and structures to collapse in the downpour. Many residents were highly critical of how the city’s infrastructure failed to successfully weather the storm, with many asking why the city, with its all its investments in dazzling Olympic facilities, could still experience such deadly floods. By contrast in Hong Kong, while a handful of scattered flooding incidents were reported, Vicente appeared to pass through without doing any serious damage. City officials reported that 129 people had sought medical treatment at local public hospitals, but no casualties have been recorded. On Tuesday morning in downtown Hong Kong, scattered tree limbs lining the downtown streets, bus stop signs knocked akimbo and unusually empty, rain-streaked streets were the only evidence on the storm. Students and workers were warned to stay home while high-level storm signals were raised. Mainland Chinese microbloggers also expressed admiration for the Hong Kong’s government’s promptness in sending out alerts about the typhoon, which was the strongest the city has experienced since 1999. “Look at how Hong Kong handles a typhoon,” wrote one Shenzhen-based user, commenting on reports that the government had issued warnings to taxi drivers reminding them not to illegally gouge passengers seeking transport during the heavy storm. “Hong Kong’s legal system is very robust,” the user wrote. “There’s no use in trying to bicker, let’s learn from their system.” Though Beijing authorities issued a constant stream of updates through the city government’s official Sina Weibo account after Saturday’s downpour began, many residents complained that the city has posted just a single warning the day prior to the storm’s arrival. Another user offered a wryer comparison. “Why is it that capitalist Hong Kong gets the day off when there’s a typhoon, but we in socialist mainland China still have to go to work even in typhoons, no matter what the weather? Surely it can’t mean that capitalism is better than socialism?”

 China*:  July 27 2012

Xi says consensus reached in US meetings - US national security adviser Thomas Donilon (left) meets Vice-President Xi Jinping for bilateral talks. Xi says the visit shows the importance the US government attaches to relations with China. Vice-President Xi Jinping said a consensus was reached on many points in bilateral talks with US President Barack Obama’s national security adviser, who concluded a visit to Beijing on Wednesday. Xi, who will succeed President Hu Jintao later this year, said Thomas Donilon’s visit shows the importance the US government attaches to relations with China. Donilon spoke with Xi and met with a Chinese general on Wednesday after meeting with Hu the previous day. Details of their talks were not released. One issue expected to have been discussed was Syria, where a violent fight to overthrow President Bashar al-Assad has escalated into a civil war. China and Russia last week vetoed a UN Security Council resolution backed by the US and other Western nations that would have imposed new sanctions on Assad’s regime. Washington has also been pressing the Chinese military for more transparency about its plans, while Beijing is wary of the US military shift to the Asia-Pacific region. It was not immediately known if the issues were raised in Donilon’s meeting with General Xu Caihou, a vice chairman of the Chinese Central Military Commission. The official People’s Daily reported that Hu and Donilon pledged to promote US-China relations. But the newspaper said Hu asked for a “cautious” approach in handling sensitive issues. It did not say what those issues were. Donilon also met State Councilor Dai Bingguo, China’s top diplomat, and Vice Premier Wang Qishan during his two-day visit. He is scheduled to visit Japan next. 

Apple Inc.'s weaker-than-expected earnings and slowing growth in China have raised concerns that the technology giant is feeling the effects of a slowdown in the country's economy, but analysts expect upcoming products in the second half to lead to stronger momentum later this year. Apple said its revenue in Greater China for the three months ended June 30 rose 48% to $5.7 billion from a year earlier, but the figure marked a 28% decline from the $7.9 billion posted in the fiscal second quarter ended March 31. Greater China, Apple's second largest market by revenue after the U.S., is playing an increasingly important role, given the huge potential demand for smartphones among the country's one billion mobile users. But recently, there are signs of a slowdown in general consumer demand, with major Chinese consumer electronics retailers such as Suning Appliance Co. and GOME Electrical Appliances Holding Ltd. issuing profit warnings this month. In the April-June quarter, China's economic growth slowed to 7.6%, the slowest rate since the global financial crisis. Still, Apple Chief Executive Tim Cook said during a conference call with analysts that the on-quarter decline in revenue in China was due in part to "normal seasonality" after the iPhone 4S, which became available in China in January and boosted the previous quarter's revenue. He also noted that the new iPad just debuted in China last week and therefore its sales are not included in the April-June revenue. "We did not see an obvious impact in [the April-June quarter] that we would associate with the economy in Mainland China," Mr. Cook said. Apple's net profit for its fiscal third quarter through June rose 20.7% from a year earlier to $8.8 billion, though the increase was smaller than the 94% on-year profit growth in the January-March quarter. In the fiscal third quarter, Apple sold 26 million iPhones worldwide, below the 28 million or more forecast by many analysts. Many analysts said the latest earnings numbers don't change their view on Apple's outlook given that the Cupertino, Calif., company's product cycle is going through a transition period between last year's launch of the iPhone 4S and the much anticipated launch of the next iPhone, expected later this year. While some Chinese consumers may be getting more conservative with their purchases due to the economic climate, many of them are also waiting for the next iPhone, even though the iPhone 4S only came to China several months ago, said Mark Natkin, Beijing-based managing director of Marbridge Consulting. While Apple has never confirmed its launch plans, some analysts expect the new iPhone to debut in September or October. People familiar with the situation said in May that Apple is planning to launch a new iPhone with a screen larger than the current iPhone models. "We've been seeing a lot of (Chinese) consumers holding off waiting for the iPhone 5 as opposed to the iPhone 4S," said Ben Cavender, associate principal at China Market Research. While Asia is a key consumer market for the iPhone and iPad, the region is also crucial for Apple's supply chain. Taiwan, South Korea and Japan are home to a number of electronics companies that either provide Apple with components or assemble Apple products. Shares of those Apple-linked companies in Asia fell Wednesday, after the weaker-than-expected earnings. In Taiwan, shares of Hon Hai Precision Industry Co., the assembler of the iPhone and iPad commonly known as Foxconn, fell 4.3%, while TPK Holding Co., which supplies touch panels, fell 2.3%. In South Korea, LG Display Co., which supplies liquid crystal display panels, fell almost 5%. Samsung Electronics Co., which supplies chips and display panels to Apple, fell more than 1%. Samsung, which sells smartphones and tablet computers, is also Apple's major competitor. Barclays analyst Kirk Yang said the decline in shares of Apple's suppliers may represent a buying opportunity given that the outlook for the next iPhone is expected to be strong.

Car maintenance becomes big business in China - An auto mechanic repairs a Volkswagen car in Nanjing. The number of automobiles in China was more than 106 million by the end of 2011, an increase of 16.4 percent year-on-year, according to data from the National Bureau of Statistics. Global auto-maintenance and parts companies are firing on all cylinders as they seek to tap the potential of China's after-sales services market. The number of automobiles in the world's second-largest economy was more than 106 million by the end of 2011, an increase of 16.4 percent year-on-year, according to data from the National Bureau of Statistics. Meanwhile, revenue in the Chinese automotive after-sales services market, which includes car maintenance, repairs, parts, modification and renting, is expected to be more than 400 billion yuan ($62.6 billion) by the end of 2012, according to a report on One company that entered the burgeoning market early was Germany-based Wuerth Group, a top supplier of automotive maintenance supplies and a presence in China since 1994. "Our automotive business grew well in the first half of this year, a rise of nearly 10 percent year-on-year, and this is quite a good development even as car sales are dropping," Christoph Ladurner, Wuerth China CEO, told China Daily. Wuerth is aiming at annual sales of 2 billion yuan in the automotive sector, he said. Wuerth's global sales reached 9.7 billion euros ($11.74 billion) in 2011, of which 500 million yuan ($78.28 million) came from the China market with a growth of 29.22 percent. Wuerth's automotive division accounted for about 30 percent of its total sales. Ladurner said that while Europe and the United States are struggling with their respective economic woes, China's economy and purchasing power are strong. "The after-sales service market is looking for solutions, not just products," Ladurner said. "The market means security for drivers and car owners, so it is important for us to give know-how to customers." He said that as "4S stores" - so named because of their sales, spare parts, service and customer-satisfaction surveys - have become useful to car owners, Wuerth has played a bigger role in how they are run. In 1994, Wuerth opened its first Chinese company in Tianjin. The network now includes more than 100 cities in China. "Now we are playing in almost every region of China, which is our strength. We hire local people to serve local 4S stores," he said. And because Wuerth is a family enterprise, creating a family atmosphere for its workers is important, and Chinese culture is appreciated. Ladurner said that Wuerth's brand is its biggest value, and informing customers of its premium quality is a priority. To that end, Wuerth has sponsored China's men's national basketball team and the China Touring Car Championship. Also taking advantage of China's growth in auto care is Tyreplus, an automotive maintenance workshop chain set up by global tire manufacturer Michelin. Tyreplus has more than 730 workshops in China, and its five-year target is to double that. "Although the growth of China's economy may slow this year, the after-sales service market keeps increasing," said Liao Chuhang, a director at Tyreplus and a distribution development manager at Michelin China. Liao said more car owners understand that not all their cars' problems are serious enough to require a trip to a 4S store. More car owners are choosing other auto-maintenance options when their vehicle warranties expire, he said. Liao said Michelin entered China early in 1988 when it set up its first office in Hong Kong, and drove into the mainland market in 2003. Liao said Tyreplus' 14 main services, including washing, tire replacement and oil changes, offer customers convenience. "Apart from 4S stores, the network Tyreplus developed has been the largest in China among car-maintenance workshops, and the market is still fragmented," Liao added. Meanwhile, the market for automobile service continues to expand. About 20,000 4S stores were in China in April, and that number will grow to about 30,000 by the end of 2015, according to the State Administration for Industry and Commerce as quoted by the Beijing Morning Post.

A ceremony to mark Sansha city's establishment takes place on Tuesday morning on a square in front of the city government's main building on Yongxing Island, a part of the Xisha Islands. China on Tuesday established the city of Sansha on Yongxing Island in the southernmost province of Hainan. Sun Shaochi, vice-minister of civil affairs, announced the State Council's approval of the establishment of the city at a ceremony. Luo Baoming, Party chief of Hainan province, said in a keynote speech that Sansha was established to administer the Xisha, Zhongsha and Nansha islands and their surrounding waters in the South China Sea. "The provincial government will be devoted to turning the city into an important base to safeguard China's sovereignty and serve marine resource development," he said. He said the main task now is to build up political power in Sansha to ensure efficient administration. A ceremony to mark the city's establishment began on Tuesday morning in a square in front of the city government's main building, located on Yongxing Island, a part of the Xisha Islands and the largest island in the area. The national flag was hoisted while the national anthem played after the signboards of the Sansha city's government and the city's committee of the Communist Party of China were unveiled. A military garrison was also established on Tuesday in the city. Xiao Jie was elected on Monday the first mayor of the newly established city in the first session of the Sansha People's Congress held on Yongxing Island. Xiao, 51, was head of the Hainan Provincial Agriculture Department. Fu Zhuang, 56, former deputy director of the Hainan Provincial Civil Air Defense Office, was elected director of the Sansha People's Congress Standing Committee, the city's legislative body. The legislative conference also elected three deputy mayors, head of the city's intermediate people's court and head of the city's procuratorate, or prosecuting office. It also elected another five members of the Sansha People's Congress Standing Committee. "It's a great honor to be the first mayor of Sansha, and it's also a brand new mission, challenge and test for me," said Xiao. The first Sansha government will be devoted to administrative management, economic development, people's livelihoods and environmental protection in the coming five years, Xiao said. The deputies to the legislative body should make positive contributions to the management, development and protection of the islands as well as the sea waters surrounding Xisha, Zhongsha and Nansha, said Fu. Forty-five deputies to the Sansha People's Congress attended the session and cast their votes. The deputies were elected by about 1,100 residents from the Xisha, Nansha and Zhongsha islands on Saturday. The State Council in June approved the establishment of Sansha, a prefecture-level city in Hainan province.

Hong Kong*:  July 26 2012 Share

Nicholas Brooke has called on the government to install smart meters in all its buildings. Tech park tenants must hit energy-saving target - 150 companies are due to move into six new buildings dubbed a living laboratory and intended to be the city's first zero-carbon district. Tenants in the new third phase of the Science and Technology Parks risk not having their leases renewed if they fail to meet energy-saving targets, as part of a drive to create Hong Kong's first zero-carbon district. The so-called "green leases" will be just part of the Science and Technology Parks Corporation's effort to make the HK$4.9 billion phase-three project, a future hub for environmentally-friendly research, greener. The choice of developer for 50 per cent of the site in Tai Po involved what is described as a "two-envelope" system, under which a panel of experts examined a bidder's designs and technical plans before considering the financial aspects of the bid. A similar system was used for Singapore's Marina Bay development. Parks chairman Nicholas Brooke says the parks are a "living laboratory" and urged the government to adopt green leases and "two-envelope" tendering for prime sites like the former Kai Tak airport. While technical improvements in the construction of the six new buildings will play a big role in the goal of ensuring zero-carbon emissions, the 150 companies that are due to move into the park will also have extensive duties in saving energy through the use of energy efficient equipment and their employees taking responsibility. Brooke says the park will set out targets for energy usage in the lease with the tenants, which will be companies developing green technology. Smart meters and sensors will be used to check on their progress. "They are our partners," Brooke said. "If they fail to comply, in the short term, we will persuade them to change their culture and work harder. Ultimately, the lease lasts for three years. If someone is a non-performer, they will run the risk of not getting the lease renewed." Parks management have already started talks with international companies specialising in reducing waste, cutting energy use and developing renewable energy on taking up space in the new development. Details of the green leases should be in place by 2014 with the first tenants moving in a year later, although the first buildings are expected to be completed next year. The project is due to be completed by 2016. Parks bosses are also considering holding an inter-building competition to encourage tenants to cut consumption, but the bigger challenge lies in convincing the existing tenants of phase one and two. Brooke hopes they will be convinced to cut energy usage by the example set by newcomers in phase three. And Brooke believes the green leases will not be a problem for potential tenants, which are big enterprises and will benefit from the reduced electricity bills. Similar concepts have been widely adopted in the US, Europe and Taiwan. Asked if the zero-carbon target for the third phase of the parks was too ambitious, given that a similar pledge for the arts hub in West Kowloon has already been scrapped, Brooke said he saw it as the Parks' mission to be carbon-neutral. "It is ambitious but the parks should be setting an example anyway. It's funded by taxpayers so it should set the bar at a much higher level," he said, adding that Parks management sees big business opportunities in attracting firms providing green products and services for Hong Kong and mainland cities. He called for the government to step up its environmental efforts by installing smart meters in all government buildings and persuading major developers to follow suit. "I think it's doable. Everything will indicate significant savings can be made. In Hong Kong, the dollar-sign is a driver." Government officials had said installing smart meters, which give tenants detailed information on energy usage, would be difficult for buildings with multiple ownership, but Brooke said the meters should be installed in commercial buildings first. "The next decade is a green decade," Brooke said. "The government may provide financial incentives to retrofit existing buildings. But to new buildings, green should be the norm. It shouldn't be something special."

Commuters crowd the Admiralty MTR station as the typhoon neared on Monday night. At other stations, some passengers were stuck after rail lines were suspended. The MTR Corporation (SEHK: 0066) came under fire for poor emergency management on Tuesday after hundreds of passengers were stranded in trains and stations overnight when Typhoon Vicente battered the city. The railway operator halted commuter-loaded trains on the East Rail line after a tree fell on an overhead power cable near the Tai Po Market station about 11.30pm, shortly after the Hong Kong Observatory issued the No 9 storm signal. Hundreds of passengers had to spend the night on trains or in station halls, mostly in Tai Wai and Fo Tan, unable to complete their journeys until workers finished repairs to damaged cables to resume train services about 6am. Commuters told media that railway staff did not tell them when services could be resumed. They also criticised the rail operator for not arranging buses to take them to their destinations. MTR Corp operation director Adi Lau Tin-shing said halting train services in severe weather was to ensure commuters’ safety. “This is the safest arrangement for passengers,” he said. Lawmaker Andrew Cheng Kar-foo, chairman of the Legislative Council transport affairs panel, said the incident showed that MTR’s emergency plans were inadequate. “It should have provided coaches or vans to take stranded passengers to stations. This doesn’t seem a difficult thing to do,” he said. Cheng also urged the MTR to install covers to protect its cables.

A man reacts while walking past an uprooted tree after Typhoon Vicente hit Hong Kong. A woman battles to hold her umbrella and bicycle against rain and gales in En'ping county, South China's Guangdong province, on July 24, 2012. Typhoon Vicente made landfall in Chixi county, Guangdong province, early Tuesday morning, bringing torrential rain and hurricane force winds to southern China. Hong Kong was lashed by gales on Monday as typhoon Vicente moved towards the financial hub, sending office workers home early and prompting the local observatory to raise the tropical cyclone warning signal to number 8, the third highest classification. Hong Kong workers cleared roads of fallen trees and other debris on Tuesday afternoon as the city slowly returned to normal after being lashed by Typhoon Vicente overnight. The storm injured more than 100 people and uprooted over 1,000 trees. Most public transport services were back up and running, although 56 bus routes remained suspended due to fallen trees and scaffolding, the Transport Department said. By Tuesday afternoon, weather conditions were improving and most Hong Kong people had returned to work. The Hong Kong Book Fair has re-opened for its last day. Vicente continued moving away from Hong Kong on Tuesday afternoon. The No 10 hurricane signal had been raised at 12.45am – the first time since Typhoon York in 1999. That typhoon, which had the No 10 signal up for 11 hours, caused two deaths and 500 injuries. No deaths were reported as a result of Vicente, with just under 130 people injured. The top signal lasted less than three hours on Tuesday morning, when it was replaced by No 8 Southeast storm signal at 3.35am. The signal was subsequently lowered to No 3 at 10.10am, the Hong Kong Observatory said. The signal was lowered to No 1 at 2.40pm. "Vicente continues to move inland and weaken gradually. Winds are still occasionally strong over the waters over western Hong Kong... the public should stay alert," the Observatory said on Tuesday afternoon. The Hospital Authority said some 129 people, aged 4 to 86, received emergency treatment during the storm and 72 were admitted to public hospitals. Vicente also felled 1,033 trees while causing seven flooding reports and one landslide. Sixty airline flights had been cancelled, 60 delayed and 16 diverted to other places, from midnight to 8am, according to the Airport Authority. A total of 266 residents had been admitted to 24 temporary shelters opened by Home Affairs Department. Hundreds of passengers had been stranded in trains and stations along the MTR Corporation (SEHK: 0066) East Rail line overnight after a tree collapse hit a power supply unit near the Tai Po Market station around 11pm, causing a failure in its power network. Eight northbound trains had to be stopped midway at Fo Tan, short of their destination of Sheung Shui. The passengers could only finish their journeys seven hours after they had boarded the train when services resumed around 6am. They said they were not happy the MTR failed to arrange buses to take them to their destinations. Trading on share and derivative markets in Hong Kong will resume at 1pm. Classes of all-day schools were suspended. Night school classes resumed. All court hearings will resumed at 2.30pm. At 11am, Vincente was estimated to be about 260 kilometres west of Hong Kong, and was moving west or west-northwest at about 22km/h crossing western Guangdong and entering Guangxi.

 China*:  July 26 2012

Luigi Maramotti is bullish about the mainland, aiming to develop MaxMara in second- and third-tier cities after it has captured strong market shares in places such as Shanghai. As chairman of Italian fashion brand MaxMara, one of Luigi Maramotti's biggest challenges is forecasting the outlook for its China business, which is set to grow by at least one new store a week over the next six months. "In China, growth has been always much bigger than we could ever predict. Basically, we could not catch up" with the speed of growth, Maramotti said. Most of the new stores would be opened on the mainland, but MaxMara also planned to add stores in Hong Kong and Taiwan, he told the South China Morning Post (SEHK: 0583) yesterday during a trip to Hong Kong. Maramotti is the son of the late Achille Maramotti, founder of the closely held company. His first job at MaxMara, in 1981, was as a marketing manager. "The [China] story for the last 10 years is the story for everybody's big expansion," he said. "Sometimes, it's not just double-digit but triple-digit in terms of business growth and development of our stores." MaxMara now hires more than 2,000 staff on the mainland, mostly salespeople. The brand has about 320 stores in China, including the mainland, Hong Kong and Taiwan, Maramotti said. His group also manages the Max & Co and iBlues labels. He said his brand would focus on expansion in the mainland's second- and third-tier cities once the company secured strong market shares in top-tier cities including Shanghai and Beijing. Other international fashion labels such as France's Louis Vuitton and Britain's Burberry are expanding in China. Italian brand Prada raised its profile in the region by listing its shares on the Hong Kong stock market last year. Last week, Louis Vuitton celebrated the official launch of its four-storey flagship store in Shanghai, which is bigger than the brand's historic store on the Champs-Elysees in Paris. Part of the reason big luxury brands have been speeding up their expansion in China in recent years is that the 2008 global financial crisis has dented American sales. That was followed by the euro-zone debt crisis, which has damped spending power in Europe, home to many of the luxury labels, and looks set to worsen in the months ahead. "The Western world is now in trouble," Maramotti said. But mainland spending on expensive jewellery has slowed recently along with the slowing of the Chinese economy, and some analysts caution that the pace of sales growth in other luxury goods is also under threat from the weakening economy. Some politicians in the United States and Europe often blame the rise of China for the fall of Western economies. They argue that relatively cheap labour costs and an undervalued currency give China an unfair advantage, which they blame for the imbalance in international trade. The latest fashion label to get caught up in this political debate is Ralph Lauren. The US fashion maker outsourced production of the US 2012 Olympic team's opening-ceremony uniforms to China, drawing fire from some American lawmakers in the past few weeks. When asked if MaxMara considered making its products in China, Maramotti, who also sits on the boards of two major banks in Italy, told the Post: "This kind of discussions on where things are made is basically wrong because the discussion is based on geography, not on quality." He noted that MaxMara-branded products were made mainly in Italy at present. "I cannot predict what's going to happen in the world in the next 10 to 15 years," he said. "If in Italy, for instance, will we still make a lot of our things? I think in 10 years' time, nobody from the young generation will decide to be a [blue-collar worker]. I can't stop that [trend happening]."

Beijing held a ceremony on Tuesday to formally establish the city of Sansha to bolster its claim in the South China Sea. Beijing on Tuesday formally established the city of Sansha to bolster its claim on the sea’s oil and gas-rich waters. The move is likely to anger China’s neighbors and competing claimants in a dispute that has at times led to maritime stand-offs. Official broadcaster China Central Television aired the ceremony live, with speeches from Sansha’s newly appointed mayor and other officials. Blustery island winds buffeted palm trees as officials trumpeted Sansha’s important role in protecting China’s sovereignty. Sansha is 13 hours from the mainland by boat. It has a post office, bank, supermarket and hospital, but little else.

A China purchasing managers index rose in July to its highest level since February, boosted by a pick up in the pace of manufacturing output, preliminary results of a survey showed on Tuesday. HSBC’s Flash China manufacturing purchasing managers index (PMI) rose to 49.5 in July from 48.2 in June, rising close to the 50 level that divides expansion from contraction. The increase was driven by a jump in the output sub-index to 51.2 – the best showing since October last year. The new orders sub-index recovered to a three-month high while new export orders gave their best showing since May, although both remained below 50. An employment sub-index fell to its lowest level since March 2009. The flash PMI is the first significant Chinese data point in the third quarter of the year and signals that a sequential improvement in the economy in the second quarter may be broadening as pro-growth government policies gain traction. Still, the HSBC PMI has been below 50 for nine straight months, showing a need for those policies to remain in place. “This calls for more easing efforts to support growth and jobs,” Qu Hongbin, chief China economist with index sponsor, HSBC, said in a statement accompanying the survey. “We believe the fast falling inflation allows Beijing to do so and a more meaningful improvement of growth is expected in the coming months when these measures fully filter through.” The PMI, compiled by UK data provider Markit, showed broad improvement across the manufacturing sector with five sub-indexes showing their rate of decline slowing and five showing a change of direction. The output price sub-index broke above 50 for the first time in five months, a sign that final demand may be lifting factory gate prices, which have been in deflation for four months. The flash PMI is based on 85-90 per cent of total PMI survey responses, set to be published in full around a week later. The employment sub-index, however, deteriorated versus June, sinking further below 50. While still just above the readings at the depths of the global financial crisis, when some 20 million Chinese jobs were axed in a few months in late 2008 as global trade ground to a halt, the fall in the employment index is a reminder of the risks in an area to which China’s government is most sensitive. Analysts broadly believe a headline PMI of 48 is consistent with manufacturing output strong enough to deliver the jobs growth that China’s government needs to absorb millions of new graduates and rural migrant workers each year. But the fall in the employment sub-index to a 40-month low is a potential alarm bell. Jobs are a crucial variable for China’s Communist Party leadership, especially in the run-up to its once-a-decade handover of power - a showpiece event scheduled for the autumn that the government is determined to ensure takes place against a backdrop of social stability and economic prosperity (SEHK: 0803). The 2008 job losses triggered the 4 trillion yuan (US$635 billion) stimulus program from Beijing, analysts say. The government has studiously avoided delivering a carbon copy in response to this slowdown, in large part because it is still cleaning up the consequences of the last program. It has been “fine tuning” policies instead, fast-tracking fiscal spending on key projects, cutting the amount of cash banks must keep as reserves to free an estimated 1.2 trillion yuan for lending (US$190 billion) and, in the space of four weeks in June and July, twice lowering benchmark lending rates. Analysts polled by Reuters earlier this month expect one more cut to interest rates of 25 basis points and 100 bps of cuts to banks’ required reserve ratios by the end of the year. Relative tightness in China’s labour market so far in the worst economic downturn since the global financial crisis has been a function of a degree of economic rebalancing and firms holding on to workers to avoid paying a premium to rehire them when the economy starts to rebound. Despite six straight quarters of slowing growth to just 7.6 per cent in the second quarter versus a year earlier - only just above Beijing’s official 7.5 per cent target – there are more job vacancies in China than there have been for around a decade. For Nomura’s chief China economist, Zhang Zhiwei, the PMI provided further evidence that a slowdown in China’s economy bottomed out in the second quarter of this year. “This suggests the effect of policy easing is being transmitted to the economy and reinforces our view that growth has bottomed in Q2 at 7.6 per cent and will rebound in Q3 to 8.1 per cent,” Hong Kong-based Zhang told Reuters. “We continue to expect policy easing to pick up, with two cuts to the reserve requirement ratio for the rest of this year. The next cut could happen any time from now. We do not expect further interest rate cut for this year,” Zhang said. Soft demand from debt-ridden Europe – China’s single biggest export market – has piled pressure on the Chinese economy. Fan Jianping, head of economic forecasting at the State Information Centre, a top government think tank, said in an interview with the China Securities Journal published on Monday that GDP growth of 7 per cent –Beijing’s target in the five year plan to 2015 – was brisk enough to generate sufficient jobs. “There won’t be any big problems in employment as long as annual average GDP growth reaches 7 per cent or above,” he said.

The French architect being questioned in Beijing in an investigation linked to former Communist leader Bo Xilai has met with French diplomats and is in “good shape”, an embassy spokesman said. Patrick Devillers met consular officials at the weekend after flying to China from Cambodia, where he had been detained at the request of the Chinese government, said the embassy spokesman, who asked not to be named. “Our embassy colleagues were able to meet Mr Devillers at the weekend. He appeared to be in good shape,” he said on Monday. France’s foreign ministry said earlier it had asked for access to the 52-year-old architect, who left Cambodia a week ago after agreeing to go to Beijing to assist in the inquiry. Devillers, 52, is understood to have been a close business associate and friend of Bo and his wife Gu Kailai, key figures in China’s biggest political scandal in decades, although his exact role is unclear. He is believed to have first crossed paths with Bo and Gu in the 1990s, when Bo hired him to do some architectural work in the Dalian. He was detained in Phnom Penh, where he had been living, on June 13 at Beijing’s request and boarded a flight to China after he was released by Cambodian authorities. Cambodian officials and the French foreign ministry have stressed it was Devillers’ own choice to help Beijing with its investigation. China has so far made no comment on his detention in Cambodia or his arrival in Beijing. The French foreign ministry has said that as far as it is aware, he is not being detained. Bo, one of the best-known leaders of the Communist Party, had been expected to join the Politburo standing committee – an elite group of politicians who effectively rule China – before his spectacular fall from grace this year. The former head of the southwestern megacity of Chongqing has not been seen since March, when authorities announced he was being investigated for corruption. His wife Gu, a former lawyer of international standing, has been detained for suspected involvement in the murder of British businessman Neil Heywood last year. Analysts say the scandal, which first came to light in February, has exposed deep divisions within the Communist Party ahead of a crucial, once-in-a-decade leadership transition due to take place in the autumn.

A worker at an electromechanical equipment workshop in Huaibei, Anhui province. The output of China's machinery industry increased 12.17 percent year-on-year in the first half of the year, much slower than at the same time last year. This year will be the toughest for China's machinery industry since 2009, an industry leader said on Monday. "The growth of the industry in the first half was much slower than we expected, and the second half won't be much easy either," said Cai Weici, vice-president of the China Machinery Industry Federation. He made the remarks after the release of first-half figures for the industry, which accounts for nearly one-fifth of China's exports and imports. The industry's output stood at 8.7 trillion yuan ($1.4 billion) from January to June, increasing 12.17 percent year-on-year, according to the China Machinery Industry Federation. The growth rate was significantly lower than the 27.08 percent registered in the first half of last year. Cai estimated that the industry's growth rate for the whole year will be 14 percent, down from last year's 25 percent. He added that machinery exports are expected to rise 15 percent year-on-year, but the industry's profits are only expected to grow by 5 percent. "Structural adjustment from low end to high end is the key to help companies get through this difficult time," Cai said. "It is urgent that companies restructure as the government will not carry out massive stimulus policies such as in 2009." The average price of machinery products fell in the first six months, with prices in 61 out of 142 product categories falling compared with a year ago. Meanwhile, orders received by major companies in the industry declined 0.95 percent year-on-year, compared with 20 percent growth last year. However, Cai said inquiries increased recently after the central government introduced a series of policies to boost economic growth. Private companies performed better than their State-owned counterparts in the first half. Private companies realized a total output value of 4.79 trillion yuan in the first half, an increase of 17.47 percent. The growth rate was 5.3 percentage points higher than the industry's average. "Compared with State-owned enterprises, private ones are more sensitive to the market and they change their strategies faster," Cai said. Private companies in the industry made a profit of 2.07 trillion yuan, up 16.73 percent year-on-year during the first five months, accounting for 49 percent of the industry total. Exports of machinery products recovered recently, Cai said. According to the federation, exports stood at $141.5 billion from March to May, an increase of 15.78 percent year-on-year. Exports in May reached $32.77 billion, a record high for any single month. While Cai said Chinese companies still need to make greater efforts in terms of upgrading, he added some progress had been made. China's automobile exports increased 40 percent during the first five months, much higher than the industry average. Cai said this reflected China's progress in terms of high value-added products. Automobiles are categorized as machinery products.

The World Trade Organization Dispute Settlement Body on Monday adopted a report which supports China in its claim against the anti-dumping measures taken by the United States on Chinese shrimp and diamond sawblades exports. The report was adopted without US appeal, a development meaning its rulings are final. Sources close to the WTO said the United States has announced its intention to implement the rulings, while both parties informed the Dispute Settlement Body that they have agreed that the "reasonable period of time" for compliance will be eight months. In February 2011, China requested consultations with the United States regarding the latter's anti-dumping measures on certain frozen warm-water shrimp from China, complaining against the US Department of Commerce's use of zeroing in the original investigation and several administrative reviews to calculate dumping margins for the subject imports. After failed consultations, a panel was established in October 2011 to look into the case. Report of the panel, circulated to WTO members on June 8, 2012, rules that certain anti-dumping measures taken by the United States on warm-water shrimp and diamond sawblades from China have violated relevant WTO rules. The "zeroing" methodology in calculating the margins of dumping used by the United States in the investigations at issue was inconsistent with the Anti-Dumping Agreement, according to the ruling.

China's military base opens to media - A Z-9WZ military helicopter designed and manufactured by China performs as a bird flies past it during a media visit at the military base of Chinese People's Liberation Army (PLA) Army Aviation 4th Helicopter Regiment, on the outskirts of Beijing, July 24, 2012, ahead of Army Day on August 1.

Hong Kong*:  July 25 2012 Share

Several local banks have raised interest rates on yuan deposits after reducing them earlier this month. The move last week came after the mainland Finance Ministry's latest yuan bond issue met with a poor reception from local retail investors. HSBC Holdings (0005) raised the six- month rate on yuan deposits to 2.8 percent, up from 1.75 percent. The 12-month rate was raised to 2.9 percent from 2.25 percent. Increases of up to 35 basis points were declared at Standard Chartered (2888), which raised three-month, six-month and one-year rates. The six-month yuan deposit rate now stands at 2.35 percent. DBS Hong Kong raised rates by up to 25 basis points, bringing the three-month rate to 2.55 percent. On July 13, the Finance Ministry issued 5.5 billion yuan (HK$6.7 billion) worth of bonds carrying a two-year tenure, meant solely for Hong Kong retail investors. But despite the 2.38 percent yield offered, the bonds were only 2.2 times oversubscribed. Last year, the ministry's 5 billion yuan bond issue was oversubscribed 3.04 times despite offering an yield of just 1.6 percent. The debut of the latest issue on Friday was also disappointing, as the notes rose merely 0.15 percent at close. China Construction Bank (Asia) has a two-week deposit rate of 3.38 percent for those seeking a refund of yuan bond investments. And Shanghai Commercial Bank is offering 3.2 percent for one-year yuan deposits comprised of similar refunds. Most of the preferential rate offers are available only until the end of the month. Before the latest bond issue, lenders had trimmed their yuan deposit rates in a bid to encourage retail investors to subscribe. Meanwhile, the second batch of inflation-linked bonds from the government continues to perform well. The iBond 1506 (4214), which debuted last month, hit a new high of HK$106.40 on Friday.

The Tai O Heritage Hotel, seated on the edge of Hong Kong's unique Tai O fishing village, which to this day retains the indigenous heritage, combines native rural charm with a contemporary twist. The icon, originally a colonial edifice built under British rule in 1902 as a police station to guard the shore against bandits, now nestles on a secluded headland abutting Shek Tsai Po Street in the west of the village. The delicate architecture marries Western features such as arches with Chinese elements like the tiled roof. Facing out, the hotel enjoys a view of the South China Sea. As one of seven historic buildings that make up the first phase of the government's Revitalizing Historic Buildings Through Partnership Scheme, the Old Tai O Police Station was preserved and converted after a proposal from the Hong Kong Heritage Conservation Foundation. It trumped 22 other organizations that applied to use this Grade II historic site. The hotel is tiny, with only nine rooms, a restaurant and a reception area - no additional facilities. But that said, the hotel functions more as a center to educate about the building and community's history, and as a stop for visitors who may not be able to bear the two hours travel back to Hong Kong Island. As a nonprofit enterprise, the hotel spends its income on maintaining the 110-year-old building, and any surplus goes toward supporting local residents and their businesses in the form of festivals such as the Deities Parade and the upkeep of buildings around the village. Tai O Heritage Hotel is on Shek Tsai Po Street, Tai O, Lantau Island. Free tours are given daily (3pm and 4pm). Book at 2985-8383. Architect Nicholas Ho and art historian Stephanie Poon don't always see eye to eye.

Between old and new: Tsang Wing-hang, appointed managing director of Hong Kong Tramways this month, is looking for opportunities to expand its operations into Kowloon. Putting fresh life into the ding ding - Hong Kong Tramways' boss is overseeing the replacement of 80 per cent of its fleet by 2014 in a bid to win back riders. Can air conditioning be far behind? Tsang Wing-hang may be a local and has worked for the public transport system all his life, but he had just one encounter with a tram before taking the top job at the city's iconic ding ding - and it was not a happy one. "I was interviewed by a TV reporter on a tram more than two decades ago," Tsang said. "I was then a junior transport officer, and I specifically requested that no question be asked on whether the tram system should be scrapped. "The reporter agreed, but when the camera rolled, guess what she asked!" Refurbishing the lumbering tram network was a hotly debated topic in the late '70s. At a time when the MTR was being rolled out across Hong Kong Island, a question on a sensitive issue like the fate of the trams could have proved to be a fatal trap for a junior official who had just joined the Transport Department. Tsang, however, dodged the bullet with elan, and his long-winded response on how the government would listen to all stakeholders and relevant departments before reaching a decision threw the reporter off the track and won the plaudits of his superiors. He was eventually promoted to the post of chief transport officer, but in his 16-year career with the department, the contentious issue of trams would never cross his path again. "I handled many tricky issues - including the change of hands of China Motor Bus, fares and toll rises - but for some reason, nothing related to trams," he said. Until 2010 that is, when he joined Hong Kong Tramways as a part-time consultant. On July 1 this year, the 65-year-old became the managing director, appointed to the post by French conglomerate Veolia, which bought the company from Wharf Holdings (SEHK: 0004) in 2009. The acquisition by a foreign multinational not only startled many stakeholders in the public transport sector at the time but also raised the eyebrows of conservationists, who worried the century-old piece of the city's heritage would lose its way as Veolia rolled out a HK$200 million renovation plan to regain passengers and boost the bottom line. Tsang, who had just retired from New World Group, was also sceptical. Some in the public transport field thought Veolia's move defied logic, as the tramway was barely profitable and had suffered a steady haemorrhage in passenger numbers. But three years on, with himself in the driver's seat, Tsang thinks differently: "The only way a foreign newcomer could get a toehold in a public transport market was through acquisitions, and if Veolia could do a good job with Hong Kong Tramways, it would set a good example, helping the company on mainland China." Veolia's had a bit of a rough ride, though. In the beginning, its efforts to make more effective use of the tram schedule resulted in the first protest by staff in more than 12 years. They complained that they were working odd hours, sometimes in other districts, which cut into their family time. The management was forced to return to the original arrangement. Its application for a 50 HK cent fare rise to fund part of the renovation project also hit a bump, as the Executive Council approved an increase of only 30 HK cents per trip. Some of Veolia's other initiatives to better serve passengers, such as breaking the tram loop into segments, with turnarounds in Wan Chai and North Point, didn't go anywhere, either, as the Transport Department protested that it would cause disruptions at key road junctions. The company's attempts to obtain more exclusive lanes for trams and the removal of some parking areas along busy roads in Central and Wan Chai to improve tram speed also fell on deaf ears. "The police and the Transport Department were actually supportive [of the idea to remove some parking areas], but they needed the endorsement of the community and other stakeholders, which is not always the easiest thing to do," Tsang said. Despite all the obstacles, Tsang - with his diplomatic skills and connections in the government, political parties and the transport sector - is confident of achieving all the pending tasks in his tenure as managing director. "I had already half-retired and led a leisurely life prior to joining Tramways," Tsang said. "If I hadn't thought the company had a future, I wouldn't have opted to stay." When Tsang joined Tramways as a part-time consultant in 2010, he wasn't thinking of staying for long, as he enjoyed splitting his time among work, teaching and travel. But last year, he was promoted to deputy managing director, and when his predecessor, Bruno Charrade, moved to Veolia's office in Chile this year, Tsang was offered the top job. One of his priorities, Tsang said, was to regain the passengers the trams had lost. The number of passengers dropped 4.6 per cent last year, a steeper fall than the 1.9 per cent the previous year. His other goals include improving the trams' image and launching new projects. "We will bid for transport projects in Kai Tak and West Kowloon. I understand the government prefers monorail to trams in Kai Tak, but we'll still bid for the project if we can't change their view. We have the experience in building a monorail and we'll not lose it to MTR." But with trains as the backbone of Hong Kong's transport system, developing other modes of transport isn't going to be a cakewalk. The planned opening in 2014 of the West Island Line to extend MTR services from Sheung Wan to Kennedy Town could deal another blow to trams. Tramways, which should have more than 80 per cent of its fleet replaced by 2014, might then be in a position to put a previously infeasible plan to retrofit trams with air conditioners back on track. Established in 1903, Hong Kong Tramways has 161 passenger trams and two antique trams. It is the world's largest fleet of double-decker trams in service. They carry an average of 230,000 passengers every day over six routes covering a total of 120 tram stops over 30 kilometres between Shau Kei Wan, Happy Valley and Kennedy Town. Veolia Transport China, owner of Hong Kong Tramways, is a 50-50 joint venture between Veolia Transport and RATP Development, which are both major public transport operators based in France. Since the takeover, Veolia has renovated the trams' interiors, put in new braking and traction systems and upgraded tracks. It has also installed a digital passenger information service and the city's first real-time traffic system to make operations smoother.

Hong Kong activists planning to set sail for the disputed Diaoyu Islands next week to protest against Japan's plans to strengthen its claim will ask for a warship escort. About ten members from the Action Committee for Defending the Diaoyu Islands marched to the Japanese consulate-general in Central on Monday and demanded that the Japanese “go away” from the islands. The group said recent moves by the Japanese to buy some of the uninhabited islands in the East China Sea from private landowners amounted to an invasion. Lo Chau, an activist organising the voyage, said they would ask the Peoples’ Liberation Army to send warships to escort their vessel. Their plan came amid renewed tensions between China and Japan over the issue. The Diaoyus are claimed by the mainland, Taiwan and Japan, which calls them the Senkaku Islands. Last month, Tokyo Governor Shintaro Ishihara sought donations to the city government to buy three of the five islands. Earlier this month, Prime Minister Yoshihiko Noda said his government was considering a similar acquisition. The group planned a similar voyage in January, but it was thwarted when Marine police intercepted their boat in Hong Kong waters, saying it had been licensed only for fishing and related purposes.

Citic Securities, China’s top brokerage firm, will buy CLSA from Credit Agricole of France for US$1.25 billion, in the latest move by a Chinese company to acquire assets of troubled European firms. State-owned Citic Securities completed the acquisition of 19.9 per cent of Hong Kong-based brokerage CLSA for US$310.3 million, the company said in a statement filed with the Shanghai stock exchange on Saturday. Citic Securities aims to take the remaining 80.1 per cent in CLSA for US$941.7 million by the end of June next year pending regulatory and shareholder approvals, it said. “The investment in CLSA will enable Citic Securities to partner its strong franchise in China with CLSA’s established global clientele and bring capital market products and services from China to international clients,” Wang Dongming, chairman of Citic Securities, said in a separate statement Friday. Credit Agricole also announced the deal. The value of assets under management by Citic Securities is 62 billion yuan (US$9.7 billion), the largest in China, according to the company. The deal is the latest move by Chinese companies to tap the global market by taking advantage of the woes of debt-laden European economies. Credit Agricole, one of the world’s largest financial institutions, reported in May a 75-per cent drop in first-quarter net profit, as a result of its exposure to the Greek debt crisis. Hydroelectric project manager China Three Gorges in December beat competitors to take a 21.35 per cent stake in Energias de Portugal, paying 2.7 billion euros (US$3.3 billion) as Portugal sold assets to bolster state coffers. In January, Chinese construction equipment giant Sany Heavy Industry acquired Putzmeister, a German family-owned engineering firm for an undisclosed sum. China Investment Corporation, the country’s US$400-billion sovereign wealth fund set up in 2007 to invest some of China’s huge foreign exchange stockpiles, bought 8.68 per cent of British utility Thames Water in the same month.

 China*:  July 25 2012 Share

China National Overseas Oil Corporation, the mainland's dominant oil and gas producer, will pay US$15 billion for Canada-based Nexen in what would be the country's largest overseas acquisition. The deal, unveiled yesterday, marks CNOOC (SEHK: 0883)'s second attempt at taking over a major North American oil and gas company. In 2005, it failed to buy California-based Unocal for US$18.5 billion after US political opposition. The proposed deal to acquire all of Nexen tops the US$14.32 billion paid for a 12 per cent stake in Australian mining giant Rio Tinto by Aluminium Corporation of China and US partner Alcoa in 2008. Within the oil and gas sector, the Nexen deal would be far bigger than the US$9 billion acquisition of Switzerland-based Addax Petroleum in 2009 by China Petrochemical, parent of listed China Petroleum & Chemical (Sinopec (SEHK: 0386)), according to figures from data provider Dealogic. The latest deal reflects Beijing's strategy of enhancing energy security by diversifying resources away from politically unstable regions such as the Middle East to more stable regions including North America and Europe. In a statement to the Hong Kong stock exchange, CNOOC said it will pay US$27 for each Nexen share, representing a 61 per cent premium to Nexen's closing price last Friday on the New York Stock Exchange. CNOOC and Nexen have been partners in an oil sands project in Canada for about a year and have an oil exploration project in the Gulf of Mexico. Nexen's board has approved the deal but it is also subject to the approval of shareholders of both Nexen and CNOOC, as well as regulators in Canada, China and the US, because some of Nexen's assets are located in the Gulf of Mexico. The deal aims to be completed in the fourth quarter, assuming it gets the regulatory nods. "Major acquisitions like this reflect global oil and gas firms' struggles to boost production," said Gordon Kwan, head of energy research at Mirae Asset Securities. Acquiring Nexen will boost CNOOC's output, which has suffered after a major oil spill last year halted production at one of its largest oilfields, Penglai 19-3, a joint venture operation with US-based ConocoPhillips in Bohai Bay. Kwan said the hefty premium offered by CNOOC was fair, given Malaysian state-owned oil and gas firm Petronas offered a 77 per cent premium last month to buy its Canadian shale gas joint venture partner Progress Energy Resources. He added that CNOOC would gain from Nexen's expertise in developing shale gas, an unconventional energy resource, and oil sands resources. The mainland has huge shale gas reserves but lacks the expertise to exploit them. Separately, Sinopec, the nation's biggest refiner, agreed to pay US$1.5 billion for a 49 per cent stake in Calgary-based Talisman Energy's UK unit, gaining access to oil and natural-gas fields in the North Sea. That deal is also subject to regulatory approval.

China and the United States both claim wins in a WTO panel decision about China UnionPay. 'Wins' but no gain in UnionPay card game - China and US both say a WTO ruling on electronic payments backs their claim but, either way, it's not set to expand mainland access for foreign players - The World Trade Organisation's (WTO) ruling on the mainland's electronic-payment market is curiously being portrayed as a "win" by both the warring parties: China and the United States. Now that the dust is settling, what's becoming clear is that the new ruling is unlikely to lead to wider access to the China market anytime soon for the likes of Visa, MasterCard and American Express. A WTO dispute panel said in a decision last week that Beijing was breaking WTO rules by requiring all yuan-denominated payment cards issued in China to work with the network belonging to China UnionPay, as well as requiring every merchant and ATM to accept UnionPay's cards. The panel, however, dismissed US accusations that UnionPay, a state-controlled enterprise, enjoyed a monopoly in China. It ruled that measures by Beijing had not barred foreign players from entering the market because they had some limited access. White House spokesman Jay Carney called the ruling a "win" that showed "our determination to go after China's efforts to distort global trade rules". Meanwhile Commerce Ministry spokesman Shen Danyang said, that with some "reservations", China welcomed the ruling that stipulated foreign companies must meet Beijing's requirements to handle payments. Central University of Finance and Economics professor Guo Tianyong said Beijing was expected to take a gradual and cautious approach to opening China's credit card payment market "under the premise that financial security is being safeguarded". He said security concerns were higher in relation to credit cards than other financial services because of the access to cardholders' personal details. Shanghai-based China UnionPay, set up in 2002, is owned by the central bank's China Banknote Printing and Minting and 80 Chinese commercial banks. Its logo appears on about 29 per cent of the eight billion cards on issue worldwide, a higher share than Visa's 28.6 per cent, according to Retail Banking Research in London. Overseas companies have been given limited access to China's US$723 billion payment-processing market. They are not allowed to issue their own bank cards denominated in yuan except for "co-branded" cards with local banks. When payments take place on the mainland, co-branded cardholders have to use the UnionPay system. UnionPay has been expanding aggressively and now handles payments in more than 130 countries. Increasing numbers of Chinese use UnionPay to settle their overseas purchases, which prompted Visa to warn clients in 2010 to stop processing international transactions for co-branded cards through UnionPay's system rather than Visa's. Since then, the foreign companies have tried to tap into China's market by resorting to the WTO. The panel's ruling can be appealed within 60 days. A final ruling will be hammered out three months after any appeal is received. Tu Xinquan, deputy dean of the China Institute for WTO studies at the University of International Business and Economics in Beijing, said the WTO's final ruling usually supported most of the panel's primary judgments. "It is very rare to see a long-term monopoly by one or a few companies in any industry. It is understandable that the government supports some company over a certain period. However, with the rising demand for financial services, opening is inevitable and competition will benefit the sector," Tu told China National Radio last week. However, analysts cautioned the opening would be limited, at least in the coming few years, because under terms hammered out for its WTO entry Beijing still required companies to operate on the mainland for at least three years and have two consecutive profitable years before they could apply to provide paymentprocessing services. Up to now, no international payment service providers have payment-processing companies on the mainland.

Foreign investors eye medical services - New policies, relaxed rules make healthcare sector more attractive - Shanghai Landseed International Hospital, the first wholly Taiwan-funded hospital in Shanghai. Compared with Shanghai Chenxin Hospital, which mainly serves people from Taiwan, Shanghai Landseed International Hospital will cater more for local Chinese mainland residents. It opened for business last month. The opening of the first wholly Taiwan-funded hospital in Shanghai sent a positive signal about overseas investment in medical institutions on the Chinese mainland but industry insiders still have concerns. Shanghai Landseed International Hospital, which is also the first totally Taiwan invested hospital on the mainland, opened for business in Shanghai on June 26. It was the first Taiwan hospital to benefit from the signing of the Economic Cooperation Framework Agreement in 2010 and the first wholly externally funded hospital on the mainland - The hospital was built with 150 million yuan ($24 million) from the Taoyuan-based Landseed International Medical Group, which entered a joint-venture to build Shanghai Chenxin Hospital in 2002. Compared with Shanghai Chenxin Hospital, which mainly serves people from Taiwan, Shanghai Landseed International Hospital will cater more for local Chinese mainland residents. "We have sensed that residents on the mainland, especially those in first-tier cities such as Shanghai, Guangzhou and Beijing, now have a big demand for high-end medical services on the mainland," said Victor Chang, founder and president of Landseed. Victor Chang said he had great confidence in the development of new hospitals on the mainland market. He also said the number of patients from the mainland expected to be treated at Landseed hospitals will in three years grow more than 50 percent annually, up from the current 20 to 30 percent. Such high expectations are not held just by Chang: Many investors are keeping a close watch on the huge potential in Chinese healthcare with the gradual loosening of policies and growing demand for high-end medical services. The signing of an economic cooperation agreement allows investors from Taiwan to set up wholly owned hospitals in Shanghai as well as Fujian, Jiangsu, Guangdong and Hainan provinces. Investors from Hong Kong and Macao are welcomed under a similar pact known as the Closer Economic Partnership Arrangement to set up wholly owned hospitals in Shanghai, Chongqing, Fujian, Guangdong and Hainan. "Investors from Hong Kong, Taiwan and Macao are welcome to develop the medical industry on the mainland. They can hopefully form good interaction with public hospitals," said Liu Zhenqiu, deputy director of the healthcare reform office under the State Council. An implementation plan for deepening the reform of the medical and healthcare system during the 12th Five-Year Plan period (2011-15) was issued by the State Council this April. The plan encourages qualified individuals to open private medical establishments by further loosening the entry policy. By 2015, the beds and medical treatment provided by non-public hospitals will account for 20 percent of total medical services, according to the Ministry of Health. "For many investors, both from home and abroad, the medical services market on the mainland is very promising and attractive. And the supporting policies in recent years are also beginning to gain traction. Enthusiasm from private investors is increasing in an unprecedented way," said Michael Qu, a lawyer from Shanghai Co-Effort Law Firm, who has provided legal service for investors. In recent three years, Qu has kept in touch with many investors who have shown an interest in investing in the medical services industry on the mainland. "Although content with the encouraging policies, many of them still have to face other problems, which cause them to dither and be cautious, " he added. Up until now, overseas funding of medical institutions accounts for a tiny proportion of the mainland's total investment in the medical services industry. Most of it is in the economically more developed areas such as Shanghai and Guangdong and mainly targets overseas people working or traveling on the mainland and the newly wealthy Chinese. According to the Ministry of Health, 13,519 public hospitals and 8,864 privately run hospitals were operating on the mainland as of March. "Foreign investors may feel uncomfortable or a bit out of place when they entered this market. They have to continue to adjust to the local market," said an industry insider surnamed Li, who declined to give his full name. Chang said Landseed hospital made many adjustments to adapt to policies on the mainland. "For example, if we want to open some departments, we are required to have a certain amount of space and a number of personnel working in them, which may not be reasonable," he said. "Besides, patients' recognition and trust of private hospitals is not high," he said. But in Qu's eyes, the biggest hurdle for investment in the medical services industry is the shortage of qualified personnel and an immature social insurance policy. "Although physicians are now encouraged by the government to practice at several sites, many are still working in limited places for various reasons. In addition, there is still a need for the reform of the qualifications for private hospitals in order to reimburse expenses from social insurance," Qu said. "With these concerns, many overseas investors may have less motivation to move into the sector any time soon." With the ceiling for private capital entering into the medical services industry on the mainland gradually being removed, more real opportunities will be seen for specialist services such as dentistry, ophthalmology and pediatrics, according to a report by ChinaVenture Group, a research and consulting firm focusing on venture capital and private equity investment. Medical services in these niche areas are in very short supply and have a higher technical barrier, which means they have more opportunities, the report said. "Specialist hospitals are often operated on a small scale where there is higher profit and lower risk," Qu said. Another report, by Zero2IPO, research center showed that there were 158 investment deals in the medical and healthcare sector in 2011, worth $4.14 billion - around the same amount as the total deals in the sector from 2006 to 2010. Most of them are in niche areas, such as dentistry, maternity care, health examinations and elderly care. Taiwan Landseed International Medical Group is also investing in a specialist children's hospital in Changning district in Shanghai. The construction of the hospital is expected to be finished in 2013. "Now Chinese parents want to spend more on their only child. There is huge potential in this niche market. In this hospital, we will provide a quality service for them," Chang said.

Lenovo bucks trend, keeping things in-house - Lenovo Group Ltd's workers assembling PCs in the company's manufacturing center in Shanghai. Unlike Apple Inc, Hewlett-Packard Corp and Acer Inc, which outsourced most of their manufacturing to other companies, the China-based company uses its own factories and employees to assemble its products. Although outsourcing manufacturing has become the trend for most PC companies globally, Lenovo Group Ltd, the second largest PC maker worldwide, still keeps about half of its production in-house. The Chinese company has six solely owned manufacturing bases in China, three of them in Beijing, Shanghai and Chengdu. It also will open a new plant in Brazil and begin producing PCs in Japan. Lenovo plans to invest $30 million building a computer factory and a distribution center in Itu, in the Brazilian state of Sao Paulo, the company said in an e-mailed statement. It will have as many as 700 employees at the unit in two years, when it's expected to reach maximum capacity, Lenovo said. Compared with Apple Inc, which outsourced most of its manufacturing to Taiwan-based Foxconn Technology Group, Lenovo uses its own factories and employees to manufacture its products. In so doing it is working against the industry trend. Gaining greater end-to-end control will improve performance in all key areas, including pioneering new technology, cost management, delivery cycle times and product quality, company President and Chief Executive Officer Yang Yuanqing said. In northwestern Beijing's Shangdi area, its factory is next to the company's country headquarters. Lenovo's Beijing research center is only about 10 minutes drive from the plant. Shuttle buses travel back and forth between the two buildings every day and the company even provides bikes for its employees to commute to work. Lenovo believes that retaining its own factories gives the company advantages over its peers. "Selling PCs is like selling fresh fruit," said Yang in an interview with The Wall Street Journal. "The speed of innovation is very fast so you must know how to keep up with the pace, control inventory, match supply with demand and handle very fast turnover." About a decade ago, businesses in the West started to move their factories outside their homelands and outsource production overseas. Back then, designing and producing a cellphone required about two years. It was reduced to about a year in 2002. By 2006 it took less than six months and now a smartphone can evolve from a draft into a customer's hand in four months. Along with the intensive competition in the PC and smartphone industries, quicker reactions and faster service are required to attract customers. However, outsourcing means it takes longer to react to market changes, according to industry experts. In order to cater better to users' needs, many companies are considering moving their production bases to local markets or to bring them back under their own umbrella. After forming a joint venture with the Japan-based NEC Corp, a provider of IT products and services, and buying the German consumer electronics maker Medion AG, Lenovo's sales in developed economies increased from January to March by 85 percent year-on-year, reaching $3.4 billion. Lenovo is now the largest PC brand in Japan measured by sales. The company recently decided to shift part of its PC production facilities to Japan by using NEC's factory. The move will reduce the time spent delivering goods from the Chinese plant to the Japanese market to five days. It used to take more than 10 days. Last year, Lenovo invested in a desktop computer factory in Chengdu. Because the company is producing more mobile Internet products such as tablet PCs and smartphones, it will invest 5 billion yuan ($78 million) to set up a mobile Internet product factory in Chengdu in the next five years.

A new track has been laid to link a major potash production base in the Xinjiang Uygur autonomous region with the country's railway network, creating a pathway for transporting the area's undeveloped natural resources, officials said. A worker guides a crane loading rails onto a freight train at the construction site of Hami-Lop Nur Railway in the Xinjiang Uygur autonomous region on Thursday. The 374-kilometer line, which was finished on Sunday, will link Luozhong station in Lop Nur with Hami prefecture in eastern Xinjiang and will have an annual capacity of 30 million tons of cargo. With a total investment of 3 billion yuan ($470 million), the line was a joint project of the Ministry of Railways, the regional government and the State Development and Investment Corp. It took two years to build and will open at the end of October. "The area along the railway is rich in natural resources, especially leopoldite, to produce potash fertilizer, as well as coal and nonferrous metals such as copper and gold," Turghun Abdulla, deputy Party secretary of Lopnurpo township, was quoted as saying by Xinhua News Agency. Lop Nur, which was once a large salt lake but is now largely dried up on the east edge of Tarim Basin, holds most of the country's potash salt reserves. It once nurtured the kingdom of Loulan, an ancient civilization along the Silk Road, but gradually became a wild desert region with no human settlement. It was selected as a place for nuclear tests by China in the 1960s. Li Songyan, deputy chief engineer of the project, told Xinhua that the railway construction was extremely difficult because the weather was harsh and the track had to be laid on a salt-rock base easily eroded by rainfall. China is the world's largest consumer of potash, which is widely used as fertilizer. The country has relied on other countries to meet market demand, with 70 percent of the resources used being imported. In 2011, the country produced 4.7 million tons of potash fertilizers but imported 3.78 million tons to meet domestic demand, according to a Xinhua report, citing data from a fertilizer industry association. Lop Nur, located in the country's remote and underdeveloped northwest region, has a proven reserve of about 500 million tons of potash salt.

French roller skate performer stuns Chinese fans - Jean-Yves Blondeau, a French roller skate designer and performer, tests his courage by skating down a winding mountainous road in Zhangjiajie, Central China's Hunan province, on Sunday. Wearing a multiplewheel roller suit, Blondeau took less than 20 minutes to skate 10.77 kilometers from the peak of Tianmen Mountain to its base, descending at an altitude of 1,519 meters. 

Homeward bound? Firms mull return - Rising labor costs and cheaper US energy drive some companies back - Tim Cook (left), chief executive officer of Apple Inc, visiting the iPhone production line at the Foxconn Technology Group facility in Zhengzhou, in Central China's Henan province. Apple Inc now outsources most of its manufacturing to Taiwan-based Foxconn. It has taken 25 years to evolve from the brick-like dageda (big brother's handset) to the slim iPhone currently in vogue. The first mobile phone, the Motorola 3200, entered the Chinese market in 1987 and marked the start of a craze that now sees them in nearly everyone's possession. It is similar for other electronic products that first made their way to China from foreign companies and then began to be produced here en masse because of the country's huge and relatively cheap labor. Soon the Middle Kingdom became the global manufacturing center after Japan. A random search of electronic products on a retailer's shelves now inevitably reveals "Made-in-China" labels or, at least, components produced in the country. Now, however, some overseas companies are considering moving their manufacturing facilities out of China. Heading home? When US President Barack Obama joined Silicon Valley's top luminaries for dinner in California in early 2011, he asked the late Steve Jobs, the founder of Apple Inc, what it would take to start assembling iPhones in the United States. Jobs' answer was quite straightforward and might have disappointed Obama. "Those jobs aren't coming back," he said, according to another dinner guest. However, one year on and after Jobs' death last year, Tim Cook, his successor as Apple's chief executive officer, gave Obama a more positive reply. Cook said in a May interview in Rancho Palo Verdes, California, that he wanted the cellphones to be manufactured in the US. Although it would not be easy to achieve the goal, it was a clear hint that it may come to pass. And it fitted in with Obama's call for corporate America to reduce manufacturing outsourcing overseas, especially to China. Some US companies have been on the move. The Michigan-based Whirlpool Corp, the world's No 1 home appliance maker with sales of $19 billion last year, brought back production of its KitchenAid hand mixers to the US. For the previous six years, a contractor in Huizhou, South China's Guangdong province, made them. Company Chairman and Chief Executive Officer Jeff Fettig said in order to fulfill the company's commitment to produce in the US and cater to local customers' needs, Whirlpool decided to move some product lines back to the US. The shift created a net gain of about 25 job opportunities in the US, the Wall Street Journal reported. In contrast to Whirlpool's total 68,000 employees across the world, the figure is tiny. General Electric Co plans to invest $1 billion by 2014 to upgrade product lines and create new factories for items not previously made in the US. The company is about to add hundreds of employees to its sprawling Appliance Park operations in Louisville, Kentucky, this year. Similar moves by Otis Elevator Co, Caterpillar Inc and Ford Motor Co, have created a few thousand more positions in the US. The examples above may be just a beginning. According to findings by the Boston Consulting Group, more than a third of US-based manufacturing executives at companies with sales greater than $1 billion are planning to bring back production to the US from China - or are considering it.

Hong Kong*:  July 24 2012 Share

Just about half of the sixth formers who passed Hong Kong's first Diploma of Secondary Education exam are sure of a local university place. And the others face the prospect of studying abroad or in the mainland. This emerged yesterday after the Hong Kong Examinations and Assessment Authority announced that 26,431 students - or 37.7 percent of 73,074 candidates who sat the exams - met requirements for four-year subsidized university programs. Results will be handed out today. But just 15,150 places at the eight publicly funded universities are available for the candidates who passed. Because of the higher pass rate, questions are being asked whether examiners were less strict than before. In the last Advanced Level exams, 19,000 candidates out of 41,000 - representing 46.3 percent - met the minimum requirements for local universities. But the 19,000 competed for 14,000 available places, meaning a chance of 35.7 percent entering local universities. Under the new education reforms, which will see six years of secondary school and four years of university, the government-funded universities generally require a minimum level in core subjects: Chinese language, 3; English language, 3; compulsory maths, 2; and liberal studies, 2. Examinations authority secretary- general Tong Chong-sze said the exams outcome was satisfactory. When asked about the shortage of university places, Tong said: "There are 4,000 to 5,000 places available at local private universities and 63 mainland universities have enrolled 3,000 students." The diploma has been well-received by 130 universities abroad. "We have talked to top universities such as Harvard, Yale and Princeton and their representatives said they would consider Hong Kong students taking the DSE this school year, believing it would make their campuses more international," he said. A total of 47,831 candidates achieved level 2 or above in five subjects, including Chinese and English. They are eligible to apply for sub-degree courses and civil service appointments. Five students got the highest possible grade of 5** in seven subjects and 83 students 5** in five or more subjects. Authority deputy secretary general George Pook said: "The results of the HKDSE are based on the standard of performance of the students. There is no pre-fixed grade distribution and students are not graded on their rank order among the candidates as a whole. "Every student should be made to understand that if they do well and improve their work, better grades and even top grades are available to them. "There is no blocking of the top grade because there are brighter students around to take them." In liberal studies, a new compulsory subject that caused greatest concern, 90.8 percent of students got level 2 or above. Tong denied examiners were lenient in marking. Three candidates were also disqualified for plagiarizing, including memorizing content from newspapers. The Vocational Training Council said it has received 40,000 applications. Continuing Professional Development Alliance chairwoman Virginia Choi Wai-Kam said it takes time for employers to fully understand the new exams and so graduates may find it difficult to find a job.

Champion of the middle way - Former Hongkonger who bridged Belfast's sectarian divide to become first elected Chinese legislator in Europe attributes her success to focus on community - An anecdote - no doubt true given Northern Ireland's bitter history of sectarianism - is often told to sum up the years of violent conflict. A man of Asian ethnicity is walking down a street in Belfast. He meets a local man who stops and asks him where he is from. "I'm Chinese," the Asian man replies. The Belfast man then asks: "But are you a Chinese Catholic or a Chinese Protestant?" Nothing could summarise better the conflict, or "the troubles" as they are also known, involving Northern Ireland's Catholics, who seek a united Ireland, and the Protestant community, which supports the union with Britain. To say the Irish can be a little inward-looking is an understatement, but it makes the achievements of Anna Lo Man-wah all the more amazing. Not only has Lo worked tirelessly for ethnic minorities in Belfast for the past 38 years, but she was also the first ethnic Chinese person to be elected to a legislature in Europe when she won a seat on the Northern Ireland Assembly in 2007. "At first it was like this place was not made for me nor I for it. I was initially looked upon differently by locals and they would stare at me, as they had never really seen a Chinese person before," Lo said. "But this was soon replaced by the warmth and humour of the Northern Ireland people, who accepted me for who I was." Lo was born in Hong Kong. She grew up in North Point, where she attended the Java Street Primary School and Shau Kei Wan Technical School. She left Hong Kong at the age of 22 in January 1973. She was a qualified secretary then and had planned to work for a year in Britain before returning home. At first she worked in London, where she got reacquainted with David Watson, whom she had met in Hong Kong when he was working as a journalist with the South China Morning Post (SEHK: 0583). Romance soon blossomed and they got married. Watson was from Northern Ireland so they moved to Belfast in 1974 to start a new life together. To think that Lo went to Belfast in the 1970s when the sectarian conflict was at its worst is hard to fathom. Bombs were going off in the city all the time, while sectarian murders were happening on a daily basis. The place was in chaos. As culture shocks go, they did not get any bigger than this one. "I was used to eating out a lot in Hong Kong, like many people do today. But that all changed when I went to Belfast," Lo said. "I didn't see any restaurants around anywhere. When I asked where do people eat out in Belfast, I was told they don't, as most of the restaurants have been bombed. "You could eat in some hotels, so long as it wasn't the Europa as it was the most bombed hotel in Europe." In those early days, Lo's other great passions - a night out at the cinema and shopping - were seriously curtailed too. "We would go a couple of nights a week to the cinema in Hong Kong, but that ended in Belfast because there weren't many and the ones that were operating were regularly bombed," she said. "I had to stop going shopping as well because Belfast's city centre was like a ring of steel. There was huge security, so getting in and out took all day." The other problem with shopping in Belfast was of a more practical nature. All the clothes and shoe sizes were far too big for Lo and she had to get her clothes shipped from Hong Kong, or she would bring suitcases back whenever she returned to the city for visits. It was an inauspicious and ominous start to Lo's new life, but it did not stop her from going on to bigger and better things in a career that made her a household name in her adopted city, not just in the Hong Kong Chinese community but also across the Catholic-Protestant divide. For several years she initially made regular contributions to the BBC Chinese Service about the Chinese community and Northern Ireland affairs. In 1978, she started the first English-language evening class for Chinese people in Northern Ireland in a further education college. Initially, Lo said, she would feel homesick during Lunar New Year or when close family members celebrated their birthdays, but she got settled in remarkably quickly. "The thing was, I liked and got on well with the people here," she said. "Yes, the early years weren't easy, but it helped so much that the people here were so friendly. "I like the outdoors and the countryside is beautiful, so I really fell in love with the place." Following a career break to have her two sons, Conall, now 30, and Owen, 27, she joined the Chinese Welfare Association in 1987 as a community interpreter. Four years later she returned to full-time education and qualified as a social worker from the University of Ulster in 1993 and worked in the health and social services trust and the children's charity Barnardo's. She took up the post of director at the welfare association in 1997, and was the first vice-chairwoman of the Northern Ireland Council for Ethnic Minorities. A founding commissioner for the Equality Commission for Northern Ireland, she was also the first chairwoman of the South Belfast Partnership Board. Lo's tireless work in the community was recognised when she was awarded an MBE in 1999 for services to ethnic minorities, but hard as it is to believe, there were even bigger things to come. In March 2007, she was elected to serve the South Belfast constituency on the Northern Ireland Assembly for the Alliance Party, the biggest political party in the province not affiliated with either a unionist or nationalist group. The assembly is the devolved legislature of Northern Ireland. It was established under the Good Friday Agreement of 1998, an accord aimed at bringing peace to Northern Ireland. Lo had some initial doubts when she was asked to stand for election by the Alliance, but in the end she took up the challenge just to check if the people would ever vote for anyone who had no affiliation with the traditional Protestant or Catholic political parties. "That I was voted in said a lot. I think people do know where I stand - I'm in the middle ground - and so have no axe to grind for either side," Lo said. "People voted for me on that basis, that I'm on bread and butter issues, not on tribal issues. And I think politicians do have to take note of that." Lo was re-elected to the assembly in May last year when she topped the polls in her constituency. It is a clear indication of the respect and admiration her constituents have for her, although there is still room for improvement. Lo admitted that at times she and members of the Chinese community did endure taunting and low-level racism, such as name-calling, which generally came from young people. In fact, the Chinese community is so well accepted now that it is "old hat" for them to suffer racism in Northern Ireland. "We've established ourselves here for so many years that the focus of racism has turned to other ethnic minorities unfortunately, such as eastern Europeans, who are now targeted," she said. The 62-year-old sits on various equality committees, including the Bill of Rights Forum and the South Belfast Roundtable on Racism. She also chairs the environment committee, is a member of the audit committee and is the party's spokeswoman on culture, arts and leisure. Lo still has a sister living in Hong Kong, where she works with her husband in an interior design company. A brother also lives in Belfast and is in information technology. Lo's last visit to Hong Kong was in 2008, when she attended a 40th anniversary reunion with classmates of Shau Kei Wan Technical School, now known as Shau Kei Wan Government Secondary School. "I saw, for the first time since we left school in 1968, a lot of old classmates at the reunion dinner during my last trip to Hong Kong," she said. "My Chinese friends say I speak Cantonese with a kind of Belfast accent. I don't know if that's entirely true but it's what they say. What else would you expect!"

Fun-loving, fashionable British girl (with roots in Hong Kong) seeks long-term partner for travel - and making money - on the mainland. Sindy (pictured), Britain's Hong Kong-made answer to the Barbie doll, turns 50 next year. And while the toy's popularity in the UK and Europe has dwindled in recent years, its owner is hoping to crack the mainland market by partnering with a new licensee or equity partner. UK-based Pedigree Group owns the rights to Sindy and has put a call out to anyone who would like to revive the brand. Henry Hu Hai-lin, the Hong Kong-based director of Pedigree's toy and dolls division, said there was growth potential for a fashion doll with a strong British brand history to expand into the mainland. "Younger girls in China don't have a lot of good toys because most of the toys are for boys," he said. "Their parents will be in their late-30s - the highest income group - and willing to spend money on their kids, contrary to the older generation which was more conservative and didn't spend as much. "Girls of about eight to 12 years are probably the first generation where their parents are going to spoil them, so there is a market for a far-sighted manufacturer who wants to market a doll and a whole lot of merchandise." Hu said a potential licensee could also develop a fashion doll with Chinese characteristics under the Sindy brand. He added: "As a licensor, we encourage a more diverse and expanded thinking of how the licence could be exploited." More than 150 million Sindy dolls have been sold since she burst onto the scene in 1963, four years after Barbie. For decades she dominated the fashion doll market in Britain before her more glamorous rival entered the UK in the 1980s. In 1986, Hasbro took over the licence and changed Sindy to look more like Mattel's Barbie. The move lifted sales but also attracted a lawsuit over copyright issues, won by Mattel. Hasbro quit the brand in the mid-90s and a 2006 partnership with Woolworths in the UK which was intended to revive the brand failed when the British offshoot of the US retail giant collapsed in 2008. Jerry Reynolds, chief executive of Pedigree Group, said part of Sindy's appeal was her "demure girl-next- door" image. Hu said this could be a key to cracking the mainland toy market. "If a Chinese manufacturer decided that they would like a doll of good virtue, as perceived by parents, they can then capture the spirit but interpret the values," he explained. A Sindy doll for mainland children also may not wear Chanel and Gucci dresses. Instead "she will wear T-shirts and jeans", he said. Hu, 67, has had a long relationship with the British fashion doll icon as he started making the product at a Quarry Bay factory in 1975. Hu opened his own factory in Chai Wan during the height of Hong Kong's toy manufacturing boom and continued to make the doll along with many other toys before retiring from the business in 1990. "Hong Kong was in the right time and place in the 60s, 70s and 80s to emerge as the manufacturing centre for the toys of the world," he said. "Even as we speak today, the largest toy manufactures are still in southern China for top brand names such as Mattel and Hasbro."

 China*:  July 24 2012 Share

2nd phase of duty-free store starts trial operation in China's Haikou. Customers select watches in the second phase of the duty-free store at Meilan International Airport in Haikou, capital of south China's Hainan Province, July 20, 2012. The second phase of the duty-free store, which stands at 1,500 square meters, started a trial operation on Friday. The first phase of the duty-free store opened on December 21, 2011.

China pledged Friday to make joint efforts with the Association of Southeast Asian Nations (ASEAN) to safeguard regional peace and stability after the 10-member bloc issued a six-point statement on the South China Sea. "The Chinese side is willing to work together with the ASEAN members to implement the Declaration on the Conduct of Parties in the South China Sea (DOC) comprehensively and effectively," Chinese Foreign Ministry spokesman Hong Lei said in response to a question on the ASEAN statement. In the statement issued earlier on Friday, the ASEAN members reaffirmed their commitment to the "peaceful resolution of disputes" in the South China Sea. Analysts said the six-point principles were reached to make up for the lack of a customary communique after a foreign ministers' meeting last week. In an unprecedented development, the 45th Foreign Ministers' Meeting of the ASEAN was not wrapped up with the release of a communique showcasing common ground. ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Qu Xing, head of the China Institute of International Studies, told Xinhua that it was Vietnam and the Philippines that should be blamed for the failure to pass a communique last week. "The two countries attempted to turn the disputes between them and China into a problem between China and ASEAN as a whole," he said, "which was unacceptable for the other members of the bloc." "The Chinese side has noticed the ASEAN's statement on the South China Sea (on Friday)," Hong said, adding that the core problem of the South China Sea was the disputes over the sovereignty of the Nansha islands and the demarcation of the islands' adjacent waters. "China has sufficient historical and jurisprudential evidence for its sovereignty over the Nansha islands and the adjacent waters," he added. However, Hong said China is open to consultations with the ASEAN on the conclusion of a Code of Conduct in the South China Sea. "(We) hope that all the parties will strictly abide by the DOC and create necessary conditions and atmosphere for the consultations," he said. As a signatory to the United Nations Convention of the Law of the Sea (UNCLOS), China attaches importance to safeguarding the principles and mission of the Convention, said the spokesman. Hong said UNCLOS is aimed to establish a legal order for the seas and oceans "with due regard for the sovereignty of all States," and it does neither serve as an international treaty to address disputes over territorial sovereignty between states nor as evidence used to judge over the disputes. The countries concerned should address the disputes over the maritime demarcation in the South China Sea, after the land disputes have been resolved, in accordance with historical facts and all international laws including UNCLOS, he added. "China attaches importance to its ties with the ASEAN," Hong said, adding the country is committed to promoting friendly neighborhood and reciprocal cooperation with the ASEAN to push ahead with the cooperation in East Asia with joint efforts. The spokesman said China and ASEAN share common interests and responsibilities in keeping Asia's development and maintaining regional peace and stability against the backdrop of the ongoing international financial crisis. "The two sides should continue to promote their strategic communication in pursuit of a reciprocal and win-win situation, with mutual respect and trust in mind as well as handle the relationship between the two sides from strategic and long-term perspective," he added.

Kenya inked eight memorandums of cooperation here on Saturday with east China's Jiangxi Province during the visit paid by the African country's Prime Minister Raila Amollo Odinga. Five of the documents were reached by Kenya and Jiangxi Corporation for International Economic and Technical Cooperation on projects of upgrading Kenya's highways and the construction of diesel-solar hybrid power supply system. Meanwhile, the other deals are stroke between Kenya and Jiangxi Zhongmei Engineering Construction Co. Ltd, covering three highway construction projects worth of 600 million U.S. dollars. Odinga paid the visit after attending the Fifth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) held in Beijing from Thursday to Friday. Statistic shows that a total of 21 contracts worth over 5 million U.S. dollars each had been inked between Jiangxi's companies and Kenya from 2009 and 2011.

China yesterday started a probe into alleged US dumping of solar products and government subsidies for the industry, the latest volley in a trade row between the world's top two economies. The Ministry of Commerce will investigate whether US companies sold the kind of polysilicon used to produce solar batteries at artificially low prices on the mainland, it said in a statement. Products made in South Korea would also be included in the probe, the ministry said. In addition, Beijing will look into alleged US state subsidies for the industry, including tax exemptions, supplying land free of charge and granting public funds for job training, the ministry said in a separate statement. "The Ministry of Commerce will investigate the dumping and subsidy situations … and the harms they caused to the industry in China and come to a ruling according to the law," the statement said. The probe, which is expected to last for at least a year, comes after the US in May slapped hefty anti-dumping duties on Chinese solar cell makers, which Beijing blasted as "protectionist". The price of US polysilicon imports fell more than 67 per cent year-on-year from January to May, squeezing many Chinese firms out of business, said He Weiwen, a researcher at the ministry-affiliated China Association of International Trade. "Only eight out of the 43 polysilicon companies in China can barely sustain production. Others have almost all stopped operations, with one in the process of filing for bankruptcy," he said. The move is the latest in a slew of trade rows between China and the US over a wide range of issues that have on occasion had to be settled by the World Trade Organisation. The WTO issued a ruling this week largely backing the US in a dispute over lucrative electronic payments, in which US companies are global leaders but lag on the mainland. Washington has also filed WTO complaints over Chinese duties on imported American cars and Beijing's export controls on rare earths, which are lucrative minerals widely used in the making of hi-tech products, including the iPad.

Yum has four restaurants per one million people on the mainland. In the United States, that ratio is nearly 60 diners per million. Fast-food chain giant Yum Brands put its mainland expansion plan into high gear after setting a new goal to add 700 restaurants this year in the world's second-largest economy. That would be a record build-out for a single market in a year by the United States-based company - owner of the popular KFC and Pizza Hut dine-in chains - after it previously targeted 600 new store openings across the mainland. Chairman and chief executive David Novak told analysts in a conference call yesterday that subsidiary Yum China, the company's biggest profit-contributing division, was expected to post "modest margin improvement in the second half of this year and double-digit profit growth". Novak described the mainland unit's 4 per cent decline in operating profit last quarter as "short-lived", as inflation in the domestic market moderates, and new restaurant menu and pricing initiatives get on track. Shanghai-based Yum China is the country's leading restaurant developer, responsible for about 5,251 stores - excluding licensees - in more than 800 cities on the mainland as of mid-June. Justifying the lofty domestic store expansion this year, Novak said: "The most compelling stat we have is we only have four restaurants per one million people in China, compared to nearly 60 in the United States. And the [mainland] consuming class is expected to double to over 600 million people by 2020." He said Yum China's sales in the quarter to June grew 27 per cent, driven by an 18 per cent increase in new stores opened and 10 per cent sales growth in existing restaurants. The mainland subsidiary also runs Pizza Hut Home Service, Chinese fast-food chain East Dawning and hot-pot restaurant group Little Sheep, the former Hong Kong-listed company that Yum bought and privatised earlier this year. "One of the things I'm most pleased with is that by the end of the year, our average unit volumes [average annual restaurant sales] will be US$1.7 million for KFC and Pizza Hut dine-in [stores on the mainland]", Novak said. "Even more impressive, the top 10 per cent of our restaurants now have volumes of nearly US$3 million [each]," he said. Yum's consolidated global second-quarter net profit advanced 5 per cent to US$331 million from US$316 million a year earlier. Total revenue rose 12 per cent to US$3.17 billion, from US$2.82 billion. Market research publisher IbisWorld has forecast the mainland's fast-food industry will generate sales of US$147 billion by 2016, up from an estimated US$74.8 billion last year.

Despite efforts by the top leadership in Beijing to reduce spending on official receptions, overseas trips and limousines in the face of widespread public anger, the Ministry of Public Security has still budgeted nearly 40 per cent more for banquets, trips and cars this year. At the same time the State Electricity Regulatory Commission said it spent 133,500 yuan (HK$164,000) on each official vehicle last year, more than the official annual income of a minister or provincial governor. In March last year, the State Council ordered almost 100 ministries and ministry-level organisations to publicise their budgets and actual spending on receptions, overseas trips and limousines. The three items are the most often cited sources of corruption and wasteful spending of public funds. So far, more than 90 have released details of their spending on their websites. This is the second year of disclosing such records. The State Council also ordered substantive, two-digit cuts in the budgets for the three items. However, the Ministry of Public Security said it planned a net increase of about 50 million yuan, or 39.2 per cent, this year, to a total of 179 million yuan. The National Development and Reform Commission, a super ministry in charge of macro-economic policy and price control, said it planned to spend 43 million yuan on the three items this year, an increase of 9 million yuan or 27 per cent from last year's actual spending. The cost of operating and maintaining vehicles takes up the largest share of budgets for the three items and accounted for nearly 90 per cent of one central agency's "three public consumptions" last year. The General Administration of Customs spent 500 million yuan on the three items, with vehicle use and maintenance costing 445 million yuan. The State Administration of Work Safety said vehicle use and maintenance accounted for 80 per cent of its spending on the three items, while the Ministry of Supervision said vehicles accounted for 70 per cent of its spending on the three and the Ministry of Justice said vehicles accounted for 60 per cent in its case. The State Administration of Taxation topped all central ministries and institutions in total spending on the three items last year, with spending of 2 billion yuan. The mandatory public disclosure of such records is part of a broader crackdown on public sector corruption, which is often cited as a major source of public discontent with the mainland's one-party rule. The heated online criticism directed towards the China Earthquake Administration could be a case in point. After media reports that the agency's spending on the three perks last year was 20 times its spending on earthquake forecasting, one internet user described the impact of the extravagance as like "an earthquake". The administration's actual spending on "earthquake affairs" accounted for about 50 per cent, or 2.8 billion yuan, of its total expenditure. Some critics say that actual government spending on the "three public consumptions" is larger than stated by many government departments and public institutions because they also use revenue collected from other sources to pay for them and do not solely rely on budget appropriations.

A wrecked passenger carriage is lifted off the bridge in Wenzhou, Zhejiang province, on which last year's high-speed crash took place, killing 40 people and injuring 172 others. Top speeds on the mainland's high-speed rail network, cut in the wake of a fatal crash a year ago, are set to be increased by 20km/h - a move that has divided academics. The crash on July 23 in Wenzhou , Zhejiang , which killed 40 people and injured 172 others, forced the government to lower the top speed of high-speed trains from 350km/h to 300km/h. Professor Wang Mengshu , a key drafter of the blueprint for developing high-speed railways, said the Ministry of Railways had told its subsidiaries to prepare for increased speed limits. "High speed lines operating at 300km/h at the moment will speed up to 320km/h, and the same increase will be applied on lines operating at 200km/h," said Wang, who works at Beijing Jiaotong University. The move could reduce travelling times between Beijing and Shanghai by about half an hour. Trial runs have already started on some lines. Wang said the proposal was being evaluated by experts and that if the results of test runs were satisfactory, the new speed limit would be implemented across the mainland. He said one reason for the move was that the Wenzhou accident last year had nothing to do with the speed at which trains travel. However, a more important reason, he said, was that a relatively small increase would once again make the mainland's high-speed trains the world's fastest. "We don't want to go back to 350km/h for now," Wang said. "Running at that high a speed would put a huge stress on our rail lines and trains, accelerating their ageing and raising the cost of maintenance. But 320km/h, according to our calculations, is affordable and economical. It will also restore our position as No1." Critics say the mainland has not learned the lessons of the crash. Professor Zhao Jian , an economist also at Beijing Jiaotong University, said that though the Wenzhou accident was caused by a series of weather, technical and human mishaps, it had revealed the root cause of all the problems in the mainland's high-speed programme was speed itself. "The biggest problem of China's high-speed rail programme is the irrational pursuit of high speed," he said. From the construction of rail lines to the manufacturing of bullet trains, the integration of control software bought from different countries, the evaluation of the safety of signalling equipment, the setting of operating speeds and the training of drivers and traffic controllers, the authorities had been rushing to accomplish in just a few years what developed countries such as Japan and Germany had taken decades to achieve, Zhao said. "China doesn't need trains running at 350km/h or higher. For passenger service, 200km/h is enough because anything more than that is a waste of energy and too much of a luxury to the low-income population who are in the most desperate need of the service," he said. Zhao said some government officials had realised the problem after the accident and had admitted privately that they had made a mistake. The 350km/h standard is longer being stipulated in the construction of some new lines but officials have never admitted that in public. "It's all about face," he said. What happened on the night of the Wenzhou crash remains a mystery, even though, more than five months after the crash, the State Council released a 78-page report by independent investigators. It said heavy lightning struck the line between the Yongjia and Wenzhou stations, melting a fuse in the Wenzhou station's traffic control system. That meant a computer could no longer judge correctly whether there was a train on the line or not, and it reported there was not, with a green signal showing on traffic controllers' monitors. However, the computer of a train running on the line detected something had gone wrong, automatically forcing the train to a stop. Its driver radioed the traffic control centre but his wireless communication equipment had also been crippled by the lightning strikes. For nearly eight minutes, he lost contact with the control centre and could not start the train. Seeing that everything was fine on their monitors, train controllers let another train set off. They only re-established communication with the first train half a minute before the crash and realised that something had gone seriously wrong. But when they tried to warn the driver of the second train, the radio communication was interrupted in the middle of the transmission and never re-established. The second train ran into the rear of the first at a speed of about 83km/h. The investigation report did not explain why the traffic control system had detected the melting of a fuse but continued beaming "green" signals, saying only that some important documents related to the design of the equipment had been lost. That prompted speculation that the mainland's designers had not fully understood the various software programs they had bought from different overseas vendors and combined hastily to meet government deadlines. Experts say the crash could have been avoided. Wang said many train controllers were fresh graduates from university with little experience of working on railways and relied too much on computers and instrument readings when making decisions. Even though the controllers in Wenzhou had received reports of abnormalities from maintenance workers on the line after the lightning strikes, they still believed what they saw on their computer screens. If they had radioed the second train soon after losing contact with the first, the crash could have been avoided, he said. Yang Wanzhi , a spokesman for the China Railway (SEHK: 0390) Signal & Communication Corporation, which designed and produced the defective traffic control equipment, said it had taken steps to improve safety after the crash but the work had not yet been finished. The key was to ensure that no signalling products would send a "green" signal when they experienced malfunctions. Wang said the ministry had set up courses at more than 30 universities to train drivers and traffic controllers. After the accident, stricter quality standards were also imposed on suppliers of high-speed-railway equipment to ensure that only the highest quality equipment would be used on the lines and trains. The railway industry is keen to rebuild its image. During negotiations with the Thai government early this year, a representative of the Chinese railway industry encountered Japanese counterparts trying to sell Japanese technology to the Thais, Wang said. "When the Japanese told the Thais that Chinese trains were not safe because we had the accident last year, we felt angry but had few words to fight back with," he said. "Our investigative report had emphasised equipment failure too much, because it was a rare and remediable issue." The central government's ambitious blueprint for the development of the high-speed rail networks remains unchallenged. Even though exports of high-speed-rail technology have suffered since the accident, the construction of high-speed rail lines continues apace. The ministry will spend more than 500 billion yuan this year to complete more than 6,000 kilometres of rail line - more than half of it high-speed. The the Ministry of Science and Technology has also begun work on designing trains with a top speed of 500km/h.

Hong Kong*:  July 23 2012 Share

In most markets it was long ago surpassed by Google as the most popular search engine, but Yahoo still rules the roost in Hong Kong.That makes the city a unique and important market for Yahoo's first woman CEO. Lorraine Cheung, head of audience at Yahoo Hong Kong, welcomed the appointment of former Google executive Marissa Mayer to the firm's top job, but declined to comment on how Mayer might influence Hong Kong operations. "I'm happy and excited but we don't have any further comment," Cheung said. Mayer - Google's 20th employee and its first female engineer - is among a handful of woman technology executives. Her appointment grabbed headlines last week when she also said she was due to give birth in October and would work through her maternity leave. Yahoo launched its Hong Kong service - which is only available in Chinese - in 1999 and has more than 4 million unique users in the city, according to web analytics firm ComScore. "The demographic in 2000 was a bit younger than now," said Cheung, who joined Yahoo in 2001. "Now, over 70 per cent of our users are aged over 25 years and those aged over 54 years account for 8 per cent." Yahoo Hong Kong ranked second only to Facebook for hits in the city in May, said internet tracking firm Experian Hitwise. YouTube, Google Hong Kong and rounded out the top five. When Yahoo first launched, it was mainly a navigational site with links to other pages. It had minimal graphics as most people browsed using painfully slow dial-up connections. As broadband connections grew, thanks to cheaper and faster technology, the site introduced more graphics and features that were tailored to the local market, with a focus on news and celebrities. In 2004, the English version of the Hong Kong site was shut down due to low usage and those users were re-directed to the United States site. There are currently no plans to reintroduce an English version of the Hong Kong site.

AMC Cinemas in Hong Kong has banned film-goers from wearing costumes or carrying replica weapons in the wake of the gun rampage at a Batman movie premiere in the United States which left 12 people dead and 58 injured. The Hong Kong arm of AMC Cinemas said screening schedules for The Dark Knight Rises would not change, but that people "in costumes that make other guests uncomfortable, such as wearing face-covering masks or carrying replica weapons, will not be allowed inside our buildings". AMC and the city's biggest cinema operator, UA, also said they would offer refunds to anyone who had bought a ticket but did not want to see the movie in the light of events in Aurora, Colorado. A spokesman for the AMC cinema at Pacific Place in Admiralty said that the moves were not designed to deter anyone from going. The Dark Knight Rises opened in Hong Kong on Thursday night. There were 14 screenings yesterday and there will be 18 today. "People are still coming as usual. There's been no one asking for their tickets to be reimbursed and we have been very busy," the spokesman said. A spokesman for UA cinemas in Hong Kong also said their showings of the Batman film would run as scheduled, but that tickets could be refunded. Police and government spokesmen have sought to reassure cinema-goers by pointing out that the possession of firearms is prohibited in Hong Kong, unlike in the US. Film-goers at the AMC cinema in Pacific Place, Admiralty, said the tragedy had not put them off. Anthony Yip, 48, was looking forward to watching the film last night. "It's very sad what happened in the US, but there's no reason to be worried here," he said. "In the US, they can get their hands on these weapons. It's crazy over there. Nothing like this would ever happen in Hong Kong." On Friday a man wearing a gas mask and body armour threw tear-gas canisters at movie-goers and then fired on the crowd inside a cinema near Denver. In New York, police commissioner Raymond Kelly said the suspect, 24-year-old James Holmes, had dyed his hair red and shouted that he was the Joker, Batman's nemesis. Police were trying yesterday to enter Holmes' flat, which was rigged with explosives. They disarmed a trip wire and one explosive device set up to kill anyone opening the door, but there were other devices which needed to be disarmed.

There was only one place to be as the sun beat down on Hong Kong – and that was in the water. The maximum temperature recorded at the observatory was 37 degrees Celsius in the afternoon. And these swimmers celebrated by causing a big splash at Shek O beach.

Grade A offices in Central are the world's most costly at US$249 per sq ft per year; in East Kowloon they are nearly 75 per cent less. Hong Kong's Central maintained its ranking as the most expensive place in the world to rent a top-grade office in the first quarter of the year - despite a fall in rents in the district. A survey of rental charges for a 10,000 sq ft grade A office in 133 prime commercial locations worldwide by commercial property consultancy CBRE found that a premier office rent in Central was the world's priciest, at US$249 per sq ft per year as at the end of the first quarter. Although the rent declined about 17 per cent from a year ago, it was still 13 per cent higher than the top rent fetched by a similar-sized office in the West End of central London, which was ranked the second most expensive location in the world. Tokyo, where prime office space fetched a rent of around US$186.49 per sq ft a year, placed third in the global rankings. Beijing's Jianguomen area took fourth spot with US$181 per sq ft. "Hong Kong's appearance at top of the rankings reflects the lack of supply feeding into the office market," said Rhodri James, CBRE's executive director of office services. But Central rents had fallen considerably from peak levels by the end of the first quarter, James noted in the report, and this made the city relatively more competitive and attractive to international tenants. Hong Kong's West Kowloon district, where rents of grade A offices were about US$159 per sq ft per year, was ranked as the seventh most expensive office location in the world, the report said. "We are also seeing strong interest in other decentralised areas of Kowloon, such as East Kowloon, where rental levels are more than 65 per cent below those of West Kowloon and almost 75 per cent less than the top rents in Central," James said. Of the 133 markets, 80 reported a rise in grade A office rent year-on-year, led by rent rises in Beijing's Jianguomen and Finance Street of nearly 50 per cent and 42 per cent respectively. A total of 24 markets saw declines in office rents, including Hong Kong's Central, Abu Dhabi (-16.7 per cent), and Thessaloniki in Greece (-16.3 per cent). According to property consultancy Knight Frank, monthly rents of premium offices in Central fell 7.1 per cent from March to HK$140 per sq ft in June, while rents for non-premium office space fell 3.8 per cent to HK$109 per sq ft. Rents in Quarry Bay and East Kowloon rose 4.4 per cent and 0.6 per cent respectively to HK$51.60 and HK$33.90 per sq ft a month. A report from property consultancy Jones Lang LaSalle noted that the rise in yuan deposits in Hong Kong was instrumental in driving growth in yuan trade settlements, wealth management, and capital-raising activity, thus boosting office demand in the city. Marcos Chan, Jones Lang LaSalle's head of research for the Greater Pearl River Delta region, said an estimated 40,000 staff would be added to the banking and finance sector due to the expansion of yuan business in Hong Kong, translating into demand for up to an additional 6 million sq ft of office space by 2020.

Civic Party lawmaker Tanya Chan says she is appalled that her party colleague Paul Zimmerman is gathering nominations in an attempt to take her on for a Legislative Council seat. Zimmerman says his first choice is to run for one of the five so-called "super seats" which will be elected for the first time by a citywide ballot of the 3.2 million voters who cannot vote in any other functional constituency. But problems in securing the 15 nominations he needs from district councillors have led him to look instead at taking on his own party in the Hong Kong Island geographical seat. Chan is vulnerable to a split in the party's vote because she is second on the ticket behind former party chairman Dr Kenneth Chan Ka-lok. "We have been trying to help him seek nominations for the functional constituency [super] seat, and tried to invite him to join our Island list, but he has rejected [it]," Tanya Chan said. Zimmerman said his late decision to join the election would not damage his relationship with the party. "Tanya and I have been good friends," the Dutch-born Southern district councillor said. "Now she may be a bit nervous because of the campaign." He said party leaders would canvass for nominations from other pan-democrats - including the NeoDemocrats, a breakaway group from the Democratic Party that holds eight seats on district councils. The Democratic Party, which is fielding two lists in the super-seat race led by heavyweight lawmakers James To Kun-sun and party chairman Albert Ho Chun-yan, would not be approached. Zimmerman is expected to make his decision early next week. Another pan-democrat, Frederick Fung Kin-kee, of the Association for Democracy and People's Livelihood (ADPL), also plans to run for the super seat and said it was not clear if he would be the main casualty if Zimmerman joined the race. But he said it would reflect a lack of unity and co-operation among pan-democrats if the camp failed to co-ordinate three teams for the new constituency. The Beijing-loyalist camp has fielded three slates while independent Pamela Peck Wan-kam has also signed up. On the third day of the nomination period, which runs until the end of this month, five tickets were nominated for the geographical constituencies - including ADPL vice-chairman Tam Kwok-kiu in Kowloon West and Democratic Party incumbent Lee Wing-tat, who will seek re-election in New Territories West. The Federation of Trade Unions' Wong Kwok-hing will team up with labour sector lawmaker Pan Pey-chyou to fight the Hong Kong Island constituency.

Two old trees next to the one that fell onto a bus shelter in the heart of Tsim Sha Tsui's shopping district on Thursday night are also diseased and may have to be chopped down, Chief Secretary Carrie Lam Cheng Yuet-ngor said yesterday. But experts questioned whether officials were doing enough to check the Chinese banyan trees, which are listed on the register of old and valuable trees, as it emerged the government knew more than a year ago that the tree that fell was suffering from "brown root-rot disease". Speaking after visiting the Park Lane Shoppers' Boulevard, where Thursday's accident injured five people, Lam said the two trees that shared a planter with the tree that fell might have to be chopped down to ensure pedestrian safety. "Because they grow on the same planter, if the soil is infected, there's a high chance the trees are also infected. An expert panel will meet immediately to see if any follow-up work has to be done on these two trees, including removal. To put pedestrian safety first, if there's a need, we may have to [remove them]," Lam said. The century-old, 14-metre tree that collapsed injured four women and a man. They were taken to hospital although none of the injuries were life threatening. The tree that collapsed, tree No8 was the fourth to fall victim to disease on Park Lane. Tree Nos 9 and 10, which shared the same planter as No8, and No31, on the other side of the road, were cut down between 2008 and last year to prevent them from falling. Lam confirmed that tree No8 was suffering from brown root-rot - a fungus that eats away at the roots - and the government had known about the condition since tree No10 was felled. But she said its condition had not been considered to be serious, and an inspector from Taiwan had said last year and in 2010 that the tree could be cured by cutting away the infected parts. The Tree Management Office's expert panel had also looked at ways to create space for the tree to continue to grow, she added. But Ken So Kwok-yin, head of the Conservancy Association, said Lam failed to clarify what her colleagues did to keep the tree in place. And Chiu Siu-wai, a professor in biology at Chinese University, said the tree could have been saved if proper care and pesticide had been used. Chiu said she informed the government in December 2010, as soon as she spotted the infection. "There are pesticides able to control and kill the fungi, but I suspect the pesticide was not used at the right place. It's no use to just spray it on the bark because the problems lie in the tree base and the roots," she said. Chiu said half of the 36 listed trees on that part of Nathan Road were ill. For example, the ones near the mosque were plagued with fungi or wood-boring bugs. Lam said the Tree Management Office would conduct a comprehensive check of the trees in the area. Officials had considered widening the planters to give the trees more space, but the ground below was full of electrical wires, water pipes and gas pipes from eight organisations, said Lawrence Chau Kam-chiu, head of the Tree Management Office. "We will have to work with the organisations to rearrange the alignment of these utilities, and liaise with the district council," Chau said. Yau Tsim Mong district councillor Hui Tak-leung said the council had urged the government to solve the planter problem, but "officials only said they would conduct a detailed study and never came back". A spokeswoman for CLP Power (SEHK: 0002) said the company would be willing to work with the government on any proposal to protect the trees. Professor Jim Chi-yung, a tree expert at the University of Hong Kong, said it was too late to remove the planters to save the trees now, but it would help to widen the tree path for new growth.

Li Ka-shing, Asia's richest man, has launched a succession plan that allows his eldest son, Victor Li Tzar-kuoi, to take the helm of the family property group Cheung Kong (Holdings) (SEHK: 0001) and conglomerate Hutchison Whampoa (SEHK: 0013). Victor Li now owns two-thirds of Li Ka-shing Unity Holdings after his younger brother Richard Li Tzar-kai transferred his one-third holding to him on July 16, according to a filing to the Hong Kong stock exchange. Their father continues to hold the remaining third of Li Ka-shing Unity Holdings, which ultimately controls Cheung Kong, Hutchison and affiliated businesses. As of June 30, Cheung Kong group companies had total market capitalisation of HK$770 billion, according to the group's official website. "The filing is a procedure made further to Li Ka-shing's comment expressed at a press conference held after Cheung Kong and Hutchison annual general meetings in May regarding his asset allocation plan," said a statement issued by Cheung Kong yesterday. On May 25 Li Snr spelled out the division of his wealth, with Victor, 47, taking control of Cheung Kong and Hutchison Whampoa. Li Ka-shing is chairman of both firms, and Victor his deputy. Li, 84, had said he would provide full financial support for his youngest son to develop other businesses and there would be no conflict among Cheung Kong group businesses. The magnate was rated last year by Forbes magazine as the ninth-richest person in the world, with an estimated wealth of US$25.5 billion. Professor Joseph Fan of Chinese University - who has studied family succession in Hong Kong, Singapore and Taiwan for more than 20 years - said the filing confirmed a clean wealth split between the two brothers. This would largely avoid potential disputes among the brothers over the listed companies, he said. Cheung Kong shares closed up 1.7 per cent at HK$102 yesterday and Hutchison Whampoa shares rose 0.56 per cent to HK$71.30. The benchmark Hang Seng Index closed up 0.4 per cent.

As dazzling spotlights shone down from the ornate golden ceiling, 50 glamorous hostesses ensured that the final night of a Hong Kong landmark, Club Bboss, went off in high style. Loyal customers bid farewell to the nightclub last night, signalling the near-extinction of mega-Japanese clubs on the city's entertainment scene. The 28-year-old club was a landmark in Tsim Sha Tsui East, covering 70,000 sq ft in New Mandarin Plaza. It was known as one of the world's top luxurious Japanese-decor nightclubs, with a dance floor big enough for 400 revellers. Apart from the Rolls-Royces, Club Bboss was legendary for its hostesses. During its peak years, more than 1,000 locals - fluent in English and Japanese - were on hand to offer "hourly conversation service" to guests. For an additional fee, men could take the women out, but they ran the risk of driving cars cheaper than the escorts' own Mercedes- Benzes; the women earned hefty amounts of money. But entertainment culture changed, industries moved to the mainland and other cities became more competitive. One after another, the glamorous nightclubs drew their curtains for the last time. Club Paris, also in Tsim Sha Tsui, will close at the end of this month, a person in the business says. That will leave Club de Hong Kong as the district's only mid-sized nightclub. Club Bboss will be replaced by a duty-free shop, paying a monthly rent of HK$1.5 million to club founder Law Cheuk, who owns the building. China City Nightclub, Bboss' biggest rival, closed in 2005. At Bboss, formerly known as Club Volvo, the number of staff dwindled to 100. An escort known as Yuki, in her 30s, has worked at the club for about five years. She took the job to pay off a debt, which she has done. "It's all a matter of luck. I met a man at the club who I've been with for half a year, and he paid me HK$500,000," she said. Escorts earned HK$20,000 to HK$30,000 a month, depending on tips. They were paid HK$700 per table, plus HK$1,600 per evening by guests who dated them - HK$300 of which went to the mama-san. "I will miss it a lot," said Yuki. "I worked here to find true love, so I stayed until the last day." Bboss was well past its glamour days, said a waiter who worked there for a decade. "It was very busy down here, with seven out of 10 VIP rooms filled. These days only three out of 10 of the rooms are used," he said. Fewer Hongkongers came, replaced by big-spending mainland customers, he said. "They are quite generous, handing out thousands of dollars at a time." Many big names have visited over the years. Li Chuwen, then deputy director of Xinhua news agency, officiated at its opening. Soccer players, including Fernando Morientes and Raul Meireles, visited in 2003. Lawmaker Chim Pui-chung, of the financial services functional constituency, used to visit the club years ago. "Times have changed," he said. "Consumers now have more choices, and there are a lot more entertainment premises in mainland cities. The gambling scene in Macau is also thriving." Anthony Lock, founder of the karaoke chain California Red and chief executive officer of the Tsui Wah restaurant, agreed that the club scene had changed. "The 80s was their golden period, with more than 10 such clubs competing on the scene," he said. "It was in line with the boom in the stock market. "Things started to change in the 1990s, when people began to head north for shopping and entertainment. Only commercial clients remained faithful." Stanley Lau Chin-ho, deputy chairman of the Federation of Hong Kong Industries, said factory managers used to bring overseas clients to the nightclub. Now the factories have moved to the mainland, and so has the entertainment.

 China*:  July 23 2012 Share

President Hu Jintao met African leaders last week in Beijing. Chinese investment and involvement in Africa continues to grow. In an attempt to counter allegations that it is exploiting Africa for its natural resources, China has pledged to help boost development of the poverty-stricken continent and expand its influence in areas other than trade and economics. According to an announcement made on Friday at the conclusion of the Forum on China-Africa Co-operation, Beijing will become involved in a number of areas including health care and even security operations. But analysts said ties between China and African states are still marred by suspicion and negative sentiments towards the emerging superpower among African people, and both sides are reluctant to support each other in major international issues. China's ties with Africa have been largely based on trade and investment over the past decade. China, which by early this year had poured in direct investment of US$15.3 billion, is one of the major buyers of the continent's oil and other resources. The trade pattern, along with allegations of labour rights violations, led to criticism that China is merely interested in extracting mineral wealth from Africa to feed its booming economy - which doesn't fit Beijing's mantra that the nation's economic rise will not pose problems for others. Even some African leaders, including South African President Jacob Zuma, said such trade patterns were "unsustainable" in the long term and they want China to diversify its role in the continent. "Beijing realises that it needs to be perceived as a genuine partner of African nations, not just a pragmatic trade partner interested in what it can extract from the continent," said John Lee, a China watcher at the University of Sydney's Centre for International Security Studies. Lee said Beijing still suffers from a lack of "soft power" in Africa even though government-to-government relations have been good. "China is attempting to counter the perception of many Africans that it does not care about local populations," Lee said. Among the measures announced by President Hu Jintao at the forum, which is held every three years, were the provision of US$20 billion in loans to the Africa over the next three years - double the amount pledged at the previous forum. China will also give financial support to African Union peacekeeping missions, send health care workers to the continent, encourage cultural exchanges and encourage Chinese companies to participate in cross-border infrastructure and financial projects. The measures come six months after China handed over a new, US$200 million African Union headquarters complex in the Ethiopian capital, Addis Ababa. Analysts said China has practical political needs to get closer to Africa after years of boosting economic ties. "China is on track to becoming a major global power, and it needs some strategic partners," said He Wenping , a specialist in African affairs at the Chinese Academy of Social Sciences. "As China's investment in Africa continues to rise, it is inevitable the country will become more influential in the continent." Xu Weizhong , another African affairs specialist at the China Institutes of Contemporary International Relations, said China could project the image that it is fulfilling its responsibility as a large nation by pledging help to Africa. China and Africa could exert pressure on, if not prevent, the United Nations passing any resolution the two sides found embarrassing. "Africa can back China on occasions such as when China's human rights is under the spotlight," Xu said. "China and Africa believe Western countries have only focused on issues such as human rights but ignored development needs. China wants to join hands with Africa." In addition to the benefits of economic ties, partnering with China enables Africa to enhance its bargaining power with the West. "Africa did not really have any international partners other than the West in past years," Xu said. "With China involved in African affairs, African states have at least got a choice other than the West. This puts African nations in a better diplomatic position." But relationships between Beijing and African states will remain problematic as Beijing's interest in the continent's natural resources deepen. Given the weak environmental and labour standards of Chinese companies, analysts said many Africans remain wary of China. Lee said intensifying security co-operation with the African Union and pledging help in non-economic aspects was a tactic to protect its trade and resource interests in Africa. "The government-to-government relationship is very much a client-based relationship based on 'no strings attached' loans rather than one of genuine intimacy," he said. The lack of transparency in the supply of conventional arms from China to Africa has led to concerns that China was supporting rebels or groups with poor human rights records, much to Beijing's chagrin. Beijing is also frustrated by allegations that it supports authoritarian regimes, even though it has blocked UN Security Council resolutions on Africa over the years. "China would not want to be in the spotlight for supporting or defending all activities by some African governments, particularly with respect to large-scale human rights abuses," Lee said. "China will continue to improve the relationship but will be reluctant to expend too much international political capital or reputation doing so."

The company that runs the Daya Bay nuclear plant wants to splash out hundreds of billions of dollars building reactors in Britain. Shenzhen-based China Guangdong Nuclear Power is bidding for a stake in a consortium that wants to construct two power plants there. Chinese nuclear industry officials have been in high-level talks with Britain's Department of Energy and Climate Change in the past week. The plans could eventually involve up to five reactors and a total cost of £35 billion (HK$424 billion). But Guangdong Nuclear will be bidding against another state-owned operator, China National Nuclear Corporation (CNNC). The Guangdong company has previously talked openly about building nuclear plants in Vietnam, Taiwan, Malaysia and Singapore, but never in a such a potentially politically charged market as the UK. London has been courting China, as the UK atomic programme has been hit by rows over subsidies and worries that EDF - the French company with the most advanced plans to build reactors in the UK - could be hampered by the change of government in Paris. A team from the Shanghai Nuclear Engineering Research and Design Institute, an arm of CNNC, met senior British officials over the last few days, three different sources confirmed. The two locations identified in Britain so far are Wylfa in Wales and Oldbury in Gloucestershire, southwest England. EDF has the right of first refusal to operate on the sites, but CNNC wants to use an existing technology tie-up with US-based nuclear engineering group Westinghouse to potentially build three more reactors. A well-placed source said: "The Chinese have the money and the experience. They see setting up in the UK as an opportunity to show they can operate in one of the world's toughest regulatory environments." A spokesman for the Department of Energy refused to comment on whether talks had taken place. But he added: "The UK is open for business and actively welcomes inward investment to our energy sector, but any potential nuclear operator is, and would be, subject to rigorous scrutiny." Keith Parker, chairman of the Nuclear Industry Association in London, said it was "highly encouraging" China wanted to invest in the UK. "They have 14 of their own reactors in operation and 25 under construction. It was clear from my discussions with them that they have international ambitions." But Greenpeace said the bid to woo China was a last throw of the dice by the British government. Chief scientist Doug Parr said: "This is a sign of desperation." Daya Bay is the mainland's first commercial nuclear plant, just 50 kilometres from urban Hong Kong. It has long held concerns for Hong Kong's environmental activists, especially after the Fukushima disaster in Japan last year.

More than one million mainlanders visited the US last year to take in sights like the New York Stock Exchange and Federal Hall National Memorial. The United States government is betting on an expected influx of mainland tourists to boost its economy and employment in the next four years. Returning from a China visit to promote Washington's latest initiatives on trade, investment and tourism, Nicole Lamb-Hale, US assistant secretary of commerce for manufacturing and services, said China would become the country's fifth-largest source of tourists by 2016 - up from ninth place last year. "China was the ninth-largest origin for visitors last year and it ranked sixth in terms of spending," said Lamb-Hale. "Our national tourism strategy was recently released, and China was named as a focus of that strategy." The US government hopes to generate US$250 billion annually in visitor spending by 2021, up from US$153 billion last year - of which Chinese tourists contributed US$5.7 billion. The assistant secretary said 50 offices had been added across China last year to process visa applications and shorten waiting times, helping to bring more than one million mainland tourists to the US in 2011. That was an increase of 36 per cent from the previous year. The number of visas granted to mainland tourists was up 39 per cent in the first five months of this year. Meanwhile, Lamb-Hale said the US was making good progress with its national export initiatives - an effort launched by President Barack Obama two years ago aiming to double US exports to US$3.1 trillion by the end of 2014, from US$1.5 trillion in 2009. Without giving figures, Lamb-Hale said exports were doing "really well" in the first five months this year. Statistics from the US Department of Labour, however, showed the export price index for June fell 1.7 per cent - the biggest single-month decline since October and basically offsetting the total growth accumulated in the first five months. While US exports hit a record US$2.1 trillion last year, its trade deficit with China also surged to US$295 billion as Americans continued to buy low-end consumer goods from China. Computer goods and other machinery are assembled in China and shipped back to the US - which makes them Chinese-made goods even though much of the value was produced elsewhere. In the first six months this year, the US trade deficit rose 17 per cent year-on-year to US$99.7 billion. Lamb-Hale said the numbers would improve if Washington could resolve challenges faced by US companies on the mainland - including intellectual property protection, a lack of transparency and discrimination against foreign firms.

U.S. under fire as diplomats pull no punches - Washington accused of undermining Beijing's interests, making 'strategic mistakes' in the Sino-US relationship and meddling in China's affairs. Top Chinese diplomats have lambasted the US for undermining Beijing's interests and making strategic mistakes in the Sino-US relationship, accusing Washington of meddling in China's domestic affairs and stirring up worries in the Asia-Pacific region. Deputy Foreign Minister Cui Tiankai and senior diplomat Pang Hanzhao warned of thorny problems facing bilateral ties. "China has never done anything to undermine the US core interests and major concerns, yet what the United States has done in matters concerning China's core and important interests and major concerns is unsatisfactory," an article said. The article was published in the China International Strategy Review 2012 by Peking University, and was posted on the Foreign Ministry's website yesterday. It came at a time of rising tensions between China and other Asian countries because of territorial disputes, with US Secretary of State Hillary Rodham Clinton saying last week that all sides should resolve the South China Sea disputes without coercion or the use of force. In the article, Cui and Pang said the US tended to see China's intentions in the worst possible light and criticised the US for intervening in disputes between China and its neighbours, even though China did not seek a dominant position in the Asia-Pacific region. "What is the true motive behind all these moves? What signals do they want to send to China and the region?" they asked. "All these have not only made China raise doubts, but also have upset other countries in the region." The article added that many countries were deeply concerned that the US had put so much emphasis on building up military alliances in the region. "Political leaders in some regional countries have openly warned the US against handling its relations with China with a cold war mentality," it said. The article also said the US should not politicise trade disputes, and urged it to treat China as an equal partner. "There have never existed such issues as one looking for the other's favour, one owing to the other or one above the other in China-US relations," it said. Cui and Pang said the US had often criticised China publicly on issues related to Tibet, Xinjiang, democracy and human rights, and called on it not to play "small tricks" against China. Professor Shi Yinhong, a US affairs expert at Renmin University, said the Chinese diplomats' remarks were a response to Clinton's comments on the South China Sea. "Beijing was also irked when [blind activist] Chen Guangcheng fled to the US embassy in Beijing in April, but it was not appropriate for Beijing to make strong remarks at that time," he said. Professor Jia Qingguo, an expert in US affairs at Peking University, said Beijing was worried China would be targeted ahead of November's US presidential election.

Residents of Kunming, Yunnan, take photos at a 90-year-old airport that was replaced by the new Changshui International Airport last month. The mainland will push ahead with airport expansion, even though more than 70 per cent of its 182 existing airports lost nearly two billion yuan (HK$2.43 billion) among them last year. The total profit from all mainland airports last year came to 4.6 billion yuan, and most of the loss-making ones were small regional airports, Li Jiaxiang, head of the Civil Aviation Administration of China (CAAC), told a press conference yesterday. Li also blamed the losses on a shortage of airports. He said all 12 small regional airports in Yunnan province were making a profit because of the "network effect", apparently referring to a comprehensive airport network. "It's like planting trees. One tree will die, but if you plant more, it will become a forest, and the trees will grow higher and higher," Li said. He advocated a focus on airport construction, saying civil aviation had developed rapidly in recent years but infrastructure construction had lagged the broader sector. The mainland has fewer than 300 airports, including only 182 conventional public airports, with the remainder earmarked for other purposes, ranging from farming to industrial use. It plans to build 82 new airports and expand 101 existing facilities during the 12th five-year plan, which ends in 2015, Li said. He said Brazil and South Africa have more airports than China. The central government provided more than 90 billion yuan to support the development of the civil aviation industry under the 11th five-year plan, which was more than double the amount spent during the 10th five-year plan. Beijing has reduced its focus on the railway sector since the arrest of former Railways Minister Liu Zhijun for suspected corruption in February last year. However, railway spending has recently picked up, and fixed-asset investment in railways stood at 48.1 billion yuan last month, according to the Ministry of Railways. Mainland airports suffer from overcrowded air routes, causing frequent delays, but Li said "the key is to improve airlines' operating qualities". The CAAC found that more than 37 per cent of delays last year were the airlines' fault. The CAAC has implemented measures such as optimising air routes and adding new ones over the last six months to tackle the air traffic congestion problem, and they were having an effect, Li said. Huang Min, a director at the National Development and Reform Commission, said small airports contributed to tourism and to the regional economy.

Growing with the flow in swimsuit business - A swimsuit workshop in Huludao, Liaoning province. Swimsuits from the city enjoy a 38.5 percent market share in China and nearly 20 percent globally. Li Haifeng hardly has any time to rest after a recent business trip to Brazil. The 40-year-old owner of Huludao Derong (Group) Garment Co Ltd, a swimsuit company in Huludao city, Liaoning province, knows that rest is the one luxury he cannot afford as "change is constant" in his line of business. Though he is busy sewing up a deal to take over a Brazilian company, Li knows that he also needs to come up with new designs for the China International Swimwear Exhibition in Huludao scheduled for Aug 17, if he is to stay ahead of the competition. But change is not new for Li, considering that was the very reason that prompted him to enter the business in 1998 with 40,000 yuan ($6,271). It was also a time of hardship for Li as the currency crisis in Russia had dwelt a killer blow to his leather export business. Though his entry into the swimsuit business was purely a gamble, Li has not looked back. His business has grown and he is also a leading luminary in Huludao's swimsuit industry. Though the margins in the swimsuit business are just about adequate, Li feels that the industry has really not evolved. The wholesale price for a swimsuit made by most of the factories in the coastal city has remained stagnant at around 30 yuan to 40 yuan for the past 15 years, Li said. Though the actual sale price in the European and the US markets is nearly 10 times the cost, the Chinese industry still does not have a name of its own, he said. "No brand, low price and no design is the impression about our industry even now. It is a different matter that we have evolved from the 40-odd factories that used to make mass-produced swimsuits, for places like Yabaolu, a Beijing market that caters mostly to Russian customers. Very few realize that we now have multiple sales channels and serve diverse markets in different countries." Though family workshops still dominate swimsuit manufacturing in Huludao, Li said there is now more than ever a growing desire among companies to grow market share and move up the value chain with mergers and acquisitions in overseas markets. "The focus now is more on creating a solid brand image for swimsuit products from Huludao," Li said. Li's company reported a turnover of 86 million yuan last year, the best among all swimsuit makers in the city. Swimsuits from Huludao enjoy a 38.5 percent share of the domestic market and nearly 20 percent of the global market. The products are exported to more than 25 countries and regions, including the United States, France, Germany, Italy, Russia and Southeast Asia. The city has 70 registered swimsuit brands, and out of this nearly 30 are fully export-oriented brands, said Du Benwei, mayor of Huludao. In 2010, the city was named China's Famous Swimsuit City by the China National Garment Association and China National Textile and Apparel Council. That was indeed a big achievement for a region that got prefecture-level city status only in 1989. Huludao, earlier known as Jinxi county, formally changed to its present name in 1994. The city is home to more than 400 swimsuit makers and 30 supplementary materials producers. There are around 50,000 people engaged in the swimsuit business in the city. The city's annual swimsuit output reached 150 million units last year with a total value of about 5 billion yuan. Nearly 637 million yuan of the revenue came from exports, Du said. According to Du, the local government is keen to broaden the city's industrial structure and wants it to move away from its traditional strengths in nonferrous metals, shipbuilding, oil and energy. "The swimsuit industry is the logical choice for development." During the First China International Swimsuit Festival held in 2011, 24 supply and sales agreements valued at $170 million and 23 investment agreements worth $3.18 billion were inked. Local government officials are hopeful that more deals will be signed during the second exhibition that will commence on Aug 17.

When tea is a dish - Sea bass is steamed with Xinyang maojian tea. Salted tieguanyin (oolong) leaves are served with deep-fried shrimps at the restaurant. Stewed chicken with three cups sauce and pu'er tea, served at Jewel Chinese Restaurant in Beijing. It was going to happen sooner or later. The idea of using tea leaves or tea infusions in food is so intriguing that many chefs have adopted it. Ye Jun looks at an increasingly popular trend in modern Chinese cuisine. The idea of combining tea with food may be tempting but it is precisely its special characteristics that make it so hard to succeed. It was inevitable that a top class restaurant in a top class hotel in Beijing would play with the idea. Take Jewel Chinese Restaurant at the Westin Beijing Financial Street for instance. It recently pushed a new menu featuring 16 dishes using more than 10 types of tea. Many of the major Chinese tea varieties were used, ranging from green tea, the semi-fermented oolong, jasmine tea, and aged pu'er. Infusions such as chrysanthemum and kuding were also included. Chinese cuisine has long included classics with tea as a main ingredient. In the Hangzhou area, prawns with longjing (dragon well) tea leaves have been on the menu for hundreds of years. Shelled prawns that have been massaged in clear cold water are then fried in an intensely fragrant tea infusion with green tea leaves. The tea produced in Hangzhou, harvested just before the Tomb-Sweeping Festival rain, is known for its chestnut-like aroma which gives the dish its distinctive taste. Another classic dish using tea comes from Sichuan, where black tea leaves and camphor wood chips are used to smoke a duck, creating zhangcha ya, or camphor tea duck. The smoking cuts through the grease under the duck skin and the meat is turned a beautiful golden amber, with an appetizing smoky musk. It is upon these foundations that Beijing's Chinese restaurants are trying to create new tea dishes. There have been hits and misses. The flavor of tea is hard to capture and the dishes do not fully absorb that elusive fragrance. Tea leaves added to the dish are sometimes more ornamental. There have been some attempts to coat the leaves in batter and fry them, but the results have been greasy and disappointing. So it is that the chefs at Jewel must have spent considerable time slaving over their new menu. And they have done a good job at conquering the odds. Dishes look good, taste good and in most of the dishes, you can taste the tea. A classic Huaiyang-style chicken soup with water shield is nicely garnished with a few chrysanthemum petals floating in the bowl. The petals are infused to extract their full flavor and you can taste the characteristic bitter-sweet of the flowers. Salted tieguanyin (oolong) leaves are served with deep-fried shrimps, and the dish is done better than elsewhere. The shrimps are done to a crisp without losing flavor, and the tea leaves too add to the crunch. In the wok-fried sliced beef with bitter melon and kuding, the bitter tea nicely matches the bitter vegetable while the three-cup chicken with pu'er is excellent with a bowl of rice. But the strong tastes of the sauces overwhelmed the pu'er and kuding leaves, and you need a really sensitive palate to detect the traces. Perhaps it is due to the properties of tea, but both these dishes tasted less oily than usual. However, it was really hard to detect tea in both the poached clams and steamed sea bass - if not for the tea leaves garnishes. Glutinous rice balls with pu'er tea or green tea for dessert showcased the teas best, although they were a tad too sweet for me. Jewel Chinese Restaurant sous chef Cai Guangmin says he likes tieguanyin, an oolong tea produced in southern Fujian's Anxi. He says he surfed the Internet to research the properties of various teas before deciding what ingredients worked best in the dishes. "I think the bold flavors of pu'er will match the strong-tasting three-cup chicken," he says. "On the other hand, the bitter taste of kuding goes well with bitter melon, and can also beat the heat and reduce dryness in summer." For both dishes, he soaked the tea leaves in hot water, and then pours the infusion into the dish, reducing the sauce before serving. Cai says tea dishes offer the same benefits as tea drinking, and the teas will reduce the grease in the food, and help the body digest a meal better. He has experimented with tea in different forms, using leaves, infusion and powder. Zou Jun, director of operations with Mingjia Yaji, a company dealing with tea, says different teas are suitable for different cooking methods. "Green tea is suitable for plain frying, and used in light, vegetable dishes. Black tea can be used for roasting, marinating and smoking. Matured pu'er has a dark color and strong taste, and is better used for seasoning in red-braised dishes," he says. "Oolong teas such as dahongpao (Fujian's famous Big Red Robe tea), is similar to black tea, and tieguanyin is similar to green tea, and can be used likewise." Taiwan was the first in China to design a complete set of tea dishes in the 1980s, according to Zou. One dish that was very popular for a time was duck or pork rib soup with Taiwan's baozhong oolong, in which the amino acid in the tea emphasizes the freshness of the meats. Later, black tea was used to roast pigeon in another dish. By the 1990s, innovative Chinese chefs in Sichuan, Huaiyang and Hangzhou created more tea dishes, one step up from the Taiwan inventions. Zou, who graduated from the Tea Department of Zhejiang University, says Shanghai's Qiuping Tea Banquet was the first specialized restaurant in Chinese mainland to offer tea cuisine when it was founded in 1994. The restaurant produced a West Lake tea banquet featuring Chinese teas of different colors: green, white, yellow, dark green, red and black. Owner Liu Qiuping pairs the tea dishes with beautiful lines of ancient Chinese poetry. She uses tea instead of ordinary seasoning such as cooking wine, aniseed, and Sichuan peppercorns. In Beijing, people can sample tea cuisine in restaurants such as Green T. House, and Wu Yu Tai Tea Restaurant. Many restaurants in big star hotels also offer some. Zou thinks tea dishes presently cater to a minority of aficionados and that it will be quite some time before a more matured tea cuisine is developed. "In the past 10 years or more, only 20 to 30 creative tea dishes have withstood the test of time," he says. "They are more for special occasions rather than for every day consumption." Tea infusions are volatile, making it hard to withstand high cooking temperatures, and so are best used for cold dishes. The exception is when the tea is concentrated into essence, like what is used in some noodle restaurants in Taiwan. "Creating new tea dishes takes a lot of creativity on the part of the chef, who must have a very good understanding of both tea and ingredients," Zou says. "It just needs more time."

Chinese health experts help Africa to battle against polio virus - A medical officer of the Chinese navy hospital ship Peace Ark provides service to nomad tribe residents in the Republic of Djibouti. The Chinese Center for Disease Control and Prevention, which joined the World Health Organization's Stop Transmission of Polio Program in 2011, has sent three experts to Africa to help launch the program there. In July 2011, two experts in epidemiology at the Chinese CDC successfully applied to volunteer for the program. In October, after two weeks of training at the US Centers for Disease Control and Prevention, Yin Zundong, deputy director of The Third Division of Epidemiological Surveillance, National Immunization Program and the Chinese CDC, was sent to Nigeria, while Xia Wei, an epidemiologist, went to Namibia. The two were the first experts the Chinese health authorities sent as part of the program. The 36-year-old Yin, who has been working in the Chinese CDC for seven years, said he was one of more than 10 experts from different countries the STOP Program selected and sent to Nigeria at that time. He was working with experts from the WHO, The United Nations Children's Fund and Nigerian health authorities to formulate vaccination projects against polio and meningococcal meningitis and supervise and evaluate the implementation of the projects. Yin said Nigeria is the only African country where polio remains endemic. What's more, it is in Africa's "meningitis belt", which means the country has a higher rate of meningitis than most others on the continent. "I worked in two rounds of supplementary immunization activities against polio targeted at children under 5 years old and an immunization project against meningitis there," Yin said. Meanwhile, his colleague Xia Wei was the only one being sent to Namibia among the experts sent for the STOP Program missions at the time. Xia's job was to evaluate the southern African country's active surveillance system against vaccine-preventable diseases and its cold-chain system, the routes where vaccines are stored and transported and give advice to the national health authorities. "The health officials there would very much like to learn from China's experience in making immunization projects and building a public health system," Xia said. Given Namibia's low population density, he noted: "I could share with them how we carried out health programs in Qinghai province, even in the Xinjiang Uygur autonomous region and the Tibet autonomous region." Yin said his Nigerian hosts also were interested in what they could learn from China. "Nigerian people are very friendly to Chinese people. They are also eager to learn from China's experience in public health. China is the most populated country in the world, and Nigeria is the most populated country in Africa. The similarity allows the two countries to share experience on making public health policies." In addition to Yin and Xia, an expert at the Zhejiang provincial center for disease control and prevention also volunteered in the African country of Ethiopia from February to April for the STOP Program. Initiated in 1998, the STOP Program is carried out by the US CDC, WHO and UNICEF and aims to stop the spread of polio. The program's focuses on Africa and South Asia. Luo Huiming, deputy director of the National Immunization Program (NIP) of the Chinese CDC, said, "Wang Yu, director of the Chinese CDC, has been encouraging us to join international public health programs. China has many programs of providing medical assistance to African countries, but this (joining the STOP Program) is a very important step for us to join the international efforts of public health."

Workers are busy working in front of sewing machines in a manufacturing workshop in the northeastern coastal city of Dalian as the 2012 London Olympics approaches. Making uniforms for this year's US Olympic athletes, Dayang Group Co, Ltd. has encountered controversy following complaints from a group of US lawmakers, led by Senate majority leader Harry Reid, who chided the US Olympic Committee for not providing US Olympians with domestically produced uniforms last week. "I think they should take all the outfits, put them in a big pile and burn them and start all over," Reid said. Li Guilian, president of the Dayang Group, said the group had acctually produced more than 3,000 formal outfits for the US delegation to the 2008 Beijing Olympics. Ralph Lauren, a renowned US fashion designer, spoke highly of the quality of clothes made by the Dayang Group, adding that their quality persuaded him to work with the company again this year. "About 80 percent of our products are targeted at overseas markets," said Zhi Yong, an employee with the Dayang Group, adding that the company exports five million suits each year. "The Dayang Group has long-term strategic cooperation with overseas customers. This recent political event will not affect the development of the company, but highlight made-in-China products and our brand," said Li. Several enterprises in East China's Zhejiang province have also been rushing to churn out products for the London Olympics. Lu Zhuyuan, general manager of a local flag manufacturing company, said his company has made more than 4,000 flags for this year's event. "Two out of every ten flags flying over the London Olympics are made by our company," said Lu. Mei Xinyu, a researcher at the International Trade and Economic Cooperation Institution under the Ministry of Commerce, said "made in China" represents an increasing advantage in terms of price competition, which in turn can help to maintain a stable foreign trade environment. Relying on its huge domestic market, China has the advantage of a stable macroeconomic environment and market initiative in the global economy, Mei added. "As energy prices drop, lost manufacturing orders are likely to return to China," Mei said. Statistics show that in the first half of this year, Yiwu in Zhejiang, China's largest small commodity wholesale market, did an export of $34.28 million to Britain, up 17.86 percent year on year.

Hong Kong*:  July 22 2012 Share

Dutch-born councillor kicks off Legco campaign - The Civic Party's Paul Zimmerman has started seeking nominations as an independent candidate. Banker Ng Leung-sing will run in the finance sector. Civic Party member Paul Zimmerman has begun his campaign as an independent candidate in September's legislative elections, which the party fears may hurt the chances of other members. A copy of an e-mail from Zimmerman, obtained by the South China Morning Post (SEHK: 0583, announcements, news) and dated on Wednesday, shows that the Dutch-born Southern District councillor has begun asking for nominations. It was sent out a day after Civic Party leader Alan Leong Kah-kit said that he was talking with Zimmerman in an effort to avoid a split in the party while reaching a satisfactory arrangement for all concerned. Zimmerman has said he was not willing to join the party ticket, which is expected to be led by former party chairman Dr Kenneth Chan Ka-lok and lawmaker Tanya Chan. Zimmerman's e-mail says: "I hope I can have your support and signature, and however many supporting family members and friends you can add. We can collect the form when ready." Zimmerman, who became a Chinese national on Wednesday - making him qualified to run - earlier said he might quit the party to run in the Hong Kong Island constituency or run as a party member for one of the five new district-council functional constituency seats. Tanya Chan said the party's management was talking with fellow district councillors and the NeoDemocrats to see if they could nominate Zimmerman to contest one of the so-called super seats. NeoDemocrat district councillor Gary Fan Kwok-wai said he and seven other councillors had yet to decide whether to nominate Zimmerman, and a meeting might be arranged between them and the Civic Party. Former chief secretary Anson Chan Fang On-sang said the next Legislative Council term was crucial because it would address the electoral methods of the 2017 chief executive race under universal suffrage, and the 2016 Legco election. She appealed to the media to monitor whether the city's freedoms and rights were being eroded under Chief Executive Leung Chun-ying's administration. That should be a higher priority than digging out top officials with illegal structures at their homes, she said. Yesterday - the second day of the nominations period, which is due to end on July 31 - the Registration and Electoral Office said six more forms for direct elections had been received, bringing the total to 29. Four more nomination forms were received for functional constituencies, making the total 20. In the finance sector, Bank of China (Hong Kong) Trustees chairman Ng Leung-sing submitted his nomination yesterday. He will probably be the only candidate in the sector, according to bankers. Incumbent David Li Kwok-po, the chairman of Bank of East Asia (SEHK: 0023), will not seek re-election and supports Ng. In the legal sector, barrister Dennis Kwok Wing-hang of the Civic Party yesterday declared his candidacy for the seat currently held by colleague Margaret Ng Ngoi-yee, who is not contesting the seat. He will take on Huen Wong, a former president of the Law Society. In the Heung Yee Kuk sector, kuk members at a meeting yesterday unanimously agreed that chairman Lau Wong-fat should run for re-election. Lau said he would announce his decision next week.

Victor Li Tzar-kuoi, son of Li Ka-shing, was passed ncontrol of Cheung Kong Holdings on Friday as part of his father's succession plan. Asia's richest man, Li Ka-shing, has kicked off a succession plan to transfer control of his empire to his eldest son Victor Li Tzar-kuoi, who has started to take control of the HK$850 billion (US$110 billion) Cheung Kong group after an asset transfer. Victor Li now holds two-thirds of Li Ka-shing Unity Holdings Limited after his younger brother Richard Li transferred his one-third holding in the family trust to him on July 16, according to a filing to the Hong Kong stock exchange. “This is just a procedure to implement what Mr Li Ka-shing had said in the company’s annual general meeting,” Cheung Kong spokeswoman Wendy Barnes told Reuters. In May, the 83-year-old billionaire said Victor, 47, would assume the stakes he holds in listed companies, while pledging to bankroll the ventures of Richard, chairman of the telecom PCCW (SEHK: 0008) Ltd. A Hong Kong business legend, Li’s $25.5 billion fortune ranked him ninth on the this year Forbes Billionaires List. Li Ka-shing will continue to hold the remaining third of the trust, which controls Cheung Kong (Holdings) (SEHK: 0001) Limited, Hutchison Whampoa (SEHK: 0013) Ltd and other affiliate companies. The major holdings of the Li empire, which includes Cheung Kong Infrastructure (SEHK: 1038) and electricity company Power Assets, have a combined market value of close to US$100 billion. Interests in another 18 affiliates push the total size of the empire beyond that mark.

Chief Secretary Carrie Lam Cheng Yuet-ngor blames an "internal misunderstanding" about issuing notices or press releases about officials' trips. An “internal misunderstanding” has been blamed for failure to publicise a trip to Beijing by the education minister, leading to accusations he had made a secret visit to discuss national education. Chief Secretary Carrie Lam Cheng Yuet-ngor confirmed on Friday that Eddie Ng Hak-kim did visit Beijing early this week, but denied the trip was a secret one. “The trip was actually a courtesy official visit. It had been pre-arranged some time ago,” she said. Local media reported that Ng visited Beijing and met Minister of Education Yuan Guiren on Tuesday to discuss implementing the controversial curriculum in Hong Kong’s schools. Before Ng’s trip, the Education Bureau did not issue any notice or press release, in contrast to the government’s usual practice of making public the itineraries of officials’ visits. Lam said an “internal misunderstanding” over press release arrangements was to blame for the failure to make the trip known. She also said Ng should have issued a press release before the trip. The Education Bureau plans to make national education a compulsory subject in primary schools in 2015 and secondary the following year. Primary schools are now being encouraged to introduce national education teaching as an independent subject in September, while secondary schools are being encouraged to do so by September next year. But students and teachers fear the course will lead to indoctrination and brainwashing. Their anxiety is furthered by a government-funded teaching manual with content praising one-party rule. Some school-sponsoring bodies, such as the Catholic Diocese, have said they will not introduce national education this September while teachers’ and parents’ groups have called for the course to be scrapped.

 China*:  July 22 2012 Share

Li Baodong (right), China's representative to the United Nations, votes against a resolution threatening sanctions on Syria in New York on Thursday. The People’s Daily newspaper on Friday accused the West of seeking a green light for military intervention in Syria, after Beijing and Moscow blocked a UN resolution threatening sanctions against Damascus. Russia and China on Thursday vetoed a UN Security Council resolution threatening sanctions against Syrian President Bashar al-Assad if he did not end the use of heavy weapons against an uprising, drawing sharp criticism from Western powers. “Frankly speaking, Western countries attempted to push the United Nations to vote for the sanction resolution in order to get the green light for their military intervention,” said the People’s Daily, mouthpiece of the ruling Communist party. The paper’s comments echoed those of Russia’s UN ambassador Vitaly Churkin, who said the resolution aimed to “open the path to the pressure of sanctions and further to external military involvement in Syrian domestic affairs”. It was the third time in nine months that Russia and China wielded their veto power. As two of the five permanent members of the 15-nation council, the two countries can block any UN resolution. The veto drew swift criticism from other permanent council members. Britain was “appalled” by the vetoes, said the country’s UN envoy Mark Lyall Grant, while US President Barack Obama’s spokesman Jay Carney said the vetoes were “highly regrettable” and called it a “mistake to prop up that regime”. World powers have so far failed to secure international action to halt the conflict in Syria, part of a series of revolts in the Arab world that have seem changes of government in Tunisia, Egypt and Libya. Analysts say China’s intransigence may stem from its discomfort with Western military action after last year’s uprising in Libya, which eventually led to the fall of leader Muammar Gaddafi. China consistently opposed military action in Libya within the 15-member Security Council, but did not use its veto to block the March last year resolution authorising the operation, instead abstaining in the vote. But it believes the West misinterpreted the resolution and went too far.

President Hu Jintao talks to South African President Jacob Zuma (front row left) and Beninese President and African Union Chairman Thomas Boni Yayi (front row right) as they, UN Secretary-General Ban Ki-moon (far right) and other African leaders enter the venue of the Fifth Ministerial Conference of the Forum on China-Africa Cooperation at the Great Hall of the People in Beijing on Thursday. China will support the African integration process, and promote exchanges between the people, media and scholars of China and Africa to "lay a solid foundation of public support" to the relations. The president also said Beijing will provide a $20 billion credit line to African countries over the next three years. The loans will support infrastructure, agriculture, manufacturing and development of small and medium-sized businesses. In addition, Beijing will "continue to expand aid to Africa, so that the benefits of development can be realized by the African people", Hu said. The plan included various items, including training 30,000 personnel in various sectors for Africa, and offer 18,000 government scholarships. "China wholeheartedly and sincerely supports African countries choosing their own development path, and will wholeheartedly and sincerely support them to raise their development ability," Hu said at the ministerial conference, which has taken place every three years since 2000. Leaders of eight African nations, as well as UN Secretary General Ban Ki-moon, attended the opening ceremony. Ministers of foreign affairs and foreign economic cooperation from China and 50 African nations will attend the ministerial conference. There have been reports on the conference linking China's assistance to Africa with criticism that Beijing is trying to get access to the resource-rich continent through massive cooperation. However, many guests saw it differently. "Africa's past economic experience with Europe dictates a need to be cautious when entering into partnerships with other countries," South African President Jacob Zuma said when addressing the opening ceremony. "We are particularly pleased that in our relationship with China, we are equals, and that agreements entered into are for mutual gain," Zuma added. "We certainly are convinced that China's intention is different than that of Europe, which to date continues to intend to influence African countries for their sole benefit." Du Xudong, a commentator for People's Daily, wrote in an article on Thursday that Western media's misunderstanding of the close relations between China and Africa is partially due to the fact that they "just saw the flower but did no realize how deep the roots have extended". China's friendship with Africa dates to the 1950s, when Beijing backed liberation movements on the continent that were fighting against Western colonial rule. Many African countries say they appreciate China's no-strings aid. "And the Chinese people will never forget it was the African brothers who carried China on their shoulders into the United Nations," Du wrote, referring to the major role Africa played in helping Beijing regain its seat at the UN in 1971. Liu Guijin, former special envoy of the Chinese government on African affairs, said the five proposals Hu raised on Thursday reflected new trends in China-Africa relations. One of the highlights is security cooperation, Liu said. "Africa is under great pressure in terms of security. ... In the past several years, the loss brought by turbulence in Africa has outdistanced the assistance it received," he said. "So China has found itself duty-bound to help." During the two-day meeting, the delegates will review the implementation of tasks set in the last meeting in 2009, explore new ways to deepen Sino-African relations and improve the forum's mechanism. It is also expected to forge a new cooperation plan for the coming three years.

People queue up to buy the New iPad during its launch on the Chinese mainland at the flagship Apple store in Shanghai, on July 20, 2012. Apple Inc launched the third generation of its iPad tablet on the Chinese mainland Friday. The New iPad with Wi-Fi are available in black or white for a suggested retail price of $499 for the 16GB model. Versions with more memory and cellular service will retail for as much as $829, the Cupertino, California-based company said on July 10 in a statement.

Hong Kong*:  July 21 2012 Share

Consumer confidence in Hong Kong dropped to a four-year low in the second quarter as living expenses and housing prices soared. Consumer confidence in the economy and livelihoods dropped to a four-year low in Hong Kong in the second quarter, a survey by City University shows. The consumer confidence index fell to 77.5 in the quarter, the lowest since the quarterly study was launched in 2008. The reading in the previous quarter was 80.7. The study found that Hongkongers worried most about inflation and exorbitant housing prices. On prices and home purchases, the index stood at 56.6 and 49.2, both lower than the readings in the previous quarter. A reading below 100 reflects a lack of confidence and above 100 shows confidence, with 200 being the most confident. "This indicates Hong Kong consumers hold a very pessimistic view of living expenses and housing prices, which they think are too high," said Zhang Juan, a representative of CityU. The survey is part of a study conducted by several universities in Hong Kong, Macau, Taiwan and the mainland to track changes in consumer confidence. According to the study, the consumer confidence index on the mainland stood at 87.2 in the second quarter, down from 90.5 in the first. But it was still higher than elsewhere in the country. In Macau, the index was 84.9 and it was 73.7 in Taiwan. Liu Yang, director of the School of Statistics with the Central University of Finance and Economics in Beijing, said the drop in the index on the mainland did not come as a surprise as consumer sentiment had been hit hard by the economic slowdown. The economic growth rate fell to a three-year low of 7.6 per cent in the second quarter. "Despite the overall decline in the index, most mainland consumers are still confident the economy will improve in the next three months," she said. The statistics released in the study are separate from those issued by the National Bureau of Statistics each quarter. The study polls 1,000 to 3,000 people each on the mainland and in Hong Kong, Macau and Taiwan through random telephone interviews every quarter, asking for their views on economic prospects, employment, prices, quality of life, home purchases and investments.

A retired senior graft-buster has been appointed deputy commissioner of the Independent Commission Against Corruption, raising doubts about succession plans at the city's anti-bribery agency. Ryan Wong Sai-chiu, 60, was appointed yesterday as the ICAC's deputy chief and head of operations, meaning he will be managing all investigators at a time when some of Hong Kong's political elite are embroiled in graft-related scandals. He retired as a director of investigation in January. Commissioner Simon Peh Yun-lu, who earlier said a long-term succession plan was in place and competent officers had been groomed to take up senior jobs, said Wong had "solid, profound investigative and management experience". Wong will succeed Daniel Li Ming-chak, also 60, who begins his pre-retirement leave today. Li's term was extended twice to look into allegations that former chief executive Donald Tsang Yam-kuen had received favours from his tycoon friends. Former ICAC investigator Stephen Char Shik-ngor said it was "obvious that the ICAC, like many other government departments, has succession problems". The appointment means that Rebecca Li Bo-lan, a director of investigation who had been widely tipped as Daniel Li's successor, will not be promoted this time. Describing Wong as highly experienced and even-handed, Char, now a barrister, said it would be good to let Wong lead investigations for several years before promoting Rebecca Li, as she was hard-working but relatively inexperienced. Rebecca Li was only promoted to director last year, while Wong served as a director of investigation for six years and also had 16 years of management experience. Section 6 of the ICAC Ordinance states that the chief executive shall appoint a deputy ICAC commissioner. But chief executive Leung Chun-ying delegated that power to Chief Secretary Carrie Lam Cheng Yuet-ngor in this case. A spokesman for Leung's office said that since there had been complaints against Leung for making false election claims, the power to make appointments was delegated to Lam to ease doubts among the public. Wong, who will now serve a three-year term, joined the ICAC with Daniel Li in 1977. He was promoted to assistant director in 1996 and to director of investigation in 2006, in a 35-year career in the ICAC.

Google poses with his trainer Raymond Cheung in Sai Wan Ho after his graduation yesterday. Hong Kong's first guide dog in more than 30 years - a Labrador retriever named Google - graduated from training yesterday even as rival guide-dog groups continued to war over who his rightful owner is. Despite the ownership fight, the one-year-old retriever was capped with a mortar board and handed over to his delighted new master, David Wong Man-chiu, 62, who has been blind for 20 years. "I attended Google's birthday party last year just because I was curious to learn a bit more about guide dogs," Wong said. "I had only seen one on TV 37 years ago. I never thought I would own one one day." Guide dogs have been non-existent in Hong Kong since the last one was struck by a car 36 years ago and an expert deemed the city too noisy and crowded for their safety. Wong said he was pleased that Hongkongers seemed to accept Google's presence as the pair trained together. "When I took the MTR with Google for the first time, I was relieved that he did not cause any panic among passengers," said Wong. "I took him to the elderly centre where I work as a volunteer and it was all right, too." Google will live with Wong until death or scheduled retirement at age 11. At that point, Wong will have to decide whether to keep him or send him to live with another family. Handing Google to Wong should for all practical purposes end the months-long ownership fight between the dog's trainer, Raymond Cheung Wai-man, and Cheung's former employer, the Hong Kong Guide Dogs Association. Nonetheless, both sides continued to claim ownership of Google, as well as another guide dog, Iris. The dispute broke out when Cheung - the city's sole licensed guide-dog instructor - left the association and, with Google and Iris, set up his own group, Hong Kong Seeing Eye Dog Services. The association blamed Cheung for a collapse in mediation talks and would not rule out further action. But Cheung said Wong and Google could not be separated. "This won't change, no matter what the result of the mediation is," Cheung said.

Queues for the first day of the Hong Kong Book Fair at Hong Kong Convention and Exhibition Centre in Wan Chai. These visitors to the opening day of the annual Hong Kong Book Fair made straight for the romance novels to cash in on the discounts yesterday. More than 530 exhibitors from 20 countries are taking part in the event at the Hong Kong Convention and Exhibition Centre where organisers are hoping to beat last year’s attendance of 950,000. The fair runs until July 24. The Hong Kong Book Fair is an echo of what is happening in society, according to many publishers and booksellers attending this year's event Wan Chai. Hongkongers turn to books to understand the issues dominating the newspaper headlines, from the chief executive election to compulsory national education in schools, they say. Books on current affairs, publishers report, have soared in popularity at this year's fair, which began yesterday at the Hong Kong Convention and Exhibition Centre. Carmen Kwong Wing-suen, editor-in-chief at Up Publications, said its main customers were youngsters. But yesterday she noticed an increase in parents asking for one book in particular, called I Don't Believe in the Beijing Consensus. The "Beijing consensus" is the theory that government-driven national enterprises - rather than a free economy - are the key to China's success. It has become a hot topic among parents since a Beijing-loyalist group printed controversial teaching materials for national education in Hong Kong schools, citing the theory and praising one-party rule. "Some parents told us they are not happy about national education [to be introduced in primary schools this September], and they want to know more about the topic," Kwong said. Other popular books include one making fun of the Hong Kong government and another criticising the new administration of Chief Executive Leung Chun-ying, she said. Parental concern about national education is pushing up sales of all education-related books, said Jimmy Pang Chi-ming of the publishing house Sub-Culture, which has released two new education titles. One carries interviews with teenagers returning from pro-China national education tours, the other is a critical look at the city's ever-changing education system since the handover. Leung Kam-hung, a Baptist University student majoring in liberal studies, said: "There are not enough good books in the fair about national education, but ideas may come after reading books about the problem of the [education] system." There has, meanwhile, been a growing interest in local history. Lai Man-cheuk, publisher of Fire Stone Publications, said his store had sold 600 books on the fatal 1967 riots. "Youngsters are familiar with June 4, which happened in Beijing, but not the riots in Hong Kong," he said. Ivy Wu, of the Chung Hwa Book Company, added that visitors were increasingly drawn to secondary school reference books on the development of modern China.

The number of elderly people registered to vote has increased. 50pc rise in number of elderly registered to vote in Legco election, and a drop in those in their 30s and 40s, may favour pro-establishment parties - Pan-democratic candidates may suffer at the polls from marked shifts in the age groups of voters registered for September's legislative election, analysts said yesterday. The latest figures were published by the Registration and Electoral Office yesterday. They show the number of voters in their 30s and 40s has dropped by more than 10 per cent since 2008. The number of elderly voters has grown sharply, notably with a 50 per cent jump in the 61-65 age group. Yesterday was also the first day of the two-week nomination period for September's Legislative Council election. Political heavyweights and fledgling challengers alike were eager to submit their nomination forms: the 39 handed in was the highest first-day number since 1997. A total of 3,466,175 voters are eligible to vote in the September 9 election, 2.8 per cent more than in the 2008 election, the electoral office reported. The increase was driven largely by big rises in young and elderly voters. Voters aged 18 to 20 are up 40.9 per cent, while the number aged 61 to 65 is up 49.9 per cent. But the numbers in between dwindled. There was a drop of 17 per cent from 2008 in registered voters who are in their 40s; the decline in the number of voters aged 41 to 45 was even more marked, at 21.7 per cent. The drop was smaller for those in their 30s: there are 4 per cent fewer voters aged 36 to 40 and 11 per cent fewer aged 31 to 35. Observers said the big rise in voters 61 and over showed that the Beijing-loyalist camp had worked hard at getting them registered. "Traditionally, the elderly are the major support base of the pro-establishment camp, which has more resources for district work," said Ma Ngok, associate professor in Chinese University's department of government and public administration. "The group that has seen a big increase may not be like normal voters, who are really interested in casting a ballot. But the pro-establishment parties are always more organised, and better at getting them to register and vote." The figures may suggest an advantage for the pro-government Democratic Alliance for the Betterment and Progress of Hong Kong and Federation of Trade Unions, Ma said. As for the shrinking number of middle-aged voters - who tend to favour pan-democrats - Ma pointed out that they tend to move home a lot, and some may have forgotten to re-register as voters. "Those who don't care about renewing their registration may not be keen on politics. They may not come out and vote in the election anyway," Ma said. Political observer James Sung Lap-kung, of City University, said radical pan-democrat parties such as People Power and the League of Social Democrats were likely to gain from the increase of young voters. The number of Legco seats increases from 60 to 70 for the September election, and a record number of nominations is expected. The registered electorate is 2.7 per cent smaller than that for November's district council polls, largely because 216,000 people lost their voting rights after ignoring the electoral office's requests to validate their addresses as part of a clampdown on vote-rigging. The electoral office sent 296,000 letters to voters whose addresses were in doubt, and gave them six weeks to reply.

Hong Kong Developer Cartel Being Challenged: Barclays - One Silversea, a property developed by Sino Group, center, stands in Hong Kong, China, on Friday, July 8, 2011. The likes of Sino Land Co. Ltd., Henderson Land Development Co. Ltd. and Cheung Kong (Holdings) Ltd. could be seeing their elite status as property developers shaken up, according to Barclays. The bank notes that there has been an uptick in deals in recent months by small and mid-cap property developers in Hong Kong, as well as increasing interest from mainland players, which it says is “unusual.” Earlier this month, an entity backed by Chinese state-owned commodities trader Cofco Corp. bought a majority stake in Hong Kong Parkview Group Ltd. for HK$362 million. Hong Kong Parkview is the developer of high-end housing complex Parkview. In May, China Vanke Co. took a 74% stake in Hong Kong-listed Winsor Properties Holdings, which has projects in Hong Kong and Singapore, its first overseas foray. China Vanke is China’s largest property developer by sales.

 China*:  July 21 2012 Share

KFC parent Yum Brands reported quarterly profit that missed Wall Street's view as higher costs in China cut into margins in that country, its top market. Food and wage costs rose in China while a move to 24-hour operations and delivery increased expenses. Yum also has been investing in training employees for new restaurants, which it is building at a rapid clip, Yum spokesman Jonathan Blum told reporters. Louisville, Kentucky-based Yum is the biggest Western restaurant operator in China, with more than 3,900 KFC shops and almost 700 Pizza Hut restaurants, and is widely viewed as a way for US investors to bet on that country. “The earnings miss is because China margins were a lot softer than people expected, but that’s largely a function of them growing,” Bernstein Research analyst Sara Senatore said. She said those pressures should stabilise over time and that wage growth in China is decelerating. “We expect this to be short-lived,” Yum Chairman and Chief Executive David Novak said in a statement, referring to the China margin hit. China has been the world’s economic engine as many other countries have struggled to recover from the financial crisis, but it recently spooked investors with data showing that its growth had cooled to a three-year low. A lengthening line of US corporations in past weeks have warned that China’s cooling growth is dampening prospects for revenue and profit growth at a time when economies in the United States and Europe are shaky. Computer chip maker Intel reduced its sales outlook due in part to China’s deceleration and the CEO of Dell said the personal computer maker had seen a business slowdown in China. Worries about China have helped to send shares in Yum, which gets roughly 40 per cent of its profit from China, down more than 10 per cent from their all-time high of almost US$75 in April. The company has been raising prices in China to offset higher costs but that has not appeared to hurt demand as traffic rose 6 per cent during the quarter. The company’s 10 per cent gain in sales at established restaurants in China topped analysts’ average call for a rise of 9.2 per cent, according to Consensus Metrix. Net income for the second quarter, ended on June 16, rose to US$331 million, or 69 cents per share, compared with US$316 million, or 65 cents per share, a year earlier. Excluding a gain of 2 cents, the company earned 67 cents per share in the latest quarter, missing analysts’ average estimate by 3 cents per share, according to Thomson Reuters I/B/E/S. Yum said its worldwide restaurant margin fell 0.6 percentage point to 15.2 per cent during the second quarter, including declines of 4.1 percentage points in China and 1.1 percentage points at its unit that includes other international markets such as Japan, Russia and France. The restaurant margin increased 5.8 percentage points in the United States, where new menu items have boosted sales at Taco Bell, its Mexican-style fast-food chain that accounts for about 60 per cent of domestic operating profit. Shares in Yum fell 1.9 per cent to US$64.30 in extended trading on Wednesday.

The reform-minded Communist Party boss of one of the poorest provinces is likely to be given a powerful Beijing post this year, three sources said, as part of a reshuffle ahead of a national leadership change that should ensure China continues to open up. Li Zhanshu , 61, was relieved as party boss of Guizhou and succeeded by provincial governor Zhao Kezhi , 58, Xinhua reported yesterday. Li would be "reassigned", the agency said but did not elaborate. Li, who has close ties to President Hu Jintao and Vice-President Xi Jinping , was the front runner to become the head of the powerful General Office under the party's elite 200-member Central Committee, said two sources with knowledge of Li's planned promotion. Both sources requested anonymity to avoid political repercussions for speaking to foreign media. "Li is the new political star," said one source with ties to the top leadership. "He is acceptable to both [Hu and Xi] camps." The General Office is the nerve centre of the top leadership, deciding the meetings and agenda of Politburo members. It is headed by Ling Jihua , one of Hu's closest aides. Alternatively, Li could become head of the party's organisation department, a third source said, also speaking on condition of anonymity. The department recommends the party's 82.6 million members for promotion or demotion. Li is a shoo-in to become either an alternate or full member of the Politburo, which has 24 members after the downfall of Bo Xilai , the party boss of Chongqing , in April. A final decision on Li's new job was expected at an informal gathering of incumbent and retired leaders in Beidaihe soon, the sources said. Hu, 69, is widely expected to hand over the top job in the party to Xi, 59, at the party's five-yearly 18th national congress later this year. Hu will pass on the presidency to Xi next year after the constitutional limit of two five-year terms. In the first major step in the provincial reshuffle ahead of the congress, Beijing mayor Guo Jinlong, 64, was named the capital's new party boss this month. Li cut his teeth as head of the Communist Youth League in Hebei province from 1986 to 1990. The league is Hu's power base and known as the party's "helping hand and reserve army", boasting more than 75 million members. During his two-year stint as Guizhou party boss, Li called for reform of the administration, state-owned enterprises, investment and financing vehicles as well as natural resources management. Guizhou is the 16th biggest province in terms of area. With a population of 35 million in 2010, it ranks 19th of the nation's 31 provinces. Its gross domestic product was 26th last year. Li convened a meeting on "reform and opening up" in June and told the province's top officials that Guizhou was an economic backwater because reform was not deep enough.

Students show their commitment to HIV prevention during a campaign in Jinan, Shandong. The amount China spent on fighting HIV/Aids quadrupled to US$530 million last year from US$124 million in 2007, making the nation an important player in the global campaign against the disease, a UNAids report said yesterday. China is now one of the top five contributors to research into HIV, spending US$18.3 million last year, including the pursuit of a vaccine. The report singled out as a milestone a new level of access to antiretroviral treatment - for the first time, half of the people who needed the treatment, about eight million, had access to the drugs. The report was released ahead of the 19th International Aids Conference in Washington next week. It said annual new infections had dropped by 20 per cent over the past decade, to 2.5 million last year. The number of people worldwide with HIV/Aids totalled 34.2 million. Steve Kraus, the director of the UNAids regional support team for Asia and the Pacific, said people could for the first time since the virus emerged talk about reversing the rise in the number of infections, and even an end to the epidemic. "Are we getting everyone on the treatment? No. Have we stopped all these new infections? No," Kraus said. "But we get an increase in the coverage of treatment and we're reducing new infections." The report highlighted the growing potential of emerging economies such as China Brazil, Russia and South Africa contributing to funding the global fight. It said their rising economic strength allowed them to assume responsibility for their domestic programmes, thereby freeing up assistance for less developed nations. But it also underscores the challenges that remain. For instance, young people accounted for a disproportionately high number of new infections - about 40 per cent. Discrimination remained a problem in many parts of the world. More than 60 per cent of HIV-infected people in China, Bangladesh, Myanmar and Scotland reported feeling ashamed of their condition, the report said. They were often verbally insulted, shunned by family members or lost their jobs because of their status, it said. China has 346,000 registered HIV carriers and Aids patients, but the number had been expected to reach 780,000 by the end of last year, according to an earlier assessment by the Ministry of Health, the World Health Organisation and UNAids. Kraus said China needed to learn to spend HIV/Aids funds wisely by working with communities to reach out to key groups at risk, such as gay men. He voiced disapproval of a recent push to demand real-name registration for counselling or testing. "It's important for people to know their HIV status, but it's voluntary and people go out voluntarily to identify and know their status, not because they're forced to do that," he said. "So if you start to introduce a compulsory test system, you drive the very people you try to seek for services underground."

China pledges Africa US$20b in loans - President Hu Jintao addresses the opening ceremony of the Fifth Ministerial Conference of the Forum on China-Africa Co-operation (FOCAC) in Beijing on Thursday. President Hu Jintao on Thursday offered US$20 billion in loans to African countries over the next three years, boosting a relationship that has been criticised by the West and given Beijing growing access to the resource-rich continent. The loans offered were double the amount China pledged for the previous three-year period in 2009 and is the latest in a string of aid and credit provided to Africa’s many poverty-stricken nations. The pledge is likely to boost China’s good relations with Africa, a supplier of oil and raw materials like copper and uranium to the world’s most populous country and second-largest economy. But the loans could add to discomfort in the West, which criticises China for overlooking human rights abuses in its business dealings with Africa, especially in Beijing’s desire to feed its booming resource-hungry economy. Hu brushed off such concerns in his speech at the Great Hall of the People, attended by leaders including South African President Jacob Zuma and Equatorial Guinea’s Teodoro Obiang Nguema, a man widely condemned by rights groups as one of the world’s most corrupt leaders. “China wholeheartedly and sincerely supports African countries to choose their own development path, and will wholeheartedly and sincerely support them to raise their development ability,” Hu said. China will “continue to steadfastly stand together with the African people, and will forever be a good friend, a good partner and a good brother”, he added at the summit held every three years since 2000. Hu also pledged to “continue to expand aid to Africa, so that the benefits of development can be realised by the African people”. He did not provide an amount. Hu said the new loans would support infrastructure, agriculture, manufacturing and development of small and medium-sized businesses in Africa. Critics say China supports African governments with dubious human rights records as a means to get access to resources. The EU has rejected what they call China’s “cheque book” approach to doing business with Africa, saying it would continue to demand good governance and the transparent use of funds from its trading partners. Such criticism draws rebukes from China that the West still views Africa as though it were a colony. Many African countries say they appreciate China’s no-strings approach to aid. “Africa’s past economic experience with Europe dictates a need to be cautious when entering into partnerships with other countries,” Zuma told the forum. “We are particularly pleased that in our relationship with China we are equals and that agreements entered into are for mutual gain,” Zuma added. “We certainly are convinced that China’s intention is different to that of Europe, which to date continues to intend to influence African countries for their sole benefit.” China’s friendship with Africa dates back to the 1950s, when Beijing backed liberation movements in the continent fighting to throw off Western colonial rule. Chinese state-owned firms in Africa also face criticism for using imported labour to build government-financed projects like roads and hospitals, while pumping out raw resources and processing them in China, leaving little for local economies. “Certainly quite a number of us are thinking we need to move into more value addition,” South African’s Trade and Industry Minister Rob Davies told Reuters. “We need to export mineral products in a more processed form ... We need to bite this bullet very seriously.” Trade has jumped in the past decade, driven by Chinese hunger for resources to power its economic boom and African demand for cheap Chinese products. China’s trade with Africa reached US$166.3 billion last year, according to Chinese statistics. In the past decade, African exports to China rose to US$93.2 billion from US$5.6 billion. Industrial and Commercial Bank of China (SEHK: 1398) 601398.SS, for example, the world’s most valuable lender, has invested more than US$7 billion in various projects across the continent.

LV lures China's super-rich with custom 'art' - A worker makes preparations for the upcoming opening the largerst Louis Vuitton store in China, which located in Shanghai, July 17, 2012. Louis Vuitton is courting China's wealthy with one-of-a-kind shoes and bags it is branding as unique works of art to reclaim its exclusive cachet in the luxury market. The French luxury brand, a unit of LVMH, is set to open its largest China store in Shanghai on Saturday, complete with a gilded spiral staircase and an invitation-only private floor where big spenders can get their hair done while dreaming up designs for custom bags. "The made-to-order concept is the ultimate luxury," Louis Vuitton Chief Executive Yves Carcelle told Reuters during a tour of the store, which the company calls a "maison". "It's the same with art. If you are interested in art, the ultimate is to commission an artist rather than buy a piece that is already done," Carcelle said. Louis Vuitton routinely ranks among the most admired brands in surveys of Chinese consumers. But ultra-luxury names such as Hermes are making inroads, and some top-tier consumers now look down on Louis Vuitton as too common. The company hopes to cement its exclusive luxury status with the new Shanghai store, which boasts steel sculptures and carries a wide array of goods ranging from chic coats and hats to brightly coloured bags made from python or alligator skin. It also sells carrying cases for tiles used to play the Chinese game mahjong and made-to-order trunks for tea sets. China is the world's third biggest market for personal luxury goods, worth at least 160 billion yuan. In the next three years, it is expected to leapfrog over Japan and the United States to take the top spot, with the luxury segment expanding to 180 billion yuan. Bad timing? The Louis Vuitton maison, one of 16 similar boutiques in the world, is located in Shanghai's address for luxury goods: the swanky Plaza 66 mall, where rival brands such as Chanel and Prada also have stores. Spanning four levels and with more than 100 staff, the store is currently the only one in China that offers custom bags and shoes. The company declined to say how much it spent on the boutique. "Being in this made-to-order market needs sophisticated customers who know what they are talking about and own several bags, if not dozens of bags," Carcelle said. "That's why the haute maroquinerie and made-to-order-shoes... are important to demonstrate in China," he said, using the French word for luxury leather crafts. "As long as we didn't have this space to show them to our clients, in a world that is changing fast, we were missing our weapons," he said. Louis Vuitton's timing, however, may be less than ideal. Luxury spending is softening in China as the economy weakens. Economic growth slowed to its lowest level in three years last quarter. Britain's Burberry said last week its sales had been hit by the slowdown in China. Carcelle declined to comment on the state of the Chinese economy or its impact on luxury spending, but said he sees more "maisons" opening up in the capital Beijing and Hangzhou, a thriving trade hub in eastern China. He said Chinese consumers had rapidly matured into luxury connoisseurs, and the company needed to cater to both first-time buyers and sophisticated shoppers. "Maybe in the West, this trend took 20 years but here it takes 5 years from the first purchase to the willingness to have more sophisticated products and services," Carcelle said.

WHO urges China to tax smokers - Cigarette tax should be increased to combat nicotine addiction in the world's largest tobacco consumer and producer, the World Health Organization chief said. World Health Organization Director-General Margaret Chan (right) gives the certificate and medal of the Director-General's Special Recognition of Contribution to Global Tobacco Control to Chen Zhu, the minister of health, in Beijing on Wednesday. WHO Director-General Margaret Chan called for more taxes on Wednesday after awarding Health Minister Chen Zhu a certificate in recognition of his efforts to combat smoking. "There is still plenty of room for China to raise its tobacco tax and the government should take more action regarding this to help curb smoking," she told China Daily. "Evidence shows that higher taxes deter people, especially the young, from smoking,'' she said. International studies indicate that for every 1 percent rise in the price of a packet of cigarettes, the number of smokers falls by about 0.4 percent, she said. "Every time I have come to China and had the opportunity of speaking to Chinese leaders, I encouraged them to raise tobacco tax," she added. There is a huge financial cost in treating tobacco-related diseases, Chan said. China has 350 million smokers, more than one-third of the world's total, and at least 1 million people die from smoking-related diseases each year, according to the ministry. By 2020, the figure for fatalities is expected to reach 2 million without effective intervention. Government agencies, like the ministries of health and education, have introduced policies such as smoke-free hospitals and schools, as well as smoking bans at most public indoor places. Tobacco products have also been targeted with tax hikes. In 2009, authorities increased tobacco tax by at least 6 percent, mostly on the more expensive brands. "But that had little effect on curbing tobacco use, particularly the low-end brands," said Yang Gonghuan, former director of the tobacco control office under the Chinese Center for Disease Control and Prevention. Tobacco tax, even after the hike, remained very low on a global scale. "Countries are looking at how to increase tobacco tax and China should also raise the tax according to its own circumstances," Chan said. China signed the WHO Framework Convention on Tobacco Control and ratified it in 2005. The campaign to combat nicotine addiction falls under the Ministry of Industry and Information Technology, which also oversees the State Tobacco Monopoly Bureau, often referred to as the China National Tobacco Corp. Chan suggested that implementation of the WHO framework should be led by the Ministry of Health instead. "I would confer an award to the Ministry of Industry and Information Technology to encourage them," she said. Vice-Premier Li Keqiang also met Chan in Beijing on Wednesday. Li congratulated Chan on her second term as director-general of WHO, which was announced in May. Chan spoke highly of China's progress in medical reform, which, among other things, saw medical insurance coverage rise from 30 percent to 95 percent for residents in the past five years.

ABB sets sights on 'designed in China' - An ABB robot used at Great Wall Motors Co Ltd's Tianjin plant. ABB is the first and only company to localize its robotics manufacturing in China. Hubertus von Grunberg suddenly got up and walked around the table holding his black electronic device. He pointed to some tiny words on the back of the tablet computer and said excitedly: "Here everybody can see a symbolic phrase. "It says 'Designed in USA, assembled in China', " which "has a lot to do with how our company thinks about China differently from what's being done here. This is not what we pursue and it will not work in the future", said the 70-year-old chairman of the board of directors of Swedish-Swiss power and automation technology giant ABB Group. "ABB is targeting an approach of 'Designed in China and made in China'. Chinese homemade products, which we produce here, are also increasingly designed, invented and patented here by our high-quality Chinese engineers. And these products are increasingly sold worldwide," said Von Grunberg. Since it first supplied a steam boiler to China in 1907 and invested in its first joint venture in Xiamen, Fujian province, in 1992, ABB has established a full range of business activities in China, including research and development, supply chain management, engineering, manufacturing, sales and services. It has 18,300 employees, 35 local companies and an extensive sales and service network across 80 cities. It has also established itself as a dominant presence in China's fast-growing power transmission market, with total revenue in China of $5.1 billion in 2011. As much as 85 percent of its revenues are derived from its locally made products. While implementing its "In China, For China" strategy, the company is now also expanding its goal of bringing products made and designed in China to the world, making China one of its core global markets and manufacturing bases. The blueprint has enabled ABB China to export to more than 40 countries and regions, achieving export growth of more than 50 percent in 2011 year-on-year. Under the new strategy, with its focus on exports, Beijing-based ABB High Voltage Switchgear Co, which was established in 1995, has performed strongly in overseas markets. The company has exported more than 1,000 high-voltage circuit breakers to more than 20 countries and regions. "We are proud of our high-tech leadership - we are second to none - in the premium segment (of the market) globally. Now we are moving into the mid-segment where Chinese products will play a very important role," said Von Grunberg, indicating the potential of the designed-in-China products. "This mid-segment market has been developed in China and some other emerging markets. We therefore focus first on bringing the products to the Chinese market. As a next step we see if these products can be also interesting for other markets including Europe and the United States," added Claudio Facchin, president of ABB North Asia and China.

China still has considerable room in which to adjust economic policy and won't face a "hard landing" this year, former US Treasury secretary Henry Paulson said on Tuesday. Just back from a trip to China, the man who led President George W. Bush's 2008 bailout of Wall Street shared observations about the country and his new blueprint for upgrading economic relations between the world's two biggest economic powers. "There's no doubt that the economy has slowed down significantly, and in a number of areas, really slowed down," Paulson said in an address at the Atlantic Council, a think tank in Washington. "My own best judgment is that we're not going to see a hard landing," he added. Economists describe a hard landing as a severe slowdown or even contraction into recession of a country's gross domestic product, following a period of rapid growth. The cause is often a government's attempts to control inflation by tightening the money supply. Last week, China reported that its economy grew 7.6 percent in the second quarter, the lowest rate in more than three years. On Monday, the International Monetary Fund lowered its estimates for Chinese growth for this year and 2013, warning of the possibility of a hard landing in the medium term for the world's No 2 economy. The IMF dropped its forecast for this year's GDP growth to 8.0 percent from its forecast of 8.2 percent in April. It also cut its estimate of next year's growth rate to 8.5 percent from 8.8 percent previously. Paulson, who met with dozens of government and business leaders on his recent trip, said Chinese have recognized and begun to address problems posed by the overheated real estate market and inflation. "There is a lot of room in their economy - unlike ours - to respond positively to monitor the economy, loosening up lending and so on," he said. "I will be quite surprised if they don't grow somewhere between 7.5 to 8 percent this year." But the bigger challenge for China will come three to five years from now, when its growth model, which is mainly driven by investment, exports and consumption, is "running out of steam" and reforms are lagging. The former top executive of Goldman Sachs Group Inc who as Bush's Treasury secretary oversaw the rescue of it and other Wall Street banks, is now in academia. In 2011, he founded the Paulson Institute at the University of Chicago with an initial emphasis on strengthening the US-China relationship through trade and investment. He has written A New Framework for US-China Economic Relations, a tract that urges the two countries to maintain close economic ties, even as a US consensus supporting this is eroding after more than 40 years. He recommends that Washington and Beijing push through reforms to adjust to new conditions. "Our best interest is having a constructive relationship with China," he said during the talk at the think tank. "There is a great opportunity in the economic area to break ground and do things that will benefit our economy, the global economy and China. "For our part, the United States needs a level playing field in China," Paulson's report adds. "But we would benefit, too, from more investment from China." The US needs to ensure greater openness to Chinese investment, grant China market-economy status on a sector-by-sector basis and reform its outdated export control system, he wrote. Pointing out that China has been investing heavily abroad since 2009, Paulson believes this trend will accelerate over the next decade and that it's in the interest of the US to garner a "fair share" of Chinese investment cash. But the US is "lagging way behind" in attracting capital from Chinese investors, he said, because "they feel unwelcome here" and "are confused by the different regulatory constraints and are put off by them".

President Hu attends China-Africa meeting - Chinese President Hu Jintao addresses the opening ceremony of the Fifth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in Beijing, July 19, 2012. Chinese President Hu Jintao on Thursday attended the opening ceremony of the Fifth Ministerial Meeting of the Forum on China-Africa Cooperation. The opening session was also attended by several African leaders and dozens of senior officials from African countries. President Hu delivered a speech at the occasion, pledging to lift the China-Africa strategic partnership to a new level. During the two-day meeting, the delegates will review the implementation of tasks set in the last meeting in 2009, explore new ways to deepen China-Africa relations and improve the forum's mechanism. The meeting is also expected to forge new cooperation plan for the coming three years and exchange views on major international and regional issues. The Chinese government is also expected to announce its new measures to promote cooperation with Africa.

Hong Kong*:  July 20 2012 Share

New World Development (0017), whose chairman Henry Cheng Kar-shun is a strong supporter of Chief Executive Leung Chun-ying, will pay a hefty premium to redevelop one of the largest remaining residential sites on Hong Kong Island. The plot, comprising the current development of New Eastern Terrace and an adjacent site, encompasses a gross floor area of 392,934 square feet, Sing Tao Daily, a sister publication of The Standard, has learned. Overlooking both Victoria Park and Victoria Harbour, it is located in the so- called North Point Mid-Levels area. A consortium - 85 percent owned by NWD - already owns the land. But it will pay HK$3.75 billion for waiving the North Point district's building height limit. Negotiations for land premium usually span a long period, covering years if not decades. But in the last couple of months the government may have speeded up some of the deals, with two major land premium talks settled last month. They include the Tsim Sha Tsui cruise terminal with Wharf Holdings (0004), and Hopewell Holdings' (0054) Hopewell Centre Two in Wan Chai. These developers, together with New World, are considered supporters of Leung, who assumed office just three weeks ago. Cheng was appointed by Leung as a working group member of the Commission on Poverty. During the CE campaign, Cheng, who was a member of the Election Committee, was said to have switched sides to Leung from his rival Henry Tang Ying-yen. Cheng has vowed to make NWD a major property developer once again. The company has become more active in submitting tenders for land after launching a HK$12 billion rights issue in November. In May this year, the firm signed a HK$1.9 billion four-year club loan for the development of New Eastern Terrace. Other than this project, New World is also redeveloping the Kai Yuen Lane project in North Point. NWD plans to build five residential towers - 28 stories each - plus a podium and a three-story car park on the coveted North Point site. Back in December 2006, New World and Hip Shing Hong Group, a small local developer, formed a 50-50 consortium and bought New Eastern Terrace from 52 homeowners for HK$650 million. A year later the developers also bought adjacent homes at Dragon Road for HK$335 million, combining the two sites for redevelopment. Earlier this year NWD increased its stake in the consortium to 85 percent. The Town Planning Board imposed a 140-meter height limit on all buildings in North Point in 2007. The developer will have to pay the premium to have this restriction waived. On a per-square-foot basis, the site will cost HK$9,544 based on the allowed gross floor area of 392,934 sq ft. While the location is considered exclusive, market watchers feel developers could be harboring a very high expectation. Together with acquisition and construction expenses, the project may have to be sold at more than HK$13,000 per sq ft to merely break even. Recent transactions of Braemar Hill Mansions, now considered a premium residential estate, averaged HK$14,387 psf, according to data from Centaline Property Agency. New World shares closed flat at HK$9.88 yesterday.

The total expenditure of Hong Kong residents making personal travel to China's mainland amounted to 35.6 billion HK dollars (about 4.59 billion U.S. dollars) in 2011, said the Census and Statistics Department (C&SD) on Tuesday. Of all the trips to the mainland, business travel accounted for about 33 percent while personal travel constituted 67 percent, said the C&SD. Personal travel refers to travel which is not business-related, It covers travel in package tour mode and non-package tour mode for purposes such as holiday-making, visits to friends and relatives, and attending recreational and cultural activities. The statistics also showed that Hong Kong residents spent roughly 730 HK dollars per trip, with an average of 1,000 HK dollars for overnight trips and 290 HK dollars for same-day trips. (One U.S. dollar equals to 7.76 HK dollars)

Paul Vallone, managing director of Berkeley Homes, says his firm plans to open an office in Singapore this year amid growing regional demand for London properties. Asian investors' strong demand for London homes has spurred the Berkeley Group, a British luxury developer, to open a Hong Kong office to serve customers in the region. The group, which markets properties under the St George, St James, St Edward and Berkeley Homes brands, opened a 2,200 sq ft showroom and office in Edinburgh Tower in Central last month. The opening of a local office marks a first for the group, even though it is no stranger to buyers in the region, having sold properties to homeowners and investors in East Asia for some 20 years, according to Paul Vallone, managing director of Berkeley Homes (Urban Renaissance). The office will be staffed by three to five marketing representatives who will assist buyers with the full range of customisable options such as kitchen fittings. "We are expanding in Asia, and the market executive suite is a step in that process," said Vallone. The Berkeley Group plans to open a Singapore office this year. Its decision to upgrade its presence in the region was a response to the rising demand for London real estate from local investors who wished to protect their assets from political and economic instability as well as to exploit the weak British currency. But Berkeley has not set specific sales growth targets. "It is all about expanding the brand in the region," said Vallone. Property consultancy Knight Frank says Asian buyers now account for a majority of sales of new homes in central London. "Around 50 per cent of central London new homes are now bought by Asians," said Seb Warner, Asia-Pacific director of international project marketing at Knight Frank. "About 22 per cent of these buyers are Hong Kong citizens, split 80 per cent between Hong Kong Chinese and 20 per cent Hong Kong expats." Berkeley's first new project for sale since opening its Hong Kong office will be its Abell & Cleland House development in Westminster, London. The two-block development will comprise 206 one- to three-bedroom flats. Berkeley is now marketing homes of 571 sq ft to 1,849 sq ft for between £850,000 (HK$10.3 million) and more than £2.4 million. The two Abell & Cleland House blocks are slated for completion in 2016 and 2017.

Digital Realty Trust, the world's largest builder and wholesale provider of data centres, moved forward its expansion plans in China after completing the acquisition of a 164,000 square foot industrial site in Tseung Kwan O this week. The San Francisco-based company and its joint-venture partner, information-technology services provider Savvis, are spending up to US$150 million to buy and redevelop the property into an advanced data centre, which will cater to multinational companies with growing operations in Hong Kong. Michael Foust, the chief executive at Digital Realty, has described Hong Kong as "one of the most attractive, yet underserved, data-centre markets in the world". A data centre is a secure, temperature-controlled facility equipped to house large-capacity server computers and data-storage systems, which are maintained with multiple power sources and have high-bandwidth links to the internet. "Through our joint venture, Savvis will utilise capacity within the facility to provide our customers with network, managed IT and cloud services," Savvis Asia managing director Mark Smith said yesterday. Savvis is a subsidiary of global broadband and telecommunications network operator CenturyLink, which is headquartered in the United States. Cloud computing services hosted in data centres enable companies to deliver over the internet various software, files and other digital resources on demand. Foust said Digital Realty was "in early days of discussions" for potential new data-centre projects in Shanghai and Beijing, initiatives that would involve forming new joint ventures with selected mainland developers and service providers. The company's Hong Kong facility, which will open in April, is the latest development in its global portfolio, which comprises 108 properties covering about 20.8 million sqft of data-centre space as of July 16.

Red Planet Hotels, a budget hotel investment and management firm, is seeking to go public in Hong Kong by 2015 as it tries to boost its presence in the emerging Asia market, including mainland China. "We are looking at closing four or five deals on the mainland next year," said Tim Hansing, chief executive of the Bangkok-based hotelier, which manages a portfolio of 20 hotels, valued at US$180 million, under the Tune Hotels brand. Seven of the 20 hotels are operating in countries from the Philippines to Thailand and Indonesia. It will have 10 hotels open, with 1,623 rooms, by the end of the year. Shenzhen, Guangzhou, Shanghai, Beijing and Xiamen were also potential destinations on the firm's radar, he said. Tune is a hotel brand mainly owned by Tony Fernandes, founder of Air Asia. It does not own or run the hotels, but lets franchisees manage them on properties it owns. As one of its four franchisees, Red Planet said yesterday that it had acquired a 16 per cent stake in Tune Hotels for an unspecified amount. The "significant multimillion-dollar transaction" makes Red Planet the third-largest investor in Tune Hotels and gives it a seat on the board. Marketing the hotels in a country such as China would be extremely tough without the brand power of Air Asia, which enables cross-marketing of hotels and flights, Hansing said. Red Planet is "closely owned" by 66 shareholders, including some private equity funds. It aims to launch two rounds of fund-raising - targeting US$120 million each - via private share placements in the next two years. By 2015, Red Planet plans to increase its portfolio of hotels to 80 to 100 in Asia. Hansing said the company planned an initial public offering in Hong Kong by 2015, to allow existing shareholders to liquidate their investments in Red Planet. He said there was an undersupply of budget hotels in the region and the market was too fragmented, with a lack of strong brands providing consistent quality of service. Asia is the fastest-growing tourist market in the world. The number of tourists was set to double to 1.8 billion by 2030, said the World Tourist Organisation, a UN agency. By then, Asia is expected to account for the biggest share of tourists globally. Tune Hotels runs 24 hotels, with 3,859 rooms, around the world. Another 38 are in the pipeline, with 10,106 rooms, including its first in India, Australia and Saudi Arabia - as well as hotels in Thailand, Indonesia, the Philippines, Malaysia and Britain.

Hongkongers will be able to watch the London Olympics for free after a last-ditch agreement was reached between rights holder iCable and free-to-air broadcasters ATV and TVB (SEHK: 0511), with the help of government mediation. After seven hours of talks, iCable agreed to sell the rights to 200 hours of action for free-to-air broadcast, including the opening ceremony a week on Friday and the closing ceremony. Free-to-air coverage of the event had been in doubt for months after iCable's application for a free channel of its own was scuppered as the government failed to make a decision on its licence, and talks with the free broadcasters stalled. iCable had come under pressure from the Games organiser, the International Olympic Committee, to ensure the Games were available to the widest possible audience, in line with its agreement when it bought the rights. TVB last week approached the IOC with a direct offer to show the Games. No more talks with the IOC would be needed, TVB said last night, and all three parties had agreed that the price was reasonable. TVB group general manager Mark Lee Po-on said: "We will pay a reasonable fee to iCable so that we could have 200 hours of programmes of our own choice, and they would be broadcast evenly on TVB and ATV. This is the commercial arrangement made today." Describing the agreement as a "win" for everyone, including the public, Lee said TVB and ATV would jointly produce Games programming. "Firstly, iCable can charge a reasonable fee. Secondly, both two free-to-air stations can now broadcast the Games evenly; and thirdly, the public can watch the Games. This is the best result. All the disputes before are now resolved," Lee said. Commerce and Economic Development Secretary Greg So Kam-leung, who took part in the talks, said: "The negotiation was filled with difficulties. But I'm happy to see that the three television stations acted on the basis of the public's expectations. Today, an agreement was reached." iCable had originally offered 200 hours of coverage to the two free-to-air rivals but had insisted on broadcasting its own advertising during most of the shows. Later, an apparent deal with ATV to show the Games on its ATV World Channel fell through amid concerns about rights on the mainland. The channel is available in much of Guangdong province, where state broadcaster CCTV holds exclusive rights to the Games. The precise arrangements will be announced by the three stations later, and they are expected to meet for further talks. Live coverage is expected to be shown on ATV World and TVB Pearl, while two Cantonese language channels, TVB Jade and ATV Home, will show highlights.

Legislators pose for a "class photo" in the Legco Chamber after wrapping up the term. The Legislative Council's traditionally fierce rhetoric and political rivalry were put to one side last night as lawmakers bade farewell at the end of their four-year term. The legislative term wrapped up as the clock struck midnight, and for those not contesting September's election, it was time to say goodbye for good. Before the deadline, lawmakers rushed to complete outstanding business, passing three bills, among them the Trade Descriptions Bill, intended to stamp out unfair trade practices. Of 16 resolutions, half were passed within the final hour. Two resolutions increased compensation for occupational deafness and for workers infected with the lung disease pneumoconiosis. That means the thorny issue of Chief Executive Leung Chun-ying's government restructuring plan is the only proposal that will have to go through the legislative process again from scratch when the new Legco term begins in October. As midnight struck - the "Cinderella moment" for legislators who turned back into ordinary citizens - Legco president Tsang Yok-sing called time on the Legco term and for lawmakers to have a group picture taken. Lawmakers of all political persuasions then joined government officials for a late supper. The atmosphere outside the chamber had already became lighter as the midnight hour drew near. Democratic Party lawmaker Fred Li Wah-ming opened a bottle of 21-year-old scotch and shared it with reporters and lawmakers such as the pro-government Chim Pui-chung. Chim opened three bottles of wine in return. Li said he would not be staying away from politics completely. "I will devote myself to the election campaign of the Democratic Party," he said. Outgoing lawmakers, including the Civic Party's legal-sector veteran, Margaret Ng Ngoi-yee, brought in cupcakes as a farewell present to the press core. Ng is standing down after serving since 1995. Labour-sector lawmaker Li Fung-ying vowed to go on fighting for labour rights outside the Legco. "Remember, we still have not legislated for standard working hours," said Li, who said she would focus on voluntary work for labour unions. "It was a pity that I could not attain this during my tenure." Accounting sector lawmaker Paul Chan Mo-po is also leaving the legislature after serving just one term, but he is unlikely to be absent from the political scene for long. He is expected to be appointed deputy financial secretary when the position is created as part of the government restructure, although there is speculation he could also be the new secretary for development after Mak Chai-kwong was arrested by graft-busters and forced to stand down amid accusations that he abused civil service housing allowance in the 1980s. Agriculture and fisheries sector lawmaker Wong Yung-kan announced yesterday that he was leaving Legco after 14 years of service. One Legco tradition that fell victim to the rush of resolutions was the valedictory motion traditionally tabled to mark the end of legislators' work. Independent pan-democrat Andrew Cheng Kar-foo instead held a press conference to give his de facto farewell speech. He has served as a directly elected lawmaker since 1998, but decided not to seek another term "to make way for younger lawmakers". He hopes to set up a civil legal aid platform to help less well-off people obtain legal advice.

Secretary for Food and Health Ko Wing-man says the atmosphere at meetings between Leung and his ministers has been “heavy” with a hint of unease. The temperature in the government “kitchen” is hotter than he expected – uncomfortably so of late – but health minister Ko Wing-man has no regrets about entering it, he said on Wednesday. Ko, feeling the heat of scandals rocking the two-week-old administration of Leung Chun-ying and personal heat over his response to the death of mainland dissident Li Wang-yang, said: “I do not regret [joining the government], it is a price I was ready to pay. But still I feel slightly for my family.” The secretary for food and health also said the atmosphere at meetings between Leung and his ministers since the shock of Mak Chi-kwong’s resignation as development chief and his arrest over alleged abuse of a civil service rent subsidy scheme had been “heavy” with a hint of unease. “I can see from each other’s eyes that we are not feeling at ease, but I can also feel that there is support for each other as a team,” he said. For him, “the kitchen is hotter than I thought”, and the temperature had reached an “uncomfortable level”. Speaking separately on RTHK and Commercial Radio, Ko was asked about his earlier response to the suspicious death of Li, which his predecessor Dr York Chow Yat-ngok had said was “unlike” a suicide despite being described as such by mainland police. Ko drew criticism of being “insensitive” and “lacking morality” when he said he needed to look at the medical evidence before commenting on the nature of the death. On Wednesday, he offered condolences but still said he needed the full facts before commenting. “As a medical professional, I cannot answer the question without knowing the facts well, or else it may cause even more debate,” he said. “I can only say that, as a human being, I pass on my condolences. That’s all I can talk about. But I respect how people from different backgrounds feel suspicious about the incident.” Asked whether he, as a minister, had a responsibility to fight for the truth about the death, Ko said he had a lot of responsibilities and trusted that many people in society would be following up the matter. Referring to health policy, Ko said the waiting time for emergency wards in public hospitals would be shortened, and a desirable queuing time should be set for general family medicine and specialties. “I cannot say for sure how long the time should be, but it is obvious that waiting one or two years is too long,” he said. “Half a year may also not be desirable but at least it is comparatively better. I am hoping a balance can be reached.” Hiring more medical staff to ease the manpower shortage in public hospitals was the most urgent task, he added. He hoped the increase in the healthcare vouchers for elderly people from HK$500 a year to HK$1,000 next year – announced by Leung on Monday – would divert patients to private medicine, freeing up more services in the public hospitals.

About 216,000 voters have been struck off the Hong Kong electoral roll after they failed to validate their addresses, the Registration and Electoral Office confirmed on Wednesday. The office earlier launched an unprecedented check on the registers of electors after vote-rigging activities were reported during the District Council elections last November. Letters were sent to 290,000 voters asking them to confirm their registered addresses. A spokesman for the office said that about 230,000 had not responded to inquiry letters or provided adequate information by May 16. A second letter was sent to these voters in mid-June to remind them they could lodge a claim or update their registered residential addresses to reinstate their voter registration. About 216,000 electors failed to do so by the deadline on June 29. “Their names and addresses were therefore not included in the final registers of electors,” the spokesman said. A total of 3,466,175 electors are in the final register for the geographical constituencies. They are eligible to vote in the Legislative Council election in September. For the functional constituencies, about 241,000 electors are listed in the final register. The office embarked on “improving” the voter registration system after November’s District Council polls were dogged by accusations of vote-rigging by people giving false addresses, or being found to be registered at the same address as other voters. Some gave non-existent addresses. Last week, a man was sentenced to 2 ½ months in jail, suspended for 18 months, after being convicted of registering as a voter with a residential address where he had never lived. Seven Hong Kong men living in Shenzhen were also given suspended jail terms in March for using false addresses to register to vote in Yuen Long in November’s elections.

Hong Kong Moves to Tame its Rakish Retailers - A woman listens to a music track as she tries a mp3 player in a shop in Hong Kong on June 18, 2012. Hong Kong passed a new law to strengthen consumer protections, pleasing consumer advocates but drawing the ire of some business groups concerned the changes will stifle competition and undermine the territory’s reputation as a free-market bastion. The law passed Tuesday by the city’s governing body, the Legislative Council, requires sales agents in shops, restaurants and telecommunications companies to inform consumers of any promotions and provide a price list of products. Employees are also not allowed to pressure customers into making a purchase, while stores are expected to deliver on their advertised promotions and goods. Hong Kong has earned a reputation as a difficult place for shoppers, especially mainland Chinese tourists, some of whom have been the target of aggressive tour guides who pressure them into purchases at certain stores. Locals have also complained about deceptive advertisements. The changes to Hong Kong’s consumer protections are the culmination of a four-year saga that began with a 2008 report by the Hong Kong Consumer Council, a government-funded agency that acts independently on behalf of consumers. The report highlighted common practices by Hong Kong retailers including bait-and-switch advertisements, prepaid coupon scams in which goods were never delivered, and the use of aggressive sales tactics. The new law includes most of the Consumer Council’s suggestions from its 2008 report. “The only major omission” said Thomas Cheng, a law professor at Hong Kong University and a member of the Consumer Council, was the lack of a “cooling off period.” The period would have given customers time to cancel long-term contracts that gyms, beauty salons and spas often push. Hong Kong has long prided itself as one of the freest markets in the world. But as the economy matures, residents have demanded greater regulation in commerce. In 2011, the city got its first minimum-wage law. Earlier this year, Hong Kong passed its first antitrust law, though some contend it isn’t as strong as it could be. Critics say the changes to the consumer protections are vague and will prove difficult for businesses to interpret. “Businesses and their staff will be deterred from competing aggressively for fear of committing an offense,” said Shirley Yuen, Chief Executive of Hong Kong General Chamber of Commerce, which represents more than 4,000 businesses. “This would reduce market competition, and harm consumers and Hong Kong’s reputation as a shopper’s paradise,” she added. Business groups have warned that new rules forbidding “misleading omissions” could, for instance, put a cosmetics sales girl in jail for not mentioning a lipstick promotion to a customer. Failing to adhere to the law is an act punishable by a five-year jail sentence and a 500,000 Hong Kong dollar (US$64,000) fine. Government officials tasked with overseeing the discussion with the public over the amendments have assured retailers that those who genuinely made mistakes wouldn’t be arrested. “It’s not so easy and simple to just arrest and charge people,” said Fred Li, legislator and chairman of the committee that oversaw the bill’s progress. “The Customs Department would need to investigate first,” added Mr. Li. “The law provides check and balances and prevents unscrupulous practices. Mr. Li is confident that advertisements will educate consumers of their rights. “There’ll be a lot of publicity like TV commercials,” he said. A couple of small amendments were accepted at the last minute to assuage business concerns. Retailers can’t face criminal prosecution if distributors fail to deliver goods that the retailer advertised. “For example, for products like the new iPhone, Apple would promise to provide resellers like Broadway maybe 500 on the launch day,” said Vincent Fang, a member of the Liberal Party who acted as a representative of business interests in the debate over the law. “But if Apple’s supply is running low on that day, Broadway may not receive 500 phones. You can’t penalize Broadway for that.” Mr. Fang says the law is “vague” in parts, but acknowledged it will help to prevent retailers from conducting bad practices. “Salespeople can’t act as aggressive and retailers can’t switch products or lie about stocks,” he said. Not all retail business groups are against the bill. “We don’t have any concerns or complaints with the law” said Raymond Luk, representative from the Hong Kong Wine Merchants Chamber of Commerce, a group that represents wine suppliers and retailers. “The market is quite transparent.”

Where Pirates Used to Stay - Converted from a marine police station, the Tai O Heritage Hotel contains a former pirate lockup. Opened in March, this former marine police station turned petite hotel is a rare example of Hong Kong preserving and repurposing a historic structure rather than razing it to build as big and as modern as possible. Amid stilt houses and locals mixing up barrels of fermented fish paste, the lush setting – in a sleepy fishing village on the western edge of Hong Kong’s territory – offers a taste of how life was in the Pearl River Delta before skyscrapers and shopping malls invaded. The Design: The British built the original 1902 structure to withstand both weather and pirates, with heavy metal shutters on the windows and deep porticos to protect from wind and heat. The restoration, led by the government and the Hong Kong Heritage Conservation Foundation, has retained its old-world charm while adding conveniences such as a nifty elevator that rises at an angle up the bluff on which the hotel sits. The old pirate lockup, with two holding cells, doubles as the check-in area. An airy atrium restaurant occupies the top floor, though it suffers from a pedestrian menu and laconic service. The Rooms: The hotel has nine rooms in what used to be offices and dormitories for police staff. Decor is faithful to the early 20th-century colonial aesthetic, complete with restored fireplaces and, in the bathrooms, late Victorian reproduction fixtures. Several rooms have small windows, original to the building, which restrict views and light. The rooms are clean with wood floors and white walls, but scuffs on the carpet and walls show lack of attention to early wear and tear. The Location: Tai O is a rambling village of creaky houses, many with colonial and art-deco charm, interspersed with Taoist and Buddhist temples. To the east are towering green mountains, and to the west, rare pink dolphins share the delta waters with cargo ships plying the South China trade. Old timers laze away the hot days playing with grandkids and tending to tasks like drying fish and preserving salted duck egg yolks in the sun. Long a day-tripper destination, Tai O has a smattering of restaurants, cafés, trinket sellers and traditional Chinese art galleries. Our Tip: Ask for the corner room upstairs for better light and more privacy. And get there in time for sunset. For dinner, bypass the hotel restaurant and head to one of the seafood joints in the center of the village. In the mornings, choices are limited to an English-style breakfast: eggs, scrambled or fried. Getting There: Catch the city’s stellar Airport Express train to the airport (HK$100 one-way), then take a blue-colored taxi to the Tai O bus depot. From there, call the hotel to arrange a two-minute motorboat ride across the cove to the hotel. Boat service ends around 6:30 p.m. After that, getting to the hotel requires a 20-minute stroll through the village. Follow signs for the police station.

Hong Kong’s Office Rents Fall, But Still Top the Charts - Surrounded by ads for flats and businesses for lease and sell, a real estate agent works at his desk in Hong Kong on June 21, 2012. Hong Kong’s stratospheric office rents have shrunk in the past year, but the city is still the most expensive place in the world to set up shop. That’s the latest finding from CB Richard Ellis, a commercial real estate firm, which found that it costs a whopping $249 per square foot to rent office space in the city’s central business district. And renters who lock in that rate might count themselves lucky, compared to a year ago. Amid global economic uncertainties, the cost of renting in central Hong Kong has actually slid by 17% over the past year–the sharpest rate of decline seen in the 133 global office markets CBRE tracks. The second-most expensive market was London’sWest End, where office space costs $220 per square foot to rent. Hong Kong’s sticker shock comes as no surprise, given the city’s status as a financial hub and proximity to mainland China. Lack of supply has also helped ratchet up prices in recent years, says Rhodri James, CBRE’s executive director of office services. Just 0.4% of Hong Kong’s landmass has so far been developed for commercial use. The city’s government, which owns all land in the city, has been wary of releasing more supply onto the market for years, fearful of triggering a fall in prices such as that seen during the 1997 Asian financial crisis. Still, lower office rents can help boost Hong Kong’s overall competitive appeal, says Mr. James. “Far from diminishing the city’s status as Asia’s financial hub,” he says, falling office rents make Hong Kong “more competitive and relatively more attractive for international tenants.” Hong Kong’s newly sworn in leader, Leung Chun-ying, says that he intends to boost land supply during his five-year term, part of an overall plan to diversify the city’s economy, which is dominated by finance and tourism. Despite slowing growth on mainland China, office rents there also leapt in the past year, vaulting by 49% in Beijing’s Jianguomen business district and 40% in Guangzhou. Among the world’s top 10 priciest office rental markets, CBRE notes, six can be found in Asia, including in two business districts in Hong Kong and Beijing, as well as parts of Tokyo and New Delhi.

Hong Kong caterers urged to bring expertise to China market - A chef prepares dishes at a hotel in Yangzhou, Jiangsu province. An official at the Ministry of Commerce said the combination of the mainland's huge market and Hong Kong's management expertise in the catering and hotel industry would create a win-win situation for both sides. With the Hong Kong catering and hotel industry relatively saturated, those involved in the business should turn to the mainland market, which offers plenty of opportunities, a senior official from the Ministry of Commerce told the China Daily on Tuesday. Speaking on the sidelines of the China Hotel Hong Kong Forum, which focuses on the catering industry, Deng Tingfu, division director of the circulation industry promotion center at the Ministry of Commerce, said the combination of the mainland's huge market and Hong Kong's management expertise in the catering and hotel industry would create a win-win situation for both sides. "There are many successful catering companies in Hong Kong, like the Paramount Catering Group and Maxim's Group," Deng said, adding that these companies should boost communication with their peers on the mainland and explore the vast opportunities. Deng also urged catering firms on the mainland to enhance cooperation with each other and with Hong Kong businesses in order to become more competitive. The potential of the catering and hotel industry on the mainland is significant, but the scale of individual companies is relatively small compared to their overseas peers, he said. In order to become larger and more competitive, catering firms on the mainland need to work closely, Deng said. Li Kwok-hung, managing director and general manager of the Hsin Kuang Restaurant in Hong Kong, agreed with Deng. Li said that the operating environment of the catering business in Hong Kong is tough, due to constantly increasing rents and wages and a labor shortage. "I believe that the catering market on the mainland is better than it is in Hong Kong," said Li, adding that the Hong Kong market is saturated. Speaking at the forum, Deng said that, along with the mainland's urbanization and consumption patterns upgrade, the catering business has been expanding rapidly in the last 20 years. The number of companies involved in the catering industry on the mainland is over 20,000, with the sector employing more than 2 million people. The industry's average revenue is about 2 trillion yuan ($313.80 billion) a year, said Deng. He expects revenue to increase 15 percent annually in the next four years. Wan Jun, director of Beijing Xiangeqing, an A-share listed catering company, echoed that view. He said his company started from a very small restaurant in Shenzhen in 1995. Due to the rapid expansion of the catering market, Beijing Xiangeqing was publicly listed in 2009 on the Shenzhen Stock Exchange, with a market value of more than 5 billion yuan. "China is rich in population and has a vast territory, so a catering company can become a world famous brand just by focusing its business in China," he said.

 China*:  July 20 2012 Share

The mainland's trade surplus this year is likely to exceed that of last year, making it tougher for the government to balance trade and avoid friction with trading partners. Ministry of Commerce spokesman Shen Danyang said yesterday that a higher trade surplus was probable as imports were expected to weaken more than exports. The trade surplus last year totalled US$155.14 billion. In the first half of this year, the surplus jumped 56.4 per cent from a year ago to US$68.92 billion. Last month alone, exports surpassed imports by a three-year high of US$31.72 billion as domestic demand softened while global prices of energy and raw materials fell. Shen Jianguang, an economist at Mizuho Securities, said: "The rising trade surplus is expected to lead to yuan appreciation by up to 3 per cent in 2012." The yuan has weakened against the US dollar by about 1.3 per cent so far this year. Ministry spokesman Shen said the mainland's goal of achieving trade balance and reducing surplus remained unchanged. Analysts see it as a reaffirmation of Beijing's stance to avoid criticism that the world's biggest exporter supports local firms by undervaluing its currency artificially while granting foreign companies limited access to the Chinese market. The World Trade Organisation said on Monday that Beijing had violated trade rules through regulations that helped China UnionPay dominate the lucrative electronic payment market. The ministry said yesterday that Beijing had reservations over the ruling, which largely backed allegations filed by the United States accusing China of discrimination against foreign bank cards. Foreign investors are continuing to pour money into China, but complaints about fair market treatment, policy transparency and the legal environment have risen in recent years. Last month, foreign direct investment into the mainland fell 6.9 per cent year on year to US$12 billion, with 2,444 foreign firms setting up shop - down 16.3 per cent from a year ago. In the first six months of this year, FDI dropped 3 per cent year on year to US$59.1 billion. The Commerce Ministry attributed it to government curbs on real estate. "Stripping out the property sector, FDI was down only 0.1 per cent year on year to US$46.8 billion in the first half," spokesman Shen said, adding that full-year FDI would show steady growth from last year. Chang Jian, an economist at Barclays Capital, said capital outflow from the mainland was likely to have continued in the second quarter, going by the central bank's foreign-exchange purchases position that showed a small net increase of US$1.8 billion during the period. The ministry says outbound direct investment surged 48.2 per cent year on year to US$35.42 billion in the first half, with a third of the funds used in mergers and acquisitions. Investments going to Hong Kong soared 58.9 per cent, funds heading to Asean countries rose 34.3 per cent, while those to the United States went up 28.2 per cent. The US Chamber of Commerce released a report titled The Faces of Chinese Investment in the United States, aiming to facilitate investment from Chinese firms. The chamber's president and chief executive Thomas Donohue said: "The US market is highly competitive and open to the Chinese investment. There are challenges, but they can be managed."

A preparatory committee was established yesterday to set up a local people's congress in a new Chinese city that will oversee disputed regions in the South China Sea. The prefecture-level city of Sansha was established on June 21 in a move to claim sovereignty over the disputed Spratly and Paracel islands, the Macclesfield Bank undersea atoll and surrounding waters. Sansha will operate under the province of Hainan, and the local government will be located on Woody Island, also known as Yongxing Island, in the Paracels, on which some 1,000 civilians live. Few, if any, of the other islands has a permanent civilian population. Hainan news portal said the provincial people's congress announced that the preparation committee would host elections for members of the Sansha People's Congress, which will have 60 members - all directly elected by the people of Sansha. The local people's congress will, in turn, elect standing committee members, as well as a mayor, vice-mayor, head of an intermediate people's court and head of the local people's procuratorate. Analysts said the move showed that China was officially moving forwards with plans to form a government in Sansha. Li Guoqiang a South China Sea expert at the Chinese Academy of Social Sciences, noted that Sansha had yet to establish a people's congress, as required by national laws. It is difficult to predict how long it will take to establish the people's congress, but Li said he believed it would happen fairly soon. Wang Hanling, a maritime expert at the Chinese Academy of Social Sciences, said facilities were already being upgraded for residents in the new city, including the building of public housing for fishermen. Earlier reports suggested that a military airport was being built on Woody Island. Improved facilities would be needed to help cater to an expected increase in Sansha's population, he said, specifically citing the boon that would accompany a military command unit in the city. Prefecture-level cities are generally given army divisions of at least 6,000 military personnel. China has made various moves in the past month to assert its sovereign rights in the disputed waters of the South China Sea. Following the establishment of Sansha city, the Ministry of Defence said on June 28 that it was reviewing the defence deployment for the new city.

A Frenchman who was being held in Cambodia because of his alleged links to Beijing’s biggest political scandal in two decades has been flown to China, where he is wanted as a witness in the case, Cambodia’s information minister said on Wednesday. Patrick Henri Devillers, 52, was detained last month in Cambodia, where he had been living for several years. He was held at the behest of China because of his suspected business links to the wife of deposed Chinese politician Bo Xilai. Information Minister Khieu Kanharith told reporters that Devillers, an architect, had taken a flight from Cambodia to China late on Tuesday and that he had left of his own free will, without an escort from the French embassy. “He voluntarily went as a witness,” he said, adding that China had given an assurance that Devillers would only be required for up to 60 days before being allowed to return. Bo’s wife, Gu Kailai, has been named by China as a suspect in the murder last November of British businessman Neil Heywood. Both Heywood and Devillers were known to be close to her. Devillers has lived in Cambodia for at least five years, according to friends. He entered Bo’s inner circle while living in Dalian in the 1990s when Bo, who was mayor of the city at the time, helped him to chase up an unpaid debt. China has not said publicly whether Devillers himself is accused of any crime. Bo was stripped of his post as Communist Party secretary of Chongqing in southwest China in March. Cambodia is a close ally of China, which is a big aid donor and investor in the Southeast Asian country.

US companies may bid for oil exploration projects in the South China Sea, China's largest offshore oil explorer, China National Offshore Oil Corp, said on Tuesday. "US companies are displaying interest in bidding for the oil and gas projects, which have been progressing as scheduled," CNOOC Chairman Wang Yilin said on the sidelines of the China-US Enterprises Investment and Cooperation Forum. CNOOC, China's third-largest oil company, last month issued tenders seeking joint exploitation of nine offshore blocks in the South China Sea. The nine blocks cover more than 160,000 square kilometers and are 300-4,000 meters deep, according to a statement on CNOOC's website. Seven blocks are located in the Zhongjianan Basin and two are in areas covering parts of the Wan'an and Nanweixi basins, the company said. The move came amid tension between the Philippines and China caused by their dispute over Huangyan Island. CNOOC will invest 200 billion yuan ($32 billion) in developing the South China Sea blocks over the next 20 years, with the aim of building an annual capacity of 50 million tons in the deep sea area by 2020. Companies from a number of countries such as Malaysia and Thailand have displayed an interest in developing these projects with CNOOC. However, experts said that some large developers are still concerned about the investment return and the amount of reserves. "Capital and technology are the challenges for the development of China South Sea oil projects," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University. Drilling of the first deepwater oil rig indicates that China's deepwater drilling technology has improved, and shows that Chinese companies are closing the gap with major oil giants in the area of deepwater drilling, according to Lin. CNOOC set a target to increase oil and gas output to 120 million tons of oil equivalent by the end of 2020, double the amount in 2010. China has 18,000 km of coastline and a continental shelf of 1.3 million sq km. The country's rich offshore resources are mainly located in the Bohai Bay region, the East China Sea and the South China Sea. The South China Sea is the world's fourth-largest deepwater region for oil and gas exploration after the Gulf of Mexico, West Africa and Brazil. The South China Sea region has proven oil reserves of around 7.7 billion barrels, with an estimated 28 billion barrels in total. Natural gas reserves are estimated to total around 266 trillion cubic feet. Experts said offshore exploration will help reduce China's dependence on oil imports.

China's Ministry of Commerce is in a position to start anti-dumping and countervailing investigations into exports of polysilicon, a material used in solar manufacturing, from the United States and a similar investigation into polysilicon exports from South Korea. The investigations are being undertaken in response to requests made in March by domestic leading polysilicon makers, including GCL-Poly Energy Holdings Ltd, LDK Solar Co Ltd and Daqo New Energy Corp, 21st Century Business Herald reported on Tuesday. China imported 64,600 tons of polysilicon in 2011, up 36 percent from the previous year. According to an average of polysilicon prices set by the market and prices fixed by long-term contracts — which comes to $40 a kilogram — China's imported $2.59 billion worth of the raw material. Sixty percent of those imports came from the US and South Korea. The first five months of the year saw China import 34,000 tons of polysilicon, worth $960 million. The US supplied 41.4 percent of that and South Korea supplied 22.2 percent. "Because of the low price of polysilicon imports from the US and South Korea, 80 percent of Chinese polysilicon producers have been driven out of business, causing 5,000 workers in the industry to be out of work," the newspaper said. In a preliminary ruling in May, the US Department of Commerce imposed anti-dumping tariffs ranging from 31.14 percent to 249.96 percent on imported solar panels from China after it had imposed countervailing duties of 2.9 percent to 4.73 percent on Chinese panels in March. The US Department of Commerce is scheduled to make a final ruling on its investigation into Chinese solar products in early October and the US International Trade Commission is expected to make a final decision in the case in late November.

Hong Kong*:  July 19 2012 Share

Cheung Kong Holdings (0001) has already met more than half its sales target for the year, having sold HK$17 billion worth of new homes so far. The developer has sold 2,700 new residential units since January, executive director Justin Chiu Kwok-hung said. "If the 400 remaining units at The Beaumount [are sold], altogether we could be cashing in HK$20 billion," Chiu said. That will cover two-thirds of the 2012 sales target of HK$30 billion, which the company is confident of reaching. It raised prices by about 5 percent for the 87 two-bedroom units of the Tseung Kwan O project, which go on sale from tomorrow. "Those flats are of better quality and are located on higher levels," Chiu explained. Meanwhile, Wheelock Properties (0020) cashed in HK$4.5 billion from new flat sales and non-core projects in the first six months. "[We] will focus on the Kadoorie Hill project in the second half and units will be available for sale in September," assistant general manager Ho Wing-yee said. Units at the HK$2 billion Ho Man Tin project will likely be priced at about HK$20,000 per square foot, Ho said. And executive director Ricky Wong Kwong-yiu said Wheelock may submit tenders for plots at Tseung Kwan O Area 66D1 and Tsuen Wan West. Separately, the Lands Department received a total land premium of about HK$152 million from 15 lease modifications and one land exchange from April to June. Two of the modifications were of a technical nature and did not involve any land premium. Of the 16 transactions, six were on Hong Kong Island, three in Kowloon and the rest in the New Territories. Meanwhile, a survey found that about 35 percent of private housing tenants fear home prices will fall under the new administration. But overall, 58 percent of the 1,000 respondents polled by online property platform GoHome voiced optimism about the market and expect prices to rise steadily.

Gangsters are being used as "middlemen" in an alleged vote-buying scam in villages, a district council chairman has claimed. Leung Che-cheung yesterday lodged a complaint with the police and the Independent Commission Against Corruption, alleging that gangsters are acting as intermediaries in bribing rural leaders, district council members and leaders of residents' groups seeking support for candidates in the September Legislative Council election. Leung, chairman of Yuen Long District Council, said the ICAC has assured him it will investigate. He claims leaders accepting the bribes are expected to influence voters by speaking positively about certain candidates. The alleged fees are HK$4 million for a village chief, HK$500,000 for a district council member and HK$200,000 for the chairperson of a residents' group. Leung said he was told that chairmen of rural committees are paid an upfront HK$1 million to help secure the votes of an entire village and an additional HK$3 million if they succeed. The practice is commonly known as "black gold politics" in reference to connections between Taiwan politicians and triads and other underground groups. Leung, who plans to run in the New Territories West as a candidate for the Democratic Alliance for the Betterment and Progress of Hong Kong, said one of his volunteer workers was intimidated when canvassing for him in Yuen Long. He said he does not know how much the gangsters receive for acting as intermediaries. He urged New People's Party vice chairman Michael Tien Puk-sun to speak up after Tien reportedly told the press he had heard of such reports. An ICAC spokesman would not comment, while a spokesman for the Electoral Affairs Office said no complaint has been received. Leung said his volunteer, Leung Muk-lam, received an intimidating call after he put up a banner for Leung on June 28 and reported the matter to police. Police refused to comment as the case is under investigation. Leung urged voters to report to the police or the ICAC if they are threatened or approached by gangsters.

The supply chain arm of Deutsche Post DHL will invest more in warehouse facilities in Greater China, including Shenzhen's Qianhai Bay economic zone. "The economy of China will continue to grow as it has a huge growing population of middle-class," DHL chief executive Frank Appel said at the opening of the firm's HK$630 million warehouse in Tsing Yi yesterday. "The business has grown quite rapidly in this area over the past few years and no doubt it will continue in the next year." Tomorrow, the Germany company will join with the China Merchants Group to develop a supply chain and freight forwarding business in Qianhai Bay, which Beijing has decided will be a service industry hub and a showcase for further integration with Hong Kong. The joint venture will include a 71,000 square metre warehouse. By 2015, DHL will invest a further €300 million (HK$2.8 billion) in China and other countries in North Asia, on top of the €224 million is has already invested in North Asia. Paul Graham, chief executive Asia Pacific for DHL Supply Chain, said management of warehouses, distribution and repackaging were under-developed in North Asia, where only half of the firms had out-sourced their warehouses to management companies. Hong Kong's Interlink, a 25-storey warehouse with 900,000 square feet of floor area, will serve industries from the technology, retail, health care and consumer sectors. It is operated under a long-term leasing contract with the landlord, Goodman Group. DHL rivals United Parcel Service and FedEx Express are applying to gain access to the mainland domestic express market, nearly one year after DHL quit its domestic business. "If our competitors think they can make money in the domestic market, it's fair enough," Appel said. "But I don't understand what they are trying to do in the domestic market when certain things are not allowed." On the mainland, foreign players are banned from conveying small parcels and mail under 2 kilograms. Appel said it would therefore be hard for competitors to make money as local consumers were very price sensitive.

Chief Executive Leung Chun-ying adopts a statesman-like pose as he rolls out his proposals in the Legislative Council yesterday. Chief Executive Leung Chun-ying gave out HK$7.35 billion of sweeteners in his first question-and-answer session as he sought to move beyond a series of scandals that have battered his fledgling administration. Faced with plunging popularity ratings and the resignation of a minister, Leung turned his appearance yesterday at the Legislative Council into a "mini-policy address". He laid out plans to create a special old age allowance, build youth hostels and let eligible buyers purchase second-hand Home Ownership Scheme flats from January. Lawmakers and academics said the proposals appeared to be an attempt to shore up Leung's political base against a barrage of controversy, including questions about illegal structures at his home. Some legislators, including at least one previous ally, also criticised the chief executive for dodging their questions about the illegal structures and said he must do more to answer their concerns. Leung arrived at Legco amid protests outside the building. Once in the chamber, he launched into a 20-minute speech, which he used to roll out a raft of measures, including a HK$2,200 monthly allowance for an estimated 400,000 qualified elderly. He proposed spending HK$350 million to double the HK$500 medical vouchers due to about 700,000 eligible citizens. He would also spend HK$1 billion to help three NGOs build the first batch of a planned 3,000 youth hostel units. Under another plan, 5,000 qualified buyers who currently live in private housing would be able to buy second-hand flats. But when the floor opened for questions, lawmakers continued to press Leung on political issues. They included his leadership, the illegal structures, attacks on his integrity and his response to the suspicious death of Tiananmen activist Li Wangyang. Leung said he would not comment on his illegal structures because of legal proceedings regarding his comments about the matter. He was referring to lawsuits from two pan-Democratic lawmakers who have asked the Court of First Instance to review whether the chief executive's earlier denial about having illegal structures proves he is not "a person of integrity" as required by the Basic Law. But Eric Cheung Tat-ming, an assistant law professor with the University of Hong Kong, said it was unlikely that Leung's answers could affect the case. "It is common for lawyers to advise their clients not to say anything before a lawsuit, but, for a chief executive, I think the public will not accept a personal reason," he said. Democratic Party lawmaker James To Kun-sun accused Leung of evading the illegal structure issue. "While the livelihood measures announced today may win him some applause, those accolades are short-term and will be digested very soon," To said. Even Beijing-loyalist Wong Kwok-kin, a Federation of Trade Unions lawmaker who voted for Leung in the chief executive election, expressed disappointment at Leung's responses to questions about his integrity. "He was avoiding the focus when answering the questions," he said. Political scientist Ivan Choy Chi-keung, of Chinese University, believed Leung adopted an evasive strategy because he was running out of ways to save his popularity. "Leung has more support among the elderly and those with a lower education background," Choy said. "So he is proposing the new policies to secure his basic support. At least it will stop the bleeding."

Chief Executive Leung Chun-ying during yesterday's Legislative Council session, where he announced a HK$1 billion plan to build 3,000 hostel units for young people. Chief Executive Leung Chun-ying announced a HK$1 billion plan to build 3,000 hostel units where young people could live for a limited period, to address their need for independent housing. Leung said his scheme enlarged a proposal raised by his predecessor, Donald Tsang Yam-kuen, while adding a construction subsidy. Critics faulted the new plan as too expensive and generous, with some doubting that young people were the most deserving of taxpayers' aid. "I am pleased to see many non-governmental organisations willing to use land granted to them earlier to build youth hostels, to let young working people have their own living space," Leung said. "The government proposes to fully subsidise the construction costs for these NGOs." Single people between ages 18 and 35 will be eligible if they earn no more than HK$17,000 per month and do not own property. There will be a smaller quota for married couples, for whom the income cap is doubled. Tenancy will be limited to five years, and rents will be set at no more than 60 per cent of the market rate in nearby residential properties. The first stage of the programme will deliver 3,000 units, ranging from 160 to 215 sq ft, according to Secretary for Home Affairs Tsang Tak-sing, who said the scheme would encourage young tenants to save money to buy their own homes. The Tung Wah Group of Hospitals, the Girl Guides Association and Federation of Youth Groups have expressed interest in the plan. They would have to cover operating costs under the proposed scheme. A Federation of Youth Groups spokeswoman said it welcomed the full construction subsidy. In an earlier version of the scheme, the organisation had hesitated to proceed when it thought it would have to shoulder all costs. The federation said it planned to build hostels in Tai Po and Tin Hau. Josephine Pang Tsui Mei-wan, chief commissioner of the Girl Guides, said the group planned to build a hostel with a new headquarters at a site on Jordan Road. Tung Wah Group said it hoped to build an 18-storey hostel with 200 units within three to four years. Lee Wing-tat, chairman of the Legislative Council's housing panel, said the HK$1 billion budget meant each unit would cost HK$333,000 to build, which he said was expensive. "It's almost like building a 400 sq ft public rental housing unit, but these hostel units are much smaller," Lee said. Priority for their use should be given to those who live in substandard conditions, like partitioned flats, ahead of those already in public housing, Lee added. Lawrence Poon Wing-cheung, a spokesman for the Institute of Surveyors' housing panel, had reservations about the plan, asking: "Should taxpayers help those who simply don't want to live with their parents?" In a separate housing initiative, Leung said the government would launch a scheme in January to select 5,000 families who earn no more than HK$30,000 a month, to buy second-hand Home Ownership Scheme (HOS) flats at below-market prices. He presented this as an interim measure to help the middle class before new supplies of HOS flats were completed in 2016. HOS owners selling their flats to the 5,000 families will have to pass on the discount they were given when they purchased their flat. Meanwhile, the Labour Party yesterday renewed its call for rent controls to ease the burden on needy tenants living in partitioned flats. Party chairman Lee Cheuk-yan, who led a group of tenants to meet Secretary for Transport and Housing Professor Anthony Cheung Bing-leung yesterday, said they also asked for public units to be offered to those affected by the clearance of illegally partitioned units. Lee criticised the measures announced yesterday for failing to address the housing needs of tenants of partitioned flats who found themselves without accommodation after the illegal units were dismantled.

Any bills not passed by the Legislative Council before midnight will be tabled until October, after September's elections. Legislators were confident on Tuesday afternoon that they could pass the remaining livelihood-related issues in the hours remaining in their current term – but not the government’s restructuring plan that languished at the bottom of the agenda. They had worked through three pieces of legislation but 17 government resolutions still awaited. Bills passed included the Trade Descriptions (Unfair Trade Practices) (Amendment) Bill, a proposal to extend consumer protection. Another was the Supplementary Appropriation Bill, which provides HK$54.1 billion for the government to cover extra expenses in the past year such as funding for the HK$6,000 cash handouts and establishment of the Community Care Fund. Any items not passed before the 15-hour meeting ends at midnight will have to be tabled again in October, after September’s elections. Government resolutions that had not been scrutinised included a plan to raise workers’ compensation, the suspension of a levy paid from Mandatory Provident Fund schemes and adjustments in legal aid. Radical pan-democrats continued to employ delaying tactics by making lengthy speeches to ensure there would not be time to tackle Chief Executive Leung Chun-ying’s proposed government revamp. Chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, Tam Yiu-chung, said he was concerned that the radical democrats’ action might cause some livelihood proposals to lapse. But People Power’s Wong Yuk-man, one of the filibustering legislators, said the livelihood-related measures could be passed in time. “Only some of the remaining resolutions concern livelihood issues and I am confident we can pass them all before midnight,” Wong said. Labour Party chairman Lee Cheuk-yan echoed Wong’s view. He also urged the government to launch a public consultation on its restructuring plan during the summer recess before tabling it again in Legco. The legislature will expand from the current 60 seats to 70 in October, as a result of an electoral reform passed two years ago. Five of the new seats will be directly elected. Of the current legislators, at least nine have decided not to run. They include banker David Li Kwok-po, accountant Paul Chan Mo-po, the textiles and garment sector’s Sophie Leung Lau Yau-fun, independent pan-democrat Andrew Cheng Kar-foo, the Democratic Party’s Kam Nai-wai and newly appointed Executive Council member Cheung Hok-ming.

Tony Chan Chun-chuen arrives at court last month. He may have to pay HK$330 million in taxes after his appeal application was rejected on Tuesday. Self-styled fung shui master Tony Chan Chun-chuen suffered a new setback on Tuesday after the Court of Appeal rejected his application to appeal to the top court over HK$330 million in unpaid taxes. The case centred on whether the Commissioner of Inland Revenue was justified in rejecting Chan’s request for more time to challenge 25 tax assessments after a provisional one-month limit expired. The tax claim involves 23 property tax assessments of HK$631,784 and HK$330.24 million in profits tax, which allegedly arose from fung shui services that Chan gave to late billionaire Nina Wang Kung Yu-sum, who died in 2007. The ruling meant Chan would have to pay HK$330 million in taxes immediately unless he took the case to the top court to ask for leave to appeal there directly. Lawyers for Chan said the businessman had not made a decision yet. The blow came at a time Chan was fending off the Chinachem Charitable Foundation’s court bid to have him declared bankrupt for failing to pay HK$80 million in legal fees arising from his defeated claim for Wang’s estimated HK$50 billion estate. Chan won a judicial review of the tax case in the Court of First Instance, but the decision was overturned by the Court of Appeal in March. The court heard earlier that tax assessments were mailed in January and February 2010. Chan said he did not receive them and became aware of them only in April that year. On Tuesday, Johnny Mok SC, for Chan, argued that ruling in favour of the tax department meant that his client was denied access to court and a fair trial – fundamental rights guaranteed by the Basic Law. He pointed out that the case involved a huge sum of money and a one-month deadline for filing was extremely short. He said his client should have the right to take his objections to the tax assessments to an independent and impartial tribunal. But Mr Justice Peter Cheung Chak-yau said this issue was not relied on in the lower courts and Chan could not rely on it now. In a unanimous decision, Cheung, Mr Justice Michael Hartmann and Mr Justice Johnson Lam Man-hon refused Chan’s application. In March, the three judges ruled that the tax commissioner, after sending the assessments, did not need to prove further that the tax papers “actually” came to Chan’s knowledge. Once the document was properly served, the actual notice was considered to have been given to the taxpayer, the judges said. “The commissioner must be of the view that it was plainly too much of a coincidence that all the 25 assessments, which were sent at different times, would not have reached the taxpayer,” Cheung wrote in his judgment handed down in March. “It is not sufficient for the taxpayer to say that he had not received the assessments.” Cheung said evidence indicated Chan, who claimed he did not know about the papers until months after they were mailed out, had indeed received the assessments. From October 2009 to February 2010, Chan used the postal address of a law firm, which said any letter it got would have been forwarded to him.

Venice Film Festival Taps Hong Kong Director for Jury - The Venice International Film Festival has reached out to Asia in selecting this year’s jury. The festival, which opens next month, named Hong Kong director Peter Chan among its nine-member panel for the main competition’s films. Mr. Chan is one of Asia’s most-prominent commercial filmmakers and a leading figure in Chinese-language movies. His directing career began more than 20 years ago and includes the award-winning “Comrades, Almost a Love Story” (1996) and the 2007 war epic “The Warlords.” Last year, he ventured into the martial-arts genre with “Wu Xia.” Earlier this month, Mr. Chan began filming “American Dreams in China,” about three friends who form a multibillion-dollar empire. The story spans three decades starting in the 1980s and is set against the backdrop of China’s economic reform. Mr. Chan was last in Venice in 2005, when his musical “Perhaps Love” held its premiere. “It’s my utmost honor to be part of the jury in the oldest and one of the most prestigious film festivals in the world,” Mr. Chan said. “It’s like a summer film camp in the beautiful city of Venice. Does life get any better than that?” Venice’s commitment to Chinese cinema came into question at last year’s festival, as Marco Müller was winding up his second four-year term as artistic director. Mr. Müller, who speaks Chinese and is often seen wearing Mandarin-collar jackets at premieres, is a long-time champion of Chinese cinema. He is now artistic director of the Rome Film Festival. Asian movies, and the Chinese-language film industry in particular, have held a strong presence at Venice in recent years. Last year, four of the 23 films in the festival’s main competition were from Greater China — the mainland, Hong Kong and Taiwan — with the Silver Lion for best director going to Cai Shangjun of China for “People Mountain People Sea” and Hong Kong actress Deanie Ip winning best actress for “A Simple Life.” In 2010, legendary Hong Kong director John Woo was awarded the Golden Lion for Lifetime Achievement. And in 2006, mainland Chinese director Jia Zhangke’s film “Still Life” won the Golden Lion, the festival’s top prize. This year’s jury president at Venice is American director Michael Mann. The other members of the jury are Serbian artist Marina Abramovic, French actress Laetitia Casta, Israeli director Ari Folman, Italian director Matteo Garrone, French-Swiss filmmaker Ursula Meier, British actress Samantha Morton and Argentinian director Pablo Trapero. The 69th Venice International Film Festival runs from Aug. 29 to Sept. 8. This year’s lineup will be announced at a press conference in Venice next week.

Louis Yu, director of performing arts for West Kowloon, in the temporary West Kowloon Bamboo Theatre. Foster + Partners Leads Shortlist to Design Cultural Venue in West Kowloon - Months after erecting the temporary West Kowloon Bamboo Theatre, the West Kowloon Cultural District is one step closer to building its first permanent arts institution. The West Kowloon Cultural District Authority board on Tuesday shortlisted five architecture teams for the design of the Xiqu Centre, a Chinese opera venue slated for completion at the end of 2015. On the shortlist are Foster + Partners with O Studio Architects; Safdie Architects; Bing Thom Architects and Ronald Lu & Partners; Mecanoo architecten and Leigh & Orange; and Wong & Ouyang and Diamond & Schmitt. The deadline for the teams to submit their design concepts is Oct. 5. The Xiqu Centre is set to be the first permanent cultural institution to open in the West Kowloon District, a future 21.6 billion Hong Kong dollar (US$2.8 billion) arts hub that will occupy nearly 100 acres of reclaimed waterfront. Last year, the design for the district’s master plan was awarded to London-based firm Foster + Partners, helmed by architect Norman Foster, whose name is synonymous in Hong Kong with such high-profile structures as the HSBC headquarters building and the city’s international airport on Lantau Island. Sited at the corner of Austin Road and Canton Road at West Kowloon’s eastern edge, the Xiqu Centre will comprise a 1,100-seat main theater, a smaller 400-seat theater, a tea house for performances and additional educational facilities. It will be among 17 cultural venues in the district, including contemporary-art museum M+, planned for completion in 2017. The district will also include some 60 acres of open space, a 1.2-mile harborfront promenade, and commercial areas for restaurants, offices, hotels and shops. Xiqu, or traditional Chinese opera, incorporates singing, acting, movement, speech, martial arts, gongs, drums and costume. Cantonese opera, still performed in Hong Kong, is among the genre’s most widely recognized art forms and belongs to Unesco’s Representative List of the Intangible Cultural Heritage of Humanity.

 China*:  July 19 2012 Share

A Chinese submersible that last month set a new national record will dive in the South China Sea next year, state media said on Tuesday, as Beijing asserts its claim over the resource-rich area. The mission is “part of the preparations for future commercial mining of the seabed”, the China Daily quoted the China Ocean Mineral Resources and Research Association as saying. China claims the entirety of the South China Sea on historical grounds, but Taiwan, Vietnam, Brunei, Malaysia and the Philippines dispute this. Tensions in the South China Sea have risen recently, with China and the Philippines locked in a maritime dispute over the Scarborough Shoal, a reef off the Philippine coast. The China Daily said the Jiaolong, China’s most technologically advanced manned submersible, would conduct the mission next April and May, after it reached depths of more than 7,000 metres in the Pacific Ocean last month. The craft gives China the ability to explore 99 per cent of the world’s seabeds, the China Daily said. Its first mission in the area aims to study the “formation and evolution” of the South China Sea bed, the newspaper reported. Chinese researchers estimate that the South China Sea holds more than 213 billion barrels of oil, equivalent to at least 80 per cent of Saudi Arabia’s reserves. Those deposits are an enticing prospect for China, the world’s largest energy consumer, which relies on imports to meet over half of its oil needs.

Hong Kong filmmakers can run up the curtain on larger audiences - and profits - under measures to open up the Cantonese film market in Guangdong province. In a deal arranged under the Closer Economic Partnership Arrangement, Cantonese-language films made in Hong Kong will nearly double their share of box-office takings across the border, from 13 per cent to 25 per cent, the Film Development Council announced yesterday. In addition, a new subsidy of up to HK$250,000 per movie will be available to cover the costs of distribution and publicity in Guangdong, for Cantonese-language films from Hong Kong. " This will give Hong Kong-made movies a lot of opportunities, as Guangdong has a population of over 100 million [counting migrant workers], which is a huge market," said film council member Raymond Wong Pak-ming, a leading film producer and presenter. He expects the new schemes to increase the output of Hong Kong films made with 100 per cent local content, in contrast to Hong Kong-mainland co-productions. Film council vice-chairman Peter Lam Kin-ngok, an entertainment mogul, said local moviemakers were well placed to take advantage of the measures to attract Guangdong audiences. The province's residents had been watching cross-border TV broadcasts, developing a taste for Hong Kong-produced films, he said. "Guangdong is an exclusive market for Cantonese moviemakers," said Lam. "We share the same dialect and a similar cultural background, so the essence of Cantonese films is not lost in translation." A further financial boost is aimed at encouraging investment in films made by novice directors. The film council is raising its financing assistance to 40 per cent, up from 35 per cent, for films made by novice directors working with producers who have made at least two films. The program, under the Film Development Fund scheme, applies to films with budgets of up to HK$10 million. In another initiative, the film council began a survey this month to investigate the outlook for cinemas in the city. The number of theatre seats has fallen from over 120,000 in 1993 to about 40,000 last year, according to the Hong Kong Theatres Association. The council plans further research in other countries and regions, starting in October, to see how they promote the use of cinemas and encourage the development of their movie industries. Early next year the film council will submit the findings of its research to the government for consideration in making policy. Theatres have been shut down in recent years to make way for luxury-brand shops. In February, UA Cinemas' complex in Times Square, Causeway Bay, was closed down, leaving only three cinemas to serve Wan Chai, Causeway Bay, Tin Hau and North Point. "The movie industry is a cultural industry for Hong Kong," said Wong. "If there are no theatres, the habit of watching movies in cinemas will simply die out."

Under Health Minister Chen Zhu, the mainland has stepped up efforts to curb tobacco use in recent years. The World Health Organisation is giving China’s health minister an award for battling smoking in a country whose people and government remain prodigiously addicted to tobacco. China has stepped up efforts to curb tobacco use in recent years. The Health Ministry released the country’s first official report on the harms of smoking in May, banned smoking in its office building and hospitals, and is lobbying for airports and other indoor public facilities to do the same. WHO said Health Minister Chen Zhu will be presented a certificate of recognition at a ceremony on Wednesday attended by WHO chief Margaret Chan Fung Fu-chun, Hong Kong’s former director of health. Tobacco control is a difficult task in a nation where huge revenues from the state-owned tobacco monopoly hinder anti-smoking measures. Nearly 30 per cent of adults in China smoke – about 300 million people, roughly equal to the entire US population – a percentage that has not changed significantly. The tobacco monopoly’s influence is pervasive, with cigarette companies sponsoring schools, sports events and fostering close ties with the academic community. In December, a tobacco scientist who specialises in adding traditional Chinese herbs to cigarettes in an attempt to reduce their harmful effects was appointed to the prestigious Chinese Academy of Engineering in a move that was criticised by other academics, several of whom sent letters to the academy in protest. Despite the many challenges that remain in stamping out tobacco use, anti-smoking activists welcomed the WHO award. “Among the government departments, the Health Ministry is the one that has made the biggest efforts in promoting tobacco control,” said Xu Guihua, vice president of the government-affiliated Chinese Association on Tobacco Control. “On many occasions, Minister Chen Zhu has told the public that tobacco is harmful and asked people to give up smoking. He also called on the government to step up tobacco control legislation.” Xu said China still needs to issue a national tobacco control plan, raise prices of cigarettes and better educate the public on the health risks of smoking. She criticised the apparent conflict of interest in the dual role that China’s State Tobacco Monopoly Administration plays as both tobacco policymaker and overseer of the China National Tobacco Corporation – the world’s largest cigarette maker. Health officials have warned that smoking-related deaths could hit three million per year by 2030 without greater efforts. Last year’s certificate for anti-smoking efforts was awarded to Australian Attorney General Nicola Roxon, who as health minister led a campaign to make Australia the first country in the world to require cigarettes to be sold in plain packages with large, graphic warnings.

The Ministry of Railways will withdraw from directing inter-city railway construction and hand over the task to local governments, Economic Information reported, citing unnamed sources within the National Development and Reform Commission, China's economy planner. The Ministry will mainly play its role as a regulator and the corresponding local governments are being encouraged to absorb private investment to ease any financial burdens.

Global banks posted record profits from their Chinese operations last year, with many foreign lenders expecting annual growth of about 20 percent up till 2015, according to a survey released Tuesday by PricewaterhouseCoopers. Combined net profits of 181 foreign banks more than doubled to 16.73 billion yuan ($2.65 billion) in 2011 from 7.78 billion yuan in 2010, boosted by multinationals' investment growth in China, according to the survey, which polled chief executives, senior managers and branch presidents of 41 foreign banks. Assets of those foreign banks in China expanded 24 percent year-on-year to 2.15 trillion yuan last year, PwC said in the survey report. "The fundamental challenge for the foreign banks over the next three years will be balancing the investment and needs of a dynamic and fast-developing Chinese market against the constraints of a slowing economy back home," PwC Financial Services Advisory Partner William Yung said in the report. Since the first quarter of 2011, China's economy has slowed for six consecutive quarters, with its gross domestic product expanding only 7.6 percent in the second quarter of this year, the slowest growth pace in three years. Foreign banks are more dedicated to their Chinese investments now than since 2008, as China continues to liberalize its currency and restrictions on its financial system, the survey found.

Hong Kong*:  July 18 2012 Share

The honor guard of PLA Garrison in HKSAR perform on the opening ceremony of Hong Kong Youth Military Summer Camp at the San Wai Barracks of the Garrison, July 16.

Cathay Pacific Airways (0293) is bullish about "premium" passenger numbers despite the economic doldrums in the United States and Europe, says its chief operating officer. Ivan Chu Kwok-leung said the airline will be focusing more on the lucrative regional business travel to meet the challenge of declining markets in the West. The airline is set to unveil in a few months an Asian "regional business class." Chu said the emphasis is on the "premium," not the class. In December, Cathay launched its premium business class "researched and developed, designed and made in Hong Kong" that was voted on Thursday the "World's Best Business Class" in the annual Skytrax World Airline Awards program, in which more than 18 million airline passengers from around the globe voted. Premium business class was followed by the launch of premium economy in February. "We are very bullish on the business class because we have GDP per capita rising, more people are doing leisure travel in addition to business travel," Chu said. "Business travel in Asia is doing quite well vis-a-vis other parts of the world so, yes, we are very bullish about business. That's why we are investing in the long-haul business class. "In a few months we have very exciting [news] to announce about the regional business class of between one- to five-hour flights." There is champagne served in premium economy - a step up from economy class and about 50percent more on the ticket. Cathay will always provide "a competitive product at a competitive price," Chu said. CX general manager (product) Alex McGowan said the wing-back design of the seats in soft dark green colors, which are soothing and relaxing, is "very modern and very contemporary."

Sun Hung Kai Properties' Kwok brothers are buying the best legal brains in the business as they build a team of top barristers to defend them against corruption and conspiracy charges. Lawrence Lok Ying-kam, who accompanied Thomas Kwok Ping-kwong to the Independent Commission Against Corruption on Friday, has been retained for three years with an annual fee of HK$30 million. And Raymond Kwok Ping-luen has won the services of Clive Grossman, who helped the late Nina Wang win a legal battle for control of her late husband Teddy Wang Teh-huei's Chinachem business empire against her father-in-law Wang Din-shin. The total legal bill could top HK$100 million. A legal source said there are only 30 to 40 barristers in Hong Kong who specialize in criminal cases. It is understood the Kwok brothers have already approached 20 to 30 of them - apart from those likely to have a conflict of interest, like Cheng Huan, who has been secured by their elder brother Walter Kwok Ping-sheung. The Kwok brothers' search for the best of the bar also shrinks choices available to the government. Director of Public Prosecutions Kevin Zervos is reportedly planning to hire barrister Kim Robinson from Britain, senior counsel Joseph Tse Wah-yuen and two more barristers. Sources said Raymond Kwok may also hire silks from Britain too. Among those in Thomas Kwok's team are British silk Clare Montgomery and senior counsel Selwyn Yu Sing-cheung. Thomas and Raymond Kwok, along with former chief secretary Rafael Hui Si-yan, Sun Hung Kai's executive director Thomas Chan Kui-yuen and Francis Kwan Hung-sang, a former official of the Hong Kong stock exchange, were charged last Friday in one of the highest-level corruption cases in Hong Kong's history. Hui allegedly owed a debt of around HK$72 million by the end of last year. Hui will be represented by barrister Edwin Choy Wai-bond, and Chan by barrister Chung Wai-keung. Barrister Albert Luk Wai-hung said: "It is rare that most of the top local barristers specializing in criminal cases have been employed by various defendants in one single legal case." Lawyer Wong Kwok-tung said renowned barristers can charge between HK$10,000 and HK$50,000 an hour just to study documents. Top barristers can charge more than HK$10 million a case. Hui faces two charges of misconduct in public office. They allege he accepted the rent-free use of two flats and unsecured loans from a subsidiary of Sun Hung Kai when he was managing director of the Mandatory Provident Fund Schemes Authority and chief secretary between June 2000 and January 2009, failing to declare these to the government. The advantages allegedly received by Hui totaled about HK$40 million. Hui and Thomas Kwok face a joint charge of conspiracy to commit misconduct in public office, while Hui and Raymond Kwok face a similar charge. As a result of the charges, SHKP has appointed Thomas Kwok's son Adam Kwok Kai-fai, 29, and Raymond Kwok's 31-year-old son Edward Kwok Ho-lai as alternate directors. They will be supported by two new deputy managing directors, Mike Wong Chik-wing and Victor Lui Ting, who have worked for the company for more than 30 years. On Friday trading in New York after the suspension of its Hong Kong shares, the American depository receipts of the company rose 0.6 percent to an equivalent of HK$96.12.

Haywood Cheung says overseas firms will find Hong Kong a good base for trading gold and storing it for export to the region. The 102-year-old local gold bourse has signed up a Middle Eastern gold trading firm, the first of the overseas companies it is planning to recruit as non-voting members. Chinese Gold and Silver Exchange Society president Haywood Cheung Tak-hay told the South China Morning Post (SEHK: 0583, announcements, news) in an exclusive interview that players around the globe would be allowed to join as non-voting members as the gold bourse beefs up its international exposure. The exchange has 171 members who co-own it and have voting rights. Non-voting members do not have ownership or voting rights but will be allowed to trade on the exchange and use its gold storage facility at Hong Kong International Airport. "We have signed up a gold player from Istanbul. This will mark a new chapter for the Chinese Gold and Silver Exchange Society," Cheung said. "We want to get more international firms to join as non-voting members so that they can use the Hong Kong gold market to trade gold." He would not identify the Istanbul trader but said he would do so later. Cheung said he was also in talks about similar link-ups with gold traders in other countries in the Middle East, in Switzerland, the United States, Japan and India. "Many of these international gold traders may not want to be a full member of the exchange, because some local market features may not suit their needs," he said. "For example, they may not be interested in trading in tael local gold in Hong Kong dollars." But these international firms might be interested in non-voting status, which would allow them to trade directly in the Hong Kong market in gold products denominated in US dollars, Hong Kong dollars and yuan. They would also be allowed to use the physical delivery services provided by the local gold bourse, including the airport gold storage facilities to house physical gold for settlement or for export. "Hong Kong is a good location for international players to trade gold and then export the precious metal from our airport storage facility," Cheung said. This is particularly important for big players eyeing the China market, he said. "The mainland Chinese gold market hasn't yet opened up, but international players who want to get closer to mainland investors can come and trade on our bourse," Cheung said. "Traditionally, the Chinese Gold and Silver Exchange Society is mainly for local players, but with gold prices still rallying, it's time for us to go international." Gold prices reached a record of US$1,920.30 per ounce in September last year before falling back to about US$1,600 now. Cheung believes gold could still hit US$2,000 an ounce.

A man walks in front of an ad for Lenovo computers in a Kowloon computer centre. Lenovo Group (SEHK: 0992) is on track to overtake Hewlett-Packard as the world's biggest PC maker by sales as soon as this year, making it the first Chinese company to grab the top spot globally in a technology sector. The ThinkPad maker’s rise highlights the advance of China’s technology firms on the world stage in recent years thanks to a combination of aggressive pricing, overseas acquisitions and their taking advantage of a fast-growing home market. Analysts, however, also warn that Lenovo’s rapid gains in market share have come at the expense of profit margins, while the company faces slowing growth in the market for personal computers and tough rivals in the tablet PC space. “It’s just a matter of time before Lenovo becomes No 1 and it won’t be surprising at all if it happens later this year,” said Frederick Wong, executive director at Avant Capital Management (Hong Kong) Limited, which owns shares in Lenovo. He added, however, that competition in the tablet sector and a weak PC market outlook could put pressure on Lenovo. Lenovo, which became the world’s No 2 PC vendor in the third quarter of last year, had a 14.9 per cent global market share in the April-June quarter this year, a mere 0.6 percentage point away from HP’s 15.5 per cent, according to research firm IDC’s latest data. Figures from industry tracker Gartner show an even narrower gap, with Lenovo just 0.2 percentage point from HP. In another technology sector, China’s Huawei Technologies, the world’s No 2 maker of telecom equipment, had been expected to surpass Sweden’s Ericsson last year sales. But slow telecom spending, stiff competition in the handset market and difficulties in tapping the massive US market held it back. Lenovo’s rise has been helped by its purchase of Germany’s Medion and a joint venture with Japan’s NEC Corporation last year, as well as its acquisition of IBM’s PC business in 2005. Investors have rewarded Lenovo for its market share gains, sending its stock up by around 16 per cent this year and outpacing rivals HP, third-ranked Dell and No 4 Acer, whose stocks have dropped over the same period. Lenovo currently trades at a multiple of 12.5 times forward earnings, the second-highest among the top-five PC makers and well above the 4.6 times multiple for HP, Thomson Reuters Starmine data showed. But profit margins have suffered. Lenovo had a 1.4 per cent operating margin in the latest quarter, lower than HP’s 7.4 per cent and Dell’s 6.2 per cent, the data showed. “HP, Dell and Acer have switched lanes in the PC race and passed the baton to L enovo in terms of focusing on sales rather than margins,” said Dickie Chang, an analyst at IDC in Hong Kong. Another risk is slowing growth in the PC market as the global economy, including Lenovo’s home turf and stronghold China, eases. China accounts for about 42 per cent of Lenovo’s total revenue, with the bulk of that coming from PC sales. Global PC shipment growth was largely flat in the second quarter, marking the seventh straight quarter of low 0 to 5 per cent growth for the industry. “We remain positive on Lenovo’s market share expansion, but the absolute growth is nevertheless being negatively impacted by a slower market,” Jefferies said in a report. Jefferies has an “underperform” rating on Lenovo with a price target of HK$5.70. Overall PC demand could pick up this year with the launch of Windows 8, though the catch is that competition in the sector for tablet PCs – not Lenovo’s strongest area – will heat up because the operating system is designed to run on laptops and tablets. Mizuho analyst Charles Park forecasts the PC market will grow by just 3 per cent this year. Lenovo’s tablets, its LePads, will also face competition from new products, including the next versions of’s Kindle Fire and Apple’s iPad, as well as Google’s Nexus 7 and Microsoft Corp’s Surface.

Financial Secretary John Tsang accepts a letter from protesters, among them pro-government supporters, in Sha Tin. In what looked like a case of "if you can't beat them, join them", protesters from pro-establishment factions were seen among the rowdy crowds outside two town hall meetings yesterday, in a sign of discord in the coalition ahead of Legco elections. Shortly before Chief Executive Leung Chun-ying and Secretary for Food and Health Dr Ko Wing-man arrived at the Lai Chi Kok Community Hall in Sham Shui Po, more than a dozen protesters from the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) were involved in a stand-off with dozens of People Power supporters. The pro-establishment supporters' actions signal a break from being the new administration's coalition partners in the Legislative Council poll in September. With DAB district councillors and demonstrators chanting in support of the implementation of the special old-age allowance, they were all but drowned out by a larger crowd of People Power protesters who shouted: "DAB ... the most shameful." Leung made a campaign promise to give impoverished elderly people HK$2,200 a month, while those aged at least 65 with less pressing financial needs would continue to receive HK$1,090 a month under the existing scheme. At the meeting in Sham Shui Po, DAB district councillor Vincent Cheng Wing-shun asked Leung when the special allowance would be handed out. Leung replied: "Please rest assured that I have pushed the relevant departments to implement the special old-age allowance as soon as possible. We will announce it once the details are set. "It is unnecessary that we must wait until the [February] budget and the [October] policy address. Policies of public concern … will be put forward once they are ready." Meanwhile, during a visit to Sha Tin, Financial Secretary John Tsang Chun-wah and Anthony Cheung Bing-leung, the transport and housing chief, were greeted by protesters from the DAB and fellow pro-establishment camp Civil Force. Tsang shook hands with some protesters and received their petitions. Civil Force councillor Scarlett Pong Oi-lan, who is considering contesting the New Territories East constituency in September, voiced concern over town planning in Tai Wai. Outside the Hin Keng Neighbourhood Community Centre, also in Sha Tin, DAB district councillors Dr Elizabeth Quat, who will run in the New Territories East constituency in the Legco poll, and Yeung Man-yui also urged the government to look into town planning there.

Police surround Leung Chun-ying as he leaves Lai Chi Kok Community Hall. The government has suspended town hall-style visits, saying it wants to avoid any possible conflicts in the run-up to September's Legislative Council elections. The move came as the third weekend of town hall meetings was dogged by more mayhem, with demonstrations by various factions and constant scuffles between protesters and police. Chief Secretary Carrie Lam Cheng Yuet-ngor said yesterday that candidates might use such meetings to gain publicity. The nomination period for the elections opens on Wednesday and electoral-related activities will also kick off soon. But she and Chief Executive Leung Chun-ying vowed to continue to reach out to the public as they completed the first round of district visits. Secretary for Education Eddie Ng Hak-kim and Secretary for Labour and Welfare Matthew Cheung Kin-chung had to cut short their session in Yuen Long as some participants began shouting slogans about the 1989 Tiananmen Square crackdown, provoking scuffles in the audience. It was the second of the 18 district visits that had to be abandoned. The other was in Tuen Mun on July 2 when Leung was forced to make a hasty retreat under police escort after activists stormed his meet-the-public session. Yesterday, addressing residents in Lai Chi Kok Community Hall, Leung said: "We need to listen to views face to face and feel the pulse of the community … We will continue to use this way, or combine it with other ways to listen to opinions." His remarks came despite an earlier call from New People's Party chairwoman Regina Ip Lau Suk-yee for him to stop the visits in view of the chaos and criticism from pan-democrats that the town hall sessions were just a "political show". Outside Lai Chi Kok Community Hall, Leung's arrival and departure were marred by scuffles and noisy protests. People Power said one of its volunteers had been beaten up just before Leung arrived and had to be taken to hospital. Police later said a man had been arrested for assault. As soon as Leung walked into the venue, League of Social Democrats lawmaker "Long Hair" Leung Kwok-hung, donning a Leung Chun-ying mask with an extended Pinocchio-style nose, stood on a chair to demand he step down and explain the unauthorised structures at his home. This was greeted by boos from the audience and one resident tried to pull the pan-democrat from the chair. The lawmaker was then forcibly removed by security guards. As the chief executive left, dozens of protesters chased his car, which was surrounded by police officers until it left Sham Shing Road. Speaking at the Princess Alexandra Community Centre in Tsuen Wan, Lam said the government would continue to gauge public opinion to better formulate policies despite the protests. "Although on TV it seems quite chaotic … it would be pitiful if we fear these challenges and give up opportunities to talk to the public directly," she said.

Chief Executive Leung Chun-ying leaves Legco after a question-and-answer session on Monday. Chief Executive Leung Chun-ying on Monday announced a special allowance for the elderly and help for homebuyers but tried to avoid questions about his illegal structures in his first Legislative Council question-and-answer session. To help the elderly in need, a means-tested monthly living subsidy of HK$2,200 would be introduced in October while the value of health vouchers would be doubled to HK$1,000 a year, he said. On housing, Leung said 5,000 people would be allowed to buy pre-owned subsidised flats under the Home Ownership Scheme. A scheme to build hostels for working youths would encompass 3,000 units in its first phase. The chief executive said livelihood issues were given high priority in his policy, and he would announce such measures whenever they were ready. Executive Councillor Starry Lee Wai-king had earlier urged Leung to announce some measures immediately to regain public confidence instead of waiting until his maiden policy address in October. He has already lost one of his ministers, Mak Chai-kwong, the former development secretary who quit after he was arrested by graft-busters and who is also embroiled in a controversy over six illegal structures at his home on The Peak. Last year, Leung told reporters that two lawyers and an architect had confirmed he had no illegal structures at his luxury home on The Peak. But six illegal structures, including a glass enclosure and a wooden trellis, were later uncovered by the media. At Monday’s session, Leung faced a series of questions from pan-democrat lawmakers about the structures, particularly whether he had had lied about when one of them was built. He came under fire after replying that he could not comment further because of court action being taken against him. “I would like to give a complete explanation on all these questions at one time,” Leung said. “Now a judicial review and an election petition have been launched in court. It is not appropriate for me to comment further.” Independent Andrew Cheng Kar-foo said the chief executive was trying to use court proceedings as an excuse to evade questions on his illegal structures. “The proceedings now only concern whether the court will accept a judicial review launched by Albert Ho Chun-yan. I am a lawyer and I have discussed this case with other legislators from the legal profession. There is no reason answering one simple question – that is, whether your trellis was built before you moved in or after – will affect the proceedings,” Cheng said. “How can the public know whether our chief executive is an honest, reliable person?” Democratic Party chairman Ho and radical lawmaker “Long Hair” Leung Kwok-hung are seeking judicial reviews of Leung’s election on the grounds that the chief executive is not a “person of integrity”, as required under the Basic Law. Meanwhile, an application by the chief executive’s lawyers to strike out an election petition sought by Ho has been adjourned to August 15. The question-and-answer session was disrupted for several minutes when “Long Hair”, of the League of Social Democrats, was expelled. He had thrown towards Leung a hood mocking the chief executive.

Ping Pong Couple Swaps China for Hong Kong - Hong Kong’s Tie Yana in action against Dutch Li Jiao during the 2012 World Team Table Tennis Championships on March 30, 2012. Three years ago, Tie Yana was late to her own wedding because she was busy playing a ping-pong match. Fortunately, her fiancé—and fellow professional ping-pong player—Tang Peng forgave her, they signed the marriage papers, and this month, the duo are headed to London for one of the biggest tests of their careers: the Olympics. Though they’re representing Hong Kong, the city where they met and married, both players actually hail from mainland China, where ping pong was early on enshrined as a national obsession by enthusiasts from Mao Zedong to Deng Xiaoping. There, competition to join the country’s national team is so fierce that even ambitious top-level talents find it difficult to break through. Both Ms. Tie and Mr. Tang knew their best chance of ever making it to the Olympics meant leaving home. “There’s definitely more opportunities as a player in Hong Kong,” says Ms. Tie, 33, who moved to the city a decade ago after being spotted by a talent scout in Shanghai. “Ping pong is China’s national game, so competition is more fierce.” For years, China has allowed plenty of ping-pong players to go abroad, confident that the exodus will scarcely threaten the country’s own unparalleled dominance at the sport. “China’s goal is to have us encourage the development of ping pong overseas,” says Mr. Tang, age 31, who came in Hong Kong in 2005 and says that, like Ms. Tie, he gave up his Chinese citizenship for an HKSAR passport. “So Chinese [ping pong] players go to Africa, to Europe, to Japan—they’re everywhere.” When the team competed in the 2008 Olympics, every single one of their players was originally from mainland China. “China isn’t selfish about ping pong,” says Mr. Tang. “The country is already so strong at the game.” Since ping pong was first counted as an Olympic sport in 1988,China has scooped up 20 out of 24 gold medals. “It’s like America’s basketball,” says Mr. Tang of China’s exports of ping-pong talent. “There are also Americans who come to China to play basketball, to help the development of the sport in China.” Though Hong Kong returned to Chinese control in 1997, the former British colony continues to operate with its own independent political and economic system, and also sends its own athletes to compete in the Olympics. The city of 7 million, though, has only ever taken home two medals: a gold one in 1996 for windsurfing, and a silver medal in 2004 for ping pong. Like Hong Kong’s four other ping-pong Olympic hopefuls (which include two additional talents from mainland China), Ms. Tie and Mr. Tang spend hours per day fiercely volleying ping-pong balls in a cavernous training hall, the floor strewn with white balls like drifts of popcorn. The only sound is the squeaking of sneakers, the echoing tempo of ping-pong balls, and occasional grunts from the players. Though Mr. Tang and Ms. Tie married in 2009, currently the duo live separately in gender-segregated rooms in dormitories along with other athletes who are in training, each with their own roommate. “Hong Kong doesn’t have much land,” explains Ms. Tie. “Its resources are restricted. Anyway, the dormitories are a lot nicer than college dormitories.” When asked whether she has aspirations to win the gold medal this year, Ms. Tie laughs. “China’s team will definitely be really strong,” says Ms. Tie, who has twice competed in the Olympics and is seen as one of mainland China’s stronger challengers this year. “But I’ll do the best I can.” She hasn’t won any Olympic medals yet, but has defeated players from mainland China in previous competitions, including during the East Asian Games in 2009—just before she married Mr. Tang, as it happens. “That day, everyone was there waiting for me [at the hotel] to finish my competition,” she remembers, including the lawyer that they’d asked to help officiate. “I was still wearing my sports clothes when I arrived. It was the last game of the day. And I won. It was really such a lucky day.” Ms. Tie makes a face and laughs when asked about her husband’s chances of bringing home a gold medal, but Mr. Tang—who is competing in the Olympics for the first time—says he’s upbeat. “It’s the Olympics,” he says. “I’m really looking forward to it. Anything can happen.” And while he’ll be competing against mainland China, Mr. Tang, who was raised in Beijing, says that he doesn’t mind having a compatriot for his opponent. “After all, it’s one country,” he says of Hong Kong’s relationship with the mainland. “You can play ping pong with your good friends,” he says. “You respect your opponent.”

 China*:  July 18 2012 Share

China Shale Gas Is Lure for U.S. Firms - China’s shale-gas industry is still in its early days, with production nowhere near the commercial stage, but that hasn’t deterred foreign companies from trying to get in on the ground floor. U.S. companies that provide oil-field services are looking to gain a foothold in China by investing in local partners before the country launches a second round of bidding later this year for its huge reserves of natural gas trapped within shale. Chinese state-owned companies were allocated shale-gas blocks in the first round in June 2011. “There’s money to be made here,” said Simon Powell, head Asian-Pacific oil and gas analyst at broker CLSA. “It’s like the gold rush—it’s the guys who sold the picks and shovels who made the money, not the miners themselves.” Last week, U.S.-based oil-field-services giant Schlumberger Ltd. bought a 20.1% stake in Hong Kong-listed Anton Oilfield Services Group for about $80 million, making it the second-largest shareholder of the Chinese company, which provides a range of operational services for shale-gas developers. With the deal, Schlumberger gains access to China’s largest energy producers—China National Petroleum Corp. and China Petrochemical Corp., also known as Sinopec Group—both of which are Anton’s primary customers. Schlumberger’s decision to take a minority stake better protects its intellectual property, unlike joint ventures where overseas companies may have less control over the transfer of technology that China craves. Meanwhile, China’s big three energy producers—CNPC, Sinopec Group and China National Offshore Oil Corp., or Cnooc Group—have been investing in shale-gas assets in North America. Some analysts have said they appear to be doing so as a way to obtain advanced technology for use at home. However, China’s state-owned producers say these deals are mainly driven by a search for higher returns and that most expertise remains firmly owned by oil-services companies such as Schlumberger, Baker Hughes Inc. and Halliburton Co., which are reluctant to pass on unconventional drilling know-how to their Chinese counterparts. Now that Schlumberger has moved deeper into China, more U.S. competitors may follow, analysts say. Halliburton and China’s SPT Energy Group Inc. already have a strategic alliance to provide drilling operations, while Honghua Group Ltd., another local oil-services company, is already 14% owned by Nabors Drilling, a U.S. oil-field-equipment manufacturer. Honghua is even in talks to form a joint venture with a leading foreign oil-services company to provide shale-gas drilling, according to its chairman, who declined to name the company.

Model contest held in Beijing - Award ceremony of model contest hosted by a Chinese female fashion magazine, "Xinwei", was held in Beijing.

Jiaolong brings back 11 new species from 7,000-meter dive - Through the program, oceanauts and scientists have explored the underwater geological structure and discovered 11 new species.

A spokesman for the Ministry of Commerce (MOC) on Monday welcomed a ruling by a World Trade Organization (WTO) dispute panel set up following accusations by the United States against China's handling of cross-border electronic payments. In a report published by the WTO on Monday, the dispute panel dismissed U.S. accusations concerning China UnionPay's market status at home, ruling that measures by China have not barred foreign service providers from entering the Chinese market, Shen Danyang said. The ruling also rejected the U.S. view that foreign service providers can provide cross-border supply of electronic payment services into China. The panel judged that foreign service providers must meet the requirements under China's Schedule of Specific Commitments on Services, Shen said. "However, China takes reservations in the panel's ruling that the electronic payment service belongs to the 'all payment and money transmission services' that China pledged to open up when joining the WTO," Shen added. The spokesman said that China will seriously review the panel's report, and will properly deal with the ensuing work related to the case in accordance with the WTO's dispute settlement procedures. On September 15, 2010, the United States filed a consultation request with the WTO's dispute settlement body, saying that Chinese measures related to electronic payment services violated its commitment to the General Agreement on Trade in Services. The United States alleged that China permits only China UnionPay to supply electronic payment services for payment card transactions denominated and paid in yuan in China. Either side can appeal within 60 days after the initial ruling. If they do so, the WTO's Appellate Body will issue a final ruling within 90 days. If neither side appeals, the ruling by the dispute settlement panel will be final. China UnionPay is a bankcard association established in March 2002. At present, the Shanghai-headquartered UnionPay has about 400 domestic and overseas associate members.

Taiwan is considering extending the runway on the contested Spratly Islands in a move that may provoke fresh tensions in the heavily disputed South China Sea. If approved, the project would extend by 500 meters the runway on Taiping Island, the largest in the disputed waters and some 1,376 kilometres from Taiwan. "The national security authorities lately convened a meeting to evaluate the proposal as the situation in the South China Sea has been getting ever complicated," a security source said. Tensions in the area have risen recently, with Beijing and Manila locked in a dispute over the Scarborough Shoal, a reef off the Philippine coast. The runway, currently 1,150m, was built in 2006 despite protests from other countries with claims in the potentially oil-rich area, including the mainland, Vietnam, Brunei, Malaysia and the Philippines. Calls for an increase in Taiwan's defense capability in the disputed area have been on the rise as the claimants have deployed more troops and added military facilities there. In May Taiwan's coast guard said the number of intruding Vietnamese boats surged to 106 last year, up from 42 the previous year. In the same month Taiwan formed a special airborne unit capable of scrambling to the South China Sea in just hours, after three legislators and several top military officers made a trip intended to renew Taiwan's territorial claim.

US swimmer Ryan Lochte (left), decathlete Bryan Clay, rower Giuseppe Lanzone and soccer player Heather Mitts are in the official team uniform, which was designed by Ralph Lauren but manufactured in China. An uproar over the US Olympic team’s made-in-China uniforms is a blasphemy on the Olympic spirit which is supposed to separate sports from politics and is a show of pure ignorance to boot, Xinhua news agency said in a commentary on Monday. With US unemployment hovering just above 8 per cent, US politicians have spoken out against the uniforms for the London Games, which start later this month, and six Democratic senators said they plan to introduce legislation requiring the ceremonial uniforms be produced in the United States. But Chinese government-run Xinhua said in a commentary that it was hard to believe such hysteria over the matter could come from the mouths of such senior US politicians. “The Olympics spirit is all about separating sports from politics, but these US politicians are going too far and trying to force a political tag onto the uniforms,” it said in the Chinese-language commentary. “This is a parochial nationalistic attitude, a blasphemy on the Olympic spirit and a show of ignorance,” Xinhua added. There can be little doubt that US election-year politics are to blame for this spat, as in the previous years the US Olympic team’s uniforms have also be made abroad, it said. “The reason this issue has stirred people up is because the words ‘made-in-China’ touch upon the most sensitive topic of the US election – ‘outsourcing’,” Xinhua added. Democrats have attacked Republican presidential candidate Mitt Romney who, while at private equity firm Bain Capital, was involved in firing workers and outsourcing US jobs to foreign countries. Romney, for his part, has repeatedly pledged to get tougher with China on its trade and currency practices, including pledging to quickly declare China a currency manipulator if elected. The US Olympic Committee has defended its decision to have Ralph Lauren design the outfits and oversee the manufacturing process. Xinhua said the United States would do well to remember how many of its people benefit from the cheap goods China provides. “The unjustified criticisms of US politicians about ‘made-in-China’ is incredibly politically hypocritical,” it added. While Xinhua commentaries do not necessarily constitute official statements, they may be read as a reflection of Chinese government thinking on important issues of the day.

Chinese fishing fleet arrives in Spratlys - A Chinese fishery administration ship (background) guards a Chinese fishing vessel near Yongshu Reef of the Spratly islands in the South China Sea on Sunday. A large fleet of Chinese fishing vessels arrived at the disputed Spratly Islands in the South China Sea on Sunday, state media said, amid tensions with its neighbours over rival claims to the area. The fleet of 30 fishing vessels arrived near the Yongshu Reef in the afternoon after setting off on Thursday from the province of Hainan, Xinhua news agency reported. Chinese fishing boats regularly travel to the Spratlys, a potentially oil-rich archipelago which China claims as part of its territory on historical grounds. But the fleet is the largest ever launched from the province, according to the report. It includes a 3,000-tonne supply ship, and a patrol vessel has also travelled to the area to provide protection, the report said. The vessels will spend the next five to 10 days fishing in the area, it added. The fleet’s arrival came after China earlier on Sunday extricated a naval frigate that got stranded four days earlier on a shoal in the Spratlys, near the western Philippine island of Palawan. However the Philippines did not lodge a diplomatic protest over the matter, saying the stranding of the vessel in its exclusive economic zone was likely an accident. China says it has sovereign rights to all the South China Sea, believed to sit atop vast oil and gas deposits, including areas close to the coastlines of other countries and hundreds of kilometres from its own landmass. But Taiwan, Vietnam, Brunei, Malaysia, and the Philippines also claim parts of the South China Sea. The Spratlys are one of the biggest island chains in the area. The rival claims have long made the South China Sea one of Asia’s potential military flashpoints, and tensions have escalated over the past year. The Philippines and Vietnam have complained that China is becoming increasingly aggressive in its actions in the area – such as harassing fishermen – and also through bullying diplomatic tactics. The Philippines said the latest example of this was at annual Southeast Asian talks in Cambodia that ended on Friday in failure because of the South China Sea issue. The Philippines had wanted its fellow Association of Southeast Asian Nations to refer in a communique to a stand-off last month with China over a rocky outcrop known as the Scarborough Shoal in the South China Sea. But Cambodia, the summit’s host and China’s ally, blocked the move.

Cross-Straits event goes swimmingly - Swimmers compete during the Fourth Xiamen-Kinmen Swimming Competition on Sunday. The fourth annual Xiamen-Kinmen Swimming Competition was held on Sunday, when 150 competitors raced across open water from Kinmen to the mainland. With competitors' ages ranging from 57 to just 14, the duo relay event, aims to strengthen cross-Straits ties through sport and healthy competition. Seventy swimmers came from both the mainland and Taiwan, and about 10 traveled form Hong Kong and Macao. Escorted by canoeists along the 8-kilometer course, competitors set out from Shuangkou village of Kinmen at 8:20 am, and arrived at Yefengzhai of Xiamen on the mainland. The event was organized by the Chinese Swimming Association, Xiamen city government, the Chinese Taipei Swimming Association and Taiwan's Kinmen county government. Duo Yao Han and Zhang Zibin clocked in at 1 hour 31 minutes and 29 seconds to win the men's category, while Yang Dandan and Lei Shan claimed the women's title in 1 hour 35 minutes 15 seconds. Both teams are from the Fujian Swimming and Diving Administrative Center. "It's difficult to swim in a straight line and sometimes you have to guess the direction. Apart from that, it's smooth swimming," said Yang Dandan, 17, who also won the women's category in last year's event. The winners of the men's and women's groups picked up 25,000 yuan ($3,900) each in prize money. "More important than the prize money is the endurance and courage we exhibited in the competition," Yang said, adding she will try to compete in next year's event to continue her training. Lo Chun, who earned third place with his partner Chiu Ssu-chi, said he experienced some fatigue when swimming against the current. "Although I was a first timer at the event, I didn't rush but slowly adjusted my breath and movements," said Lo, a 17-year-old high-school student from Taiwan's Keelung city, who has been swimming since he was 10. Lo said the event is a way for sports to improve cross-Straits ties, a bond he wishes to see get better. Kinmen used to be a military stronghold against the mainland, but today it serves more as an island of cross-Straits exchanges, said Li Wo-shih, magistrate of Kinmen. Li said he was happy to see more people from Hong Kong and Macao participate in the competition, and applauded the event as being a recreational activity that strengthens ties among all Chinese people. "I expect more people to participate in the event to create a new record. Let's swim to maintain health and swim for peace," Li said.

Training session strengthens ties - China and Indonesia pledged to cooperate more and take steps to strengthen the ties between their two militaries, a high-level military official said on Sunday while announcing the conclusion of a two-week counterterrorism training session. It was the second time the countries had held such exercise. "The 2012 training, a milestone for the two militaries, will further strengthen our communications and broaden our vision for the future," Zhao Zongqi, chief-of-staff of the Jinan Military Command of the People's Liberation Army, said in Jinan, East China's Shandong province. Special forces from the PLA and Indonesian National Defense Forces took part in the session, which was named "Sharp Knife - 2012" and was deemed a "Special Force Counter-Terrorism Joint Training". More than 70 commanders and soldiers from each country attended the event, which started on July 3, and were trained in shooting, blockading and seizing tactics and other skills. Besides field exercises and simulated hostage rescues, the session this year also included training in the use of advanced technology. A system used to simulate combat indoors relied on laser sensors and an automatic scoring system to help trainees pretend they were in the midst of a real conflict. The drills are to play a significant role in the two countries' future cooperation, in their work to fight terrorism, provide relief from natural disasters and combat cross-border crimes, Indonesian Major General Dedi Kusnadi Thamim said. He said he hopes the cooperation and training exercises will be expanded and applied to the two countries' air and naval forces.

Replica of Zheng He's ship to navigate ancient routes in 2014 - If you'd like to explore the oceans on a wooden ship as people did in times long past, you may have such a chance in the near future. In 2014, 36 volunteers will get to travel on a 71.1-meter-long wooden replica of the treasure ship on which Admiral Zheng He (1371-1433) undertook seven voyages in the 1400s. The ship is being built in Nanjing, East China's Jiangsu province. A replica of a treasure ship that Admiral Zheng He (1371-1433) sailed in. The ship was on display in Nanjing, Jiangsu province, on Thursday and is to make its maiden voyage in 2014. "It'll be really great to be one of the volunteers," said Wang Yuanyuan, a 19-year-old student from the Nanjing University of Information Science and Technology. But with her excitement came a note of caution. Wang said she worries about how safe she will be on the trip and will buy life insurance before embarking. "To adapt to the modern requirements of navigation and ensure the crew's safety, the ship will be equipped with advanced technologies, including some that can be used for communications, life saving and fire control," said Zhao Zhigang, general manager of Jiangsu Longjiang Shipbuilding. The replica will undertake its first of eight expeditions after going on a trial journey in August 2014, according to the Nanjing maritime safety administration. A captain, boatswain and chief engineer for the ship are to be chosen by the end of this year. "It is the world's biggest handmade wooden ship," Zhao said. "The ship's mast will be 38 meters tall, and its six sails, when they are unfurled, will cover an area of 600 square meters." He said it has proved difficult to build a type of ship that was used centuries ago, especially since those working on the project did not have a model that they could copy. Various Chinese historical sources hold that the biggest treasure ship was about 127 meters long and 52 meters wide. The wooden ship is being built in part in observance of China's Maritime Day, which was held on Wednesday to mark the anniversary of Zheng He's first voyage in 1405. Zheng He, a Ming Dynasty (1368-1644) admiral, explorer and diplomat, took Chinese fleets on seven expeditions around the rim of the Indian Ocean from 1405 to 1433. According to some historical sources, Zheng's fleets traveled to Southeast Asia, South Asia, the Middle East and the Horn of Africa. The project has prompted much discussion on the Internet. "It has no practical value," said Li Yanxi, a 27-year-old woman who lives in Suzhou, Jiangsu province. "It would be more meaningful if the money spent on building the wooden ship could have gone to education or charity." Zhao, though, sees merit in the project. "The construction of the ship provides a chance to revive traditional Chinese shipbuilding techniques," he said. "Large wooden ships built to explore the world's oceans have not been used in China for 500 years." He said the vessel is being built with the help of craftsmen from families that make traditional wooden ships. The oldest of them is 78. Zhao said the ship, if well-maintained, can be used for 30 to 50 years.

Hong Kong*:  July 17 2012 Share

An innovative plan to combat flooding in Happy Valley by building a huge tank under the racecourse that can store enough storm water to fill 24 swimming pools has won an international award for innovation. The Drainage Services Department has taken the top prize for planning in the International Water Association's Project Innovation Awards for East Asia. Around HK$1 billion has been allocated to build the enormous 60,000 cubic metre storage plant, which will form part of a HK$10 billion programme to eliminate the city's remaining flooding hot spots. The big innovation, according to the judges, is that there will be active monitoring and control of the weir leading into the water tank. This means that the tank will start receiving storm water at just the right time, and then discharge it through the regular drainage system in Happy Valley and Wan Chai when it is safe to do so. Judges said the system would provide "a drainage solution that works with nature in a time of climatic uncertainty" and praised the department for being "keen to identify a sustainable alternative to simply just 'throwing more drains at the flooding problem'". The Drainage Services Department said the first of two formal phases of the Happy Valley project would be commissioned before the start of the 2015 rainy season, with completion expected in 2018. "This award is recognition for the work we are doing," said Kelvin Lau Ngai-fai of scheme consultant Black and Veatch. "Because it is innovative and different it stands out from other projects we have done," said Lau. "The fact that all the stakeholders involved support this scheme makes a huge difference as well." Happy Valley has long been a flooding black spot, with the low-lying Happy Valley recreation ground, at the centre of the racetrack, particularly susceptible. Storms in June 2008 saw the area completely flooded. The planned works will have an effect on those who use the recreation ground, however. Seven sports pitches will be closed in two phases, and services provided by the Leisure and Cultural Services Department will be suspended temporarily during construction. But new landscaping and the restoration of the jogging trail will follow when the work is completed. The IWA established the Project Innovation Awards Programme in recognition of excellent and innovative water engineering projects around the world. A group including the Hong Kong University of Science and Technology, the Water Supplies Department and the Drainage Services Department was also honoured in the awards, receiving second prize in the applied research category for its efforts to make better use of sea water as a resource.

Italian Marco de Mutiis with his exhibit designed to bring back memories of Kai Tak at the Cattle Depot Artist Village in To Kwa Wan. It is 14 years this month since the last plane rolled down the runway at Kai Tak, yet memories of jumbo jets thundering low over the mountains and tenements of Kowloon before landing on the edge of the harbour still send a shiver down the spines of Hongkongers and aviation fans. And the hair-raising reputation of the airport and the place it still holds in the hearts of many have inspired an Italian artist's latest work, an attempt to captured the nostalgic, almost mythical reputation of the beloved airport. "The airport is a sort of a legend, like a fairytale you tell children," said Marco de Mutiis, a creative media research associate at City University, whose first experience of Hong Kong when he arrived in 2009 was of the vast new airport at Chek Lap Kok. "I know someone who has never been to Hong Kong, but they know all about the old airport. "Kai Tak's identity is in limbo and even though it's quite recent that it closed, the spotlight is on the new airport, the focus is on the future," he said. "So the work is about this concept of memory versus history." Mutiis' piece is on show at Videotage, one of the galleries at the Cattle Depot artist village in To Kwa Wan, a stone's throw from the old airport. It features a web of red wires that spread across the room from a central point on the ceiling. At the end of each of the 26 wires is a single flip-board module, similar to those that showed arrival and departure times at the old airport. The artist used his laptop to control the letter or number displayed on each module, displaying aviation terms, famous destinations and quotes from documents and extensive interviews with the former airport's neighbours in To Kwa Wan and Kowloon City. He collected a patchwork of memories, including how children would go to the airport in the evening to do their homework in air-conditioned comfort. "Some said the noise was so loud," Mutiis said. "Others said it was not so loud. So we will never know what Kai Tak was." Mutiis hopes the distinctive flip of the module will bring memories of Kai Tak flooding back. "The sound is very specific to this medium and it triggers something in every one of us," he said. "Sometimes I want the audience to get lost in the sound and personal memory." He stripped the modules from a display board he salvaged last year at a regional railway station near the Italian city of Bolzano. They were made by the same company that supplied the display boards at Kai Tak. Mutiis prefers using analogue, rather than digital technology in his works because he sees it as "more human". "It makes mistakes and I can relate to it more," he said. "We always want to replace the old with the new because it's more perfect." But it's the imperfection of memory that interests Mutiis most. "I want to suggest this embedded imperfection in our memory as there's this ambiguity between the real and the fiction," he said. "I like this idea of reality built by fragments and not one absolute truth." Mutiis believes the idea has resonance in fast-changing Hong Kong, where the old is quickly replaced with the modern. "There's not much space for memory or history in Hong Kong and the memory of the airport is not defined," he said. "It feels like it could be legend of a distant past, but it's just 14 years ago."

Hongkongers have come to love maligning the new government almost as much as they like Apple's iconic gadgets - but a top adviser to the new chief executive says Leung Chun-ying can still come good. That's if he takes a lesson from the technology giant's founder. Executive Council member Franklin Lam Fan-keung admits Leung had made a "bad start" after a series of scandals, but said Leung can turn things around, just as Steve Jobs did when he rejoined Apple in 1996. "A bad start does not imply a bad ending. When Jobs was back at Apple it was a mess," Lam, 51, said in a television interview yesterday. Jobs famously took the business from near bankruptcy to become one of the most valuable brands in the world before his death last year. Lam, a former property market analyst turned policy researcher, is new to Exco and admits to being ambivalent about politics, despite being part of a body that can approve or reject government policies. "I have never had any interest in being linked to politics and would not participate in politics," said Lam, although he admitted he had stepped into "a 45 degree Celsius kitchen" when he agreed to join Exco. He made headlines last week, days after his appointment, by telling an interviewer: "If the ministers can remain a full team after a month we should stage a banquet." The resignation of development chief Mak Chai-kwong on Thursday took the food off the table. But Lam said yesterday there was no problem in finding new talent after Mak's departure and arrest on suspicion of abusing civil service housing allowance in the 1980s. "There are still many talents who are willing to serve," said Lam. On land and housing policy, Lam said Leung's pledge to restrict flat sales to local buyers in an attempt to cool a housing market boosted by an influx of money from the mainland was a pilot scheme and "a small part of his housing policy". "The key is to increase the supply of land and housing," said Lam, who was noted for his precise predictions of the property market in the 1990s and reportedly owns 20 homes. Rejecting suggestions of a bubble in the housing market, Lam said: "If we have done a lot to combat what we saw as bubbles … and little effect is seen, the demand for housing is [proven to be] concrete." The demand, which has pushed prices close to record levels, comes from Hongkongers and outsiders working for international businesses, he added.

 China*:  July 17 2012 Share

On the sidelines of "serious" military research, optics Professor Liu Jiansheng accidentally created something he never expected to see in his laboratory: a snowfall. Playing around with a laser beam at the Shanghai Institute of Optics and Fine Mechanics at the Chinese Academy of Sciences, Liu and his team triggered a tiny flurry in their lab's cloud chamber. "We had not anticipated the event at all. It was beautiful," Liu said. For more than a decade, scientists have known a powerful laser beam can manipulate the nature of air, but all they could achieve was condensation barely visible to the naked eye. As other researchers elsewhere have done, Liu's team fired a laser into the cloud chamber, a sealed environment containing vapour, in bursts one quadrillionth of a second apart. When energy is released in such short bursts, it can tear apart molecules, charge particles and create plasma. Experiments conducted by teams overseas have focused on low-frequency blasts, while Liu fired his pulse at a higher one. The higher frequency proved key - as the laser beam pierced the cloud chamber, it severed electrically charged nitrogen, oxygen and hydrogen atoms from air component molecules, such as carbon dioxide. These atoms provided the essential "seeds" for condensation and then snow. Liu and his team published their findings in the April edition of Optics Letters, an international journal run by the Optical Society of America. "An intense updraft of warm moist air is generated owing to the continuous heating" by the laser, they wrote. "As it encounters the cold air above, water condensation and large-sized particles spread unevenly across the whole cloud chamber via convection and a cyclone-like action on a macroscopic scale." The turbulence blew snow all over the chamber, making the sight "spectacular", Liu said. "It was difficult to believe that we could create such extreme atmospheric phenomenon using a laser, but we did it," Liu said. "The technology may have some military applications, but I think its biggest use will be in the battle with climate change." Liu, who has twice received the nation's top prize for advances in military science and technology, hopes to get extra funding to further his research. It could lead to the development of large laser cannons set up in drought-hit areas, replacing the current expensive, polluting practice of using silver iodide to seed clouds and trigger rain. The central government has long sought to control the weather, with the most publicised incident occurring during the Beijing Olympic Games in 2008, when rain was delayed for several hours until after the opening ceremony. But the use of chemicals has prompted concern from other nations. Japan has pointed to pollutants drifting into its territory, and suggested manipulating weather over an area as large as the mainland may lead to atmospheric imbalances - lower rainfall for instance - elsewhere. So far the technology used by the government has only affected weather within a small area and for a short time. After firing the beam for about two hours, Liu's team had created 13 micrograms of snow. While not much, they were excited that the snowfall had not only occurred in areas immediately close to the laser beam, but extended to a relatively large area around it. "It means we can use very fine laser beams to create a thick belt of snow. If we shoot many beams into the air, it could create a snowfall zone of considerable scale and scope," Liu said.

Pan Jiazheng , a top hydraulic engineer and staunch advocate of the Three Gorges Dam, has died of cancer, aged 85, in Beijing. As one of the first domestically trained engineers after the Communist Party came to power in 1949, Pan dedicated most of his life to dam construction and was awarded a national lifetime-achievement prize only last month. But he was best known for his pivotal role in the approval of the world's largest dam project nearly two decades ago and his enthusiastic defence of the country's most controversial project ever since. While Xinhua hailed him as the most acclaimed hydraulic expert on the mainland, it was a view not shared by environmentalists and other dam opponents. Pan's academic achievements, his critics say, were largely tainted by his public image as an apologist for politically driven projects, such as the Three Gorges and the massive South-North Water Diversion Project. A native of Zhejiang province, Pan enrolled at Zhejiang University in 1946, majoring in civil engineering. Like many other hydropower engineers of his generation, Pan was apparently influenced by the Soviet view of dams as engineering marvels and a source of national pride by conquering nature, despite possible environmental and social impacts. Pan was made a member of the Chinese Academy of Sciences in 1980 when he was 53. In 1985, he became the technical chief for the feasibility study of the Three Gorges Dam Project at the recommendation of the water resources minister at the time, Qian Zhengying . While the dam has been touted as the country's most prestigious engineering project of the past three decades, it also attracted controversy from the outset when it was given a green light by Deng Xiaoping in 1982. Top leaders, including Mao Zedong Deng, Jiang Zemin and Li Peng were obsessed with the project. Advocates believed it would provide clean energy, flood control, navigation and jobs. But others feared the dam would wreak ecological and social havoc. Pan earned notoriety for his efforts to sideline prominent scientists who spoke out against the dam. Witnesses' accounts in recent years showed that he even overruled the conclusion of a panel of top environmental and geological experts who said the dam should not be built given its grave environmental impact. He then rewrote the verdict and said the impact could be managed. Geologist Chen Guojie , who was involved in the study, recalled that Pan attacked those who tried to alert decision-makers about the project's environmental consequences as demonising it. In an interview with state media two years ago, Pan admitted he turned a deaf ear to those critics. "At the beginning of the dam project, I was most impatient with any criticism and felt angry whenever I heard people challenging it." Pan was also renowned for his advocacy of other controversial dam projects, such as those along the Jinsha (Yangtze) and Nu (Salween) rivers. He continued to be a staunch supporter of damming Tiger Leaping Gorge, a World Heritage Site, even after the project was suspended in 2007 amid widespread opposition from the public and government-backed scientists. Dai Qing , a writer and opponent of the Three Gorges, said: "Pan could have become an pillar of academic excellence given his intelligence and diligence. But intentionally or not, he chose to serve those in power at the expense of academic conscience, like most other mainland engineers." Geologist Fan Xiao said Pan failed to distance himself from powerful vested interests. Historian Zhang Lifan wrote on the Sina Weibo microblog that it was a shame for scientists like Pan to be involved so heavily in political projects.

The number of Chinese mainland residents going overseas reached 38.56 million in the first six months of the year, up 19.75 percent year-on-year, the Ministry of Public Security said Sunday. The number of exit and entry across the Chinese border reached 208 million in the six months, up 6 percent from the same period of last year, according to a statement of the ministry's Bureau of Exit and Entry Administration. The numbers of mainland residents, Hong Kong and Macao and Taiwan citizens, and foreigners crossing the border during the period was about 76.7 million, 105 million and 26.78 million, respectively, the statement said. The first five destinations reached by mainland residents are Hong Kong, Macao and Taiwan as well as the Republic of Korea (ROK) and Japan, it said. The number of entries by foreigners was up nearly 4.6 percent year-on-year in the six months, most of whom came from the ROK, Japan, the United States, Russia, Malaysia, Vietnam, Singapore, the Philippines, Mongolia and Australia, according to the ministry. Most of them crossed the Chinese border via airports in Shanghai, Beijing and Guangzhou, the statement said. Police at the border found 1,337 persons involved in illegal entry or exit, discovered 24,200 persons violating exit and entry laws and regulations, and seized 343 alleged escaping persons during the first half of the year, the ministry said.

The navy frigate that ran aground in the waters of China's Nansha Islands has successful refloated with the assistance of a rescue force, an official release said Sunday. The frigate stranded in the waters around the Banyue Shoal of Nansha Islands managed to refloat on its own at around 5 am Sunday with the assistance of the Chinese navy's rescue force, a news release posted on the website of the country's Defense Ministry said. The fore body of the ship was slightly injured, all staffs were safe and the ship will be on a return voyage, according to the statement. "It has not caused any contamination for the nearby waters," the statement said. The ministry said Friday the ship ran aground when conducting routine patrol mission at about 7:00 pm Wednesday.

Hong Kong*:  July 16 2012 Share

Hutchison Whampoa (SEHK: 0013), the flagship conglomerate of Li Ka-shing, yesterday forged an agreement with British telecommunications giant Vodafone to merge their mobile networks in Ireland into a 50-50 joint venture. That combination of infrastructure marks the first deal of its kind in Ireland and is expected to create the country's biggest mobile network. Hutchison's Three Ireland unit and Vodafone Ireland will share their physical network and site infrastructure at more than 2,000 locations across the country. It is a strategy that is being widely adopted by many operators to cut costs, without compromising service to customers. Both Irish operators said they would continue to run separately the "intelligent" elements of this unified mobile infrastructure, including their core network capabilities and service platforms. They will also independently manage their own radio equipment and spectrum. "Around the world, operators are adopting a network-sharing and consolidation strategy that delivers cost efficiencies and rapid network expansion with the roll-out of new technologies such as LTE [standard for high-speed 4G mobile], whilst still competing fiercely on customer service and acquisition," said Three Ireland chief Robert Finnegan. Savings for each mobile carrier are estimated to be worth more than £200 million (HK$2.43 billion) over five years, the Financial Times has reported, citing a person with knowledge of the negotiations. Under the kind of arrangement agreed by Three Ireland and Vodafone Ireland, duplicate sites will be decommissioned and each operator will have access to the other's network sites. But each retains the flexibility to invest in dedicated sites and the pace of technology deployment. The joint-venture company is expected to be fully operational from autumn and will be headquartered in Dublin. The managing director will be appointed from an independent pool of talent and the new company will have its own management board. About 80 employees will transfer from Vodafone Ireland and Three Ireland to the joint-venture company after a consultation period.

Once seen as being unprepared for command of Hong Kong's largest property developer, the third generation of the Kwok family has finally been entrusted with the task of controlling Sun Hung Kai Properties (SEHK: 0016). Sun Hung Kai Properties last night announced that it had appointed the two sons of the billionaire co-chairmen - Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen - as alternate directors. As part of the reorganisation, Mike Wong Chik-wing and Victor Lui Ting, who have each served the group for more than 30 years, have also been promoted to deputy managing directors. "These changes will further strengthen our corporate governance structure and will ensure that the company continues to develop steadily," Thomas Kwok said last night. The boardroom reorganisation came on the same day the two co-chairmen were charged with bribery and misconduct by the Independent Commission Against Corruption, the anti-graft agency. Their eldest brother, Walter Kwok Ping-sheung, was arrested early in May by the ICAC but was not charged yesterday and was released on bail. The charges have raised concerns about succession planning at SHKP, where members of a new generation - the three brothers have 10 children - are now poised to take over, albeit gradually. Adam Kwok Kai-fai, 29, and Edward Kwok Ho-lai, 31, were appointed as alternate directors to Thomas Kwok and Raymond Kwok respectively. Adam is the eldest son of Thomas Kwok and Edward is a son of Raymond Kwok. But the reorganisation did not mention Walter Kwok's two sons, Geoffrey and Jonathan. They are also beneficiaries of the family trust that controls SHKP. Geoffrey, 26, is studying for a master's degree at Stanford University after working briefly for SHKP. Geoffrey's younger brother, Jonathan, is studying in New York, and his sister works in Singapore. Apart from Adam, Thomas Kwok has another son and a daughter who are still in secondary school. His eldest daughter is married and no longer works outside the home, a family associate said. A source said Raymond has another son, Christopher, who works for an investment bank and also runs a restaurant, while his daughter works for an American retailer. "We hope the reorganisation of the board members will give investors a clear and transparent picture of how the company will move forward," said the source, who is close to the company. According to the announcement, Adam Kwok holds a bachelor's degree in management science and engineering from Stanford and a master's degree from Harvard Business School. He worked in an international investment bank prior to joining the group in November 2008, and currently is a project manager taking charge of key residential and commercial projects in Hong Kong and the Pearl River Delta region. Edward Kwok is the son of Raymond Kwok and holds a Bachelor of Arts from Yale and a postgraduate diploma in professional accountancy from Chinese University. His professional qualifications include being a member of the Hong Kong Institute of Certified Public Accountants and the Institute of Chartered Accountants in England and Wales. He joined the group in January, 2010 and is now a sales and project manager, responsible for feasibility studies, marketing and planning of new residential projects in Hong Kong. Before joining SHKP, Edward Kwok worked in a major international audit firm. "Adam and Edward have been rotating among various departments, such as planning, leasing, construction and infrastructure, to learn the company's business, for years," said a source close to the family. "They are smart and hard working," the source said. "They have been learning for several years about how to run the company. "Thomas and Raymond are not going to let their sons take over the company. They are still young. They need to be trained. "They will come back to the office every day to keep the company running smoothly." To strengthen investor confidence, Raymond Kwok said the business strategy of SHKP remained unchanged. "We will continue to uphold and strengthen our brand, relying on our quality buildings and service to win the support of the market. Our business decisions will continue to be guided by the interests of Hong Kong's development, our company, shareholders and employees," Raymond Kwok said. "There is a Chinese saying: sturdy grass is only revealed by strong winds. Challenges will only make us stronger and I will cope with this challenge with perseverance." Thomas Kwok said: "History tells us that perseverance and faith can take us through the rough times. "With this faith, I am facing this challenge with no fear. He also said his religious beliefs had helped him. "I am grateful that as a Christian, my faith gives me hope, peace and joy. The Bible's teachings act like a beacon, guiding me through the darkness and anchoring each phase of my life." Another senior executive said: "Even if the two chairmen could not run the company, in a worst-case scenario, Kwong Siu-hing, the matriarch of the Kwok family, could still look after things. "She is always our spiritual leader."Kwong, who has maintained a low profile in her 79 years of life, is now seen as a key person in controlling the fate of Sun Hung Kai Properties - which has more than 27,000 employees. Born in the Guangzhou suburb of Huadu, Kwong moved to Hong Kong in 1947. She married the founder of Sun Hung Kai Properties, Kwok Tak-seng. The mother of six had never sat on the board of a Hong Kong company, but she became the chairman and non-executive director of the city's largest real-estate developer in May 2008, partly as a result of the a family feud that led to the ousting of her son Walter Kwok as chairman and chief executive. The boardroom battle is without precedent in Hong Kong's recent corporate history in terms of drama, intrigue and acrimony. In October 2010, Sun Hung Kai Properties issued an announcement, on behalf of Kwong, that excluded Walter Kwok in a reorganisation of the family trusts that hold in the empire. A third of the shareholding of the trust is now held for the benefit of "Walter Kwok's family", rather than Walter Kwok and his family. Walter's younger brothers, Thomas Kwok and Raymond Kwok, are each beneficiaries of a third of the trust along with their families. In December of last year, Kwong stepped down as the chairman and non-executive director. Thomas and Raymond became joint chairmen. The fallout among the Kwok brothers - Thomas, Raymond and Walter - has now been further complicated by the fact that all three have been arrested by the ICAC. In early May, two months after his younger brothers were arrested, Walter Kwok was detained in relation to the same case. In an interview with the South China Morning Post (SEHK: 0583) in early May, Walter Kwok said that his mother was seldom involved in the company's business. "She is just a housewife," he said. "My mother has not been involved in the company's business. Only when the three of us had arguments did she offer an opinion." In the interview, Walter Kwok also challenged his mother's power to remove him as a beneficiary of the family trust that controls the Sun Hung Kai Properties empire. But a source close to the company said that Kwong was greatly involved in Sun Hung Kai Properties' business after Kwok Tak-seng's death. Kenny Tang Sing-hing, general manager of AMTD Financial Planning, said: "In the next few years, I believe the company's business will continue to grow due to its quality assets." The company will run smoothly provided the mother stays in the picture, and the anti-corruption investigation result is not too serious, according to Tang. In a recent research report, Daiwa Capital Markets said shares of Sun Hung Kai Properties might fall 20 per cent further in a worst-case scenario resulting from the anti-corruption investigation into the billionaire Kwok brothers. That worst-case scenario would occur if new and more serious charges were raised against the brothers by the Independent Commission Against Corruption, Daiwa property analyst Jonas Kan wrote in a report dated June 29. There could be a further sell-off in the stock if the pair were charged with offences more significant and serious than what had been discussed in the media, Daiwa said. "The share price may test lower ground, but we would see support at about HK$74," Kan said in the report. Shares in SHKP yesterday rose 0.052 per cent to HK$94.45 in the first 17 minutes, before it was suspended from trading at 9.48 am.

TVB (SEHK: 0511) has agreed to pay a fee to the International Olympic Committee to broadcast the London Olympic Games, meaning iCable, which holds the broadcast rights, faces being shut out of a deal to show 200 hours of footage on free-to-air television. With just two weeks to go until the Games open, TVB said yesterday it had made an offer to the IOC to transmit 200 hours of coverage in collaboration with fellow free-to-air broadcaster ATV. The company would pay a "reasonable fee", its spokesman said, and coverage would include the opening and closing ceremonies. ATV's executive director, James Shing Pan-yu, says his company is "actively involved" in the talks and expects an announcement soon. The move follows the collapse of talks between the free broadcasters and iCable, which insisted on broadcasting much of its own advertising in breaks in their coverage. Other issues included problems with the availability of Hong Kong's free-to-air channels in Guangdong, where state broadcaster CCTV holds the right to show the Games. Under TVB's proposal, the company would "evenly" share the coverage with ATV and the Games would be shown on the international channels ATV World and TVB Pearl. iCable had no comment yesterday. The company gave the IOC assurances that the Games would be widely available when it won the right to show the event in 2007. But the government has yet to make a decision on its application to run a free-to-air channel of its own. It said on Tuesday that the IOC had agreed a deal over mainland coverage that would allow its negotiations with ATV to proceed. TVB has urged the IOC to make its decision quickly so preparations for its co-production with ATV can start. Meanwhile, the city's sports chief yesterday reiterated the IOC had told him it would ensure a deal was struck to show the Games for free. "Such an assurance has been given to me all along," Sports Federation president and Olympic Committee chief Timothy Fok Tsun-ting said. 

 China*:  July 16 2012 Share

A growing number of mainland retail properties are coming up for sale as global investment funds seek to cash in on their investments due to difficulties in raising fresh capital because of the euro-zone debt crisis. With new buyers keen to enter the market, the shop sell-off is a quick way to raise cash, say property brokers. "It comes as no surprise to see a rise in profit-taking by investment funds," noted David Ji, the head of greater China research at property brokers DTZ. The liquidity crunch caused by the deepening debt crisis in the euro zone is being blamed, along with the slow pace of economic recovery in the United States. The situation has left funds needing to cash in their investments in China, Ji said. In addition, some funds may have reached their investment horizon of five to seven years on their mainland portfolios, and may be scheduled to roll them over. Shanghai, where the rental sector is more resilient than in other cities, has been the main focus of investment. The city is a magnet for global brands wanting to get a slice of the world's second-largest economy. Betty Wong, executive director of investment services for east and southwest China at consultancy Colliers International, said the "for sale" signs going up on several retail properties on the mainland had already attracted prospective buyers. She expects to see a number of properties changing hands in big-ticket transactions in the final quarter of this year. Investors who bought into several projects between 2006 and 2008 believed the time was ripe for selling, she said. A bottleneck of deals built up last year as a result of the slow approval process for foreign purchases of property in China, Wong said. Concerned about excessive speculation in the nation's red-hot real estate sector, mainland authorities were reluctant to give the go-ahead to foreign-exchange-related property transactions. But foreign investors would be back actively seeking acquisition targets in the coming months, particularly in Shanghai, said analysts, where the limited supply of retail space in prime locations has resulted in increasing rents. "Shanghai rents are increasing and the expected high yields have attracted foreign investors to step up chasing top-quality commercial buildings," said Joe Zhou, head of research at Jones Lang LaSalle, Shanghai. "At least several mega deals involving potential foreign buyers are going on and, hopefully, the overseas buyers will become the major driving force for the market," he said. "Investors find retail property is a safer bet than residential and offices as it is offering stable rental income," said Zhou. While cities such as Shenyang had a glut of supply in the retail market, Shanghai had not encountered similar problems, he added. According to data from DTZ, total transaction values in the retail market reached US$1.56 billion (HK$12 billion) in the first quarter, representing a 126 per cent quarter-on-quarter surge and a 28 per cent year-on-year increase.

State-owned China Railway Construction Corporation (SEHK: 1186) (CRCC) plans to spend 80.66 billion yuan (HK$99 billion) on infrastructure, urban development and property in the next three years, its bond prospectus says. And the Shanghai- and Hong Kong-listed firm plans to issue 10 billion yuan of one-year bonds, its biggest bond issuance since 2009 - further evidence that Beijing is moving to stimulate the sluggish economy. "The company's shortfall in working capital is rather large. This 10 billion yuan bond issue will be entirely used for working capital, including the procurement of steel, cement and gravel," the prospectus said. CRCC builds nearly half of the mainland's railways and is also engaged in mining, road-building and property development. It is No 111 among the Fortune 500 global firms. After a sharp drop late last year and early this year, Beijing's rail spending is picking up. Fixed-asset investment in railways was 48.1 billion yuan in June, up from 40 billion yuan in May and 12.3 billion yuan in January, according to the Ministry of Railways. "Premier Wen Jiabao again reiterated rail projects must be implemented well, leading the market to believe rail construction projects will accelerate in the second half, which should benefit rail-related stocks," said a Kingston Securities report on Thursday. On Tuesday, Wen said shoring up China's slowing economy was a top priority and policies to boost growth included encouraging investment. In the first half of the year, the total value of CRCC's new contracts rose 30.4 per cent to 104.8 billion yuan, of which 87.4 billion yuan was domestic contracts and 17.4 billion yuan overseas deals, according to its prospectus. Recent international contracts include a US$941 million expressway in Nigeria and a US$505 million rail deal in Djibouti. On March 5, CRCC and Tongling Nonferrous Metals Group signed a contract to develop a copper mine in Ecuador. The two Chinese firms have a 50-50 share in the mine, which will need total investment of 15.67 billion yuan. CRCC is also hoping to win contracts for the 530 kilometres of light rail expected to be built in mainland cities over the next few years, with an investment of 560 billion yuan, its prospectus said. But it warned that "such a huge investment can increase the company's debt burden and weaken its debt repayment ability. Our gearing ratio is rather high, which may negatively affect its financial condition and profitability". The firm's gearing ratio stood at 84.29 per cent on March 31. "The company's debt has risen quickly, while its debt repayment ability has decreased," said China Chengxin International Credit Rating. CRCC's gross debt rose 81.87 per cent to 97.2 billion yuan last year, which mainly comprised short-term borrowings, said Chengxin. Although rail spending accelerated, fixed-asset investment in railways was down 36.1 per cent year-on-year at 177.75 billion yuan in the first half, the railways ministry said.

Shares of mainland airlines soared in Hong Kong yesterday after the central government issued a circular aimed at boosting the aviation industry, predicting a tripling of the mainland's air transport volume by 2020. Despite some of the airlines having issued profit warnings, airline shares were among the biggest gainers yesterday. Investors were betting the government's support would fuel the industry's growth in the medium to long term, and that falling international oil prices will help airlines in the second half of the year. Shares of China Southern Airlines, the mainland's largest airline by fleet size, jumped 8.4 per cent to HK$3.74, those of Air China (SEHK: 0753) rose 4.6 per cent to HK$4.99, and China Eastern Airlines (SEHK: 0670)' rose 6.88 per cent to HK$2.64. Shares of AviChina Industry & Technology, an aircraft and components manufacturing conglomerate, jumped 10.16 per cent, making it one of the day's top gainers. The Hang Seng Index edged up 0.35 per cent. The State Council's circular said air passenger and freight transport volume would grow 12.2 per cent annually to reach 170 billion tonne-kilometres in 2020, compared with 57.7 billion tonne-kilometres last year. Flight services are projected to reach 89 per cent of the nation's population by 2020, with the number of air passengers hitting 700 million, up from 293 million last year. Capacity will expand at existing airports and new ones will be built, the document says. It promises more efforts to develop aviation as a new growth sector, and more encouragement for private jet and business jet services. "By 2020, a safe, convenient and efficient civil aviation system will be in place in China," it says. Li Lei, an analyst with the China Securities Company, said: "The document takes a longer view than the previous one issued by the administration. The industry growth rate it specifies for the next eight years is lower than what we have seen between 2000 and 2010. It's in line with the government's expectations of slower GDP growth." Meanwhile, China Eastern Airlines issued a profit warning in a filing with the Shanghai stock exchange yesterday, saying its first-half net profit would fall by more than 50 per cent. It blamed weak passenger and cargo demand as well as fuel costs. Despite their sterling performance in Hong Kong, the stocks of the top three mainland airlines dropped by between 0.4 and 1.3 per cent in Shanghai yesterday. Earlier this week, China Southern Airlines said it expected its first-half net profit to fall more than 50 per cent from last year, because of slower economic growth and higher jet fuel prices. A report by Swiss bank UBS said lower oil prices and a more stable the yuan exchange rate may help mainland airlines in the second half. It expects China Eastern Airlines and China Southern Airlines to post profit increases in the second half, as a result of a significant jump in passenger numbers in the summer and a rise in ticket prices of 4 to 5 per cent.

Fans practice yoga at 474m - More than 30 yoga fans practice yoga on the 100th floor of the Shanghai World Financial Center, July 14, 2012. The 100th floor is the observation deck, which offers views from 474 meters above ground level.

Revealing moment on wedding ceremony - A bridegroom lifts the red headscarf of his bride at a group wedding ceremony in Fushun, Liaoning province, on Friday. Fifty brides from the Manchu ethnic group participated in the ceremony, held in accordance with traditional Manchu customs. Thousands of local residents offered their best wishes to the couples at the ceremony.

Hong Kong*:  July 15 2012 Share

Friends and foes of Chief Executive Leung Chun-ying slammed him over the Mak Chai-kwong fiasco, expressing concern it will deal a heavy blow to his governance. Academics are also concerned that, given the government's battered image, it will be difficult for Leung to find a replacement. The vice chairman of the pro-administration Democratic Alliance for the Betterment and Progress of Hong Kong, Ray Lau Kong-wah, said the incident struck at the heart of governance. "The saga has tarnished the reputation of Leung's government," Lau said. "I think Mak's resignation is mainly aimed at restoring the credibility of the new government and Mak has acted in a responsible manner to resign from his post." Federation of Trade Unions lawmaker Wong Kwok-hing said it was to be regretted that Mak had been arrested. "Definitely, the government will encounter great challenges in the near future and Leung has to launch concrete policies to boost public confidence in his government as early as possible," Wong said. Civic Party lawmaker Audrey Eu Yuet-mee described the Mak saga as "sad" and a "disastrous outcome," adding the government will face a tough road ahead. The party's Ronny Tong Ka-wah said citizens generally have serious doubts over the integrity of Leung and some of his ministers who have been involved in rows over illegal structures. "Leung should immediately check with his Cabinet members to see whether they have been involved in other scandals or misconduct," Tong said. Labour Party chairman Lee Cheuk-yan said citizens have generally lost confidence in government since Mak's arrest, the illegal structure rows surrounding the Leung team as well as controversy over the conflict of roles for Equal Opportunities Commission chairman Lam Woon-kwong, who is also to be Executive Council convener. People Power lawmaker Albert Chan Wai- yip urged Leung to step down immediately, saying: "Leung has a lot of political enemies with few friends surrounding him." Chan said his resignation is the only way to ensure that Hong Kong's political crisis will not be further aggravated. Democratic Party chairman Albert Ho Chun-yan said Leung must have endured a mental struggle before accepting Mak's resignation as he had to consider the impact this would have on his government. Liberal Party chairwoman Miriam Lau Kin-yee said if Mak stayed he risked bringing down the whole government. New People's Party chairwoman Regina Ip Lau Suk-yee said she was disappointed to learn that Mak had been arrested. Federation of Civil Service Unions chairman Leung Chau-ting said the Mak saga has soiled the clean image of the civil service and had undermined the morale of civil servants. Lingnan University political analyst Li Pang-kwong said: "After all those scandals surrounding Leung's team, it is likely the pro-establishment parties will avoid becoming too close to the ruling team or blindly support Leung's policies. "Leung will face greater challenges in trying to gain the support of the pro-establishment camp in the Legislative Council when launching any social and economic policy in the future."

A deal struck between ATV and TVB (SEHK: 0511) a decade ago will make it impossible for either station to enter into a bilateral agreement now with iCable over London Olympics coverage, it emerged yesterday. Details of the deal, which is "legally binding and irrevocable", are contained in a report following an anti-competition investigation by the Office of the Communications Authority, or the then Broadcasting Authority. The investigation stemmed from a complaint filed by Cable Television, a subsidiary of iCable Communications, in 2002, which the authority found to be unsubstantiated. The authority report shows that letters submitted by TVB state that their deal excluded the possibility for either of the free-to-air stations to negotiate and secure broadcasting rights to the Fifa World Cup or the Olympics between 2002 and 2012 from any event sponsor or licence holder. Cable TV had alleged that the ATV-TVB deal prevented it from entering into a sub-licensing agreement with only one broadcaster for the World Cup in 2002, and it was forced to enter into a three-party deal that compromised its business. It also accused ATV and TVB of violating the Broadcasting Ordinance, which prohibits the broadcasters from engaging in conduct that prevents, distorts or substantially restricts competition in the television programme services market. However, the regulator rejected the accusation as it believed the deal had minimal impact on the viewers, and whether the purpose of the deal was to prejudice fair acquisition of the rights was out of the ambit of the ordinance. Earlier iCable said it agreed in principle with ATV on the sub-licensing of coverage, but the free-to-air station then said copyright issues in Guangdong where it widely broadcasts remained a stumbling block to an agreement. On Tuesday, iCable said the International Olympics Committee resolved the copyright issues. But on the same day TVB also said it was in talks with the IOC, while ATV said it terminated talks with iCable. On Wednesday, TVB said it would co-produce and co-broadcast with ATV if the IOC granted it the rights to the Games. ATV said it would actively engage in this offer. Victor Hung Tin-yau, chief research and trade practice officer with the Consumer Council, said Cable TV might have grounds to lodge a fresh complaint due to the changing circumstances over the past decade. Hung said it would be a problem if ATV and TVB abused their market position, and colluded in boycotting iCable in the sub-licensing arrangement for the Games. He believed that could become the subject of an investigation under the new Competition Ordinance, covering a much wider scope of conduct than the broadcasting laws. All three broadcasters yesterday refused to comment on the issues.

Brenda Chau Tam Yuet-ching and her late husband, Chau Kai-bong, in 2002. Brenda Chauwants to mount a judicial review of a government decision to cancel her licences to two sites near a country park in Sai Kung. Socialite and barrister Brenda Chau Tam Yuet-ching on Friday applied for permission to mount a judicial review of a government decision to cancel her licences to two exclusive sites near a country park in Sai Kung which she has used for more than 20 years. Chau, the widow of flamboyant fellow lawyer Kai-bong Chau, launched the legal action after the Lands Department gave her a deadline of May 23 to cease occupation of the 3,700 square metres of land near Ma On Shan Country Park. She was told to quit the sites in March after failing to comply with an order to remove structures erected in breach of licence conditions and for occupying adjacent government land. She is asking the court to quash the Lands Department’s decision which she called rash and unfair. She said it was being unreasonable in taking into account rumours in the media that she wanted to surrender the sites. Mr Justice Au Hing-cheung, of Court of First Instance, reserved his judgment. To obtain leave to lodge a review, Chau’s lawyer had to persuade the court that her complaint fell within the scope of public law and therefore could be reviewed by the court. Opposing the application, Charles Mok SC, for the department, said the economic dispute between the licensor and the licensee was a private law matter and could not be dealt with by way of a judicial review. He added that there were no factual disputes whether Chau had breached the terms of the licence by trespassing on government land and putting up unauthorised structures and therefore no issues for the court to make a judgment on. Mok also said that Chau had tried unsuccessfully to obtain an injunction against the department from the High Court. But Philip Dykes SC, for Chau, citing a precedent, said that if the enforcement of land resumption involved sufficient public law elements then the matter would amenable to a judicial review. According to the court documents, Chau was granted the licence in 1988. In early February, a site inspection by the department found that illegal structures including brickwork, a pond and a bridge had been built. Some government land was also illegally occupied. Chau said in submissions to the court that the breaches occurred out of necessity, while the illegal occupation of government land was attributed to mistakes made by a government surveyor. She said she made all necessary changes, but only after the deadline and after she was told her licences had been cancelled.

Former development secretary Mak Chai-kwong left ICAC headquarters in North Point on Friday, and returned after an hour. Former development minister Mak Chai-kwong was detained by the Independent Commission Against Corruption for a second day on Friday. Mak was arrested on Thursday on allegations of breaching anti-bribery laws in his government housing allowance claims in the 1980s. He resigned the same day as development minister, 12 days after he took office. He was seen leaving the ICAC headquarters in North Point in a car shortly after noon on Friday but returned after about an hour. Assistant highways director Tsang King-man, his wife and Mak’s wife were also arrested in relation to the housing allowance claims. The arrests came after Apple Daily last week reported that Mak and Tsang had bought then leased to each other flats on adjacent floors in City Garden, North Point, for 27 months between 1986 and 1988. They both collected the civil servants’ rent subsidy. Mak confirmed the report’s findings but denied breaking any regulations.

Sun Hung Kai Chairmen Charged in Bribery Probe - The co-chairmen of Hong Kong's largest real-estate company and a former government official were charged with bribery as part of an investigation that has shaken the city at its highest levels and fanned suspicions about cozy relations between politicians and local tycoons. Hong Kong's Independent Commission Against Corruption said brothers Thomas and Raymond Kwok, co-chairmen Sun Hung Kai Properties Ltd., face charges including conspiracy to offer advantages to a public servant. The antigraft agency also said Rafael Hui, previously the city's No. 2 official, faced charges including misconduct in public office. Sun Hung Kai Executive Director Thomas Chan and businessman Francis Kwan were also charged, the ICAC said in a statement. The March 29 arrests of Thomas and Raymond Kwok, who jointly run Sun Hung Kai, the world's second-biggest listed property developer by market capitalization, as well as Mr. Hui, stunned the city, marking the highest-level arrests by the antigraft agency in decades. The corruption probe deepened when the city's antigraft agency subsequently arrested the Kwoks' eldest brother, Walter, who has been estranged from his siblings since they ousted him as company chairman in 2008. Mr. Hui is accused of accepting rent-free use of two flats and two unsecured loans that he didn't disclose to the government. The ICAC also stated that a Sun Hung Kai subsidiary had allegedly advanced an unsecured loan to Mr. Hui, as a reward for Mr. Hui to "remain favorably disposed" to Raymond Kwok and his interests. Other charges laid by the ICAC involved furnishing false information on an invoice for settlement of consultancy fees. The eldest brother arrested in the probe, Walter, wasn't charged Friday. The five suspects have been released on bail, pending their court appearance Friday afternoon. The corruption probe is the latest scandal to hit the Kwok family, whose travails have periodically taken center stage in the city's tabloids. In 1997, Walter was kidnapped by a man nicknamed "Big Spender" and held captive for a week until his family ransomed him for $77 million. A feud between the brothers a decade later, which ended with Walter being removed from his role as company chairman, similarly occupied the city's lively local press for weeks.

 China*:  July 15 2012 Share

Sheng Baijiao, Chief Executive Officer of Belle International Holdings Limited. Shares of shoe maker and distributor Belle International Holdings Limited jumped nearly 6 per cent to their highest level in a week on Friday after it posted surprisingly better same-store sales. The result was a rare bright spot amid a series of downbeat news from China’s consumer sector, which is feeling the impact of a slowdown that has hit demand for everything from home appliances to luxury goods. Belle, which distributes brands including Nike, Adidas, Kappa, Puma, Converse and Mizuno, said its footwear business recorded same-store sales growth of 10.5 per cent in the second quarter of this year, while its sportswear business posted same-store sales growth of 5 per cent. That compared with 2.8 per cent and 2.4 per cent growth, respectively, in same-store sales in its footwear and sportswear businesses in the first quarter of this year. “It was a better-than-expected set of data. It came as a surprise to the market in an obviously slowing consumption market in China,” said Steven Leung, a director at UOB Kay Hian. “We still have to wait for more performance data to confirm any recovery trend,” he said. Belle posted a net increase of 537 retail outlets in the mainland in the second quarter of this year, bringing the total number to 15,964, including 11,022 footwear outlets and 4,942 sportswear outlets. That compared with a net increase of 477 outlets in the first quarter. Belle’s stock rose as much as 6 per cent to HK$13.88 on Friday, outpacing a 0.45 per cent gain in the benchmark Hang Seng Index. The rare spot of good news for the sector was short-lived. Belle’s smaller rival Daphne International Holdings became the latest company to report a slowdown in sales late on Thursday. It said same-store sales growth slowed to 14 per cent for the second quarter, from 22 per cent in the first quarter, while the net addition of points of sale was at 217, up from 149 in the first quarter. Daphne, which makes and sells footwear under the same name, as well as Shoebox and other licensed brands, said it saw a “mid-single-digit” drop in average selling prices during the second quarter due to aggressive promotional efforts, while labour and rental costs pressured margins. Daphne shares fell 5 per cent to HK$7.23, the lowest since October 13. The stock was down 1.7 per cent at 11.18am. Li Ning (SEHK: 2331) shares gained 0.5 per cent and Anta climbed 1.1 per cent.

A PLA frigate reportedly ran aground in disputed waters near the Philippines. A Chinese naval frigate has run aground while patrolling disputed waters in the South China Sea, the defence ministry said on Friday, amid tensions with the Philippines over territorial claims. The ship was on “routine patrol” when it became stranded near Half Moon Shoal in the Spratly Islands on Wednesday evening, the ministry said in a statement posted on its website. The shoal is off the Philippine island of Palawan. No one was injured or killed in the accident and the navy was now organising a rescue, the statement said, but gave no further details. The Sydney Morning Herald on Friday quoted Western diplomatic sources as saying the frigate, which has been discouraging fishing boats from the Philippines from entering the area, was “thoroughly stuck”. Beijing says it has sovereign rights to all the South China Sea, believed to sit atop vast oil and gas deposits, including areas close to the coastlines of other countries and hundreds of kilometres from its own landmass. But Taiwan, Vietnam, Brunei, Malaysia, and the Philippines also claim parts of the South China Sea. The Spratlys are one of the biggest island chains in the area. The rival claims have long made the South China Sea one of Asia’s potential military flashpoints, and tensions have escalated over the past year. The Philippines and Vietnam have complained China is becoming increasingly aggressive in its actions in the area, such as harassing fishermen, and also through bullying diplomatic tactics.

Beijing has sent a big fishing fleet to the sensitive Spratly Islands in the South China Sea, state media reported on Friday, as tensions rise with its neighbours over rival claims to the area. The 30-vessel fleet set out from the southern province of Hainan on Thursday, the Xinhua news agency said. Mainland fishing boats regularly travel to the Spratlys, a potentially oil-rich archipelago which Beijing claims as part of its territory on historical grounds. But the fleet deployed on Thursday is one of the largest ever launched from the province, according to the report. Beijing says it has sovereign rights to all the South China Sea, believed to sit atop vast oil and gas deposits, including areas close to the coastlines of other countries and hundreds of kilometres from its own land mass. But Taiwan, Vietnam, Brunei, Malaysia, and the Philippines also claim parts of the South China Sea. The Spratlys are one of the biggest island chains in the area. The rival claims have long made the South China Sea one of Asia’s potential military flashpoints, and tensions have escalated over the past year. The Philippines and Vietnam have complained that Beijng is becoming increasingly aggressive in its actions in the area – such as harassing fishermen – and also through bullying diplomatic tactics. The Philippines said the latest example of this was at annual Southeast Asian talks in Cambodia that ended on Friday in failure because of the South China Sea issue. The Philippines had wanted its fellow Association of Southeast Asian Nations to refer in a communique to a recent standoff with China over a shoal in the South China Sea. But Cambodia, the summit’s host and China’s ally, blocked the move.

Days of heated diplomacy ended in failure on Friday as splits over territorial disputes with China prevented Southeast Asian nations from issuing their customary joint statement at a summit. Foreign ministers from the Asean meeting have this week tried to hammer out a final communique in Cambodia, which has held up progress on a draft code of conduct aimed at soothing tension in the flashpoint South China Sea. The Philippines lambasted the failure at the summit, saying “it deplores the non-issuance of a joint communique... which was unprecedented in Asean’s 45-year existence”. Beijing, however, described the Asean summit as “productive”. A foreign ministry spokesman emphasised China’s positions had been supported by some among the 10-member bloc. “It is a productive meeting and China’s views and position on many issues has won the appreciation and support of many participating countries,” ministry spokesman Liu Weimin said when asked to comment on the summit. “Over the years this Asian regional cooperation has made important achievements relating to regional peace, stability, development and prosperity (SEHK: 0803). “China has also made important contributions and efforts to this end, which is widely appreciated.” China claims sovereignty over nearly all of the resource-rich sea, which is home to vital shipping lanes, but the Philippines, Vietnam, Malaysia and Brunei among others have competing claims in the area. The Philippines had insisted Asean refer to a stand-off last month with China over a rocky outcrop known as the Scarborough Shoal, but Cambodia – a Beijing ally and chair of the meeting – resisted. Taking “strong exception” to Cambodia for opposing mention of the shoal, the Philippine statement said divisions undercut previous Asean agreements on tackling disputes as a unit, “and not in a bilateral fashion – the approach which its northern neighbour [China] has been insisting on”. China is a key bankroller of Cambodia and some diplomats said Phnom Penh had played Beijing’s hand at the summit by blocking a communique mentioning specific alleged infringements. Cambodian Foreign Minister Hor Namhong expressed regret at the discord within the organisation, but said he could “not accept that the joint communique has become the hostage of the bilateral issue [between the Philippines and China]”. US Secretary of State Hillary Clinton, who joined the summit on Thursday, had expressed hope of Asean unity and had urged progress on the code of conduct, which is seen as reducing the chances of conflict in the South China Sea. Analysts said the friction could “contaminate” future negotiations between Asean and China. “Cambodia is showing itself as China’s stalking horse. This will make negotiating a final code of conduct with China more difficult,” said Southeast Asia expert Carl Thayer, who runs a consultancy. “I find it difficult to believe that Asean foreign ministers cannot come up with some formulation that satisfies all parties.”

China's economic growth slowed to a new three-year low, damping hopes it can make up for US and European weakness, but analysts said a rebound might be in sight. The world’s second-largest economy grew by 7.6 per cent in the three months ending in June over a year earlier, down from the previous quarter’s 8.1 per cent, data showed Friday. That was the lowest since the first quarter of 2009 during the depths of the global financial crisis. China’s slowdown could have global repercussions, especially at a time when the United States and Europe are struggling. Lower Chinese demand could send shockwaves through Asian economies that supply industrial components to its vast manufacturing industry and exporters of oil, iron ore and other commodities such as Australia, Brazil and African nations. Other indicators, though, including strong June bank lending, which is closely tied to business activity, suggest the low point of the decline might be past, analysts said. “The Chinese economy has already bottomed out in the first two quarters,” said Xiao Li, an economist at Industrial Bank in Shanghai. “It is not certain whether or not there will be a strong upward rebound. But at least the economic growth rate will stop coming down,” Xiao said. The slump raises the threat of job losses and political tension. That comes at a politically difficult time for the ruling Communist Party, which is trying to enforce calm ahead of a planned once-a-decade handover of power to younger leaders. China’s export growth has fallen steadily and consumer spending has weakened despite stimulus measures that include two interest rate cuts since the start of June. The government also is pumping money into the economy through higher investment by state-owned industry and more spending on low-cost housing and other public works. Quarterly growth was in line with the government’s official target of 7.5 per cent for the year, which private-sector forecasters say China still is likely to achieve. “The growth rate of 7.6 per cent is already an achievement because the economic situation facing China has been complex and severe,” said Sheng Laiyun, a government spokesman, at a news conference. “We have seen tepid domestic and external demand.” Sheng rejected suggestions by some analysts that the slowdown might be deeper than reported and that Beijing ordered companies to make the economy look healthier by inflating data on electric power consumption, a key industrial indicator. “I want to say right here they are wrong,” Sheng said. China’s rapid economic growth has decelerated steadily for eight quarters, the longest slowdown since the government began reporting such data in 1992, according Yu Bin, a Cabinet researcher. He said the previous record was six quarters. The slowdown is due in part to government controls imposed in 2010-11 to cool overheating and inflation fueled in part by Beijing’s huge stimulus in response to the 2008 crisis. Chinese leaders reversed course last year and began easing controls after global demand abruptly plunged. The government is moving cautiously after its 2008 stimulus pushed up inflation and spurred a wasteful building boom. Authorities have said curbs imposed on building and home sales to cool surging housing prices will remain in place, even though pumping up the country’s slumping construction industry offers a quick way to boost growth. Some parts of Beijing’s response to the slump threaten to set back efforts to reduce reliance on exports and government investment and to nurture more self-sustaining growth driven by domestic consumption. Premier Wen Jiabao said this week that sustaining investment should be China’s priority, an acknowledgement that efforts to boost consumption are taking longer than expected to gain traction. June retail sales growth declined to 12.1 per cent adjusted for price changes, down from the previous month’s 13.8 per cent growth, the National Bureau of Statistics reported. Growth in factory output edged down to 9.5 per cent from May’s 9.6 per cent. In a reflection of efforts to spur the economy with higher investment, growth in spending on factories, real estate and other fixed assets accelerated to 23.2 per cent in June, up from the previous month’s 20.1 per cent. The first half “saw the bottom of the cycle and growth is set to rebound” later in the year, said Credit Agricole CIB economist Dariusz Kowalczyk in a report. China’s relative strength compared with Western economies conceals severe pain in some segments of the economy. Retailers in some areas say monthly sales have fallen by as much as half and the mainland shipbuilding industry association says orders in May were down by almost half as shippers facing weak trade put off buying new vessels. Wen, the country’s top economic official, has promised more bank lending and other aid to small businesses that generate most of China’s new jobs and wealth. Entrepreneurs say they have yet to receive help.

Temasek Holdings Pte Ltd will maintain its stake in China's banking sector in the long term despite a possible economic slowdown and the ongoing interest rates reform, the Singapore state investor said on Thursday. "Seeing the current increase in consumption and ongoing urbanization, we are still confident in China's economic potential," Ding Wei, head of operations at Temasek China, said at a Beijing news conference. Ding said the Chinese economy has slowed amid the current global economic downturn and internal imbalances, but he believes it is not likely to have a hard landing. "The banking industry is the acme of a country's economy, thus we will maintain a considerable scale of holdings in Chinese banks," he said. Temasek this year has made a series of changes to the way it allocates its investments in mainland banks in the Hong Kong market, selling, for example, a $2.5 billion stake in Bank of China Ltd and China Construction Bank Corp, but buying $2.3 billion worth of Industrial and Commercial Bank of China Ltd shares. Ding denied that the operations are "short-term", only saying "Temasek's operations are based on long-term strategy". The People's Bank of China's recent decisions to cut interests rates have been widely viewed as marking the start of more market-oriented reforms and as posing a threat to commercial banks' profits, which used to come mainly from interest. Ding said the effects of the changes have appeared in lending institutions' share prices. "But what Temasek values is not just their net profit but their market value," Ding said. According to Temasek's recently released 2012 annual report, China receives the second-largest amount of the company's investments - no less than 20 percent of Temasek's S$198 billion ($157 billion) portfolio. Last fiscal year, Temasek's net profit decreased by 16 percent to S$10.7 billion. The proportion of Asian investment in its portfolio, excluding investment in Singapore, has decreased from 45 percent to 42 percent, while the proportion of North American and European investment has gone from 8 percent to 11 percent. China's percentage of the investment was up slightly from the previous year, said Lau Teck Sien, managing director of investment at Temasek Beijing. "Most of Temasek's investments in China are in the banking sector, but we are also actively exploring new investment opportunities," Lau said. By the end of the last fiscal year, the proportion that investments in financial services had in Temasek's total investments was down by 5 percentage points to 31 percent, a result of the global financial crisis. Meanwhile, Tamasek has doubled its exposure to the energy sector in the past fiscal year, taking it from 3 percent to 6 percent. Part of that addition came from an equity purchase of part of PetroChina Co's unit Kunlun Energy Co Ltd. The transaction involved nearly half of the $1.34 billion worth of shares in Kunlun Energy, Reuters reported, citing sources with direct knowledge of the deal. CITIC Securities Co Ltd and ICBC were added to Temasek's China investment portfolio last fiscal year. The state investor also holds stakes in Alibaba Group, Tudou Holdings Ltd, Shanghai Pharmaceuticals Holding Co Ltd and New China Life Insurance Co.

Hong Kong*:  July 14 2012 Share

Time for Leung 'to hand in his homework' - Chief executive should introduce promised welfare programs before maiden policy address to regain public's confidence, his youngest adviser says - Starry Lee Wai-king says there is room to rethink the Executive Council's rules about confidentiality. A new executive councillor has called on Leung Chun-ying to announce how and when he will introduce three promised social benefits to win back public confidence before delivering his maiden policy address. Starry Lee Wai-king said the scandal-plagued chief executive should roll out the special old-age allowance, improvements to the transport subsidy scheme and a relaxation in the age limit for senior citizen travel cards as soon as possible. "It will be too late if the public only sees policy results in the policy address," Lee, 38 and the youngest executive councillor, said. "Of course the maiden address will be a critical factor for the popularity for the government. But in light of the recent incidents, Leung should deliver his proposals before October." The new administration is mired in controversy. Leung and health minister Dr Ko Wing-man are caught up in the row over illegal structures, while development chief Mak Chai-kwong has been accused of abusing a civil service housing allowance in the 1980s. Adding to the pressure, the ministers - and particularly Leung - have faced protests during their "meet the people" district visits. Lee, a legislator with the Democratic Alliance for the Betterment and Progress of Hong Kong, said Leung should consider leaving the town-hall style meetings to his ministers. "He has been touring various districts to listen to views for a long time," she said. "It is time for him to hand in his homework. What people are concerned about most are solid policies that really influence them." Lee said it was unlikely Leung could deliver soon on his core election pledge - to increase housing supply. "It takes time to plan housing development," she said. The newcomer to the top advisory body said that as Leung planned to expand of the role of Exco - its weekly meetings already last longer - there was room to change the rule about its discussions staying confidential. "I was recruited to act as a bridge between the government and political parties, and between the government and the people," she said. "But if the Exco members have to keep tight-lipped about upcoming policy plans, little time will be left for consultation. Is it possible we can reveal policy details to parties slightly earlier? We are moving in the direction of reviewing the rule but no details have been finalised." In September's Legislative Council election Lee is likely to run for one of the new district council functional constituency seats. But she said her appointment to Exco could affect her chance of winning. "It remains unknown whether the appointment is a plus or minus, but citizens have increased their expectations of me, asking me to express their policy demands to Leung," said Lee, who now serves the Kowloon West constituency.

Hongkongers invest more often and more aggressively than people in any other big city - and nearly as many women as men play the financial markets, bucking the global trend of male dominance in the investment world. Some 55 per cent of local residents have financial investments, compared to the global average of 33 per cent, according to an online survey of 28,000 worldwide by US-based research company, Nielsen. Hong Kong's investing community also leads the Asia-Pacific region, where 48 per cent invest on average. Stocks are the most popular investment among Hongkongers, with 87 per cent of investors reporting that they have money in corporate shares, according to the survey, which polled 500 people in each of 56 markets. Women account for 49 per cent of the city's investors - significantly more than the global average of 42 per cent. That may be less of a surprise given that women make up 46 per cent of investors in the region. Nielsen managing director Oliver Rust said that Asian women tend to be more involved in matters of household finance than their counterparts elsewhere in the world - a trend that will increase as more women advance in the business world. "Disparity comes when females are less active in financial decisions," he said. Women investors offered a significant marketing opportunity to financial institutions and they were targetting them in their advertisements in Hong Kong, he said. "The purchasing power of females in Hong Kong is as strong as males," he said. "A lot of people have woken up to the fact that the power of female consumers in the long run should outweigh the men." Wealth accumulation is increasing faster among women than men due in part to increased opportunities in education and employment. A new generation of financially independent Asian women are looking to expand their wealth, experts say. "The rate of growth in female purchasing power will outstrip men 2-1 per annum for the next five to ten years in the region," Rust said. The poll found Hong Kong investors less risk-averse than others, with 38 per cent saying they would accept a considerable amount of volatility for a chance at higher returns, compared with 25 per cent in the region and 24 per cent worldwide. Rust compared "caution amongst Western investors" amid the European financial crisis, with the "more bullish Asian investor", who has a higher disposable income and a higher rate of savings. The property boom had also given Hongkongers more money to invest, he said.

The city's two free-to-air broadcasters may jointly produce and broadcast Olympic programming after TVB (SEHK: 0511) said yesterday it would invite ATV to help with coverage of the London Games once it wins the rights. The two TV stations are negotiating with the International Olympic Committee on broadcasting the Olympics, after they failed to reach an agreement with rights holder iCable. TVB said it would invite ATV's participation as soon as its broadcast rights were confirmed. ATV reacted positively to TVB's invitation, saying it would "take an active role". On Tuesday, ATV had said it would welcome further talks with iCable, but iCable did not comment on yesterday's development. TVB said yesterday it was "actively negotiating with the IOC", and believed a solution would be reached soon. Legislator Timothy Fok Tsun-ting, president of the Sports Federation and Olympic Committee of Hong Kong, said a decision on the Games broadcasting arrangements could come as soon as today. TVB's statement said: "Once the broadcast right is confirmed, TVB will invite Asia Television Limited to co-produce and co-broadcast the sporting events and related programs." TVB said it was confident that the problem of cross-border rights affecting ATV broadcasts could be "handled properly through concerted efforts of both parties". ATV's broadcasts would be watched across the border, where mainland broadcaster CCTV holds the rights to Games coverage. Games coverage could be shown on the English-language channels Pearl and World using Nicam technology. ATV said it would "take an active role in co-operating with TVB". The IOC requires iCable to provide at least 200 hours of free Games broadcasts, which puts huge pressure on the Wharf Group-controlled broadcaster to strike a deal with TVB and ATV. The London Olympics begin on July 27 and Hong Kong sports fans have been wondering when the broadcasting arrangements will be in place. iCable had hoped ATV would broadcast the Games after sorting out copyright issues in the Pearl River Delta. TVB had rejected iCable's subletting terms as too harsh. Secretary for Commerce and Economic Development Greg So Kam-leung said yesterday he was optimistic the public would be able to watch the Games on free channels. "The wish of the IOC is the same as Hongkongers and the government - that the Games would be shown on free-to-air channels."

Office rents in Central fell 7 percent during the first half from a year ago, Jones Lang LaSalle said yesterday. Rentals in Kowloon East, however, rose steadily from January to June. "Offices are relocating out of Central due to the lack of suitable space, hike in rents, technological advancements and infrastructure improvements," said Marcos Chan, national director and head of research at Jones Lang LaSalle. The global property services agency released a paper on how the local Grade-A office market is being affected by rising yuan deposits and the Closer Economic Partnership Arrangement between between Hong Kong and the mainland. "A major driving force for office demand will be the development of Hong Kong as an offshore yuan market," Chan said. The banking and finance sector makes up 56 percent of Grade-A office tenants in Hong Kong. An additional demand for six million square feet of office space may emerge by 2020 from the banking and finance sectors if they continue steady growth. But Central can only supply 3.5 million sq ft of office space during the next decade. Meanwhile, many multinational banks have begun to relocate their offices out of Central. A case in point is Morgan Stanley, which has relocated from offices of 200,000 sq ft, divided between Exchange Square and The Landmark, to a 490,000 sq ft office in West Kowloon's International Commerce Centre. Chan thinks Kowloon East is necessary and he expects that area to become as large as Central by 2020, reaching 54 million sq ft. "We don't see a need for banks to expand now and some may need less space than before. In the long term, such a need may increase," Chan said. Real-estate sector advisers Debenham Tie Leung said demand for local office space and rentals are likely to remain subdued until the global economic situation stabilizes.

Sun Hung Kai Properties (0016) beat six other developers to win the former North Point Estate site for a lower-than-estimated HK$6.91 billion yesterday, as prospects dim for the local property sector. Several restrictions placed on the plot also discouraged bidding for the tender. The 251,876 square foot Java Road waterfront plot is the biggest tendered in the past 15 years and had been tipped to fetch HK$7.4 billion to HK$9 billion. The maximum gross floor area of 900,677 square feet translates to a price of HK$7,672 per square foot. The price offered is about 7.5 percent lower than the HK$8,300 psf that Cheung Kong Holdings (0001) paid for a site on nearby Oil Street last year. "Developers have become cautious when filling up their land banks as global economic uncertainties prevail," Centaline Surveyors director James Cheung King-tat said. "Restrictions on height, number of units and noise levels also tempered the plot's appeal." As much as 64 percent of the gfa, or 577,807 sq ft, will house 700 residential units. And 18 percent, or 162,122 sq ft, will be taken up by mall and office space. The rest will be used for public facilities including an elderly day care center and a traffic interchange. SHKP executive director Victor Lui Ting said the total investment cost will be HK$15 billion. "The site faces the sea and has a convenient traffic location. The scale of development is not too big nor too small. We are happy to have won the tender," Lui said. Cheung at Centaline expects the completed flats to be priced at about HK$15,000 psf - higher than secondary flats nearby. But he said the lower-than-expected premium paid for the site by SHKP would add pressure to the North Point secondary market.

New development minister Mak Chai-kwong resigned on Thursday after the ICAC arrested him for breaching the anti-bribery ordinance in government housing allowance claims.

Lawyers for Leung Chun-ying applied to strike out an election petition filed by Albert Ho on grounds that the chief executive lied about illegal structures at his Peak home.

Lawmakers have passed a controversial Companies Bill that imposes criminal liability on auditors who fail to declare problems with the financial statements of a client company.

 China*:  July 14 2012 Share

COSCOL: First-half profit to plummet 99.5% - A container ship at the port of Lianyungang, Jiangsu province. Shipping companies, including China Shipping Haisheng Co Ltd and COSCO Shipping Co Ltd, gave investors an early warning of a first-half slump. Shanghai-listed COSCO Shipping Co Ltd, the vessel service provision arm of China Ocean Shipping (Group) Co, said on Thursday that profit attributable to shareholders for the first half will drop 99.5 percent from a year earlier to about 700,000 yuan ($109,000). Shanghai-listed COSCOL did not provide a reason for the drop. COSCOL is not the only shipping company in China releasing warnings about a profit slump in the first half. Shanghai-listed China Shipping Haisheng Co Ltd, a bulk carrier operator, also gave investors an early warning of a first-half loss, without disclosing specific figures. The company reported 26 million yuan in net profit in the first half of 2011. CSHCL said price drops caused by shipping capacity oversupply are behind the losses. China's shipping industry is being hit with increasing costs and price drops since last year. Most companies reported huge losses in 2011. COSCO, China's top shipping conglomerate, posted losses of about 10 billion yuan last year, the biggest losses in the industry. Experts said the shipping business, especially dry bulk carriers, may not recover in the second half as demand in domestic and foreign markets is expected to remain weak. The Baltic Dry Index - a measure of shipping rates for bulk goods such as coal, iron ore and grain - declined 37 percent from 1,624 points on Jan 3 to 1,004 points at the end of June. The index recorded its lowest reading, 647 points, on Feb 3. "Due to the slowdown in China's economic growth and overcapacity, we believe 2012 will be a difficult year for dry bulk ship owners," said UBS Securities analyst Jean Rao in a report. UBS cut average readings on the index forecast for 2012 from 1,400 points to 1,250 points. "In the domestic market, the development of the shipping industry is closely related to the development of the steel manufacturing, infrastructure and construction sectors and the property development sector. At this point, those industries may not recover quickly," said Zhou Dequan, deputy director of the Shanghai International Shipping Institute. However, not every sector in the shipping industry will suffer in the second half year. UBS said peak-season freight rates will support a profits rebound in the third quarter for container shipping service providers. "We think the market has recently been overly concerned about the fall in container shipping freight rates and believe that rates can be maintained above the breakeven point during this year's peak season," Rao said in the report. However, Zhou has a pessimistic view about the container shipping sector. "Many companies adjusted containers freight rates to maintain profitability. However, as demand is not getting better, it is hard to say whether the rates can be maintained in the future," said Zhou.

Fishing vessels set off for Nansha Islands - A joint oceangoing fishing operation involving 30 boats set sail for the Nansha Islands in the South China Sea on Thursday from South China's Hainan province. Fishing boats line up in a port in Sanya, Hainan province, on Thursday, before setting off for waters around the Nansha Islands. It is one of the largest fishing activities in Hainan's history, according to the local fishery authority. Their destination for the 20-day fishing operation is near the waters of Yongshu Reef. According to local fishery authorities, the fleet consists of a 3,000-ton supply vessel and 29 fishing boats. Among them, 18 belong to the Sanya Haiyu Fishers' Association and 11 are from the Sanya Yufeng Fishers' Association. They will be divided into several teams when fishing. The fleet has a chief commander, three deputy commanders and a control team that will arrange and coordinate the operation of each team, said Zhang Huazhong, director of the Sanya marine and fishery bureau. Ships patrolling the waters around the Sansha area and related departments will be prepared to meet urgent situations for the fishery operation, he said. "The vessels are totally different from the old ones. They have the Beidou Navigation System, and the sailors in the vessels are professional," Lu Guangxian, the captain of Qiong Sanya 72029, one of the 29 fishing vessels, told China Daily. Every year the fishermen in Hainan organize a month-long fishing operation on their own, but this time the fishers' associations are involved. "With the participation of the associations, we will be better organized and can support each other in an emergency. The operation is a trial of oceangoing fishing. The Nansha Islands have plenty of fish resources. If this time we have a good harvest, we will go to Nansha more frequently," said Zhang Guanfu, captain of Qiong Sanya 7250. The waters around Sansha have a potential fishery volume of 5 million metric tons every year. But currently Hainan has only 80,000 tons of fishing production. In late June, China established Sansha city to administer the three island groups of Nansha, Xisha and Zhongsha. The new city also covers the islands' surrounding waters. China is considering setting up a legislative body in the newly established city. Sources said on Thursday that the Standing Committee of the Hainan Provincial People's Congress will deliberate on a motion to set up an organizing committee for the legislative body in Sansha. 

Chinese firm makes Olympic flags - Olympic flags are made in a Kings Industrial factory in Wuyi county, East China's Zhejiang province, July 12, 2012.The company will make 40 million flags for the London Games.

Lender aids exit from NY - China Development Bank is helping smaller mainland firms delist in the US as stocks plunge after scandals cast shadow over Chinese firms - For smaller Chinese firms, the US market has become an unfriendly environment where short-selling firms have been issuing hostile reports. China Development Bank (CDB), the state-owned lender charged with strengthening the country's competitiveness, is providing more than US$1 billion to help smaller companies leave the US stock market. The mainland's biggest policy lender offered funding so that Fushi Copperweld, a Beijing-based wire maker listed on the Nasdaq Stock Market, could buy back its shares from the public, Fushi said last month. And China TransInfo Technology said on June 8 it would drop its Nasdaq listing with CDB financing. The bank has provided more funding than any other lender to help mainland companies exit the world's biggest equity market, according to Roth Capital Partners, which specialises in emerging markets. While more than 60 Chinese companies joined exchanges in the US in the three years up to the end of last year, only one has listed there this year, after those with market capitalisations of less than US$500 million lost 53 per cent of their market value. The crash began in June last year, when Muddy Waters, a short-selling firm, raised concerns about accounting and corporate governance standards at Chinese companies by accusing Sino-Forest, a timber company that traded on the Toronto exchange, of exaggerating its assets. "There's this sort of stigma on Chinese listed companies," said Phil Groves, president of Hong Kong-based DAC Financial Management China, which assists investors with due diligence on China investments. "These Chinese companies - if they're not really big, they are essentially marooned on the US listing system, where the promised land of lots of further share issuances and debt financings aren't happening." Beijing-based CDB, established in 1994, is providing financing through US dollar loans as stock market losses in the United States prompt smaller companies to consider moving their listings to Hong Kong and other exchanges. With foreign currency loans of US$187.3 billion at the end of last year, the bank backs mainland companies by helping them obtain business across the globe. Shareholders of the unlisted lender include the Ministry of Finance, the National Council for Social Security Fund and state-owned Central Huijin Investment. Sino-Forest, the tree grower accused of fraud by Muddy Waters, filed for bankruptcy in March after denying the allegations. Groups that bet on stock declines, including Ripley Capital and Jonestown Research, have questioned other mainland businesses. Moody's Investors Service said in July last year that 61 Chinese companies it examined raised "red flags" because of possible accounting risks. The 53 per cent plunge in the share prices of such firms since the Muddy Waters report last year is more than five times the 9.5 per cent fall in the same period for the top Chinese companies traded in the US. After going private, the smaller companies might relist again in Hong Kong, where they would aim to get higher multiples, Johnson Chng, head of financial services at Bain & Co in Shanghai, said. "The cost of compliance being listed in the US isn't low," Chng said. "The wave to delist in one market to go to another higher-multiple market, that trend will probably pick up." "China Development Bank has played quite a large part in going-private transactions" because of its mission to help Chinese companies, said John Shum, a Hong Kong-based lawyer at White & Case. CDB spokeswoman Feng Qihua didn't answer requests for comment. Fushi Copperweld's shares have gained 12.3 per cent to US$8.95 since the company said on June 28 that it had agreed to be bought for US$9.50 a share. Its stock fell to a low of US$5.81 in April after Muddy Waters accused the firm of overstating production and possibly falsifying financial statements in a narrated slide show. The manufacturer "presents a high risk of fraud" and overstated production at one of its factories by almost 13-fold, Muddy Waters said. The company denied all the claims, which it called "vague and non-specific", on April 11. Hong Kong-based private equity firm Abax Global Capital and Fushi Copperweld chairman and co-chief executive Li Fu will acquire the company with a CDB loan. The bank is an anchor investor for Abax's yuan-denominated private equity fund, according to its website. Harbin Electric, a maker of electric motors that was also listed on the Nasdaq, went private in November in a buyout financed by CDB. The company's stock slid in August after Citron Research said it "fabricated customers" and overstated revenue. Investors received 20 per cent more than they would have if they had sold their shares at the closing price on the day before the offer by company founder Yang Tianfu and Abax. CDB's Hong Kong branch financed the privatisation with a US$400 million loan. "That was one that if it had gone much further, everyone was confident they were going to find a lot more smoking guns," Groves said. The deal followed the CDB-funded privatisation of Shenzhen-based China Security & Surveillance Technology in September. The offer of US$6.50 a share was 58.5 per cent higher than the previous day's close.

China, US seek to play down rivalry - US Secretary of State Hillary Clinton meets Chinese Foreign Minister Yang Jiechi on the sidelines of the Asean summit on Thursday. US Secretary of State Hillary Clinton and her Chinese counterpart Yang Jiechi pledged on Thursday to work more closely together after talks designed to soothe their countries’ often spiky relations. After a meeting in Cambodia, Clinton sought to highlight areas of common interest such as disaster relief and disease control, which she said were “an important signal that the US and China not only can, but will work together in Asia.” Yang said “China and US relations have continued to make progress this year”, adding both sides had agreed to “enhance our dialogue ... to continue to expand our common ground”. The display of togetherness on the sidelines of a regional Asian security meeting came despite constant friction in the world’s most significant bilateral relationship, which is linked to China’s economic and military rise. There have been concerns the US’s new foreign policy “pivot” to focus on Asia, where it hopes to counter China’s enormous clout, could antagonise Beijing ahead of a leadership transition later this year. Clinton had been expected in Cambodia in conciliatory mood. At the same Asian summit in 2010, she had angered China by saying the US had a “national interest” in the disputed South China Sea. China claims essentially all of the South China Sea, while Taiwan and Asean members the Philippines, Vietnam, Brunei and Malaysia also have claims in the waters, causing regular diplomatic flare ups. These disputes have been the biggest issue at the Asean Regional Forum and a new spat between China and Japan over disputed islands in the East China Sea on Wednesday provided an ominous background for Thursday’s talks. Clinton said earlier on Thursday that nations should settle their territorial disputes “without coercion, without intimidation, without threats, and without use of force.” She again urged progress on the long-stalled code of conduct for the South China Sea to avoid “confusion and even confrontation” over shipping and fishing rights in the resource-rich waterway which is home to key shipping lanes. There are little signs of movement on the code, however, with Southeast Asian nations in regional bloc Asean divided over what should be included and China apparently in no mood to begin discussions, diplomats say. China said on Wednesday it would only begin negotiating the code with Asean “when conditions are ripe”. “The qualifying statement – when the time is ripe – means that planned talks in September [to advance on formulating a code] are unlikely to take place,” one Asian diplomat said. The Philippines is leading a push for Asean to unite to propose a code of conduct based on a UN law on maritime boundaries that would delineate the areas of the sea belonging to each country. Other countries, led by staunch China ally Cambodia, are pushing back in a bid to avoid antagonising Beijing, which wants all territorial disputes to be settled bilaterally and rejects “internationalising” the issue. Analysts say Clinton is trying to balance support for US allies Japan, the Philippines and Vietnam – all angered by China’s recent perceived aggression in contested seas – with efforts to keep Beijing onside. Japan lodged a formal complaint with China on Wednesday over their dispute and summoned the Chinese ambassador, while Beijing said the remote islands “have always been China’s territory since ancient times”. Japan refers to the islands in the East China Sea as Senkaku and sees a Japanese family as the owners, while China calls them the Diaoyu. The islands are covered by a US-Japan security pact dating back to 1960, but Washington is keen for the issue of ultimate sovereignty resolved “through peaceful means”. Analysts say the unexpected confrontation over the islands in the East China Sea will further drive neighbouring countries anxious about China’s rise into the United States’ orbit. “The Chinese huff and bluff with Japan does not augur well,” said Southeast Asia expert Carl Thayer, who runs a consultancy. “China’s actions have certainly pushed the Philippines towards Washington.”

China Brands Lose to Western Labels - Chinese sportswear brands, from Li Ning Co. to Anta Sports Products Ltd., 2020.HK -3.66% have lost favor with Chinese consumers who prefer foreign brands or casual clothes. In recent years, Chinese consumers have been moving toward the Western brands that have been cutting their prices sharply while appealing to the hip. Nike Inc., for instance, sponsors basketball star Jeremy Lin, who has a huge China fan base, while China's top brand Li Ning sponsors now-retired National Basketball Association star Shaquille O'Neal and is still closely identified with its 49-year-old founder. Mr. Li, winner of three gold medals for China in the 1984 Los Angeles Olympics, caught viewers' eyes world-wide when he carried the torch and "flew" around the Beijing stadium at the opening of the 2008 games. "Because they do less on research or advertising, Chinese sports brands have lost touch with what consumers want," Core Pacific-Yamaichi analyst Eugene Mak said. "Foreign brands are more popular with China's growing middle classes who can afford pricier and trendier products." Last week, following a profit warning, Li Ning said it is replacing its chief executive of 20 years with the founder, and investor TPG Group is stepping in to overhaul operations. Two smaller Chinese sportswear brands, Peak Sport Products Co., and China Dongxiang Group Co., which has the China franchise for Italy's Kappa shoes, also said tough competition should eat into their earnings this year, and warned of lower profit. In the wake of the 2008 Olympics, these brands saw a surge in sales, with revenue at Li Ning and rival Anta, which sells Fila clothes and shoes, rising over 50%. Sales growth has since been falling. From heights of 60 times earnings, Li Ning is now trading at 23 times and is down 28% this year, while Anta, valued at 33 times, is down to nine times. In contrast, Chinese retailers like Belle International Holdings Ltd., which sells fashionable high-heels as well as sportswear, are up 45% since 2010. "We like investing in Chinese consumer-focused companies but, even among businesses in this attractive sector, there are no guarantees as declines in the fortunes of some Chinese sportswear brands is reflected in their continued buildup of inventory," said George Raffini, managing partner at private-equity firm Headland Capital Partners, which bought a stake in down-apparel maker Bosideng International Holdings Ltd. 3998.HK +1.01% before it listed in 2007. In 2011 alone, domestic sports brands had inventory levels climbing 36% to 58% from a year earlier, the annual reports of these brands showed. The brands have also over expanded, opening mainly franchise shops. Between 2007 and 2010, Anta as well as the other Hong Kong-listed Chinese sports brands—Li Ning, Xtep International Holdings Ltd., and China Dongxiang—opened a combined 9,900 stores in China. Western sports brands, such as Nike and Adidas, that began selling in China in the 1980s, are gaining share. They had 24% of China's sports apparel and shoe market in 2010, according to Euromonitor, but that should rise to 28% next year, at the expense of home grown brands, Barclays estimated. While both foreign and domestic sports brands make the bulk of their sales from selling to franchises and wholesalers in trade fairs months before they are sold, Western sports brands have better ties with the shops that sell their products. Nike, for instance, has an alliance with Belle, which has tens of thousands of stores across China. Li Ning last week said it wants to move to a more consumer-oriented model, opening more of its own shops and factory outlets rather than franchising them out to third parties or relying on wholesalers to distribute their products. "Sports brands in China are generally slow to understand demand from end-consumers because of these multiple layers of distribution," said Alfred Ying, analyst of Piper Jaffray Asia Securities Ltd. Even a recent spate of trying to move upmarket hasn't helped these brands. "Consumers now see [local brands] as discount brands. They won't buy the products if they're not discounted and then when there are discounts, will wait for deeper discounts before they buy," Piper Jaffray's Mr. Ying said. Both spokesmen for Li Ning and Anta declined to comment. But a deeper change is harder to overcome. "Chinese sportswear brands are facing, as are foreign brands, a change in consumer buying habits in China, particularly the increasing popularity of casual wear," said Headland Capital's Raffini. Casual lifestyle brands like Inditex SA's Zara and Fast Retailing Co's Uniqlo have done well in China as younger Chinese veer toward the "fast-fashion" trend, with crowded shops in shopping malls in the country's top cities. For instance, partly due to that trend, and partly because of China's slowdown, Nike's Greater China sales fell 3.9% in the three months to the end of May this year, compared with the quarter just before that. "It is an industrywide structural problem, rather than a company-specific issue," said Piper Jaffray's Mr. Ying.

Sleepy travelers happy to be in sleeping box - Zhang Zhenyu, a 40-year-old businessman from Shanghai, was sound asleep on Wednesday morning in a sleeping box at Xi'an Xianyang International Airport. "I was on a business trip here and worked through the night. I'm flying to Beijing for a conference and I felt so tired, so I am pleased to have had a sleep in the box," Zhang told China Daily. Seven travelers, including Zhang, have used the "sleep boxes" since they began operating on Tuesday, said Dong Liang, the airport official behind the service. A worker at Xi'an Xianyang International Airport, Shaanxi province, shows a sleeping box on Tuesday. "We have 20 boxes all up, 10 have been put into operation and another 10 are being prepared for travelers," Dong said. The sleep boxes are made to look like a small wooden house and contain a single bed, a TV, a desk, a reading light and wireless Internet. But there is no toilet inside. "The floor area of the sleep box is about 3 square meters with a height of 2.7 meters," Dong said. The airport started the service after being inspired by a similar program at the Moscow airport that has been operating since September. "Our airport is the first to provide such services in China. Although only seven passengers have used them since they have been put into operation, I think they will prove popular," Dong said. Use of the box costs 30 yuan ($4.70) for less than 30 minutes, 60 yuan an hour for the first two hours, and 40 yuan an hour from the third hour. "I think the price is somewhat expensive, but it is a good place to sleep with good sound insulation and ventilation," Zhang said.

Hong Kong*:  July 13 2012 Share

Hysan Place will be the biggest mall completed here this year and will open on August 10. New mega mall to open its doors in Causeway Bay - Hysan Development has high hopes for its project on Hennessy Road, with retail occupancy at 98 per cent. Hysan Development (SEHK: 0014)'s flagship, Hysan Place in Causeway Bay, is scheduled to open next month, after a six-year build-up. Hysan Place, formerly the Hennessy Centre, will be the largest shopping mall completed in Hong Kong this year and opens on August 10. Chairman Irene Lee Yun-lien of Hysan Development yesterday said the average retail rent for Hysan Place was about HK$150 per square foot. Based on the total retail space of 450,000 sq ft, the developer is expected to generate monthly rental income of about HK$67.5 million from Hysan Place. The company said the retail occupancy rate at Hysan Place had increased to 98 per cent, from 95 per cent in March. "We believe it will be fully let when it opens in August," Lee said. Given its location in the key shopping zone of Causeway Bay, Cissy Chan, Hysan's director of retail portfolio and marketing, said it could attract 100,000 shopper visits a day. While growth in mainland tourist spending has slowed since Chinese New Year, the company was still upbeat. "Causeway Bay is attractive to different shoppers. We are targeting different types of shoppers, not only tourists, but also locals," Chan said. Lau Siu-chuen, Hysan's deputy chairman and chief executive, said retail rents in Hong Kong had seen unexpectedly sharp growth over the last few years. "But the trend will be more rational this year and next," he said. "The mainland economy will continue to grow long-term. We are not worried about a slowdown in mainland tourists' spending. We don't think it will affect our business." The developer demolished the Hennessy Centre, which used to house Japanese department store Mitsukoshi, in 2006. The site at 500 Hennessy Road was then developed into Hysan Place, a 40-storey office and retail building with a total gross floor area of 710,000 sq ft. The office occupancy rate was about 40 per cent in March, but Hysan did not give updated figures yesterday. The building has 17 retail floors, which have been leased to more than 120 firms. Most of the space will be taken up by fashion brands such as Gap and Nanette Lepore. Taiwan's largest bookstore chain, Eslite has leased more than 41,000 sq ft for its first shop outside Taiwan. Apple is also expected to open a three-level store in the mall. Shares in Hysan Development rose 0.8 per cent to close at HK$31.50 yesterday. The Hang Seng closed down 0.16 per cent.

Pachinko is one of the most popular pastimes in Japan, with more than 16 million people playing it in the country in 2010. Pachinko parlour operator Dynam Japan is betting a Hong Kong listing will help it raise about US$200 million, but it may face a lack of interest from local investors not familiar with the popular Japanese pastime. Dynam, Japan's second-largest pachinko hall operator as measured by the total value of pachinko balls and pachislot tokens rented in 2010, may have pruned the planned initial public offering (IPO) with earlier speculation pointing to a US$300 million IPO. The company made a pre-listing filing to the Hong Kong stock exchange this week. "Although the number of IPOs in Hong Kong has picked up since the latter half of the second quarter, IPO sizes are all relatively small," Kenny Tang Sing-hing, general manager of AMTD Financial Planning, said. Pachinko is like vertical pinball. Players rent small metal balls and fire them in rapid succession into a playing field. It's one of the most popular forms of entertainment in Japan, adding up to a 19.4 trillion yen (HK$1.8 trillion) industry and accounting for 28.6 per cent of Japan's entertainment market in 2010, according to the Japan Productivity Centre. But, pachinko has not taken off outside Japan and this may make investors wary of putting their money into the company. "My interpretation is that Dynam chose Hong Kong because at the moment the markets with the most abundant funding are it and the mainland," Sun Hung Kai Financial analyst Daniel So. Last week, mainland authorities cut interest rates for the second time in a month to spur its economy, prompting speculation that the People's Bank of China planned further measures to boost liquidity in the market. So warned that Hong Kong investors would not be very interested in Dynam because of their limited knowledge of the pachinko business, although some might see pachinko as comparable with Macau gaming stocks. "If the IPO price is low compared with Macau gaming operators, investors may buy it," he said. Tang said Hong Kong investors had generally welcomed gambling-related stocks and the gaming factor in Dynam's business might help lure investors. "Its stock performance may not be as good as that of the Macau casino operators, but like NagaCorp it's better than average," he said. Hong Kong-listed gaming resort operator NagaCorp has operations in Cambodia. Its shares have surged 88.3 per cent this year, compared with a rise of 5.4 per cent in the benchmark Hang Seng Index. Dynam also provides pachislot games, which are similar to casino slot machines, according to Tang. Players rent pachislot tokens, allowing them to spin reels on the machine in search of a matching sequence of pictures. Based in Tokyo, Dynam operated 355 pachinko halls in 46 out of 47 prefectures in Japan as of March 31, according to the firm's filing. It posted net profit of 15.9 billion yen (HK$1.5 billion) for the financial year ended March 31, compared with 16.2 billion yen a year earlier, the filing showed. Revenue for the 2012 fiscal year was 165 billion yen (HK$15.5 billion), slightly less than the previous year's 169.6 billion yen. That reflects intense competition in the industry crowded with more than 4,000 operators. In Japan, 16.7 million people played pachinko in 2010, according to research firm Yano Research. Dynam is one of only three operators with more than 100 halls in the country. The company said it would continue to invest in information technology, "which plays an important supporting role to our daily pachinko operations". It also said it would continue to "strategically" expand pachinko operations, and planned to build 75 more halls over the next three years. Kazuo Okada, a former long-time business partner and friend of Las Vegas billionaire Steve Wynn until their relationship soured and became mired in lawsuits, is also a pachinko magnate in Japan.

Cathay Pacific on Tuesday closed a deal with Airbus to buy ten long-haul A350 airliners. European planemaker Airbus on Tuesday announced deals to deliver long-haul A350 planes to Hong Kong airline Cathay Pacific (SEHK: 0293) in deals worth US$4.2 billion. Cathay has agreed to buy 10 of the future Airbus A350-1000 planes worth a combined US$3.2 billion, it was announced at the Farnborough airshow near London. The airline will also convert 16 of its existing orders for the A350-900 to the larger A350-1000, earning Airbus an additional US$1.0 billion at list prices. “This is an important and strategic development for Cathay Pacific. The A350-1000 aircraft will bring us world-beating fuel efficiency and environmental friendliness” the airline’s chief executive John Slosar said. The announcement came on the second day of the Farnborough airshow taking place near London. “This announcement from one of the world’s most highly respected airlines is a clear endorsement of the unbeatable operating economics offered by the A350-1000,” said Airbus chief executive Fabrice Bregier. “The A350-1000 will be a game changer in the 350-seat category, offering outstanding payload-range capability and a 25 per cent reduction in fuel burn.” The A350 is a response to Boeing’s 787 Dreamliner, which is now flying after long technical delays.

Sun Hung Kai Properties (SEHK: 0016), Asia’s largest property developer by market value, agreed to pay HK$6.9 billion for a huge waterfront plot in Hong Kong, a price far less than the market had expected. Hong Kong’s Lands Department said in a release that the site, at Java Road and Tin Chiu Street in North Point, would go to Choice Win Limited on a 50-year land grant. A Sun Hung Kai spokeswoman confirmed that the site will go to the company. The waterfront area, on Hong Kong island’s northern edge along Victoria Harbour, has a site area of 23,400 square metres and is designated for non-industrial purposes. Three real estate agencies had said they expected the site to fetch between HK$8.15 billion and HK$8.47 billion. Hong Kong’s residential and commercial property markets, among the world’s most expensive, has seen parts of the sector hit by the mainland’s economic slowdown. On Monday, Hong Kong’s subway operator MTR Corp withdrew its tender of a site on top of a railway station in the New Territories after bids from three major developers came in below expectation.

Executive Council convener and Equal Opportunities Commission chairman Lam Woon-kwong said on Wednesday the likelihood of a conflict of interest was slim. Executive Council convener and Equal Opportunities Commission chairman Lam Woon-kwong announced on Wednesday that he would stay in both positions for now, saying the likelihood of a conflict of interest was slim. He added he would leave the commission when his three-year tenure ends in January. His decision came after a meeting on Monday with commission members. They discussed concerns over a possible conflict of interest in his dual roles. Lam has faced calls to resign from one of the two positions due to these concerns. Speaking at a press conference, Lam said he would not resign immediately from Exco, the government’s top advisory body, or from the commission. He said a majority of members of the commission and its partner organisations supported him serving in both positions in the belief that the chance of a conflict of interest was low. “When no real conflict of interest has arisen, resigning from Exco rashly is not an appropriate move. It is not a responsible one,” he said. “Similarly, quitting the EOC just now will go against my original wish to serve in the commission and bring serious disruptions to its work.” Lam also pledged to avoid any conflict of roles and said there were adequate mechanisms in both organisations to handle such situations if they occurred.

Free-TV Olympics coverage certain, says sports chief - While broadcasters wrangle over rights to show London Games, local president Timothy Fok receives assurances from International Olympic Committee - Hongkongers will definitely get to watch free-to-air live coverage of the London Olympic Games, despite the wrangling among local broadcasters, the city's sports chief pledged yesterday. Timothy Fok Tsun-ting, president of the Sports Federation and Olympic Committee of Hong Kong, said: "They [the International Olympic Committee] have told me I can convey this message. There will be free-to-air television broadcast of the Games. And [the arrangement] will be made public as soon as within one or two days." Fok did not reveal further details about his meeting with IOC representatives, or say what broadcasting arrangements would be put in place. Rights holder iCable said last night that one major obstacle to showing the Games on free-to-air broadcaster ATV's World channel had been resolved. iCable said the IOC had overcome potential difficulties and the Games would now feature on ATV, which is available to households in the Pearl River Delta area. It gave no details about how the difficulties had been resolved. ATV, which confirmed that it had been in talks with the IOC, was unaware of any deal and said that the problem with cross-border rights was not the only obstacle. A company spokesman said "our door remains open" for further talks and that "ATV was optimistic the problem will be resolved". Fellow free-to-air broadcaster TVB (SEHK: 0511) has also been in talks with the IOC. "We are still in the process of negotiation," said Winnie Ho Wai-sheung, TVB's senior manager of corporate and community relations. It remains uncertain what sort of restrictions would be imposed on the two broadcasters and what fee they would be charged for acquiring the Games rights. An IOC spokesman said yesterday that it would make public any news updates regarding the issue. Fok's comment came hours after TVB and ATV claimed they had halted talks about subletting Games broadcasts with iCable, which outbid rivals to secure the right to show the Games on all media platforms in Hong Kong. TVB said iCable's subletting terms - including reserving nearly all the commercial air time for the cable television company's own sponsors - were too harsh for it to accept. The IOC requires iCable to provide at least 200 hours of free Games broadcasts, which puts huge pressure on the Wharf Group-controlled broadcaster to strike a deal with ATV or TVB. iCable had hoped ATV could broadcast the Games if it could sort out copyright issues in the Pearl River Delta, where mainland broadcaster CCTV holds rights for the Games. ATV broadcasts widely across the border and has an advertising revenue sharing arrangement with the mainland. A spokeswoman for CCTV's sports channel said it was not familiar with the case. But another source at the channel said copyright for Games broadcasts would not be an issue for CCTV in the Pearl River Delta.

 China*:  July 13 2012 Share

Two years after eclipsing Japan as the world's second-largest economy, China has taken the No 2 spot on the Fortune 500 list of the biggest global companies from its Asian rival. In its annual revenue rankings, Fortune magazine said China overtook Japan for the first time, landing 73 companies on the list compared with 68 Japanese companies. Anglo-Dutch energy giant Royal Dutch Shell retook the top spot, knocking off US retail titan Wal-Mart from a two-year reign with revenues last year of US$484.5 billion, up 28.1 per cent from 2010. The remaining members of the top 10 are, in descending order: ExxonMobil (US); Wal-Mart Stores (US); Britain's BP; Chinese companies Sinopec (SEHK: 0386) Group, China National Petroleum and State Grid; Chevron (US); ConocoPhillips (US) and Japan's Toyota Motor. "Although the US still hosts the lion's share of Global 500 corporations, no country has lost more companies during the last decade," the US magazine said. "There are 132 US-headquartered businesses on this [list], down from 197 a decade ago." China added 12 companies to the list, while the number of European firms fell to 161 amid the debt crisis, from 172 last year. "One of the more remarkable shifts has been in the number of Chinese companies on the list," Fortune said, noting that only 11 Chinese firms were on the Global 500 in 2002, while the number of Japanese firms had fallen from 88. Still, it said, Tokyo hosted 48 Global 500 company headquarters, more than any other city. "Despite the Fukushima [nuclear] disaster and two decades of slow growth, it's way too soon to count Japan out." Eight energy businesses dominated the top 10. Commercial banks accounted for the second-largest industry among the 500, while the car sector was in third place. In total, the Global 500 firms saw revenues of US$29.5 trillion, up 13.2 per cent over 2010. "Despite financial turmoil in Europe and disasters in Japan, the world's largest corporations had record profits and revenues in 2011." Two Indian firms made the top 100 list: state-run Indian Oil (83th) and Reliance Industries (99th).

A Chinese patrol boat (left) cruises near a Japanese Coast Guard vessel in the East China Sea on Wednesday. China told Japan on Wednesday it should respect Beijing’s “indisputable sovereignty” over islands claimed by both countries in the East China Sea which are again the cause of fresh tension. Chinese Foreign Minister Yang Liechi met with Japanese counterpart Koichiro Gemba in Phnom Penh where he “reaffirmed China’s principled position” on the islands known as Senkaku in Japanese and Diaoyu in Chinese. “He stressed that Diaoyu Islands and their affiliated islets have always been China’s territory since ancient times, over which China has indisputable sovereignty,” said a statement from the Chinese delegation. Yang “urged Japan to adhere to relevant agreements and understanding between the two sides in good faith, return to the right path of managing differences through dialogue and consultation with the Chinese side and take concrete actions to uphold the overall interests of the bilateral ties.” Japan summoned the Chinese ambassador in Tokyo on Wednesday as three Chinese patrol boats approached the chain of islands. The crew of the vessels, which have since left the islands’ immediate vicinity, initially rebuffed Japanese orders to leave, Japanese officials said. Chief Cabinet Secretary Osamu Fujimura said three Chinese fishery patrol ships entered waters near the uninhabited islands. The islands, claimed by Beijing and Tokyo as well as Taipei, are located near rich fishing grounds and potentially huge oil and gas reserves. Japan said last week it was considering a plan to buy the islands from private landowners instead of letting the nationalist governor of Tokyo go ahead with a similar plan, a move diplomatic experts said may have been intended to dampen tensions but which risked backfiring and sending Sino-Japanese ties into a deep chill. “It is clear that the Senkaku islands are inherently Japanese territory from a historical point of view and in terms of international law and that they are under the effective control of Japan,” Fujimura told a news conference. The three Chinese ships later left the waters but two of them were still sailing in the contiguous zone as of 9.30am, with Japanese patrol ships keeping close watch, he said. Xinhua news agency said the patrol vessels had entered the waters “to carry out a fishery protection mission in our exclusive economic zone” and repeated that the islands and surrounding waters have been Chinese territory since ancient times. 

China's central bank has detailed rules on yuan foreign direct investment (FDI), setting restrictions on different yuan FDI accounts to invest in securities, derivatives or property, the Shanghai Securities News said on Wednesday. Yuan money in accounts set up by foreign investors before they start the FDI must not be used for land or housing purchases, the newspaper quoted a document issued by the People’s Bank of China (PBOC), the Chinese central bank, as saying. Yuan in accounts opened after the FDI begins flowing must not be invested in securities, financial derivatives and asset management products, and must not be used to buy properties which are not for the foreign investors’ own use. The new rules also banned foreign investors from using yuan credits borrowed outside China to invest in China’s property developers, the newspaper quoted the PBOC document as saying. The detailed rules followed broader regulations by the PBOC and the Ministry of Commerce last October that formalised the pilot scheme to allow foreign businesses to invest in the country with yuan legally obtained overseas, as the country moves to internationalise its currency. Among other stipulations, previous rules said all applications for yuan FDI worth 300 million yuan (US$47 million) or above must be submitted to the ministry for approval. As part of its efforts to increase the influence of the yuan , China first launched a yuan trade settlement scheme in July 2009 in a few cities and expanded it to other parts of the country. However, foreign businesses have complained that they are facing difficulty investing their yuan revenues due to China’s capital controls.

Apple's latest iPad finally hits store shelves in China on July 20, months after the newest model of the tablet computer went on sale around the globe, the company said on Tuesday. The product’s rollout in the world’s No 2 economy comes weeks after the iPhone maker finally settled a dispute over the iPad trademark, paying local company Proview Technology US$60 million in a court-mediated settlement. China is a crucial market for Apple, but the company has to fend off growing competition and has come under criticism for not addressing alleged labour abuses at Foxconn and other contract manufacturers. In March, Apple agreed with Foxconn to improve wages and working conditions. Apple’s sales in China, Hong Kong and Taiwan leaped threefold to US$7.9 billion in the fiscal second quarter ended March, accounting for about a fifth of global revenue. The iPad, whose latest model went on sale in March in 10 countries from Australia to the United States, currently dominates China’s tablet PC market with a more than 70 per cent market share. But homegrown PC maker Lenovo (SEHK: 0992) ’s Lepads and Samsung’s Galaxy Tabs have been gaining traction. 

Chinese demand brings new luster to yellow metal - A shop assistant arranges a display showing gold jewelry in a store in Huaibei, Anhui province. Last year, about 496 metric tons of gold were used in the production of jewelry for the Chinese market. But it remains strong in China, helping to fuel expectation that the price of the metal will be above $1,800 an ounce before the end of this year, experts said on Tuesday. Because gold prices remain high and concerns have arisen about fluctuations in the metal's price in the short term, the global private sector has been purchasing less of it, said Philip Klapwijk, global head of metals analytics of Thomson Reuters GFMS. "But the Chinese market remains strong, which makes it an important factor global investors have to focus on." Last year, China's demand for bullion for investment purposes was strong enough to lead to the sale of 250 metric tons of the metal, an increase of 40 percent. In India, even more gold bars were sold, 288 tons worth. In the same year, 496 tons of gold were sold in China for use in making jewelry. In India, though, the amount sold for that purpose decreased by 3 percent year-on-year. "The Chinese demand for jewelry will be similar to that of India in 2012, while China will have more gold bars than India this year," Klapwijk said. "So China is expected to be the world's largest market for gold consumption by the end of the year." Globally, the amount of gold bought for investment purposes decreased 10 percent year-on-year in 2011, falling to 1,605 tons. Even so, that went for a record high of $81 billion. Low interest rates, the worsening debt crisis in Europe and concerns about inflation were the main reasons cited for the increase in the value of gold. Also last year, 2,759 tons of the metal were sold globally for use in manufacturing. That was down 0.9 percent year-on-year, a result largely of a decline in the demand for jewelry. Klapwijk speculated that central governments are also buying more gold, saying such official buying becomes more influential when the private sector is weak. A report Klapwijk released on Tuesday said that a modest increase in mine production and a higher supply of scrap gold have led to a record supply of the metal in 2012. Meanwhile, demand for manufacturing purposes, which mostly comes from jewelry makers, is forecast to fall by a small amount this year. The report said external economic and financial conditions in the coming months are predicted to attract more money into the gold market. One reason investors are expected to take a greater interest in gold is the likelihood that more countries will ease their monetary policies in the near future. Klapwijk said the gold market will continue to fluctuate in the very short term, although the price of the metal should remain around $1,500 a troy ounce. "We would not be surprised if heightened volatility was to continue, in part as investors' interpretation of the impact of macroeconomic news on gold seems to be increasingly variable," he said. "Despite this noise, and the stagnation in the price that we have seen over much of the year-to-date, we believe the gold bull market remains intact. "Indeed, as we move into the fourth quarter, a clearer uptrend should establish itself, with gold easily breaching the $1,800 mark before year end. A new high for the price does, however, seem to have been postponed until the first half of 2013." At $1,586.30 a troy ounce, the price of spot gold was little changed at 2:03 pm on Tuesday in Singapore, down from a record of $1,921.15 in September. The price of the metal has increased for 11 straight years, Bloomberg reported.

Foreign schools give a valuable lesson - An overseas-education counselor (second from left) talks to students and parents at an international education exhibition in Hangzhou, Zhejiang province on June 24. Representatives of well-known schools, colleges and universities from more than 30 countries attended the exhibition. Tina Shan's beautifully tanned face glowed with enthusiasm as she talked about her two years at Concord Academy, a private school in Massachusetts in the United States. "My mom's idol is Jacqueline Kennedy and she always says she never imagined she would be able to send her daughter to the school 'Jackie' attended. The connection makes her feel really great," said the 17-year-old from Shanghai. Shan is also thrilled at the people whose paths cross hers. "After taking the exam to enter Concord, I went to the cinema and watched 2012. I didn't imagine that I would end up as a schoolmate of the daughter of one of the stars. The daughter of Oliver Platt, who played a Russian billionaire in the movie, is my classmate," she said. Through the exclusive school, Shan also shares connections with Drew Gilpin Faust, president of Harvard University, Queen Noor of Jordan and other notable alumni. Those connections come at a price, though. The fee for boarding students at Concord is $48,000 during the 2011-12 school year, but Shan's parents are unlikely to miss the money. Her father owns a real estate company, and her mother used to run an international trading business. Originally from Wenzhou in East China's Zhejing province, a hotbed of private industry in the 1980s, the couple moved to Shanghai, many years ago. Shan and her peers are part of a growing trend among wealthy Chinese parents to send their children to elite secondary schools. The parents may have worked their way up from the bottom of a developing nation, but want their children to have international skills and gain entry to the global elite. At Eton College in the UK, which counts Princes William and Harry among its alumni, Chinese students make up the second-largest group among international scholars, after those from the US, according to headmaster Tony Little. At the Webb School in California, whose motto is "Leaders, not ordinary men", the number of applications from Chinese students has risen fourfold since 2006, said Leo Marshall, director of admission and financial aid. These Chinese students mainly come from three distinct family types: they are the children of political leaders, business people - the largest group - and professionals, especially those with academic strengths, such as college professors. They are the new kids on the block, but their numbers are growing, said Eton's Little. Moreover, 80 percent of Chinese millionaires plan to send their children to study overseas, according to research conducted earlier this year by the Hurun Research Institute. Among the super-wealthy, such as billionaires, the number rises to more than 90 percent. In the past five years, the super-wealthy have started to send their children abroad at a younger age, sometimes as young as 13, and they are fascinated by elite schools. Shan said she was only the second student from the Chinese mainland to gain admission to Concord Academy, but the year she entered the school, 2010, three other children from the Chinese mainland arrived and became her schoolmates. "The largest national group among the international students used to be Korean, there were around 30. But now, Chinese students have taken the top spot. The numbers include those from outside the Chinese mainland, places such as Hong Kong and Taiwan, as well as some first-generation children of emigres, who hold American passports but still reside in China," said Shan. "The Chinese parents have seen the international opportunities. They are the first generation with global vision and they send their second- and third-generations to study overseas to gain international skills," said Rupert Hoogewerf, founder of the Hurun Research Institute. Eton has good academic results and its students regularly gain admission to the top universities, according to Little. However, the school aims to provide a rounded and high-quality education, and not just good exam grades. "Eton is not an exam factory," said Little. "Instead, we care about whether our students will suit all environments and take all the opportunities open to them." The students are expected to spend time on a range of non-exam-related compulsory courses, such as philosophy and music. They study six days a week, but on Tuesdays, Thursdays and Saturdays, school finishes at lunchtime and the students engage in a range of outside activities and sports. Also, all students have to play a team sport. "That's how they learn team work," said Little. Marshall from the Webb School said that its current crop of Chinese students are top performers, and are set to follow in the footsteps of previous generations who gained admission to elite universities such as John Hopkins and UCLA.

Hong Kong*:  July 12 2012 Share

Despite high-profile disputes in Hong Kong over the distribution of family assets, Bernard Rennell says trusts can be a useful tool. Billions at stake as descendants inherit riches - Tycoons need strategies to ensure intergenerational transfer preserves family wealth, private banker says - A massive intergenerational wealth transfer is set to take place in Asia over the next three decades as the richest people approach their succession-planning age, HSBC Private Bank says. Many billionaires in Asia are now aged 55 or above, said Bernard Rennell, the bank's chief executive officer for North Asia, and these super-rich individuals will begin wrestling with wealth transfer issues over the next 20 to 30 years. According to Forbes magazine, there were 226 US dollar billionaires in Asia aged 55 or above last year, accounting for 70 per cent of the region's 327 billionaires. Many billionaires in Asia accumulated their fortunes after the second world war. These tycoons, now in their twilight years, are facing new challenges of succession and wealth distribution. And history shows the odds are stacked against the next generations maintaining the wealth-creating ability of their antecedents. Only 30 per cent of family businesses in the world are successfully transferred to the second generation, Rennell said. The success rate drops to only 10-15 per cent, and in rare cases only the low single digits, for the fourth generation. "There is an old saying: 'shirtsleeves to shirtsleeves in three generations'," he said. Appropriate wealth structuring is critical, he said, given the increasing globalisation of the assets of ultra-high net worth families, their complex portfolios and their age profile. Wealth advisers are trained to create ownership structures for tangible assets, such as trusts and other holding vehicles, and to design integrated and supportive governance arrangements, he said. Both are developed with the family's input so that they reflect its goals. Rennell said a trust is a useful tool if properly structured. Some dramatic disputes over the intergenerational transfer of family wealth have arisen in Hong Kong in the past, most notably in the Kwok family that controls Sun Hung Kai properties (SEHK: 0016) and in the family of Stanley Ho Hung-sun, whose four wives have borne him 17 children. Two daughters of Chen Din-hwa, the late founder of privately run Nan Fung Group, took their fight over family assets to court in 2010, and a legal battle between two brothers over the fortune of the late tycoon Henry Fok Ying-tung was reported at the end of last year. These cases arose, Rennell said, because families had not put enough time and effort into planning a strategy for the family legacy. HSBC Trustee is the trustee of the Kwok family trust, which owns a stake of some 42 per cent in Sun Hung Kai Properties. But Rennell declined to comment on the issue. "The thing is [that] trust has survived so long because it is flexible. There is almost nothing that you cannot write into a trust. You can structure it to suit your own circumstances," he said. If properly structured, trusts have proven to be a success, Rennell said, citing the Rockefeller and Rothschild family trusts, which have maintained the families' wealth for generations. "Getting it right requires careful thought and strategy," he said.

Hong Kong airline Cathay Pacific (SEHK: 0293) has ordered 10 of the future Airbus long-haul A350 planes worth US$3.2 billion, the firms announced on Tuesday. “This is an important and strategic development for Cathay Pacific. The A350-1000 aircraft will bring us world-beating fuel efficiency and environmental friendliness” the airline’s chief executive John Slosar said. Cathay has also agreed to convert 16 of its existing orders for the A350-900 to the larger A350-1000, earning Airbus an additional US$1.0 billion at list prices. The announcement came on the second day of the Farnborough airshow taking place near London. “This announcement from one of the world’s most highly respected airlines is a clear endorsement of the unbeatable operating economics offered by the A350-1000,” said Airbus chief executive Fabrice Bregier. “The A350-1000 will be a game changer in the 350-seat category, offering outstanding payload-range capability and a 25 per cent reduction in fuel burn.”

Hong Kong's economic outlook will depend on how the euro zone debt crisis pans out, Financial Secretary John Tsang Chun-wah said on Tuesday. Speaking in the first Legislative Council financial affairs panel meeting under the new administration, he said exports from the territory had weakened in recent months but the government was maintaining its economic growth forecast of between one and three per cent for the year – subject to revision. Tsang said the mainland would provide support for the city’s economy. On the property market, he said there was a lack of direction in prices. Sentiment had turned cautious during the past two months due to the worsening euro zone crisis, but the fact that interest rates remained very low made the market prone to bubbles. At the same meeting, Hong Kong Monetary Authority chief executive Norman Chan Tak-lam said whether the United States would inject more money into the economy in another round of quantitative easing remained to be seen, but even if it did, the city’s market would not be affected. Property prices in Hong Kong grew at a slower pace and sales fell in the second quarter as global stock markets weakened, but Tsang warned on Tuesday that risk of a bubble will remain as long as interest rates stay low. Tsang told legislators that market sentiment had moderated in the past two months after a sharp rebound in February. In May, prices grew by less than 1 per cent and in June registered transactions fell by 30 per cent to 5,890, but Tsang said the direction of the real estate sector was still unclear. “The property market ... is under the influence of the weak external economic environment and ultra-low interest rates and it’s difficult to predict its future direction,” Tsang said. “But as long as the low-interest rate regime remains unchanged, the risk of the property bubble remains.” Low interest rates and a flood of buyers from the mainland have pushed up Hong Kong real estate prices in recent years, fuelling broader inflationary pressures in the territory. Prices soared 94 per cent over the last five years to end-last year, according to brokerage Knight Frank. In answer to widespread local anger at being priced out of the market, the new Chief Executive Leung Chun-ying has proposed a number of countermeasures, including selling land for developments that would be restricted to Hong Kong residents only. The risk of a sharp correction in the city’s property market has grown as Europe’s debt crisis deepens and as the global economy slips, reducing demand for goods from China and Hong Kong. Hong Kong’s private sector output fell for the second straight month in June, with new business from the mainland declining for the third consecutive month and at the sharpest rate since last November, according to a purchasing managers survey released last week. Hong Kong’s domestic exports fell 26 per cent in January-April compared to the same period last year. For the month of April alone, domestic exports fell 23.4 per cent compared to a year earlier. China’s customs administration announced on Tuesday that imports rose 6.3 per cent in June from a year earlier, less than half the 12.7 per cent increase forecast in one survey. The uncertain economic environment may have also dampened developers’ appetite for new projects. On Monday, the MTR Corporation (SEHK: 0066) withdrew its tender of a site on top of a railway station in the New Territories after bids from three major developers came in below expectation.

 China*:  July 12 2012 Share

The huge market of China can be both a blessing and a curse for local information technology firms, said Lee Kai-Fu, founder of Innovation Works and former president of Google China. Speaking at the FutureChina Global Forum in Singapore, Lee said most of the companies his venture capital firm funds are mainly exploring the domestic market. Lee, who had also worked with companies like Microsoft and Apple, was responding to a question about whether there are an increasing number of Chinese entrepreneurs going to the overseas markets first and avoiding the domestic market in fear of being copied. He said that it is the stereotype of China being a market of copycat is unfair, though this does happen in some areas. The reasons for some companies going directly to the overseas market is more complicated. For some of the mobile game companies, for example, one of the reasons might be that the mobile payment is more mature in the overseas market, he said. Lee said he was worried about the reverse problem of the huge Chinese market being both a blessing and a curse for the local IT firms. It's a blessing in that it is a huge market that is usually difficult for foreign firms, and it is a curse in the sense that, because the Chinese market is so large that it is difficult for a firm to lift itself up and go get the overseas market once it has succeeded in optimizing for the Chinese market. "So I am quite optimistic that the companies we fund and other VCs (venture capital) fund will find success in the local Chinese market. I am less optimistic that there will be great IT brands outside China in five years' time," Lee told a big audience at the forum. Lee delivered a speech on Monday evening on how the IT technologies have changed the lives and the way people work. The innovation in the IT sector is also drastically different from that for a traditional product like a car in that you can't try different versions of the cars out before it hits the market but you can try and optimize the IT applications. He said the IT sector is typically more resilient than others in the economic downturn as it is easier to adjust its investment plans. Economic downturns don't prevent people from upgrading from dull phones to smart phones or from using phones just for making phone calls to using them for accessing information and reaching out to friends over the Internet.

CapitaMalls' Simon Ho is encouraged by retail sales growth on the mainland, which outstrips that in the company's home market. Singapore-listed shopping arcade developer CapitaMalls Asia remains optimistic about the outlook for the mainland's retail property market despite slowing economic growth. It says it expects to double the value of its assets in China to US$20 billion in three to five years. "One reason that the China market gives us confidence is tenant sales, which are improving year after year. This year, the mainland's retail sales are expected to increase by 16 to 17 per cent," Simon Ho Chee-hwee, the company's deputy chief executive, said in an interview in Singapore. He said retail sales in Singapore and Malaysia grew by 5 per cent in the first half of this year. The shopping-mall arm of CapitaLand, the largest property developer in Southeast Asia, has 98 malls in its portfolio, of which 26 are yet to open, in Singapore, Malaysia, China, Japan and India. They have a combined gross floor area of 88.6 million square feet and include 42 operating malls on the mainland and 15 in the pipeline. Ho said notwithstanding slowing economic growth, there would still be an uptrend for the retail property market and China would remain the group's major driver for growth. "China is definitely one of our big markets and we are going to focus on it a lot," he said. "From now to December, we will open seven more malls in China, so that means we will open a new mall every three weeks." Target markets for the group are key cities such as Shanghai, Beijing, Wuhan, Chongqing and Chengdu. It believes its portfolio of 19 malls in Singapore, which has a population of about five million, is sufficient, compared with Shanghai, where the population is 23 million and the firm has only five malls. Last week, the company launched a new fund, named CapitaMalls China Development Fund III, with a size of US$1 billion and a fund life of eight years, to support its growth in the country. Ho said the fund would provide the "fire power" for growth. Separately, parent CapitaLand said it plans to acquire a serviced residence in Singapore for S$369 million (HK$2.25 billion) to boost profit, Bloomberg reported. The company will purchase Somerset Grand Cairnhill Singapore from Ascott Residence Trust, whose primary properties include serviced apartments and rental properties. It will then sell part of the redeveloped Cairnhill property, which will comprise commercial and residential units, to Ascott's real estate investment trust, in which CapitaLand has a 49 per cent stake.

China’s vice-foreign minister called on Tuesday for closer defence and economic ties with Australia and warned against what he said was a growing “Cold War mentality” in the United States. Vice-Foreign Minister Cui Tiankai made a veiled criticism of Australia’s deepening military ties with Washington after attending annual talks on human rights in Canberra. Beijing has condemned a plan announced by US President Barack Obama in November to send US military aircraft and up to 2,500 marines to the Australian city of Darwin to create a training hub to help allies and protect American interests across Asia, calling it a throwback to the Cold War. “China and Australia need to work together with other countries in this region to promote common security, peace and stability in this region; in particular, we should guard against the resurgence of a Cold War mentality,” Cui told reporters. China is Australia’s most important trading partner. Its demand for Australian iron ore and coal helped keep Australia out of recession during the recent global economic crisis. But Australia’s 61-year-old defence treaty with the United States is a source of tensions between Canberra and Beijing. China has accused the US of attempting to contain its rise as an economic, political and military power. The US says it has no intent to contain China, while affirming its determination to remain a Pacific power. Washington has been forging closer military ties with other Asian countries and has announced that 60 per cent of the US Navy’s fleet will be deployed to the Pacific by 2020, up from about 50 per cent now. Indonesia, a neighbour of Australia, has shared China’s concerns about the new US military configuration in the region. While not specifically naming China, Indonesian Foreign Minister Marty Natalegawa said in March that “the management or the containment of a rising country, we believe, would see the return of old-style Cold War power politics”. The Australian government has rejected claims that the increased US military presence on Australian soil is aimed at containing China and says it remains open to China’s participation in joint exercises in Darwin in the future.

As Southeast Asian states discussed on Tuesday forming a united position on the dispute over the South China Sea, China warned against “hyping” the territorial row. China insisted the dispute should only be resolved directly between rival claimants, not at the 10-nation Association of Southeast Asian Nations (Asean) summit in Cambodia. “This South China Sea issue is not an issue between China and Asean, but between China and some Asean countries,” foreign ministry spokesman Liu Weimin said. “Hyping the South China Sea issue... is against the common aspirations of the people and the main trends of the time to seek development and cooperation, and is an attempt to take China-Asean relations hostage.” China has expressed a willingness to discuss with the Asean bloc a potential South China Sea code of conduct aimed at reducing tensions. But Liu said Beijing did not want the issue raised when Asean foreign ministers met their colleagues from China, the United States, Japan and other countries during the Asean Regional Forum starting in Phnom Penh on Thursday. “The foreign minister’s meeting at the Asean Regional Forum is an important platform for building mutual trust and enhancing cooperation, it is not the appropriate place to discuss the South China Sea issue,” Liu said. Southeast Asian foreign ministers are meeting in Cambodia to draw up a long-delayed code of conduct to be signed by them and China aimed at easing friction in the South China Sea. They want a UN maritime convention to be the basis for settling competing claims, a draft document agreed by foreign ministers showed on Tuesday. The draft document outlining Asean’s position called on all sides to “undertake to resolve territorial... disputes in the [South China Sea] by peaceful means in accordance with international law, including UNCLOS”. UNCLOS is the UN Convention on the Law of the Sea, an international treaty that sets limits on how much of neighbouring seas a nation can consider as their territorial waters or exclusive economic zone. Beijing is a signatory to UNCLOS, but experts say its claim of essentially all of the South China Sea, home to vital shipping lanes and believed to be rich in oil and gas deposits, would fail under its provisions. Taiwan and Asean members the Philippines, Vietnam, Brunei and Malaysia all make rival claims on areas of the sea, where tensions recently mounted. The draft Asean document calls on all parties to resolve disputes “without resorting to the use of force or the threat to use force” and to “commit to respect freedom of navigation and overflights”. Asean is proposing that all sides attempt to settle disputes first within the framework of the Treaty of Amity and Cooperation, an Asean-centred pact that also bans the use of force to settle disputes. Failing that, parties may resort to the “dispute-settlement mechanism provided in international law including UNCLOS”, according to the draft, which also calls for cooperative activities to build trust and confidence. China on Monday said it was willing to discuss the code with ASEAN “when conditions are ripe” but insisted that any potential pact must not be used to resolve rival claims. “The [code of conduct] is not aimed at resolving disputes, but aimed at building mutual trust and deepening cooperation,” foreign ministry spokesman Liu Weimin told reporters in Beijing. Pavin Chachavalpongpun, associate professor at Kyoto University’s Centre for Southeast Asian Studies, said Asean members are resisting the idea of settling territorial claims bilaterally. “This is because they feel that they will not have enough bargaining power in dealing with a bigger China,” he said. Regional tensions have risen recently, with both Vietnam and the Philippines accusing Beijing of aggressive behaviour in the South China Sea.

China's Consumer Inflation Eases Sharply - China's consumer inflation slowed sharply to the lowest level in nearly two-and-a-half years in June, likely one key reason why the central bank was comfortable with cutting benchmark interest rates for the second time in less than a month last week. Economists said the slower inflation is opening doors for a further loosening of monetary policy and more investments by the government in the second half to ensure the country's economy rebounds. Other data due later this week will give a clearer picture of the extent of the slowdown in the world's second-largest economy. Trade data are due Tuesday, while gross domestic product, industrial production and fixed-asset investment data are scheduled for Friday. China's consumer price index rose 2.2% in June from a year earlier, slower than May's 3% rise, data from the National Bureau of Statistics showed Monday. June's inflation was the lowest since January 2010, when CPI rose 1.5% year on year. The inflation figure matched the median 2.2% gain forecast by 10 economists in an earlier Dow Jones Newswires survey. The decline in inflation is mainly because of moderating food prices, which rose 3.8% from a year earlier in June, down from 6.4% in May. Real returns on bank deposits, after taking into account inflation, are now comfortably in positive territory. Following China's most recent rate cut, which took effect Friday, the benchmark one-year deposit rate stands at 3%. The "lower CPI opened room for further policy easing, which we expect will pick up. In particular, Premier Wen Jiabao's comments over the weekend point to stronger public investments in the coming months," said Nomura economist Zhiwei Zhang. Mr. Wen said on a visit to Jiangsu province Friday and Saturday that China needs to continue with a large-scale program that aims to build more public housing for the lower-income group, and ensure that the construction of such housing units is sustainable, according to a statement issued by the State Council, China's cabinet. Mr. Zhang forecast inflation to accelerate in the fourth quarter after economic growth rebounds, and due to the fact that food prices usually rise after summer. Nevertheless, China's consumer inflation for 2012 would likely be lower than the government's 4% annual target, which would open up room for energy-price reforms, he said. From a month earlier, the CPI declined 0.6% in June. It fell 0.3% in May. Producer prices, meanwhile, also extended their decline in June. The producer price index fell 2.1% in the month from a year earlier, after dropping 1.4% in May, matching the median forecast of the economists in the Dow Jones poll. The PPI declined 0.7% in June from May, when it fell 0.4% from the preceding month. Lu Ting, an economist at Bank of America-Merrill Lynch, said the widening gap between CPI and PPI rises implies that profit margin could improve for some downstream manufacturing sectors. Mr. Lu said consumer inflation in the next several months is likely to drop further to around or even slightly below 2% year on year, while PPI could still decline due to lower oil prices and higher bases of comparison. He expects two further symmetric interest rate cuts of 0.25 percentage point each and three reserve requirement ratio cuts of 0.5 percentage point each in the remaining months of this year.

China to Officials: No More Spending Public Funds on Luxury Goods - No more Chanel for China’s officials. Hard times have fallen on Chinese bureaucrats. Already, they’ve been told to cut down on perks like restaurant meals, cars and expensive liquor. Now, their bosses say they’re to stop spending public money on luxury items altogether. The Chinese government on Monday told its civil servants to stick to “a frugal working style” and banned them from using government funds to purchase luxury goods, according to the state-run Xinhua news agency. China continues to try to so-called “three publics” spending — the use of public money to fund cars, banquets and foreign travel. This latest edict from the central government comes just a week after it said it would stop serving shark’s fin, a controversial and expensive ingredient, at state banquets. The new rules also follow an announcement by the coastal city of Wenzhou earlier this week that it would bar officials from throwing lavish dinners, limiting its employees to meals that cost no more than 60 yuan ($9.40) per person. Wenzhou also culled its car fleet, selling 215 official vehicles last month. The new rules are set to take effect on Oct. 1. Those who don’t follow them could be fired, Xinhua reported. This latest rule change has caused a stir among the Chinese public: On Tuesday, news of the luxe ban was among the most-searched stories on Baidu, China’s most popular search engine. “If ‘three publics’ spending can be successfully controlled, it could be a turning point in the building of clean government in China and an inspiration to the entirety of Chinese society,” wrote Hu Xijin, editor of the Global Times, a nationalist-leaning tabloid published by the Communist Party on Weibo, China’s Twitter-like microblogging service. But others were skeptical. “A bunch of monkeys find themselves shut in a room with a bunch of bananas. One day the monkey king tells the other monkeys, each monkey gets to eat one banana, no more. Do you think that group of monkeys is actually going to listen, Editor Hu?” one Weibo user wrote. Chinese citizens were incensed after seeing officials clutching expensive handbags and wearing gold-plated watches at the country’s annual legislative meetings in March. That month, Chinese Premier Wen Jiabao said the government would ban the use of public funds to buy expensive cigarettes and “high-end” alcohol, adding that corruption could threaten the future of the ruling party. The ban could hurt sales for some labels. “A lot of goods sold in luxury stores are meant for gifting from officials to other officials or to business,” said Corbett Wall, a retail consultant. “Whenever there’s a big government meeting, those stores in Beijing get busy.”

Chinese Firm Pursues Hawker - Exclusive Talks to Sell Most Assets to Superior Aviation for $1.79 Billion Are Likely to Stir U.S. Concerns. A Chinese bidder is in advanced talks to buy the bulk of aerospace company Hawker Beechcraft Inc.'s businesses for $1.79 billion, an approach that could raise political concerns given U.S. sensitivities about previous Chinese attempts to buy American assets. Superior Aviation Beijing Co. will have an exclusive right for 45 days to negotiate to buy Hawker's corporate jet and propeller plane operations, the U.S. company said. If a deal is reached, Superior would serve as the opening bidder in a bankruptcy auction in which other suitors could try to top its offer.

More Chinese firms opt for M&As - An assembly line at Sany Heavy Industry Co Ltd in Lingang industrial park in Shanghai. Earlier this year, Sany invested 324 million euros ($426 million) for a 90-percent stake in Putzmeister, Germany's largest concrete pump maker. While the past decade was the period that saw a huge inflow of foreign investment into China, the coming 10 years are certain to herald a wave of outbound direct investment by Chinese companies. Although some people have expressed doubts over the intentions behind Chinese companies' overseas investment, a number of examples show that these projects create win-win benefits. Huang Bao'an, administrative vice-president of Qingdao Kingking Group, the world's second-largest candle maker, has been traveling around the world since early this year, from Africa to Europe, to see whether there are business opportunities amid the spreading European debt crisis. "We plan to invest $100 million to develop gold and copper mines across the world in the next three years", with Africa being a priority, he told China Daily. Due to the debt woes, "many European companies, which own energy projects in Africa, are finding it hard to survive and are considering halting or withdrawing their investments. This has given Chinese enterprises huge opportunities to invest abroad and develop natural resources", he said. As part of the expansion, Kingking, based in the coastal city of Qingdao in Shandong province, is considering buying a gold mine in Mozambique, covering more than 100 square kilometers. While the European debt crisis worsens and the global economy remains sluggish, developed economies are committed to economic stimulus, while developing economies are boosting their spending on infrastructure construction. "This offers Chinese companies new opportunities for overseas investment," said Wang Shengwen, deputy director-general of the Department of Outward Investment and Economic Cooperation at the Ministry of Commerce. Chen Runyun, commercial counselor at the department, agreed. "China's ODI is still in the initial stages, but the growth trend is clear. ODI is on a fast-growth track which will probably continue for some decades," Chen said. Due to the global financial crisis, foreign direct investment worldwide has been weak since 2008, but China's outbound investment has grown. In 2010, China overtook Japan and the United Kingdom to become the fifth-largest global investor. China was the largest investor among developing economies in 2010 and 2011. The nation's ODI grew 1.8 percent year-on-year to $60 billion last year. And the trend is set to get even stronger. A recent statement from the ministry said that ODI is expected to register an annual growth rate of 17 percent from 2011 to 2015, reaching $150 billion in 2015. Kingking's expansion plan comes after a series of purchases in the United States since the outbreak of the global financial crisis. In January 2009, the company bought 9 sq km of oilfields from the US State of Oklahoma, the first time a Chinese company bought oilfields in the United States. Later, the company purchased six oilfields covering 290 sq km in the US states of Texas and Louisiana. "Our success in the US could be attributed to the global financial crisis, which caused problems for energy companies and also forced the US government to loosen investment restrictions on M&A deals," Huang said. During the past few years, the Chinese government has stepped up its efforts to encourage Chinese companies to expand overseas. In 2011, in his annual Government Work Report, Premier Wen Jiabao, for the first time, prioritized boosting the nation's ODI over absorbing FDI. In his 2012 Government Work Report, Wen also emphasized the point, saying that China will encourage enterprises to buy, invest and merge in key sectors overseas, including energy, raw materials, agriculture and manufacturing, the first time that specific sectors were included in such a report. Considering many factors, including the Chinese government's positive attitude and the large volume of foreign exchange reserves, "the high growth trend (of Chinese ODI) is irreversible", said Jessie Tang, a partner at Jones Day's Beijing office. Jones Day is the world's eighth-largest law firm in terms of revenue that specializes in mergers and acquisitions. "There are many driving forces behind the surge," she said. "Chinese enterprises either want commodities, markets, technology or brands, or simply expand their business overseas and create jobs to fend off growing trade protectionism." M&As represent a growing trend in Chinese ODI, which had previously been dominated by investment in greenfield sites, including new factories or new infrastructure. Last year, 37 percent of Chinese ODI by value was realized through M&As, in the mining, manufacturing, transportation and retail sectors. "The energy and mining sectors will be the major focus of M&A activity," said Li Tong, executive director of the China Enterprise Forum.

Workers produce vaccines in a plant of the Institute of Medical Biology at the Chinese Academy of Medical Sciences. The institute is building a factory in the Chenggong New Zone, in Kunming's high-tech industrial zone. Companies in Kunming industrial development zone earn income of $17b in 2011 - What would come into your mind if someone asked you about Yunnan province in southwestern China? Perhaps beautiful natural landscapes, wild animals and various ethnic groups, but it's less likely that you would think of the high-tech industry. However, the companies gathered in the Kunming National High-tech Industries Development Zone, which occupies an area of five square kilometers in the provincial capital, had an annual income of $17 billion last year. Thanks to the support of the local government, companies in the zone are making a number of achievements that are putting Kunming and Yunnan on the high-tech map. Improving healthcare - An undiagnosed illness that was found when he was a baby almost wiped out 15-year-old Cheng Jianfeng's family's savings. When he was young, Cheng would often suffer from fevers, and fell into comas on several occasions. As a result, his family in northeastern Yunnan province, with an annual income of no more than 3,000 yuan ($472), was plunged into debt. However, the biggest problem his family faced was a lack of access to good doctors and decent healthcare. It takes more than a day to travel from Cheng's home to Kunming, the provincial capital. And despite having received medical treatment twice at a hospital in Kunming, his condition failed to improve. Events took a turn for the better in 2006, when doctors from Peking University First Hospital gave him a consultation. However, rather than traveling the long distance from Beijing to rural Yunnan, which would have taken a great deal of time and money, the doctors conducted their consultation using telemedicine technology. Telemedicine - the use of telecommunication and information technology in order to provide clinical healthcare at a distance - is still an unfamiliar word to most Chinese people. But in Yunnan, Cheng is among the 626,000 telemedicine cases that Sunpa has handled in the past 14 years. Thanks to telemedicine, Cheng was finally diagnosed with sequel encephalitis and returned to school after a couple of weeks of treatment. Sunpa, in the Kunming National High-tech Industries Development Zone, is China's the largest developer and manufacturer of telemedicine systems and digital medical devices. The company, established in 1998, has set up one of the largest telemedicine networks in the world centered on Beijing, Shanghai, Guangzhou and Kunming, and affecting more than 1,000 hospitals at different levels throughout China. It has gathered more than 6,500 well-known medical experts and 70,000 outstanding doctors, aiming to provide quality medical services for 500 million people. "It will make a significant change to the medical services in a very large geographical area in China," said Liu Yong, chairman of the company. "Especially in those remote areas, where transport and medical support are so scarce, telemedicine will provide patients with chances to get healthier while reducing costs." It is estimated that in Yunnan alone, Sunpa has helped to save the government and patients more than $460 million over the past 14 years. It also has successfully carried out several telemedicine projects in South Africa and India. "Our medical service platform will also benefit doctors, bringing convenience to medical education. Even physicians in county level hospitals can observe complicated surgery done by well-known doctors in other countries," Liu said. He said the medical education services provided by Sunpa have saved the government and medical institutions $178 million. Moreover, the company will further develop its portable wireless medical devices, providing various tests, and can immediately update information on its Internet database. Sunpa is now working to develop a cloud-based medical service platform. "We will build an all-in-one solution for health information systems," he said.

Hong Kong*:  July 11 2012 Share

New People's Party chairwoman Regina Ip Lau Suk-yee has called on the chief executive to stop his district visits, saying they often lead to chaos and protests. Ip made the call as Tam Yiu- chung, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, denied mobilizing elderly supporters to attend a Wong Tai Sin forum on Sunday. Ip said Leung Chun-ying could get the views of the public by other means without risking a public relations disaster. Civic Party lawmaker Ronny Tong Ka-wah described the visits as a "political show," adding Leung should instead give top priority to improving ties with the legislature. Leung yesterday visited Tai Po where he heard of hardships faced by the elderly. Residents called on the government to launch initiatives to improve the livelihood of the underprivileged. Also on Sunday, Leung was mobbed by hundreds of protesters - mainly from People Power and the League of Social Democrats - after attending a forum in Wong Tai Sin. Just over a week ago he was forced to abandon a meeting in Tuen Mun after activists stormed a meet-and- greet session. 

Hong Kong men and women are still on the lookout for Western lovers and spouses, even 15 years after the handover, a shock survey shows. The street poll was conducted by the Democratic Alliance for the Betterment and Progress of Hong Kong - but the controversial findings have drawn flak from some experts who say such "romantics" may just be after money. The survey was in response to the hit TVB reality show Bride Wannabes which showcased dating strategies that baffled relationship experts and caused controversy in women's rights groups. But Professor Wong Chak of the Chinese University of Hong Kong warned the poll's figures may be misleading, saying local Chinese are only enamored by expats from the richer Western countries. Wong, who is also a commentator on current affairs, said people willing to be interviewed on the street tend to be more liberal, so the poll sample may have been biased. Of the 240 single Hongkongers interviewed - 115 men and 125 women - 57 percent said they would choose expatriates as lifelong partners. Only 45 percent said they would accept mainland Chinese. Among the males, 68 (59 percent) said they would prefer an expatriate woman as a girlfriend or spouse. The figure for female respondents was 70 (56 percent). Elizabeth Quat, who organized the survey, said many local Chinese admire foreign culture 15 years after the handover - and celebrity pairings may have influenced the public to follow suit. "Hongkongers are more receptive to foreign culture, our thoughts more liberal," Quat said. "This is well exemplified by the fact that, increasingly, local female artists prefer marrying foreigners over locals." But CUHK's Wong disagreed, saying: "This is not an act of admiring the West. Hongkongers do not admire South America, Africa or Eastern Europe. We only admire the richer Western countries." Wong said that in countries such as the United States, Canada and Britain, people are generally wealthier and better educated with a higher cultural standard. These are the common demands Hong Kong women have for their ideal spouse, so men from these countries better fit their criteria. The survey ranked dignity, financial capability, personality, understanding and property as the five most important characteristics that Hong Kong women seek in a spouse. Chinese women marrying foreign men has become a fashionable trend in Shanghai. Over the past seven years at least 2,000 pairings have been made, with women 10 times more likely than men to marry expatriates. According to local media reports, the wealth of foreign countries is the main reason, followed by access to social status and the desire to satisfy vanity. Several local celebrities have chosen foreigners instead of Chinese men. Actress Maggie Cheung Man-yuk was married to French director Olivier Assayas for three years and began a relationship with German architect Ole Sheeren in 2007. They separated recently. Cantopop singer and actress Gigi Leung Wing-kei married her Spanish boyfriend last October, and singer- actress Coco Lee married Canadian Bruce Philip Rockowitz, chief executive of Li & Fung.

Legislative Council president Tsang Yok-sing admitted yesterday that he failed to improve the public image of the legislature during his term. But he was quick to defend his colleagues, saying that inadequate public understanding of Legco's watchdog role only magnified the negative impressions of legislators. According to a University of Hong Kong survey, Hongkongers' dissatisfaction rate towards Legco was 49 per cent at the end of last year, compared to only 29 per cent less than four years ago. The hurling of bananas and eggs, together with abusive language, also left a deep impression on the public. Tsang's four-year tenure as Legco president expires next Tuesday, when Legco's term ends. Speaking at a business lunch yesterday, Tsang conceded that "my wish in 2008 was to improve the image of the legislature among the people. Now, apparently, this has completely failed". Tsang felt that the main reason was because the public did not fully understand Legco, which only magnified their negative ideas about lawmakers. He cited the 2008 case when lawmaker Wong Yuk-man threw a banana during a question and answer session with Chief Executive Donald Tsang Yam-kuen as an example. Although it only happened once, replays in the media led people to think similar incidents happened frequently, Tsang Yok-sing said. "I received more than 10 letters from the chief secretary … complaining about lawmakers' behaviour, and asking for a change to our rules of procedures to stop [such misconduct] from happening again, but that is impossible," Tsang said, because he believed the power to punish lawmakers was vested with the electorate, not the Legco president. However, Tsang revealed that he once suggested banning lawmakers from meetings they planned to disrupt, but legislators rejected this idea. Aside from flying objects and heated debates in the Legco chamber, Tsang insisted that "overall, lawmakers are lovable … and most of them are hardworking". He said more than 50 committees and panels helped pass nearly 100 bills during the past four years, including the controversial minimum wage and competition laws. Tsang also believed that Legco's watchdog role was bound to create negative impressions, but changing this was part of the government's problem - how to get the support of the Legco and the public on controversial policies. "This is a question to be explored," he said.

'Factual guy' ready to serve - The relatively unknown Franklin Lam is now an executive councillor. Executive councillor may know policy numbers but is a blank slate when it comes to democracy demands - Property market analyst turned executive councillor Franklin Lam Fan-keung describes himself as a "factual guy". He believes his proposals to boost the supply of housing, malls and hospitals to solve social and economic problems are justified by statistics. But when it comes to political issues like universal suffrage, the new government adviser says he has "no views" and has "not even opened the first chapter" on the topic. Lam, 51, was managing director at UBS Global Asset Management until last year and was often interviewed by business reporters. But as he admitted to the South China Morning Post (SEHK: 0583, announcements, news) yesterday, he is an unknown to most of the public. "I'm not a politician. I'm not a C.Y. Leung supporter. The corporate I represent is a HK$2 company that's an NGO," Lam said, referring to the policy research organisation HKGolden50 that he set up last year. Lam said he was not a close friend of Chief Executive Leung Chun-ying and assumed it was his ability as an analyst - and his think-tank's proposals - that caught Leung's eye. He has proposed developing Tung Chung as a global hub for services, including a mega mall, eight hotels, a medical centre and office hub to deal with the demand generated by the influx of mainland tourists. "People should not think mainlanders are 'locusts' devouring our way of life. We should tap into the opportunity to create more jobs for the post-80s generation and new immigrants," he said. But on other questions that Hongkongers care about, such as universal suffrage and political reform, Lam struggled to give an answer. "We have great freedom of expression and freedoms can be measured in many ways," he said. "But is there an optimal political system that Hong Kong should benchmark itself against to achieve a better outcome for everyone? This is a scientific study and I haven't even opened the first chapter." Lam was more willing to talk about the 1989 Tiananmen Square military crackdown, describing June 4 as a "sad day" that had become "a second Ching Ming festival" in Hong Kong. "History will stand on the side of Hong Kong and students." As for recent property scandals involving new officials, Lam disagreed there was an integrity issue but said he found the political system "penalising". Lam, who is reported to own 20 residential properties, dismissed concerns that he could have a conflict of interest when discussing housing policy in Exco, saying he would sell only "a few" properties soon - to get money for medical care for his elderly parents - but would otherwise stay out of the market. "Whether you own property or not, you can be construed as having vested interests," he said. "If you don't have one, people can still say you talk the prices down so you can enter the market." It was not fair to criticise Leung for the illegal-structure issue, he said. "I'd say anybody throwing stones should examine what type of house they are living in. I hope it's not a glass house."

Hong Kong insurers are the latest to oppose a proposed US tax law, and are seeking waivers to protect nine million local policies that could be affected by it. The US Foreign Account Tax Compliance Act (FATCA), which will take effect from January, aims to prevent wealthy Americans from avoiding tax by requiring companies and banks to provide more detail on their US clients. Non-US financial institutions which fail to co-operate will face a 30 per cent withholding tax on most US-sourced income. "The proposed FATCA will seriously add to the costs of Hong Kong insurers and pension providers and would affect their investment choices. That's why the Hong Kong insurance industry is opposing FATCA," said Lennard Yong, chairman of the Hong Kong Federation of Insurers' FACTA task force and chief executive of ING Hong Kong. Yong said the industry had written to US tax authorities demanding an exemption from the US tax law for all Hong Kong-based life insurers. Local general insurers are not affected by the FATCA. "Hong Kong life insurers aren't trying to sell life insurance policies in the US, and insurance policies are not commonly used for tax evasion," Yong told the South China Morning Post (SEHK: 0583, announcements, news) . "In addition, Hong Kong has laws and regulations to prevent money laundering which should prevent tax evasion," he added. He said most of the nine million local policies were denominated in US dollars because of the Hong Kong dollar's peg to the US dollar. Many insurers invested in US stocks and bonds seeking higher returns, and would come under the FATCA legislation due to this US exposure. "Under the law, even if you invest in companies like Coca-Cola or Microsoft, they have to report under the new law or we face withholding tax. This will add to costs and will affect the return on the policies," he said. Earlier, the HKIFA and a law firm said 2.5 million local employees covered by the Mandatory Provident Fund (MPF) with US investments would be affected by the new law. Mark Oh, BlackRock's Asia-Pacific director and head of tax, said the law would hurt international pension funds and insurers, and the world's largest asset management group has written to the US government lobbying for changes to the proposed rules. Under the planned law, even if one client out of 1,000 was a US citizen, investment funds would be obliged to report. And even if a fund was set up outside the US and did not serve any US clients, it might still need to submit a report saying so to be able to invest in US stocks or bonds. This means - even with just a handful of US clients or a small investment in the US - many funds could face onerous reporting duties. Yong said if US tax authorities refused to exempt Hong Kong insurers, it would hope for an exemption for policies with a cash value of more than US$50,000. He said the HKFI had worked with the government to lobby the US authorities about the local insurance industry's concerns.

Community upset - Chief executive's plan for town-hall meetings is frustrating both supporters and detractors alike, with both groups claiming their expectations are not being met - Arrangements for the town hall meetings may have improved, but the community visits initiated by the new chief executive Leung Chun-ying seem destined to upset his supporters and detractors alike. Both Peter Cheng and Joe Chan said yesterday they wanted a seat in the Tung Tau Community Hall in Wong Tai Sin where Leung was to hold a public consultation session with local residents. While the former, a university graduate, planned to demonstrate his anger towards the government's failure in providing affordable flats, the latter hoped to meet the city's new leader and show his support. Only Cheng managed to get in. There were many, like Chan, who failed to get into the meeting yesterday and showed their frustration. "I just want to show my support. I was here at 10am but I still can't get in," said a man outside the hall who declined to be named. The government said tickets were delivered at 12.15pm. But some of the elderly, who admitted to being "encouraged" by pro-government parties to queue for a ticket, said they arrived at 7am. Leung eventually arrived at 1pm with a police escort, amid crowds of protesters asking him to step down. The district councils modified the way the six town hall meetings were organised yesterday, after one held last week in Tuen Mun turned into a fiasco. But the limited number of seats, about 200, was just too few for too many. The different expectations of those attending the meetings and those who protested outside also highlighted the need for the new government to address political and social issues. Following criticism of the first round of public meetings last week, in which council chairmen were moderators and picked questions according to their preferences, the Home Affairs Department and the district councils assigned a ticket to each attendant yesterday. The tickets were used for a lottery by which the council chairmen granted the right to ask questions. The new arrangements have allowed opposing views to seep into the sessions. But exchanges between Leung's team and the attendees were interrupted from time to time. "I'm still unhappy with the arrangement. The Trade Unions have made use of old people, asking them to occupy the seats of the meeting in early morning. Many still couldn't get in," said a man who only gave his name as Lau. He held a banner saying "Wolf-like Leung doesn't represent us" during the Wong Tai Sin meeting and commented on Leung's answers loudly from his seat from time to time. About a third of the attendees at the meeting were elderly, some of whom left quietly within 30 minutes. But Chan Yuen-han, a Wong Tai Sin district councillor and honorary president of the Hong Kong Federation of Trade Unions, said she did not know if her organisation had "arranged" for the elderly to attend the meeting. Outside the hall, protestors called loudly for democracy and questioned Leung's commitment to the city's core values, unlike the meetings which focused more on livelihood issues. In an attempt to relieve the tension, Leung told attendees yesterday that he would express a clearer stance on the latest controversy surrounding the police detention of a reporter who asked Hu Jintao a question about the June 4 crackdown when the president visited Hong Kong two weeks ago. "I attach great importance to press freedom, including the freedom to cover news," Leung said. His transport and housing minister, Professor Anthony Cheung Bing-leung, also emphasised that he treasured the city's core values at the same meeting. But those who tried to put questions to Leung seemed concerned with more pragmatic issues: affordable housing, hospitals with emergency units, more elderly-friendly infrastructure, more facilities for revitalised industrial buildings, even paternity leave for fathers-to-be. Leung was also tested by a member of the Hong Kong Association for Democracy and People's Livelihood, who showed him a pile of cardboard and old newspapers. "Mr Leung, do you know how much people can make by selling them?" Leung received the pile and named a few proposals in his election platform that he thought would improve the life of the elderly. In concluding remarks, Leung urged residents to be more tolerant if public housing flats were built near their homes: "You may want an open space instead of public flats. But it will take a little sacrifice to accommodate all requests from 7 million people." He was sent off by about 100 protestors from the League of Social Democrats and People Power, who tried to push through the police cordon. It took Leung more than 10 minutes to leave the estate where the community hall is located. Chief Secretary Carrie Lam Cheng Yuet-ngor and health minister Dr Ko Wing-man convened a meeting in Ap Lei Chau. As one of the Leung cabinet's most popular officials, Lam - dressed in a casual green shirt and white sports shoes - impressed the audience by saying that popularity and "face" form no part of her self-evaluation. Amid a public outcry over integrity issues now confronting key officials, including her boss, Lam assured the crowd by saying, "I won't do anything that goes against my conscience." After taking an array of questions, including one suggesting she "stage a coup" to replace Leung, and another about the insufficient number of places to put urns, Lam restated her loyalty to the chief executive.

Joseph and Zoe von Hess perform in Central. A place less bustling to do some busking - As city warms to buskers, performers are shunning pavements of Mong Kok and Causeway Bay for quieter corners where people can hear their music - It was about 8pm on a recent balmy evening and lone guitarist Tomii Chan Wai-yan was plucking his strings for the few passers-by who paused on their nightly stroll to listen to his performance. But most threw him no more than a glance or two before moving on. This apparent lack of an audience, however, did not seem to bother the 19-year-old digital music and media student who had intentionally left the bustling Sai Yeung Choi Street in Mong Kok for this quiet spot on the Kwun Tong Promenade. He is not alone. Joseph and Zoe von Hess of Head Clowns have also abandoned the heavy human traffic of Causeway Bay for smaller crowds in more remote corners in Central and Tsim Sha Tsui. "Some people say [Mong Kok] is a real Mecca for busking. I don't think it is really," said the Welsh musician, who started busking with his wife on Sai Yeung Choi Street three months ago. "It's just a place where all the buskers squash together and you have to compete for space." The competition arises not just from other street performers, but also mobile phone contract salespeople and hawkers active on the street at night. It was also hard for the duo - who play light, funky folk music with a clarinet and a ukulele - to make themselves heard over amplified music from shops and LED billboards. "We're an acoustic setup here; we're not that loud," he said. "So it's really not that good for us." They now play once or twice a week on Queen's Road Central and near the ferry pier in Tsim Sha Tsui, appreciating the more relaxed atmosphere and fewer run-ins with the police. Busking is legal in Hong Kong. A court ruling in 2010 stated that street performers and artists, including buskers, are protected under Article 34 of the Basic Law, which guarantees the freedom to engage in literary and artistic creation. Andrew So Chun-chau, known as "Mr Funny", was acquitted of obstructing a public place after he attracted 50 to 80 onlookers while juggling on Great George Street in Causeway Bay. His success has led to a rise in number of street performers congregating in Mong Kok and Causeway Bay. Police say street performers must not break laws against obscenity, indecency or creating a nuisance. If they do, the police may issue verbal warnings, terminate the performance or charge the performers. But Joseph von Hess said some officers were more zealous than others. "They invoke any and every reason for moving us on, including telling us that busking is illegal, which is of course not true. The final straw came when a policeman told us there had been a noise complaint before we had even started playing!" Chan, who began busking two years ago, was lured to the Kwun Tong Promenade not only because of its open space, but the buzz the district has as a hub for independent musicians. Kwun Tong's old industrial harbour area is developing into a recreational district under the Kai Tak Outline Zoning Plan. Musical studios and practice rooms have moved there because of the lower rent and the freedom to make noise. The operators of Hidden Agenda, a live performance venue in Kwun Tong, estimate that factory buildings in the district provide practice space for 80 per cent of Hong Kong's independent musicians. "It's kind of like a gathering point for music workers in Hong Kong," Chan said, "They're moving their lives to Kwun Tong. They're moving their performances to Kwun Tong." Chan busks at Kwun Tong's promenade also because he can borrow hard-to-transport gear from friends who work in the music industry and live nearby. The MTR station is also close. Lai Yin-chi, assistant artistic director of FM Theatre Power, a veteran in street performances, said busking culture had a chance to grow in Hong Kong as public attitudes change to one of tolerance. Nathan Tse, a Kwun Tong resident who occasionally sees buskers at the promenade, said: "I don't really have an opinion about busking. As long as it doesn't affect too many people, I don't care." Others such as Irene Leung, 19, a counselling and psychology major at the University of Hong Kong, admires buskers for their bravery and hopes that with time, busking will spread to other areas of Hong Kong.

American contemporary artist Jeff Koons plans his first Chinese solo exhibition in Hong Kong next year. The famed artist spoke about his plan in Basel, Switzerland, where he is having his first Swiss museum exhibition at the Beyeler Foundation, a private museum founded by late art dealer Ernst Beyeler. "I'd like to plan for an exhibition next spring at the Gagosian Gallery in Hong Kong. Areas where I'd love to be doing things are Korea and also China," Koons said. While he did not elaborate on the Hong Kong show, the 57-year-old artist known for a range of works including the monumental stainless steel sculpture Balloon Dog said the plans had developed after his recent experiences in China. In March, Koons gave a lecture on his career to 1,000 people at the Art Museum of the Central Academy of Fine Arts in Beijing as part of the ART in Embassies Cultural Exchange programme with the US embassy. The experience was enjoyable, said Koons, attired as usual in a perfectly tailored suit, making him look more like a Wall Street banker than an artist. But it was the experience in Xian that Koons found mesmerising. The artist visited the Xian Beilin Museum, which houses the largest collection of steel and stone sculptures dating back to the Han dynasty (206BC-220AD). "I had one of the greatest artistic experiences in Xian. They have an incredible collection of Buddhas," Koons said. "They have these Buddhas that are supposedly in the purest state. The first-level Buddha was more minimal and it was the most beautiful experience of understanding minimalism. And the highest- level Buddha … was like an Aphrodite sculpture." Koons has achieved fame and commercial success. Born in York, Pennsylvania, in 1955, the award-winning artist developed a love for art as a child. "It always gave me a sense of self when I was young, made me feel that I could do something that maybe my sister couldn't do," Koons said. He went on to study at the Maryland Institute College of Art in Baltimore and Chicago's School of Art Institute. "When I went to art school, I realised that art connects all the different disciplines: philosophy, sociology, physics, aesthetics … just the whole world." He rose to stardom with his 1988 porcelain sculpture Michael Jackson and Bubbles, from the Banality series. Koons' works have been widely exhibited at galleries and museums. Puppy (1992), his monumental floral sculpture, was displayed at the Rockefeller Centre and was installed on the terrace of the Guggenheim Museum Bilbao. Split-Rocker (2000), also a floral sculpture, has been exhibited at the Palace of Versailles, where he was the first living artist to have an exhibition at the extravagant old home of the ill-fated Marie-Antoinette. Critics have divided opinions about Koons' works. Those who admire him say that he is a pioneer in the contemporary art world, but others call him a king of kitsch. Despite the debate, his works claimed astronomical prices at art auctions. In 2007, his stainless steel sculpture Hanging Heart from the Celebration series fetched US$23.6 million at a Sotheby's auction in New York, setting a new record for a living artist. However, his Smooth Egg with Bow sculpture (estimated at HK$55 million to HK$75 million) failed to sell at least year's Seoul Auction autumn sale in Hong Kong. Gagosian Gallery has 11 locations around the world and it represents Koons. Its Hong Kong branch said the gallery was exploring the possibility of staging a Koons exhibition, but no date had been confirmed.

The government on Monday reordered its agenda in the Legislative Council by giving priority to livelihood-related proposals over its restructuring plan amid pressure from radical legislators who have launched a filibuster. Chief Secretary Carrie Lam Cheng Yuet-ngor announced that the government restructuring plan was now made the last item in a queue of proposals and resolutions awaiting discussion before the legislature’s term ends on July 18. This means chances are slim for the revamp plan to be formally endorsed by legislators during this term. The restructuring plan proposed giving the chief secretary and financial secretaries deputies and increasing the number of bureaus from 12 to 14. But the plan was opposed by pan-democratic lawmakers who argued that it would cause confusion and an unclear line of command. Three radical pro-democracy lawmakers last week tabled hundreds of amendments to the Companies Bill in an attempt to block the passage of the restructuring plan. Their move could cause the livelihood proposals which followed the bill on the agenda to lapse. Lam said the aim of reordering the administration’s agenda was to ensure the proposals relating to people’s livelihood would not be affected by the filibuster campaign. She said the delaying tactics had “seriously curtailed” legislative proceedings lately. The livelihood proposals awaiting lawmakers’ attention included an expansion project for Kwong Wah Hospital, a plan to raise workers’ compensation, a HK$2 standard transport fare for disabled people and proposed reductions in some import and export fees. “Our aim is to ensure proposals relating to livelihood issues that are of much concern to the public will be passed before the legislature’s term ends,” she said. “This is in accordance with the chief executive’s objectives of focusing on people’s livelihood.” Lam maintained this move was not a concession to the radical lawmakers’ actions, saying the government was not withdrawing the revamp plan. “We are not backing down,” she said. “It is a reorder of our agenda and we are not withdrawing the proposal. Our revamp plan has the support of lawmakers and the community, as shown by the fact that it has passed three of five hurdles in Legco already.” Lam admitted the revamp plan now looked set to fail in this term. If this happened, she said the government would reintroduce the proposal in October. Parties from across the political spectrum welcomed Monday’s decision. Starry Lee Wai-king, vice chairwoman of the Democratic Alliance for the Betterment and Progress of Hong Kong, said the government made a “responsible” and “reasonable” move to handle matters concerning people’s livelihood first. Democratic Party chairman Albert Ho Chun-yan praised it as the “wisest” decision made by Leung Chun-ying’s administration. Labour Party legislator Cyd Ho Sau-lan said bulldozing the restructuring plan would only come at the expense of losing public support. People Power’s Wong Yuk-man, one of the three pan-democrats who launched the filibuster, said it was good to see the government abandon its attempt to get its restructuring plan tabled before other outstanding bills. He said they would continue to use delaying tactics to block the plan within this term, and their ultimate aim was to force the government to shelve the proposal altogether.

 China*:  July 11 2012 Share

Hawkish commander heads South Sea Fleet - Appointment of former political commissar of North Sea Fleet seen as strengthening sovereignty - Wang Dengping: ''we should not let our territory be diminished.'' A famously hawkish senior navy commander has been appointed as the political commissar of the South Sea Fleet of the Chinese Navy. Vice-Admiral Wang Dengping, previously the political commissar of the North Sea Fleet, will now oversee the fleet that patrols the disputed South China Sea waters. His appointment follows Beijing's moves to step up its sovereignty claims in the region which is rich with oil and gas. Beijing recently announced the establishment of Sansha city to administer three island chains, while China National Offshore Oil Corporation (CNOOC (SEHK: 0883)) offered tenders to foreign partners for nine oil blocks in the South China Sea. "Wang will help strengthen measures to stop other [countries] from claiming territorial rights over the disputed waters," said Shanghai-based military analyst Ni Lexiong. Antony Wong Dong, president of the Macau-based International Military Association agrees. "The appointment is in line with Beijing's strategy to strengthen sovereignty claims," he said. In an interview with China National Radio in March, Wang said the PLA had the capability and the will to defend the nation's sovereignty. "We, as navy officers, should not let our territory be diminished on our watch, and we should not let our lands be lost. We would be guilty to our countrymen if that happened," Wang said. In another interview with China News Service, Wang said he was frustrated with the theory that China posed a geopolitical threat to the world. He said the national defence policy would not be changed even though China now had its first aircraft carrier. "There is nothing special happening, but some mediocre people are making troubles," he said. Wang, 59, joined the PLA when he was 18. He has held various positions in the army. In 2002, he took part in the PLA navy's first global diplomacy effort as a deputy commander. He visited 10 countries, including America and Russia, in 132 days. That same year, he was promoted to rear admiral. Last year, he was promoted to vice-admiral. In 2009, he succeeded Vice-Admiral Li Guang as the political commissar of the North Sea fleet.

The Chinese navy will soon launch a drill in waters near Zhoushan, East China's Zhejiang province, as part of its annual exercise plan, the Defense Ministry said on Monday. The ministry made the announcement on its website in response to reports saying that the navy will conduct a six-day, live ammunition drill starting on Tuesday in the East China Sea. The People's Liberation Army issued two announcements on July 2 prohibiting all vessels from entering its designated exercise area during the period, and urging them to follow naval ships' instructions to guarantee safety. According to the announcements, the exercise area is a bit bigger than before, but it is not in the disputed waters between China and its neighbors, and it is far away from the Huangyan and Diaoyu islands. This is not the first such drill in the East China Sea. In July 2010, the PLA launched a six-day, live-fire drill shortly before a joint drill between the United States and the Republic of Korea in the Yellow Sea, close to East China's Shandong province. The forthcoming drill is not a counteraction against the ongoing one between the Philippines and the US, said analysts. But it still drew attention due to the intensive drills conducted by the US and its Asian allies recently as well as Tokyo's plan of "nationalizing" part of the Diaoyu Islands. The live-fire drill is part of an annual exercise conducted in the East China Sea, regularly held around the same time and in the same area, Song Xiaojun, a military affairs commentator, told China National Radio. It's impossible for any navy to temporarily organize a drill to counteract the others since it usually needs at least six months to prepare for it, Meng Xiangqing, deputy director of the Strategic Research Institute at the National Defense University of the PLA, said. Considering ocean and weather conditions, Asia-Pacific countries, including China, often carry out naval drills between May and July, he said. "Most exercises are to improve campaign capability at first, but may also demonstrate strength and sovereignty." On Saturday, Japanese Prime Minister Yoshihiko Noda's statement that his government was negotiating with a "private owner" to "nationalize" part of the Diaoyu Islands triggered a strong reaction over sovereignty from China. On the same day, China's Foreign Ministry responded on its website that China's territory is not allowed to be bought or sold by anyone, and the country will continue to take necessary measures to resolutely safeguard the islands' sovereignty. Foreign Ministry spokesman Liu Weimin on Monday reiterated the stance at the daily news conference, saying that the ministry and the Chinese embassy in Japan on Saturday lodged solemn representations to Tokyo over its latest move. Indisputable historical and jurisprudential evidence shows that "the Diaoyu Islands and their affiliated islets have been inherent parts of Chinese territory since ancient times", he said.

Yurun shares plunge as chairman quits - Former China Yurun Food Group chairman Zhu Yicai. Shares of China Yurun Food Group (SEHK: 1068) Limited plunged more than 9 per cent on Monday after the meat processor's founder resigned as chairman, the latest mainland company to see a management reshuffle amid increasing economic uncertainty. China’s consumer-facing companies are grappling with an economic slowdown that has hit demand and resulted in a series of profit warnings and share price slides in recent months. Yurun, which competes with Henan Shuanghui Investment & Development Company , Tangrenshen Group and New Hope Liuhe, said over the weekend that founder Zhu Yicai had resigned because of personal commitments that required more of his attention. The news came just days after the company dismissed as untrue “recent rumours alleging certain accounting misstatements”. It did not specify the source of the allegations. “The resignation suggests that the chairman himself does not have full confidence in the company, and that further dampened investors’ confidence,” said Alex Wong, a director at Ample Finance Group. “For Yurun, there is nothing much the company can do for the time being to fuel investor interest when its prospects still look very unclear.” The stock, which has dropped 36 per cent so far this year, fell more than 9.6 per cent to HK$6.38, the lowest since October 2008 and lagging a 1.4 per cent drop in the benchmark Hang Seng Index. “The resignation has added uncertainty over the longer term direction of the company,” said Steven Leung, a director from UOB Kay Hian. China Yurun Food said Zhu would become honourary chairman and a senior adviser. Chief Executive Yu Zhangli has been appointed as chairman, and Vice-President Li Shibao will replace Yu as chief executive. The reshuffle comes just days after the country’s best-known sportswear group, Li Ning (SEHK: 2331), whose share price has halved in recent months, replaced its chief executive and said it would focus more on its business in China.

Cambodian Prime Minister Hun Sen, in his opening address on Monday, tells Asean to draw up a code of conduct with China for the South China Sea. China said on Monday it was willing to discuss a code of conduct with Southeast Asian nations over the disputed South China Sea, after Cambodia’s premier urged Asean nations to give top priority to easing tensions with Beijing. “When conditions are ripe, China would like to discuss with Asean countries the formulation of the COC [code of conduct],” foreign ministry spokesman Liu Weimin told journalists. “But I want to stress that the COC is not aimed at resolving disputes, but aimed at building mutual trust and deepening cooperation.” At a forum of the 10-member Association of Southeast Asian Nations (Asean) in Phnom Penh, Cambodia Prime Minister Hun Sen stressed the importance of regional stability. Tension over competing claims in the South China Sea promises to be the hot button issue of the meetings, particularly later in the week when US Secretary of State Hillary Clinton and her China counterpart are among regional participants for the security-focused Asean Regional Forum (ARF). In his opening address Hun Sen urged delegates to “give emphasis” to working towards a code of conduct in the sea, which will provide guidelines to resolving disputes over a web of conflicting territorial claims involving several member nations. He said Asean should show that it can be a “driving force for the promotion of dialogue and cooperation” on political and security issues. “Maintaining regional peace and security is indispensable for Asean prosperity (SEHK: 0803, announcements, news) ,” said the Cambodian leader, whose country holds the rotating chairmanship of the bloc. Tensions have risen recently in the sea, with both Vietnam and the Philippines accusing Beijing of aggressive behaviour. Manila is leading a push for Asean to unite to persuade China to accept a code of conduct but Beijing has preferred an approach that would deal with the claimants individually. Senior diplomats attending the meetings in Cambodia said Asean was still wrangling over how to approach the issue without offending China, the world’s second biggest economy and a major trade partner for many Southeast Asian states. One diplomat, who asked not to be named, said Asean has yet to reach consensus on whether to mention the recent standoff between Chinese and Philippine ships in the disputed Scarborough Shoal in a joint communique. Another statement, to be issued at the end of the wider ARF meeting, is expected to refer to the South China Sea issue in general terms, another diplomat said. China claims essentially all of the South China Sea, home to vital shipping lanes and believed to be rich in oil and gas deposits. Taiwan and Asean members the Philippines, Vietnam, Brunei and Malaysia also have claims in the waters. China recently angered Vietnam by inviting bids for exploration of oil blocks in contested waters, sparking protests in Hanoi. Clinton on Sunday urged “progress” on the code of conduct in the sea. The strategic rivalry between Washington and Beijing is expected to loom large over the summit, following the recent expansion of US military relations with the Philippines and Vietnam. But observers predict Clinton will be eager to downplay any friction with China and may be less outspoken on the maritime dispute than in the past. Asean comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – a grouping of nearly 600 million people from disparate economic and political systems. The bloc has often been dismissed as a talking shop but it has assumed new strategic importance in light of Washington’s foreign policy “pivot” to Asia and the economic rise of China in recent years.

China's Consumer Price Index grew 2.2% in June, down from May's 3.0 %, National Bureau of Statistics said Monday.

Dalian Wanda Group Corp Ltd's acquisition of AMC Entertainment Holdings Inc was approved by the National Development and Reform Commission in June. Dalian Wanda Group inked an agreement with AMC in May after a two-year negotiation process. The largest domestic theater chain operator paid $2.6 billion for the acquisition. Under the terms of the agreement, Wanda has to assume the debt of the US cinema chain and it also promised to invest up to $500 million in its operations. With the deal, Wanda becomes the owner of the second-largest theater chain in the world's largest film market, and is set to be the largest-scale theater chain operator globally. Wanda Cinema Line owns 86 cineplexes and 730 movie screens, of which 47 are IMAX screens, and it aims to expand to more than 200 cineplexes with 2,000 screens by 2015. According to the State Administration of Radio, Film and Television, Wanda Cinema Line grossed 1.785 billion yuan ($280.1 million) in box office receipts in 2011, ranking first among domestic rivals. Total ticket sales reached 13.12 billion yuan last year. After the acquisition, AMC will keep its management team and employees, and its equity structure will remain unchanged, according to AMC's chief executive officer Gerry Lopez.

Hong Kong*:  July 10 2012 Share

Former teacher helped with land issues pre-1997 - Melinda Ko's English-language skills smoothed activities of Sino-British office in run-up to handover - When she was asked to meet the chief Chinese representative to the Sino-British Land Commission, Sun Yanxing, in September 1985, Melinda Ko Shuen-hing had no idea what the organisation did. Ko, who was then working in the property-leasing and management division of China Resources (SEHK: 0291), could hardly have imagined that she would soon become one of the few Hongkongers to take part in negotiations between Beijing and London over leases of Hong Kong land in the run-up to the handover. The commission was needed because a provision in the Sino-British Joint Declaration signed a year earlier limited the lease of new land to 50 hectares a year until 1997. It was the job of the panel - set up in May 1985 - to monitor that limit and consider proposals from the British side for exceptions to it. Sun wanted Ko to be a liaison officer and spokeswoman for the Land Commission. She agreed, assuming the title of third secretary of the Ministry of Foreign Affairs. "Beijing wanted some Hong Kong people who were familiar with land supply and land laws of Hong Kong to work in the Land Commission," said Ko (pictured). "I am honoured to have had the opportunity to help tackle some practical issues for Hong Kong people during the transitional period." Her role on the commission earned her a Chinese diplomatic passport and diplomatic immunity in Hong Kong, something she enjoyed until the Land Commission was dissolved in June 1997. She was promoted to first secretary in 1993. Ko, who had not graduated from a traditional pro-Beijing school, was not an obvious choice to join a mainland institution in Hong Kong. After graduating from a government-run secondary school in 1970, she had taught secondary school. Then, in 1978, a China Resources employee asked her to join the state-owned enterprise and take part in investment research. "They wanted people who were proficient in English." Before long, Ko was transferred to the company's land-leasing and management division, where she was, among other things, responsible for the management of the China Resources Building in Wan Chai. Ko felt a little uneasy at first after joining the Land Commission because its Chinese representatives were based in the Hong Kong offices of the Xinhua news agency, which in those days had a function similar to that of the central government's liaison office in Hong Kong today. But Ko soon settled in, playing a crucial role in decisions that would shape the city's future long after the transition period. "At times, the British side wanted to grant land beyond the limit of 50 hectares per year as stated in the Sino-British Joint Declaration. The Chinese side considered their demands if they were reasonable." The amount of new land granted between 1985 and 1997 was 2,972 hectares, or an average of 250 hectares per year. Ko joined the Hong Kong Monetary Authority in November 1997 after the dissolution of the Land Commission. She retired from the authority last month.

The government plans to set up four high-level task forces to better co-ordinate policy proposals before they reach the Executive Council, says Chief Secretary Carrie Lam Cheng Yuet-ngor. Lam yesterday told TVB (SEHK: 0511) in an interview that they were needed because key issues had become more complicated and required more focused discussions among ministers. The four task forces would each have a specific focus and they would be separate from Lam's existing general policy committee. In the past five years, the committee has met weekly to resolve issues between departments before proposals are submitted to the Exco or released to the public. "Nowadays, it would be impossible for a single bureau to formulate its policies alone," Lam said. "It requires more discussions among ministers at the stage of policy formulation." The task forces will focus on four main policy areas: security and constitutional issues; land, housing and infrastructure; welfare, education and manpower; and sustainable development and the environment. Lam said Chief Executive Leung Chun-ying gave the green light last week during his first meeting with ministers to advance his campaign promises. She said the government could set up more task forces in the future if necessary. Environment Secretary Wong Kam-sing said he supported Lam's efforts to improve communication between the bureaus. "For instance, it requires more co-ordination between the Environment Bureau and the Transport [and Housing] Bureau to formulate policies on bus fuels and bus routes," Wong said. Lam also said she was surprised by the controversies over illegal structures at the homes of members of the new administration. However, she said she thought the government would be able to recover from its rocky start and begin implementing its policies. "The new team might be facing some difficulties at the moment," Lam said. "But we are all prepared to weather this tough time and hope that we can regain the public's confidence soon if we work hard for the public." The chief secretary said she did not expect the media to uncover information about individual officials, including things that happened more than two decades ago - a reference to the controversy surrounding Mak Chai-kwong, the development secretary, who has been accused of abusing the civil-service rental allowance in the 1980s by leasing a flat he owned to another civil servant. Meanwhile, Financial Secretary John Tsang Chun-wah said he expects public spending to increase in coming years, but warned policymakers must take care to make sure increases do not get out of control. "Money cannot solve all the problems," Tsang, who held the post under former chief executive Donald Tsang Yam-kuen, told Commercial Radio. "We should have incremental increases of an appropriate level and strike a balance." Leung has vowed to improve the livelihoods of residents by narrowing the gap between rich and poor and giving more subsidies to the elderly.

Social media, all but non-existent at the time of handover 15 years ago, has since evolved into a powerful loudspeaker for the city's internet users. It has allowed Hongkongers' long-held passions for everything from food to activism to flourish. Last Sunday's July 1 march, for instance, was partly galvanised by social media. It saw tens of thousands of Hongkongers voice their discontent with the government on the anniversary of the city's return to China. The strong turnout - especially among the youths - was partly the result of the organising capacity that social media affords an increasingly web-savvy community, regardless of age or social status. "People were very politically aware in 1997, but they didn't know how to share it," said Napoleon Biggs, a social media commentator who first came Hong Kong in 1993. "You've always had people who have been frustrated, angry, dissatisfied. "What Facebook, Twitter, and [Sina] Weibo do is rally people and get them to go on the streets," he said. "Imagine if we knew the conversations that were happening in 1997." Today, 87 per cent of local households have a broadband internet connection, up from 28.6 per cent in 2002, government statistics show. In 1999, only about 700,000 Hongkongers had internet access through dial-up accounts. The popularity of smartphones has been playing a crucial role in the growth of social media. In 2002, the city had about 75,000 mobile phone subscribers. Today, there are 15.3 million mobile phone accounts in a city with seven million residents - among the highest rates in the world. In 2003, more than 400 million text messages were sent. Last year, 7.4 billion texts were sent. "There was a tiny fraction of people who cared about what the internet was about [15 years ago]," Biggs said. "It just wasn't on people's radars." Only those who knew how to work the hardware and configure dial-up connections could access the web. "It was mainly travelling executives and systems engineers," Biggs said. Internet access has grown increasingly convenient, with the number of wi-fi hotspots doubling to more than 10,000 in the last five years. At the end of 2006, the number of local Facebook users was an estimated 25,000, Biggs said. By then, the fledgling America-based social-networking site had about 12 million users worldwide. "Hong Kong was lagging behind places like Australia and Singapore, but as soon as the Chinese interface arrived, the whole thing went through the roof," Biggs said. There are now 3.7 million Facebook accounts in Hong Kong, says Socialbakers, a social media research company. The groundswell of angry feet on the city's pavements last Sunday was also a sign of how the friendship networks so valued by Facebook has shifted to suit its users. "With the evolvement of social web, we are also seeing the rise of the power of friends," said Jayne Leung, Facebook's regional director for North Asia. "Instead of searching for information from the web, we are now seeing users look to their friends as a powerful source of information." Professional networking site LinkedIn has also seen a rapid increase in users in Hong Kong, with an estimated membership of half a million people. That prompted it to launch a local sales office in April. John Merakovsky, Experian Marketing Services' managing director for Asia-Pacific, said their data also showed Hongkongers were following mainland websites more closely than before. "This supports the development of a closer relationship between the people of Hong Kong and mainland China in the 15 years since the handover," Merakovsky said.

Rimsky Yuen will seek a legal solution on babies. Secretary for Justice Rimsky Yuen Kwok-keung said yesterday that resolving legal issues regarding babies born to mainland mothers in Hong Kong would be a top priority in his five-year term. But he said seeking an interpretation of Basic Law clauses covering those issues was not an appropriate solution. Speaking on a radio program, Yuen said his team had begun reviewing ways to alleviate the crisis over mainland mothers giving birth in the city without resorting to a controversial appeal to the central government. "Ultimately this is a legal issue. To solve the problem, it should be by legal means," Yuen said. "This is an important work priority for me. We are looking at different options and assessing them. I hope that the problem can be solved within the city's legal system." The controversy stems from a 2001 Court of Final Appeal ruling that all babies born to mainland mothers in Hong Kong have right of abode. Since then, an estimated 170,000 such babies have been born in the city, bringing fears such an influx will strain public services. Some believe the government should amend the Immigration Ordinance, while others think it would be better to ask the National People's Congress Standing Committee to interpret the Basic Law. Chief Executive Leung Chun-ying has taken a hard line on the issue, saying in April that his administration might refuse residency to mainland babies born in city hospitals. He has proposed not allowing private hospitals to take bookings for births by mainland mothers at all next year. Leung, however, has said he plans to stick to legal channels to address the issue, suggesting he would not seek Beijing's intervention.

Hong Kong Chinese Orchestra members play the huqin, the instrument it modernised, during a rehearsal in Sheung Wan. The Hong Kong Chinese Orchestra has become the first local art group to receive the Ministry of Culture's prestigious Innovation Award, after developing a modern version of the huqin, a stringed instrument. The orchestra's work on the bowed instrument was praised by the contest jury for successfully blending 1,000-year-old tradition with modern technology and introducing it to the world, Wang Feng, a ministry official, said on its website. The orchestra was named last week as one of the 20 winners of the national prize among 144 entries from top institutions. Each winner will receive 20,000 yuan (HK$24,500) at a ceremony in Anhui later this year. For Yan Huichang, the orchestra's artistic director who spearheaded its work on the huqin more than a decade ago, the prize vindicates years of hard work in the face of budget constraints and controversy. The project involved adjusting the inner structure of the huqin, which comes in various sizes like the violin family in the West. The biggest change was replacing the python skin that envelops the soundbox - which gives the huqin its unique sound - with a biodegradable synthetic membrane. "There has been opposition to the change. We were accused of breaching time-honoured tradition," said Yan. "But when we were barred by countries [from performing] on animal rights grounds, and when our python-skinned instruments became unplayable due to changes in climate, we realised we had to go ahead with the changes," he said. Yuen Shi-chun, 61, who played for the orchestra for 35 years and who is now its research and development officer for musical instruments, crafted the new huqin by hand. Yuen, who began dreaming up tweaks to the huqin almost 10 years ago, got the support he needed when the orchestra agreed to fund the work. Celina Chin, the orchestra's CEO, said it had to "make do by [generating] publicity and squeezing funds from the education budget". The project, which lasted four-and-a-half years, required HK$1 million annually. It was criticised by the government after a 2010 audit report found a lack of "milestone dates" in the program. Despite these hurdles, the modifications resulted in a more powerful sound and more homogeneity, factors which are especially noticeable in bass instruments. The new huqin, ministry official Wang said, would be promoted across the country. "The prize holds major significance and should cheer and inspire everyone and all sectors in Hong Kong," said Secretary for Home Affairs Tsang Tak-sing on his blog. Tsang nominated the so-called "Eco- huqin series" - the only Hong Kong entry - for the competition, held every three years since 2000. With a top prize under orchestra's belt and renewed interest in the project, the veteran Yuen said more work lay ahead. "The project is by no means complete. And it will need the government's support to take it further, such as expanding the one-man workshop and production line, and for the next phase covering plucked and woodwind instruments," he said.

 China*:  July 10 2012 Share

New breed of provincial leaders - The days of Soviet-educated engineers-turned-bureaucrats are over, with the new line-up holding more postgraduate degrees and less ideological baggage - The new line-up of provincial leaders brings a markedly different mindset to the problems facing the mainland compared to their predecessors', having come of age during the reform era and immersed themselves in liberal studies at university, according to information available and analysts. Historically, most of the mainland's leadership have been engineers-turned-bureaucrats, trained in an education system heavily influenced by the Soviet Union. By contrast, seven of Tianjin municipality's current 13-member standing committee have doctorates, spanning management, economy, law and culture. The Beijing municipality finally ended its party congress last Tuesday - the last provincial-level party organ to decide its representatives for the upcoming national congress. A clearer picture is now emerging of the politicians set to govern until the 2030s. They are coming to power relatively young and armed with master's degrees and doctorates. All 31 provincial party congresses except for Beijing's re-elected their current party chiefs. Among them, 17 hold postgraduate degrees, with 14 holding a master's degree and three holding a doctorate. Some are expected to be promoted to the central leadership at the party's upcoming national congress, while most of the 402 newly elected members of the provincial party standing committees will likely take over regional portfolios or be promoted to ministries. Some will be groomed to take on roles as regional leaders or senior figures in the party headquarters in the coming decades. Some analysts said the regional party congresses gave clues to the political manoeuvring behind the upcoming national congress, which will see a once-in-a-decade leadership transition. "The regional reshuffles have shed light on the political manoeuvring for the upcoming party congress and offered glimpses into the horse-trading among factions," said Joseph Cheng Yu-shek, a political science professor at City University. Of the 31 provincial chiefs, seven are from the Communist Youth League, one of the main power bases of President Hu Jintao . Of the 402 regional-party standing-committee members, 148, or about 37 per cent, were in the youth league. Cheng said the regional reshuffles saw Hu and Premier Wen Jiabao solidify their power base. Most of the third generation, such as former president Jiang Zemin and ex-premier Li Peng , were educated in the Eastern bloc during the 1950s. The fourth generation - Hu and Wen - received their university education before the Cultural Revolution began, when textbooks were still Soviet copies. Many of the fifth generation, which is expected to be headed by Vice-President Xi Jinping , with Li Keqiang as premier, went to university around the time of the shift to a market economy. While most of the fourth, and almost all of the third, generation of leaders are engineers, many of the new crop trained in economics, law, philosophy or history. Of 402 regional party officials, 100, or about a quarter, hold a doctorate. Thirty-two have PhDs in economics, 29 in business administration, and 15 in law. The rest have PhDs related to science or liberal studies. Only 13 of the PhDs are related to engineering. Officials with a master's degree are in the majority in the core decision-making bodies in regions, according to official information. Steve Tsang, a professor of contemporary Chinese studies at the University of Nottingham, said that almost all top provincial positions were held by politicians who came of age during the reform era, and were thus less ideologically rooted. Only eight of the 402 regional party officials, fewer than 2 per cent, were born in the 1940s. And 277 - or 69 per cent - were born in the 1950s; 117 - or 29 per cent - were born in the '60s. Under the party constitution, party committees at the central and local levels hold congresses every five years. A lower-level party committee convenes its congress before an upper one, as it must elect delegates to attend the higher-level congress. In an unusual delay, the Beijing municipal committee closed its party congress only last Tuesday. The party secretary is the top official, while the party standing committee is the top decision-making body in provinces, municipalities and autonomous regions.

After orbiting space lab, China wants an undersea one - Plan for manned facility on ocean floor faces major technical hurdles, and questions about real motive - The Jiaolong surfaces. Imagine, for a moment, that the year is 2034, and China has just declared ownership of a massive copper mine deep below the surface of the Western Pacific. Although the site was first discovered and repeatedly explored by robotic submersibles from other countries, China is the first to send a manned vessel to the depths. Living and working for two months in a nuclear-powered deep-sea station, at a depth of about 1,000 metres, 33 Chinese "aquanauts" finish construction of a sophisticated mining facility atop the considerable mineral deposit. The switch is flicked, and rocks on the ocean floor begin to be pulverised - their copper-rich remains pumped to a floating platform above that is the size of a small city, where a fleet of empty cargo ships bearing China's flag await. This may be just science fiction today, but it's all part of China's latest blueprint for construction of an elaborate facility on the ocean floor, in line with the nation's ambitious plans for deep-sea exploration. At the 15th China Beijing International Hi-Tech Expo in May, the China Ship Scientific Research Centre, which built the Jiaolong manned submersible that reached a depth of more than 7,000 metres in the Western Pacific's Marianas Trench last month, revealed the official design of a mobile deep-sea station that is to be used in future ocean exploration. Equipped with a nuclear reactor, the station would be able to support 33 crewmen for up to two months at a time. "If a submersible were a plane, this station would be an aircraft carrier," Ma Xiangneng , a researcher with the project, told China National Radio. "The station will be an underwater palace, with showers, a living room and laboratories." The designs show the station resembling a nuclear submarine, with two propeller fans at the tail. It would measure 60.2 metres long, 15.8 metres wide and 9.7 metres tall, weighing about 2,600 tons. Like a space station, the deep-sea station would have multiple ports to support the docking of smaller manned or unmanned vessels. Researchers such as Ma have said the station's main purpose would be deep-sea mining. With an underwater "mother ship" hovering above the station, located just below the surface and undisturbed by weather conditions, mining facilities could be built much more quickly and cheaply than if surface ships were used. A smaller prototype, able to carry 12 crewmen on an 18-day dive, is expected to be finished by 2015. No completion date was given for the larger station, but some experts think it will be finished by 2030. It's a risky endeavour, and the Chinese scientists involved conceded that they were aiming for operations at depths where more developed countries had failed. During the cold war, the Soviet Union deployed underwater habitats for military research, and the US built three so-called Sealabs for experiments that included testing the effects of living in an isolated environment. These facilities all operated in much shallower waters, and they were discontinued relatively quickly after failing to prove their worth. France also tinkered with such deep-sea stations in the 1960s, with its series of Continental Shelf stations. The Aquarius Reef Base, owned by the US National Oceanic and Atmospheric Administration, is currently the world's only undersea research station. It operates at a depth of just over 19 metres. "We are still years behind developed countries and trying to catch up," Ma said. But as it is considered the "world's factory" at a time when its resources are dwindling on land, China has come under more pressure than deep-sea forerunners to exploit ocean resources. The country imported more than 250 million tonnes of oil last year, or more than 5 million barrels a day. Official figures show that it is only a matter of time before China surpasses the US to become the biggest oil consumer. And Chinese companies are consuming ores from all over the globe as they flood the world with products ranging from toys to heavy machinery. As prices for energy and raw materials continue to rise, Chinese officials and companies are eager to explore the untapped resources at the bottom of the world's oceans. The Russians have given China a big hand in this regard. A designer of the Jiaolong said that when the project was started in the late 1990s, no factory in China could produce the titanium alloy needed to withstand the enormous pressure found at depths of 8,000 metres. So the hull was made at a military plant in Russia. Chinese scientists and engineers then studied the materials for years to be able to replicate them. The designer, who wished to remain unnamed, said future generations of Chinese submersibles and the planned station would utilise a made-in-China titanium alloy. Although Beijing frequently says its deep-sea programme is for civilian purposes, there has been no denial of military involvement. Since 2002, the deep-sea project has been financed by the 863 Programme, a government effort that is widely known to focus on military needs. The China Ship Scientific Research Centre also operates under the China Shipbuilding Industry Corporation, one of the country's largest builders of naval vessels. Possible military overtones aside, sending people to such risky depths has also sparked debate. Some experts argue that it will be neither economical nor safe for people to be mining at depths of several thousand metres underwater. But Professor Fan Dejiang , a deep-sea geologist with the Ocean University of China, said that technological advancements would eventually allow deep-sea mines to be mostly automated. "I think a deep-sea station probably has more military applications than economic value," he said. "You don't send miners to a place a million times more deadly than coal pits." But Fan said that manned underwater activities would play a crucial role in finding and locating minerals, as well as in setting up mining facilities and repairing broken pipelines. Analysts also note that China has to overcome several hurdles in order to tap into the treasures of the sea. Constructing a massive, floating mining facility in the middle of the ocean will require technology that has not yet been developed, such as for anchoring and power generation. But the biggest risk might be the environmental damage that such mining could cause. "We know little about the oceans, not to mention the regions at depths of several thousand metres," Fan said. "Many creatures have lived on the deep-sea floor undisturbed for millions of years. "Once we start mining and drilling for oil, we can cause damage that no technology can repair."

Michelle Garnaut's capital restaurant is a hit now, but the Beijing winter and the prime location's cost made it a challenge to launch. Australian restaurateur gains fame on the mainland doing things by the book, but can't reopen her original restaurant in Hong Kong, Mark Graham reports. Renowned restaurateur Michelle Garnaut operates two of the classiest restaurants on the Chinese mainland, known for immaculate service, fine-dining cuisine and tasteful decor. The repertoire of the M Restaurants in Beijing and Shanghai now also includes a hugely popular literary festival and other cultural events throughout the year. But one of Garnaut's primary goals - to open a restaurant in Hong Kong - is proving to be the toughest and most frustrating challenge of her career. The Australian's first venture, M at the Fringe, closed two years ago after 20 years in operation. To date, another venue at the right rental price has proven to be mission impossible. The restaurateur claims to have inspected hundreds of properties over the past few years, none of them quite right. The irony does not escape her: Two thriving operations on the mainland itself but no presence at all in the city where the M Group was founded and flourished. The runaway success of M at the Fringe, located in a central district heritage building, persuaded Garnaut to take the same concept to Shanghai some 13 years ago. M on the Bund, located in a classic, British-style stone building on the famous riverside promenade, was the first freestanding Western gourmet-level restaurant in the city. It was an immediate hit with the expatriates and, in subsequent years, with newly affluent local Chinese. "It cost us about $1 million to get Shanghai up and running, which now seems like nothing. But at the time it was one restaurant and that was an enormous amount of money for us." Garnaut, who hails from Melbourne, is a plain-speaking Aussie with a bone-dry wit and not afraid of using an expletive to emphasize a point. Behind that blunt facade is a keen intellect: Garnaut studied English literature at university and still reads voraciously, attends classical music concerts on her days off and ensures that the M restaurants in China have a strong cultural element. The most high profile of these is the annual literary festival, which began when an author pal came to give a talk on how to mix the perfect martini. It ultimately grew to become the pre-eminent event of its kind in China. This year, 70 authors attended, including Alan Hollinghurst, Mohammed Hanif and Tom Rob Smith. Previous participants include Amy Tan, Gore Vidal, Jan Morris, Junot Diaz, John Banville and Louis de Bernieres. The selection of flown-in writers is always eclectic, penners of books on crime, business, China, sex, pop music, soccer, science, religion, wine and typography - something for everyone who has an interest in the printed word. "Running the festival is a lot of hard work and it certainly doesn't make money, it costs money," says Garnaut, who also sponsors residency programs for upcoming writers and poets. "Through it, I have now met an unbelievable number of writers, and through the M restaurants' connection with music, I have met some of the top conductors in the world. The nice thing about running a restaurant is that you generally find people who are usually in a happy situation." The success of M on the Bund gave Garnaut the confidence to open a second China restaurant, Capital M, in a prime location near Beijing's Tian'anmen Square, which cost almost $3 million to set up. "Our first winter there was tough," admits Garnaut. "We didn't really allow for the deadness of the winter. The whole city seems to close down. "We are now into our third year and the increase in business is 30 to 40 percent on last year." The customers of Capital M know they are not in for any major surprises with the fare. Crispy suckling pig is an M staple, house-smoked salmon and imported steaks are popular and pavlova, an ultra-sweet dessert that hails from the proprietor's home city, is an ever-present. One Garnaut venture was a failure. The ill-fated Rollo de Pollo opened in Shanghai, on the same premises as M on the Bund, with the aim of selling reasonably priced Western fare. But locals gave it the cold shoulder - preferring to save up for a visit to the real-deal M rather than a budget-priced imitation. Garnaut takes pride in maintaining an eco-friendly and ethical approach to doing business, a policy which involves putting back into the community via charity. One initiative that makes her swell with pride is the Village People project, set up to build bathhouses in the remote, and desperately poor, communities of Northwest Gansu province. The bathhouses are operated as ongoing concerns; young children and elderly people are admitted free. "We found it made a really big difference," she says. "M Restaurant funded them for the first five years, and after that, we went and found other sponsors. We set them up as social enterprises where we had real input and real decision-making, and weren't just part of a big organization. It was originally just me and my friends. We wanted to do something that met a real need rather than impose a view."

Hong Kong*:  July 9 2012 Share

Three local welfare groups yesterday backed Equal Opportunities Commission chairman Lam Woon-kwong to stay on as convenor of the Executive Council, despite concerns about a possible conflict of interest. The saga over whether Lam should quit Exco showed no sign of dying down yesterday, a week after he was named to the government's top advisory body. He has faced calls for his resignation since taking the job, although Exco and EOC allies rallied behind him on Thursday, urging him to keep both posts. Lam, who was in Beijing yesterday attending a conference on equal opportunities, declined to make his intentions known. "I have not had enough time to consider all views," Lam said, but he added that he had told Chief Executive Leung Chun-ying he might consider stepping down as Exco convenor. Lam said earlier in the week that if he had to choose between the two posts, he would stay with the EOC. He added that he might resign if agencies with close ties to the commission saw his two roles conflicting. The EOC often finds itself criticising government policies and supports people bringing discrimination cases against the government. However, Lam argues that his post as an adviser makes a conflict unlikely. In a joint statement yesterday, three welfare groups praised Lam's record of defending minority rights and leadership of the EOC. The Society for Rehabilitation, the Federation of Handicapped Youth and Arthritis and the Rheumatism Foundation said Lam could help convey minority groups' voices to the highest level of government. Lam said the controversy had become "much bigger than what I had expected ... and I should be responsible for all that". He said that his resignation, if it came, would not be a big blow to Leung's six-day-old administration. ATV reported yesterday that Exco member Bernard Chan was a possible replacement for Lam as convenor. But Chan said he saw no need for Lam to leave, saying conflicts were unlikely and that there were procedures in place for such situations.

The days of having to rush back to "feed the parking meter" could be over thanks to a revolutionary upgrade that would allow drivers to remotely extend their parking time before it expires. The Transport Department has been studying ways of incorporating more payment features into a new generation of parking meters to be introduced after 2018, to replace the city's existing 9,800, which have been in use since 2003 and only accept payment via an Octopus Card. Under the remote-payment plan, pre-registered drivers would receive a text message when their parking time was about to expire. They could then pay for more time by making a phone call or sending a reply message - without having to return to the parking meter in person. The idea is included in a study submitted to the Legislative Council for discussion by a transport panel next Tuesday. The paper, which was drawn up after joint research with the Electrical and Mechanical Services Department, says that the system could also provide information on the availability of parking spaces. However, while extending parking time remotely would be extremely convenient for drivers already occupying a space, it presents difficulties for others roaming the streets looking for somewhere to park. "We are mindful of its possible impact on the principle of the provision of on-street spaces for short-term parking," the department paper says. "There is also concern that the introduction of this payment method might call for a need to revamp the existing enforcement mechanism." Central and Western district councillor Cheng Lai-king, who serves in one of the most traffic-choked districts in Hong Kong, echoed the concern. "Maybe the government should introduce this at less heavily used meters," Cheng suggested. The new meters could also accept "contactless cards", like Visa payWave and the soon-to-be introduced MasterCard PayPass, the government paper says. A trial scheme would begin after Legco's approval, with interested service providers being allowed 20 meters for experiments. The new meters would still retain the Octopus-card payment option. James Kong Yat-hung, the vice-president of the Hong Kong Automobile Association, urged the government to also look into ways to improve charging arrangements for overnight parking.

China has denied criticism by US Secretary of State Hillary Rodham Clinton that it is hampering efforts to end the Syrian conflict by supporting President Bashar Assad's government. Foreign Ministry spokesman Liu Weimin said in a statement Saturday that Clinton’s remarks were “totally unacceptable” and that China has contributed greatly to the cause of Syrian peace. He said China has wide international support for its “just and constructive” stance on Syria. Clinton said at a recent conference on Syria that Russia and China should pay a price for supporting the Assad regime. Neither Moscow nor Beijing attended the conference. The two countries have twice blocked UN condemnations of Syria’s government and last weekend worked to water down a transition plan by international envoy Kofi Annan.

Discussion over free-to-air broadcasting of the Olympics is now almost back to the starting blocks, with ATV saying it has yet to reach an agreement with i-Cable (SEHK: 1097) on a plan to televise the Games on ATV World. Sports fans have been on an emotional roller coaster over the past few months. Cable TV, which secured broadcasting rights for the London Olympics, suggested at the end of May that talks with free-to-air stations TVB (SEHK: 0511) and had ATV failed. In little more than a week, the pay-TV station changed its mind and sent an ultimatum to the two broadcasters, making what it called a final offer over rights to broadcast the Games. Under its proposal, ATV and TVB would have to pay US$1 for the rights to show the Games on their four channels. But they would only be allowed to show 400 minutes of their own commercials during the 250 hours of broadcasting, with i-Cable advertising shown the rest of the time. TVB rejected i-Cable's offer, while ATV came up with a counter-offer to broadcast the programmes only on its English language channel, ATV World, which i-Cable accepted. ATV said its counter-offer was only a "proposal", which offered directions for further talks, not a final agreement. Details - including the sharing of advertising time - had yet to be worked out, a spokesman said. "We proposed to broadcast the Games on ATV World, and i-Cable agreed we can start discussions based on that," he said. I-Cable refused to comment yesterday. Under the International Olympic Committee's terms, at least 200 hours of Olympic coverage should be broadcast on free-to-air television channels. Rule 51 of the Olympic Charter says: "The IOC takes all necessary steps in order to ensure the fullest coverage by the different media and the widest possible audience in the world for the Olympic Games." The organisation's president, Dr Jacques Rogge, said shortly after the rights were awarded that the IOC would be prepared to strip i-Cable of the broadcast rights if its reach was inadequate. If ATV backtracked, i-Cable would fall short of the requirement and be liable to a penalty. A free-to-air licence application was filed by the pay-TV station two years ago, but has not yet been ruled on. Some 80 per cent of Hong Kong's households are technically capable of receiving its services, but just 1.1 million of the city's 2.3 million households subscribe to its channels. For its part, a TVB spokesman said it was still open to discussions. It had described i-Cable's earlier offer as "unfair, unreasonable and against the Olympic spirit". For now, it said it would broadcast none of the sporting events. Only still images would be included in its news broadcasts of the Olympics. Such an arrangement would be a first in local broadcasting of the Games but has been adopted for other sports such as the English Premier League. In the last World Cup, TVB created computer-generated animation to replace playbacks. Sports sector legislator Timothy Fok Tsun-ting said an IOC representative came to Hong Kong and discussed the issue with the television stations. "I hope all stations will work for the benefit of society," he said. It is not the first time that stations have been in deadlock over broadcasting rights, but it is unusual not to reach a consensus at least a month before an event. In late April 2010, TVB and ATV announced they would screen live four matches of soccer's World Cup - which began on June 11 that year - and screen highlights from others, but only on their digital channels. i-Cable was the rights holder.

 China*:  July 9 2012 Share

No need to fear China, Xi tells forum - Chinese Vice President Xi Jinping (left) at the opening ceremony of the opening ceremony of the World Peace Forum in Beijing on Saturday. China's leader-in-waiting Xi Jinping insisted on Saturday that Beijing would never impose its will on the rest of the world and instead wanted to “abandon the old mindset” and strive for global peace. Speaking at a forum in Beijing, Vice President Xi sought to reassure other countries that the rise of China, which in 2010 became the world’s second largest economy, was not something to be feared. “Even when China becomes developed in the future, it will never seek hegemony,” Xi told the World Peace Forum. “China is always committed to economic development, world peace and common development of mankind.” “We must abandon the old mindset and approach that has been rendered obsolete, we must keep pace with the times, forge ahead with innovation and foster a new security concept,” he added. China has been pushing for emerging powers to take a bigger role in international institutions, such as the International Monetary Fund where Beijing is playing a leading part, and Xi said this trend would continue. “China will actively participate in the reform of the international system for governance with a view to move toward a more just and equitable international political and economic order.” Besides its growing economic power, China’s increasing military might has also irked other countries, especially its regional neighbours and the United States, which has realigned its forces to address Beijing’s buildup. Xi is widely expected to be named head of the ruling Communist Party later this year and become president next March in the country’s once-in-a-decade leadership transition, replacing Hu Jintao.

An infant is rescued in Linyi city, Shandong, in a crackdown on baby trafficking. Mainland police arrested 802 people and rescued 181 infants this week in one of the largest crackdowns on baby trafficking, busting two syndicates operating across 15 provinces. For the first time, police found clinics collaborating with baby traffickers and providing "technical support", such as sex determination and delivery. In some cases, babies were even auctioned. At 10pm on Monday, 10,000 police officers in 15 provinces, including Hebei , Shandong , Sichuan , Fujian , Henan and Yunnan , raided premises identified by earlier investigations. A statement posted on the Ministry of Public Security website said the police got their first lead in December after they arrested four suspects on a bus in Henan who were on their way to sell four babies. After questioning the suspects, they became aware of a baby trafficking syndicate operating in Hebei, Fujian and Yunnan. In April this year, police from Xingtai , Hebei, became suspicious because a clinic in Pingxiang county was being visited frequently by pregnant women from other places. They uncovered another massive baby-trafficking ring, controlled by Ji Xiaofang and Yang Xuehua and operating in provinces including Sichuan, Hebei and Shandong. Ji and Yang also collaborated with three other clinics in Guangzong, Julu and Wei counties in Xingtai. The clinics helped arrange buyers and provided medical check-ups and sex determination and assisted in births, because the health of the babies and their parents affected the prices. In some cases, potential buyers would inspect the appearance of the parents before agreeing on a price, the Beijing News reported yesterday. The operator of the clinic in Pingxiang, Guo Yanfang, joined the syndicate after Ji and Yang brought many women - usually with Sichuan accents - to give birth in her clinic. Ji, from the Daliangshan district, an impoverished mountainous area in Sichuan, took pregnant women who wanted to sell their babies to Xintai - instead of bringing babies - because it made the traffickers less of a target of the police. Some mothers said their children would end up in better families, but many trafficked children suffered brutal treatment or died. Chen Shiqu , director of the ministry's anti-human-trafficking campaign, told China Central Television: "[They] often forced infants to take sleeping pills, so that during long-distance travel, they could avoid people noticing them. "When some children got sick, [the suspects] did not give them any medical treatment, but threw them into bushes, leaving them to die in the wild." Sun Jinli, from the public security bureau in Zaozhuang , Shandong, who participated in the crackdown, told CCTV the suspects were driven by the lucrative profits on offer. An intermediary such as a doctor could pocket 2,000 to 5,000 yuan per baby, while ringleaders like Yang could pocket 6,000 to 8,000 yuan. The mothers would receive 30,000 to 50,000 yuan in return. A boy could be sold for 70,000 to 80,000 yuan, while girls fetched 30,000 to 50,000 yuan, the Beijing News said.

Hong Kong*:  July 8 2012 Share

University graduates have been warned not to set their hopes too high despite a big increase in vacancies registered with an employment service. Vacancies recorded by the online Joint Institutions Job Information System rose to 18,006 between March 1 and May 31, an increase of more than 30 per cent from 13,663 at the same time last year. The number surprised employment consultant Edmond So Wai-chung, who said he had expected the numbers to be down because of difficult economic conditions. "I thought it would have been worse than last year," said So, general manager of Besteam Personnel Consultancy. The increases in jobs offered were as much as 84 per cent for community and social work and 61 per cent for the creative, design and arts industries. But So was especially surprised by a rise of more than half in vacancies offered by the banking and finance industry, which he said was "beyond my expectations". The vacancies in this sector rose from 2,177 to 3,355, an increase of 54 per cent. Despite the greater opportunities, So warned that employers would expect candidates to be proficient in English, Cantonese and Putonghua. The English of some graduates was not up to standard, he said. The median salary offered for graduate jobs is HK$11,000 a month, while the average is HK$12,036. So said that judging from his experience, the top salaries were paid only to graduates from the elite universities, such as The University of Hong Kong and Chinese University, while others had to settle for less. He advised this year's graduates not to be too selective when hunting for jobs. "Don't expect too many high salaries as the competition is fierce nowadays." A spokesman for the Joint Institutions Job Information System said there was unlikely to be any duplication with the vacancies since the entries were based on employers' business registration numbers. 

Thousands of elderly people living in private housing will be able to apply for a one-off payment of up to HK$12,000 to help them cope with rising prices and soaring rents. The Community Care Fund will roll out the subsidy program next week for those aged 65 and over who do not receive money under the Comprehensive Social Security Assistance scheme. People living alone will get a maximum of HK$4,000, with HK$8,000 for two-person households and HK$12,000 for households with three residents or more. The HK$50 million scheme has been welcomed by the elderly, but concern groups have warned that the payment will not be enough as the rising cost of living continues to bite. The government expects about 11,900 people, living in 9,700 households, to benefit. "The programme helps to relieve the burden caused by inflation in the past few years," said Dr Law Chi-kwong, chairman of the fund's executive committee. "The poorest group of people [in Hong Kong] is probably elderly people who have retired and live a life with little income and few savings." Applicants will have to undergo a means test, with limits based on their income and the rent they pay. Single people will have to show that they have an income of no more than HK$8,740 per month and pay no more than HK$4,370 in rent. Public housing tenants will not be eligible, nor will anyone who owns a property. The fund was set up in October 2010 with a goal of attracting HK$5 billion in donations from the business community to cover gaps in the welfare system. By May this year it had received HK$5 billion in public funds and HK$1.8 billion in donations. Mak Hon-kai, chairman of the Association of Senior Citizens, said: "The policy is, of course, a good attempt. But it will only help the hard-up elderly people a little bit, as it's a one-off." He said elderly people were often particularly vulnerable to inflation, especially when it came to rent and the price of food. The fund will work with 113 community centres for the elderly to implement the subsidy programme. Social workers from the centres will look for isolated elderly people and help them with the application process, Law said. For Lau Yan-chi, 72, who collects cardboard to make ends meet, the subsidy is very welcome. "I'm very glad the government is concerned about our plight. It surely helps me relieve my burden, but I hope that it isn't just a one-off measure," said Lau, who lives alone. He spends HK$6,000 per month on rent for his Hung Hom flat and living expenses. The only regular support he receives from the government is the monthly HK$1,090 old age allowance. Law said the payments could be made regular. The scheme will be open for applications until January 31. "Applicants will have ample time to submit their applications," Law said.

Hong Kong does not need to follow Singapore's example and set up a state-owned investment company to achieve high returns for its currency reserves, a minister and an analyst have said. Their comments poured cold water on a suggestion that a sovereign wealth fund might be the best option for the city. Secretary for Financial Services and the Treasury Chan Ka-keung said the HK$2.43 trillion Exchange Fund, which is tasked with maintaining the stability of the Hong Kong dollar under the oversight of the Monetary Authority, could achieve higher returns the way sovereign funds did. "The Exchange Fund has started diversifying its investments to achieve higher returns," Chan said on radio yesterday. Traditionally, the fund has invested mainly in bonds as well as in Hong Kong and overseas stocks, and has generated a lower return than most sovereign funds. During his election campaign for chief executive earlier this year, Leung Chun-ying suggested setting up a Temasek-like state-owned investment fund to invest Hong Kong's reserves in local businesses to boost the city's economy. Separately, lawmakers have called for a sovereign investment fund, which tends to invest more aggressively and achieve higher returns. Since 2008, the Exchange Fund has been diversifying its portfolio. Last year, it invested HK$83.6 billion in property, private equity and yuan-denominated shares and bonds, along with emerging-market bonds, to achieve a return of 7 to 9 per cent, higher than the 1 per cent return generated from bonds and stocks. But the Exchange Fund's average 5.6 per cent return from 1994 until the end of last year significantly lags the 17 per cent annual average return from Temasek since its establishment in 1974. But the Exchange Fund's returns are more stable. "A sovereign fund is not a magic wand," Chan said, adding that many saw volatile investment returns. This may not be suitable for the Exchange Fund, whose returns represent about 10 per cent of government income. Mark Konyn, chief executive of Cathy Conning Asset Management, said a state-owned investment fund needed well-defined aims to prevent conflicts of interest. "A challenge in Hong Kong is to ensure sufficient investment in strategic projects that benefit the community longer term." Financial-services legislator Chim Pui-chung said: "The HKMA is managing the Exchange Fund and setting up such a fund would create duplication. The HKMA needs to abandon its excessively conservative approach and invest more aggressively."

Singapore to give Hong Kong a run for its money - Trading shares in yuan will help 'raise currency's global status' Singapore's stock exchange plans to start listing securities denominated in the yuan as it challenges Hong Kong and Tokyo for a bigger share of equities and currency trading from the world's second-largest economy. The move is also seen by analysts as a boost to the Chinese mainland's ambition to internationalize the yuan. Singapore Exchange Ltd, or SGX, announced on Friday that it is ready to list, quote, trade, clear and settle securities denominated in the yuan as the city-state strives to be an offshore trading center for yuan assets. "SGX, as the Asian gateway, is committed to being the exchange of choice for issuers with RMB fundraising needs and for investors who are keen to participate in the China growth story," SGX CEO Magnus Bocker said in a statement. "The listing and trading of RMB securities on SGX will also extend Singapore's position as an offshore RMB center." Issuers listing yuan securities on the exchange have the option of offering dual currency trading, either in the yuan or Singapore dollar, according to the exchange, which is the world's first exchange to offer the clearing of over-the-counter foreign exchange forwards for the yuan. The first-ever offshore yuan IPO was conducted in Hong Kong last year, where billionaire Li Ka-shing's Hui Xian Real Estate Investment Trust raised 10.48 billion yuan ($1.65 billion). There are no yuan-denominated stocks in Singapore. Global financial centers are scrambling for opportunities in the surging offshore trading of yuan assets, boosted by growing offshore yuan deposits accumulated in part through yuan-denominated trade settlement. Singapore is competing against Hong Kong, Tokyo, London and many others to capture the yuan's growing offshore activities, as the Chinese mainland encourages the yuan's cross-border flow. In April, London issued its first yuan-denominated bond, totaling 1 billion yuan. Hong Kong also took a step forward this week, as lenders in the city are allowed to extend yuan loans to companies in the Qianhai Bay development zone in Shenzhen, created in part to test a freer yuan. There are more than 4,000 Chinese companies operating in Singapore and 142 of them are listed on SGX with a total market capitalization of $606 million as of June 30, according to stock exchange data. Ong Chong Tee, deputy managing director of the Monetary Authority of Singapore, the country's central bank, said last month that yuan deposits in Singapore had grown to about 60 billion yuan. Singapore-based companies such as Global Logistics Properties and Singamas issued renminbi debts in 2011. Singapore's central bank is one of 17 central banks that have bilateral swap agreements with the People's Bank of China, the central bank. It also inked an agreement with the PBOC on the establishment of a representative office in Beijing last month, the third overseas representative office following London and New York. Nathan Chow, a Hong Kong-based economist with DBS Group Holdings, a Singaporean bank, said that Singapore faces two challenges on its road to becoming an offshore yuan center. First, the Singapore dollar has appreciated by more than 10 percent against the yuan over the past decade, and the constant appreciation makes investors reluctant to hold the Chinese currency, he said. Second, the amount of yuan is limited in the city-state, which means the market will lack liquidity. There is currently around 60 billion yuan in deposits in Singapore, around one-tenth of that in Hong Kong. "But I am bullish on Singapore as it could facilitate yuan trading in the ASEAN countries should it become an offshore center," Chow said. SGX's move to begin yuan-denominated securities trading will not pose a threat to the yuan-denominated business of Hong Kong Exchanges and Clearing Ltd, analysts said. "SGX was always flexible enough to introduce innovative financial products to compete with the HKEx," said Dickie Wong, a Hong Kong-based analyst and director at Kingston Securities Research. "There is no doubt that SGX also wants to get a slice of the yuan-denominated share trading business." However, Wong said that Hong Kong will still be the primary destination for mainland enterprises to list. "Hong Kong's stock market is more active in trading and mainland companies can get higher valuation when they list in Hong Kong," Wong told China Daily. "Singapore does not possess as huge of a yuan liquidity pool as Hong Kong does to support yuan-denominated share trading. Therefore, I do not think SGX’s move will pose a threat to the HKEx," said Linus Yip, chief strategist at Hong Kong's First Shanghai Securities. According to the Hong Kong Monetary Authority, yuan deposits in the city totaled 554.3 billion yuan in March. SGX's announcement was made on the same day as the mainland and Singapore signed documents to promote cooperation in the banking sector. Banking authorities in Singapore will quicken the approval of two mainland banks filing for full banking licenses in Singapore, according to a statement by the China Banking Regulatory Commission. It did not reveal the names of the banks. In return, the commission will accelerate its examination of requests by three Singaporean banks — United Overseas Bank Ltd, DBS Group Holdings and Oversea-Chinese Banking Corp Ltd — to set up subsidiaries on the mainland.

The former North Point Estate site is expected to attract aggressive bidding. Prime site to draw fierce bidding - Close to an MTR station and the waterfront, the former North Point Estate site is expected to attract strong investment interest on Friday - Big developers are expected to bid up to HK$10 billion for the site of the former North Point Estate. Surveyors have put the value of the prime commercial and residential site on the waterfront at North Point at between HK$7.21 billion and HK$10 billion, or between HK$8,000 and HK$11,103 per sq ft. Bids for the site, part of which is used for a bus terminus, will be unsealed on Friday. The 251,875 sq ft site is behind the North Point Ferry Pier and can be developed into a project with a maximum residential floor area of 577,812 square feet. Including commercial space of 322,866 square feet, it could yield a total gross floor area of 900,678 square feet. As it is located on the waterfront, there is a height restriction of 80 metres (about 22 storeys) on the buildings that may be developed on the site. Under the land lease, the site also has to provide at least 700 flats. Despite this requirement - a condition not welcomed by developers, as it restricts their freedom to build larger flats - Vincent Cheung Kiu-cho, national director for Greater China at valuers Cushman & Wakefield, believes the auction will be keenly contested. "The developer could build small flats sized from 600 to 700 square feet, as well as larger apartments from 900 to 1,100 square feet - and demand for the larger apartments on Hong Kong Island is very strong," he said. Cheung therefore expects strong interest in the site from developers, given its location on the Hong Kong Island waterfront and proximity to North Point MTR station. "Most of the floor area is available for residential development. Only a small area is for commercial development, which is useful for long-term investment. That means the winning bidder could get a faster payback by selling the flats," said Cheung. "The Oil Street site in North Point, which was released for tender last year, called for a higher proportion of commercial development and the payback period for the winning bidder (Cheung Kong (SEHK: 0001)) was therefore longer. It may take them five to 10 years to break even and begin generating a profit," he said. Cheung estimates the site North Point Estate site is worth HK$8.46 billion or HK$9,391 per square foot. However, he believes bidding for a residential site at Tai Wai MTR station - which closes on June 22 - may be more aggressive. "North Point is a mature district. There are no new factors to consider, such as new infrastructure development, that will benefit the district. "But the site in Tai Wai will benefit from the construction of the Sha Tin to Central MTR link, so it offers a higher upside potential for flat prices compared with the North Point flats. "The total land price for the North Point site will also be higher, which means the winning bidder has to take on a higher investment risk." The rail line is scheduled for completion in phases between 2018 and 2020. Alnwick Chan Chi-hing, head of valuation and professional services at property consultancy Knight Frank, believes the site is worth HK$7.21 billion or HK$8,000 per square foot. Since the winning bidder will need to spend more than HK$10 billion on the land and on construction, Chan believed there will be no more than five bidders for the site. Alvin Lam Tsz-pun, a director at Midland Surveyors, believes the site is worth around HK$10 billion, or HK$11,103 per square foot, and expects flats there to sell for HK$15,000 to HK$20,000 per square foot.

More people in Hong Kong and the mainland are identifying with designer clothes and expensive handbags this year than ever before, as the luxury-retail industry makes big gains in a report on the most reputable brands across the region. Brands such as Louis Vuitton and Prada have soared up the rankings in the survey of the top 1,000 Asia-Pacific brands, shooting up as much as 271 places on the list. But the region's love for gadgets remains unabated, with electronics brands - led by Samsung at the expense of last year's leader, Sony - filling four of the top five slots. Campaign Asia magazine, which compiled the report with global information provider Nielsen, attributed the rise in designer goods to the region's growing affluence, despite global economic woes. "Asians now want product quality," said the magazine's reports editor, Jolene Otremba. "It is also about making a statement of their success." A top Nielsen executive said, however, that the new trend was also due in part to the downturn. "Even in tough economic times, people still want to treat themselves to a premium experience. But instead of the luxury automobile you might have the handbag," said Therese Glennon, a managing director for the Asia-Pacific region. The online survey asked 400 people from each market to provide their first and second choice of brands in 14 major categories and 73 subcategories. The results, released yesterday, were weighted to reflect the age and sex ratios and household income of the general population. Chanel comes in at number nine in the Asia-Pacific rankings, having jumped 21 places from last year. Gucci is at number 11, compared to 81 last year. Both brands dominate in a number of subcategories, including perfume, cosmetics, shoes and women's fashion. Louis Vuitton won first place for the luxury-fashion subcategory, rising 84 places. Calvin Klein, Armani, Burberry and Prada have also made big advances, climbing 91, 94, 263 and 271 places respectively compared to last year's rankings. A breakdown by region of the findings shows that Gucci ranks number 14 and Chanel is at 17 in Hong Kong for this year, with Calvin Klein, Louis Vuitton and Armani also making the top 100, at 21st, 59th and 65th place respectively. Last year, only two luxury-retail brands made it into the top 100: Gucci at 74 and Louis Vuitton at 100. Chanel has jumped to number three in the mainland rankings, up from number 24 last year. Gucci, Armani, Louis Vuitton and Prada all have positions in the top 100 (at number 17, 24, 38 and 96 respectively), even though they did not make an appearance at all in the top 100 brands for the mainland last year. Meanwhile, Samsung is the favourite brand, both in Hong Kong and the wider Asia-Pacific region, knocking Sony off the top spot for the first time in four years. Apple won best brand for both the mobile-phone and smartphone subcategories in Hong Kong, but Samsung took one of the top spots in a number of other subcategories, including TV, home audio, refrigerator and tablet computer. The brand came second for mobile phones and smartphones, and Sony took fifth place for both. HSBC, at number 12, has dropped out of the top 10 for the first time in six years, following a period of public mistrust in the banking industry and a rebranding move that some experts say has been unsuccessful locally.

Australian billionaire James Packer and Macau gambling tycoon Lawrence Ho are teaming up with the Philippines’ richest family to develop a US$1 billion casino in Manila, the Philippine partner said on Friday. The Belle casino will form part of a huge gambling development which the government hopes will turn the city into the world’s No 2 gaming destination ahead of Singapore and Las Vegas, and behind only Macau. SM Investments, which is controlled by the Henry Sy family, told the Philippine Stock Exchange its affiliate Belle Corp signed an agreement with Melco Crown Entertainment to form a consortium to develop the project. “Subject to [regulatory] requirements, Belle and MCE plan to create a US$1 billion premiere integrated resort facility and enter into implementing and definitive agreements within the next two months,” the disclosure said. Melco Crown, which operates a Macau casino, confirmed the signing of a consortium agreement on Thursday in a disclosure to the Hong Kong Stock Exchange. It said its unit MPEL Projects expects to invest up to US$580 million over the course of the project, or more than half its entire cost. Melco Crown is a joint venture between Melco International Development (SEHK: 0200) of Ho, son of Macau gaming mogul Stanley Ho, and Packer’s Crown of Australia. Belle holds one of four licences handed out by the Philippine government to build a casino worth at least US$1 billion each at a site on Manila Bay called Entertainment City. Gaming regulator Philippine Amusement and Gaming (Pagcor) has also granted licences to Malaysia’s Genting, Bloomberry Resorts, and another casino backed by Japanese gaming equipment supplier Kazuo Okada. With the completion of the US$4 billion Entertainment City project by 2016, Philippine gaming revenues are expected to draw level with current No 2 Singapore’s revenues of about US$7 billion, Pagcor chief Cristino Naguiat said in a recent interview. Asia is poised to eclipse the United States as the world’s biggest gaming market next year, powered by the region’s growing economic prosperity (SEHK: 0803) and fondness for gambling, PricewaterhouseCoopers said in a report in December. Revenue in Asia is forecast to more than double from US$34.3 billion in 2010 to US$79.3 billion in 2015, it said.

Community Care Fund chairman Dr Law Chi-kwong - About 12,000 elderly people on low incomes are expected to benefit from a HK$50 million rental subsidy programme announced on Friday. The scheme, set up by the government under the Community Care Fund, will hand out an average of HK$4,000 each to people age 65 or above who live in private flats. The one-off allowance will be HK$4,000 for single people, HK$8,000 for two-member households and HK$12,000 for households with three or more members. To be eligible, applicants must not be receiving welfare or own any property in Hong Kong, and they must fall within income and rent limits. The monthly income caps for singles, two-member households and three or more members will be HK$8,740, HK$13,410 and HK$17,060, respectively. The rent limits are set at HK$4,370, HK$6,705 and HK$8,530 for the respective households. Dr Law Chi-kwong, chairman of the fund’s executive committee, said the scheme aimed to relieve financial pressures on elderly tenants in view of rising inflation and recurring rent increases. Applications will be accepted from Monday until January 31.

The Customs Drug Investigation Bureau confiscated 649kg of drugs discovered in a container supposedly carrying lumber. Customs officers have seized HK$760 million worth of cocaine – the largest haul in the city’s history – found in a shipping container from Ecuador, an official said on Friday. The 649kg of drugs was discovered on Wednesday when officers – acting on a tip-off from US narcotics authorities – inspected the container at the Kwai Chung Container Terminal. The container was supposedly carrying lumber from the South American country, but X-ray scanners revealed the presence of something else inside. The cocaine had been cut into small slabs and concealed in 22 nylon bags that were mixed in with the planks. Three men have been arrested, including a truck driver delivering the container and two recipients. Customs drug investigators believe the operation smashed a local drug ring, according to John Lee Cheung-wing, head of the Customs Drug Investigation Bureau. Much of the haul had been intended for transshipment to Southeast Asia, and a small portion for sale in Hong Kong, he said. The seizure comes after a recent rise in cocaine seizures at Hong Kong International Airport. In April and May, officers seized 20kg of cocaine with a street value of HK$22 million, arresting 14 suspected mules, compared with two arrests and 3kg of cocaine seized between January and March. No similar increase has been noticed in drug smuggling using shipping containers, Lee said. US authorities earlier sent a list of suspicious shipments from South America, for follow-up inspections, and the massive find was on that list.

 China*:  July 8 2012 Share

The Industrial and Commercial Bank of China (ICBC), the world's largest lender by market value, on Friday completed its purchase of an 80-percent stake in the Bank of East Asia (BEA), the first time a Chinese lender has taken a controlling interest in a US bank. With the finalization of the deal, ICBC gained the license to conduct retail banking in the United States and expanded its organization and business network in the country, ICBC Chairman Jiang Jianqing said at a ceremony marking the completion of the transaction. ICBC will further localize its operations and strengthen cooperation with US financial institutions to better serve US clients and Sino-U.S. economic and trade activities, he said. The 140-million-US-dollar deal was signed in January 2011 and approved by the US Federal Reserve Board in May.
ICBC had 244 overseas institutions in 34 countries and regions as of the end of the first quarter of this year. The BEA has 13 branches in the United States, running retail banks, commercial banks and trade finance business.

Chinese duties cover more than 80 per cent of US auto exports to China and fall disproportionately on General Motors (pictured) and Chrysler, the White House says. China said on Friday it would “appropriately” handle Washington’s complaint with the World Trade Organisation over Chinese duties on cars from the United States, amid rising tensions in bilateral trade. “China will appropriately handle relevant requests for consultation according to WTO dispute settlement procedures,” the commerce ministry said in a one-line statement reacting to the US move. The United States had launched a trade complaint on Thursday, accusing Beijing of unfairly imposing duties on more than US$3 billion in exports of American-produced automobiles. The announcement came as US President Barack Obama hit the campaign trail in the battleground state of Ohio, where automakers have been affected by the tariffs imposed in December. It underscored how America’s trade relations with rising economic power China could colour the political debate ahead of the November presidential election. Under WTO rules, countries are allowed to impose punitive tariffs to offset damage from both subsidies and dumping – selling products at below market value – but the US contends that in this and other cases, China has used those remedy measures in an unfair and retaliatory way to hurt American exporters. Last month, the US successfully challenged Chinese tariffs imposed on American high-technology steel products and has also disputed tariffs levied on chicken products. China announced last year it would impose anti-dumping and countervailing duties on more than US$3 billion in exports of American-produced automobiles, amid a rising number of tit-for-tat bilateral trade actions. US Trade Representative Ron Kirk said in Washington on Thursday that Obama’s administration had asked the WTO for “dispute settlement consultations” in the case, the first step in a trade grievance. “The key principle at stake is that China must play by the rules of the global trading system,” the White House said in a statement. “When it does not, the Obama administration will take action to ensure that American businesses and workers are competing on a level playing field.” China set the duties for imports of some passenger cars and sports utility vehicles, applying anti-dumping penalties from 2.0 per cent to 21.5 per cent and anti-subsidy tariffs at a maximum 12.9 per cent. It reportedly affects no more than 50,000 units a year – a small fraction of the total number of vehicles sold in China – and US manufacturers said Beijing had kept the action in reserve as it waited to see how Washington dealt with other trade problems. White House spokesman Jay Carney told reporters Thursday that the Chinese duties cover more than 80 per cent of US auto exports to China and fall disproportionately on General Motors and Chrysler because of the actions Obama took to support the auto industry during the financial crisis. Some critics have contended that the administration’s bailout of the auto sector — which has seen it return to profitability even as the wider economic recovery has stuttered — could leave US products vulnerable to countervailing duties by international competitors claiming it amounted to an unfair subsidy. China and the US are at odds over a slew of trade issues. In March, the US, the European Union and Japan brought a trade case against China over its curtailment of exports of rare earth minerals over whose production China has a virtual monopoly. Those minerals are used to manufacture hybrid car batteries, flat-screen televisions and other high-tech goods. China says curbing rare earth exports is for environmental protection, not intended to help Chinese companies. With American manufacturers still struggling to recover from the financial crisis, and unemployment running over 8 per cent, the administration is keen to show it is getting tough on discriminatory trade practices by its chief economic rival — also its main foreign creditor — blamed by many in the US for a loss of American manufacturing jobs.

China's central bank lowered interest rates for the second time in less than a month, a move that sparked concern that the world's second-largest economy may be slowing more than anticipated. The People's Bank of China said it would cut the one-year yuan lending rate by 0.31 percentage point, to 6%, effective Friday, making borrowing more attractive. To boost the effect, the PBOC—which sets a floor on lending rates and ceiling on deposit rates—also said banks could lend at 70% of the benchmark rate, down from 80% currently, making loans more affordable for borrowers. Combined with the similar cut in June, "in theory from where we were just a few weeks ago, the price of a one-year loan has fallen [2.4 percentage] points," said Patrick Perret-Green, a Citigroup analyst. "I think it means that [the central bank] is clearly worried," said Louis Kuijs, project director of Fung Global Institute, a Hong Kong think tank. "They want to have a decent amount of policy easing in the system by the time we get into the summer," he added. In the first quarter, China's growth decelerated to 8.1% from the year-earlier quarter, the slowest pace since the summer of 2009. Economists widely expect it to decline further to roughly 7.5% in the second quarter, when Beijing announces GDP data on July 13. But HSBC economist Sun Junwei said the PBOC's interest-rate decision suggested that "we have to be prepared for worse-than-expected growth data and a faster-than-expected drop in inflation." One factor that may have worried the central bank: government data as well as interviews with bankers and borrowers suggest bank borrowing may be slowing. J.P. Morgan, in a note, said it believed the "direct trigger" for Thursday's interest-rate cut was a "significant easing in inflation pressure," to less than 3%. "As the inflation concerns dissipate, it opens the room for the central bank to cut interest rates to lower the funding cost and support economic growth," J.P. Morgan economists wrote.

Chinese spare parts companies are striking it big in the West, but face stiff competition in their homeland - For a glimpse into how the US auto industry has been dramatically globalized since the 2008 financial crisis, take a look at whom Chrysler has been working with lately. The Michigan-based automaker gets its antennae from Taizhou Suzhong Antenna Group in eastern Jiangsu province. Parts that require rubber are flown in from Zhongding Holding and Ningbo Tuopu Group in eastern Anhui province. Steering system parts? They are from Nexteer, which General Motors Co sold to Pacific Century Automotive Systems Co Ltd - an affiliate of the Beijing government that was formed by the Tempo Group in Zhejiang province - in 2010 for $420 million (332 million euros). Pan Ren, an engineer at the Chrysler Research and Development Center in Detroit for a decade, has seen the recent changes. He says he noticed that not only are more and more Chrysler spare parts being supplied by Chinese companies, but that many US spare parts manufacturers are being run by Chinese executives. For Pan and for countless observers of the fall of the US and European auto industries, the recent collaborations are not only an indication that Chinese auto parts manufacturers are getting a leg up in the global industry, but that the mergers and acquisitions have been key to fueling an economic comeback for Western countries. "The machinery industry is the foundation of a country's auto industry, especially the spare parts industry," Pan says. After the financial crisis of 2008, spare parts companies in the West were on the verge of bankruptcy. Many Chinese auto parts manufacturers that China Daily spoke to saw this crucial time as an opportunity to merge into the global supply chain by acquiring these struggling overseas companies. There are no statistics available about the number of acquisitions, but many major transactions are notable. In 2009, Zhejiang Geely Holding Group acquired supplier Drivetrain Systems International, an automatic transmission supplier based in Australia, for A$70 million (approximately $56 million then). Last year, Beijing Hainachuan Automotive Parts Co Ltd purchased the Netherlands' Inalfa Roof Systems Group B.V., the world's second-largest auto roof system supplier. In June, Joyson Holdings (a company based in Ningbo, Zhejiang province) bought out German auto parts supplier Preh GmbH. Ravi Ramamurti, a professor of international business and strategy at Northeastern University in Boston, said that investments from Chinese companies provide a lift for struggling American companies. "They have the momentum and the financial strength (to rescue other firms)," he said. "The likelihood of a US investor doing the same is dim." Last year, revenue from Chinese auto parts exports reached 46.63 billion yuan ($7.34 billion, 5.84 billion euros), a 27 percent increase from the previous year, according to the China Automotive Technology & Research Center. Because of the growth in exports from China, American and European governments have imposed stringent regulations on China's exports of spare parts.

Hong Kong*:  July 7 2012 Share

New executive councillor Barry Cheung says he is keen to serve the city. Crisis? What crisis, asks Leung's right-hand man - Barry Cheung is adamant chief executive can get over 'difficulties' by showing he is tackling the real issues - The man who ran Leung Chun-ying's election campaign has dismissed suggestions that his administration is in crisis and says Leung can overcome what he called "difficulties". Barry Cheung Chun-yuen, an executive councillor, told the South China Morning Post (SEHK: 0583) yesterday the administration was not facing a crisis despite seven cabinet members being mired in controversy. "It's not a crisis. Obviously he is encountering difficulties. But they can be overcome," Cheung said. Five cabinet members are embroiled in a storm over illegal structures at properties they own: commerce minister Greg So Kam-leung, education minister Eddie Ng Hak-kim, health minister Dr Ko Wing-man, and Exco members Cheung Hok-ming and Bernard Chan. Leung, who is facing doubts over his own integrity after the discovery of six illegal structures at his homes on The Peak - may also lose the head of his cabinet, Lam Woon-kwong, and Secretary for Development Mak Chai-kwong. Mak is accused of abusing government housing allowance more than 20 years ago, while conflict-of-interest concerns have arisen over Lam's dual role as Executive Council convenor and Equal Opportunities Commission chairman. Cheung suggested an action plan to put out the fires. First Leung must fully explain his illegal structures. "I believe people without bias will accept his explanation if he gives details of the story," he said. Leung should also make the most of opportunities to show his determination to defend the city's core values. On freedom of speech, Cheung agreed the police overreacted to a reporter who shouted a question about the 1989 Tiananmen crackdown at President Hu Jintao during his visit for the 15th anniversary of the handover. The Apple Daily reporter was held in a stairwell for 15 minutes. Cheung said the government should start tackling real issues such as poverty and the shortage of affordable housing. "By focusing on the right issues, the government will bring back the trust of the people." He conceded town hall meetings by Leung's team could be improved by addressing issues such as who is invited and who asks questions. Cheung pledged after the election to make sure Leung listened to the public. But he himself appeared not to be doing so, to judge by comments attributed to him after the July 1 march. "The high turnout proved Leung's vision that the city needs change," he was quoted as saying. Yesterday Cheung said: "I didn't mean people who joined the march are Leung's supporters. I only saw their desire for change, and it's what Leung has proposed." He denied blindly protecting Leung, who he says is the city's best hope for change. Cheung, who is chairman of the Hong Kong Mercantile Exchange and the Urban Renewal Authority, said: "I have seen the results from the urban renewal process and I feel compelled to improve life in the city and to give people hope. I have been sincere. I have not changed."

A vendor looks non-plussed as government hygiene officers check the records of his shop in Mong Kok's famous Yuen Po Street Bird Garden after closing down the area for three weeks following confirmation of a case of the deadly H5N1 bird flu virus. The infection was discovered in the cage of an Oriental magpie robin, a species common in Hong Kong, after a routine check last month. Bird Garden in Mong Kok was yesterday closed for three weeks and more than 1,000 birds were slaughtered after traces of potentially deadly bird flu were found in a shop. The H5N1 virus was detected in a swab sample collected last month from a bird cage holding an Oriental magpie robin, raising fears the disease could be passed to pet buyers. But the Health Department said yesterday the risk of transmission to humans "is not particularly high" as the swab trace was probably from a wild bird that flew into the shop. All birds caged in the affected stall turned out to be healthy but were slaughtered as a precaution, Dr Thomas Sit Hon-chung, assistant director for inspection and quarantine for the Agriculture, Fisheries and Conservation Department, said. "The exact source of the infection is still unknown to us, but we suspect it is more likely to belong to some wild birds. Risk of human infection is still low," Sit said. "We believe it is also necessary to close down the garden to undertake a thorough cleansing. It will not reopen until all samples we have taken are free of the virus." An infectious diseases expert suggested the swab was more likely to have come from the pet bird, as it was unlikely a wild bird would get into a cage. But University of Hong Kong microbiologist Ho Pak-leung added there was little risk to human health. "The risk from infected live poultry such as chickens, ducks or geese in wet markets is higher than from pet or wild birds," he said. Ho said Hong Kong was still using a first-generation vaccine on imported birds, whereas the strain of the H5N1 virus commonly found in the city was of the fourth generation. "It is time for the government to review whether the Dutch vaccine we have been using for years is still protective enough for the virus," Ho said. Bird flu has been detected in 22 samples taken from birds this year - mostly from the New Territories - more than double the number collected in the previous two years from some 10,000 samples taken annually. Yesterday afternoon, health officials disinfected the Bird Garden area and moved birds onto a truck; 25 bird stall owners and workers, as well as 14 agriculture department workers, were put under medical surveillance. None showed any symptoms. There are 18 stalls in the garden in Mong Kok, with more than 10,000 birds for sale. Most are imported from Malaysia, with some from Taiwan and the Philippines. Some stall owners said the government had overreacted. Chan Siu-ho, 60, who earns HK$20,000 to HK$30,000 a month selling birds and bird food, said he expected business to be affected for the next six months. "People may avoid coming here, fearing the virus, even after the garden reopens," he said. "It's a total overreaction from the government. It's pretty normal that birds get sick." Au Sing-cheong, who keeps more than 100 birds worth up to HK$200,000, said the area had been very clean, and he suspected the infected droppings were from a wild bird. The garden was last closed during the bird flu outbreak of 2007. Last December, around 20,000 chickens and other poultry were destroyed following a bird flu scare in Cheung Sha Wan.

The Hong Kong stock exchange will launch a new platform offering commodity trading and settlement within the Asian time zone, Ronald Arculli, former chairman of the local bourse operator, said. Arculli - now an independent non-executive director of Hong Kong Exchanges and Clearing (0388) - said the move follows the recent HKEx acquisition of the London Metals Exchange. "The acquisition of LME will diversify HKEx's business and will attract more firms to raise funds in the city," he said yesterday. HKEx, the world's most valuable stock exchange, successfully bid for LME, agreeing to pay a higher-than-expected 1.38 billion (HK$16.65 billion), or 107.60 per share last month. LME is the largest commodities exchange, handling more than 80percent of the world's metal trade. HKEx is expected to host a special shareholders' meeting on July 28, seeking approval for the acquisition. The deal cannot be finalized until at least 50 percent of LME members and 75percent of its shareholders have approved it. It also requires approval from Britain's Financial Services Authority, which is expected in October. HKEx is said to have persuaded key LME members on the deal, after promising that the commodity exchange will be operated independently following the acquisition. However, how some LME shareholders, such as US investment banks Goldman Sachs and JPMorgan, will vote on the matter remains unknown. HKEx shares fell 0.18 percent to HK$110.10 yesterday.

Savoring Shanghai in Wan Chai - Zhe Jiang Heen serves a limited number of its popular pork belly dish each day. In Hong Kong, Zhe Jiang Heen is where Shanghai expatriates go for a taste of home. Few dishes better exemplify the city’s rich fare than its pork belly and squid cooked in the sweet-savory braise known as hongshao. Pan Kau-lung, whose father grew up near Shanghai, has more than 30 years of experience cooking in the style of his home region and was the former chef at Ye Shanghai, a two-Michelin-star restaurant in Hong Kong’s Kowloon district. Last year, he left Ye Shanghai to helm Zhe Jiang Heen. Zhe Jiang Heen was founded by members of the United Zhejiang Residents Association, one of the regional social clubs in Hong Kong that have long attracted mainland-Chinese immigrants looking for people, and in some cases, food, from their hometowns. The restaurant is just one floor above the association headquarters and often used for events, but club members couldn’t keep it a secret. Zhe Jiang Heen is a favorite among Hong Kong gourmands, particularly for its pork belly. Mr. Pan, who prepares a traditional version of the dish, serves only a dozen or so portions a day, so it must be pre-ordered when making reservations.

A bird flies past the Tian Tan Buddha, a major tourist attraction which measures 34 metres (111.5 feet) tall and weighs 250 metric tons, at Po Lin Monastery on Hong Kong's Lantau Island July 4, 2012. 

Lai Sun Development executive director Chew Fook-aun sees government plans to expand land supply as an opportunity for his company. One of Hong Kong's long-established property developers has a message for the market: it's back. Lai Sun Development hasn't bought land at a government auction since 1997, when it bit off more than it could chew just before the real estate market crashed. But the company has overhauled itself, paid down its debt and hired a new top corporate gun in the form of Chew Fook-aun, a veteran executive who was named deputy chairman last month. Now the company is eyeing the new administration's plans to increase land supply as a chance to get back in the game. With more land likely to come up for auction, "it will naturally provide more chances for us to participate", Chew said. Chew, 50, moved up the corporate ladder after being chief financial officer at several companies, including the Link Real Estate Investment Trust, Kerry Properties (SEHK: 0683) (a stablemate of the South China Morning Post (SEHK: 0583 and most recently at clothing retailer Esprit. He was also previously in charge of the property portfolio of a private family office in Hong Kong. With his previous exposure in investor relations, Chew has forged close links with global funds and research analysts. He said he hoped to leverage his expertise to inject new life into Hong Kong-listed Lai Sun Development, which trades at a steep discount to its peers on thin volumes. "We will take a proactive role to explain to the investment community about Lai Sun's business operation after its reorganisation," Chew said. Chew is also a deputy chairman and executive director of parent Lai Sun Garment (International) and executive director of eSun Holdings, which has interests in media and entertainment, and the group's mainland property arm, Lai Fung Holdings. All told, Chew gets paid HK$13 million for those four jobs, according to the group. Chew, who plays squash and takes daily swims, said he was recruited to Lai Sun after he resigned from Esprit in December because he could not spend the required time in Europe, where most of the struggling fashion brand's sales are made. "Appointing a new deputy chairman shows [Lai Sun's] intention to increase its exposure in the property market," said Jonas Kan, a senior vice-president who tracks property at Daiwa Capital Markets Hong Kong. Kan noted that the group owned a number of quality assets in Hong Kong such as Hong Kong Plaza in Shanghai and the HK$1.1 billion redevelopment of the Ritz-Carlton Hotel into a grade-A office building in Central. The Central project is a 50-50 joint venture with China Construction Bank (SEHK: 0939, announcements, news) and due to be completed in the third quarter. Lai Sun Garment Group, was founded in 1947 by the late textile tycoon Lim Por-yen, the father of the present chairman Peter Lam Kin-ngok. The group diversified into property development, becoming a midsize developer in Hong Kong. It also went into hotel management, owning a single property in Vietnam, and in 2000, branched into the production and distribution of media and entertainment. The founding family still controls the company, whose main business these days is property in Hong Kong and on the mainland. It no longer has interests in garment making. Lai Sun Development ran into financial trouble after it paid HK$7 billion for the Hotel Furama in Central at the peak of the market in 1997, an investment that became a big liability as the Asian financial crisis hit. Collapsed property values left the company mired in debt and it took them seven years to dig themselves out from under it. At the peak of its credit crisis in 2002, the firm reported total debts of HK$8.19 billion. It had to sell core assets, including a 90 per cent stake in the Hotel Furama redevelopment, to Singapore's CapitaLand and American International Group (AIG) in 2003. The hotel site was redeveloped into the AIG Tower, which has been renamed AIA Central. Lai Sun Development still has a 10 per cent stake in the project. By July 2011, Lai Sun Development's debt load had fallen to HK$2.41 billion, and it now has HK$1 billion in cash on hand. As a whole, the group of four companies had total cash reserves of HK$5.3 billion, which should be enough to finance the construction of existing property projects, Chew said. Of the group's 15 million sq ft property portfolio, 11 million square feet of residential and commercial projects is under construction in Hong Kong, Guangzhou, Zhongshan and Shanghai. The rest is completed office and retail properties that the company rents out. Investors have so far been unimpressed with Lai Sun's corporate overhaul. Yesterday, the share price of group flagship Lai Sun Development rose 0.87 per cent, closing at 11.6 HK cents. The benchmark Hang Seng Index, meanwhile, added 0.13 per cent to 19,709.75 points.

Hutchison Whampoa (SEHK: 0013), the flagship conglomerate of Li Ka-shing, saw its shares rise sharply yesterday on news that it was nearing a deal with British telecommunications giant Vodafone to merge their mobile networks in Ireland into a joint venture. The combination would be the latest example of efforts by rival mobile network operators to pool resources to cut costs and make the best use of their infrastructure investments, without compromising service to customers. Shares of Hutchison were up 3.9 per cent to finish at HK$70.60, the blue-chip stock's highest close since reaching HK$70.82 on May 9, after earlier rising almost 5 per cent to a nine-month high during the session. Details of the proposed 50-50 joint venture between Hutchison's Three Ireland unit and Vodafone had been drawn up, but nothing has been signed, according to separate sources cited by Reuters and Bloomberg. That infrastructure-sharing arrangement would result in the biggest mobile network in Ireland, where Dublin-based Eircom Group's Meteor Mobile and Telefonica Ireland's O2 also compete. Three Ireland and Vodafone, however, will maintain their respective radio spectrum licences, sales teams and marketing operations to serve their own subscribers. Savings for each mobile carrier are estimated to be worth more than £200 million (HK$2.43 billion) over five years, the Financial Times said, citing a person with knowledge of the negotiations. Both Hutchison Whampoa spokesman Hans Leung and Three Ireland spokeswoman Rachel Channing declined to comment on the reported deal. Three Ireland had earlier sought to expand operations in its market through a €2 billion cash offer to buy the troubled Eircom, which had been in supervised credit protection. The Hutchison unit's bid was rejected in May after authorities accepted a restructuring plan. Management consultancy Booz Allen Hamilton said telecoms firms started adopting network-sharing arrangements in Europe as early as 2001, when the cost of acquiring 3G licences in the region soared. That put pressure on many mobile network operators to share infrastructure deployment and operating expenses. In Hong Kong, Hutchison also has an infrastructure-sharing deal with a rival operator. Its subsidiary, Hutchison Telecommunications Hong Kong, formed a joint venture called Genius Brand with PCCW (SEHK: 0008) telecommunications arm HKT that won a government licence in 2009 to deliver high-speed 4G mobile services on a block of radio spectrum in the 2.6-gigahertz band.

The new chief secretary has rejected protesters' claims that Beijing has interfered in Hong Kong's internal affairs in contravention of the "one country, two systems" principle. Carrie Lam Cheng Yuet-ngor said yesterday that she could find no evidence from her experience in the administration to support the frequently levelled accusation that the "Western District is ruling Hong Kong" - a reference to the location of the central government's liaison office. "That could never happen because the government is accountable to the public," the former secretary for development said. Lam insisted that the boundary between the two systems, as outlined in the Basic Law, was very clear and she promised to uphold the principle in her coming five years in office. "I think the liaison office's intention was to express care," she said. Her comments on Commercial Radio contrasted with the strongly expressed views of some of the up to 400,000 protesters in the annual July 1 march that mainland authorities had interfered in the city's affairs and the chief executive election. New chief executive Leung Chun-ying fuelled these fears with an hour-long visit to the liaison office a day after he won the job in March. Pan-democrats accused him of thanking liaison office staff for canvassing for him, but Leung said the visit was to prepare for his trip to Beijing to accept the appointment. "The backing of the mainland is one of the strengths of Hong Kong 15 years after the handover," Lam said yesterday. "The use of labels like 'pro-China' or 'leftists' nowadays is outdated. It is no cause for criticism if the central government's institutions based in Hong Kong express care about the city's affairs." Legal sector lawmaker Margaret Ng Ngoi-yee disagreed. "I think Lam's experience was very different from the public's, as there was clear evidence that the liaison office interfered in the chief-executive election," she said. But former secretary for justice Elsie Leung Oi-sie said the liaison office's operations had been in accordance with the standards stated in the Basic Law. In the US, State Department spokeswoman Victoria Nuland declined to comment directly when asked whether the US had been asked to help Hong Kong prevent interference from the mainland. "We support the right to peaceful protest and dialogue to solve issues." Meanwhile, Lam said she did not have ambitions to be the next chief executive because she had promised her husband, Lam Siu-por - who persuaded her to accept the job as Leung's No2 - that she would quit public service in five years.

The size of Ko Wing-man's balconies breached a rule. Two ministers apologised yesterday for illegal structures and building work at their properties, as the controversy rolled on. The apologies came on the second day in office of Chief Executive Leung Chun-ying, who is facing legal challenges and calls for him to resign over the illegal structures found at his house on The Peak. Food and Health Secretary Dr Ko Wing-man made a second apology for not seeking approval before merging his two penthouse flats in Kowloon Tong. This was followed by Ko's colleague, Education Secretary Eddie Ng Hak-kim, apologising for an unauthorised drying rack outside his tenanted flat in Wan Chai. Meanwhile, Leung has yet to clarify whether a trellis at his home - one of six unauthorised structures found at the Peel Rise property - was a replacement for a trellis built by the former owner or a new one that he had built. In an ironic twist, one of the "authorised persons" Leung hired to inspect his home last month was found to have an illegal housing structure. Andy Wong Kam-din, a Poly University engineering professor, changed the flower bed design at his home in Tsuen Wan without seeking approval, and a removal order the Buildings Department issued in May 2010 has yet to be complied with. Wong said in statement last night that the removal order covered 1,500 households in similar situations to his on the estate where he lived and that more than 100 of them, including him, had filed appeals. A preliminary hearing is scheduled for October 22, he said. Others embroiled in the growing controversy of illegal structures include lawmaker Cheung Hok-ming, Executive Council member Bernard Chan and Commerce and Economic Development Secretary Gregory So Kam-leung. So and Chan yesterday said that removal works were under way. In the Legislative Council yesterday, Ko declined to comment on his integrity, saying it was for the public to judge. "It is true that I did not appoint an authorised person to submit a revised plan [for the alteration] at the time [in 2005]. For this, I sincerely apologise to the public," Ko said, adding he did not do so as the alteration did not involve a structural wall. Surveyor Vincent Ho Kui-yip said the Buildings Department usually approved merging flats without removing a structural wall. But in Ko's case, the size of the expanded flat's balconies exceeded the five-square- metres-per-apartment rule. Ho said that the building plan shows that Ko's contractor gave the merged unit two balconies with a total area of 5.4 square metres. "Ko may have to restore the wall or reduce the size of his balconies, but the latter would be a great disturbance to residents," Ho said. Ko has also admitted that a glass house was built on the rooftop, but it was immediately removed after Leung asked him in May to be the new health minister. As for education chief Eddie Ng, a spokeswoman said his drying rack had been removed. On an RTHK programme yesterday, Executive Council convenor Lam Woon-kwong echoed Chief Secretary Carrie Lam Cheng Yuet-ngor's view that it was unlikely Leung had tried to conceal his illegal structures, as some critics have claimed. Asked if he ruled out doubts about Leung's integrity, Lam said: "We'll wait and see how he will explain the details."

A law to hold auditors criminally liable if they fail to declare a company's accounting problems is set to pass after the city's two largest political parties yesterday said they backed it. The 2,000-page Companies Bill, being debated in the Legislative Council, aims to modernise the outdated Companies Ordinances. Accountants have been lobbying lawmakers hard in the past two weeks to remove the criminal liability provision. But the bill is expected to be approved by Legco after the Democratic Party and Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) told the South China Morning Post (SEHK: 0583) yesterday they would back it. "Although many accountants worry about the liability, there is a public interest so we support the law change,'' said DAB legislator Starry Lee Wai-king, herself an accountant. Paul Chan Mo-po, legislator for the accountancy sector, yesterday withdrew a proposed amendment to the bill that would have removed the criminal liability provision. He told the Post he will ask lawmakers to accept an amendment that accountants only face criminal liability if they failed to make the declaration "knowingly" and not "recklessly'' as stipulated in the bill. "I agree there is a public interest issue here. If an accountant knows about the problem and does not make the declaration, they should face liability,'' Chan said. Chan will still lobby lawmakers to vote down a provision that would make junior accountants liable. He wants only qualified accountants who have signed the audit report to face criminal sanctions. The bill means auditors will face prosecution if they fail to disclose financial irregularities. They could also be punished for failing to declare if they were unable to obtain all the information needed to resolve any discrepancies. If convicted they would face a maximum fine of HK$150,000, but there would be no jail term. Separately, the Securities and Futures Commission (SFC) has proposed criminal sanctions, including fines and jail terms, for sponsors of initial public offerings (IPOs) which fail in their due diligence. Auditors and sponsors have come under the spotlight recently after several companies were found to have accounting problems after listing. The High Court last month ordered sport fabric maker Hontex International Holdings to pay back more than HK$1 billion to investors for overstating its revenue and profit in the three years before issuing its listing prospectus in 2009. However, even with support secured for the bill, there is little hope of a quick resolution as three radical democrats continue filibustering attempts to delay the vote. "Our target is not the Companies Bill but we will make sure it will not be voted on until next week," said People Power lawmaker Wong Yuk-man. Brokers have complained that the filibuster has hurt investors' interests. "The law change will ensure accountants perform their duties,'' said Christopher Cheung Wah-fung, chairman of Christfund Securities. "The lawmakers should abandon their filibuster." The bill is already having an effect. Listed building materials distributor E. Bon Holdings said yesterday its auditor Grant Thornton had resigned over two outstanding accounting issues in its annual report.

Decades before Asian influences became ubiquitous on Western runways, Guangzhou-born designer Vivienne Tam moved to New York, determined to bring her own vision of Asia. At first, she met with resistance. “There are designers in China?” she recalls hearing. Ms. Tam, 52 years old, remains New York-based but travels to Asia every two months, and celebrities ranging from Beyoncé to Zhang Ziyi wear her clothes. She plans to expand her business further in China, with a goal of building 200 stores there over the next two years. With a career built on blending influences, she is known for her collaborative work. In 2010, she designed a butterfly-themed “digital clutch” laptop for Hewlett-Packard, and she has recently branched into clothing for yoga, which she practices herself, with Olympic gymnast Li Ning. Her most recent project is the Vivienne Tam Suite, a minimalist corner space at Hong Kong’s Hotel Icon that she designed with the principles of feng shui in mind. Sitting on a plush red Bouroullec Brothers sofa, one of the few splashes of color in her suite, Ms. Tam spoke to the Journal about China, telling stories through design and her favorite Hong Kong filmmaker. Many years ago, when I went to New York and said “I’m a designer from Hong Kong and China,” they said, “There are designers in China? There are no designers in China, only manufacturers.” The world is different now. Back then, they questioned me. I cried when they said these kinds of things. It was hard to hear that, because I’m Chinese. It was only when I got an appointment, once they saw my work, that they’d say, “I love your work.” 

 China*:  July 7 2012 Share

Water is discharged from the dam to lower its level - The final turbine of the massive Three Gorges Dam was connected to the grid yesterday, marking the completion of the controversial hydropower project that cost more than US$50 billion and displaced at least 1.3 million people. The installation of the project's 32nd 700-megawatt unit brought total capacity up to 22.5 gigawatts (GW), accounting for 11 per cent of the country's hydroelectric capacity. "The complete operation of all the generators makes the Three Gorges Dam the world's largest hydropower project, and the largest base for clean energy," China Radio International quoted Zhang Cheng, general manager of the project's operator, China Yangtze Power, as saying at a ceremony. The construction of the hydropower plant began in 1994 and its first generating unit was connected to the grid in July 2003. Xinhua reported that it had already generated 564.8 billion kilowatt-hours, saving nearly 200 million tonnes of coal a year. But the project, on the middle reaches of the Yangtze River, cost 254 billion yuan (HK$312 billion), four times the original estimate, and a further 123.8 billion yuan has been spent on "follow-up work". Beijing has long held up the dam as a symbol of its engineering prowess, a solution to the frequent floods of the country's longest river and a source of badly needed electricity. But in May last year the government admitted the dam had spawned a range of problems. The project began in 1993 despite warnings the weight of the reservoir would dangerously alter central China's geology, uproot millions of people, poison water supplies by trapping pollution and disrupt the Yangtze watershed. Hydropower construction slowed after building work on the dam was completed in 2006, with several large-scale projects vetoed because of the soaring costs of handling displaced people and protecting the environment. But Beijing is now committed to bringing another 140 GW of hydropower capacity on line between now and 2015 to meet its renewable-energy targets.

Li Ning sponsor the Singapore Open badminton championship in June. Shares in the sportswear group jumped on Thursday on news their CEO resigned. China's best known local sportswear group Li Ning (SEHK: 2331) Company Limited, grappling with a slowdown that has halved its share price in recent months, replaced its chief executive on Thursday and said it will focus more on its business in China. The company said founder and Olympic gymnast Li Ning and executive vice-chairman Kim Jin-Goon, who is a managing director at US private equity fund TPG Capital that invested in the retailer this year, will lead the firm during the search for a new CEO after the departure of Zhang Zhiyong. Shares in the company, which have dropped abount 20 per cent this year, jumped on the news on hopes of more effective management and a clearer strategy for China. “Investors put a bet on the new jockey. Kim has a strong track record in retail and comes from the private equity front, and that fuels hopes of better prospects going forward,” said Steve Chow, head of research of Kingsway Group Research. “It’s set to strengthen the management team. At least the management is now facing the problems of the industry and trying to solve them.” Li Ning, backed also by Singapore sovereign fund GIC, has struggled in recent months as China’s economy has slowed, leaving inventories bloated. Like many other local sportswear groups, it plans to cut back on new stores openings after an expansion blitz following the 2008 Beijing Olympics. “The first most important focus for us is to build a very clear and strong brand with clear brand strategy that focuses on the core businesses in China,” Kim said on a conference call. “Secondly, to continue to make investments into this brand with a much clearer focus in building comparatively exciting products with much better design and technology, and shortern the development cycle to keep track with market changes.” Li Ning said Zhang, who has been with the company for 20 years, had agreed the time was right for new leadership, but would continue as an executive director and adviser. The change of management comes just three weeks after Li Ning, which competes with local player Anta Sports as well as Adidas and Nike, warned that profits for this year would be weaker than expected because of soft sales and high marketing costs. Kim said it could take 6-12 months for inventories to return to a normal level, while it may be three years before the group’s earnings rise steadily. Li Ning’s inventores of finished goods swelled to 1.25 billion yuan as of December last year, up from 872 million a year earlier. Li Ning’s shares rose nearly 6 per cent to HK$4.96, outpacing a 0.4 per cent drop in the benchmark Hong Kong index. They have shed half their value since a mid-March peak. “It brings new excitement and may help strengthen the management,” said Patrick Yiu, a director at Cash Asset Management. “It brings new hope of a potential breakthrough in a struggling industry.” Kim has a successful track record in driving transformation at consumer and retail companies in South Korea and China, including Dell Korea, China Grand Auto and footwear and apparel distributor Daphne International Holdings Ltd. He was previously an executive at Daphne, a family-run Taiwan shoe firm in which TPG invested through a convertible bond in 2009 and turned the company around. TPG’s other investments in China have included Shenzhen Development Bank and Wumart. TPG and GIC agreed in January to invest around $115 million in Li Ning through a convertible bond, giving much-needed capital to a company whose stock fell more than 60 per cent last year. TPG also acquired 5 per cent of existing stock of the company from a family trust. Li Ning also appointed Samuel Su as an independent non-executive director. Su is Chairman and CEO of the China Division of YUM! Brands, Inc, a restaurant group with brands including Pizza Hut, KFC, Taco Bell and Little Sheep.

Giant pandas grab London's imagination - Sichuan province in Southwest China is home to the giant panda and boasts the largest population of the animals in the world. But this week Sichuan has a rival to its title of panda capital of the world, and the competition comes from an unlikely challenger. London, better known as the home of Big Ben, is hosting 108 pandas who will be sightseeing in the English capital as part of International Panda Awareness Week, fittingly known as PAW. The event was launched on Wednesday with 108 costumed pandas performing a tai chi-inspired dance in central London's Trafalgar Square. PAW was pioneered by the Chengdu Panda Base, a world-leading breeding and research center for giant pandas in Sichuan, and aims to enhance awareness and support for the conservation of one of the world's most threatened species. There will be a number of events in London this week, including a panda posse hosting a panda party in Covent Garden, pandas taking over the London Underground and pandas visiting the city's most famous landmarks. The week is Chengdu's latest campaign to raise awareness of the endangered animal. London was chosen as the venue for the campaign because the Olympic Games open in the city in just over 20 days. Last month black-and-white stripes were painted on 30 taxis to imitate the look of a panda, and another 20 taxis were decorated with a painting of a cartoon panda in its natural habitat surrounded by bamboo. Both designs featured the slogan "Chengdu, hometown of pandas, spice it up." PAW is supported by British TV wildlife presenter Nigel Marven, who is also the first Chengdu panda ambassador from the West. Marven and panda experts from Chengdu, accompanied by the costumed pandas, will visit London primary schools to educate children about the importance of saving the giant panda and tell them how they can play a role in Chengdu's conservation efforts. "It was a truly magical experience that resulted in me having the privilege of becoming the first Western Chengdu panda ambassador. Pandas have been a lifelong passion of mine, which is why I jumped at the chance to be involved with the launch of PAW in London," said Marven. "I am confident all the great work taking place during PAW will highlight the fantastic efforts of Chengdu city, especially the CPB, and help raise awareness for one of the world's most threatened species, the giant panda." The panda base was founded in 1987 when six giant pandas were rescued from the wild. Chengdu now has the largest captive breeding panda population in the world and aims to increase the number from 108 to 150 in the next decade. Sichuan is home to more than 80 percent of the world's panda population. "Our ultimate goal is to help pandas return to their natural habitat and to increase the number of giant pandas living in the wild. We hope that PAW will help us to boost support for panda conservation and find new advocates for this special cause," said Zhang Zhihe, director of the panda base.

The Taiwanese fishing boat (left) carrying the protesters is chased by a Japanese coastguard vessel near the Diaoyu Islands. Taiwan's coastguard has blocked an attempt by its Japanese counterpart to board a Taiwanese fishing boat sailing near the disputed Diaoyu Islands in the East China Sea, in the latest protest over competing sovereignty claims to the chain. The boat, carrying three protesters from Taiwan's Defend Diaoyutai Association, sailed towards the islands on Tuesday night from a fishing port near New Taipei City, the Taiwanese coastguard said. "When the boat was just 1.6 nautical miles from the Diaoyu Islands, Japan's coastguard sent three patrol vessels which attempted to block the fishing boat and hold it for inspection," said Wang Chung-yi, deputy director general of Taiwan's Coastguard Administration. But Taiwan's coastguard, which sent five patrol vessels as escorts, flashed LED signals stating the Japanese boats were intruding in Taiwan's territorial waters, Wang said. The Japanese responded with a similar device declaring its claim to the area, he said. The incident ended without further conflict. The fishing boat later sailed back to Taiwan, Wang said. The three protesters, led by Huang Hsi-lin, chairman of the Taiwanese association, said the protest was the first against Japan by the newly formed World Chinese People Defend Diaoyutai Alliance. He said it was a response to recent moves by the Japanese side, including the landing of two local assemblymen on the Diaoyus and the launch of a campaign by nationalists, led by hawkish Tokyo Governor Shintaro Ishihara, to buy islands in the chain from their purported private Japanese owners. Japan lodged a protest with Taipei's foreign ministry over the incident. Steve Hsia, deputy spokesman for the ministry said: "We refused to accept the protest on the grounds that the islands are our territory." The Diaoyu Islands, known as the Senkaku Islands in Japan, are claimed by Taipei, Japan and Beijing. Over the years, there have been a number of protests organised by Taiwanese and Hong Kong activists to protest against Japan's claims. In Beijing, Foreign Ministry spokesman Liu Weimin reiterated Beijing's claim to the Diaoyus, saying: "We have asked the Japanese side not to do anything that is harmful to the safety of Chinese people, including those from Taiwan." Beijing has asked Taipei to help uphold Chinese claims and explore fishing and oil resources in the region, but Taipei rejected the call.

Beijing on Wednesday urged Tokyo not to take any action that could endanger Chinese lives or property, including those of Taiwan compatriots. Foreign Ministry spokesman Liu Weimin made the remarks in response to a Taiwan fishing boat entering waters near China's Diaoyu Islands. The boat, carrying Taiwan activists, sailed near the islands in the East China Sea and entered "Japanese waters" on Wednesday, Japan's Kyodo News Agency cited Japan Coast Guard officials as saying. The boat bumped into a Japanese patrol ship and paint was scratched, a Japanese coast guard official said. No injuries were reported. "The Diaoyu Islands and its affiliated islands have been Chinese territory for centuries and China has indisputable sovereignty over the islands," Liu told a news conference. "China will continue to take necessary measures to firmly safeguard its sovereignty over the Diaoyu Islands," he said. According to Kyodo, an aircraft from the 11th Regional Coast Guard Headquarters in Naha, Okinawa Prefecture, spotted the boat about 37 kilometers southwest of the main island. Japan patrol ships issued a warning to the vessel, but it kept sailing toward the islands. Officials from Taiwan's coast guard administration said five patrol boats have been sent to protect the boat and the nine people on it. In Tokyo, Chief Cabinet Secretary Osamu Fujimura told a news conference: "We do not know their objective but whatever the purpose, we will definitely not tolerate the action of entering (Japanese) waters.'' Authorities in Taiwan confirmed that a boat from the island was operating near the Diaoyu Islands, but refused to accept a protest lodged by Japan over the incident, the Taipei-based Central News Agency said. The Diaoyu Islands, a group of uninhabited islands, lie 410 km from Japan's Okinawa Islands, about 300 km from the Chinese mainland and less than 100 km from Taiwan. While China wishes to solve the issue through negotiations, Japan has refused to discuss it as it currently controls the islands, said Zhu Wenqi, a law professor at Renmin University of China and former member of the International Court of Justice. China sees no need to bring the issue to an international arena since it has indisputable sovereignty over the islands, he said. The dispute with Japan actually may help to strengthen cross-Straits ties, said Feng Zhaokui, a Japanese studies researcher with the Chinese Academy of Social Sciences. The mainland and Taiwan share the same stance and may work together to push Japan to start negotiations and even jointly develop the region with its rich fishing and tourism resources, he said.

Hong Kong*:  July 6 2012 Share

Property fund management firm ARA Asset Management said on Wednesday its two largest shareholders, CEO John Lim and Hong Kong billionaire Li Ka-shing’s Cheung Kong (SEHK: 0001) Holdings, have cut their stakes in the Singapore-listed firm. JL Investment Group, a firm controlled by Lim, said in a corporate disclosure its deemed interest in ARA will fall to 32.4 per cent from 36.45 per cent once the share sale is completed. Together, JL and Cheung Kong will continue to control a substantial stake of 46.98 per cent in ARA, according to the regulatory statement. Cheung Kong, Li’s Hong Kong-listed flagship property firm, held 15.6 per cent of ARA as at Aug 22, last year, according to ARA’s website. ARA, which manages S$20.8 billion (US$16.49 billion) in property assets as at end-March, said the sale of shares of by its two shareholders “is to enhance the trading liquidity of ARA shares and to meet investors’ strong demand for ARA shares”.

Hong Kong customs seized nearly 2kg of cocaine hidden in a suspect's "specially made underpants and a pair of shoes". Hong Kong authorities said on Wednesday they had arrested a suspected drugs smuggler at the city airport with cocaine stuffed in his specially adapted underpants. The 63-year-old, who was not identified, was arrested after arriving from Sao Paulo in Brazil on Tuesday, the Customs and Excise Department said in a statement. He was found to be carrying nearly 2kg of the drugs in his “specially made underpants and a pair of shoes”, it added. The haul was worth an estimated HK$2.2 million, according to the department, adding that the man would appear in court on Thursday to face drugs-trafficking charges. He faces a maximum sentence of life imprisonment and a fine of HK$5 million if convicted. Hong Kong made its biggest ever cocaine bust last September after seizing more than half a tonne of the drug. Eight people from the United States, Colombia and Mexico were detained. Brazilian authorities said last year they would spend US$2.2 billion to crack down on drug trafficking, particularly in border areas.

In Hong Kong, part of selling an initial public offering long meant turning to the city’s ultra-wealthy for large orders and pledges not to sell in the first months after the stock’s debut. Tycoons were seen as trendsetters, able to lure smaller investors wishing to emulate their smarts. Now, such traditional cornerstone investors have lost interest in IPOs. One reason, according to bankers, is that deals no longer are quick money-spinners; 75% of new listings since 2009 have underperformed the city’s main stock index, according to FactSet. As a result, high-net-worth investors, which include the likes of Li Ka-shing, the city’s richest man, and real-estate tycoon Lee Shau Kee, contributed just 2% to all cornerstone investments so far this year, down from 20% in 2009, according to data from Bank of America Merrill Lynch. That was a year in which the benchmark Hang Seng Index surged 52%. This year, the market is up a more modest 5.5% after sliding 5.4% during the second quarter. “Historically, the cornerstone tranche of Chinese IPOs was taken up by Hong Kong tycoons, but this has evolved over time,” said Jason Cox, co-head of Asia Pacific global capital markets at Bank of America Merrill Lynch. Now, new cornerstone investors are emerging. They range from companies in similar industries to those with government or political ties, to private-equity investors who spy value. Take Chinese coal producer Inner Mongolia Yitai Coal Co., which is taking orders for a planned $1.1 billion share sale. Trading is to begin trading in Hong Kong on July 12. It has secured $388 million from seven cornerstone investors, including China-based private-equity firm China King Link Investment Holding Ltd. and power producer Datang International Power Generation Co. All have agreed to hold shares for at least six months. So far this year, corporate buyers have accounted for 16% of all cornerstone investments in Hong Kong IPOs, double the 8% of 2011. That is becoming true even outside Hong Kong: State-owned palm-oil operator Felda Global Ventures Holdings Bhd.’s $3.1 billion IPO in Malaysia locked in around $1 billion from cornerstone investors, including state-owned funds and state governments. In cases where a company selling shares is owned by the state, other government-related firms often jump in to take part. “In today’s risk-adverse market environment, cornerstone investors’ participation is an important step in helping to ensure a successful completion of a deal, and at the moment, that is coming more from corporate or strategic investors and private funds that have taken a more strategic view in their investments” said Kester Ng, chairman of Asia equity capital markets at J.P. Morgan Chase & Co. Even private-equity funds, which don’t typically buy publicly-traded stakes, are joining in, making up 41% of cornerstone investors in Hong Kong IPOs in 2012, compared with just 5% last year, according to data from Bank of America Merrill Lynch. “IPO valuations have fallen closer to private market levels, therefore financial sponsors [like private-equity funds] are more actively participating in the IPO market,” said Mr. Cox at Bank of America Merrill Lynch. Still, these private-equity funds or corporate investors don’t often have the big-name reputations that follow the tycoons. As a result, they haven’t been able to generate the same enthusiasm for IPOs among small investors, who, like tycoons, have a reputation for seeking a quick profit.

 China*:  July 6 2012 Share

Beijing wants private firms to invest overseas in cities such as Frankfurt, Germany, to give local industries a development boost. The central government has announced a series of measures, including tax exemptions, to encourage private mainland companies to invest abroad. A joint declaration by 13 government departments - including the National Development and Reform Commission (NDRC), the Ministry of Foreign Affairs, the Ministry of Commerce and the People's Bank of China - has called for various government departments to work together to resolve the major problems faced by private mainland firms investing abroad. Mainland banks should be encouraged to provide loans, export credit and collateral to finance overseas deals of private companies, the document says. It also urges financial institutions on the mainland to assist private firms in issuing bonds in yuan and foreign currencies, help private companies list on mainland and overseas stock exchanges and establish overseas investment funds. Private companies should be encouraged to invest in high technology and advanced manufacturing in other countries to spur the development of strategic new industries and upgrade industries in China, the document says. The government should support private companies in establishing distribution centres, exhibition facilities and logistics networks overseas, it adds. The document calls for the speeding up of customs, simplification of approval procedures and reduction of red tape for private overseas investments, and says measures to ensure the safety of Chinese personnel and assets overseas should be strengthened. "Currently, our nation is at an important stage of accelerating the overseas investments of private companies," it says. Private companies account for a small share of Chinese international investments. State-owned enterprises (SOEs) accounted for 73 per cent of the value of overseas Chinese investments last year and 98 per cent in the first quarter of this year, according to A Capital, a private equity firm that assists Chinese companies investing in Europe. Although China's overseas investments are not the largest in the world, they are the fastest-growing, with an annual rate of 54 per cent, says A Capital. The company expected Chinese overseas investments to reach US$800 billion from 2012 to 2016. About two-thirds of China's overseas investments pass through Hong Kong, according to the Hong Kong Trade Development Council.

Cuban President Raul Castro (centre, with his flight crew) arrives in Beijing for talks with President Hu Jintao on Wednesday. Cuban leader Raul Castro is visiting key trading partner China for talks with President Hu Jintao and other leaders in Beijing. Castro arrived on Wednesday to begin a four-day visit. Cuban state media said he was accompanied by Vice-President Ricardo Cabrisas Ruiz and Foreign Minister Bruno Rodriguez. Neither side has said what issues are to be discussed. Castro visited Vietnam and China as defence minister, a post he occupied from 1959 until he replaced older brother Fidel as president in 2008. During a 1997 trip to China, he spoke approvingly of the Asian giant’s mixture of socialism and market liberalisations. Cuba is China’s biggest commercial partner in the Caribbean. Bilateral trade totaled US$1.8 billion in 2010, state-run website Cubadebate said.

Attractive job offers no longer guaranteed - Visitors check out the UK booth at the 17th China International Education Exhibition Tour in Beijing this March. Hundreds of education institutions from more than 30 countries and regions participated in the exhibition in the hope of enrolling more Chinese students. After earning a bachelor's degree in business administration in the United Kingdom, Wang Xiuqi did not expect his only job offer to be at a container port in Dalian with migrant workers who had never been to university. The 25-year-old's job was to type information about containers entering and leaving the port into a computer. Since he returned to China after graduation in June 2010, he has not managed to find a better job. "I can't use what I learned from college at all, and I'm not reconciled to this," Wang said. He quit the job in May, and has started the "torturous" process of job hunting. "I speak good English, I have overseas experience, but now I'm not sure whether I would get a job that offers an air-conditioned office and 2,000 to 3,000 yuan ($314 to $471) per month," Wang said. "And I don't understand why it's just so difficult for an overseas returnee like me to find a job." International recruiting company Hays reported in its 2012 college graduates employment report that 66 percent of employers across Asia would consider employing or sponsoring qualified overseas candidates in areas short of skilled workers. That is down from 79 percent in 2011. "With the fast development and globalization of China, overseas returnees have begun to lose the advantage in terms of language skills. In many cases, a graduate from a local Chinese university can speak as good English as an overseas returnee," said Simon Lance, regional director of Hays in China. "But this doesn't necessarily mean that a returnee loses his or her competitive advantage in the job market. What brings value to an overseas returnee is really their international exposure, overseas working experience and culture awareness," Lance said. "Overseas returnees need to be aware of their own advantage, personal desire and career direction. Even if the starting salary might be low, they probably will have better career progression due to the independence and problem solving skills developed from the overseas study or working experience," he said. The average starting salary for overseas returnees is around 3,000 yuan per month. About 43 percent earn less than 5,000 yuan and only 15 percent exceed 10,000 yuan, according to latest survey of Education International Cooperation Group, an overseas study consulting agency. "A 6,000-yuan job is really hard to find, but the living costs are really high," said Zhao Yaming, 27, who has just graduated with a master's degree in Australia. "I spent around 600,000 yuan studying in Australia. That means it will take 10 years for me to recover the cost of studying abroad, if I can save every cent I make," Zhao said. However, an employment expert said returnees are only losing the competitive advantage for entry-level positions. "In fact, China's companies lack high-end talent with overseas experience, at least five years working experience in world-famous companies, good professional background and managerial experience," said Chen Xi, a senior career consultant at Zhaopin Ltd, an online human resources company. "Most returnees who feel it is difficult to find a job majored in finance, language or management in college, but they are not likely to gain executive positions immediately after graduation. "For most Chinese overseas graduates, working for a few years before returning might be a better choice," Chen said. "The expanding number of overseas returnees might be one reason for the increasing pressure in the labor market," said Zhang Tao, deputy secretary-general of the UK branch of the Western Returned Scholars Association. Founded in 1913, the Western Returned Scholars Association is a Chinese government-affiliated entity consisting of more than 15,000 Chinese scholars and researchers who have studied abroad. "Studying overseas used to be confined to elite education, but now it has become an alternative of general higher education or even secondary education," Zhang said. "The era that all the returnees are granted well-paid offers has ended." "Starting their own businesses might be a good choice for returnees, since governments at all levels have been supporting returnees with business plans. But returnees should first be sure that they are capable of handling the challenge of running a company," she said.

Three Gorges Dam braces for flood peak - The sluice gates of the Three Gorges Dam are opened for the first time this year as flood water from heavy rain hurtles down the swollen Yangtze River in Yichang city, Central China's Hubei province, July 3, 2012. All 32 generators of China's Three Gorges Dam, the world's largest hydropower project, went into production on Monday, July 2 as flood season arrived. Located on the middle reaches of the Yangtze River, China's longest waterway, the Three Gorges Project consists of a 185-meter-high dam, a five-tier ship lock, a reservoir and 32 hydropower generators. The sluice gates of the Three Gorges Dam are opened for the first time this year as flood water from heavy rain hurtles down the swollen Yangtze River in Yichang city, Central China's Hubei province, July 3, 2012.

Hong Kong*:  July 5 2012 Share

More liberal-minded people should be invited to join the Executive Council, businessman and social welfare advocate Bernard Chan said after rejoining the government's top advisory body yesterday. Critics pointed out that the 29-seat council - which has 15 official members, including the chief secretary and ministers, and 14 non-official ones - lacks pan-democratic members. Half of the non-official members are seen as friendly to Beijing, as members of either the National People's Congress or delegates to the Chinese People's Political Consultative Conference. Chan said appointing more liberal figures to the body would clear doubts about Chief Executive Leung Chun-ying's sincerity to engage the wider community. "Given [that] the public are sceptical of him, it will do him good to invite more liberal-minded people [in the coming months]," Chan told the South China Morning Post (SEHK: 0583, announcements, news) after the first meeting yesterday of the new Executive Council. "Having said that, it is impossible to invite the opposition, as they are not going to agree with you anyway." Leung has indicated that more lawmakers will be appointed to Exco after the Legislative Council election in September. One legislator, Regina Ip Lau Suk-yee of the New People's Party, said she agreed to join Exco after Leung invited her in May, but she was glaringly absent from last week's list. The Democratic Party and Civic Party have hinted that they would not take seats in the council, as they saw it as Leung's "cabinet". Ip refused to speculate whether she had been snubbed because of her decision to abstain in a Legco vote on whether to expedite Leung's plans for a government restructuring. Asked if Ip would still make a good addition to Exco, should more legislators be invited, Chan said: "At the end of the day, the selected person should be a team player and follow the council's practice." In his interview with the Post, Chan defended the new Exco appointees, saying they were not merely pro-Beijing conservatives. "They are just pretty pragmatic … I think everyone wants to get things done." Chan, who was on the street to watch the July 1 rally for the first time on Sunday, said he considered himself a liberal, along with the likes of former Equal Opportunities Commission chief Anna Wu Hung-yuk and former anti-graft chief Fanny Law Fan Chiu-fun - both on Exco. "I hope this combination will show our determination to deliver the changes proposed in Leung's election platform," he said. Chan said he hoped the non-official members, who were usually informed of a policy at the last minute, could "have a certain level of participation in policymaking".

A concern group wants the introduction of a HK$3,000 monthly pension for those over 65. The call comes after a poll showing that 17 out of every 20 respondents believe poverty among the elderly is "serious or very serious." In addition, four in every five are "not or definitely not confident" of being able to enjoy retirement on their MPF money. The Alliance for Universal Pension said the findings are the result of telephone interviews with 1,032 people between June 5-12. Alliance organizer Au Yeung Kwun-tung said more than 85percent of respondents feel the current level of poverty among the elderly is serious or very serious, and 65.6percent believe the "elderly Comprehensive Social Security Assistance" cannot resolve the problem. Among the working group, more than 80percent said they are "not confident" or "definitely not confident" they will be able to rely on the MPF and personal savings for their daily needs and health- care expenses when they retire. Au Yeung said the new government should give retirement protection a high priority in order to alleviate poverty. "According to a survey we did after last year's policy address, more than one-third of the elderly live in poverty," he added. "The elderly poor are likely to be the cause of social conflicts in Hong Kong." Au Yeung said the means- tested special old age allowance of HK$2,200 a month proposed by Chief Executive Leung Chun- ying during his election campaign may only be used as a transitional measure towards an ultimate system of universal pension. "More than 163,000 elderly are unable to apply for the elderly CSSA because of means-testing. The government ought to review its current rationale of means- tests," Au Yeung said. "In the long run, the government must establish a universally covered retirement protection system - we urge a universal pension of HK$3,000 a month for everyone over 65." Alliance consultant Lee Kim- ming said the fact that 89.3percent of respondents support a universal pension scheme challenges a statement by the former chief executive, Donald Tsang Yam- kuen, that there is no consensus on the matter. "This is a very strong figure. We urge the new government to set a committee or a department to study whether it is feasible to establish a universal pension system," Lee said. Au Yeung said the alliance expects the new government to draft proposals on a universal pension scheme within the next five years.

A judge was unable to contain her anger upon looking at the photo of a skeletal three-month-old who died of starvation and slammed the mother for failing to recognize his condition. The mother, So Suk-yee, pleaded guilty to one count of ill-treatment of a child. The unemployed 32-year-old is now left with four children, three sons and a daughter. The dead infant was her fifth. Judge Adriana Tse Ching said the boy in the photo looked even more dreadful than children in the third world. The district court judge then passed the photo to So and demanded she look at it. But So showed no emotion as she said she did not know why her son died of starvation. Angered even further, the judge said So was utterly unreasonable and may have mental problems. Tse also said the nature of the case was serious and the court had to hand down a stiff sentence to prevent similar tragedies from recurring. She called for a psychological report on the accused and adjourned sentencing to July 13. So had two sons with her former boyfriend more than a decade ago, the court heard earlier. She later had a daughter with her husband and then two more sons with her current boyfriend Chan Kin-wai, of which the dead child was one. She lived with her daughter and two younger sons and survives on Comprehensive Social Security Assistance of HK$6,300 a month. The court heard that on April 19 last year, a social worker visited So's home in Kwai Chung and discovered the infant was skinny. But the accused told her she fed the child three to four times a day, about 200 milliliters each time. On May 5 last year, So found the baby showed little sign of life and took him to Princess Margaret Hospital where he was declared dead. A postmortem found the milk consumed by the baby contained just 60 percent of the fat concentration and 65 percent of the protein concentration found in normal milk solutions. The court heard that the milk was inappropriately diluted and was nutritionally insufficient for a baby. The victim weighed just 3.01 kilograms at the time of death. The figure shocked Prince of Wales Hospital obstetrics head Cheung Tak-hong, who said an infant of that age normally weighs about double that. Sze Lai-shan of the Society for Community Organization said: "It is a rare case of a baby being starved to death in Hong Kong because of poverty. "With these low-income families or those families living on the dole, mothers trim diets to save money to purchase baby powder." Social welfare lawmaker Cheung Kwok-chu noted that the workload of the Social Welfare Department has become extremely heavy. He said it is possible the social worker involved may not have identified the problem on account of being overworked. It is understood that the baby was asleep when the social worker visited. A department spokesman said the two remaining children who lived with So are now under the care of government-subsidized hostels.

 China*:  July 5 2012 Share

Confucius has been in the United States for nearly 300 years. Confucius (551–479 BC) was a Chinese teacher, editor, politician, and philosopher of the Spring and Autumn Period of Chinese history. A 1735 issue of the New York Weekly Journal devoted two pages to a reader's letter about the Chinese people's reverence for Confucius and several quotes from the ancient sage. Zhang Tao, a professor at Sichuan International Studies University, thought Americans lacked a basic understanding of China, when he first went to the United States as a visiting scholar. At the time, Zhang was looking through early U.S. media archives to study the formation of American national consciousness. Much to his surprise, he found Chinese cultural traces in this "purely American" academic field. Zhang ran across an issue of the New York Weekly Journal published in 1743, when the country had not become independent, at the library of the University of Pennsylvania in 2005. The four-page newspaper devoted its entire front page to an article about the morals of Confucius and the Chinese people's advocacy of Confucianism. Afterward, Zhang spent seven years collecting nearly 10,000 Confucius-related articles from 15 U.S. newspapers and studying the image changes of Confucius in these newspapers. Based on his studies, Zhang wrote a book named "Confucius in the United States of America." Almost all modern U.S. presidents have received 'criticism from Confucius' The New York Times, one of the most influential newspapers in the United States, once published an article criticizing George W. Bush for his malapropism. "Confucius said that if language is not correct, then what is said is not what is meant; if what is said is not what is meant, then what must be done remains undone; if this remains undone, morals and art will deteriorate; if justice goes astray, the people will stand about in helpless confusion."

Shark fin is going off menus at official banquets in the mainland by order of national leaders. While the move will make the stomachs of some tradition-bound officials rumble, activists in Hong Kong applauded a decision that could save many types of shark from extinction. The news came from the Government Officers Administration of the State Council, though officials admitted the ban could need three years to take hold. But as CNN noted on responses to the action, it will "help cut the cost of sometimes lavish banquets." As activists here also worry that it could take quite a while for the ban to take effect across the mainland, they are calling on Chief Executive Leung Chun- ying to take a firm cue from Beijing and step up efforts to halt the SAR's still- flourishing trade in shark fin as well as its consumption. In fact, efforts are already under way. Hong Kong Shark Foundation program director Bertha Lo Ka-yan said the word is that shark fin soup is no longer served at SAR functions. If this was announced publicly, she said, it would set a good example. "The CE's Office contacted us and said Leung was also concerned about the issue of environmental protection," Lo said. In the longer term, she added, the hope is for legislation to ban the sale and possession of shark fins in Hong Kong. Officials in Hong Kong's Environmental Protection Department, meanwhile, said menus for official functions do not usually include shark fin - though they did not make it clear that this was solely meant to save the big fish. Shark fin was off the menu to avoid giving impressions of extravagance with public money, they said. Up to 73 million sharks are killed each year, according to a 2006 estimate quoted by the Hong Kong Shark Foundation. And the World Wildlife Fund has said that 181 species of shark are under threat compared to 15 species in 1996,. Shockingly, many sharks that are caught have their fins hacked off and then dead or dying creatures are thrown back into the sea. The WWF's Hong Kong director, Andy Cornish, believes the Hong Kong government can do more to restrict shark fin sales in the SAR than just following China's plan. It was "avoiding the topic" of trade in shark fin, he said. Still, Cornish also said the ban in the mainland shows China is showing global leadership on the issue, reckoning that the leadership would do a "pretty decent job" within the three years. With shark fin soup a traditional and top-line dish served in Chinese cuisine, the total consumption for the mainland, Hong Kong and Taiwan is 95 percent of the world's dried shark fins. And in 2009 Hong Kong people consumed more than 9,300 tonnes of fins. Hong Kong is one of the world's largest trading centers for shark fin. From 70 to 80 percent of dried shark fin arriving here is sent on to the mainland and other places. Besides moves to take shark fin off menus at government functions, hotels and restaurants in Hong Kong have acted too. More than 97 have joined the WWF's "Alternative Shark-free Menu Program" since 2010. And Hong Kong and Shanghai Hotels has this year stopped serving shark fin at all its properties.

Hong Kong*:  July 4 2012 Share

Across America: Hong Kong film festival opens in US capital - Keith Wilson, curator of ancient Chinese art at the Smithsonian Institution's Freer Gallery of Art and Arthur M. Sackler Gallery, opens the 17th annual Made in Hong Kong Film Festival on June 27 in Washington. The Hong Kong Economic and Trade Office co-sponsored the festival, which runs through August. The annual roundup of Hong Kong cinema is one of the biggest events of its kind in the US. 

Across America: UN celebrates Chinese cuisine - United Nations Secretary-General Ban Ki-moon (left) accepts a souvenir from Thomas Woo, honorary president of the Food and Beverage Industry Association of Hong Kong, during a June 25 luncheon at UN headquarters in New York. The event, part of a daylong event to honor UN public servants, featured Cantonese cuisine, which originated in southeastern China, and cultural exchanges between China and the rest of the world. It was co-sponsored by the China International Cultural Communication Center and the association that Woo heads. 

The rate of sales of new and second-hand homes increased during the three-day-long weekend. Cheung Kong Holdings (0001) sold about 500 flat at The Beaumount in Tseung Kwan O from Friday. So far, 584 three-room flats have been put on the market. On Sunday, though, Cheung Kong raised prices for 42 flats by 5 percent. The highest per- square-foot price was HK$6,147 for a 927-sq-ft unit on the 45th floor. Cheung Kong will release more flats soon and also plans to hike prices for some remaining units by 5 percent or more. This is after more than 10,000 people visited the showflat at the weekend. In one of the biggest deals, a mainland family bought flats for more than HK$40 million. The Beaumount has 1,777, two-three flats between 657 and 1,003 sq ft. The showflat at another project, Providence Peak from Sino Land (0083), attracted 2,000 visitors at the weekend, realtors said. That development has 548 flats of 788 to 4,260 sq ft. The Riverpark at Sha Tin from New World Development (0017) and MTR Corp (0066) recorded 10 transactions. The developers released four more flats, taking the total to 687. The project has 981 flats from 655 to 3,029 sq ft with an average price of HK$9,065 psf. More action too in the second-hand market. Centaline Property recorded 17 transactions at 10 benchmark projects on Saturday and Sunday, up by around 42 percent from the previous weekend. Four more deals went through yesterday. Midland Property recorded two transactions at Metro City Plaza in Tseung Kwan O during the weekend. One was an upper-level, 862-sq-ft home in Block 1 of the third stage. The original asking price was HK$5.28 million, but a deal was struck when the owner lowered the price to HK$5.09 million, or HK$5,905 psf.

Hong Kong police are looking for more potential victims after 16 local investment and trading companies' websites, with a combined estimated daily trading volume of HK$44 billion, were compromised by mainland computer hackers. Police said six men from Shanghai, Hunan and Hubei were arrested in a joint operation by Hong Kong and mainland police on June 20 for launching "distributed denial of services attacks" - which swamp targeted websites with vast amounts of data - and blackmailing their victims for a total of 460,000 yuan (HK$563,000). Police believed there could be more unreported victims and appealed to them to come forward. Wang Xiaoyang, from the mainland's Public Security Bureau internet safety protection department, said: "Every successful attack not only caused great losses to the company, but also affected the stability of Hong Kong's financial system." The Hong Kong Police Technology Crime Division received reports between February and June about the attacks on 16 gold and silver investment and securities trading companies and the Chinese Gold and Silver Exchange Society. Fifteen of the companies were blackmailed for 30,000 yuan to 100,000 yuan. Four companies transferred 290,000 yuan to the attackers' mainland bank accounts. The identities of the 16 firms were not disclosed. Roy Ko Wai-tak, manager of the Hong Kong Computer Emergency Response Team Co-ordination Centre, said the denial of service attacks had become more popular in recent years as a way of extorting money from financial institutions. "In the past, we talked about computer viruses or hacking," Ko said. "This is not a real hacking - it just makes your computer unable to operate normally as it tries to process meaningless data." He said more companies had been offering data-scrubbing services to filter out malicious data before it reached websites and more firms had become aware of the threat since last year's hacking of the Hong Kong stock exchange's regulatory disclosure site. Police found that overseas hackers orchestrated that attack, which crashed the HKEx (SEHK: 0388, announcements, news) website and forced the suspension in trading of seven companies with a combined market value of HK$1.5 trillion. They included HSBC, Cathay Pacific (SEHK: 0293) and HKEx itself. Trading was also halted on a debt security and 419 warrants and derivatives linked to the suspended stocks.

The Nam Hoi Traders Association team (foreground) giving it their all in Victoria Harbor. Under an unforgiving sun followed swiftly by thick clouds, thousands of competitors yesterday paddled their way through the choppy waters of Victoria Harbour during the city's annual Dragon Boat Carnival. Canada's 22 Dragon-MDBC won the Women's International Championships, while Thailand's national dragon boat team took the International Cup. The main race yesterday drew professional and amateur teams alike to Tsim Sha Tsui East. Competitors seemed unfazed by the reported presence of a shark off Lamma Island, which triggered the closure of 12 beaches on Sunday afternoon. "I am not concerned," said Wukihiro Garcia, a racer for the Okinawa Takara Dragons. "We have lots of sharks in Okinawa too." The one-day event was divided into three races for international teams and seven for local teams, including the Professionals' Championships and the Hong Kong Disneyland Mixed Championships. There were 155 participating clubs from 12 countries, including Thailand, Canada and America. For the Gila Dragons, from the arid state of Arizona, it was their first race in Hong Kong, and they looked like an unlikely contender. "We know we are the underdogs," said Eric Tang, the team captain. They failed to place in the top three yesterday. The team was formed in 2002 and its 40 members used to train by paddling on top of milk crates on the Tempe Town Lake and each other's swimming pools. Taipei city later gave them a few real dragon boats in 2004, but they stuck to their roots: the team logo shows a Gila monster, a type of venomous lizard, sitting on a milk crate. The event also tested long-time local rivalries. Liu Kwong-sang, from the Accounting Professionals Association, still remembers his team's bitter loss to the Hong Kong Institute of Marketing last year by 0.45 seconds in the Professionals' Championships. "They are our biggest competitor," Liu said. But the marketing team won the title again yesterday, and Liu's team ranked third. The festival continues tomorrow, with a world championship competition and a final race on Sunday.

Chief Executive Leung Chun-ying talks to reporters after his first meeting with the Executive Council. The new government got down to work on Tuesday morning, as Leung Chun-ying chaired his first Executive Council meeting as chief executive amid continuing controversy about illegal structures at his home. Before the meeting started, Leung said he welcomed media coverage of his new cabinet and he planned to introduce Exco’s new non-official members to the press at noon. They include Barry Cheung Chun-yuen, chairman of the Urban Renewal Authority. Asked to comment about Sunday’s large protest march – estimates of the turnout ranged from 400,000 to 63,000 – Cheung said it reflected Hongkongers’ desire for change. “They want the government to change how it does things, to deal with their pressing concerns and implement policies that will cater for their needs”, he said. Commenting on protests against Leung on Monday night in Tuen Mun, Cheung said “[the protest] was normal because Hong Kong is a diverse society and people enjoy freedom of expression”. The Society for Community Organisation protested outside the chief executive’s office, where the Exco meeting was held, calling for the building of more public housing each year to shorten the waiting time for low-income people. Leung and non-official Exco members received their petition before the meeting.

Chief Secretary Carrie Lam Cheng Yuet-ngor, with Secretary for Education Eddie Ng Hak-kim (left), at a town hall meeting on Monday. She called on the chief executive to address the home issue as soon as possible. Chief Executive Leung Chun-ying faced calls from members of his new administration, on Tuesday morning, to clear public doubts over illegal structures found at his home on The Peak. Two members of the government – Chief Secretary Carrie Lam Cheng Yuet-ngor and Executive Council member Cheng Yiu-tong – asked Leung to give a detailed public explanation of the issue. But they insisted that Leung had no credibility problem, despite accusations that he may have lied about the structures. They were speaking on different radio programs. Lam said: “Based on the information I’ve got, Mr Leung has no integrity problem … Had I had any doubts over Mr Leung, I would have seriously reconsidered [whether to take up my post].” She said she would ask the chief executive to address the problem over his illegal home structures as soon as possible. Cheng said: “[Leung] should come out to explain [the illegal structures] in detail in a bid to put an end to the problem.” Although protesters forced Leung to abandon a town hall meeting in Tuen Mun on Monday night, Lam said the administration would continue to reach out to the community, “irrespective of whether people view [our visit] as a show or not”. Lam added that she had no ambition to become the city’s next leader.

Water quality 'guaranteed' for Hong Kong - People from Guangdong province, Hong Kong and Macao release fish into the Dongjiang River in Huizhou, Guangdong province, in June 2011. The quality of drinking water supplied to Hong Kong is fully guaranteed, despite the increasing number of environmental incidents on the Pearl River and growing demand on the Chinese mainland, a senior official said. Lin Xudian, deputy director of Guangdong Water Resources Department, said maintaining fresh water for the special administrative region is a priority. "At present, 1.1 billion cubic meters of water have been allocated to satisfy Hong Kong's annual water demand, which varies according to needs," he said. About 820 million cubic meters of water were transported to Hong Kong in 2011 through the Dongjiang-Shenzhen water supply project, which met 70 to 80 percent of demand, according to Guangdong Water Resources Department. The project, which was built in Dongguan, Guangdong, has provided up to 21 billion cubic meters of water to Hong Kong since it came into service in 1965. The source is at the lower reaches of the Dongjiang River, a tributary of the Pearl River, the banks of which have seen increasing industrialization and urban growth in recent years. Environmental incidents do happen, Lin said, but stressed that sufficient water has been stored in Hong Kong's reservoirs to meet any contingency. The river water sourced to Hong Kong is Grade 2, a higher standard for drinking water, Liu Zhisen, a water resources protection officer at the Pearl River Water Resources Commission under the Ministry of Water Resources, said in May. "Pollutants in the Pearl River can now be diluted and absorbed in certain sections," and are not harmful to the river, he said. A monitoring system for the Dongjiang River will be completed in the near future, to ensure safe supplies to Hong Kong, Lin said. Hong Kong's water supplies department estimated a shortfall of 39 million cubic meters of fresh water by 2020, partly caused by a rise in population. In his 2011 policy address, Donald Tsang, former chief executive of Hong Kong, announced plans to explore having a desalination plant in the city to meet its thirst.

Almost 90 per cent of the city’s low-income earners fear they will not have enough money put aside to support them in retirement, a pensions pressure group says. A survey for the Alliance for Universal Pensions found that 89.5 per cent of people earning less than HK$8,000 per month had no confidence that the Mandatory Provident Fund and their savings would be enough to support them when they could no longer work. “It’s difficult for low-income workers to save for the future. What’s more, the money they put into their MPF accounts may lose [value] in the long run,” said Nicholas Chan Hok-fung of the alliance. The MPF, created as the city’s compulsory private pension scheme in 2000, has long been criticised for offering poor returns, while fund managers charge high fees. Employees must pay in 5 per cent of their monthly salary between HK$6,000 and HK$25,000, with employers matching that contribution. Some 64.7 per cent of people at all income levels believe Chief Executive Leung Chun-ying’s plan to double the old-age allowance, so called “fruit money” for hard-up elderly people would not be enough to support the recipients’ basic needs. The city’s new leader promised in his manifesto that “fruit money” would be increased from HK$1,090 to HK$2,200 for those most in need, subject to a simple means test. But Chan said that would not be enough. “According to a study [by the alliance] in 2009, the amount of money that an elder needs to meet his basic monthly expenses is HK$2,900. The figure should be higher now because of inflation.” Dr Law Chi-kwong, of the University of Hong Kong’s department of social work and social administration, agreed that HK$2,200 might not be enough to meet an elderly person’s needs, but said the figure was a good starting point. “Some elderly people refuse to apply for the Comprehensive Social Security Allowance because of various reasons ... implementing the special old-age allowance is a quick fix to help more grass-roots elderly people,” he said. Some 70.8 per cent of respondents called for the government to drop the means test for elderly applicants seeking CSSA. Claimants have to provide details of their income and assets before receiving the money. “Many elderly people would rather collect aluminium cans or paper boards than apply for the CSSA because of the serious labelling effects and stigmatisation,” Chan said. A 68-year-old man, who refused to be named, said he felt “discriminated [against] and ashamed” when Social Welfare Department officials asked him to provide piles of documents to prove his eligibility. “I contributed to the city when I was young. But when I ask something in return [from the government], I don’t think I am respected,” he said. The study was conducted by Polytechnic University’s department of applied social science from June 5 to 12. It questioned 1,032 people, of whom 200 had low incomes.

 China*:  July 4 2012 Share

China’s services sector expanded at its fastest pace in three months in June, an official survey showed on Tuesday, but left intact market expectations that Beijing will deliver more policy measures to support growth in the near future. The latest survey by the National Bureau of Statistics and the China Federation of Logistics and Purchasing (CFLP) showed the purchasing managers’ index for the country’s non-manufacturing sector rose to 56.7 from 55.2 in May, the best reading since a 10-month high of 58.0 recorded in March. A reading above 50 indicates expanding activity and one below 50 signals contraction, according to the survey methodology. The reading from the services sector follows two PMI surveys of China’s vast manufacturing industry showing factory activity fell to a seven-month low in June, dampened by both external and domestic weakness. China’s fast-growing services industry, which accounts for about 43 per cent of output in the world’s Number 2 economy, has so far weathered the global slowdown much better than the factory sector. “The index shows stable and steady growth momentum of China’s services sector. Taking the official PMI indexes under consideration, they all indicate that China’s current economic growth shows signs of stabilising,” Cai Jin, a vice president at the CFLP, said in a statement accompanying the index. China’s official manufacturing PMI for June confounded market expectations of slippage into contrationary territory and clung to an expansionary reading of 50.2 when it was published on July 1 – albeit at a seven month low. A sub-index measuring new orders for the services sector r ose to 53.7 in June from May’s 52.5, t he highest level so far this year, according to CFLP’s Cai. The input price sub-index fell to 52.1 in June from 53.6 in May, while prices charged h eld below 50 f or the second straight month, at 48.6 versus May’s 48.5. Easing price pressures provice more room to ease monetary policy without igniting inflation – a key worry for policymakers in Beijing obsessed with managing the impact of costs on social stability. Economists and traders expect the central bank to move soon to cut the required reserve ratio (RRR) for banks again, and many think another cut to borrowing rates is also possible later this year. China has lowered RRR in three 50-basis point steps since November last year, freeing up an estimated 1.2 trillion yuan (US$190 billion) for fresh lending. It cut benchmark interest rates by 25 bps in early June to 6.31 per cent in a surprise move – its first cut since the depths of the global financial crisis. On the fiscal front, Beijing has fast-tracked investment projects and rolled out new incentives to spur consumer spending on energy-efficient products.

Police patrol on horseback in Zhaosu county, Ili Kazak autonomous prefecture in Northwest China's Xinjiang Uygur autonomous region, June 30, 2012. The horse patrol team was established in February to help protect the region. 

Stronger ties offer greater protection - Attending the opening ceremony of the Eighth Beijing-Tokyo Forum on Monday in Tokyo are, from left, State Council Information Office Minister Wang Chen, former Japanese prime minister Yasuo Fukuda, former vice-premier Zeng Peiyan and Zhao Qizheng, head of the foreign aff airs committee of the National Committee of the Chinese People's Political Consultative Conference. The top two Asian economies — China and Japan — are creating opportunities to strengthen relations to safeguard themselves against global economic turbulence, former vice-premier Zeng Peiyan said. Both countries should also fast-track negotiations on the China-Japan-South Korea free-trade pact, cooperate further in the new energy sector and promote small and medium-sized enterprises, Zeng said during the opening ceremony of the Eighth Beijing-Tokyo Forum. The forum, being held in the Japanese capital and co-sponsored by China Daily and Genron NPO, a Japanese think tank, has been held alternately in Beijing and Tokyo since 2005. China and Japan are marking the 40th anniversary of the normalization of diplomatic relations. "Against the severe backdrop of the global economy, and the debt crisis, no single country or region can deal with all the challenges on its own," Zeng said. The dynamism of Asian markets has helped drive the global economy, he said. As the leading economies in Asia, "China and Japan exert a significant impact on the regional and global economy," Zeng said. They "shoulder important responsibility'' and should work together to promote stronger ties and make a greater contribution to global stability, he said. Wang Chen, minister of the State Council Information Office, agreed. "As two of the major global economies, China and Japan should boost cooperation to tackle the global economic crisis and infuse new vigor into the Asian and world economy," Wang said at the forum. China-Japan trade volume in 2011 hit a record $340 billion, 330 times greater than four decades ago. China is Japan's largest trade partner and the second-largest destination for Japanese exports. Japan is the fourth-largest trade partner for China and the third-largest source of foreign investment. "Mutual trust and benefit have persistently been the two fundamental factors of China-Japan relations," Zeng said. "China and Japan face new opportunities in economic cooperation and the two nations share common interests in growth strategies," Zeng said. China is transforming its growth model and Japan is committed to reconstruction. As a major part of its 12th Five-Year Plan (2011-15), China will focus on boosting domestic consumption. New energy, innovation and the green economy will also play a greater role. The Japanese government plans to spend 20 trillion yen ($252 billion) to rebuild areas devastated by last year's earthquake. "We can expand cooperation in energy management, the green economy, manufacturing and strategic emerging industries," Zeng said. Wang highlighted the fact that the two economies are highly complementary. This means there is huge potential for the two countries to tap into "environment protection, low-carbon, agricultural development, forestry, the protection of wild animals and food and medicine safety". From January to April, Japanese investment into China surged by 16 percent from a year earlier, to $2.7 billion, but the flow from the EU to China dropped by 28 percent, year-on-year, during the same period. "It is a fantastic time for China and Japan to develop investment and trade relations, and we have reason to believe that a new wave of investment flowing into China by Japanese companies is coming," said Wei Jianguo, former vice-minister of commerce. Wei said China's efforts to expand domestic consumption will provide immense opportunities for Japanese investors and companies. "If more Japanese companies come to invest in China and target the consumption market, Japanese investment in China could grow by more than 70 percent," Wei said. In May, the governments of China, Japan and South Korea agreed to launch negotiations for a three-way trade pact this year. "China should push the negotiation process forward," Zeng said. China-Japan relations were strained in 2010 after a Chinese trawler collided with patrol boats from the Japanese Coast Guard in waters near China's Diaoyu Islands. In June, Japan joined the United States and the European Union in requiring the World Trade Organization to form a dispute settlement board to investigate China's exports of rare earths. These are materials that are widely used to make high-tech goods. "History has shown that if we cooperate with each other, we both enjoy benefits," Zeng said.

Hong Kong*:  July 3 2012 Share

Former HKICPA chief executive Winnie Cheung carved out a niche for herself on the technical side of accounting that enabled her to stand out from the crowd. Winnie Cheung is leaving the city's accounting institute after 22 years - and eight at its helm. It's been a time of huge change in the industry, especially for women. Accountancy is still a man's world, but Winnie Cheung Chi-woon, chief executive of the Hong Kong Institute of Certified Public Accountants (HKICPA), has managed to smash through its glass ceiling. And she says women are playing a much bigger role than when she started. "When I first joined the industry more than 30 years ago, very few women were taking senior roles in accounting firms or in the business sector as a whole. But this is changing and I believe we'll see women chief executives in future," Cheung told the South China Morning Post (SEHK: 0583). Cheung, 54, retired at the end of last week after 22 years at the institute - including eight years at the helm. Before that, she worked for Ernst & Young in London for 10 years. She says she has seen many changes in the industry during her 32 years crunching numbers - beginning with the role of women in the profession. There are now more young women accountants than men, according to HKICPA figures. And 59 per cent of all accountants under the age of 29 are women. But in terms of accountants over 40, the men clearly outnumber the women. Just 14 per cent of accountants aged over 55 are women. And men still dominate the senior ranks of the "big four" accounting firms, with about 30 per cent of the partners women. Many young women join the industry, says Cheung, but then many also leave to take care of their families. Cheung herself has had to juggle career and family - she has a son aged 24 and a daughter, 19. "I had to be one of the boys at work so that I could communicate with the men, since most of the HKICPA council members are male," she said. "But if possible, I always left work at 8pm to have dinner with my children every night. That's important for me because I need to be able to communicate with my children every day. I couldn't abandon my role as a mother because of my work. Luckily, I was able to handle both." Cheung was born and raised in Hong Kong and went to high school and university in Britain. Armed with an economics degree, she joined Ernst & Young as an accountant, which she says was almost by chance. "The husband of my piano teacher was an accountant and I thought it was a good profession," she said. Cheung began in auditing and moved to the technical side of things, focusing on setting accounting standards and guidelines related to new government regulations. This niche area turned out to be a good choice, she says. "The technical side may be boring but that was how I was able to stand out from other auditors," she said. Cheung returned to Hong Kong with her husband in 1989. It was supposed to be a short visit, but she was offered the job of technical director with the institute. That two-year contract turned into a 22-year stint that has seen significant change, including the introduction of accounting rules for the first batch of mainland companies to list in Hong Kong in 1993. Several hundred mainland firms are now listed in the city. She has also worked with her mainland counterparts on full convergence of accounting and auditing standards between Hong Kong and the mainland. When she started at the institute, Hong Kong did not have its own qualification programme and local accountants sat their examination overseas. In the 1990s, Cheung developed a programme for Hong Kong - the HKICPA qualifications are now recognised by 14 accounting bodies worldwide. Now, there are 34,000 qualified accountants in Hong Kong - almost double the number 20 years ago - as more mainland initial public offerings create business opportunities. But it hasn't been smooth sailing for the industry here. Accounting scandals in the United States and Hong Kong in early 2000 prompting the local administration to set up the Financial Reporting Council (FRC). This accounting regulator was set up in 2007 to take over - from the HKICPA - investigation of alleged auditing failures at listed companies. After its investigation, the FRC reports to the HKICPA, which decides on any disciplinary action. The creation of the FRC put an end to the era of self-regulation, which Cheung says was in line with the international trend. "It's good to have independent people investigating accounting problems, but the HKICPA still has a regulatory role to play because we're the licensing body for accountants and set standards for the industry," she said. Accounting problems have been in the spotlight recently since the FRC put 13 companies on a watch list when their auditors resigned. "I don't think this means that there are problems with accountants. If an auditor can't get information from company management, they should resign to let the public know about the problems," Cheung said. At 54, Cheung is not yet ready to retire - she wants to try something new, but she's not sure what. "I may do something that's got nothing to do with accountancy. But first it's time to take a break." She will be replaced by Raphael Ding, who is an executive director of listed investment firm Guoco Group (SEHK: 0053). Mabel Chan Mei-bo, who owns an accounting firm and is an HKICPA council member, said Cheung had been a CEO with vision. "I hope the accounting industry can generate more opportunities for women. More and more women are working nowadays but few are bosses or senior management. I hope that can change over time," Chan said.

CSL lawsuit turns the spotlight on HK's roaming fees - Phone firm accused of unfair practices after overseas calls totalling less than an hour cost user HK$2,540. When Ben Sargent went to Italy to attend a friend's wedding and then to Dubai for a holiday last summer, his international phone calls totalled less than one hour. He came home to a HK$2,540 bill from CSL. Now, Sargent, 40, is probably the first person to take a Hong Kong mobile phone company to court over non-transparent roaming charges. CSL has some of the highest roaming rates in Hong Kong. Its rates in Italy, for example, are from HK$27.64 to HK$46.56 a minute compared to PCCW (SEHK: 0008)'s HK$26.90 to HK$33.46. However, roaming rates of Hong Kong firms altogether are some of the highest in the world. Furthermore, the charges Sargent received from his trips were several hundred Hong Kong dollars over the published rates on CSL's website. Sargent, who works at an investment bank in Hong Kong, first contacted CSL on September 23 to inquire about the rate discrepancy. It told him that his bill included rate increases due to the exchange rate, its policy of rounding up to the nearest minute and extra charges from third-party service providers' tariffs, according to e-mails. Sargent thought CSL's explanation did not make sense. "At the time the euro was trading at a 12-month low, so that would actually lead to a reduction in cost," he said. "The rates on their website are already rounded up, so that is not a logical explanation either, and CSL should have accounted for third-party tariffs in their rates instead of applying hidden charges." CSL eventually offered Sargent a refund of HK$23.67 in December, which he rejected. The Consumer Council helped Sargent file a claim to the Small Claims Tribunal. "We don't know what our roaming charges will be until after we make our calls," he said. "Under that logic, mobile companies could say they have a right to charge customers a million dollars, or any other amount of hidden fees." The first hearing between Sargent and CSL at the Small Claims Tribunal was in April, where Sargent rejected CSL's settlement offer of HK$270. The second hearing is scheduled for August 1. Sargent is asking for a full refund on all roaming overcharges, and compensation for costs he incurred during the legal process. CSL issued a defence in the run-up to the August 1 hearing, where it denied Sargent's claim and stated that it "did not overcharge the claimant during the six years between 2006 and 2012". CSL spokeswoman Ruby Lo said: "In relation to roaming rates, our charging is in line with industry standard practices across other operators in Hong Kong." CSL's acting CEO, Han Kotterman, sent Sargent an e-mail on Thursday saying: "I am disappointed with the way the issues have been handled from our side so far and hence would like to see if there is an opportunity for us to connect."

Grace Tang Wai-king (third left) and Leong Che-hung (centre) at the opening of the University of Hong Kong-Shenzhen Hospital. Hospital off to a healthy start - Despite some patients being turned away from new HKU-Shenzhen institution, many with appointments expressed satisfaction with trial of fixed-price clinic. A few dozen patients who sought treatment at the University of Hong Kong-Shenzhen hospital yesterday were turned away on the clinic's first-day trial. But many patients expressed satisfaction with the primary healthcare clinic - the only department to open at the complex in Futian, Shenzhen, yesterday - although it accepted only pre-arranged bookings with a package fee of 130 yuan (HK$159) per consultation. The new institution, which still had boxes of equipment and supplies lying in the lobby waiting to be unpacked, provided treatment to about 110 patients on its half-day trial run. Those who arrived without an appointment seeking specialist treatment were turned away. "There are still a lot of small operational problems to be touched up, and the co-operation between Hong Kong and Shenzhen doctors has to be improved," said Dr Leong Che-hung, the university council chairman. "But overall the trial was satisfying." So far, the 3.5 billion yuan project, funded by the municipal government, had hired 31 doctors and 80 nurses, or about 80 per cent of the targeted total staff, he said. Other specialities and resuscitation rooms will be opened in subsequent phrases with the healthcare complex expected to be in full operation by the end of next year. The new booking system and a fixed-price package for public hospital visits are among measures the mainland is taking to combat corruption and overcharging at hospitals. The fixed 130 yuan price includes a booking fee, a check-up, the doctors' fee, general treatment and medicine for seven days. Extra fees are paid only if the patient is referred to a specialist. Under current practice on the mainland, the patient goes directly to a specialist for treatment. "There is a big difference between the way mainland [and Hong Kong] hospitals work," said Professor Grace Tang Wai-king, dean of the hospital. "The patient may make a wrong judgment when seeking a specialist doctor on their own, while in fact 80 per cent of cases can be treated by general doctors. It is part of the culture we want to change on the mainland in their healthcare reform." Leong said the fixed price of 130 yuan would be reviewed after a six-month to one-year trial. Reports in the Shenzhen media said the price for general treatment at a top healthcare institution averaged around 230 yuan per person over the past three years, but could vary depending on treatment. Patients yesterday welcomed the one-off payment, which allows them to estimate the cost involved in their treatment. "I am more confident in this hospital than others because it is managed by Hong Kong people", said one woman patient who was treated for a stomach ache. "Patients are not allowed to give red packets [bribes] to the doctors working here, and I believe Hong Kong doctors have more morals in their profession," she added. "If I get to choose, I would like a Hong Kong doctor to treat me, as I believe their qualifications are more trustworthy." She also said the booking system allowed her to save a lot of waiting time. "If I go to other hospitals, I may need to queue and wait for a whole day in a very congested environment," she said. "It gives me a feeling that this hospital is more humane and civilised than others." The healthcare complex will later provide services in five specialities on top of primary care, and will have 2,000 beds when fully open. Seven professors from the University of Hong Kong, including head of surgery Dr Lo Chung-mau and head of microbiology Professor Yuen Kwok-yung, will be at the Shenzhen hospital to provide training to mainland doctors.

Chief Executive Leung Chun-ying attends a youth concert in Hung Hom on Monday. Leung starts his term with falling popularity ratings. Hong Kong’s new leader vowed on Monday he would “humbly” listen to the public, but some critics are already branding him a lame duck after the city’s biggest protest in nearly a decade. Organisers said 400,000 people took to the streets on Sunday to protest against Leung Chun-ying’s leadership and Beijing’s interference in local affairs, hours after Leung was sworn in as chief executive before President Hu Jintao. Police gave a much lower turnout of 63,000 at the rally and march, which took place on the 15th anniversary of Hong Kong’s handover. But both estimates were the highest respective figures for eight years. “My government and I will seriously and humbly listen to the people’s demands, no matter through what means or how many people were there,” Leung said about the massive protest. “We hope we can fight together with the people to fulfill the people’s demands,” he told reporters as he visited a local neighbourhood, part of a charm campaign designed to address simmering public discontent. Sunday’s protest came as a defiant reception for Leung and a show of popular anger among the seven million people of Hong Kong. Hu’s weekend visit was held under smothering security, and drew sneers from Hongkongers as anti-Beijing sentiment surges to a post-handover high in opinion polls. Leung has pledged to tackle public grievances, including a widening gap between the rich and poor, and soaring property costs which have made home ownership an impossible dream for many residents, especially younger people. Pictures of the huge sea of people who marched for hours on Sunday in sweltering heat were splashed across Monday’s newspaper front-pages, as editorial writers spelt out the challenge for Leung on his first day in office. “Leung Chun-ying becomes a lame duck,” the Chinese-language Apple Daily News, which is known for its anti-Beijing views, blared in a banner headline. Even before his term began, Leung had already attracted protests drawing thousands of people decrying Beijing interference in the March election where he was picked by a committee stacked with pro-Beijing elites. Political analysts say that while it is premature to write Leung off already, he has to navigate a particularly rocky road. “Usually we expect a newcomer to have a sort of honeymoon period but he will never have one, it will be a difficult period for him,” Chinese University of Hong Kong political analyst Ma Ngok said. “He didn’t start with high popularity even when he was so-called elected,” he said. “His popularity rating hovered around for a while and it nose-dived after the recent scandals.” Just a week before his inauguration, Leung was forced to apologise over illegal improvements at his luxury home and faced criticism from an inquiry into a conflict-of-interest row involving a government project a decade ago. A poll released by the University of Hong Kong last week showed Leung’s popularity rating falling to 51.5, down 4.2 points from a month ago, with nearly 40 per cent of people saying they did not trust the government. “If he wants to give Hong Kong people a chance [to trust him], he should show himself to be fighting for democracy and not just kowtowing to Beijing,” leading pro-democracy lawmaker Lee Cheuk-yan said. The 57-year-old Leung urged people to work with him on Monday, as he gears up to lead the city into its first direct election at the end of his five-year term. Hong Kong does not get to choose its leader via universal suffrage yet. But Beijing has promised a direct election for the chief executive post in 2017, and for the legislature by 2020. “Hong Kong doesn’t belong to just a small group of people, it belongs to everyone, so I hope everyone can be a part of it,” said Leung, who dressed down in an orange T-shirt as he met locals in a town hall-style meeting.

 China*:  July 3 2012 Share

Residential buildings in Qingdao, Shandong province. The average house price in China's 100 major cities edged up 0.05 per cent in June from May, according to data from the China Real Estate Index System. The average home price in China's 100 major cities edged up 0.05 per cent in June from May, snapping a nine-month decline and reinforcing signs that property prices are stabilising, a private sector survey showed on Monday. The data from China Real Estate Index System (CREIS) added to evidence that the property market is being supported by monetary policy easing and growth-obsessed local governments, even as the government vowed to keep curbs on property price inflation in place. Home prices in the world’s second-largest economy began easing in September last year in response to Beijing’s tightening steps to deflate potential bubbles. “Property sales have been rebounding since March as the government fine-tunes monetary policy and some property developers stop offering discounts and even raise prices of new homes,” CREIS, a consultancy affiliated to China’s largest online real estate company Soufun Holdings, said in a statement. But home prices in the 100 cities were still down in June from a year earlier, by 1.9 per cent on average to 8,688 yuan (HK$10,632) per square metre, CREIS said. The average home price in China’s top 10 cities, including Beijing and Shanghai, rose 0.75 per cent from May but was down 2.5 per cent year-on-year, the survey showed. The Chinese government is due to publish data on home prices in 70 major Chinese cities for June on July 18. Home prices fell for an eighth straight month in May but the pace of decline eased, official data showed. China’s central bank cut benchmark interest rates in early June, the first such move since the depths of the 2008/09 global economic crisis. The cut followed three reductions in the bank reserve ratio since November. Many local governments have been unveiling measures to spur home buying. In one move, China’s eastern city of Yangzhou won consent from policymakers to offer cash subsidies for families buying fully furnished apartments.

Apple pays $60m for iPad trademark in China - Apple Inc has agreed to pay $60 million to Proview Technology (Shenzhen) to settle the dispute over the iPad trademark, the Higher People's Court of Guangdong province announced Monday. Apple has transferred the money to the account designated by the Guangdong higher court, and the Intermediate Court of Shenzhen on Monday notified the State Administration for Industry and Commerce to transfer iPad's trademark to Apple, the higher court said. The court said the settlement agreement went into effect on June 25. Proview Shenzhen, a Shenzhen-based maker of computer screens and LED lights, claimed it had the rights to use the iPad trademark commonly associated with Apple's popular tablet computer. Proview says the Taipei subsidiary of its Hong Kong-based parent company, Proview International Holdings Limited, registered the iPad trademark in a number of countries and regions as early as 2000. Though Apple bought the rights to use the iPad trademark from Proview Taipei in 2009, Proview says it reserves the right to use the trademark it registered on the Chinese mainland in 2001. The two sides have since been entangled in a drawn-out legal battle. Guangdong's higher court heard the case in February as Apple and its proxy for the trademark purchase appealed a previous court ruling by Shenzhen intermediate court in favor of Proview.

Chen Ning Yang celebrates his 90th birthday - Chen Ning Yang, right, and his wife Weng Fan smile at each other during a forum held by Tsinghua University to commemorate his 90th birthday in Beijing, Chinese-American Nobel laureate Chen Ning Yang, center, and his wife Weng Fan leave hand-in-hand after a forum held by Tsinghua University to commemorate his 90th birthday in Beijing, June 30, 2012. Tsinghua University held an academic forum to celebrate the physicist and Nobel Prize winner's 90th birthday on Saturday, along with Yang's wife Weng Fan. 

Hong Kong*:  July 2 2012 Share

Yuan exchange cap will stay in place, PBOC says - Central bank decides not to heed calls from HK banks to scrap 20,000 yuan limit, although it may allow more foreigners to open accounts in currency - People's Bank of China deputy governor Hu Xiaolian. The central bank has ignored calls by senior Hong Kong bankers and left in place the city's daily exchange cap of 20,000 yuan (HK$24,500). The decision, which was announced during a visit yesterday by People's Bank of China deputy governor Hu Xiaolian, puts the city at a disadvantage to the other offshore-yuan trading centres, London and Singapore. Hu said, however, said the PBOC may soon allow non-Hong Kong residents to open accounts for trading yuan in the city, a move local bankers see as a boon for business. Hu detailed the developments in a briefing in which she said the central bank considered the current daily cap to be "suitable for the demand from Hong Kong citizens". "One could exchange up to 600,000 yuan a month, which is a lot, and many people do not exchange that much," Hu said. "As such, the PBOC at present has no plan to lift the cap, though we will review it in the long term." She said the central bank would "have an answer pretty soon" on calls from Hong Kong banks to let foreigners open yuan accounts. Hu also said the PBOC would encourage more overseas companies to issue yuan-denominated, or "dim sum", bonds locally to strengthen the city's role as an offshore yuan trading centre. Louis Tse Ming-kwong, director of VC Brokerage, said the decision not raise the cap was "bad news for Hong Kong". "The exchange cap means Hong Kong could find it hard to compete with Singapore, London or other markets keen to develop as offshore yuan centres, where they do not have the exchange cap," Tse said. "If investors find it easier to exchange the currency in these markets, they will abandon Hong Kong." The 20,000 yuan cap was first set in 2004, when Beijing, in its cautious first steps to broaden the yuan's reach, allowed yuan exchanges in Hong Kong. Since then, other financial centres have been begun yuan exchange without such caps. Bankers were hoping the PBOC would level the playing field. "The cap is definitely too small for those who want to trade yuan bonds or yuan shares," Tse said. "For Hong Kong to develop yuan shares or other yuan investment products, investors need to have a lot of yuan on hand, as they need to settle the deals one or two days after the transaction." Bankers believe the PBOC is concerned that the amount exchanged would become too great if the cap was lifted in Hong Kong, which has a greater share of investors interested in the currency. In May, Bank of China (Hong Kong) deputy chief executive David Wong See-hong told a conference that raising the cap and allowing yuan accounts for foreigners were both "important steps in the internationalisation of the yuan and the strengthening of Hong Kong's role as an offshore yuan market". Andrew Fung, executive director Hang Seng Bank (SEHK: 0011 ), yesterday welcomed the prospect of more yuan accounts, saying it would spur more people to open them locally. The Hong Kong Monetary Authority also lauded the steps to boost yuan business in the city. Investments in yuan products and yuan deposits have multiplied as investors bet the yuan will continue to gain against the US dollar. The yuan has risen more than 30 per cent against the US dollar since 2004, gaining 4.7 per cent last year. But as the yuan's growth slowed, local retail yuan deposits fell 11.7 per cent between November and May.

The 40-year-old Leighton Bakery serves the last crop of clients at its namesake location. The Lan Fong cafe shuts its gate for the last time. Bakery, tea shop fold as real estate market heats up in Causeway Bay - Food lovers suffered the bitter taste of disappointment yesterday when two more much-loved culinary mainstays in the city closed their doors. Devoted customers of Leighton Bakery's store on Matheson Street, Causeway Bay, munched on its delectable egg tarts and sausage buns for the last time yesterday as owner Lam Shek-yam closed his store to cash in on the city's property boom. Taking a break from the lunchtime rush, which saw crowds snaking around the block for a final snack, Lam said it was with a heavy heart that he shut down the bakery, which has been his place of work for the last 28 years. Resting in a seat next to the drinks counter, Lam, who started baking at the age of 12, said: "A lot of customers came this week to say goodbye." The store has long been a favourite with shoppers and office workers grabbing a bite for lunch or a quick breakfast. Lam says he has sold the shop for HK$140 million - a huge profit on the HK$13 million he paid to buy the site in 1996. Customers will now have to go a little further afield to the bakery's sister outlet on Leighton Road. A few blocks away, restaurateur Tai Chung pulled down the shutters on Lan Fong, a cha chaan teng, or Hong Kong-style cafe. He has fallen victim to the cut-throat property market in Causeway Bay, one of the most expensive places in the world to rent retail space. He paid just HK$19,000 per month for the premises when he opened his business in 1987, but is now paying HK$80,000. He was given his marching orders after negotiations on a new lease broke down in March. Tai, who still runs the original Lan Fong on Jaffe Road, Wan Chai, would not disclose the rent he was asked to pay but said that even if he had offered double the previous figure, he would not have kept the lease. "We just couldn't work it out," he said last night. He hopes to open another Lan Fong in Causeway Bay and is scouting for a new venue. It's a familiar story in Causeway Bay, where last month a sock retailer was forced to become a street hawker after the rent on her 250 sq ft shop was doubled from HK$70,000 to HK$150,000 and the site of a small noodle shop went on the market for HK$180 million in April - a year after it was sold for HK$100 million. Indonesian restaurant 1968 closed its main Causeway Bay location when rents rose last year, while the UA Cinema chain was ousted from Times Square, apparently to accommodate a luxury retailer. Japanese restaurant Wallmann Market, near the new Best Western hotel on Canal Road West, closed in August after the landlord raised the monthly rent to HK$180,000 from HK$85,000. The 3,000 sq ft Nam Ah Restaurant, also on Leighton Road, closed in November after its landlord increased its rent to HK$360,000 from HK$255,000. The area around Times Square, a popular spot for rich mainland tourists, has seen a huge influx of luxury brands in recent years, while analysts believe the opening of the massive Hysan (SEHK: 0014) Place shopping and office complex will push rents up further. 

The Hong Kong and Chinese flags are set to be released at a flag-raising ceremony at Golden Bauhinia Square in Wan Chai on Sunday. Fireworks explode over the Victoria Harbor to mark the 15th anniversary of Hong Kong's handover. Fireworks cap handover anniversary - A timeline for 15th anniversary of handover on July 1 2012: 
8.00am Government helicopters trail the Chinese and Hong Kong flags in a flypast over Victoria Harbour, kicking off day-long official ceremonies to mark the 15th anniversary of the city’s return to Chinese rule. New Chief Executive Leung Chun-ying officiates a flag raising ceremony at Golden Bauhinia Square in Wan Chai for the first time. Meanwhile, dozens of activists from radical pro-democracy group People Power protest near the venue opposing Leung’s taking office.
9.00am to 10.30am The inauguration ceremony of the Fourth Term Hong Kong SAR government begins at Convention and Exhibition Centre in Wan Chai. Leung Chun-ying is sworn in as new Chief Executive of the fourth term of the Hong Kong SAR government and swears in his new cabinet members. Leung pledges in his inaugural speech to push forward Hong Kong’s constitutional development, develop the economy and improve people’s livelihood. President Hu Jintao urges Leung’s government to solve deeply-seated social problems, pledges to respect cross-border differences and to uphold the one country two system principle.
10.30am Hu, mainland officials and Leung hold talks and gather with C.Y. Leung and his cabinet members gather for a photo shoot.
11.30am Hu concludes three-day visit and flies back to Beijing.
3.00pm Tens of thousands expected to turn out in annual pro-democracy march beginning in Victoria Park. This year, their destination is the new government headquarters in Admiralty, instead of the old one in Central, although some protesters are expected to continue on to the central government’s liaison office in Western district. Organisers expect at least 50,000 people to join the march but hope to beat last year’s figure of 218,000 following recent outrage over the suspicious death of Tiananmen activist dissident Li Wangyang and the discovery of illegal structures at the home of the new chief executive Leung Chun-ying.
8.00pm A fireworks extravaganza will be held over Victoria Harbour to mark the 15th anniversary of Hong Kong's handover back to Chinese rule. A total of 50,000 firing shells will be discharged from five barges in a 23-minute, nine-scene show. Highlights include displays of the English letters "HK" and the number 15 in Chinese numerals, to mark the 15th anniversary of the handover, and a fast-paced volley as a finale to wish Hong Kong prosperity.

Chinese President Hu Jintao delivers a speech at the swearing-in ceremony of the fourth-term government of the HKSAR at the Hong Kong Convention Centre on Sunday. President Hu Jintao has laid down four expectations for new chief executive Leung Chun-ying, including promoting social harmony and stability, and nurturing political talent. Speaking at the 15th anniversary of Hong Kong’s handover of sovereignty and inaugural ceremony of the fourth cabinet on Sunday morning, the president once again asked the city to resolve the deep-seated problems and challenges. “While fully recognising the remarkable achievements Hong Kong has made since its return to the motherland 15 years ago, we should also be sober-minded of the deep-seated problems and challenges in the Hong Kong society,” said Hu after witnessing the Leung and his principal officials swearing in at the Hong Kong Convention and Exhibition Centre. Click here for the full text of Hu Jintao's speech. He said the next five years were significant to Hong Kong and called on the government to put the people first in its administration to build a harmonious society. “It is imperative ... [to] accurately gauge public opinion and take concrete and effective measures to properly address issues concerning people’s livelihood,” said Hu. While Leung’s cabinet and Executive Council had been criticised as underqualified, Hu asked the city to nurture “outstanding young political leaders” who “love the motherland”. His speech was briefly disrupted at the beginning by Ken Tsang Kin-chiu, a Civic Party member who shouted slogans calling for vindication of the June 4 crackdown and an end to one-party rule. Tsang, invited in his capacity as an election committee member of the social welfare subsector, was ejected by the security guards out of the hall as he kept yelling. The ceremony marked the final event of Hu before he closed the three-day visit to the city. The new chief executive said his team would start working right away to realise his election pledges. “I will fulfill the trust placed in me by the central government and the people of Hong Kong with policy achievements,” said Leung in his first speech as chief executive. “We will focus our energy on addressing the major and pressing issues.” The preparatory task forces on Economic Development Commission, Financial Services Development Council and Commission on Poverty commenced operation on Sunday.

 China*:  July 2 2012 Share

The resignation of Tsingtao Brewery (SEHK: 0168) chairman Jin Zhiguo, coming just days after a major shareholder sold HK$1.5 billion worth of shares in the company, will weigh on market sentiment towards the brewer, analysts say. Jin, 55, resigned from the top post and left on Thursday after a 37-year association with the company. His departure surprised analysts, as he had extended his tenure for another term just last year, brokerage Yuanta Securities said in a report. In a filing to the Hong Kong stock exchange, Tsingtao said Jin resigned for health reasons. But the timing of the resignation and the earlier sale of 32 million H-shares in the brewer by its second-biggest shareholder, billionaire Chen Fashu, at reportedly HK$47.00 a share - or a 10 per cent discount to the prevailing market price - sparked allegations of insider dealing. The company denied the claims in a separate announcement on Thursday. Chen was reported to have netted HK$1.5 billion from the sell-down of his shareholding. Tsingtao president Sun Mingbo, 55, has succeeded Jin as chairman. Analysts said the transition should not have a great impact on the daily operations of the brewer since Sun had been with the company for 19 years and was familiar with the business. Shares in the company dropped as much as 2 per cent before recovering most of the intra-day losses to close down just 0.6 per cent at HK$44.05 yesterday. Tsingtao said the outgoing chairman confirmed that he had undertaken no communication with Chen prior to the share sale and neither had Chen communicated with the company before the sale. Under the reign of Sun, Tsingtao would probably roll out a more volume-focused growth strategy, a UBS report said. "Sun has been endeavouring to fulfill a 10 million kilolitre sales volume target in 2014 by nurturing a second brand and by acquisition," it said. Jin led Tsingtao's internal consolidation after its aggressive acquisitions in the 1990s. But volume growth has slowed since 2001, and from the second half of 2010, the brewer has devoted more energy to achieving higher sales volumes. It acquired Shandong Yinmai Beer last year. Earlier this month, it announced a joint venture with Japanese beverage maker Suntory to produce and distribute beer in Shanghai and the neighbouring province of Jiangsu. However, the ability of the new management team to execute the growth plan was doubtful, given that the company's organic volume growth last year was just in line with the sector average, a Citigroup report said. The brokerage firm said the incentive programme for the top management was not enough, compared to privately owned companies. Sun receives an annual remuneration of 1.58 million yuan (HK$1.94 million) while the new president, Huang Kexing, will receive 946,900 yuan a year.

Beijing yesterday lowered the hurdles for foreign investment funds, including Hong Kong's Mandatory Provident Fund schemes, to put money into mainland stock and bond markets. Hong Kong investment houses and the government responded positively, and said they would apply for a share of the quota for investment. China has not yet fully opened its capital markets but launched a US- dollar-denominated qualified foreign institutional investor (QFII) scheme in 2002, under which about 150 international fund houses and investment banks have been allowed to invest in the mainland markets subject to a quota. But the threshold for investment has been so high that no Hong Kong pension funds or insurers have qualified to apply until now. In December it introduced a renminbi-denominated, or R-QFII, scheme but only gave licenses to 21 Hong Kong subsidiaries of mainland fund houses. Speaking in Hong Kong yesterday, China Securities Regulatory Commission (CSRC) vice-chairman Yao Gang said companies would only need five years, rather than 30 years, of investment experience to join the US-dollar QFII scheme, and the requirement for firms' minimum assets under management would be reduced from US$5 billion to US$500 million. Yao also said Hong Kong firms could apply to join the R-QFII scheme, for which the requirement that 80 per cent of funds be invested in bonds and 20 per cent in equities would also be scrapped. "These relaxations will hopefully allow more long-term investors, including the many pension funds in Hong Kong, to invest in China,'' Yao said. Such liberalisation is part of a concerted effort by Beijing to attract more foreign capital into China's equity and bond markets. QFII regulations now limit net foreign investment through the programme to US$80 billion, but only US$25.19 billion had been allotted by mid-April. The R-QFII quota stands at 80 billion yuan (HK$98 billion). The measures will also benefit Hong Kong investors. The city's bond market is small, and the QFII schemes give access to the much bigger mainland bond market, allowing for better returns. Hong Kong's Treasury Department said it was "actively planning to apply for a QFII licence". It would invest both government reserves and funds under its management such as a provident fund for public school staff. Joseph Tong Tang, executive director of Sun Hung Kai Financial, one of the largest locally based financial firms, said the company would probably apply for the QFII quota if it qualified. Thomas Chan Yu-cheong, chief executive of MPF operator BOCI-Prudential, welcomed the move but said it would need the Hong Kong government to relax restrictions preventing Hong Kong MPF operators investing on the mainland.

China's top legislature has endorsed a tighter immigration regulation aimed primarily at foreign illegal workers. The regulation ratified by the Standing Committee of the National People's Congress shortens the minimum duration of residential certificates for foreigners carrying a work visa to 90 days - half of the current period. The rule also bans any organisation or individual from employing expatriates without either a work visa or a residential certificate for foreigners working in China, Xinhua reported. Public and state security bodies have been authorised to restrict expatriates from living or working in certain areas when it is deemed necessary for public security reasons. The regulation is said to target foreigners who have entered China illegally, have overstayed or are working illegally. The number of immigration prosecutions involving foreigners doubled from 10,000 in 1995 to 20,000 last year, official statistics show. Employers of foreigners or foreign students must now report relevant details to public security bodies, the report said. In addition, the Public Security Ministry was now entitled to deport foreigners who violated the regu