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

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Hong Kong, China & Hawaii News Archive for Year 2002  Archive Jan 1, 2003.........:>
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China President Hu Jintao USA State Visit January 19 - 21 2011 http://www.b2bchinadirect.com/hujintaousavisit.htm

Wine-Biz - Hong Kong Brand Hong Kong Video

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

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

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

Year of the Dragon - January 23 2012 Dance w/ Firework http://www.youtube.com/watch?v=-VoFfOglJuI 

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

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

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

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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 http://www.youtube.com/watch?v=DJiOXUHIOeA 

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

londonolympics2012logo1.png (18599 bytes) London Olympics 2012 - China Team Highlight Pictures

Hong Kong*:  Sept 2 2012 Share

Merkel means business in Beijing with heavy-hitting delegation - Chancellor's heavy-hitting team kicks off visit with a dozen deals - now all she has to do is convince China of Europe's promise. German Foreign Minister Guido Westerwelle will address a luncheon in Hong Kong. German Chancellor Dr Angela Merkel has brought Germany's largest ever business delegation with her to China, but experts say the fast-changing global economy could cast a shadow over her mission. The chancellor arrived in Beijing yesterday accompanied by seven cabinet ministers and two dozen leading German businessmen. A separate delegation led by Foreign Minister Guido Westerwelle arrives in Hong Kong today. This is the second visit in five years by Westerwelle, who will give a luncheon speech on the debt crisis in Europe. The unprecedented high-level visits by German officials underline the country's eagerness to foster stronger ties with China. "Both our governments are working hard to further deepen and broaden our strategic partnership," Westerwelle told the South China Morning Post ahead of his visit. "An important pillar of our comprehensive partnership is our dynamic economic relations." Merkel's two-day visit to China got off to an auspicious start. The two governments announced a dozen major deals at a press conference by the chancellor and Premier Wen Jiabao - including ICBC Leasing's US$3.5 billion order for 50 Airbus jets. But Mark Williams, the chief Asia economist for Capital Economics, said it was hard to judge if her visit was successful based only on the deals announced. "Governments always come under pressure to demonstrate visible gains from a high-profile visit - usually in the form of orders for products which probably would have happened anyway," the London-based economist said. "But the successes of a visit lies in incremental progress." Still, the growing economic links between China and Germany - the world's second- and fourth-largest economies - are undeniable. While German manufacturers still sell more of their products to other European nations, China is expected to soon overtake the US as its largest trading partner outside the continent, according to the Association of German Chambers of Industry and Commerce. German exports to China have almost tripled in the past five years. Westerwelle said the trip's goal was to develop a deep and wide-ranging relationship. A key mission for Merkel and Westerwelle is to convince Chinese leaders that Europe can keep its debt crisis under control. Beijing sees Berlin as the de facto decision-maker in Europe and is eager to hear from the chancellor on the region's prospects. "Chancellor Merkel has a difficult sales job," Williams said. "To policymakers in Beijing, Europe must look divided, its leaders bickering among themselves, unable to get on top of a crisis that seems to be dragging on interminably." The German foreign minister admitted the euro-zone crisis had shaken faith in the region. "It is true: the debt crisis has morphed into a crisis of trust in the project of European integration," he said. But Germany remained "deeply committed to the European Union and Euro currency" and he was confident the region would emerge from the crisis "stronger than ever". Westerwelle said the measures Europe took would rest on three legs: budget consolidation, structural reforms to restore competitiveness and "solidarity with weaker partners". The minister noted "encouraging signs" in Ireland, Italy, Portugal and Spain. Curiously he did not mention Greece, whose debt troubles have propelled the crisis. But even if Merkel can make a convincing case to her Chinese audience about Europe's promise, it remains unclear whether China is in a position to help as its own growth slows. Williams pointed out that Chinese investments in Europe were far below the level needed to make a meaningful difference, and the situation was not going to change soon. "Now that the People's Bank [of China] is no longer accumulating huge quantities of foreign exchange reserves, it has less to invest abroad," Williams said. "In any case, risks to the euro are skewed to the downside, making any sizeable investment in the single currency a bold call for a manager of the state's foreign exchange reserves."

Unions demand more staff to meet Shenzhen rush - Immigration Service Officers Association chairman Ngai Sik-shui says more staff were urgently needed at the border. Immigration unions are demanding the appointment of 400 extra staff members to cope with an expected increase in the number of mainland visitors following Shenzhen’s relaxation of the Individual Visit Scheme. On Friday, 10 representatives from four unions covering Immigration Department staff met their bosses to raise their concerns over increased work due to the influx. From Saturday, Shenzhen will allow 4.1 million non-permanent residents to make multiple visits to Hong Kong under a change in permit rules. Immigration Service Officers Association chairman Ngai Sik-shui said existing facilities and manpower at border checkpoints would be insufficient to cope with the extra work and more staff were urgently needed. Ngai said the workforce not only had to perform routine border checks, but also had to deal with other issues such as mainland women trying to enter the city to give birth, cross-border students and other emergencies. “It is impossible to estimate how many more people will enter the city with multiple-visit permits,” he said. “We estimate that manpower will be a big issue. It is imperative to act now.” Ngai said the workforce would need at least 400 extra staff members to handle routine border checks and emergencies. The unions called for a response to their demands from the department’s top officials within one month. Individual Visit Scheme permits were previously available only to Shenzhen’s 2.8 million holders of hukou or residents’ permits. Non-permanent residents had to return to their home provinces to apply for permits. The move to allow millions more visitors to cross the border has caused consternation among many Hong Kong residents, who feel the surge will overwhelm local infrastructure and push up prices of consumer goods.

Mainland puts new Shenzhen visitor plan on hold - The mainland had agreed to put its plan to issue multiple-visit permits to non-residents of Shenzhen on hold for three weeks until there had been further assessment of its impact on Hong Kong, Chief Executive Leung Chun-ying announced on Friday afternoon. Leung said at a press conference that the central government acknowledged there was a need to assess Hong Kong’s capacity to take in the expected increase in incoming mainland visitors before the new permits were issued. “The central government has agreed that Hong Kong’s capacity to receive them [the visitors] must be assessed and the number of visitors be adjusted according to actual situation,” he said. Leung said the agreement came after he reflected on Hongkongers’ concern over Shenzhen’s new travel permit rules to the central government. The new policy would have allowed 4.1 million non-residents of Shenzhen to enter Hong Kong from Saturday using multiple-visit visas under the Individual Visit Scheme. Leung said a group of Hong Kong officials would meet their mainland counterparts in the coming three weeks to discuss the new scheme’s impact and the setting up of a mechanism for Hong Kong and Shenzhen to decide on a suitable number of visitors. The group would be led by Secretary for Security Lai Tung-kwok and Secretary for Commerce and Economic Development Greg So Kam-leung. Lai said they would tell the mainland about the capacities of Hong Kong’s border checkpoints and tourist attraction points so that Shenzhen could have a better idea of reasonable numbers when issuing permits. Individual Visit Scheme permits were previously available only to Shenzhen’s 2.8 million holders of hukou or residents’ permits. Non-permanent residents had to return to their home provinces to apply for permits. The move to allow millions more visitors to cross the border has been causing consternation among many Hong Kong residents, who feel the surge will overwhelm local infrastructure and push up prices of consumer goods.

Hong Kong Discovers 140 Million Year-Old Supervolcano - People stand on large hexagonal columns of volcanic rock, southeast of Hong Kong in this handout photo released August 30, 2012. Some 140 million years after it erupted and then toppled into the sea, an ancient supervolcano in Hong Kong is making headlines. The government announced Thursday that it had located the supervolcano—the first discovery of its kind in southeastern China—while surveying in the area in southeastern Hong Kong. The volcano is now extinct and poses no threat to Hong Kong. What makes the volcano super? When it last exploded 140 million years ago, it would have darkened the sky with 312 cubic miles of ash, enough to blanket all of Hong Kong, said Denise Tang of the government’s civil engineering & development department, which discovered the volcano. About 50 other such supervolcanos are known to exist around the world, she said. The original base of Hong Kong’s supervolcano would have measured about 11 miles in diameter, and the vista of vaulting, hexagonal rock columns and small islands it left behind remain gorgeous reminders of its dramatic geologic past. They can be toured by boat, but Ms. Tang was quick to warn any would-be tourists to use caution before making any expeditions. “Although it’s very beautiful,” she said, “there’s no facilities, no pier facilities, so we actually do not recommend people try to land on the island.”

 China*:  Sept 2 2012

China investment in US rises, creates jobs, despite campaign rhetoric - Pin Ni, president of Wanxiang America Inc., poses for a portrait at his warehouse in Elgin, Ill. Pin Ni, president of the American arm of the private Wanxiang Group, an auto parts and renewable energy manufacturer that has close to 6,000 employees in the U.S., said negative views of China and political tensions between the two governments deter some companies. Yet in reality, he said, that's little impediment to doing business. U.S. presidential candidates talk tough on fighting what they see as China's unfair trade policies, but Chinese companies are investing more than ever in the U.S. and supporting thousands of American jobs. With two separate billion-dollar deals in shale oil and gas, a struggling chain of movie theaters and other major ventures in the works, investment from China is set to hit record levels in 2012. Its cash-rich companies have expanded their presence here in the past three years, keen to get closer to the lucrative American market and tap U.S. know-how. The jobs created far from offset what American politicians and some economists see as the millions of jobs lost because of China's currency policies and theft of intellectual property. Also, Chinese investment, especially in telecommunications and other sensitive businesses, isn't always welcome. But the growth in investment underscores how the relationship between the U.S. and China is more complicated than depicted on the campaign trail. Cheap Chinese products have benefited American consumers, and China's massive purchases of Treasury securities have helped finance the U.S. budget deficit. And while Chinese investment in the U.S. is barely off the starting blocks given the size of its economy, some believe it could become a major source for American jobs. "There's a huge amount of ignorance in the U.S. market place of how to take advantage of potential Chinese investment," said Larry Morrissey, independent mayor of Rockford, Illinois, a city of 150,000 which hosts three major Chinese companies. While money is tight in the U.S., he said, Chinese firms want to invest and have the funds to do it. But in the presidential campaign, China seems to attract only negative attention. "They steal our intellectual property rights. They block access to their markets. They manipulate their currency," Republican vice presidential candidate Paul Ryan told supporters in Ohio last week. He accused President Barack Obama of allowing China to treat him like a "doormat" and vowed Mitt Romney would crack down on China cheating. Obama, who has sought deeper ties with China, says his administration has nevertheless stepped up trade complaints, and announced one in response to Chinese tariffs on U.S. auto exports during a campaign trip to Ohio in July. But the administration, as well as the Republican-supporting U.S. Chamber of Commerce, are actively seeking Chinese investment. They want to capitalize on the ambitions of state-owned and private Chinese companies to expand from the developing world to developed countries. The private Rhodium Group, which closely tracks Chinese foreign direct investment, or FDI, puts the total attracted to the U.S. since 2000 at $20.9 billion. It predicts that Chinese companies could invest between $1 trillion and $2 trillion internationally by 2020 and a significant chunk could come to the U.S. "Chinese firms are arriving at the inflexion point at which it makes sense for them to be developing more of a commercial presence in the United States and Europe," said Daniel Rosen, partner at the New York-based group. While China is still far from emulating the outward expansion of Japanese companies into the United States the 1980s, this could be a formative example. Fears then that the U.S. economy might be dominated by Japan proved unfounded. Today, Japanese-affiliated companies employ about 700,000 Americans. As a strategic and emerging military rival of the U.S., however, China brings with it more baggage. China still restricts foreign investment in much of its own economy. Many of its biggest companies looking to invest abroad are state-controlled. Cybersecurity is also a major concern because of repeated reports of cyber-attacks on Western companies and government departments originating from China. That has dented the prospects for its telecommunications and technology giants. Attempts by Huawei, a private Chinese company founded by a former army officer, to acquire 3Com in 2008 and failing U.S. computer company, 3Leaf Systems, in 2011 were floored by security concerns. U.S. lawmakers have often weighed into the debate. The House Intelligence Committee is investigating Huawei, one of the world's biggest suppliers of telecoms gear, and its rival, ZTE, examining their ties to the Chinese government. It is also probing reports that ZTE is supplying surveillance equipment to Iran. Lixin Cheng, CEO of the American arm of ZTE, says the company has cooperated in the probe but denies that ZTE is influenced by the Chinese government. (The company is state-owned but has a portion of its shares publicly traded). He describes the allegations as "noise coming from guys who don't want competition here so they can protect their market share." But Cheng says handset sales have been rising and he remains bullish on the company's prospects in supplying American mobile network carriers, which account for about 90 percent of handset sales in the U.S. Pin Ni, president of the American arm of the private Wanxiang Group, an auto parts and renewable energy manufacturer that has close to 6,000 employees in the U.S., said negative views of China and political tensions between the two governments deter some companies. Yet in reality, he said, that's little impediment to doing business. Ni set up Wanxiang America from a home office in Mt. Prospect, Illinois, in 1994, essentially as a sales outlet for the parent company. It now has 27 manufacturing facilities across 14 states, annual revenues of more than $2 billion, and supplies most of the major American auto manufacturers. He said that only about 10 percent of the parts it supplies in America are now sourced from China. "Our labor costs are higher (in the U.S) but our overall costs are lower because it's more efficient here," he said. Mayor Morrissey said Wanxiang had acquired a struggling auto parts manufacturer in Rockford. Attracted by the Chinese company's long-term commitment to the U.S., Rockford chose Wanxiang to develop a $12.5 million solar panel manufacturing plant employing 60 people, and a large solar power farm, as part of the city's strategy to attract more green business. Two other major Chinese firms have investments in Rockford, including Dalian Machine Tool Group which acquired Ingersoll Production Systems and employs 100 people. Rockford is also in talks with Wanxiang about plans to modernize the city center. "A lot of American cities are completely on the sidelines," said Morrissey, who has made several trade missions to China. "I don't see many cities, especially cities of our size, doing what we are doing, of being proactive and looking to exploit the opportunities there are for Chinese investment." Joy Huang, president of Connect East, which advises mostly Chinese state-owned enterprises on working in the U.S., said companies want to establish their own brand presence here — something few Chinese firms have achieved, other than appliance-maker Haier and computer-maker Lenovo. She said the main challenge is learning to comply with the myriad regulations and customizing products for picky American consumers. Chinese companies are targeting a wide range of industries, also including aerospace, banking, metals processing and plastics. In a sign of those diversifying interests, conglomerate Dalian Wanda Group announced in May it is acquiring cinema chain AMC Entertainment Holdings for $2.6 billion, the biggest Chinese takeover of an American company to date. Both the Rhodium Group and the Heritage Foundation, a Washington-based conservative think tank that maintains a database of major Chinese FDI across the world, predict a record year in 2012. But Derek Scissors, an expert on China's economy at Heritage, remains skeptical that augurs a spiraling takeoff in Chinese investment into the U.S. He said Chinese FDI in the past eight years has tended to spike from one region to another: first in Australia, then sub-Saharan Africa, and most recently in Latin America. With the global energy firms now turning their attentions to shale oil and gas in North America, "we're next on the hit parade," Scissors said.

Mainland government officials yesterday boarded a Taiwanese coastguard frigate for the first time, in a rare joint search and rescue drill involving hundreds of crew members, Taiwan coast guards said. Around 600 rescuers and coastguards from Taiwan and the mainland took part in the manoeuvre in waters near Kinmen, a Taiwan-controlled island group off the mainland's southeastern coastline, the Coast Guard Administration said. A group of mainland officials led by deputy transport minister Xu Zuyuan watched the exercise on board the 2,000-tonne Taiwanese frigate, Tainan. "It's the first time ever that [mainland] Chinese government officials [have] been on board a coastguard vessel from Taiwan," coastguard spokesman Hsieh Ching-chin said. "It's significant historically and symbolically." Kinmen was the scene of bloody battles in the 1940s and 1950s when communist troops repeatedly tried to seize the fortified island group. Yesterday's manoeuvre, only the second of its kind between the two sides, involved 18 rescue and coastguard vessels and two helicopters from Taiwan, while the mainland dispatched 11 ships and one helicopter. The exercise played out a scenario where an aircraft crashed into the ocean, hitting a passenger boat shuttling between Kinmen and the mainland. Beijing still considers Taiwan part of its territory awaiting reunification, by force if necessary, even though the island has governed itself since 1949.

Private companies accounted for nearly half of China's outbound investment in 2011, a senior trade official said on Thursday, while expecting the proportion to continue expanding as the government supports investors seeking overseas projects. In 2011, China's outbound direct investment in the non-financial sector reached $68.58 billion, among which around 45 percent was from non-State-owned enterprises, said Shi Ziming, commercial counselor at the Department of Outward Investment and Economic Cooperation of the Ministry of Commerce. Although SOEs still accounted for around 90 percent of China's cumulative ODI by the end of 2011, Shi was confident the private sector would play a bigger role. "Private enterprises will definitely play a more and more important role in the process of the nation's outbound direct investment activities. "They will probably surpass State-owned enterprises as the major force of China's investment wave," Shi said. According to the top 100 non-financial Chinese companies ranked by ODI in 2011, Lenovo Group Ltd, Huawei Technologies Co Ltd, and Geely Holdings Group are the three largest private investors overseas, ranking 25th, 27th and 31st. The report did not give the exact amount of overseas investment by each company. These major private investors are also among the leaders in the latest ranking of the top 500 Chinese private companies by revenue, which was released on Thursday by the All-China Federation of Industry and Commerce. According to the league table, in terms of revenue in 2011, Huawei took second place, Lenovo ranked fourth and Geely was sixth. Jiangsu Shagang Group, China's largest private steelmaker, secured the top spot with annual revenue of 207.5 billion yuan ($32.7 billion) in 2011. It ranked fourth among overseas private investors. Construction equipment maker Sany Heavy Industry Co Ltd, which gained a worldwide reputation earlier this year after it bought a 90 percent stake in German concrete pump manufacturer Putzmeister for 324 million euros ($407 million), was the fifth-largest overseas private investor and China's 10th largest private company. The 500 largest private companies reported combined revenue of more than 9.3 trillion yuan in 2011. In another league table complied by the Statistical Society for Foreign Economic Relations and Trade of China, which ranked China's top 500 private foreign traders, Huawei came top with an export-import volume of 11.7 billion yuan. Huang Mengfu, chairman of the federation, said it has been a general trend for China's private companies to expand overseas. "To become world-class enterprises, China's private companies should introduce more global talents and capital, and meanwhile respect local regulations and the environment," Huang said. Ren Hongbin, a senior researcher with the Chinese Academy of International Trade and Economic Cooperation, said private companies with complementary advantages should expand overseas "in groups", in order to enhance the competitiveness and lower their risks in global operations. According to the Ministry of Commerce, by the end of 2011, a total of 18,000 Chinese companies had made investments abroad, among them, 78 percent had made a profit or broke even, and 22 percent suffered losses. "Many worry that State-owned enterprises' performance overseas is bad, but to be frank, it is much better than expected. Their business performance is fairly good, and it's not a concern," Shi said. Out of the 2,000 institutions and branches set up abroad by Chinese SOEs, 73 percent made a profit or broke even, and only 27 percent suffered losses. To help Chinese enterprises expand their horizons globally, the central government has taken a series of steps to encourage investors' participation in international projects. The National Development and Reform Commission said this month applications will no longer need to be filed for overseas resource development projects with an investment worth less than $30 million. In February, the nation's top economic planning agency gave approval powers for resource projects with an investment of up to $300 million, and non-resource projects with an investment of up to $100 million.

Hong Kong*:  Sept 1 2012 Share

Most of Chief Executive Leung Chun-ying's housing measures involve increasing the supply of new flats. Chief Executive Leung Chun-ying on Thursday afternoon announced a series of housing measures to help Hongkongers buy homes amid rising property prices. Most of the measures involve increasing the supply of new flats to address rising demand in the short and medium term. Leung said the rental option of the My Home Purchase Plan, a rent-or-buy programme to help those in the “sandwich class”, would be dropped, meaning some 5,000 new flats to be built over the few years would be sold directly. The first batch consisting 1,000 flats in Tsing Yi would be available and open for application early next year, Leung said. Some 800 unsold flats under the Home Ownership Scheme, mostly in Tin Shui Wai, would be put up for sale next year. In the middle-term, Leung said 36 vacant government and community sites would be turned to residential use to provide about 11,900 public and private flats. The Urban Renewal Authority will also launch two pilot schemes next year to redevelop industrial buildings into residential flats and commercial offices. On the so-called “flats for Hong Kong people” proposal, Leung said his government had begun drafting laws to create new terms for land sales that would require developers to sell the flats only to Hongkongers. “Once the conditions are in place the policy can be introduced,” he said. One long-term housing measure was a plan to launch a new scheme to help Hongkongers buy homes, which would be designed by the Housing Society. A new steering committee will be set up to assess the housing needs of different community sectors, and to form long-term land and housing policies to meet their needs. The committee will be chaired by Secretary for Transport and Housing Anthony Cheung Bing-leung. The chief executive said he was concerned about the heated property market given the unstable global economy and high liquidity in international markets.

The latest Cheung Kong Holdings (0001) project may be available for sale as early as next week. Le Chateau in Kowloon Tong comprises 31 four-bedroom duplex units, ranging in size from 1,673 square feet to 2,052 sq ft and carrying a minimum price tag of HK$30 million. "The price will be set in accordance with other luxury apartments in the area," Cheung Kong senior sales manager Fung Hoi-lun said. The average selling price in Kowloon Tong currently stands at HK$25,000 per square foot. Rival developer Sun Hung Kai Properties (0016) starts presales next week of its latest project - Century Gateway in Tuen Mun - executive director Victor Lui Ting said. And Wing Tai Properties (0369) will launch presales by the year-end at The Pierre, its Mid- Levels development in Coronation Terrace. The luxury boutique tower with a gross floor area of 40,000 square foot will have 70 flats and is scheduled for completion by 2014. Also, a 50:50 joint venture project with the Nan Fung Group in Ko Shan Road, Hung Hom, is under construction. Sales at the 160,000 sq ft gfa development start next year. Executive director Dennis Au Hing-lun, meanwhile, expects Grade-A office rents outside of Central to rise further in the second half. This comes after rents at its major Grade-A commercial property -Landmark East in Kwun Tong - doubled to more than HK$26.50 psf this year, from HK$13 in 2009, on the current decentralization trend in Grade-A office space.

Chinese University doctors have discovered that infertile women lack the necessary genetic process in their uterus which makes them unable to conceive even if they use in-vitro fertilization. The new cause of implantation failure does not only solve one of the "long- standing mysteries" of human reproduction but also sheds new light on the cause of miscarriages and low success rate of test-tube baby techniques. It also opens a new way for diagnosing infertility and contraception - or even an anti-pill that will reverse infertility, said Chan Hsiao-chang, Li Ka Shing professor of physiology and director of Epithelial Cell Biology Research Centre at the university. The ground-breaking study, published in last month's issue of Nature Medicine, came ahead of the grand opening ceremony yesterday of the Lo Kwee- Seong Integrated Biomedical Sciences Building, as the university stakes its claim to be the "leader in biomedical research" in the SAR. Chan said for pregnancy to occur, women need to have an "epithelial sodium channel" in their uterus as an "initial starting point." Without that channel, women cannot have the embryo implanted in their womb. "The next step we propose is to have an infertility diagnostic tool. The other one could be the target for contraception - by targeting the channel to prevent pregnancy," she said. Director of the School of Biomedical Sciences professor Chan Wai-yee said the discovery of this sodium channel could also be used to find an "anti- contraceptive pill" for women to conceive. Patents have been filed for the discovery but the university still has to find interested companies to take it further. However, the center will focus on cutting-edge technologies to study cancer and inflammation, neuro-degeneration and reproduction, thanks to a HK$150 million donation by Vitasoy founder Lo Kwee-seong, Chan Wai-yee said. Dean of Medicine Fok Tai-fai said: "Corporate support of research is important. There is nothing unethical in itself unless there is ulterior motive."

A Sha Tin Christian school will cancel two weekly morning assemblies - which include Bible studies - to make way for national education. The move by Baptist Lui Ming Choi Primary School has upset parents who chose it for its religious character. The school told parents in a letter that the contentious subject will be taught to all grades on Monday and Friday mornings in the new school term, which starts on September 3. The letter said students' progress in the subject would be evaluated four times a year. A parent who declined to be identified said the 8am to 8.30am time slot was formerly used for morning assemblies. "I chose this school because it is a Christian school," she said. "The school needs to clearly define what it is doing. Is it sacrificing its educational philosophy and moral teachings?" In a three-hour briefing session for new students on Saturday, the school managers said the national education subject would proceed but did not provide details, the parent said. She said that if she was consulted, she would suggest that national education be taught in other class hours or during extra-curricular activities. School principal Wong Kit-lin said most of the elements of the new subject were irrelevant to national education and the school would focus on the civic education as well as the moral components. She said students would still get to pray during the lessons. Only a small number of the city's 500 primary schools have indicated that they will heed the Education Bureau's advice to launch the subject voluntarily in this school year. Concerns intensified last month after a set of teaching materials published by a pro-Beijing group described the Communist Party as a "selfless" and "unifying" regime. Critics said the subject was an indoctrination tool for Beijing. HKFEW Wong Cho Bau School yesterday said the subject would be taught in a weekly 40-minute session. The school is run by the publisher of the teaching materials, the Hong Kong Federation of Education Workers.

Police officer Leung Wai (left) and Sergeant Sit Ching-fung pose in Tuen Mun with their cut-out figures, which will be used as a warning to drivers to be careful. Meet the new traffic police who will be on the roads in the northern New Territories today. The life-sized cut-out copies of two real officers, Leung Wai and Sergeant Sit Ching-fung, are aimed at reducing the number of accidents, even though they will not be able to physically stop or arrest speeding drivers. The "officers" also don't get paid, don't need holiday or sick leave and will be on duty from 9.30am to 6pm. They each weigh 9kg and are made of cardboard and aluminium alloy, costing the force HK$10,000 in total. "We hope drivers passing by [the cut-outs] will pay extra attention to their driving when they think that there are officers around," said Tony Tsang Kin-keung, acting superintendent of the enforcement and control team of the traffic division for the New Territories north region. He said the number of accidents on the region's three highways rose 12.5 per cent from 367 in the six months to July of last year to 413 in the same period this year. Tsang said the three main causes were motorists not paying attention while driving, being too close to the vehicle in front and careless overtaking. Similar cut-outs have proved effective in reducing the number of traffic accidents in Britain, Canada and on the mainland. In Prague, the Czech Republic, cut-outs of female officers in miniskirts caused the number of accidents to increase. But the Hong Kong cut-outs are in more serious poses, with one holding a radar speed gun and the other with a clipboard in hand. During the two-month trial, the pair will be moved to various locations along the Tolo Highway and in Tuen Mun and Fanling. "If they [the cut-outs] prove to be effective ... we may have more of them in other districts," said Tsang. He also said that after the trial, the cut-outs may get "extra shifts" during peak hours. Ng Kwan-sing, chairman of a taxi union, said: "It may be able to deter drivers from outside the district from speeding, but drivers in the district won't be fooled once they get used to them." He also said having more actual police officers on duty on the road to enforce the law would be more effective.

Grey market helps HK, traders say - Mainland parallel importers hit back at criticism and say they contribute to the city's economy. Mainland parallel importers have hit back at criticism of their activities by the chairman of the tourism board, James Tien Pei-chun, calling it despicable and discriminatory. The importers, who buy goods in Hong Kong for sale back across the border, insisted they were contributing to the city's economy through their activities. Yesterday Tien attacked Shenzhen's deicision to relax travel-permit rules from next month, saying the move would lead to more mainlanders joining the parallel-imports business. He said the border city should defer the launch of multiple-visit permits for its 4.1 million non-permanent residents. Tien said many coming to Hong Kong with the permits would not be genuine visitors, but parallel importers or illegal workers. Some of the 50 mainland parallel importers gathered around Sheung Shui station at noon yesterday said Tien's remarks were discriminatory and despicable. One woman from Shenzhen said they had been contributing to Hong Kong's economy because they did not only resell milk powder and cosmetics to make a profit, but also shopped and ate in the city like tourists. "How can that not be beneficial to the [Hong Kong] economy?" she asked. She has been helping take goods to a Shenzhen seller one day a week for the past year. She makes three trips a day, being paid 100 yuan for each trip. While she criticised Tien's remarks as "discriminatory", she said she was concerned that the multiple-trip permits would harm her business because more mainlanders might join the trade. Another Shenzhen woman said she was angry about Tien's remarks, asking: "What is he treating us mainlanders as?'' She said she had had enough of Hong Kong people's rude attitude every time she made a bulk purchase in a pharmacy. This woman, who buys goods in Hong Kong to sell in her Shenzhen shop, and makes a profit of HK$20 on a can of milk powder, expects the number of mainlanders in the trade to increase fivefold under the new permit rules. "It will be hard for Hong Kong's border control staff to handle the influx," she said. The trade is popular despite a mainland law change last year meaning importers risk up to three years' jail for tax evasion.

 China*:  Sept 1 2012

Brilliance China (SEHK: 1114) Automotive will consider declaring a dividend next year after it completes most of its investment projects. The Shenyang-headquartered carmaker - which has a 50-50 joint venture with Germany's BMW - declared no interim dividend this year despite reporting a 41.6 per cent rise in net profit to 1.33 billion yuan (HK$1.63 billion). Chairman Wu Xiaoan said this was because it still needed to invest in certain projects. But he added that shareholders might be rewarded next year. "We will consider paying a divided next year according to sales performance. But we are confident we will outperform the overall growth rate of 20 per cent we have forecast for the mainland's luxury auto sector next year," Wu said. But JP Morgan analysts warned that the company might have to book up to 600 million yuan of start-up losses in next year's financial statements for a new electric car model expected to enter production in late 2013. Brilliance said sales of BMWs in China jumped 46.9 per cent year on year to 80,792 in the first six months - nearly double the luxury car market's average growth of 25 per cent. Brilliance said it was likely to exceed its sales target of 153,000 units forecast for this year, backed by a new 3-series China-only car launched in July. The company's minivan business continued to be a liability, with both sales and gross profit margin down due to slower sales of high-end minibus models. Brilliance said sales were likely to remain sluggish until it launched new models in 2014. The company - which JP Morgan named as its top car share pick - has cut its dealership target for this year to 350 from 370. Meanwhile, slowing mainland demand for commercial trucks dragged down Dongfeng Motor (SEHK: 0489)'s net profit by 8.36 per cent to 5.37 billion yuan during the first six months. The mainland carmaker, which has a joint venture with Nissan, Honda, and Peugeot, said car sales grew 21.6 per cent to 939,500 units, while sales of commercial vehicles fell by 18.84 per cent to 236,753, but price cuts squeezed gross profit margins in both segments.

Mohammed Mursi meets Xi Jinping at the Great Hall of the People yesterday. Mursi meets next leader Xi during 'valuable' visit - Egyptian president's first state visit outside Middle East and Africa underscores China's importance as source of trade and investment. Egyptian President Mohammed Mursi met China's future leader yesterday on the second day of a visit that seeks to deepen economic and diplomatic ties despite Beijing's uneasiness with the Arab spring revolution that helped bring him to power. Mursi hopes that his trip will bring trade and investment to shore up his country's flagging economy. On Tuesday, China pledged US$200 million in credit for the National Bank of Egypt, with the sides also signing agreements on agriculture, telecommunications, the environment and other areas. Vice-President Xi Jinping told Mursi yesterday China placed "tremendous value on this visit". "It is hoped this visit will further increase our mutual understanding and trust, promote greater co-operation and exchanges between our two countries, bring new vitality to bilateral relations and open a new chapter in friendly contacts," said Xi, who is due to take over as president next spring in a transition of power to a younger generation. Mursi responded by terming Egyptian-Chinese ties as a "strategic relationship" he hoped to enhance with his meetings in Beijing. Mursi, an Islamist who took office in June as Egypt's first freely elected civilian president, met President Hu Jintao on Tuesday. It is Mursi's first state visit outside the Middle East and Africa since becoming president, underscoring China's importance as one of five permanent members of the UN Security Council and as a vital source of trade and investment. The visit is also seen as part of a reorientation of Egyptian foreign policy away from a heavy focus on the US. In a separate meeting yesterday, Premier Wen Jiabao told Mursi that China would strengthen trade and economic co-operation with Egypt. China and Egypt should co-ordinate more closely to ensure both ongoing and settled projects proceed smoothly, he said. Wen said the two sides should co-operate more in the fields concerning people's livelihood and development. He also called on the two sides to improve regulations on investment promotion and protection so as to create good environments for co-operation. Mursi was preceded to Beijing by a delegation of 80 Egyptian business leaders who planned to discuss investment projects with 200 Chinese counterparts. The trip is also a chance for the countries to rebuild their relations in the wake of the popular uprising last year that drove longtime president Hosni Mubarak from power, paving the way for democracy and Mursi's election. Mursi leaves Beijing today to attend the world gathering of self-described non-aligned nations in Iran, the first visit to that country by an Egyptian head of state since relations between them were severed in 1979.

Li Na advances at U.S. Open - Li Na of China enters to next round at the 2012 U.S. Open tournament in New York, the United States, Aug. 29, 2012.

Top executives of General Electric Co., one of the world's largest companies, are urging countries such as the U.S. and Australia to open their doors wide to Chinese investors to help boost financing for infrastructure needs. In an interview, GE Vice Chairman John Rice said broader Chinese investment could fund transportation infrastructure such as bridges and airports in the U.S. and developing countries. GE, which had sales of $147.3 billion last year, provides products including aircraft engines, railroad cars and roadway lighting in 150 countries.

China to Continue Investing in Europe - German Chancellor Angela Merkel, left, is greeted by Chinese Premier Wen Jiabao after a joint press conference at the Great Hall of the People in Beijing on Thursday. China will continue to invest in European government debt, though on the condition of a full evaluation of risk, Chinese Premier Wen Jiabao said Thursday. At a press conference held jointly with German Chancellor Angela Merkel, who is here on her second trip to China this year, Mr. Wen said China will also strengthen talks with the European Central Bank and others in an effort to help the debt-laden continent ride out its crisis. Mr. Wen said the euro-zone debt crisis was a major focus of his talks with Ms. Merkel on Thursday. The key to solving the crisis is to "strike a balance" between fiscal tightening and economic stimulus, Mr. Wen said, acknowledging that solving the crisis will take a long time. China maintains its confidence in the euro and will continue to buy European government bonds to help debt-ridden European countries to ride out the crisis, Mr. Wen said. Ms. Merkel said "big progress" has been made toward arresting the crisis, but it is not over yet. European countries have the "political will" to revive market confidence in euro, she said. European officials have expressed hope that China could deploy significant amounts of its huge foreign-currency reserves to invest in EU bailout funds. China has been a regular buyer of bonds issued by the European Financial Stability Facility and also the sovereign debt of various euro-zone nations, but the level of its investment remains unknown. Mr. Wen's remarks echo some recent comments made by Chinese officials. At an EU-China meeting in Beijing in July, Dai Bingguo, the Chinese co-chairman of the talks, pledged that "China is sincere and firm in supporting European efforts to deal with the sovereign debt problem." Ms. Merkel and Mr. Wen pledged to strengthen their own economic ties, amid signs both are being affected by the euro-zone crisis. On Thursday, China and Airbus unveiled a procurement deal with the leasing arm of Industrial & Commercial Bank of China Ltd. involving 50 Airbus A320 jetliners valued at $3.5 billion, according to the state-run Xinhua news agency, one of a number of deals announced during Ms. Merkel's visit. Xinhua didn't disclose financial terms. Chinese Premier Wen Jiabao and Ms. Merkel attended the signing ceremony, Xinhua said. Airbus is a unit of Franco-German European Aeronautic Defence & Space Co. Airbus also signed an agreement to build an assembly line in the Chinese city of Tianjin under an agreement it valued at $1.6 billion, according to German officials, and Germany's Volkswagen AG signed an agreement to invest about $290 million in Tianjin. Under the agreement, Volkswagen will build a plant in Tianjin to make auto parts. The pact marks Volkswagen's continued bet on the growth in China's auto market, said an official with the Administrative Commission of Tianjin Economic-Technological Development Area. Meanwhile, officials said Chinese telecommunications equipment maker ZTE Corp. and Germany's IET Holding GmbH signed a $1.3 billion pact for a telecommunications project. Ms. Merkel is seeking to improve relations between Europe's largest economy and the world's second-largest economy. She is accompanied by an entourage of seven cabinet ministers and nearly two dozen leading German industry executives. Trade between China and Germany has grown steadily over the past decade, reaching about €144 billion (about $180.6 billion) in 2011, an increase of 10% from the year before, according to the German government. German companies invested €26 billion in China last year, dwarfing China's investment in Germany of about €1.2 billion. About 5,000 German companies have set up shop in China, employing 220,000 people, according to statistics from the German Chamber of Commerce in China.

China and Germany signed a series of cooperative documents Thursday, including a procurement deal for 50 Airbus planes. The signing ceremony was attended by Chinese Premier Wen Jiabao and German Chancellor Angela Merkel, after both co-chaired the second round of Chinese-German intergovernmental consultations in the morning. China's ICBC Leasing and Airbus signed the procurement deal for 50 Airbus A320 planes with a worth of $3.5 billion. The two countries also inked more than 10 other cooperative documents, including an agreement about Airbus plane assembling in China. The documents range from aviation, automobile, communication, energy, environment, health to maritime cooperation. Merkel arrived in Beijing Thursday morning, kicking off a two-day official visit to China at the invitation of Chinese Premier Wen Jiabao.

Nebraska gets busy beefing up trade links - Heartland state sets pace in growing relationship with China When Nebraska Governor Dave Heineman visited China for the first time on a trade mission in 2007, he was surprised at how much his hosts already knew about his state in the US heartland. Chinese business leaders he met on that trip impressed the governor when they mentioned that famous Nebraskan often called the most successful investor of the 20th century, and how much they wanted to be the "Chinese Warren Buffett". "We've got a great role model in Warren Buffett, but I want it to go beyond Warren Buffett," Heineman told China Daily at the Republican National Convention in Tampa, Florida. "I want the Chinese people to understand the warmth, the hospitality and welcoming atmosphere we have in Nebraska - that we will give your businesses the opportunity to grow and prosper." The state's relationship with China has become closer in recent years. After the governor made a second trip to China in July, the state opened a trade office in Shanghai for further economic exchanges. Heineman expects the Shanghai office will bring "fruitful" results as Nebraskans and Chinese seek more business opportunities on each other's territory. Recently five Chinese companies decided to set up their US headquarters in Nebraska. Heineman said the state offers low-cost energy, a business-friendly tax environment and, due to its central location, the ability to transport goods anywhere in America in two days. "A number of others have made commitments to us when we were in China this time," he said. One of these was Shanghai Liuhe Qinqiang Food Co. Its chairwoman, Lu Jingjing, recently said that the agribusiness company decided to open an office in Omaha, the state's biggest city, to focus on meat exports to China. "We want to help them, so as they grow and prosper they will tell other business leaders in China and encourage them to come to (invest in) Nebraska," Heineman said. China, the United States' third-biggest market after Canada and Mexico, imported more than $100 billion in US goods and services in 2011, according to the US-China Business Council. China is Nebraska's fourth-largest trading partner and among its fastest-growing overseas markets. The state's exports to China (chiefly corn, soybeans and meat) have grown by 30 percent in each of the past three years. "Obviously we have a good relationship with Canada and Mexico - they are our northern and southern partners. But we are looking throughout the world," said Heineman, adding that fast growth may make China the state's No 1 trading partner. The governor's optimism about the Chinese market isn't deterred by a recent slowdown in the pace of growth in the world's second-biggest economy. The current 7 percent to 8 percent expansion in the economy is "good enough", he said, given China's size, population and growing middle class. The past few years have seen numerous US governors leading high-priority trade missions to China in pursuit of bilateral investment. This year, five US governors including Heineman have brought business executives from their states to explore the growing Chinese market, while a few more have lined up trips to China in coming months. Heineman, the current chairman of the National Governors Association, believes the US and China have "an obligation to the entire world" given their status as economic superpowers. "If China and America are strong, the world's going to be. And economically we need to be connected, and we need to have a strong relationship. In my state we would like to do our part," he said. Nebraska hosted reciprocal trade missions in 2008 and 2011, when more than 100 Chinese business leaders came to explore opportunities in the Cornhusker State. "We want to export to China, and we want you to invest in our state; it's a two-way street," said Heineman, who said Nebraska will host a third visit from a Chinese delegation sometime in 2013. While the US is experiencing a weak economic recovery, many states have been active in seeking foreign investment. On his recent week-long visit, Heineman met with Vice-Premier Wang Qishan. In Xi'an, he met with Shaanxi Governor Zhao Zhenyong as well as a number of business executives who were eager to learn more about the state. Heineman wants Nebraska to build a lasting relationship with China. "This is a partnership we want for a lifetime," he said. "We are not there for a partnership for a day. We want you to come to Nebraska to become part of our community and we want you to be here forever." The state is working to establish a sister-state relationship with China's northwestern Shaanxi province, whose central location is similar to that of Nebraska in the US. Such an arrangement would encourage more exchanges in education, business and other areas, Heineman said. For the governor, "going to Xi'an is like coming to Nebraska".

Hong Kong*:  Aug 31 2012 Share

A Hong Kong court will rule next month on whether Ernst & Young can use state secrets as an excuse for withholding information from the securities regulator. According to a writ filed by the Securities and Futures Commission with the High Court on Monday that was made available to the public yesterday, Judge Jonathan Harris will rule on September 11 on whether he is "satisfied that there is no reasonable excuse" for the accounting firm to refuse to comply with the SFC's request to share documents related to a listing candidate. The writ says the SFC issued nine notices from April 2010 to October 2011 to E&Y for accounting records of mainland waste water treatment company Standard Water, which the accounting firm was helping to apply for listing on the Hong Kong stock exchange in 2009. The SFC writ says E&Y failed to produce the documents and failed to help the commission "conduct an investigation concerning Standard Water" by refusing to share the documents citing restrictions under the mainland's secrecy law. Standard Water filed an application in November 2009 to list in Hong Kong. In March the following year, E&Y informed the exchange that it had resigned as Standard Water's reporting accountant and auditor as it had found certain inconsistencies in its documents. Standard Water withdrew its listing application soon after. Although the company eventually did not list, the regulator has the right to check that listing sponsors ensure firms do no provide misleading information in their listing applications. In response to the SFC action, E&Y said yesterday: "We understand our obligations to the SFC and endeavour to fully comply, while also meeting our compliance obligations with mainland China's laws and regulations. "Ernst & Young supports close working relationships between Hong Kong and mainland China audit regulators on matters of public interest. We will work closely with the relevant regulators, and trust that there will be a quick resolution to enable our full compliance with applicable laws and regulations." Since E&Y had resigned as auditor for Standard Water in March 2010, it had not issued an accountant's report for the initial public offering, E&Y said. The accounting industry has mixed views on the case. Roy Lo Wa-kei, deputy managing partner of ShineWing (HK), said he was surprised that E&Y refused to give the SFC the documents it sought. Hong Kong Institute of Certified Public Accountants chief executive Raphael Ding Wai-chuen, however, supported E&Y, saying: "Hong Kong accounting firms need to comply with the mainland's secrecy law requirements."

China's Olympic gold medalists and their coaches received a check for HK$10.2 million from the Macau government to share it among themselves. The check, presented by Macau Chief Executive Fernando Chui Sai-on on Sunday, was made out in Hong Kong dollars rather than patacas for easy convertability. This was revealed by the group yesterday on the last day of their visit to the gambling capital. There were 70 people in the delegation, including 47 medalists and 23 coaches and officials. A spokesman for the Macau government said it was up to the mainland authorities to decide how the money would be shared. According to people familiar with the mainland system, the athletes will usually share part of the sum with the remainder going to their sports team and the state. Macau also gave the 2008 Beijing Olympics' gold medal winners HK$10.6 million. According to a report on the value of Olympic gold medals by the China Brand Research Institute, the commercial worth of a gold medalist varies. The potential "advertising contract" for badminton king Lin Dan could be about 6million yuan (HK$7.3 million) while swimmer Sun Yang, who won the 400- and 1,500-meter freestyle, could rake in from 3million to 5 million yuan. Ye Shiwen, who won the 200m and 400m individual medley, is worth about 1.5 million to 2 million yuan. A Hong Kong Home Affairs Bureau spokeswoman said the SAR government did not give any similar incentive although the Olympians received HK$25.2 million from a number of enterprises in Hong Kong.

Hong Kong director Wong Kar-wai will head the jury at next year's Berlin International Film Festival, one of the most prestigious events in global cinema. The Berlinale's organisers praised Wong as one of the world's most celebrated filmmakers who has charmed international audiences with his "distinctive signature and the poetry of his works". "Since the 1980s, the Berlinale has established itself as a platform for contemporary Chinese cinema, which is another reason why we are honoured Wong Kar-wai will be presiding [over] the International Jury 2013," said director of the Berlinale Dieter Kosslick. Wong said in a statement that he was greatly privileged to return to Berlin for his appointment as jury president. It is not the first time Wong has chaired such a jury. In 2006, he was named jury president at the prestigious Cannes Film Festival. Other Hong Kong filmmakers who have sat on the Berlinale jury include Hong Kong-born Chinese-American director Wayne Wang, veteran producer Nansun Shi and Taiwanese actress Shu Qi. Shanghai-born but Hong Kong-raised, Wong began his career at TVB (SEHK: 0511) before making his directorial debut in 1988 with As Tears Go By, starring Andy Lau Tak-wah and Maggie Cheung Man-yuk. International acclaim followed with a string of hit features, including Days of Being Wild (1990), Chungking Express (1994) and Fallen Angels (1995), which were screened at the Berlinale's Forum, reserved for daring and experimental films. But it was Happy Together that sealed Wong's screen-master status, winning him best director at Cannes in 1997. Afterwards, came a sultry tale of forbidden romance, In the Mood for Love (2000), which won local actor Tony Leung Chiu-wai the best actor award at Cannes. Wong's next film The Grandmasters has already been a decade in the making. The biopic of Bruce Lee's mentor and martial arts legend Yip Man stars Leung in the lead role alongside actress Zhang Ziyi and is reported to open later this year.

Hong Kong exporters with factories across the border are battling overseas buyers who delay settling bills but want quicker delivery of finished goods. Yeung Chi-kong, executive vice-president of the Toys Manufacturers' Association Hong Kong, said sluggish demand had prompted overseas buyers to delay orders and payment to exporters, weakening exporters' ability to pay their own suppliers, and even banks, creating a "triangular debt" situation. Triangular debt, exacerbated by Beijing's tight credit regime, had ballooned so much that it could potentially be worse than the global financial crisis of 2009. "Overseas importers are dragging their feet in settling bills by as long as 90 days in many cases against the usual period of about 60 days," Yeung said. "Exporters are in distress." He said the period between the placing of an order and the shipment, also known as the lead time, had been shortened dramatically to less than a month from a common practice of two to three months. "Buyers lack confidence," he said. Triangular debt is a key concern of mainland policymakers, who want economic stability in the lead-up to the leadership transition at the Communist Party's 18th Congress in Beijing in a few weeks. Sources at the Ministry of Commerce and the China Banking Regulatory Commission (CBRC) confirmed mainland media reports that ministries were looking into the problem and formulating measures. The CBRC source said one measure would stipulate that banks loosen the tap by rolling over loans to loss-making state-owned enterprises; and extending loans to small and medium enterprises grappling with short-term cash problems but operating in a long-term promising market. Zheng Xinli, a researcher and deputy director with the party's Central Policy Research Office, warned of an outbreak of profit decline, triangular debt and unemployment if the economic slowdown deepened further. "It's hard to say whether the economy will rebound or continue softening in the third quarter," he said. Profits at mainland industrial companies fell for the fourth month in a row in July. A preliminary reading of a purchasing managers' index for manufacturing, compiled by HSBC/Markit Economics, showed the lowest level since November. Export growth almost stalled in July and new yuan loans and industrial production both trailed estimates. "A new round of triangular debt is forming," said Li Xunlei, vice-president and chief economist at Haitong Securities. "Companies are involved in guaranteeing one another's debts with fake or inflated collateral, or using borrowed money from loan sharks in property speculation. These rampant practices pose a challenge to the central government." Concern about the deteriorating situation was underscored in Premier Wen Jiabao's visit to Guangdong last week, his fourth field trip to key regional areas in about two months. Shuttling among industrialised centres in Guangzhou, Dongguan and Foshan, Wen said difficulties in stabilising the economy were "still relatively large". He called for concerted efforts to stabilise exports to meet the nation's economic target. Federation of Hong Kong Industries deputy chairman Stanley Lau Chin-ho said consumer confidence was so fragile in the euro zone and the United States that Hong Kong exporters across the border were likely to see sales tumble as much as 30 per cent this year. "No one knows how long the bleak export [outlook] will last," Lau said. "Many overseas customers are delaying shipment of finished goods, and naturally asking for a delay in payment." The problem of receivables - the money that clients owe businesses - is apparent in the railway sector, where heavy spending on high-speed links has made it difficult for companies in this business to pay their bills. For example, trade receivables of state-owned CSR, which makes trains, ballooned 157.3 per cent to 35.22 billion yuan (HK$43.09 billion) as of June 30 from the beginning of this year, mainly because of customer delays in paying for the company's rolling stock.

Chain stores in Tseun Wan, including pharmacies, are reaping the benefits of more mainland visitors. New Territories businesses and residents remain divided on whether more mainland visitors would be good or bad for them. Worries about next month's opening-up of multiple-entry permits to 4.1 million non-permanent residents of Shenzhen range from rising rents and prices to a scarcity of train seats. But many shopkeepers welcome an increase in business. The extra visitors are expected to spread from the busiest tourist and shopping areas to new towns stretching from the border district of Sheung Shui to more distant Tsuen Wan, bringing both stress and opportunities. "I see mainlanders everywhere, even when I go to the markets," Tsuen Wan resident Trevina Law, 59, said. "Not only do they crowd the markets, the shopkeepers raise the prices of goods, like rice, oil and salt, because the demand for their goods has increased." Steve Luk, whose shop Luk Kam Kee, King of Melon Seeds, has been in Tsuen Wan since 1948, said the influx of mainlanders had already brought changes. Rents had risen about 20 per cent in a year, while the cost of shop space on major streets had risen to levels that Luk described as "not worth it". Only big chain stores like Mannings, Watsons, Broadway and jewellery shops could pay such prices and they had taken over many local businesses, dominating main streets such as Tai Ho Road, he said. "Luckily, the local community is still supportive of small businesses," he added. A Sheung Shui resident told Commercial Radio yesterday it was impossible to find a seat on East Rail trains unless he went to the Lo Wu terminus first. On the other hand, many shops including pharmacies welcomed the relaxation in permits as the growing numbers of mainland visitors had been a major boost to business. Rejecting accusations of profiteering, the operators said rising costs were the reason for higher prices. Mainlanders are still keen to visit despite being aware that many locals do not welcome them. Zhang Zheng-min, 60, from Shenzhen said: "I visit Hong Kong for my pleasure. If I want to purchase goods, I will buy them. We don't have to be wary of what the Hongkongers think." Another visitor said: "We bring more benefits to the city than harm."

Preview of new fashions at Lee Gardens in HK - Models present new creations at a preview of new fashions at Lee Gardens of south China's Hong Kong, Aug. 29, 2012.

Hong Kong is getting ready to roll out the doormat for more mainland Chinese tourists—much to the chagrin of many residents. Starting Sept. 1, an additional four million visitors from the neighboring mainland city of Shenzhen will be allowed to more easily obtain multiple-entry visas to visit Hong Kong, an arrangement that’s helped stoke fears that the city will be overrun by mainland Chinese tourists, whom some locals have begun resentfully dubbing “locusts.” Analysts estimate that the Sept. 1 arrangement will boost the number of visitor arrivals from mainland China by as much as 15%. Last year, 28 million mainland Chinese visitors came to Hong Kong, a city of just 7 million residents. Such tourists come to shop for luxury goods, buy property and even give birth, embittering locals who feel they are being priced and crowded out of their own homes and subways. Last year, visitors to Hong Kong spent a combined $263 billion. Mainland tourists, who make up two-thirds of all visitors toHong Kong, are an economic lifeline for the city, where the tourism sector employs 6% of all residents. Already, visiting Hong Kong is so convenient that residents of Shenzhen make regular trips to the city to buy their soy sauce and other daily goods. Though Shenzhen’s permanent residents can easily apply for multiple-entry visas to Hong Kong, this week’s expansion will grant Shenzhen’s students and migrants—that is, those who aren’t permanent city residents—the same privilege.

 China*:  Aug 31 2012

Tokyo's Foreign Minister said it is time to address relations with China that have soured over a territorial dispute as an incident targeting the Japanese ambassador added to tensions. Monday's incident in which the national flag was ripped off a car carrying the envoy in Beijing came amid widespread anti-Japan demonstrations over a disputed East China Sea island chain known in China as the Diaoyus and in Japan as Senkakus. Describing the incident as "very regrettable," Foreign Minister Koichiro Gemba said yesterday he would send an envoy to deliver a letter to President Hu Jintao. He declined to elaborate on the contents, but said it is a good opportunity to address ties that have soured over the island dispute. "I believe that we must exchange opinions now on the situation of Japan- China relations, on the situation of the region as a whole, including the Korean peninsula, as well as the global situation," Gemba said. Chief Cabinet Secretary Osamu Fujimura, the government's top spokesman, hinted at the wider diplomatic issues at play, saying the letter to Hu is about "developing stable Japan-China relations based on a broad view." Despite their large and mutually important trade relationship, ties between Tokyo and Beijing are often blighted by historical animosities, especially wartime atrocities. Finance Minister Jun Azumi hinted last week that Japan may freeze its plan to buy South Korean government bonds amid a separate diplomatic tussle with Seoul. He added: "I hope that [China] will avoid inviting a situation that would worsen" relations. Ambassador Uichiro Niwa was not hurt in the Beijing incident and there was no other damage to his diplomatic vehicle, according to the Japanese embassy. Senior Vice Foreign Minister Tsuyoshi Yamaguchi was expected to leave for Beijing yesterday to deliver the letter from Prime Minister Yoshihiko Noda to Hu. The United States, a close ally of Japan, reacted to the flag incident by saying that it is "concerned" more broadly about relations between Japan and China, Asia's two largest economies. Tensions between the neighbors flared earlier this month after pro-Beijing activists landed on one of the disputed islands, which are controlled by Japan. They were arrested by Japanese authorities and deported. About a dozen nationalists raised Japanese flags on the island days later. Thousands of Chinese citizens in more than 20 cities have protested over the past two weeks. Japanese businesses, restaurants and cars were targeted in some cities, including Shenzhen.

First-half earnings at China Mengniu Dairy fell to 645 million yuan, a result that the company partly attributed to a fall-out from quality-related scandals. China Mengniu Dairy (SEHK: 2319) plans to undertake more quality-control measures, after sales were severely hit by quality-related scandals in the first half of the year. The largest dairy producer on the mainland saw its net profit plunge 18 per cent to 645 million yuan (HK$789.16 million) in the first six months while revenue fell 1.2 per cent to 18.4 billion yuan. The company, based in Inner Mongolia, said sales volume plunged nearly 30 per cent after a government check in December found its milk products contained unsafe levels of flavacin M1, a cancer-causing substance. Chief financial officer Wu Jingshui blamed the drop in net profit on aggressive spending on marketing to regain consumer confidence, and extra costs for product inspection. "The incident has taken a bigger toll on Mengniu than expected," said Sunny Kwok, an analyst at Guotai Junan Hong Kong. "It will affect sales expectations for the rest of the year as well." The dairy producer, plagued by a series of quality scandals in recent years, was in the media spotlight again this month. A Mengniu sales manager in Yiwu city, Zhejiang, reportedly falsified the production date on 3,000 boxes of milk products that were about to expire. Chief executive Sun Yiping, who is a former senior executive of Cofco, the largest stakeholder in Mengniu, said the company had compensated affected consumers and was working to ensure that such incidents did not recur. She said the incident did not have any significant impact on the company. Mengniu said it was establishing upstream milk sources and improving its internal control system. In the first half, revenue generated from liquid milk products amounted to 15.9 billion yuan, about 86 per cent of the total revenue. Ice cream and other dairy products accounted for 11.7 and 1.4 per cent respectively. The overall gross profit margin stood at 25.7 per cent, down 0.3 percentage points from a year earlier. Mengniu did not propose an interim dividend for the reporting period. Its shares closed at HK$23.10 yesterday, up 0.4 per cent.

Top offshore oil producer CNOOC (SEHK: 0883) is inviting foreign companies to explore for oil and gas in another 26 blocks, including 22 in the South China Sea, although an analyst said none of these were in disputed territory. Experts said the tender, which also covers blocks in the Bohai Sea off north China and in the East China Sea, was probably the largest offered by China National Offshore Oil Corp (CNOOC) since the 1990s - a sign that the oil giant wants to boost exploration as its output growth slows. The tender comes two months after CNOOC invited international firms to bid for nine blocks in the western part of the South China Sea, a move Vietnam said was illegal as the blocks encroached on its territorial waters. China at the time insisted the tender in June was in accord with Chinese and international law and urged Vietnam not to escalate the quarrel. Huang Xinhua, a geologist at energy consultancy IHS, said none of the latest blocks appeared to be in disputed areas. One of the blocks is in northern Bohai Bay, with three in the East China Sea, 18 in the eastern part of the South China Sea and four in the western South China Sea, the company said on its website www.cnooc.com.cn They cover a total area of 73,754 square kilometres. The three deep-water blocks in the eastern part of the South China Sea are at depths between 700 and 3,000 metres, it said, adding that foreign firms had until November 30 to view data packages for all the blocks tendered. "The tender should be CNOOC's largest in terms of the number of blocks offered since the 1990s, showing CNOOC really wants to beef up its exploration in offshore China with the help of international firms," Huang said. The three deep-sea blocks, which cover a total of 15,365 square kilometres, as well as areas in the Qiongdongnan basin in the western part of the South China Sea, were attractive as hardly any drilling had been carried out there so far, Huang said. In this round of auctions, block 65/12 is near block 65/24, which Vietnam singled out in a March as violating its sovereignty. The area sits one nautical mile from the Paracel Islands, which China and Vietnam fought over in 1974. China calls them the Xisha Islands and Vietnam calls them the Hoang Sa Islands. "China must assert its sovereignty over these blocks as preliminary geological assessments suggest huge oil and gas exploration potential," said Gordon Kwan, the Hong Kong-based head of regional energy research at Mirae Asset Securities. "China's rising global dominance can fend off any political or military challenges that could come" because of the new tenders.

President Hu Jintao leads the way for Mohammed Mursi during his welcoming ceremony in Beijing yesterday. China is hosting Egypt's new president despite its uneasiness with the Arab Spring revolution that helped bring him to power, while the new leader seeks to shore up his country's flagging economy. On the first day of President Mohammed Mursi's trip, China pledged US$200 million in credit for the National Bank of Egypt and leaders signed deals on agriculture, telecommunications, the environment and other areas. Mursi, an Islamist who took office in June as Egypt's first freely elected civilian president, was welcomed by President Hu Jintao at the Great Hall of the People. It is Mursi's first state visit outside the Middle East and Africa since becoming president, underscoring China's importance as one of five permanent members of the UN Security Council and as a vital source of trade and investment. The visit is also seen as part of a reorientation of Egyptian foreign policy away from a heavy focus on Washington. "Mr President has chosen China as one of his first countries to visit and this fully shows that your country attaches great importance to the desire to develop relations with China," Hu said after a welcoming ceremony. Xinhua quoted Hu as saying China understood and respected the will of the Egyptian people and supported them in choosing a political system and path of development in accordance with their country's situation. Hu also called for more contacts between the two countries' officials and an expansion in economic ties. Mursi was preceded to Beijing by a delegation of 80 Egyptian business leaders, who planned to discuss investment projects. The trip is also a chance for the countries to rebuild their relations in the wake of the popular uprising last year that drove Hosni Mubarak from power, paving the way for democracy and Mursi's election. Beijing was decidedly cool towards that movement, criticising what Chinese state media derided as thuggish "street democracy". Yesterday's talks also touched on the Syrian crisis. Both countries were opposed to a military intervention, Egyptian presidential spokesman Yasser Ali said. "I presume that there is an understanding from both sides that we have to work together to stop the bleeding in Syria's streets, and the other understanding also regarding the military [intervention] in the Syrian scene is not accepted by both countries." Before leaving Cairo, Mursi said he would pursue a "balanced" foreign policy, reassuring Israel its peace treaty was safe, hinting at a new approach to Iran and calling on Bashar al-Assad's allies to help lever the Syrian leader out.

Ford readies Lincoln launch in China by 2014 - Ford Motor Co will launch its Lincoln brand in China within two years as it races to catch up with rivals in the world's largest auto market and home to a growing number of luxury buyers. President of Ford Asia Pacific and Africa Joe Hinrichs, Ford Motor's CEO Alan Mulally, Group Vice President, Global Marketing Sales and Service of Ford Jim Farley, Chairman and CEO of Ford Greater China Dave Schoch (L - R) pose with a Lincoln MKZ Concept car in Beijing in this handout photo provided by Ford Motor (China) Ltd. on August 28, 2012. The additional investment to launch Lincoln, which Ford did not disclose, comes on top of around $5 billion that the US automaker has spent since 2006 in a market where it lags some way behind General Motors and Volkswagen. As Ford builds its top-tier nameplate, it is also developing a low-cost car under the mainstream brand to appeal to more price-sensitive consumers in the fast-growing cities in western China. This vehicle will compete with GM's Sail car. The US automaker, which joins several other companies looking to expand or launch luxury auto brands in China, is building its dealership network from scratch and will begin selling Lincoln vehicles in the second half of 2014. "The brand in China could be a bright spot for Lincoln globally," Ford's global marketing chief Jim Farley said during a Beijing media event on Tuesday. "We have a chance to be different here." To succeed in China, Ford said it will slowly court dealers who can help burnish Lincoln's image. Ford is also in the early stages of reviving the brand's stale image in the United States, where sales peaked two decades ago. Ford will launch a refashioned MKZ sedan in the United States this year in a bid to attract younger, more affluent buyers. Much of the design, including push-button transmission, was influenced by Chinese consumer tastes. "We're trying to revitalize the Lincoln brand image and the sales and satisfaction image in the US," said Dave Schoch, Chairman and CEO of Ford Motor China. "Here we have a clean sheet of paper. We don't have the legacy issues." Despite slowing growth in new vehicle sales, China has already overshot the United States as the world's largest auto market. By 2020, analysts expect luxury sales in the country will surpass those in the United States. By 2015, Ford aims to double its production capacity and dealers in China. Executives, including Chief Executive Alan Mulally, flew to Ford's manufacturing hub in Chongqing earlier this week to mark the groundbreaking of a third assembly plant. But Ford faces considerable challenges in launching its Lincoln brand. A heavy import tax of at least 25 percent will eat into margins as Lincoln initially will not build cars in China. Competition is also mounting. Toyota Motor Corp's Lexus, Nissan Motor Co Ltd's Infiniti and GM's Cadillac are among those looking to expand in China to appeal to a growing number of luxury buyers. One prominent dealership operator in China said he sees "little chance" for the brand to take off the way BMW, VW's Audi and other German brands have, adding that the brand would face a better chance if the market was growing at the torrid pace of 2009 and 2010. But under current circumstances, "there's just no way I would take a chance with Lincoln," said the operator, who declined to be named. 

Hong Kong*:  Aug 30 2012 Share

A family court judge believes a proposal to allow divorced couples to have joint custody of their children may not suit those in Hong Kong. The government last year launched a public consultation on joint custody put forward by the Law Reform Commission in 2005. The proposal called for the consent of both parents on important decisions for the children including emigration, traveling out of Hong Kong for more than a month and changing their surname. The parent who gets to live with the child would need the other parent's consent over important decisions relating to the youngster. Speaking in a forum at the University of Hong Kong yesterday, Family Court judge Sharon Melloy said in cases involving children under 18, orders in the past generally involved sole custody. Melloy said of the 352 cases she handled between March and August this year, around 75 percent or 265 cases were made for sole custody and only around 10 percent or 33 cases for joint custody. The remaining 54 cases were still in dispute. Melloy said joint custody orders "are clearly not commonly made" and there is no indication they are likely to be made today. According to the commission report on child custody and access, the joint parental responsibility model is a new approach to deal with the arrangements for children after the divorce of their parents. It emphasizes the continuing responsibility of both parents toward their children rather than stressing parental rights. Both parents may participate in important decisions about their children after they divorce. Society for Community Organization social worker Sze Lai- shan said currently courts arrange the parental rights of divorced couples through custody orders. "A sole custody order may empower only one parent to make important decisions for the child," Sze said. Sze warned that under the joint responsibility model, it is possible for one parent to always harass the other. Harmony House executive director Queenie Tao How-wah echoed the view of Sze, saying that the joint parental responsibility model might not work well with children whose families have been involved in serious cases of domestic violence.

The Securities and Futures Commission says it has the mainland authorities' backing in the matter against Ernst & Young. The Securities and Futures Commission initiated legal action yesterday against Ernst & Young for refusing to provide information on a listing candidate on the grounds of state secrets. The securities watchdog said it had asked E&Y for records of Standard Water, which the accounting firm had helped to apply for listing on the Hong Kong stock exchange in 2009. The firm refused to comply with the request, citing the mainland's secrecy law.This is the first time the commission has used its power under Section 185 of the Securities and Futures Ordinance to ask the courts to order E&Y to comply with its request. Although Standard Water did not eventually list, the SFC can demand documents of any company that had applied for listing. The commission has the mainland authorities' backing in the matter and said it had "brought this proceeding after consulting the relevant mainland authority about access to these records". E&Y declined to comment on the commission's move. This is the second time in recent days that the regulator has taken action on non-disclosure issues pertaining to the mainland's secrecy law. Last Wednesday, it ordered China High Precision Automation Group to suspend trading in its shares after the mainland-based company announced that it could not furnish its former auditor KPMG with all the information it sought because some of its businesses were related to "state secrets". SFC's statement yesterday said Standard Water filed an application in November 2009 to list in Hong Kong. Then in March 2010, E&Y informed the exchange that it had resigned as Standard Water's reporting accountant and auditor as it had found certain inconsistencies in its documents. Standard Water withdrew its listing application soon after. The SFC issued a formal notice to E&Y seeking the documents related to Standard Water. It did not say when it issued the notice. E&Y initially said it did not have the records in Hong Kong as the documents were held by its mainland joint venture Ernst & Young Hua Ming. It later said the documents could not be produced because of restrictions under the mainland secrecy law as "accounting records, including audit working papers, may be the subject of claims of state secrecy", the SFC said. The SFC sought the help of the relevant mainland authority in the investigation. E&Y Hua Ming also failed to provide the records to the relevant mainland authority, the commission said. "Given Ernst & Young was the reporting accountant … the failure to produce these records to the relevant mainland authority on the SFC's request is a matter of serious concern," the SFC said.

Border areas like Pak Fu Shan, facing the mainland's Liantang, could see benefits. Border development 'will bring Hongkongers jobs' - Think tank chief and Exco member says commercial zones will draw mainland shoppers. Encouraging commercial developments in border areas will offer job opportunities for Hongkongers and reduce shop rents for business start-ups, according to Executive Council member Cheung Chi-kong. Cheung, who is also executive director of the One Country Two Systems Research Institute, was defending the think tank's proposal to allow mainlanders into the 2,400-hectare border zone, which is being opened to the public after 60 years, on a visa-on-arrival basis. He said the plan had been "misinterpreted" by some as a visa-free arrangement. The institute and its two-year-old proposal have come under attack after reports, since denied, that visa-on-arrival admission would also cover three controversial new towns being planned for the northern New Territories. That led to claims that the new towns, opposed by many because they would take up much of the city's remaining farmland, would become economic centres for mainlanders rather than being used to solve Hong Kong's housing problems. On a radio programme yesterday, Cheung said the visa-on-arrival plan would only apply to commercial developments inside the border zone, covering just a few square kilometres. "It is just an idea suggested by a non-governmental organisation," he said. Chan Kim-ching, a member of a concern group opposed to the new towns, said the proposal would create a new "shopping economy" for mainlanders in border areas, similar to those that are creating problems in urban areas popular with shoppers from the mainland. But Cheung said the border commercial zone would provide local jobs, attracting people from crowded urban space to move into a better living environment in the New Territories. It would also mean shops could enjoy lower rents, providing opportunities for new businesses.

Hong Kong faces the prospect of steadily rising taxes, just like Singapore, if it does not increase productivity in the face of an ageing population, an expert warns. Paul Yip Siu-fai, a professor in population policy at the University of Hong Kong, said this was the likely scenario if the government did not invest in education and occupational training to boost productivity. "We have a shrinking labour force, meaning fewer taxpayers. Given the narrow tax base, a tax rise seems to be unavoidable." Singaporean Prime Minister Lee Hsien Loong said in his National Day Rally address on Friday that the city state's government would need to raise taxes to boost social spending on its ageing population. "As our social spending increases significantly, sooner or later, our taxes must go up. Not immediately, but ... within ... 20 years, whoever is in government will at some point have to raise taxes because the spending will have to be done," Lee said. He said the government drew S$8 billion (HK$50 billion) from returns generated by its reserves in the last financial year, exceeding the amount it collected from income taxes. "It's helped us fund many new programmes and still balance our budget without having to push up taxes sharply," he said. "We have to draw from the reserves in a sustainable way." Singapore will invest more in kindergartens and old people's homes. It will also consult the public on measures to increase its fertility rate of 1.2 (which means the average woman bears 1.2 children, far short of the rate of 2.1 deemed necessary to maintain developed countries' populations). Hong Kong's fertility rate was similar last year. Ideas being considered include flexible work arrangements, priority housing for couples with young children, and improving cash benefits for having children. Hong Kong Taxation Institute president Philip Hung said there were other options for Hong Kong, given its large foreign currency reserves.

Simulator manager Chris O'Dea demonstrates the 747-8F cargo simulator at Cathay Pacific's training centre. Cathay Pacific (SEHK: 0293) pilots will do less training in aircraft as flight simulators become more technologically advanced and realistic. The airline has added two new Boeing simulators in the past two months to the eight existing machines in its training centre at Chek Lap Kok. One of them, the 747-8F cargo plane simulator, is the first of its kind in Asia. "What you see [in the new simulators] is similar to the real thing. In the old ones, the hills look like triangles," the airline's simulator maintenance manager Edward Yan Sut-yim, said. The addition to its training facilities is part of expansion plans by Cathay Pacific. This year the airline recruited 350 pilots to its training programmes, up by a quarter from last year. The airline has ordered 99 Boeings and Airbuses for delivery by 2020; it currently has a fleet of 135 aircraft, some of which will eventually be retired. The new simulators can replicate up to 400 malfunctions and reproduce the landing approaches of airports around the world. They use only 15 per cent as much electricity as older simulators. "Some of the features that are now coming onto our new simulators will allow [training on aircraft] to reduce somewhat," simulator engineering manager Neil Cothran said. Pilots can get more credit for different kinds of training hours, such as landing and taking off in very bad weather, on a simulator than before, he said. Training on aircraft is costly not only because it uses up fuel, said Cothran, but also because it means fewer aircraft can carry passengers or cargo. New pilots receive 90 hours of training on simulators before taking passengers. The Civil Aviation Department requires serving pilots to undergo simulator training once every six months. The new cargo plane simulator will go into use next month. The other new simulator, for the ultra-long-haul Boeing 777-300ER, is now being assembled and is expected to go into use in November after testing. Each costs about HK$130 million.

Chief Executive Leung Chun-ying visits the Lok Ma Chau immigration check-point last week. Chief Executive Leung Chun-ying on Tuesday pledged to control the number of incoming mainland individual visitors after Shenzhen earlier announced it would allow regular visits by 4.1 million non-permanent residents from next month. Leung said his government was concerned the city’s infrastructure might be put under strain by the influx of travellers from across the border. “We will control the number of incoming visitors and at the same time build more facilities at popular tourist locations,” he said, outside the government’s headquarters before attending an Executive Council meeting. Leung said the number of mainland cities which allowed residents to visit Hong Kong on the Individual Visit Scheme had not been raised for some time because the central government was also concerned about the impact. Over the past nine years the scope of the scheme – which allows mainland tourists to travel to Hong Kong by themselves rather than in a tour group – has been expanded from the initial four cities to 49, making 270 million people eligible to visit Hong Kong. The new policy announced by Shenzhen will make multiple-entry permits available to millions of residents of the border city who do not hold hukou, or household registration documents. Previously, non-permanent residents of Shenzhen had to return to their home provinces to apply for multiple-entry permits, although they have been allowed single-entry passes since 2010. Multiple-entry permits were made available to Shenzhen hukou holders in April 2009.

HK listing outlook worsens as Everbright pulls deal - China Everbright Bank Co has become the latest company to scrap a first-time share sale in Hong Kong, where listings are on track for the worst year in almost a decade. Everbright Bank will delay the offering because of "continuous sluggish capital markets and relatively low valuations of banking shares", it said in a statement to the Shanghai Stock Exchange late on Sunday. The sale could have raised about $1.7 billion, based on the price of Everbright Bank shares traded in Shanghai. Everbright Bank had already cut the proposed size of the share sale from $6 billion last year. The lender joins companies including London-based diamond retailer Graff Diamonds Corp and Chinese machinery maker Sany Heavy Industry Co in shelving at least $4.8 billion of offerings in Hong Kong this year, data compiled by Bloomberg show.

 China*:  Aug 30 2012

Foxconn International Holdings (2038), maker of Nokia and Motorola mobile phones, saw losses deepen sharply in the first half as it admitted challenges in the last six months of the year. Interim net loss at the world's largest contract maker of mobile phone handsets rose to US$226 million (HK$1.76 billion) from US$17.6 million a year earlier. Foxconn issued a profit warning in April. Sales tumbled 16 percent to US$2.5 billion as revenue declined in all geographic sectors: Asia, Europe and America. The company failed to make a gross profit. "At present, we still see a tremendous challenge to restore our financial position to profitability by the end of 2012," it said in a statement last night. Top smarphone makers Samsung and Apple reported robust sales in the first half. But sales at Nokia - Foxconn's primary client - plunged. Foxconn's parent, Hon Hai, makes iPhones for Apple. In July, chief executive Cheng Tien Chong quit after less than a year in office. It has slashed almost a quarter of its staff numbers to 75,487 as of June 30. But it only managed to reduce staff costs by 8 percent from a year ago due to pressure to raise pay to avoid the "sweat shop" stigma. Bad news included an impairment loss in plants and equipment of US$56.3 million as demand waned. Shares of the company rose 2.9 percent to HK$2.88. Those of Nokia jumped more than 8 percent while Samsung plummeted 7.5 percent, losing US$12 billion of market value yesterday, after the Korean mobile brand faced a possible ban and phonemakers are forced to consider alternatives to Android software. An American court ruled last Friday that Samsung will have to pay US$1 billion to Apple for patent infringements. Analysts expect Android-equipment makers to turn to platforms such as Windows 8 to avoid a similar trip to court.

Japanese Foreign Minister Koichiro Gemba on Tuesday said it was time to address relations with China which have soured over a territorial dispute as an incident targeting the Japanese ambassador added to tensions. Monday’s incident in which the national flag was ripped off a car carrying the Japanese ambassador in Beijing came amid widespread anti-Japan demonstrations over a disputed East China Sea island chain known in China as Diaoyu and in Japan as Senkaku. Describing the incident as “very regrettable”, Foreign Minister Koichiro Gemba said he would send an envoy to deliver a letter to Chinese President Hu Jintao. He declined to elaborate on the contents, but said it was a good opportunity to address ties that have soured over the island dispute. “I believe that we must exchange opinions now on the situation of Japan-China relations, on the situation of the region as a whole, including the Korean Peninsula, as well as the global situation,” Gemba said. Chief Cabinet Secretary Osamu Fujimura, the government’s top spokesman, hinted at the wider diplomatic issues at play, saying the letter to Hu was about “developing stable Japan-China relations based on a broad view”. Despite their large and mutually important trade relationship, ties between Tokyo and Beijing are often blighted by historical animosities, especially war-time atrocities carried out by the invading Japanese army. Japan’s Finance Minister Jun Azumi, who last week hinted Japan may freeze its plan to buy South Korean government bonds amid a separate diplomatic tussle with Seoul, added: “I hope that China will avoid inviting a situation that would worsen” relations. Ambassador Uichiro Niwa was not hurt in the Beijing incident and there was no other damage to his diplomatic vehicle, according to the Japanese embassy. Senior Vice Foreign Minister Tsuyoshi Yamaguchi was expected to leave for Beijing later on Tuesday to deliver the letter from Japanese Prime Minister Yoshihiko Noda to Hu. The United States, a close ally of Japan, reacted to the flag incident by saying on Monday that it was “concerned” more broadly about relations between Japan and China, Asia’s two largest economies. Tensions between the neighbours flared earlier this month after pro-Beijing activists landed on one of the disputed islands, which are controlled by Japan. They were arrested by Japanese authorities and deported. About a dozen nationalists raised Japanese flags on the island days later. Thousands of Chinese citizens in more than 20 cities have protested over the last two weeks. Japanese businesses, restaurants and cars were targeted in some cities. Japan was also embroiled in a territorial dispute with South Korea amid tense relations over issues tied to Japan’s 1910-1945 occupation of the Korean peninsula. Some analysts have voiced concern that the flare-up between northeast Asian allies has set back broader interests in the region, where concerns remain high over North Korea and China’s rising clout.

Li Na enters 2nd round at U.S. Open - Li Na of China wins 2-0 to enter the next round at the 2012 U.S. Open tournament in New York, the United States, Aug. 27, 2012.

China's aircraft carrier starts 10th sea trial - China's aircraft carrier started its 10th sea trial on August 27, 2012.

Newcomers in China may find market saturated - A Marks & Spencer Plc department store in Shanghai. Statistics from the National Commercial Information Center of China showed that the sales of 50 large department stores in China increased by 8.15 percent year-on-year in the first quarter of 2012. But foreign companies continue to push aggressive expansion plans - By noon on Monday, a dozen shoppers were milling about the newly opened Marks & Spencer Plc department store on Huaihai Road in Shanghai. Wearing loose-fitting shirts and drowsy, listless looks, the shoppers, mostly middle-aged women, were outnumbered by the shop assistants inside. Rather than peruse the clothes and accessories put carefully on display, most of them appeared to have entered the store to bask in free air conditioning. Asked about the scarcity of customers, a saleswoman who declined to provide her name said: "It's Monday and it's already better than we had expected". The other side of Huaihai Road offered the casual observer a study in contrasts. There a Zara store displayed large posters to advertise a sale and was packed with long lines of customers waiting to pay at counters or trying on clothes inside fitting rooms. Despite slumping sales, rising costs and increasing competition from domestic online-shopping websites, foreign retailers are showing no signs of wanting to back away from their plans to venture into crowded shopping streets in cities such as Shanghai and Beijing. Shortly after Marks & Spencer opened its Shanghai store - its biggest in Asia - Pascal Martin, regional director for Asia at the company, disclosed an ambitious plan to open another eight outlets in the country in the next 12 months. Macy's Inc, a US department store chain, has meanwhile announced plans to invest $15 million in the Chinese luxury shopping website VIPStore, and will sell merchandise under its own brand on a sub-channel of the website starting in spring 2013. "Our relationship with VIPStore will allow us to gain additional experience in the fast-growing Chinese market and to better understand how consumers across China interact with Macy's and the products we sell," Terry J. Lundgren, chairman of Macy's Inc, said in an official announcement about the investment. "We continue to believe there is a significant long-term opportunity internationally for both Macy's and Bloomingdale's. But we need to be certain that our future decisions in this regard are based on facts and experience." Many retail experts say Macy's investment is the latest sign that foreign retailers hope their overseas stores will make up for the stagnation they are seeing in their home markets. Others said the deal will help the company decide if it wants to open a physical store in China.

Hong Kong*:  Aug 29 2012 

Miss Hong Kong Pageant 2012 Winner - Last night there was a Grand Finale of the biggest beauty contest of the Hong Kong and the jury has announced the name of the winner and the runner ups of the competition with pride. Carat Cheung has won the title of Miss Hong Kong Pageant for 2012. Her name was announced by the judges at the end of the ceremony while her competitor Jacqueline Wong was selected as the first runner up of the and Tracy Chu got the position of second runner up for the Miss Hong Kong Pageant for 2012. That was a tremendous night for the entire contestant but the best one for the Carat Cheung as she became the winner of her country’s biggest beauty competition. On 23rd of July TVB (Television Broadcasts) announced the name of the ten contestants those have been chosen as the finalist of the Miss Hong Kong Pageant 2012 and this time there was a contestant who is not from Hong Kong she was the last contestant and from New York Amy Cheung.

A Hong Kong cyclist beat athletes from 17 nations in the 2012 UCI Junior Track World Championships at Invercargill in New Zealand on Saturday to win his first world gold medal. Leung Chun-wing, 18, moved to the front after two laps and held on to win the men's points race, beating Aydar Zakarin of Russia and Cristain Cornejo of Chile. He is the third Hong Kong representative to wear the junior world championships' Rainbow Jersey after Wong Kam-po and Kwok Ho-ting. The Hong Kong Cycling Association wrote on its web-page yesterday: "Congratulations to Leung Chun-wing, junior rider of the HK National Cycling Team who achieved a gold medal in the 25km points race in the 2012 UCI Junior Track World Championships. "Following Wong Kam-po and Kwok Ho-ting, he is the third Junior World Champion from Hong Kong to be awarded the Rainbow Jersey." Leung said: "The award is a pleasant surprise and will encourage me to work harder in the future." He is now looking to compete in the 2014 Asian Games. Hong Kong team coach Shum Kam-hong was happy with his performance. Under his family's influence, Leung started cycling at the age of four. He snatched four gold medals at the 19th Junior Cycling Championships in Malaysia in February. This earned him the Outstanding Junior Athlete Award from the Hong Kong Sports Institute. Australia continued its dominance of the junior championships with a clean sweep in the men's sprint. Jacob Schmid won the world title from countryman Emerson Harwood, with Zachary Shaw taking the bronze medal in a ride-off with Colombia's Santiago Ramirez Morales. The five-day championships finished yesterday.

Pep and personal - Olympians tell goodbye stories - China's Olympic gold medalists Sunday wrapped up their three-day Hong Kong visit with a pep talk to athletes. They also entertained locals with Sun Yang singing along with his swimming team members, Ye Shiwen and Jiao Liuyang. Boxing champion Zou Shiming also gave a lively imitation of his favorite martial arts star, the late Bruce Lee. Long-time Olympian and "Diving Queen" Wu Minxia, on the other hand, shared the secrets of her Olympic success, boiling down her years of hard work to the one single trait: persistence. "A lot of challenges arise as you try to fulfill your dream," she said. "What matters is that you persist according to your goals. Work hard and have no regrets." Meanwhile, men's 20-kilometer walk champion Chen Ding summed up his experience with the Chinese saying "10 years of hard work for a minute on stage." Asked what advice he would give Hong Kong athletes, Chen wrote three words: challenge, belief and persistence, while highlighting the importance of support from loved ones. "People see us at our glorious moment but in truth everyone has gone through a lot of tough times," he said. "I once thought of giving up because of my injuries yet in the end I stayed on because I knew I had the support of my family and friends." Chen's views were shared by air rifle champion Yi Siling, who promised to spend more time with her loved ones. Hong Kong's Olympic badminton team player Yip Pui-yin said she was delighted to learn about the athletes outside their sporting events. China's team of 47 gold medalists toured two stadiums following their arrival on Friday, with members of the badminton, table tennis, weightlifting and diving teams performing. They left Sunday for Macau, where they will stay until Tuesday.

Secretary for Education Eddie Ng Hak-kim insists the government is determined to push ahead with the controversial national education subject. This comes after Executive Council member Anna Wu Hung-yuk, the chairwoman of the Committee on the Implementation of Moral and National Education, said it may be scrapped. In a prerecorded interview on ATV's Newsline program last night, Ng said the government will press ahead since it has the support of the greater majority. In a TVB interview a day earlier, Wu said the committee will not blindly support its introduction and does not rule out recommending that it be scrapped. However, she said the final decision rests with the government. Ng said the opposition of hundreds of school heads, the Hong Kong Professional Teachers' Union, and parents' and students' groups is just a "small portion." Ng denied there is strong opposition even though 90,000 people took to the streets to protest the subject's introduction and 100,000 signatures were sent to Chief Executive Leung Chun-ying opposing the plan. "I believe it represents one sector of the community, but not definitely the bigger sector of society," Ng said, saying there are more than 400,000 primary pupils and millions of parents in the city and believes the "silent majority" supports the subject being taught in schools. The possibility of delaying the launch "is really low," he added. Ng reiterated the government held consultations over its introduction and submitted a summary to draft the curriculum guide. However, he said the government refused to release the findings of the consultation until "very much later" because of privacy concerns. He said among the 1,000 submissions during the consultation period, 65 to 70 percent supported the subject, though they expressed concerns on how it would be taught and the sort of teaching materials used. Ng added the public was misled by certain media and denied its introduction is a political mission. When asked if it is a directive from the central government, he said: "I don't think so." Ng said the task of Wu's committee is to identify the key concerns during the three-year launching period. But for the committee to recommend a delay "is not impossible." Yet, he added: "As far as the current plan is concerned, actually there is no intention, no indicator that we should delay it."

Kazuya Shimada (top), Ikue Honda, Yuki Yoshikawa and Naoko Kanehara. Japanese students praise HK's commercial culture - Diaoyus dispute put to one side as four visiting scholars enjoy a three-week training program. The ongoing dispute over the sovereignty of the Diaoyu Islands did little to dampen the enthusiasm of four Japanese university students who were in town to gain first-hand experience of Hong Kong's business culture. As part of a three-week financial training programme organised by Pegasus Fung Managers, Ikue Honda, Naoko Kanehara, Kazuya Shimada and Yuki Yoshikawa spent their time attending lectures and meeting representatives from international corporations such as Bloomberg, HSBC and UBS. The managing director of Pegasus Fund Managers, Paul Pong Po-lam, said he hoped the programme would open more doors to top-tier firms for capable and aspiring students as well as reinforce Hong Kong's status as an international financial centre. "In the advent of the Diaoyu disputes, many Hongkongers are biased against the Japanese. But this programme helped locals see that the Japanese students can be hard-working and well-mannered," Pong said, "Following the success of this pilot test, we will take this programme further and invite students from other parts of Asia. I believe that effective communication can bring cultures together." The students praised the city's diversity, culture and people. Yoshikawa, a 22-year-old from Kyoto, said: "I've met many people who enjoyed what they're doing a lot. I've learned that you have to enjoy your work to make it through." Honda was overwhelmed by the city's pace. She said Japan was slower and more peaceful, but the 24-year-old from Kyoto was glad to see gender equality at play in Hong Kong's workplace. "I was surprised on a site visit that women worked as hard as men. I hope women can work in the same positions as men in Japan as well," Honda said. Yoshikawa, who lived in Seattle for a year, liked the healthy mix of East and West. "Hongkongers' mannerisms are like that of the Japanese. For example, they use two hands to present a business card, whereas in the States, people just throw their cards at you. "But Hongkongers are more casual than the Japanese. They call people by their first names most of the time." Kanehara, 22, said Hong Kong had offered her a more international viewpoint. "Japan is an island nation, so we rarely get to talk to foreign people. The diversity in Hong Kong made me want to work in other places too," the undergraduate from Kyoto University said.

Books are the core of Eslite's business, but it makes more money on other products - Eslite has big cross-strait ambitions. The chain that created a bookshop culture in Taiwan is studying plans for more shops in Hong Kong and as many as four on the mainland. Its management expects its unusual mix of merchandise to be a hit with customers from across the strait as well. Eslite, which was founded in Taiwan 23 years ago and now operates 40 often packed shops around the island, opened an outlet on August 10 in Causeway Bay and hoped to open three more in Hong Kong, general manager Jack Lee said. Lee said that by 2014 it hoped to open a twin-tower entertainment city in Suzhou, Jiangsu province, and would be looking to Beijing and Shanghai for as many as three future properties. Eslite's books, a million of which are sold in Taiwan each year, account for just 30 per cent of the chain's NT$12 billion (HK$3.1 billion) in revenue. Taiwanese readers don't always buy what they read but instead order drinks at a shop's sideshow coffee houses. More find their ways to Eslite's malls of concessionaire-run bakeries, and clothes, cosmetics and soap outlets. The same mixed-merchandising formula would appeal to the mainland and Hong Kong as reading and lifestyle habits changed, Lee said. "Eslite's target is to be the Greater Chinese world's most influential independent brand in the cultural and creativity fields," Lee said in an interview with the South China Morning Post (SEHK: 0583, announcements, news) . "Being a Taiwanese brand, Eslite hopes to develop on the mainland and in Hong Kong. That's a very important goal for our future. The Hong Kong store was a key first step, as it was the first outside Taiwan." In 2001, Eslite simplified its business by starting a logistics arm to co-ordinate orders and shipments from its 400 to 500 upstream sellers, he said. It also helps booksellers in four parts of the mainland with their logistics. The company's Taiwan operations now earned "low" profits of 2-4 per cent, Lee said. Eslite chose its site in Suzhou's business park, two hours from Shanghai, after the firm's leaders met representatives from Suzhou in Taiwan. Lee said the mall would acquire foreign books through a licensed importer, and domestic titles will be subject to vetting by mainland cultural censors. The Suzhou property will cover the same floor area as the biggest store in Taipei, with 10,000 square metres for books. Eslite will add to its Suzhou mall an arts cinema plus space for exhibits and performances. Whether people buy books, in the shops or online, has become less important as Eslite leans on revenue from other merchandise and services. Customers in Taiwan, who make 120 million visits per year, say their peers across the strait should still brace for a literary experience. "The key is still the Chinese book titles, and especially those in [traditional] characters, which express something about Taiwan's culture," said Pinki Huang, 48, a clothing store worker who visits Taipei's biggest Eslite shop at least once a month to look at magazines. Eslite will compete with the state-run Xinhua bookshop chain on the mainland and Joint Publishing (HK) in Hong Kong. The Taiwanese chain's fusion of books, fashion and food should keep endearing it to younger clientele, said David Frazier, a Taipei-based arts and entertainment writer. "Suddenly they had a venue that was bringing literature, art, design, and fashion together as a lifestyle package," Frazier said. "The rise of Eslite bookstores over the past two decades is very much intertwined with the emergence of a cultural youth demographic in Taiwan, maybe so much that you can't really pull them apart." Eslite is hardly finished growing in Taiwan. Next year it will open a 14-storey, 45,000 square metre bookshop mall in a 75-year-old Taipei tobacco factory that is being remade as a cultural centre.

Candidates back Leung on 'flats for locals' - Most Legco hopefuls reject the chief executive's government restructuring plans but agree with limits on sales of homes to non-Hongkongers. It might be difficult for Chief Executive Leung Chun-ying to find any common ground with his rivals, but a survey conducted by the South China Morning Post (SEHK: 0583, announcements, news) found that one policy does have would-be legislators' support: Hong Kong property for Hong Kong residents. Out of the 50 slates of Legislative Council election candidates who have responded to the survey, 32 said they backed Leung's electoral pledge to guarantee some private flats be sold only to local residents. However, Leung's government restructuring plan is likely to be voted down if those respondents are elected. Instead, 70 per cent of the respondents urged the government to launch consultations on electoral reform and not make any changes until the 2017 chief executive and 2020 Legco elections. Most of the survey respondents were pan-democrats. Candidates from major pro-establishment factions including the Democratic Alliance for the Betterment and Progress of Hong Kong and the Federation of Trade Unions declined to respond. Earlier this month, the Post invited all 127 slates of candidates running for directly elected and trade-based seats in the Legislative Council to respond to a questionnaire that covered issues such as political reform, Leung's government restructuring plan, the introduction of national education in schools, and land and environmental policies. Barely 52 per cent of the 67 slates of candidates in geographical constituencies had replied by last Friday, while only 15 out of 60 functional constituency slates of candidates answered. The controversial proposal "Hong Kong property for Hong Kong residents" was backed by 21 slates running for directly elected seats and 11 slates running for functional constituencies, including the "super lawmaker" seats, which allows 3.2 million voters not belonging to the traditional functional constituencies to cast ballots. As part of the proposal, Leung promised to study the feasibility of limiting sales of homes to non-local buyers. The Democratic Party, the Civic Party, the Labour Party and the Liberal Party all supported the policy, saying that it could help to curb property speculation by mainlanders in Hong Kong and help stabilise property prices. The radical People Power party has reservations about the policy because no details have been revealed yet. Independent candidates Huen Wong, running for the legal sector seat, and Tang Yu-lap, campaigning for the financial services sector, opposed Leung's idea because they thought the policy would be difficult to enforce and property prices should be determined by the market. Patrick Lau Sau-shing of the architectural, surveying and planning sector also objected to it, saying Hong Kong was an open city operating under a free market economy. Meanwhile, 38 slates of candidates said they opposed Leung's proposal to introduce the posts of deputy chief secretary and deputy financial secretary as part of a government restructuring. Some 29 slates were also opposed to plans to add a culture bureau and technology and communications bureau to the existing framework. The New People's Party, Liberal Party, Tang and Peter Chan Po-fun, an independent running in the accounting sector, backed the whole restructuring plan. The Civic Party's candidates were among those who opposed creating the deputy posts but believed the new bureaus were needed. Almost all responding candidates supported amending legislation to allow the chief executive to have a political party affiliation when universal suffrage is introduced in 2017.

Mainland Olympic gold medalists arrive in Macao - The delegation of the mainland Olympic gold medalists kicked off a visit to Macao on Sunday. Chinese mainland Olympic gold medalists visit Macao - The delegation of Chinese mainland London Olympics' gold medalists visited Ruins of St. Paul and Macao Museum on Monday during a three-day visit to Macao.

$61 Million Hong Kong Apartment Sale Tops Records - A buyer has reportedly paid $61 million for an apartment perched in one of Hong Kong’s loftiest neighborhoods, setting another stunning record in a city already known for its sky-high prices. The apartment sold is situated on the city’s Peak and is part of architect Frank Gehry’s first creation in Asia, the Opus. The building, which was completed in March, has an undulating glass facade that curves and offers each floor a distinct vista of the surrounding leafy environs. Last year, project developer Swire Properties’ chief executive declared the company had “every expectation it will break records.” Analysts said Monday that the price paid is the highest ever fetched in Hong Kong. Local media reports also said that for a unit sized at 6,200 square feet, it was the highest price per square foot ever paid in Asia and the second-highest in the world, after London’s One Hyde Park. Centaline Property Agency Head of Research Wong Leung-sing said the price didn’t surprise him, given the fame of its architect. “They’re selling it not as an apartment, they’re selling it as a masterpiece,” said Mr. Wong. “It’s just like buying artwork.” Swire had earlier announced that it intended to lease the dozen apartments that make up the site, which a spokeswoman on Monday declared was still the company’s overall plan. “We do get inquiries from time to time,” she said. “If it’s an exceptional offer, we’ll consider it.” The company declined to confirm the Opus purchase or reveal any details about the property’s leasing progress to date, though the spokeswoman noted that one unit was recently leased for HK$850,000 (US$110,000) per month. Hong Konghas seen its share of vertigo-inducing records before, including the 2009 sale of an apartment for $56.6 million. The city’s financial secretary, John Tsang, has warned repeatedly about the risk of a bubble emerging. Since 2011, the cost of renting luxury housing has jumped 15% in Hong Kong, where it now costs over $11,800 to rent an unfurnished, three-bedroom apartment in a desirable neighborhood, according to human-resources consulting firm ECA International. Hong Kong property prices exceeded 1997 peak levels last year, despite the recent adoption of various government cooling measures, including taxes to try and curb speculation. Such high prices in Hong Kong have increasingly served as a flashpoint for local anger, particularly given the influx of mainland buyers in the past few years, which has helped bid up prices in a city already parched for affordable housing. However, Mr. Wong said he believes that the impact of the Opus’ head-turning sale on the market will be limited. If other developers are determined to set similar records, he said, “they’ll need to find a great artist to work with them first.” 

Hong Kong stocks close 0.41% lower - Hong Kong stocks closed down 81. 36 points, or 0.41 percent, at 19,798.67 on Monday. Turnover totaled HK$39.31 billion compared with last Friday's HK$39.88 billion ($1 equals to HK$7.76).

 China*:  Aug 29 2012

Staying in fashion is a tough sell - International fashion brands are looking to the expanding China market as the global economy slows - but turning a profit isn't easy. International fashion labels have turned China into their main battlefield this summer, opening one new store a week as they bid for the spending power of wealthy consumers in the world's No 2 economy. Prominent among the labels expanding their presence in mainland shopping malls at a time when slow economic recovery in the United States and a worsening debt crisis in the euro zone have forced Western consumers to tighten their spending, are Italy's MaxMara, and Gap, the iconic American fashion brand. But it's not easy to make money in China, where rapid rent rises have forced some global retailers such as Nokia, once the world's No1 mobile phone maker, to close their stores. Earlier this month, Abercrombie & Fitch launched its first store in Hong Kong's Central district, after agreeing to a monthly rent of more than US$1 million - several times more than the last tenant, Shanghai Tang, owned by Swiss luxury product giant Richemont Group, was paying for the space. In the circumstances, some analysts wonder if the high rents leave room for profitable trading. They cite, for example, the price tag on an A&F T-shirt - one of its big selling products - of around HK$400 and point out that the company would need to sell more than 20,000 T-shirts a month to just cover the rent on its Hong Kong store. In addition to rent, fashion firms are often big spenders on marketing and advertising. Earlier this year, fashion label Louis Vuitton agreed to pay around HK$20 million a month to rent space for its new flagship store in Causeway Bay, one of the busiest shopping areas in Hong Kong and a must-go destination for many mainland travellers. Small wonder Redmond Yeung, Gap's president for Greater China, identifies sky-rocketing rents and property prices as the main challenge facing international brands seeking a foothold in Hong Kong to capture the spending power of mainland visitors. "But as long as there are still people [stores] who pay the rent, there must be a reason. It's all about supply and demand. Retailers and landlords always have a love-hate relationship," said Shanghai-born Yeung, who held senior positions at American retail giant Best Buy and fashion firm Ports before he joined Gap in early 2010. "If a landlord asks for a rent that no one can pay and still make a living, that will be a problem and eventually no one will rent the place," he said. But this was not happening because competition for prime locations among retailers remained intense. Yeung didn't give sales figures for Gap's stores in Hong Kong or on the mainland and would only say he felt "comfortable" about the performance of the new stores. Other business leaders who once thought rents in China were too high have since admitted they were wrong, and whatever the cost, Chinese consumers cannot be ignored. In 2008, Paul Smith, the designer and founder of his namesake fashion brand, told the Financial Times in an interview that the China market was "extremely dangerous", as rents were too high and most of the 1.3 billion Chinese population only wanted "clothes to cover their bodies". But in May this year, London-headquartered Paul Smith announced it would re-enter the mainland market by opening a new store in Tianjin near Beijing in September, after it had pulled out of the mainland in 2007 due to undisclosed losses made in the early years of its operations in China. Luigi Maramotti, chairman of Italian fashion brand MaxMara, told the South China Morning Post (SEHK: 0583) recently that he believed consumers on the mainland were now better able to afford luxury products, thanks to the country's fast economic growth in the past decade. He also believed that Chinese spenders had gained a greater understanding of fashion since more and more of them were travelling abroad for work, study or just holidays. "Today, the [China] story … is a story of everybody's big expansion," said Maramotti, the son of the late Achille Maramotti, founder of the closely held company. "The Western world is now in trouble," he added. Both MaxMara and Gap plan to open one new store a week in the next six months. John Rindlaub, president for the Asia-Pacific region at Wells Fargo, the largest bank by market capitalisation in the United States, told the Post that he was concerned about the pace of expansion of many global brands in China, though he understood the reason behind those moves. "Many US company CEOs tell us that maybe 10 years ago the story in China was all about manufacturing in China, and then exporting to the US," Rindlaub said. "Now the story in China is that they still manufacture in China but sell to local Chinese consumers." A senior executive of a global brand that is ready to expand into China told the Post on the condition of anonymity that many brands have to prepare for "a period of losses" when they come to China because brand recognition took time, and Chinese consumers were not loyal to just one or two brands. "But we have to be there. It's just like those foreign banks in China. How many of them can really make decent profit? What we care about is the future of China," he said.

An O2Sun bookstore in better times. The chain was forced to shut down in October. Chapter is ending for independents - Standalone brick-and-mortar bookstores can't compete with prices online, and face extinction. For Zhang Yu, going to a little bookshop called O2Sun was one of her favourite activities while at university. She would read for hours in the shop on days without classes. Located in Beijing's Wudaokou area, it was a privately run store, featuring exquisite decorations and a quiet atmosphere - a haven of sorts for students such as Zhang who wanted to temporarily escape the capital's bustle. So it came as very sad news to Zhang, now 24, when she learned that O2Sun closed in October because of financial difficulties. "More and more people are buying books online, where the prices are much lower. It makes it hard for independent bookstores like O2Sun to compete and survive," said Zhang, a Beijing-based translator. Faced with intense competition from online sellers, coupled with rapidly rising costs, O2Sun, a chain that originated in Xiamen, Fujian, in 1995 and had 30 outlets nationally, shut its doors after sales plunged by 40 per cent last year. Most of its branches closed overnight. And O2Sun isn't alone. Impression Bookstore in Chengdu, Sichuan, once ranked in the top 10 unique mainland bookstores, said goodbye to its readers one year ago. A few months later, the biggest privately owned book retailer in Shanghai, Jifeng Bookstore, closed four of its nine branches. Those are just a few examples of a trend that has been troubling for book lovers. Wang Xiaodong, vice-president of the Book Industry Association under the All-China Federation of Industry and Commerce, attributes a lack of pricing regulations in the book market to the decline of private brick-and-mortar retailers. "The unreasonably low prices offered by online sellers shows a disregard for the book industry, which, as an important channel for culture, influences a nation's cultural development," Wang said, adding that book prices are strongly regulated in many foreign countries. Although the Publishers Association of China announced in 2010 that it was capping the maximum discount for newly released books at 15 per cent, with support from publishing officials, the order was lifted after just eight months amid complaints from e-commerce companies that said the rule went against the need for fair competition in business. The price wars between online booksellers soon restarted. Meanwhile, property rental prices have not done the brick-and-mortar shops any favours by soaring in recent years. The net profit of private bookstores was scant after the owners paid rent, labour and utility bills, said Chen Dingfang, owner of Xooyo Bookstore, an independent chain in Guangzhou. Xooyo was also forced to shut down four branches in the past three years due to financial hardships. "Everything has become more expensive, except for the books themselves," Chen said. "We can hardly make ends meet; there is nothing we can do except close shops." In China, only state-owned bookstores, such as the largest national chain, Xinhua, are keeping their heads above water. And while not completely immune to pressure from online sales, those stores enjoy exemptions or large discounts in both rent and taxes, according to Wang. The closure rate of private stores has become high enough that even some officials have taken notice. Renowned writer Zhang Kangkang, who is also a member of the Chinese People's Political Consultative Conference, called on the government in March to support privately run bookstores through subsidies and reductions in tax and rent. And earlier this year, the governments of Shanghai and Hangzhou , Zhejiang unveiled plans to pay 5 million yuan (HK$6.05 million) and 3 million yuan respectively in aid to privately run book retailers. To survive the changing times, many bookstores have had to continually adapt, and the changes have generally been well-received. "As the role of traditional bookstores evolves, people may want different kinds of enjoyment and experiences," said Liu Suli, owner of the All Sages Bookstore, founded in 1993. Liu opened a cafe in his bookshop in 2000, and it has become a popular spot for students and scholars from nearby universities to read and chat. "Simply selling books is not enough to sustain the business. Privately owned bookstores should go beyond being just stores, to serving as cultural communication centres," Liu said. Zhang Fan, co-founder of the privately run One Way Street Library in Beijing, also noted that while independent stores could not compete with online sellers in terms of prices, they could offer experiences that were unavailable from web competitors. The store has held nearly 500 free talks featuring writers, singers or directors since opening in 2005, and those appearances have made the shop renowned in the capital, even if it is still not a cash cow. "What we are trying to do is build a cultural centre for people to acquire knowledge, exchange ideas, and find peace of mind amid the bustle of modern life," Zhang said. "We wouldn't be running a bookstore if we wanted to make a lot of money." Last month, One Way had to move because its rent had risen too much. Lacking capital to relocate and refurnish, its founders started a campaign on the store's microblog account, seeking 100,000 yuan in donations. To their surprise, they got 230,000 yuan from more than 1,000 supporters in only eight days. Many of those who contributed said that traditional bookstores were indispensable. "Bookstores are the remaining bastions that are still faithful to knowledge and culture in this materialised world," one microblogger wrote in response to the bookstore's request for aid. "It is a shame for society that they are vanishing."

A Home Inns hotel in Changzhou city, in East China's Jiangsu province. Home Inns suffered a loss in net profits in the first quarter of 2012 because of an operating loss by Motel 168, according to its financial report. Budget hotels' expansion 'roomy' - They are also looking to enter different market sectors in the hunt for profits - China's budget hotels are subdividing into different sectors during a rapid expansion that has been ongoing around the country since 2009. "The segment markets will be the direction for China's budget hotel business in the future," said Ye Bingxi, the senior public relations manager at Home Inns and Hotels Management Inc, which is China's largest budget hotel company by the number of properties. The middle and high-end business hotel is Home Inns' market position. The company has run its high-end brand, Yitel, since 2008. Yitel, where average prices are about 600 to 700 yuan ($110.04) a day, has four hotels in three cities now. Yitel will have about 50 hotels by 2015, Home Inns said. Another significant budget hotel company, 7 Days Group Holding Ltd, is also expanding its business to middle-end hotels. Zheng Nanyan, board chairman of the company, said his first middle-range hotel will be launched this year. Some companies are going downmarket while some are expanding into the upper market. Jinjiang Inn Co, the fourth largest budget hotel company in China by the number of hotels, has a brand name Bestay Hotel Express targeting the lower end of the market with prices from 100 yuan a night. Bestay Hotel Express has had about 60 hotels around China since 2009. Smaller players are also trying to find development opportunities from the segment market. "Pod Inns' position is fashion and the younger group," said Zhu Hui, founder and chief executive officer of Pod Inns. The company's consumer database also reflects its position. The main customers are young people aged between 18 and 35 years with 2,000 to 6,000 yuan monthly incomes, he added. In order to match its position, rooms in Pod's 200 hotels are smaller than other budget hotels. The company pays more attention to other facilities, such as Wi-Fi, Apple Inc computers and Skype to lure its target audience. Pod's operation was appreciated by venture capitalists with the company receiving $55 million in investment in June. The money will be used for future expansion, Zhu said. "Pod will expand to more than 500 hotels from its current 200 in the next three years," said Zhu. Unlike the main industry players, which are working on entering the smaller cities, big cities will be the ambitious small company's main target in the future. The number of Pod hotels in Beijing will increase from the current 12 to more than 100 by 2015, Zhu said.

Sansha, a new prefecture-level city in the South China Sea, launched its first infrastructure projects on Saturday. Sewage disposal and waste collection facilities will be built to ensure the sustainable development of the city, which is made up of coral islands and reefs. The city was established late last month to administer more than 200 islets, sandbanks and reefs in Xisha, Zhongsha and Nansha islands and the 2 million square kilometers of surrounding waters, where the number of sea disputes with other countries has recently surged. It is under the jurisdiction of Hainan, China's southernmost province. At around 10 am on Saturday, Xiao Jie, the first mayor of Sansha, ordered bulldozers to start construction of the public utility facilities on Yongxing Island, the government seat of Sansha, Xinhua News Agency reported. Yongxing Island, a part of the Xisha Islands and the largest island in the area, has about 1,000 residents and a military garrison that was established last month. As planned, a sewage treatment plant and pipe network will be set up and put into use within a year. The plant will be capable of treating 800 metric tons of wastewater a year, which could be used to flush roads and toilets, irrigate the greenbelt and wash vehicles, the city government said in a press release. In addition, a waste transfer station will be built to sort and compress garbage collected from the island and its neighboring islets. The waste will then be shipped to Hainan Island for further disposal. The city government said the projects aim to strengthen environmental protection and improve living conditions for residents and servicemen stationed on the islands. It will also help protect the diversity of marine species and promote the fishery industry, it said. More infrastructure, such as plants for seawater desalination and rainwater purification, will be built on Yongxing Island, local officials said. The Hainan Provincial Tourism Development Commission said earlier that tourist cruises from Haikou, the provincial capital, to Sansha might be launched by the end of this year to bring more visitors to the islands. In addition to tourism, the city also plans to develop fishing, oil and gas industries as its economic engines.

Sansha, a new prefecture-level city in the South China Sea, launched its first infrastructure projects on Saturday. Sewage disposal and waste collection facilities will be built to ensure the sustainable development of the city, which is made up of coral islands and reefs. The city was established late last month to administer more than 200 islets, sandbanks and reefs in Xisha, Zhongsha and Nansha islands and the 2 million square kilometers of surrounding waters, where the number of sea disputes with other countries has recently surged. It is under the jurisdiction of Hainan, China's southernmost province. At around 10 am on Saturday, Xiao Jie, the first mayor of Sansha, ordered bulldozers to start construction of the public utility facilities on Yongxing Island, the government seat of Sansha, Xinhua News Agency reported. Yongxing Island, a part of the Xisha Islands and the largest island in the area, has about 1,000 residents and a military garrison that was established last month. As planned, a sewage treatment plant and pipe network will be set up and put into use within a year. The plant will be capable of treating 800 metric tons of wastewater a year, which could be used to flush roads and toilets, irrigate the greenbelt and wash vehicles, the city government said in a press release. In addition, a waste transfer station will be built to sort and compress garbage collected from the island and its neighboring islets. The waste will then be shipped to Hainan Island for further disposal. The city government said the projects aim to strengthen environmental protection and improve living conditions for residents and servicemen stationed on the islands. It will also help protect the diversity of marine species and promote the fishery industry, it said. More infrastructure, such as plants for seawater desalination and rainwater purification, will be built on Yongxing Island, local officials said. The Hainan Provincial Tourism Development Commission said earlier that tourist cruises from Haikou, the provincial capital, to Sansha might be launched by the end of this year to bring more visitors to the islands. In addition to tourism, the city also plans to develop fishing, oil and gas industries as its economic engines.

Hong Kong*:  Aug 28 2012 Share

A team of Hong Kong scientists say they have found a way to transform food waste into laundry detergent, plastic ingredients, and a host of everyday products, in a discovery that may ease pressure on the city's bulging landfills. Products from the "biorefinery" could even generate income, according to team leader Dr Carol Lin, a visiting assistant professor at City University. She unveiled details of the project in the United States last week at the 244th National Meeting and Exposition of the American Chemical Society in Philadelphia. "We are developing a new kind of biorefinery, a food biorefinery, and this concept could become very important in the future, as the world strives for greater sustainability," she said. "Our new process addresses the food waste problem by turning trash into treasure, such as detergent ingredients and bio-plastics, which can be incorporated into other useful products." The biorefinery process involves blending food waste with a mixture of fungi that excrete enzymes to break down carbohydrates into simple sugars. The blend is fermented in a vat where bacteria convert the sugars into succinic acid. Succinic acid can be used to make a range of products - from laundry detergent to plastics and medicine. The team received a HK$518,000 grant from Hong Kong's Innovation and Technology Commission last year, and the work is due to be completed next August. Food waste from Starbucks in Hong Kong and drink-maker Vitasoy International is being used in the testing. In addition to providing a sustainable source of succinic acid, the technology could yield numerous environmental benefits, Lin said. Starbucks Hong Kong alone produces nearly 5,000 tonnes of food waste every year. At present, this waste is incinerated, composted or disposed of in landfills. Lin's process could convert the waste into useful products. She has transformed food waste from CityU's cafeteria and other mixed food wastes into useful substances using the technology. The process could become commercially viable on a much larger scale with additional money from investors. "In the meantime, our next step is to … scale up the process," she said.

For one of Hong Kong's youngest Paralympians, swimmer Kelvin Tang Wai-lok, success came quickly when the 15-year-old emerged as a serious contender to compete in the London games a year ago. Tang, who has a mild mental impairment, will be among 28 athletes competing in seven sports at the London Paralympic Games, which begin on Wednesday and run until September 9. The teenager will represent Hong Kong in three swimming events: the 100-metre breaststroke, 100m backstroke and 200m freestyle. Tang's mother, Vicky Ng Chun-hung, was delighted with her son's achievement: "He exudes so much joy when he sees his time improve - it's something money can't buy." The sport has also helped Tang make friends. "I'll eat breakfast with my teammates after training," he told the Sunday Morning Post (SEHK: 0583) during a recent visit to a training session. "When I'm nervous before a race, it helps to chat with them." Intellectually impaired athletes compete separately from the physically disabled in the Paralympic Games. But no competition was held for the intellectually impaired in the 2004 Athens Games after the winning Spanish basketball team in the 2000 Sydney Games was found to have no learning impediments. This year, a system for classifying mentally impaired athletes was established for the Paralympics - which stands for the parallel Olympics. Tang, who studies at Choi Jun School in Tai Wai for the learning impaired, will be one of five local swimmers in London. He competed in an international race for the first time last April, in the UK. He quickly become the fastest swimmer on his team, and his consistent performances convinced the coach to reshuffle the Paralympic line-up. His coach of three years, Ni Chaoyang, said Tang's strongest event was the 200m freestyle. "He has strong muscles and is an explosive swimmer," she said. A torpedo in water, Tang's softer side emerged by the poolside, giggling sweetly as bystanders praised his taut muscles. Ni, a firm instructor, exuded maternal warmth as they exchanged jokes. Tang shares the title of Hong Kong's youngest Paralympian at London with 15-year-old Natasha Tse Pui-ting, who will compete in equestrian dressage for the physically disabled. Another first-time Paralympian is 18-year-old Yeung Hiu-lam, who will compete in boccia, a sport where wheelchair-bound athletes throw balls as close as possible to a target ball. Yeung, who has cerebral palsy, began playing the sport in 2009. "We'll be bringing hand warmers with us to London; they help with our throws," he said.

A meeting aimed at ending the long-running battle over the fate of roaming cattle on Lantau looks to have been a success, with government officials saying they have no intention of killing or relocating the animals. Officials of the Agriculture, Fisheries and Conservation Department - often caught in the middle of a fight between opposing sides of the dispute over the fate of 14 wild cows and three buffalo - called a meeting on Friday morning to thrash out a solution. Representatives from various non-government organisations, the Mui Wo Rural Committee and Islands District Council were invited to attend. Many residents of Mui Wo, where the animals make their home, consider the beasts to be a special part of the community. But community leaders have raised concerns, such as the risk of vehicles hitting the wandering beasts and the trails of excrement the animals leave behind. "At the moment, we have no plan to relocate the cattle but will carry out [a] desexing operation to control their population," a spokeswoman for the agriculture department said. "We will also continue to work closely with other relevant departments to handle the complaints and nuisance caused by stray cattle." The meeting was not open to the press, but Ho Loy, of the Lantau Buffalo Association, said that the meeting went well and that officials confirmed that no cattle would be harmed. "The government made it clear that they do not want to kill or relocate the cattle, so this is good news," Ho said. "They also took on board the proposals that we put forward to take care of the cattle. We got a very positive reaction." One of the proposals was for the government to employ a full-time herder. Ho believes that this is a serious option that can now be implemented. Last week, long-time Mui Wo residents said the wild cattle were considered a nuisance as they lived on land owned by Mui Wo developers - the new owners of land permits granted to absent indigenous villagers so they can build village houses - who are anxious to clear the buildings for new developments.

Ex-financial chief Antony Leung Kam-chung and his wife, diving star Wu Minxia, and two children with fans. China's Olympic gold medallists were greeted at Queen Elizabeth Stadium yesterday by rapturous applause, as athletes and spectators alike relived the glory of the Games. Hongkongers Queenie Lam and Catherine Yuen Pui-yiu, who were volunteers at the London Olympics, were among the 4,300 people who watched the demonstrations in sports like badminton, table tennis and diving. Both girls donned the purple volunteer uniform and badge, catching the attention of star swimmer Sun Yang - winner of the 400-metre and 1,500m freestyle - who pointed at them and tossed them his bouquet. "In the competition, everyone was fighting passionately for something," Yuen said during the event held at the Kowloon Park swimming pool. "After volunteering and it was all over, it was sad, so we guess this event is extending [our experience]." Around 70 mainland members of the Chinese team, which had the second-largest medal count at 88, including 38 gold medals, were in Hong Kong for a three-day tour. Yuen, an 18-year-old law student at Oxford University, helped out at the water polo events, while Lam, a 19-year-old pharmacy student at University College London, assisted in the archery events. "If I had to be honest, I prefer watching the real Olympics," said Yuen. "It's more serious. Not that this wasn't serious, but in the competition, it's silent." At the pool, diving superstars including Wu Minxia leaped off the board to demonstrate moves "never seen in competition". Many in the crowd were euphoric over their country's sporting achievements - a feeling shared by some members of the press. One Xinhua reporter waved her flag so enthusiastically that a local photographer had to point out in Cantonese that she was blocking his lens. At the Queen Elizabeth Stadium, badminton's "Super Dan" Lin Dan, who won gold in the singles competition, played a match against the Hong Kong team's Wong Wing-ki, who also competed in London. Lin's smooth backhand strokes and fake serves left badminton fans in awe. But Lin's style this time was not enough to beat Wong, who won the tight seven-point match, to the delight of Hong Kong fans. Lin then showed off his versatility by playing table tennis with gold medallist Zhang Jike, who sealed a grand slam in the recent Games. Zhang hit the ball back with a badminton racket. Meanwhile, champion gymnasts spoke to around 900 young people at a special event held at the Siu Sai Wan Sports Centre. Although not all the athletes got to demonstrate their winning moves, all 47 gold medallists got to show off other talents, such as singing, at an evening extravaganza at Hong Kong Stadium.

The city's newest bookstore has slapped a warning label on a popular erotic trilogy. The Eslite bookstore in Causeway Bay last week added a "restricted content" tag - in Chinese - on copies of the English-language novel Fifty Shades of Grey and its sequels, which follow a couple's sadomasochistic relationship. The store had previously displayed the novels without any warning. A spokesman for Eslite said the decision was made "after consultation with their lawyers", but said he could not elaborate. In nearby bookstores such as Commercial Press, however, the novels remained on sale without a warning label as of last night. A veteran obscenity adjudicator said controls on English-language publications were lax. English author E. L. James' erotic trilogy - the other books are called Fifty Shades Darker and Fifty Shades Freed - had sold more than 19 million copies in the US alone by July. They have surpassed sales of the seven Harry Potter books at Amazon UK. The novels depict explicit sex scenes between college student Anastasia Steele and tycoon Christian Grey, mixed with romantic ideals, earning it the nickname "mommy porn". A veteran adjudicator for the Obscene Articles Tribunal, Yip Hing-kwok, said the books should have been classified as indecent as they "talk about intercourse between the two [lead characters] and even describe oral sex". In Hong Kong, all materials classified as indecent should be wrapped in plastic with a label that restricts sales to those over the age of 18. Publishers may voluntarily submit books to the tribunal for classification. Yip admitted that the novels were allowed to be sold freely due to relatively lax policing of English-language materials. "Government agents regularly check Chinese magazines. However, I was rarely sent any English materials, even Playboy, for classification," said Yip, who has served on the tribunal for more than a decade. He said that because of limited manpower, officials tended to focus on Chinese-language publications, which have a broader reach. The obscenity watchdog's spokeswoman says no one has complained about Fifty Shades of Grey to the Communications Authority, which submits materials to the tribunal for classification. James, the author, intended the Fifty Shades series as a "fan fiction" tribute to Stephenie Meyer's Twilight, but ended up writing adult content that bore little resemblance to the popular vampire books. All three erotic novels made it to Dymocks' top-10 list of books for adults. Teenagers were seen buying them at the Hong Kong Book Fair, which supposedly bans indecent content. Those caught publishing indecent material face a maximum penalty of one year in prison and a HK$400,000 fine on first conviction, and an HK$800,000 fine and a one-year jail term for subsequent offences. Based on Yip's experience, any material that involves intercourse would be classified as indecent or obscene. Photo or video sex scenes obscured by pixels, for example, are deemed indecent, and those that are not pixellated are classified as obscene. Another adjudicator, lawmaker Peter Cheung Kwok-che, said he dealt with illustrated publications and was never asked to classify a work of fiction, either in Chinese or English. Jimmy Pang Chi-ming, of the Sub-Culture publishing house, said adjudicators lacked cultural training to differentiate art from obscenity. "It would be a joke if they are asked to judge if Madame Bovary was obscene," he said, referring to Gustave Flaubert's 1856 novel about the adulterous trysts of a doctor's wife. In 1994, the obscenity tribunal ruled that a picture of Michelangelo's nude sculpture David was unsuitable for children.

Fencing champion Anqi Xu and badminton star "Super Dan" Lin Dan (far right) get the red-carpet treatment in Hong Kong yesterday, fresh from the London Games. Thousands of fans welcomed China’s gold medallists at various sports venues, where showcase matches and meet-and-greets were held as part of a three-day tour.

 China*:  Aug 28 2012

PLA deputy chief of general staff Cai Yingting stressed during a visit to Washington the importance of trust and credibility between the Chinese and American militaries for developing a stable relationship. Cai made the comments at a meeting on Friday with Admiral James Winnefeld, the No2 officer in the US armed forces. Analysts saw their meeting during such a sensitive period, with the United States and Japan conducting joint naval exercises in the Pacific Ocean, as evidence that the relationship between the two powers was maturing. Speaking to reporters in Washington, Cai revealed that US Defence Secretary Leon Panetta would visit China next month. Cai said he had conveyed to his US colleagues China's strong opposition to the application of the US-Japan security treaty to the Diaoyu Islands. Tensions between Beijing and Tokyo have flared in recent weeks over the disputed territory, which Japan calls the Senkaku Islands. US-Japan military exercises began on Tuesday. Both countries have described the training operations as routine and denied the exercises were held with China in mind. During his visit to the Pentagon, Cai, who also met Deputy US Defence Secretary Ashton Carter, urged the development of a "win-win" relationship based on "respect, fairness and tolerance" between the US and China, according to Xinhua. He urged both sides to focus on shared goals and values when dealing with knotty issues to avoid misunderstandings. He told Carter that a strong relationship between the US armed forces and the People's Liberation Army could foster broader co-operation between the countries. The US has declared a change of strategy under which it will move a larger share of its forces to the Pacific region, where long-simmering territorial disputes between China and its neighbours have escalated in recent months. Last week, the Communist Party-run Global Times reported that China was developing a multiple-warhead ballistic missile that could potentially overcome US anti-missile defences. The Pentagon reportedly said it planned to expand missile defences in Japan to address threats from North Korea - a move that could also counter China. Carter, however, told Cai that the US was not trying to contain China's influence in the region. Shi Yinhong , an expert on Sino-US relations at Renmin University, said the decision to go ahead with such a high-level military visit despite regional tensions suggested a healthier relationship between the two sides. He also noted improved ties between the mainland and Taiwan, a long-time recipient of US military aid. "We all acknowledge that relations between China and the US are not so harmonious right now," Shi said. "Yet their main obstacle - the arms sales to Taiwan - has become less important after cross-strait relations were improved and Washington is willing to co-operate with Beijing on the arms-sale issue." Xu Guangyu , a senior researcher at the China Arms Control and Disarmament Association in Beijing, said Cai's trip proved that Washington's "return to Asia" would not harm Sino-US relations. Cai is also scheduled to visit US army bases in the states of Texas, Missouri and Hawaii.

China's currency could be eventually used as an alternative to the U.S. dollar and Euro by southeast Asian countries, experts said. Phathanaphong Phusuwan, a senior official of the Bank of Thailand, said in a seminar on Thai-Chinese trade, investment and finance relations on Saturday that the yuan would likely be used more between China and ASEAN member states in the long run. In the panel discussion co-hosted by the National Research Council of Thailand, Huaqiao University and the Thai-Chinese Culture & Economy Association here, the official of the Thai central bank commented the Chinese currency could possibly replace the U.S. dollar and Euro when it comes to trade, financial and money-exchange dealings throughout the ASEAN community, due in part to the unresolved economic and financial problems in the United States and the European Union. "In the long run from 2015 onwards, trade with Asia will largely increase under the ASEAN-China Free Trade Area agreement, which will influence the use of the yuan and the local currencies. The yuan is then a good alternative for the international trade in the future," said the official, referring to the year in which the regional bloc will become an ASEAN Economic Community. Nevertheless, he said, the role of the Chinese currency in Thailand and other ASEAN states will remain limited in the short and medium terms. Thai merchants have increased their use of the yuan in trade, following the easing of restrictions by the Chinese government, he said. A dozen Thai commercial banks and foreign banks' branches here currently offer yuan-based services, including foreign currency deposits, money exchange, fund transfers and purchases of Chinese banknotes. The Chinese currency has accounted for 10.8 percent of China's trade dealings with the world during the first half of this year, according to a report of the Thai central bank. Professor Ridong Hu of Huaqiao University's College of Economics and Finance remarked in the seminar that last year's total trade between China and Thailand amounted to 64.7 billion U. S. dollars, 22.3 percent increase over the previous year, turning Thailand into China's second largest trading partner in the regional bloc. Thailand plays a leading role in promoting integration of the Asian economy as well as serves as a link and helps in the development of strategic partnership between China and ASEAN, the Chinese academic said. Asst. Prof Kai Yuan of Huaqiao University's School of Law described the Sino-Thai trade and economic cooperation as a win- win option for both sides and that such bilateral relationship is the touchstone of success for trade, investment and financial sectors under the China-ASEAN Free Trade Area treaty.

American sees beyond the glamor in filmmaking - Filmmaker Jay Hubert and actress Karen Mok have a profession - and perhaps great legs - in common. American sees beyond the glamor in Chinese filmmaking, he tells Zhao Xu. Ask Jay Hubert, a 34-year-old American who had previously studied cinematography at the Beijing Film Academy, about his most memorable experience working with a Chinese film crew, and the answer is well beyond any stretch of imagination. "To be Karen Mok's nudity substitute," he says in his studio-home in northwestern Beijing, referring to the wide-smiling, long-legged Hong Kong beauty with whom he was on set during the making of the 2007 movie Lost Indulgence. "There's this one scene of her in the bathroom sitting on a stool and bathing. The camera would be zooming in on her sensual, foam-covered long legs. So they wanted someone who's not only tall but also very white," he says. "The director looked around, looked at me, and called out 'Hubert!'" "That was my greatest moment because I sacrificed for the sake of art," he says, in his typical joking, self-deprecating way. But how about the, um, leg hair? "The scene was shot through an opaque glass door, so it didn't matter," he says. However, that doesn't mean being "a hairy foreigner" hasn't cost him, well, more than a few hairs. "My job title for that movie is 'film loader', which means, quite literally, opening the canister, taking out the film and taping it up onto the movie camera," he says. "Nothing hard, except that you've got to put your hands inside a bag and do it in the dark, because the film is light-sensitive." One day, about a week after the first batch of films had been sent to Beijing for developing, Hubert was told that a couple of hairs had been detected on the initial few shots of the film. "They said to me 'Be careful'." "I guessed what they meant was, 'Go and shave your arms', which I did, promptly," he says, apparently bemused by the little incident. The arm hair has since had a chance to grow back, thanks to Hubert's career evolution from a film loader to an independent artist making short movies funded by his earnings from shooting commercials for local and international brands. But back then, his zero tolerance for interfering hairs won him a big hug from the director. "He says he loved me," Hubert recalled, laughing out loud. From there, Hubert went on to shoot a mini-documentary on the making of the 2010 Chinese film Love for Life, directed by Gu Changwei and thought to be Chinese cinema's first take on the blood-transfusion-caused AIDs outbreak in an impoverished Chinese rural area in late 1990s and early 2000s. Casting the Crouching Tiger, Hidden Dragon actress Zhang Ziyi and the veteran Hong Kong heartthrob Aaron Kwok in leading roles, the movie was filmed in a small village on the western fringe of Beijing. Not knowing anyone on the crew beforehand, Hubert was impressed by the stars "as themselves". "They were fantastic people to work with - Aaron Kwok was entertaining the crew all the time, dancing and teasing with everybody," he says, referring to the sweatshirt-wearing singer-actor who's seen on Hubert's documentary twisting his well-trained body for some electrifying movements. "I think they were just so tired of their celebrity and wanted to be normal people." And in this, Hubert recognized his own longing to be "inconspicuous". "In certain parts of Beijing, being a foreigner still begets curious looks and the occasional finger-pointing," he says. "None of that existed while I worked with the crew." The village where the film was shot - so close to Beijing - has become a popular set. "So the villagers are accustomed to, even bored with, seeing star faces. And none of them would give a damn about a big white guy who's essentially nobody." Over the past few years, Hubert has made a handful of short films, recruiting actors from among his artist friends and classmates - or randomly from the streets. One is titled Banana, about a white American who traveled to Beijing, woke up one morning and found himself trapped under the skin of another man - a local rickshaw puller with a wife and a daughter. At the end of the 11-minute film, after much travail, the man ventured back to the doorstep of his hotel room and bumped into Egg, the guy with whom he had mysteriously exchanged looks with. "I know 'banana' is a byword for Chinese who have grown up in the West - yellow outside, white inside. The reverse of that must be 'egg'. And both represent for me conflicted identities and the nonstop search for true self." "People judge based on their stereotypes, and would often not give others the benefit of doubt," says Hubert, still soured by his own experience of having learned Cantonese fluently but finding no one to speak to while in Hong Kong in the early 2000s. "They all insisted on talking to me in English, which is deeply frustrating." Hubert says he adores a more profound - some may say abstruse - narrative style embraced by the Chinese art cinema, but doesn't think in a linear way. "Comedy is my answer," he says, pointing to his reputation as a "class clown" throughout his school years. "It's my way of getting things out of my system without being judgmental." In Love for Life, Hubert says, there is also a bathing scene - "the climatic end in which Zhang Ziyi's character lies submerged in cold water, then re-emerges to help cool her fevering husband down with her own chilled body." Any luck being a stand-in for the husband on that one? "I tried, but they wouldn't let me," he says.

Hong Kong*:  Aug 27 2012 

Pupils line up to get through Lok Ma Chau checkpoint yesterday. Kindergarten and primary school pupils who live in Shenzhen but attend Hong Kong schools will be able to cross the border quicker, thanks to new technology at the checkpoints. Handheld barcode readers will be used at several border points next month. Introducing the new system yesterday at Lok Ma Chau checkpoint, the Immigration Department said the barcode readers were designed to simplify clearance procedures for pupils aged under 11. Initially about 50 of the handheld devices will be used at five border checkpoints, including Lok Ma Chau and Man Kam To. While all those entitled to travel freely to Hong Kong can hold cross-border permits, only those over 11 are entitled to hold Hong Kong ID cards, which allow automated entry. With the help of the new technology, the government aims to reduce the pressure caused by an increasing number of schoolchildren who use these checkpoints every day. The total number of cross-border pupils is expected to rise to 17,000 in the 2012/13 school year, up from 12,865 last year. Most of these children are from Hong Kong families who live on the mainland. To use the new system, pupils have to preregister with the Immigration Department through their schools. They will then be issued with a barcode, that includes their photo, to stick on their cross-border permit. When they enter Hong Kong they simply tap the barcode on an identification device held by an immigration officer, then pass through immigration control. "When they tap [the barcode] on the device, their updated information and photos can be read instantly by officers," said Erick Tsang Kwok-wai, an assistant director of the department. The devices would also allow officers to get on school buses at three of the five checkpoints to help pupils complete clearance procedures. At present, cross-border pupils use re-entry permits - which are replaced every five years - to pass through the immigration checkpoints. Using the new procedure it takes only six to seven seconds for each pupil to complete clearance procedures - about five seconds faster than the existing method of examining re-entry permits. Tsang said the method would speed up procedures because a pupil's photo on the barcode would be replaced every year for easier identification. So far, about 1,600 have registered with the department, but it expects more will join the scheme when school resumes next month. Chief Executive Leung Chun-ying made a visit to the Lok Ma Chau checkpoint yesterday and used the occasion to comment on recent developments on the immigration front. He said efforts to bar pregnant mainlanders from giving birth in Hong Kong had so far been successful, with recent figures showing only a few women "gatecrashing the border". Leung also said more work needed to be done at a legal level to deal with the root of the problem. He reiterated that the government would try to avoid seeking an interpretation of the Basic Law.

Survivors and relatives of victims of the 2010 Manila hostage saga gather at Admiralty to meet government officials. Chief Executive Leung Chun-ying will press the demands of survivors and relatives of victims of the Manila hostage crisis on Philippine President Benigno Aquino at an international summit next month. Survivors and family members have been fighting for justice in the two years since seven Hong Kong tourists and their guide were shot dead by sacked policeman Rolando Mendoza. They were yesterday promised action at a meeting with Secretary for Security Lai Tung-kwok and Office of the Chief Executive director Edward Yau Teng-wah. Tse Chi-hang, younger brother of slain tour guide Masa Tse Ting-chunn, said Lai also promised to designate an official from the Security Bureau to follow up on demands for an apology from the Philippine government as well as compensation, accountability for the Philippine officials involved and improved measures to protect tourists. "It is really a tough time for us in these two years," said Tse. "It is painful for us to follow up the incidents by ourselves. We really hope the government, including the chief executive, can have something concrete done for us," Leung will invite Aquino for bilateral talks during the Asia-Pacific Economic Co-operation Summit in Vladivostok, Russia on September 7 and 8 and Yau promised that Leung would raise the group's demands, Tse said. But Tse said he was disappointed that Yau had not given a concrete promise that Leung would meet the survivors and relatives in person after the Apec summit. The group had invited Leung to yesterday's meeting, which came a day after the second anniversary of the bus siege, but Yau and Lai attended instead. Leung said at earlier that he cared very much about the incident. Lai admitted progress with Manila had been slow, but the government was continuing to follow up on the situation. Survivor Lee Ying-chuen, who was also at the meeting, said Lai had told them that the government had contacted the Foreign Ministry in Beijing four times in the past 12 months about the case, although the last contact was in September, after Premier Wen Jiabo told Aquino face-to-face to properly handle the aftermath of the siege and the botched rescue attempt, in which Mendoza was killed. On the day the siege unfolded, Leung's predecessor Donald Tsang Yam-kuen tried to reach Aquino by phone twice to express his concerns, but Aquino's aide did not pass on his messages.

Hong Kong's doors will be open for regular visits by 4.1 million non-permanent residents of Shenzhen from next month - despite the concerns of Chief Executive Leung Chun-ying that the city will struggle to cope with more mainland visitors. The announcement by Shenzhen authorities that multiple-entry permits will be available to millions of residents of the border city who do not hold hukou, or household registration documents, there prompted new concerns that Hong Kong's infrastructure would be overwhelmed and that visitors would compete with locals for resources. Previously, non-permanent residents of Shenzhen had to return to their home provinces to apply for multiple-entry permits, although they have been allowed single-entry passes since 2010. Multiple-entry permits were made available to Shenzhen hukou holders in April 2009. Dr Chan Kin-man, an associate professor at Chinese University's sociology department, said the likely influx of visitors would add pressure to the "already overloaded" city. "The transport system is already very full - you can see it from how crowded the MTR carriages are during peak hours," he said. "They may also compete with local people for daily necessities, such as milk powder." Leung said in June that mainland visitors had added to inflation in the city and "disrupted the livelihood" of residents in the New Territories, where many shopped for day-to-day goods. "[Beijing] made the right decision in not expanding the individual visit scheme over the past five years," Leung said. The Hong Kong Tourism Board welcomed the potential boost to visitor numbers. But Michael Wu Siu-ying, chairman of the Travel Industry Council, expressed concerns over the pressure that the rising number of visitors would put on border checkpoints, increasing the queuing time for each tourist. Secretary for Security Lai Tung-kwok said yesterday that the Immigration Department was encouraging Shenzhen residents with multi-entry permits to use unmanned e-channels to speed up their entry. Some 270 million residents of 49 mainland cities are eligible to apply for multiple-entry permits, but this is the first time the scheme has been extended to those who do not hold hukou. To be eligible, non-permanent residents will have to have paid social insurance in Shenzhen for a full year and hold an upgraded ID card. The influx of mainland visitors has become a bone of contention for Hongkongers. They have been blamed for everything from driving up rents and forcing small businesses out of shopping areas to putting pressure on health and education services by giving birth in the city.

Chinese Olympic gold medalists visit HK - Chinese mainland gold medalists at London Olympics arrived in Hong Kong Friday noon, kicking off their three-day visit to the city. Chinese Olympic gold medalists give sports demonstration in HK - Chinese mainland Olympic gold medalists participate in the sports demonstrations in Hong Kong, south China, Aug. 25, 2012. 

The man behind the purchase of a Burgundy winery that has caused an uproar in France has been revealed as Louis Ng Chi-sing, the right-hand man of Macau gambling tycoon Stanley Ho Hung-sun. Ng is the chief operating officer of SJM Holdings, a Hong Kong-listed company which oversees 17 casinos in Macau. Its parent company is the Sociedade de Turismo e Diversoes de Macau, which is privately held by Ho and his family. Ng has worked for them for 34 years. He bought the 12th-century Chateau de Gevrey-Chambertin in Burgundy's Cote de Nuits this year for €8 million (HK$77.9 million), the Wine Spectator reported. French politicians and winemakers expressed dismay after discovering the winery had been sold to an overseas buyer. The vineyards remain under lease to three local growers, according to Wine Spectator. The Gevrey-Chambertin winemakers syndicate had offered to buy the chateau for €5 million but lost out to Ng. The group's president, Jean-Michel Guillon, was not happy. "I am not angry because the investor is Chinese; it is because priority has not been given to local winemakers. We ask the French government to step up and legislate in order to give priority to the locals," he told the South China Morning Post (SEHK: 0583) . Guillon said a sign appeared at the entrance a few days ago saying: "The chateau is not open to the public any more." Guillon said: "The castle represents the wealth of our heritage, and it should stay the property of the winemakers." France's far-right Front National said local winemakers should have been given government help to preserve the national treasure for the country. Ng is the second Chinese businessman to buy a Burgundy vineyard. Shi Yi, who now lives in Burgundy, bought more than a hectare of vineyards at Vosne-Romanee this year. Chinese influence in French wine has been growing. Thomas Jullien, the Bordeaux Wine Council's Asia representative, said the number of Bordeaux estates owned by Chinese had grown from two to 25 in three years. "Bordeaux is more open to foreign investments," he said, adding that local veterans were happy with the new owners in general. "New investors have spent money on updating the winemaking facilities, equipment and buildings."

 China*:  Aug 27 2012

Xu Biao could sit in his office waiting for orders to roll in during a mainland building boom two years ago. Now, he is on the road trying to drum up business. "Life is difficult," Xu, a sales manager at Maanshan Fangyuan Slewing Ring, said. "Every client is cutting production." Maanshan Ring supplies parts to Sany Heavy Industry, XCMG Construction Machinery and other equipment makers in competition with some big rivals. Caterpillar, which sources 25 per cent of sales in Asia, Komatsu and Sany have all slashed output in the world's biggest construction-equipment market this year as a demand slump caused by slower economic growth has spread from building to mining. Sales of large excavators, mainly used by miners, last month slid the most since January 2009, contributing to the 15th successive decline in the overall market. "The market is just getting worse," Wang Shuangming, an analyst with consultancy China Construction Machinery Business Online, said. "It doesn't matter if you're a foreign or domestic producer, everybody is in the same boat." Excavator sales fell 24 per cent from a year earlier in July to 5,827, according to China Construction Machinery Association data revealed by Nomura Holdings. Sales have dropped year on year every month since May last year after a government clampdown on real estate triggered a building slowdown. Construction of railways also slowed following a deadly crash in July last year. Demand for the biggest and most expensive excavators, which weigh more than 40 tonnes, had largely withstood the slump because of demand. However, a slowdown in coal prices has dented the overall market, causing sales to tumble 53 per cent last month. Total fixed-asset investment in mainland coal mining slowed to a 3 per cent growth rate from 19 per cent in June. "A slowdown in mining investment in China has just begun," Nomura analyst Wenjie Ge said in a research report this month, adding that the downturn "may last longer than the market expects". He forecast a 27 per cent decline in total excavator sales this year. Caterpillar, the world's largest maker of construction and mining equipment, had slowed production at its chief mainland excavator factory, including a two-week shutdown last month, spokesman Jim Dugan said. The plant, located in Xuzhou, Jiangsu province, builds mid-size Cat 300 series excavators and track-type tractors.

Small investors are upset about on-again, off-again suspensions of trading in shares of China High Precision Automation, a mainland maker of automated industrial instruments. They blame regulators for failing to co-ordinate their response. "I bought the shares of the company after the stock exchange approved the resumption of trading on August 3," an investor who did not identify himself said yesterday after a shareholders' meeting voted on replacing the company's auditor. "But a few weeks later the Securities and Futures Commission suspended it from trading again. "I do not understand why the SFC and the stock exchange did not communicate with each other and why they didn't work together before deciding if a company should be suspended from trading or not." Scores of investors attended the meeting that approved the appointment of Pan China to replace former auditor KPMG, which resigned in November after failing to get sufficient information to conduct an audit. High Precision asked for its shares to be suspended in October. Trading resumed early this month after the company explained it was involved in "state secrets" and could not share certain information with KPMG. China High Precision had previously appointed Pan China to conduct a special audit. It confirmed the company's financial statement in the first half of last year was "true and fair". The company makes parts for quartz watches and products that measure temperature and water pressure. On Wednesday, the SFC suspended trading of China High Precision's shares according to Rule 8, which allows such a suspension if it believes "any materially false, incomplete or misleading information" is contained in any documents or announcements. Chairman Wong Fun-chung declined to comment on the commission's action, saying "we will issue an announcement according to the listing rules". A spokeswoman for the Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) said that while the bourse would not comment on specific cases, it "maintains a close working relationship with the SFC and the two organisations communicate from time to time". High Precision shares closed at HK$1.24 on Tuesday.

Pressure on China in islands row - South Korea and Russia have made strong gestures in their island disputes with Japan, prompting calls for China to take similar action. South Korean President Lee Myung-bak's strong action against Japan in a territorial dispute has triggered calls on the mainland for Beijing to get tougher in defending China's sovereignty claims, analysts say. At the same time, Beijing has become more at ease with handling the dispute with Japan over the Diaoyu Islands because of souring relations between Seoul and Tokyo, yet will proceed cautiously in dealing with its two regional rivals, they said. Beijing is unlikely to comment on Lee's action to avoid complicating the trilateral relationship and to stem calls for strong measures against Tokyo. On August 10, Lee visited the Dokdo Islands, which are controlled by Seoul but also claimed by Japan, which calls them Takeshima. Seoul also returned a protest letter sent by Japanese Prime Minister Yoshihiko Noda, prompting a frenzy of discussion among the Chinese online community. "Lee has done a good job, and this has shaped his image. Leaders of the Communist Party are disappointing," one mainland microblogger said. Another said: "China should grab this opportunity to show its harsh face to Japan." Zhou Yongsheng, a Japan expert at China Foreign Affairs University, said: "I think the public sentiment against Japan is growing, and this is putting pressure on the government." However, analysts said the tense relationship between Japan and South Korea, combined with a territorial dispute between Tokyo and Moscow, had exhausted the Noda administration, and this might benefit China. Russia has said it will send two navy vessels to the Kuril Islands, north of Hokkaido, following a visit there by Russian Prime Minister Dmitry Medvedev last month. The actions by Lee and Medvedev send a message that China is not the only one involved in territorial disputes with Tokyo and highlights the restraint exercised by Beijing. "Japan is facing frustration on all sides," said Da Zhigang, a professor of Japanese studies at the Heilongjiang Academy of Social Sciences. Zhou said the diplomatic front facing Japan has given Beijing flexibility in dealing with the Diaoyus dispute. "I believe Beijing will still refrain from taking tough actions now to maintain positive bilateral ties," he said. "However, if tensions over the islands continue to escalate, Beijing would feel more confident about being assertive given the difficult situation Tokyo is facing." The United States, Japan's close ally, has said that the Diaoyu dispute is covered by a treaty signed in 1951 between the two countries, but that it will not take sides in territorial disputes - indicating Washington may not back Tokyo if it was involved in a confrontation with Beijing. "The diplomatic outlook and the rising nationalist sentiment in Japan has made it very difficult for the Noda administration to settle territorial disputes," said Jia Qingguo, a professor at Peking University. But he said China would not openly support Lee. "Openly giving support and having a clear stance means that you are offending the other party involved in the issue," Jia said.

Hong Kong*:  Aug 26 2012 

The Opus Hong Kong development at 53 Stubbs Road, The Peak. A luxury apartment on The Peak has sold for a record HK$470 million (US$61 million), making it the priciest residential flat in Hong Kong and possibly in Asia, reports said on Friday. An unidentified buyer paid the HK$75,806 (US$9,773) per-square-foot price for the 6,200-square-feet (576-square-metre) unit at Opus Hong Kong in the upmarket Peak residential area, Hong Kong Economic Journal and Sing Tao Daily said. The whopping price for the unit, which takes up the entire eighth floor of the 12-storey building, is believed to be Asia’s most expensive apartment and the world’s second most costly after London’s One Hyde Park, Sing Dao Daily said. The building was designed by the Pritzker Prize-winning architect Frank Gehry. Developer Swire Properties declined to confirm the deal. “We have no information to share at this point,” spokeswoman May Lam-Kobayashi said. She added however that tenants recently leased another unit at the property for HK$850,000 a month. Local media reported that the sale beat the city’s previous record price of HK$360 million paid for a unit at another luxury property last year. “This is definitely a new record price for any Hong Kong apartment,” Centaline research head Wong Leung-sing told reporters. “But we think it’s an isolated case as this is an ultra luxury condo,” Wong said, adding that it could not be used as a yardstick to gauge investors’ appetite for luxury apartments in the city. Property prices in Hong Kong have surged over the past few years due to record low interest rates and a flood of wealthy buyers from the mainland. The property market however has seen a slowdown this year, with sentiment hit by the euro zone crisis and plans to boost public housing. Even so, many residents complain they can no longer afford decent accommodation, and analysts say property ownership is out of reach even for the upper middle class.

Hong Kong gave a rousing welcome to China’s Olympic gold medallists on Friday morning, when they arrived for a three-day visit to the city. A brass band and about 200 flag-waving primary school children were waiting to cheer “Diving Queen” Wu Minxia and “Super Dan” Lin Dan, along with the other champions when they walked off their chartered plane onto the apron at Hong Kong airport. The 70-strong delegation – including 47 gold-medallists – was greeted by Chief Secretary Carrie Lam Cheng Yuet-ngor, deputy director of the central government’s liaison office Li Gang, home affairs secretary Tsang Tak-sing and Sports Federation and Olympic Committee of Hong Kong president Timothy Fok Tsun-ting. “These gold medallists have come to Hong Kong very soon after the closing ceremony of the London Olympic Games to let our citizens meet them and share their glory and joy,” said Lam in her welcoming speech. “I truly thank them on behalf of the SAR government.” She said the visit gave Hongkongers a great opportunity to see the athletes’ sporting skills. Chief Executive Leung Chun-ying will host a welcome reception for the athletes on Friday afternoon, following their meeting with the Hong Kong media. The Olympians will put on demonstration shows at two venues on Saturday morning and join in a celebratory extravanganza in the evening. Badminton and table tennis athletes will perform at the Queen Elizabeth Stadium in Wan Chai, and the diving team will hold demonstrations at the Kowloon Park swimming pool in Tsim Sha Tsui. While all tickets for the sporting performances sold out within about an hour of going on sale, a small number of tickets for the extravaganza are still available at Urbtix outlets. Following their visit to Hong Kong, the delegation will head to Macau. China won 38 gold, 27 silver and 23 bronze medals in London, coming second overall behind the United States.

Immigration director Chan Kwok-ki (centre) briefs Chief Executive Leung Chun-ying (left) on the new procedures for cross-border students on Friday. Immigration officers will start next month to use radio frequency identification devices to facilitate the flow of cross-border students, the Immigration Department announced on Friday morning. The gadgets are intended to simplify the clearance procedures for students under the age of 11. Initially about 50 of the hand-held devices will be deployed at five border checkpoints, including Lok Ma Chau and Man Kam To. Although all those entitled to travel freely to Hong Kong can hold cross-border permits, only those over 11 years old are entitled to hold Hong Kong ID cards. To use the new system, students have to pre-register with the Immigration Department through their schools. They will then be issued with a barcode that includes their photo to stick on their cross-border permit. When they enter Hong Kong, they can simply tap the barcode on the identification device held by the immigration officer to pass through immigration controls. Using the new procedure, it takes only six to seven seconds for each student to complete the clearance procedures – about five seconds faster the existing method, which uses manual recognition of re-entry permits. So far, 1,600 students have registered with the department. It expects more will join the scheme when school resumes in September. Eric Tsang Kwok-wai, the department’s assistant director (control), said the method would speed up procedures because the students’ photos on the barcode would be replaced every year for easier identification. At present, cross-border students use re-entry permits – which are replaced every five years – to pass through immigration. The government estimates that the number of cross-border students will increase to about 17,000 in the new school term. Most of these children come from Hong Kong families who live on the mainland.

NBA player Jeremy Lin holds up a young fan as he attends a promotional event in Hong Kong on Friday. Basketball fans mobbed NBA star Jeremy Lin as the 24-year-old made his first public appearance in Hong Kong to promote his basketball charity on Friday. The American basketball sensation fielded questions from around 120 primary and secondary school pupils, who gathered at a Tsim Sha Tsui mall as Lin kicked off a charity basketball programme for underprivileged children. Young fans were interested in the 24-year-old Harvard graduate’s story of success, and Lin dished out a nugget of wisdom from his shooting coach. “Every day, you lay brick by brick, baby step by baby step – and then you look back and realise you have something big.” And despite the rage of “Linsanity”, the player said this past season had not been easy. He said the NBA was not what he expected it to be when he joined. “The speed and athleticism of the players is something I’ve never seen before. What you see on TV is the glitz and glamour, but it’s tough, it’s tiring ... there’s lots of travelling. You get to a city at 2 or 3am and play a game [in the morning].” The 1.9-metre star recently joined the Houston Rockets after finding fame with the New York Knicks last season. Lin was born and raised in California, and studied at Harvard University where he played for the basketball team and obtained a degree in economics. One pupil asked him how he reacted when he was lashed by racist remarks for being Asian American on the court. “I’m naturally stubborn and hard headed. Don’t let people tell you what you can or cannot do.” The star recently joined the Houston Rockets after finding fame with the New York Knicks last season. Lin travelled from Dongguan in Guangdong province by car to Hong Kong on Wednesday, where he opened the J-Lin Basketball Camp for children.

"I personally care about the incident very much," Chief Executive Leung Chun-ying said. Chief Executive Leung Chun-ying promised on Friday morning to follow up on government action on the Manila hostage crisis after a group of survivors and victims’ relatives met officials in the afternoon. Speaking during a visit to the Lok Ma Chau Spur Line Control Point, he expressed his concerns over the issue. “I personally care about the incident very much,” Leung said. “I have been updated by the security secretary on the various follow-up action the government has taken to help them.” He would receive a further update after the group met the director of office of the Chief Executive Edward Yau Tang-wah, and Secretary for Security Lai Tung-kwok on Friday afternoon. Lai said that the administration had tried various ways to address the group’s concerns. “For example, last year we requested help from the central government,” he said. “And then Premier Wen Jiabao passed on these requests to Philippine President Benigno Aquino in person.” Thursday marked the second anniversary of the bus siege, in which seven Hong Kong tourists and their guide were shot dead by sacked policeman Rolando Mendoza, who was later killed in a bungled rescue operation. On Thursday, Tse Chi-kin, brother of slain tour guide Masa Tse Ting-chunn, said the government had not helped the survivors or the victims with legal support. He complained that Leung had refused to commit to meeting the victims’ families. The survivors and relatives of victims said they were considering visiting the Philippines again to seek a meeting with Aquino after “disappointing” talks with the country’s consul general. A delegation including Tse Chi-kin and his brother Tse Chi-hang, and survivors Lee Ying-chuen, Yik Siu-ling – whose lower jaw was shattered by a bullet – and Joe Chan Kwok-chu, met Philippine consul general Noel Servigon and consul Val Simon Roque. But the talks yielded only a promise to convey the delegation’s message to the government, Tse Chi-hang said after the meeting. The families and survivors are demanding a government apology, compensation and that Philippine officials be held to account over their handling of the crisis. In a statement released after the meeting, the consul general said lessons learned from the tragedy were being taken seriously by the Philippine government. A new integrated land-sea-air crisis action force had been established to protect VIPs and night courts had been opened to help foreign tourists.

Chinese Olympic gold medalists welcomed in Hong Kong - The Chinese Olympic gold medalists started a three-day visit to Hong Kong on Friday.

 China*:  Aug 26 2012

A business group has criticized mainland calls to probe European Union wine imports as "protectionist," as a dispute between the major trading partners threatens to escalate. The China Alcoholic Drinks Industry Association this week formally requested the government to investigate whether wine from the EU is damaging the domestic market amid claims of unfair subsidies. The EU Chamber of Commerce in China called the developments a "worrisome trend of trade protectionism." Experts said the request followed a flood of cheap imports of European wine last year. Europe - China's biggest trading partner - exports an estimated 1 billion euros (HK$9.74 billion) worth of wine and spirits annually to the country. China is seeking to build its own wine industry. Much of the local wine has until recently been mass-produced and of low quality, but there are now some good local wines being sold. Jim Boyce, operator of China- focused wine blog the Grape Wall of China, said mainland winemakers find it difficult to compete against imported wines. "Countries like Spain and Chile and Australia can make a lot of very reasonably good, super- cheap wine and China is still on the quality curve," he said. "It's hard for the mass- produced Chinese winemakers to compete against that, at that quality level." 

Beijing will give 30 million yuan (HK$36.6 million) in humanitarian aid for Syrian refugees in Jordan and Lebanon. The aid aims to "show the friendly sentiments of Chinese people toward Syrian people," Xinhua News Agency reported, citing the foreign ministry. The UN estimates more than 265,000 Syrians have fled their country's raging conflict since March last year and 1.2 million are internally displaced. Beijing and Moscow have repeatedly locked horns with fellow UN Security Council members on how to handle the Syria conflict, now in its 17th month with little sign of easing. They have rejected efforts by Western nations to pressure Syrian President Bashar al-Assad to step down, and instead accused them of prolonging the conflict by backing the opposition rebel forces. China has urged Damascus and the rebels to engage in dialogue and repeatedly stressed its policy of non-interference in the affairs of other countries. About 17,000 Syrians have died in the conflict so far, including 37 in Damascus on Wednesday. Xinhua said the latest aid comes after Beijing donated US$2 million (HK$15.6 million) in aid to Syrians in March through the Red Cross. 

A section of the Yangmingtan Bridge collapsed in Harbin on Friday. Three people were killed and five injured when an eight-lane bridge in Harbin city collapsed early on Friday, only nine months after it opened, state media said. The bridge, part of an airport expressway in Harbin, only opened last November after two years of construction that cost 1.9 billion yuan (HK$2.3 billion), China News Service reported. A 100-metre section broke off when four heavy trucks drove onto the bridge, plunging them to the ground, said a CCTV news reporter at the scene. The bridge was designed to handle up to 9,800 vehicles per hour. Two people were killed on the spot, a third died later, and five remain in hospital. “To break after apparently just under a year of operation, for sure there is a problem,” said Huang Yi, spokesman for the State Work Safety Administration, which operates under the State Council, akin to a national cabinet. The official Xinhua news agency said at least six major bridges have collapsed across the country since July last year, and that shoddy construction and over-loading were to blame. The mainland has rapidly expanded its road and rail infrastructure over the past decade as its economy has boomed, but critics say that safety has sometimes been overlooked in the rush to develop. At least 40 people were killed when two high-speed trains collided near the eastern city of Wenzhou in July last year, and another train crash on Thursday in Heilongjiang province in the northeast, where Harbin is located, left at least 24 people injured. Authorities investigating Friday’s incident will look into the bridge design and construction as well as the truck loads, the Harbin government said in a statement. Thousands of people commented on the collapse on Sina Weibo, with most blaming corruption. “Just imagine, some corrupt official takes four-fifths of the project funds, that means the project manager can only make money by skimping on the job,” said one user. “I really want to yell at someone,” said another. “Seeing the pictures is so tragic.”

Mainland state media have acknowledged for the first time that China is developing a state-of-the-art intercontinental ballistic missile (ICBM) equipped with multiple nuclear warheads that could defeat America's anti-missile defences. On Wednesday, the Global Times, a newspaper under the party mouthpiece People's Daily, denied a report by the consultancy IHS Jane's last week that a Dongfeng-41, or DF-41, had been test-fired last month by the Second Artillery Corps, the People's Liberation Army's strategic missile force. Instead, it said, such a missile was being developed. The Jane's report quoted anonymous US officials as saying that the Second Artillery Corps had conducted the first flight test of a DF-41, the third generation of China's ICBMs. It was the first time the US authorities had confirmed the existence of the missile project. Andrei Chang, who edits the Canadian-based Kanwa Asian Defence Monthly, said it was unlikely the missile corps was currently able to launch a full-course flight test for its third generation ICBM. "The challenges and difficulties between the second and third generation of ICBMs are very complicated, and the intelligence I've gathered tells me that China is still incapable of overcoming many problems, even though they have spent more than 20 years to develop it," Chang said. Antony Wong Dong, chairman of the Macau-based International Military Association, said China's third generation ICBMs would not be named DF-41 because that project was cancelled years ago. The Global Times quoted Wei Guoan, a Chinese military expert familiar with the missile corps, as saying that China is developing a third generation ICBM which meets the descriptions in the Western media, but he denied that the missile tested on July 24 was a DF-41. "The third generation ICBM equipped with multiple independent re-entry vehicles [MIRVs] is exactly the developing direction of the Second Artillery," Wei told the Global Times. China has long maintained that it would not be the first to use nuclear weapons and that its nuclear forces are designed for counterstrikes against nuclear attacks on its territory. But Wei said that Beijing should proceed with limited development of third generation ICBMs because it is facing increased nuclear threats, with both the United States and Russia failing to eliminate their nuclear arsenals. The Jane's report quoted former US military intelligence official Larry Wortzel as saying that China's third generation ICBMs could defeat US missile defences. "The DF-41 is mobile and will be very hard to detect and counter because of that mobility," Wortzel said. Professor Phillip Karber, from Georgetown University, who has studied Chinese nuclear programmes, also told Jane's that China's third generation ICBMs, which could carry up to 10 MIRVs, "would be enough for China to target every US city with a population over 50,000 people" with 32 missiles. "If the Chinese end up developing that kind of counter-value posture against American cities, and we do not build missile defences against it, it spells the end of extended nuclear deterrence for Asia," Karber said, adding that the likely result would be a nuclear arms race in Asia. The US is planning an expansion of missile defences in Asia to address threats from North Korea that could also serve to counter China's military build-up, The Wall Street Journal reported.

Delivery industry's wings keep growing - The e-commerce boom has given a new burst of life to an already thriving business - Despite the weak economic outlook in Europe and the US, China remains a dynamic market that provides greater opportunities for its burgeoning express delivery industry both in the international and domestic arena. Foreign express companies are gearing up to take advantage of the huge opportunities coming up in the nation's domestic market. Thanks to the e-commerce boom, the value of the nation's express delivery market more than doubled to $13 billion (10.5 billion euros) in the five years to 2011. The industry is expected to continue growing over the next four years with annual sales of $22.5 billion by 2015, the China Express Service Association says. China is now the third-largest market for express services behind the United States and Japan. Last year, 7,575 express companies were operating in China, compared with 5,327 in 2010. The average number of pieces of mail delivered reached 130 million a day last year. With such growth opportunities, the competition for market share will intensify. International companies such as United Parcel Service Inc, FedEx Corp and Deutsche Post DHL have all been consolidating their presence by applying new tactics to collect more mail or parcels from Chinese consumers. At the same time, big Chinese express service companies have been working hard to gain a greater share of the domestic market. Against tough international competition they have shown a willingness to bare their knuckles for a tough fight. The rise of local private firms such as SF Express (Group) Co, YTO Express Co Ltd and Shentong Express Co Ltd even threatens China Postal Express & Logistics Co Ltd, the largest company in the domestic postal market. The domestic market share of this State-owned enterprise, which operates Express Mail Service, has fallen from the nearly 60 percent it enjoyed in 2006 to less than a third last year. With an eager eye on expanding in China, FedEx, the operator of the world's largest cargo airline, and UPS, the world's largest package delivery company, are both seeking permits from the State Post Bureau of China to operate a domestic express business in China this year. FedEx wants to operate innercity express businesses in eight large cities, including Shanghai, Guangzhou and Hangzhou, and the State Postal Bureau has given UPS the green light do so in five cities, including Xi'an and Shanghai. In the meantime, FedEx Express, a subsidiary of FedEx Corp, is seeking more business opportunities in China-Europe air routes and the country's western regions. The US company launched operations using a Boeing 777 freighter in Shanghai and Guangzhou last month, each city having five 777F flights a week, Tuesday to Saturday, connecting Shanghai and Guangzhou to the FedEx hub in Cologne, Germany. It is the first time that FedEx has launched a 777F direct flight from its Asia-Pacific hub at Guangzhou Baiyun International Airport to Europe, which provides more capacity for the company's international express services from China to Europe.

Despite rapid growth, China's overall investments in the United States are still small and there has much room for growth, business leaders participating the 2nd China Overseas Investment Summit (COIS) said Thursday. China has become the second fastest growing source of foreign direct investment (FDI) for the United States with an average annual growth rate of 72 percent from 2006 to 2011, Stephen Young, US Consul General Hong Kong and Macau, told a seminar during the summit. But the total amount is small, only accounting for less than 1 percent of the US total FDI, he added. James Sun, Chairman of the American Chamber of Commerce, Hong Kong said it is self-evident for the United States and China to set up mutually-beneficial economic and trade links given that the United States is the biggest developed state and China is the biggest developing nation and that they are the top two economies in the world. Sun also said their cooperation is "demand-oriented, bilateral and genuine" as China is transforming from a traditional capital- importing state to a capital-exporting one while the United States needs to boost its economy and create jobs. Amid a worldwide downturn and faltering domestic economy, the US government has launched a new effort through the Select USA program in 2011 to facilitate business investment as an engine for job growth and economic development. "The program offers information assistance for the global investors, and will help resolve issues involving federal regulations, programs, or activities during their investment process," said Stephen J Olson, Executive Director of the SelectUSA. The two-day conference themed "Global Economic Transformation and New Approaches to China's Overseas Investment" that closed on Thursday attracted more than 1,200 government officials, investors, senior managers and experts from over 40 countries and regions.

Hong Kong*:  Aug 25 2012 

The government says it will not lift the black travel warning on the Philippines even though it is two years to the day since a sacked police officer held Hong Kong visitors hostage in Manila before killing seven of them and their tour guide. Travel agencies said that since the tragedy, the number of locals visiting the Philippines has plunged, especially since they generally cannot buy insurance packages because of the black travel alert. Susanna Lau Mei-sze, a manager at Travel Expert, estimated the number of Hong Kong tourists to the Philippines dropped 50 percent compared with the peak season before the tragedy. "Most tourists prefer Malaysia for diving or other southeast Asian nations, including Singapore, and South Korea," she said. However, media reports in Manila said visitors from Hong Kong increased 2percent in the first quarter from the 138,000 arrivals during the same period last year. Tse Chi-kin, elder brother of killed tour guide Masa Tse Ting- chunn, criticized the government for failing to help them seek compensation from Manila. "I am angry that the SAR government has not put pressure on the Philippine government to accept responsibility and offer compensation to victims," Tse said. The guide's family, along with survivors Joe Chan Kwok-chu and Yik Siu-ling, who were severely injured by gunshot wounds, will hold a meeting with Secretary for Security Lai Tung-kwok tomorrow. The SAR government said it has all along been rendering assistance to the victims and their families.

Basketball superstar Jeremy Lin checks into the Hyatt Regency hotel in Tsim Sha Tsui yesterday after earlier opening the J-Lin Basketball Camp 2012 in Dongguan , Guangdong. The Taiwanese-American star, who recently joined the Houston Rockets after finding fame with the New York Knicks last season, celebrates his 24th birthday today. He will meet fans at a public event tomorrow at the K11 shopping mall in Tsim Sha Tsui, followed by a private, church-organised event on Sunday to share his Christian faith at the AsiaWorld-Expo. The point guard said he was excited at the prospect of exploring the city. Jeremy Lin Shu-hao of the Houston Rockets, the NBA star who generated "Linsanity" in Chinese communities in the United States and abroad, has arrived in Hong Kong and will celebrate his birthday today. Lin, 23, met the press outside the Hyatt Regency in Tsim Sha Tsui where he will stay during his six-day visit. Fans had waited for him for more than an hour. One called Anthony came all the way from Liaoning to see him. "I want to thank everybody who waited for a long time," Lin said. "I am excited and happy to see you guys." He will meet youngsters from grassroots families and young basketball fans in a public event at New World's shopping mall K-11 in Tsim Sha Tsui tomorrow. Souvenirs will be available and limited seats are reserved for fans on a first-come-first-served basis. Lin, a Christian, will also preach the gospel at the AsiaWorld Expo in Chek Lap Kok on Sunday. The event, organized by Hong Kong Mandarin Bible Church, will begin at 3.30pm and last two hours. All admission tickets have been snapped up but the public can view a telecast in 13 churches across the SAR. After failing to make much of an impact in his first two seasons in the NBA, Lin became an overnight sensation in February when he came off the bench to lead the New York Knicks on a spectacular winning streak. The fervor of his supporters worldwide gave rise to what the press dubbed as "Linsanity." Lin's parents are from Taiwan and his maternal grandmother is from the mainland.

Hong Kong entrepreneur helped pave the way - Many Hongkongers went to Lagos in Nigeria to run manufacturing companies and restaurants, or traded in textiles. Jimmy Chan Chi-ming was among the thousands of enterprising Hongkongers who were ahead of China's rush into Africa. A million Chinese moved there during the past 10 years as China overtook the United States and Europe to become the continent's largest trading partner. During the decade the annual growth in trade between China and Africa was more than 30 per cent a year, reaching US$166 billion last year. "I first went to Togo in 1988 with a group of friends, and for the next 20 years I worked in Ghana, Mali, Guinea, Gambia, Mauritania and Senegal. I don't have much education but even in the beginning I knew more about Africa than most Hongkongers do today." Chan specialised in trading dried shark fin. He would haggle with African fishermen in his broken English and French, and send the fins in monthly, three-tonne shipments to Hong Kong. Agents in Hong Kong sold the shark fins to local businesses. At the peak of his career, Chan was making US$50,000 a month, with an average monthly income of US$35,000, but that was before growing global concern over the inhumane practice of shark finning, which depleted shark populations in African seas. A large number of Hongkongers migrated to Africa from the 1960s to the 1980s to do business, with 1,000 Hong Kong businessmen going to Nigeria during the second half of the 20th century, running manufacturing companies and restaurants or trading in textiles and other goods. Chan, 60, now lives in Hong Kong with his African wife and their eight-year-old daughter. He met his wife while trading in Guinea and the family moved to Hong Kong with him in 2008. Sipping a beer outdoors on a hot, humid evening on Lantau Island, Chan reminisced about his time in Africa. "Over there, you always felt comfortable. It's hot, but there was always a beautiful breeze. I have a lot of African friends and I miss them. Actually, they're not my friends; they're my brothers." Business began to slow down for Chan in the 1990s as Hong Kong settled into a service sector economy. More mainland migrants arrived in Africa. "Their money was not like our money. Many of the mainland companies had the backing of the government, and really undersold us. We couldn't compete. The Westerners definitely couldn't compete."

The operator of the Hong Kong stock exchange said Wednesday that it plans to offer trading in Chinese currency futures from the middle of next month. Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) Limited (HKEx) will introduce futures in the renminbi (RMB), also known as the yuan, on September 17, it said – the first offshore futures contracts deliverable in the currency. HKEx hopes the move, first announced in April, will give it a larger role in the city’s burgeoning yuan market as China works to internationalise its currency, Dow Jones Newswires reported. The contracts will enable investors to speculate on the yuan against the dollar, Dow Jones added. “These new futures are part of our strategy to offer a wide range of RMB-related products,” HKEx Chief Executive Charles Li said in a statement. “In addition, they will help us support RMB internationalisation and Hong Kong’s further development as an offshore RMB centre,” he added.

Diaoyu voyagers hail trip as 'victory and a miracle' Emotional scenes as remaining activists and crew return, with captain Yeung Hong telling of his tears of joy as they landed on the islands. The remaining seven Diaoyu voyagers yesterday made an emotional return to Tsim Sha Tsui, from where they had sailed 10 days earlier for the islands. Captain Yeung Hong hailed their expedition, during which seven activists landed on the main island, a "miracle". And as they were greeted by hundreds of cheering supporters, activist Lo Chau praised the determination of his "brothers" as the key to their "victory". Yeung, 45, dismissed claims their mission succeeded only because the mainland, Japanese and Hong Kong authorities loosened their grip. "We never knew what the Japanese were planning," he said. "We only made use of their mistakes and went through bit by bit," he said. He said their vessel, the Kai Fung No 2, was slow and was surrounded by 17 Japanese boats. "Every single one of them was more than four times faster than us. Why did we make it [to the islands]?" Yeung asked. "It was not only a miracle ... it happened because the brothers devoted painstaking effort ... and we achieved a wish of more than a decade." Yeung said he wept tears of joy after landing on the rocky Diaoyu Island. "I was speechless ... I cried for five minutes, and did nothing else after returning to the boat." He said Chief Executive Leung Chun-ying's absence from the welcoming group did not disappoint him. "We welcome anyone who wants to greet us, but this not personal heroism, it is part of a movement," he said. Lo, who owns the Kai Fung No 2, said the vessel had been under Marine Department surveillance 24 hours a day and had been stopped seven times from leaving Hong Kong waters. "The administration is relatively civilised in many things, but towards the Diaoyu [activists], they were doing something barbaric, just like the Japanese," he said. In preparation for the voyage, the vessel was modified, he said. "But the most important preparation was our brothers' determination, which made it possible for us to break the cordon of the marine police and deal with the developments that followed ... it was a victory," he said. The Marine Department said the Kai Fung No 2 was licensed only for fishing and that it was empowered to stop it leaving Hong Kong for other purposes. Lo and Yeung both urged the government to change the rules. The activists detoured to Cheung Chau early yesterday so that fisherman Cheung Kam-mun and his two sons could meet their family. Cheung's wife, Leung Sap-mui, giggled as she waited for her husband and his special "catch" from the voyage. "He said he grabbed some pebbles ... pebbles from the Diaoyu Islands," she shrieked. Cheung was on the expedition with sons Wai-keung, 39, and Wai-man, 30. His daughters and grandson joined him later for the voyage to Tsim Sha Tsui. As the Kai Fung No 2 entered Hong Kong waters, a police boat took over escort duties from a mainland vessel. Immigration officers boarded the boat to register the activists because one was from Macau and another from Shenzhen. 

Diaoyu activist Lo Hom-chau held back tears yesterday as he admitted he did not tell the crew of fishing boat Kai Fung 2 that their mission to land on the Diaoyu Island took on the feel of a do-or-die battle. For Lo - the owner of Kai Fung 2 that docked at the Star Ferry Pier in Tsim Sha Tsui yesterday following last week's triumphant landing - had set off with enough food, water and fuel for a one- way voyage only. "We ran short of water and fuel not long after we set sail," he said. "I need to apologize to my brothers, who knew nothing about this." But the activists who returned with him, as well as supporters lining the pier to show solidarity with the Diaoyu activists, cheered Lo instead, insisting it was not his fault. The mission to the Diaoyus - to boost China's claim to islands held by Japan - succeeded with the activists making the first landing in 16 years. "We thought this would be a voyage of no return and we would not have succeeded had we not been so determined," Lo said. He explained the reason for the one- way provisions - to avoid arousing Marine Police suspicions about the purpose of their trip. The seven activists on board - along with seven others, including two newsmen, who returned by plane earlier - were greeted by more than 500 supporters and well-wishers carrying bouquets. No government official was there to greet them. The boat arrived at Cheung Chau before 4am yesterday and officers from the Immigration Department sent medical staff to check on their health. Those on board then did some fishing to comply with the boat's license requirements, before sailing to Tsim Sha Tsui in the afternoon. Skipper Yeung Hong said he was overwhelmed with emotion when the boat almost made it to the islands. He cried for five minutes and was lost for words. "There were 11 Japanese vessels chasing us at that time, and their speed was four times that of our boat," he said. "It not only took a miracle for us to land, it also took brotherhood." He attributed the landing to their preparation and mistakes made by Japanese coastguards. He said the Japanese should not have used big vessels to chase the Kai Fung 2, which is small and agile. Lo revealed that when the Marine Police went on board yesterday, they said the force reserved the right to prosecute the activists. Chinese People's Political Consultative Conference delegate Lew Mon-hung turned up and was warmly greeted by the activists. Lew has donated HK$4 million to the Diaoyu activist group over a period of six years, including HK$1 million last year. There was a commotion when Democratic Alliance for the Betterment and Progress of Hong Kong vice chairman Lau Kong-wah arrived. He stressed he was there to congratulate the activists and not to get media exposure ahead of the September 9 Legislative Council election. But his response failed to stop some activists from shouting "shame on the DAB."

Survivors of the 2010 Manila hostage crisis and members of the victims’ families gather outside the Philippine consulate to demand an apology. Survivors of the 2010 Manila hostage crisis and members of the victims’ families who presented a petition to the Philippines Consul General on Thursday morning came away disappointed. The group, which is seeking apologies and compensation from the Philippine government, as well as demanding that those officials concerned be held accountable, said Consul General Noel Servigon promised nothing other than merely conveying their message to the country. They said there had been no progress by the Philippine government to take follow-up action on the bloodbath, in which eight people died. The Hong Kong tourists and their tour guide were shot dead by sacked policeman Rolando Mendoza, who hijacked their tour bus. Tse Chi-kin, Tse Chi-hang and his wife, brothers of slain tour guide Masa Tse Ting-chunn; survivors Lee Ying-chuen, Yik Siu-ling, whose lower jaw was shattered by a bullet; and Joe Chan Kwok-chu, who suffered hand injuries, were accompanied by James To Kun-sun, a candidate for one of the five so-called “super seats” in the upcoming elections. They observed a minute’s silence before submitting their petition letter to Servigon. The group had a one-hour meeting with the consul general, but were not happy with the outcome. “We are very disappointed and angry,” Tse Chi-hang said. “Why has the government made no response to our demands after one whole year?” Last year, the two Tse brothers and Lee flew to Manila twice, to meet lawyers and pay tribute to the dead. In Manila, they met Secretary for Justice Leila De Lima, who promised to keep them informed about progress on the government’s follow-up actions. But to date they had heard nothing from her. They had demanded the Philippine government apologise for the incident and provide some compensation for injured victims and the families of the dead. They also wanted the officials involved to be held accountable and called for improved safety measures for tourists. Tse Chi-kin said it seemed that what the concerned the Philippine government most was the country’s tourism industry, which was slowly recovering. He said the Hong Kong government should not lift the black travel alert – which was imposed on the country immediately after the killings – until the incident was resolved. The group had approached several human rights lawyers in the Philippines over the past two years, but found none willing to take up their case. He suspected political pressure was to blame. On Friday the group will meet Secretary for Security Lai Tung-kwok and Office of the Chief Executive director Edward Yau Tang-wah to appeal for government’s support. Tse Chi-kin said Chief Executive Leung Chun-ying had so far refused to commit to meeting the victims’ families. Other candidates standing for the super seats are Lau Kong-wah, Frederick Fung Kin-kee, Albert Ho Chun-yan, Starry Lee Wai-king, Chan Yuen-han and Pamela Peck Wan-kam.

 China*:  Aug 25 2012

China has tightened visa rules for visitors, and now requires a letter of invitation and proof of hotel reservations. Travelers applying for tourist visas must submit a letter from an "authorized tourism unit," company or person inviting them to China, along with a photocopy of their round-trip ticket and hotel reservation, according to rules posted on the Chinese embassy's website in the United States. The rule changes come as authorities scrutinize the status of foreigners in the country and clamp down on people entering China illegally. The World Tourism Organization has predicted that China may become the world's biggest destination for tourists by 2015. "If the new visa rules are strictly implemented, the latest requirements could have an impact on the number of foreign tourists" and revenue among travel agencies, said Zhang Lu, a Shanghai-based analyst at Capital Securities. China International Travel Service, the country's biggest tourism company by market value, will "certainly be affected," she said. China's embassies and consulates in countries including Japan, Thailand and New Zealand also posted the new rules on their websites. The mainland overtook Spain in 2010 to become the world's third-biggest tourist draw, with 55.7 million visitors that year. It lies behind only France and the United States, according to data from the World Bank.

Mohammed Mursi, Egypt’s first freely elected civilian and Islamist head of state. Egypt’s new president, Mohammed Mursi, will make his first official visit to Beijing next week, China’s foreign ministry said. Mursi, Egypt’s first freely elected civilian and Islamist head of state, took over on June 30 after popular revolts last year toppled long-time leader Hosni Mubarak. “This will be President Mursi’s first visit to China since taking office, and China attaches great importance to it,” foreign ministry spokesman Hong Lei said in a statement late on Wednesday. China and Egypt will sign co-operation agreements and discuss regional and international issues of mutual interest, he said, without giving details. Trade between the two countries totaled US$8.8 billion last year, up 40 per cent from 2008, according to the Ministry of Commerce. Mursi will attend the UN General Assembly session in New York on September 23, then visit senior US officials in Washington, Egyptian state media on Wednesday quoted his spokesperson as saying.

Beijing called on Washington to stop "stoking tension" over the disputed Diaoyu Islands yesterday as the US and Japan began a month-long military drill. Japanese officials stressed that the drill was a routine exercise, but mainland media suggested it was aimed at containing China in the wake of recent disputes over the eight uninhabited islets, known as the Senkaku Islands in Japan. Xinhua said in a commentary yesterday that the drill in the western Pacific served no purpose and risked aggravating Sino-Japanese relations and jeopardising future efforts for a peaceful settlement of territorial disputes. "The move also gives the lie to Washington's alleged neutral stance towards China-Japan disputes and gives birth to more suspicion over the true intentions of the United States in the Asia-Pacific," the commentary said. It said the drill entailed strategies for taking back islands occupied by enemy troops. A People's Liberation Army delegation led by Deputy Chief of General Staff Cai Yingting left for an official visit to the US on Monday. Other mainland media ran reports of the drill, citing Japan's Sankei Shimbun, which quoted a Japanese defence official as saying that the war games were designed with China in mind. However, a Japanese Ministry of Defence spokesman dismissed suggestions that the drills, being carried out on Guam and Tinian Island, 2,000 kilometres away in the western Pacific, were anything other than regularly scheduled exercises. "These are simulations that are never aimed at fighting a certain country," said the spokesman, Takaki Ono. Professor Hiroyasu Akutsu, from Japan's National Institute of Defence Studies, said the exercises were planned months ago and were not connected to territorial disputes. Antony Wong Dong, a Macau-based military affairs commentator, said the timing of the drills and the recent territorial tensions were coincidental. "But the way the drills are based on a scenario of taking back invaded islands still sends a message that they are targeted at China," he said. Meanwhile, Taiwan's president, Ma Ying-jeou, said he would not risk harming ties with Japan by joining with Beijing to claim the Diaoyus. He said all parties should exercise restraint and resolve disputes peacefully.

A visit to America by a rising star in the People's Liberation Army, amid increased tensions between China and its neighbours over territorial disputes in the East China and South China seas, is likely to herald his further promotion. Lieutenant General Cai Yingting, one of six deputy chiefs of general staff, began his tour on Monday, Xinhua said. It is the second high-ranking visit to the United States by PLA top brass in recent months, following a visit by Defence Minister General Liang Guanglie, a member of the Central Military Commission (CMC), in early May. China Daily said the delegation Cai heads would visit the US army base at Fort Hood, Texas, and other military facilities. The tour is being seen as a prelude to the further promotion of Cai, 58, following the Communist Party's 18th national congress later this year. Two lieutenant generals who accompanied Cai are viewed as strong contenders to become commanders of one of the seven military commands in a reshuffle expected after the party congress. The two men are Wang Ning, the 57-year-old chief of staff of the Beijing military command, and Jia Xiaowei, the 59-year-old chief of staff of the Guangzhou command. Although Cai is the least experienced of the PLA's deputy chiefs of general staff, he is the favourite to become first deputy chief of the general staff after the party congress. General Zhang Qinsheng, 64, the first deputy chief of general staff, is likely to retire this year. He reportedly vented his anger in front of President Hu Jintao, the CMC chairman, at a Lunar New Year banquet attended by many top officers. Zhang, who was once tipped to become defence minister, is said to have been drunk. He is believed to have been upset at not being among the PLA officers elected to the party's new central committee. General Hou Shusen, 61, a deputy chief of general staff, is tipped to become head of the PLA's General Logistics Department, which would also secure him a seat on the CMC. The other deputy chiefs of general staff - Lieutenant General Wei Fenghe, 58, Admiral Sun Jianguo, 60, and General Ma Xiaotian, 63. Wei is tipped to be named head of the Second Artillery Corps - the PLA's strategic missile force - Sun head of the navy, and Ma head of the air force after the party congress. General Zhang Youxia, 62, commander of the Shenyang military command, is the favourite to succeed 71-year-old General Chen Bingde as chief of general staff after the party congress. But General Fang Fenghui, 61, commander of the Beijing military command, is also seen as a contender for the job. Cai was chief of staff of the Nanjing military command before being promoted to deputy chief of general staff in July last year. He joined the PLA in 1970, and served in the Nanjing military command for more than three decades. He was secretary to General Zhang Wannian, a CMC vice-chairman, in Beijing from 1996 to 2003, the year after Zhang retired.

Chinese celebrate Qixi Festival in various ways - People across China celebrate the Qixi Festival, or Chinese Valentine's Day, in various ways.

Hong Kong*:  Aug 24 2012 

Diaoyu activists return as heroes - Last 7 members of islands' mission come home to flowers and cheering - When the fishing boat Kai Fung No 2 drew alongside the public pier at Hong Kong's Tsim Sha Tsui on Wednesday, a crowd of supporters erupted in cheers. On board were seven activists from the group of 14 Chinese who sailed to the Diaoyu Islands to assert China's sovereignty. Bouquets and floral wreathes were given to the seven as they set foot on the pier. Among the enthusiastic welcoming crowd were the other seven members of the mission who flew back to Hong Kong last week. Activist Henry Wong Fah-man is greeted by supporters in Hong Kong after returning from the Diaoyu Islands on the fishing vessel Kai Fung No 2 on Wednesday. The boat entered Hong Kong waters around 8 pm on Tuesday after four and half days at sea on a journey slowed by mechanical problems. It tied up briefly at Cheung Chau, where four crew members were to reunite with family members on Wednesday morning at the end of their 10-day ordeal. The group of 14 sailed for the Diaoyu Islands on Aug 12. They managed to evade a Japanese attempt to block their passage. Five members of the mission landed on the island on Aug 15 and flew the Chinese flag, shouting "defend China's territory", and "Japan get out of the Diaoyu Islands". After negotiations between the two countries, seven members of the group flew back to Hong Kong on Aug 17 while the rest of the group decided to sail back with the fishing boat. The owner of the boat, Lo Hom-chau, attributed the trip's success to the activists' determination that there would be "no turning back" once they started the voyage. "Japanese patrol ships were shooting water cannons at us and ramming into our boat, which caused it to take on water and everything on the boat was scattered," Lo said. Lo expressed his regrets to his companions that he had prepared food for only two days and half the gasoline oil needed. Lo, who stayed on the boat during mission, said he hoped that one day he could set foot on the island. Lo also thanked the public for its support in the "defending of Diaoyu Islands". A crew member, Cheung Kam-moon, who took his two sons on the voyage, said the hull of the ship was damaged when it was hit by the Japanese vessels, and the handrail on the deck and the glass of the cabin were also struck. "Luckily, the bottom of the ship is not damaged. The boat still needs a thorough check," said Cheung. Still, Cheung said he would go to the islands again if given another chance. Cheung's daughter, who didn't know her father was the one steering the boat to the island until Cheung appeared on TV, said she would support Cheung if he insists on going to the island again, but she doesn't want him get hurt. The captain of the vessel, Yeung Hong, described the mission as "successful", saying he is very happy to be back and didn't expect so many people to welcome the group home. Yeung said the trip was a victory of strategy and tactics, including taking advantage of the mishaps of Japan Coast Guard patrol ships. Yeung said when he returned to the ship after placing the Chinese flag on the island, he cried for five minutes out of joy and pride. Yeung said he is considering writing a travel log about the 10-day trip and will think about making the log public. After leaving the pier, the group went to celebrate, mission accomplished. Charles Lo Chung-cheon, one of the seven activists who flew back to Hong Kong, said on a radio program that the group had brought three stones from the island but lost them when they arrived at Hong Kong International Airport. One of the stones was to have been given to the Hong Kong Museum of History. Lo asked that anyone who may have found a red plastic bag with three stones inside return it. In another move, activists in Taiwan said on Wednesday they are preparing to build a temple of a Taoist sea goddess on the Diaoyu Islands. "We have started to raise funds to build a temple for Mazu on the Diaoyu Islands, so the goddess can protect the safety of our fishermen and bless their work," said Tony Huang. He said a key religious ritual needed to set up the temple has already been completed. Taiwan activists are also planning to sail to the disputed islands again, even though they were forced to abort a plan last week after failing to hire a ship, he said. However, a senior Japanese police officer said on Tuesday the Japanese police will sue any Chinese citizens landing on the Diaoyu Islands in the future, without letting them easily leave Japan as the Chinese activists did this time. Japan's coast guard chief said on Tuesday that Japan will never allow Chinese citizens to land on the Diaoyu Islands "no matter what happens". In another move, the Japanese government on Wednesday accepted a revised application from Tokyo prefectural government to land on the Diaoyu Islands on Aug 29, without announcing whether it will approve the plan. Zhou Yongsheng, an expert on Japanese studies at China Foreign Affairs University, said Chinese citizens who try to land on the Diaoyu Islands in the future will face much tougher moves from Japan than this time. "But we have seen that activists from Taiwan are making every preparation," Zhou said. He said Taiwan's leader Ma Ying-jeou is trying to contain the situation, "but he also has to respect public opinion". Still, the professor did not foresee military conflicts in the region in the near future.

Taiwan residents without mainland travel permits will be able to register online to visit Hong Kong at no cost from next month, the Immigration Department announced yesterday. The new permits, which the department says will boost economic and culture exchanges, will be valid for two months, allowing visitors two entries to the city with a stay up to 30 days. "The online registration system is an additional facilitation measure on top of the existing entry arrangements," said Raymond Yeung Chi-yan, who oversees visa control policies for the department. "We believe it will further enhance convenience for Taiwan visitors and contribute to Hong Kong-Taiwan exchange." About 2.19 million Taiwan residents visited the city last year, down from 2.23 million in 2010, according to the immigration department. A fifth of them did not have mainland travel permits. Plans for such a policy were first outlined last year after the second meeting between the city's Hong Kong-Taiwan Economic and Cultural Co-operation and Promotion Council (ECCPC) and its Taiwanese counterpart. At present, those without mainland travel permits need to apply for Hong Kong visas through either travel agencies or the Immigration Department. The three existing visas cost between HK$50 and HK$650. To register for the new permit, applicants have to log onto the GovHK website and fill out the online form, a process that Yeung said should take roughly 10 minutes to complete. Results of the application should be displayed instantly. Then, applicants must print out the notification slip on an A4-size sheet of paper and present it to immigration authorities upon arrival. Some restrictions apply. Applicants must be either native-born Taiwan residents of Chinese descent or have entered Hong Kong in the past as Taiwanese residents. They must also not possess travel documents issued by authorities other than Taiwan. The new policy was welcomed by airlines, which stand to profit from any increase in travel between Hong Kong and Taiwan. "There is already a strong market between the two places," said Rupert Hogg, Cathay Pacific (SEHK: 0293)'s director of sales and marketing. "And now it will be even easier for Taiwanese visitors to come and spend time with friends and relatives in Hong Kong."

Rock's original Rocket Man Elton John will blast into Hong Kong in December on a tour marking the 40th anniversary of one of his most famous hits. The flamboyant star will touch down on December 4 for a one-off show at the Convention and Exhibition Centre in Wan Chai, marking four decades since he released Rocket Man (I Think It's Going To Be A Long Long Time), which told the story of a Mars-bound astronaut's feelings on leaving his family. It will be the third time John, awarded a knighthood by Britain's Queen Elizabeth in 1998, has played Hong Kong - although he is probably best remembered in the city for a gig that never happened: plans for an open-air show at Hong Kong Stadium to mark the handover in 1997 were scuppered when the authorities decided it would be too noisy. Before the plug was pulled, there were even suggestions that the audience would have to listen to the music through headphones. It was revealed in March that Fred Li Wah-ming, a Democratic Party lawmaker and a member of the committee that sought to bring the singer to the city, buried an Elton John CD in a time capsule to mark the end of the Urban Council in 1997 and serve as a reminder of the cancelled show. John finally made it to the city in 2004 and returned for a second gig in 2008. The musician, born Reg Dwight, boasts 35 gold- and 25 platinum-selling albums as well as 29 consecutive Top 40 hits in the United States. John has sold more than 250 million records globally. The 1997 version of his 1973 single Candle in the Wind sold more than 37 million copies and holds the record for the biggest selling single of all time. John updated the lyrics of his original hit, a tribute to Marilyn Monroe, to pay tribute to his friend Princess Diana, who died that year. Tickets for the December gig go on sale from August 23 through HK Ticketing's venue box offices, K11 Select and Tom Lee outlets. Prices range from HK$488 to HK$1,888.

The Securities and Futures Commission on Wednesday reprimanded Merrill Lynch (Asia Pacific) and fined it HK$3.5 million for failing to take adequate steps to handle fraud complaints by 11 clients in 2008. The watchdog said that when investigating each complaint, the US investment bank failed to “fully investigate all the relevant circumstances, leading to some complaints being incorrectly rejected”. It said the firm breached the code of conduct on handling complaints. The complaints were centred on a fraud committed by Joyce Hsu Ming-mei, a former licensed representative of Merrill Lynch. The clients complained to Merrill Lynch that Hsu: misrepresented certain investment products to them as principal guaranteed when they were not; conducted unauthorised transactions in their accounts; conducted unauthorised loan drawdowns in their accounts; conducted unauthorised fund transfers in their accounts; and provided false account statements. Hsu was subsequently convicted of 20 counts of theft and 12 counts of accessing computer with dishonest intent. She was sentenced to 42 months in jail in February last year. The principal amount of products invested by the 11 clients is about HK$56.38 million (US$7.23 million). Hsu also handled another 37 client accounts. The SFC said it acknowledged Merrill Lynch’s co-operation and noted that it had strengthened its internal control systems on complaints handling. Merrill Lynch has compensated nine of the 11 clients and is working to resolve the complaints of the remaining two. It has also agreed to engage an independent law firm and auditor to review all client accounts handled by Hsu, assess the amount of loss, if any, as a result of Hsu’s misconduct, and to make compensation. In May last year, the investment bank was reprimanded by the SFC and fined HK$3 million for inadequate systems in relation to the sale of two index-linked notes to 72 clients in 2007.

Executive Council member Anna Wu Hung-yuk will chair the committee that will study ways to introduce the moral and national education curriculum in schools. The Education Bureau on Wednesday formed a committee to study ways to introduce the moral and national education curriculum in schools, amid opposition to the subject by parents and students. Executive Council member and chairwoman of the Mandatory Provident Fund Schemes Authority Anna Wu Hung-yuk will chair the committee. Professor Lee Chack-fan of the University of Hong Kong, who designed the curriculum, was appointed vice-chairman. In a statement on Wednesday, the Education Bureau said the committee comprised “wide participation from the community” and its formation was to allay public concern over the new course. The committee will provide comments to the bureau on the implementation of the controversial new subject during its three-year “initiation period”. “We’ve discussed the difficulties regarding the implementation of the subject, such as teaching materials and timetables,” said Wu. “We hope to see more diversified textbooks in future.” The committee’s 16 members include school heads, parent representatives, teachers, an academic and former police commissioner Dick Lee Ming-kwai. The list also includes strong opponents of the curriculum, including convener of student group Scholarism Joshua Wong Chi-fung and Eva Chan Sik-chee, a co-founder of the Parents Concern Group on National Education, and representatives of the Professional Teachers’ Union. Wong and Chan earlier said they would not join the committee. The two groups have been calling on the government to scrap plans to introduce the subject due to concerns that it could turn into a tool for indoctrination towards Beijing. After the committee’s first meeting on Wednesday, Secretary for Education Eddie Ng Hak-kim said the committee would only study how to introduce the subject. He dismissed the need for it to consider whether the course should be cancelled. “The power of the committee is confined to matters related to implementing the curriculum during the initiation period,” Ng said. Wu pledged the committee would listen to both supporting and opposing views from representatives of teachers, parents and students to ensure the course was introduced smoothly. “Our work will be to look at ways to overcome difficulty in implementing the curriculum during the initiation period,” she said. She added there would not be restrictions on how teachers should teach the subject and they could include sensitive topics such as the Tiananmen Square crackdown. Under the government’s plan, primary schools can decide for themselves whether to start teaching national education when the school term begins in September, while secondary schools will be offered the choice next year. Few schools have indicated they will follow the government’s plan. Officials say all schools must start teaching the subject by 2016 after a three-year preparation period, or the so-called “initiation period”. It will be a compulsory element of the curriculum for primary schools in the next year/2014 school year and in secondary schools in the 2015/16 school year. Officials intend the subject to instil national pride and enhance students’ knowledge of China, but opponents fear the subject could be turned into a tool for indoctrination. Worries include the inclusion of reference materials published by pro-Beijing bodies that have been found to be excessively biased towards a Communist Party view. Critics, led by a teacher’s union and student groups, said that in their surveys most did not agree national education must be compulsory for all schools. The same topics could be taught through other subjects, such as history. A survey by the Professional Teachers’ Union last year of 2,000 teachers found 70 per cent opposed compulsory national education.

A walkway between Sun Yat Sen Memorial Park and Wilmer Street at Sai Ying Pun, where an elevator is planned. Chief Executive Leung Chun-ying says the government will spend HK$1 billion a year turning Hong Kong into a "city of lifts" to remove barriers for elderly and disabled people. But Leung's critics say the plan for 230 new outdoor lifts - serving locations such as footbridges and steep slopes - is an attempt to court popularity and divert attention from the scandals that have beset the new government in its first two months. The chief executive made the announcement on a visit to a community centre in Sheung Wan yesterday. While the first 10 lifts are already under construction, the timetable for the others remains vague. "Hong Kong is a gradually ageing society," Leung told his audience of elderly people. "So the demand for barrier-free facilities is growing." Leung said the government's previous policy of installing ramps rather than lifts to counter steep slopes had prompted complaints. He said anyone who wanted a lift in a particular location should contact the government's hotline on 1823. Transport and housing minister Professor Anthony Cheung Bing-leung, who joined Leung for the announcement, said he hoped property companies, including the MTR Corporation (SEHK: 0066) and The Link Reit (SEHK: 0823, announcements, news) , which runs car parks and shopping facilities on public housing estates, would "co-operate" with the plans. Leung said the government would spend HK$100 million on planning in the next year and then HK$1 billion on building works each year. He did not say how long the scheme would run or how many lifts would be built each year. The government will seek the money from the Legislative Council as a block grant, rather than applying for funds for each project. Leung acknowledged that the price was high but said: "The sum of this social investment is relatively big, but I believe it'll be welcomed by the aged, the physically disabled and children." The lift plan is seen as one of the "10 livelihood projects" promised by Chief Secretary Carrie Lam Cheng Yuet-ngor, who is co-ordinating the scheme. Political scientist Ivan Choy Chi-keung, of Chinese University, said Leung's decision to make the high-profile announcement himself rather than leaving it to the official responsible was an attempt to bolster his flagging popularity. "Such schemes should have been announced by the responsible officials. [Leung's] strategy now is to stabilise his core support from the aged," Choy said. Choy said the lack of detail in Leung's announcement hinted at a problem in the chief executive's style of government. "Whenever he's got a brilliant idea, he can't wait to get it out." Fermi Wong Wai-fun, executive director of social rights group Unison, welcomed the announcement, but said the barriers facing disabled people were not all physical. "A more serious barrier concerns culture and perceptions," Wong said. "I can't see [Leung] has done anything yet to help tackle these invisible barriers."

Activists who returned from the Diaoyu Islands docked at Star Ferry pier on Wednesday and were greeted by throngs of supporters. Wellwishers greet the crew members of the Kai Fung No 2 as the ship arrives in Tsim Sha Tsui from the Diaoyu Islands on Wednesday. The Kai Fung No 2 – carrying Diaoyu Island activists Yeung Hong, Wong Fah-man, Lo Chau and four other crew members – docked at the Star Ferry pier at Tsim Sha Tsui at just after 2pm on Wednesday. It was greeted with a rousing welcome from the assembled crowds. The vessel arrived in Hong Kong waters on Tuesday night, and on Wednesday morning the captain, Yeung, said he was excited and relieved to be back home safely. Speaking from Cheung Chau, he said: “I feel like I have fulfilled my responsibility.” The Kai Fung No 2, which took 14 people on last week’s expedition to assert China’s sovereignty over the disputed Diaoyu Islands, set sail from Japan on Saturday. The return voyage took longer than expected because of damage to the boat’s engine, but the activists were in high spirits as they returned home on Tuesday night. Their families and friends were overjoyed to greet them at Cheung Chau pier. The wife of crew member Cheung Kam-moon expressed relief when she saw her husband and sons wave to her as they approached the pier aboard the boat. She said the family would go out to dinner to celebrate their safe return. However before sailing for TST, the activists set up fishing nets in Cheung Chau to comply with the boat’s license as a fishing vessel. Yeung said he was not expecting Chief Executive Leung Chun-ying or any government representatives to welcome them, but the group would be happy to see all their supporters. Leung sidestepped questions on Tuesday about whether he would attend ceremonies to greet the group and a source familiar with the situation said no government officials would be there. One reason for this is that the government did not authorise the Kai Fung No 2 to carry passengers from Hong Kong for any purpose other than fishing. Hong Kong police attempted in vain to prevent its departure. Leung said whether the activists would be able to repeat their trip to the Diaoyus would be decided “according to the law”. Seven other passengers – two journalists and five of the activists who carried Beijing and Taiwanese flags onto the disputed islands – flew back on Saturday from the Japanese island of Okinawa. Japan also claims sovereignty of the island chain, known in Japan as the Senkakus.

 China*:  Aug 24 2012

The unexpected visit by a senior Chinese military official to the United States is widely seen as being linked with territorial tensions in Northeast Asia, and analysts said the Diaoyu Islands issue would be discussed by the two militaries. Cai Yingting, deputy chief of the general staff of the People's Liberation Army, left Beijing on Monday for an official visit to the US. This is the second visit by a senior Chinese military official to the US in three months. Defense Minister Liang Guanglie paid a six-day visit to the country in May. Neither China nor the US announced Cai's visit in advance. He is widely believed to be talking to Washington about the escalating tension between China and Japan over the islands, to which Japan also lays claim, although it is indisputable Chinese territory. Cai's entourage includes several chiefs of Chinese military areas and Chen Shoumin, deputy head of the strategic planning department of the PLA General Staff Headquarters. This group is likely to work on more specific and transparent development plans for the two militaries. The South China Sea and the Diaoyu Islands are issues of common concern at the top of the discussion agenda, said Zhai Dequan, deputy secretary-general of the China Arms Control and Disarmament Association. On Tuesday, Washington and Japan launched a 37-day military drill in the western Pacific Ocean. An official from the Japanese Defense Ministry indicated that the drill was devised to "take back" the Diaoyu Islands, while observers said it showed Washington's military support for its ally Tokyo over the islands. Without the US' strategic pivot to the Asia-Pacific region, Japan would not have created so much friction over the islands, Peng Guangqian, a Beijing-based military analyst, told Xinhua News Agency. China is likely to raise the islands issue during Cai's visit, hoping that Washington's moves in northeast Asia will not target any third party and will instead strengthen regional stability, said Lu Yin, a researcher with the Strategic Research Institute at the National Defense University of the PLA. "But more importantly, I believe both sides will definitely discuss three chronic obstacles to ties between the two militaries: US arms sales to Taiwan, military surveillance close to China's coast and discriminatory regulations prohibiting certain military exchanges with China," she said. "Without solving these issues, bilateral military ties can hardly be boosted further." The development of military relations lags far behind the overall relations between the two countries, said Ni Feng, a researcher of American Studies at the Chinese Academy of Social Sciences, adding that Cai's trip could reduce mistrust between both militaries. The PLA delegation is scheduled to visit the US army base at Fort Hood, Texas, and bases in Missouri and Hawaii, followed by the Pentagon, the Hong Kong-based Phoenix TV cited the US Department of Defense as saying on Wednesday.

Apple and Foxconn have improved working conditions at Chinese factories that make most of the world’s iPads and iPhones, according to auditors the firms enlisted to monitor the process, but the toughest tasks still lie ahead. The Fair Labor Association (FLA) said on Tuesday that local labour laws require the companies – which have come under fire over conditions at the plants – to reduce hours by almost a third by next year for the hundreds of thousands working in Foxconn plants across the south. Foxconn said on Wednesday it would continue to cut overtime to less than nine hours a week from the current 20, even though that could raise labour costs while also making it difficult to attract workers who often seek jobs with overtime so they can maximise their pay. “It is a challenge. When we reduce overtime it means we need to hire more people and implement more automation, more investment on robotic engineering. More workers also mean more dormitories and recreational facilities; it takes time,” said Louis Woo, special assistant to the chief executive of Foxconn. “But I expect more loyalty from workers as a result, and then we can save more costs on recruitment and retainment,” he said on Wednesday. “Yield rates will also improve. Efficiency in terms of productivity, yield gain, retention and lower turnover rates should be able to improve next year.” Earlier this year, the FLA – of which Apple is a member – found multiple violations of labour law, including extreme hours, after launching one of the largest investigations ever conducted of an American company’s operations outside the United States. Apple, the world’s most valuable company, and Foxconn – the trading name of Taiwan’s Hon Hai Precision Industry whose clients also include Dell, Sony and Hewlett-Packard – agreed to slash overtime, improve safety, hire new workers and upgrade dormitories. Woo said Foxconn not only wants to do “the right thing” for its 1 million employees, it also wants to serve as a model for other companies. In a report tracking the progress of those commitments, the FLA said it had verified that agreed-upon changes had been instituted and that Apple was trying to hold its partner, the world’s largest contract manufacturer, accountable. Auret van Heerden, president and chief executive of the FLA, said in an interview that Foxconn faces a challenge from workers’ expectations. “A lot of workers have clearly come to Shenzhen to make as much money as they can in as short a period as they can, and overtime hours are very important in that calculation,” he said. “We are picking up concerns now on the microblogs about what’s likely to happen as hours gets changed, and whether their incomes will be shaved as well.” Many people would leave Foxcom if there is no overtime, according to a post by “Shenzhen MarS” on Weibo. Foxconn’s Woo said the company has been constantly communicating with workers and telling them about the importance of the quality of life and health. “This is the thing we need to continue to communicate with workers, especially young migrant workers, that anyone who works more than a certain number of hours will feel tired and not well. If we can improve the work environment and benefits, they can enjoy their life better.” Global protests against Apple swelled after reports spread in 2010 about a string of suicides at Foxconn plants, blamed on harsh working conditions and alienation felt by migrant labourers, often from impoverished provinces, in a bustling metropolis like Shenzhen, which is home to two of the three factories the FLA inspected. Apple has tried to counter criticism that its products and profits are built on the backs of mistreated Chinese workers. The FLA’s progress report comes a day after Apple’s market value climbed past US$623 billion, surpassing the record set by Microsoft during the heyday of technology stocks in 1999. Protesters in the past year have kept up a small but regular presence at Apple events from iPad launches to shareholder meetings, holding up placards urging the corporation to make “ethical” devices. The latest report card on Apple-Foxconn comes after first findings and a timeline for improvements were announced in March, though some industry observers said the original agreement was not entirely independent because of close ties between the FLA and corporate members. Since that March audit, rights groups including China Labour Watch have conducted their own studies. The group said in a statement on Wednesday that Foxconn workers were still unhappy and urged other Apple suppliers to be scrutinized as well. “Workers have to complete the workload of 66 hours before within 60 hours now per week. As a result, the workers get lower wages but have to work much harder and they are not satisfied with the current situation,” it said. Apart from health and safety enhancements, Foxconn is offering up a few enhancements to employee morale. For instance, Van Heerden said it is increasingly giving workers a choice of accommodation, such as by providing an allowance for housing and food if the workers choose to live off-site. Foreign companies have long grappled with working conditions on the mainland, dubbed the world’s factory because of its low wages and efficient coastal transport and shipping infrastructure. In the 1990s, investigations targeted shoe and apparel maker Nike, which eventually agreed to institute changes. The FLA’s audit could have wider implications for foreign multinationals that enlist Chinese manufacturers. Foxconn alone is estimated to make half the world’s consumer electronics. Apple chief executive Tim Cook, who took over from the late co-founder Steve Jobs last year, has shown a willingness to tackle the criticism head-on. “We’ve been making steady progress in reducing excessive work hours throughout our supply chain. We track working hours weekly for over 700,000 workers and currently have 97 per cent compliance with the 60-hour maximum workweek specified in our code of conduct,” spokesman Steve Dowling said in a statement.

The 17th Dalian International Automotive Exhibition kicked off on Wednesday at the Dalian World Expo Center. Automakers from 12 countries and regions — including global top brands such as Bentley, Ferrari and Maserati — brought 1,200 cars to the five-day fair. Some automakers will be using the event to release new models to the northeastern market. Launched in 1996, the Dalian auto show sold more than 50,000 cars in the past 16 editions, a record figure in China. 

Despite tightening immigration rules in many destinations popular with Chinese immigrants, the number of applicants — who have growing wealth and a desire to live elsewhere — continues to rise. This year it has become even more difficult for many Chinese citizens to realize their immigration dreams, as most of their favorite destinations are adjusting immigration rules with higher qualification requirements and fewer openings. Canada announced in late June that it would temporarily suspend new applications to the Federal Skilled Worker Program and Federal Immigrant Investor Program, effective on July 1. The government is expected to accept applications again in January. Meanwhile, Quebec, a province of eastern Canada, has limited the maximum number of investor applications between March 21, 2012, and March 31, 2013, to 2,700. "This has been a heavy blow to new applicants, applicants being processed and the immigration intermediaries in China like ours," said Ding Wei, director of the Canadian immigration department at JJL Overseas Education, a Beijing-based education and immigration intermediary. According to Ding, many ongoing application cases in his company have stalled. "Applicants being processed have to wait longer, with a higher chance of being turned down," Ding told China Daily. Canada is not alone in having new immigration rules. Australia, for which China is the biggest source of immigrants, on July 1 introduced a new Skilled Migrant Selection Model, one of the biggest changes to the Australian immigration system in years. The new system will be less convenient for prospective immigrants to Australia. They will have to wait probably about six months to find out if they are allowed to make an application. According to Ma Jing, who is in charge of the Australian immigration department at JJL, the new model has higher requirements, including education, language ability and business experience. Because more detailed rules have yet to come out, "now is a transition period with fewer new applicants to Australia", Ma said. However, Ma is optimistic about a continued increase in the number of new applicants in the future. "Generally speaking, it has become more and more difficult to move to other countries with higher requirements, including investments, but Chinese people's wealth is also on the rise," Ma said. Ding said that people may turn to other countries such as the United States and some European countries instead of Canada, since not all news is bad news. The US on Aug 14 directed young illegal immigrants to fill out new forms and pay $465 if they wanted to apply under a new program that will let them avoid deportation and obtain a US work permit. Earlier this month, the US Congress agreed in principle to a three-year reauthorization of the EB-5 Regional Center Program, which grants residency permits to foreign investors, a program that is due to expire in September. Ding is not surprised: "The US knows well the benefits to the development of its regional economy and employment as a result of Chinese investors." In Europe, at the French Senate's Judicial Committee hearing on July 24, French Interior Minister Manuel Valls signaled that the new Socialist government of President Francois Hollande intended to make changes to French immigration law. Valls' plans would make it easier for foreign students to work in France after their graduation, said Daniel Kahn, founding partner of French law firm Kahn & Associes in Paris. Furthermore, if other measures are made regarding the residence and work permit authorization, the lives of foreign employees in France will be more stable, and they will be encouraged to settle in France for good, Kahn said. Kahn noted that the French government recognizes that non-EU students who have graduated from French universities are an asset to the French economy. "All companies established in France will benefit from this change in French immigration law," he said. Many Chinese students are studying in France. Some of them graduated from the most famous French business, commercial and engineering schools and institutes of political science. "They speak two or three languages and have a Sino-French cultural background," said Kahn. "The new immigration policy should enable many of them to find suitable and interesting positions in French companies and obtain the appropriate work permit." No matter how the rules are changed, people's wish to live elsewhere simply won't fade. Ma said that many of her clients have children who study abroad. "They feel it's a pity if their children spend years studying in a foreign country without obtaining citizenship there. So they apply for immigration, which can also help their children," Ma said. "People also want to have a life with less pressure and to enjoy a better pension when they grow old after emigrating to countries like Australia," Ma said. As for businessmen who travel around the world from time to time, a foreign passport can mean less time waiting for a visa, compared with a Chinese passport, Ma said. Yao Lei, 29, a senior system administrator on global infrastructure in the IT industry at a US company in Beijing, will soon join the middle-class force with a good salary. But he has found new momentum for life after making a decision to emigrate to the US. He plans to acquire permanent residence under the EB-1A category, which is for immigrants who can demonstrate extraordinary ability, with the help of his US-based company. He has found that his specialty is increasingly in demand, even in the US. "I think I can get a higher salary, a life with less pressure and easier access to educational opportunities for my children in the future," Yao said.

South Korea rejects proposal in island row - Tokyo's bid to take dispute to court 'not worth consideration' Tokyo's proposal to take the territorial dispute over islands claimed by both Japan and South Korea to the International Court of Justice was dismissed by Seoul on Tuesday. South Korea's Public Administration and Security Minister Maeng Hyung-kyu (third from left), Governor of North Gyeongsang Province Kim Kwan-yong (fourth from right) and other officials pose during an unveiling ceremony for a new monument on the east island of a set of remote islands called Dokdo in South Korea and Takeshima in Japan, east of Seoul on Sunday. South Korean Foreign Minister Kim Sung-hwan rejected Tokyo's proposal of jointly referring the issue of the South Korean controlled islets of Dokdo, known as Takeshima in Japan, to the Hague-based court, saying it was "not worth consideration", according to the Seoul-based Yonhap News Agency. Tokyo, which also lays claim to Dokdo, made the diplomatic proposal formally to Seoul on Tuesday, a move widely regarded as a reaction to South Korean President Lee Myung-bak's Aug 10 visit to Dokdo. On Sunday, South Korea unveiled a monument on Dokdo to commemorate the visit, triggering further protests in Japan. Dokdo is a Korean territory historically, geographically and under international laws, Kim said. South Korea has effectively controlled the island since it gained independence from Japan's colonization in 1945. Tokyo's increasingly loud competing claims over the islands and South Korea's presidential election at the end of this year have prompted Seoul to be firmer with its claim, said Wang Sheng, an expert on the Korean Peninsula studies at Northeast China's Jilin University. After the election, South Korean leaders may take a different stance on the issue, said Wang, suggesting that the remarks of Park Geun-hye, the newly nominated presidential candidate for South Korea's conservative ruling party may be mainly to woo voters by taking a position distinct of that of her pro-Japan father, former president Park Chung-hee. "Seoul is unlikely to bring the case to any international body for fear that Tokyo will use Japan's ally, the United States, as leverage on this issue and put pressure on Seoul," he said. The Korea Herald newspaper warned on Monday that with public sentiment turning increasingly bitter, the protracted standoff may squeeze businesses in both countries, affect tourist numbers due to safety jitters and damage exports of Korean music and television. Japan on Tuesday suggested Tokyo might take the unusual step of extending the standoff with South Korea over Dokdo into the economic arena. Chief Cabinet Secretary Osamu Fujimura said Prime Minister Yoshihiko Noda told Japan's cabinet to consider additional measures to deal with the conflict, beyond usual diplomatic channels. Japan's economic standoff won't be fatal to South Korea or effective in solving the issue, because the two countries' economic ties are far less intertwined than those between China and South Korea, said Wang. "What Japan wants is to make Dokdo a disputed territory and referring the issue to the ICJ is met with such an intention," Kim said. Kim warned that South Korea would take "stern measures (against Japan)", if Tokyo continues to make an "unjustified" issue over Dokdo. The ICJ will not hear the case unless the two parties agree to the referral. Seoul has repeatedly dismissed Japan's proposal to take the matter to the court. This is the third such proposal following failed attempts in 1954 and 1962. Park also took a tough stance on Dokdo. Speaking after her nomination on Monday, Park called on Japan to resolve the territorial dispute by accepting South Korea's sovereignty. The only option for successfully managing a relationship in which both sides need each other is to "buck the lure of populism and resort to 'big think'", said Scott Snyder, a senior fellow on Korean studies at the Council on Foreign Relations in Washington. "Lee's visit may hold great emotional importance for those who are still focused on past historical injustices between South Korea and Japan, but it distracts from the central reality that ultimately must propel relations between the two countries," he wrote on the think tank's blog on Aug 15.

Hong Kong*:  Aug 23 2012 

Aggressive bidding by Cheung Kong (SEHK: 0001) for a Tsuen Wan site up for tender last week has signalled a turnaround in sentiment and triggered new confidence among home sellers. Cheung Kong won the tender for the Tsuen Wan TW5 Bayside commercial and residential site above the Tsuen Wan West MTR station with a bid of HK$9.63 billion, or HK$4,308 per square foot. That was 13.4 per cent higher than the top market expectation of an HK$8.49 billion price tag, and 37 per cent higher than the price Chinachem Group paid in January this year for a nearby site without sea views. The result stunned analysts, who had noted the poor response when the site was first offered late last year. At the time MTR Corp withdrew the offer as bids were too low. "The market outlook has clearly changed compared with eight months ago," Joyce Kwock , an analyst from Swiss investment bank Credit Suisse, said. "Previously, developers were cautious about land acquisition as they were unsure who would be the new chief executive and what would be the direction of new housing policies. But now the picture is clearer," Kwock said she believed Chief Executive Leung Chun-ying would not target the primary market of private housing, and this had eased the concerns of developers. "But he will build more public and subsidised housing since his target is to help first-time buyers, who are not potential buyers of new private housing," she said. Over recent months developers have been cautious in bidding for new sites, particularly large development plots. This led to several sites being sold for less-than-expected prices, notably the former North Point Estate residential site, which was sold to Sun Hung Kai Properties (SEHK: 0016) for HK$6.91 billion in July. Charles Chan Chiu-kwok , managing director at Savills Valuation and Professional Services, said he believed developers would now become more active as the uncertainty in the property market had cleared. "Sites were sold for cheaper prices previously as there was investment risk in the property market. Developers worried whether new housing policies would affect the market and this turned them conservative in making major investments and acquisitions," Chan said. Now the new chief executive has said he would not bring down the property market, it was clear the new government would try to solve the housing problem by increasing land supply, Chan said. "But it is impossible to increase land supply to a large degree in the short run, and since housing policy is unlikely to have a major change this has helped to restore developers' confidence in the market." Lee Wee Liat, head of property research at BNP Paribas Securities, echoed this view. "It was still a question eight months ago of who would be the new chief executive and what new housing policy would be," he said. "Now that housing policy has been clarified and it is clear the government's goal is not to bring down the market, prices have not dropped but have stayed at a high level. "If developers buy sites in such a market situation, they can still enjoy a good profit margin." Kwock estimated that Cheung Kong could enjoy a profit margin of 24 per cent from the Tsuen Wan Bayside project if units in its development could achieve a premium of about 16 per cent over the prices of nearby estates when they come to the market in the next five years. Lee said the new chief executive would not pursue an aggressive property market policy as his popularity was low. However that did not automatically imply that developers would become more aggressive in land acquisitions. "It depends on the quality of sites. Developers will remain conservative as there is plenty of land," he said. Nicholas Brooke, chairman of Professional Property Services, said developers had become more selective, driven partly by the increase in the number of large sites that have been or are being put on the market. "And also partly due to the fact that it is difficult to secure bank finance to fund land purchases in the current market and developers are essentially having to use their own money and hence the selectivity," he said. Professor Eddie Hui Chi-man, of Polytechnic University, agreed that developers would remain cautious. "The sites they bought this year will see units released for sales in two to three years' time. Interest rates would be in an up cycle at that time, and economic growth may remain slow. So their bidding will depend on the quality of sites," he said.

Plan to review HK interbank rate receives support - Fund managers and companies back Hibor assessment while bankers play down worries. Fund managers and listed companies have expressed support for a planned Hong Kong review of the local interbank rate setting to ascertain whether any manipulation is occurring. The Hong Kong Association of Banks has recently mandated the Treasury Markets Association to implement a full review of the city's version of the interbank rate setting, known as the Hong Kong interbank offered rate (Hibor). This came after Britain's Financial Services Authority ordered a review last week to reform the London interbank offered rate (Libor) in the wake of a rigging scandal at Barclays. Libor and Hibor reflect the cost of funding for banks as these are the rates at which they lend money to one another on the interbank market at tenors ranging from overnight to one year. The rates are also used to set prices for derivatives and other personal loans such as credit cards or mortgage loans. This is why the rigging scandal has shocked markets worldwide, as it may mean thousands of corporates, fund houses or investors may have been overcharged. "I agree that in view of what's happened to the interbank market, there is a need to rethink the use of Hibor as a reference rate," said Chan Tze-ching, senior adviser of the Bank of East Asia (SEHK: 0023). "However, I don't have any answer except more controls could be put in place to safeguard against manipulation." Some bank loans are priced using the prime rate - also called the best lending rate - which is set by individual banks. Chan said the prime rate could not be a replacement for Hibor or Libor. "While Libor is supposed to reflect market conditions, the prime rate is always an administered setting," he said. "In other words, Libor is objective as the rate at which funds are borrowed between banks, but the prime rate is subjective because in the absence of a banking cartel, individual banks can set prime rates at their own discretion without having to explain to anyone, as long as their customers accept." Chan said products such as mortgage loans and loans to small and medium-sized enterprises were suited to using the prime rate, but he did not think all products could be priced using the rate. Andrew Fung, executive director of Hang Seng Bank (SEHK: 0011, announcements, news) , supported a review of Hibor but said the local setting did not have the same problems as Libor. "Given what has happened in Libor, it is appropriate to make a health check and improve the fixing mechanism in response to market developments," Fung said. "However, there have been no particular issues regarding Hibor fixing as the Hong Kong dollar market is much smaller than Libor. The transaction prices are more transparent." Fund managers and brokers also supported a review to enhance the transparency of interbank rate setting. "What we have learned is that the level of transparency around setting rates needs to improve in the case of Libor and potential conflicts of interest need to be better addressed,'' said Mark Konyn, chief executive of Cathay Conning Asset Management. Hong Kong-listed companies said many corporate loans and bonds were based on an interest rate benchmarked on Libor or Hibor. That may mean companies are overpaying for their derivatives trading if the products were mistakenly priced on manipulated rates. "There can have a devastating societal effect if there has been malpractice in Libor fixing. Banks will have been overcharged and borrowers will have overpaid," said Kelvin Wong Tin-yau, chairman of the Hong Kong Institute of Directors. "And almost all derivatives using Libor as a benchmark will have had their prices misrepresented. "It is high time for banks to review the mechanism of Hibor fixing. This will ensure that both banks and borrowers participate in capital marketing in a perfectly competitive environment and in such a manner that the bank can only charge their cost of funds plus a margin, while the borrower is only obliged to pay what their underlying risk justifies." Wong said it was not ideal to use prime rates for borrowing by corporations as those are targeted towards consumer-related loans. "It is understandable that corporations should enjoy lower borrowing costs than individuals," he said. "Also, adjustments to prime occurs much less frequently than Hibor, which changes daily depending on market conditions."

Hong Kong conglomerate Hutchison Whampoa (SEHK: 0013) said on Tuesday it had ended a deal to regain control of Israel’s second largest mobile phone operator Partner Communications. The conglomerate said on its website that one of its units and a subsidiary of the Li Ka Shing Foundation had ended a deal to acquire a 75 per cent stake in Scailex from Suny Electronic. Scailex owns 44.5 per cent of Partner. According to Scailex, Hutchison cited several reasons for cancelling the deal, including a substantial decline in Partner’s financial results in the second quarter. “In addition, the buyers expressed concern that it would not be possible to complete the purchase of the company’s (Scailex) bonds according to the conditions of the partial purchase offer for the bonds given the adamant stance of the bondholders’ representatives against the offer,” Scailex said in a statement. Scailex has debts of US$760 million, including US$300 million owed to Hutchison, much of it from buying Partner. Scailex was seeking to repurchase about 50 per cent of its outstanding non-convertible bonds and the deal with Hutchison was conditional on the success of the bond buyback. The sale for US$125 million in cash, announced in June, would have put Hutchison back in charge of the telecoms company it founded in 1997 but sold to Israeli holding company Scailex in 2009 for US$1.38 billion. Since the sale, Israel’s mobile phone market has faced cut-throat competition partly from de-regulation that has put pressure on Partner’s earnings and share price. The Israeli government has forced mobile operators to slash fees they charge each other to connect calls and to scrap exit fines for customers. It also issued new licences to create more competition and lower prices. Hutchison sold its Partner stake for US$17.50 a share three years ago. The Nasdaq-listed shares closed at US$3.81 on Monday. The Hong Kong company had also agreed to extend repayment of the US$300 million loan it made to Scailex under the original deal by three years to April 2017. Scailex said it could not at this time assess the impact of the deal’s termination on its business, results and securities.

School heads stay neutral on national education boycott - The Association of the Heads of Secondary Schools sent an open letter to Education Secretary Eddie Ng Hak-kim last week urging the authorities to scrap the plan to introduce national education as an independent subject. Secondary school head teachers would maintain a neutral stance if their staff decided to boycott classes over the teaching of the new moral and national education subject, even if it increased their workload, the leader of the Hong Kong Association of the Heads of Secondary Schools said on Tuesday morning. However they could consider supporting such a move if the situation became urgent and they felt “the time was right”. Yuen Pong-yiu, head of the group which represents the head teachers of about 400 of the city’s public secondary schools, added that more deliberation was required for such decision to be made, and that there was no urgency for a strike. The controversy over the introduction of the moral and national education subject to all public schools in Hong Kong continues only days before the new term begins in September. While the government suggested all primary schools start teaching the subject next month, critics insisted that neither teachers nor teaching materials were ready, and that the government had not allayed suspicions that the new subject was a tool for indoctrination towards Beijing. Officials said all schools must start teaching the subject by 2016 after a suitable preparation period. Speaking on a radio programme on Tuesday, Yuen said schools should be able to make their own choices on whether to allocate specific class time to the subject, or teach it during extra-curricular activities. He said helping students to learn to love their country by immersing them in an environment that triggered a sense of belonging was more effective than teaching them in a classroom. Such a sense could be instilled by activities such as field trips to mainland “villages where they see there aren’t even lights”, he said. He said it was not the right time for the association to support a bid by the leading teachers’ group, the Hong Kong Professional Teachers’ Union, to mobilise teachers to join a citywide class boycott when the new school term began. He said school heads should remain neutral if future developments proved that industrial action was needed. “We have never thought about the trouble and the workload associated with a boycott,” he said. “The key point is whether there is urgency. If the situation gets worse, we will possibly support it, although I don’t think there is such urgency now.” The association sent an open letter to Education Secretary Eddie Ng Hak-kim last week urging the authorities to scrap the plan to introduce national education as an independent subject. Meanwhile, Yuen said that the government should allow sensitive teaching materials, such as those on the June 4 event, to be uploaded to an official platform amid concerns the government is filtering out taboo subjects from the curriculum. He said that whether the subject amounted to “brainwashing” would depend on the materials and the teaching methods.

The Order of Blue Sky and White Sun medal is expected to fetch HK$3 million to HK$5 million. A medal awarded to late Taiwanese leader Chiang Kai-shek is going up for auction in Hong Kong, even though Taiwan’s defence ministry says it’s not the original. The Order of Blue Sky and White Sun medal is going on the block on Friday. It’s expected to fetch HK$3 million to HK$5 million. Auction house Spink says Chiang was awarded the medal in 1930 by his Nationalist government, which ruled much of China while fighting a civil war with the Communists. In 1949, the defeated Nationalists fled to Taiwan and set up a rival regime. Taiwan’s defence ministry said last week, after Spink announced plans for the auction, that Chiang was laid to rest in a mausoleum with the medal when he died in 1975. But at a press preview on Tuesday for the sale, collector and scholar Chuk Hong-ming said Chiang was buried with a duplicate medal. “Before 1995, it was the usual practice to give a new set of the medals to a general who passed away for burial,” he said. The auction house says it’s the first time the medal has ever gone up for auction.

Chief Executive Leung Chun-ying has still not confirmed if he will show up to greet the activists who sailed to the disputed Diaoyu Islands last week when they return to Hong Kong on Wednesday. But on Tuesday morning he reiterated his earlier promise that the government would ensure the group’s safety. The vessel Kai Fung No 2 is bringing activists Yeung Hong, Wong Fah-man and Lo Chau, as well as four crew members, back to Hong Kong after they were arrested and detained by Japanese authorities last week. They are the second batch of the original group to return. Seven others in the team, five of whom landed on the islands, flew back on Saturday from Japan’s southern island of Okinawa. On Tuesday morning, Leung pledged that the government would remain concerned about the safety of the Kai Fung No 2, which previously ran aground on the islands and encountered attacks and damage inflicted by Japan’s coastguard. Speaking outside the government’s headquarters he said: “The SAR government and I personally have been following up on this issue. The government will provide the Kai Fung No 2 with any assistance they need for their safe return. ”I believe everyone, like myself, is most concerned at this stage about the safe return to Hong Kong of the Kai Fung No 2 and the people on it, as soon as possible.” Leung refused to comment on whether the government was willing to revoke the restriction earlier imposed on the boat leaving Hong Kong. Members of the Action Committee for Defending the Diaoyu Islands previously urged Leung to attend the greeting session. The Kai Fung No 2 was originally expected to arrive in Hong Kong on Tuesday, but due to engine troubles had to slow down its passage. It is now is expected on Wednesday afternoon. It is being escorted by a Chinese vessel. The Diaoyu Islands exercise has had massive political ramifications as Japan also claims sovereignty over the islands it calls the Senkakus. Five of the Chinese activists managed to land on the disputed islands on Wednesday last week, triggering a diplomatic flare-up between Beijing and Tokyo. At the weekend a group of 10 Japanese activists landed on the islands and raised Japanese flags. Last Sunday, thousands of citizens in more than a dozen mainland cities took to the streets – with some throwing rocks at Japanese businesses and damaging Japanese-made cars – to vent their anger over the Japanese occupation of the islands. In Hong Kong about 1,000 people took to the streets in a protest organised by the Hong Kong Federation of Trade Unions.

Taiwanese President Ma Ying-jeou said on Tuesday that the island would not join hands with Beijing against Japan in a territorial dispute involving an archipelago in the East China Sea claimed by all three sides. The dispute has traditionally pitted Taiwan and the mainland on the one hand against Japan on the other, while the territorial issue has so far very rarely given rise to any friction between Taipei and Beijing. But in an interview with Japanese public broadcaster NHK, Ma said Taiwan has no intention to work with Beijing to avoid hurting Taiwan-Japan ties, according to a statement released by his office. “We want to let our Japanese friends know that we take our relations with Japan very seriously,” he said. “We think what’s important is not just asking self-restraint of any one particular side but that everyone should think of peace to seek peaceful resolution to the dispute.” Taiwan summoned Japan’s representative on Sunday to protest against the “provocative” act by a group of Japanese nationalists who landed on one of the islands, which are administered by Tokyo and also claimed by Beijing and Taiwan. The islands are known as Diaoyu in Chinese and Senkaku in Japanese and have been at the centre of a bitter territorial row between China and Japan. They may lie on top of significant oil reserves, and their strategic value is also considerable, but according to observers national pride is also a major reason for the acrimony attaching to the dispute. A joint survey by a Taiwanese and a mainland newspaper published in July showed that a majority of people in both Taiwan and Beijing hope the two sides can work together to resolve the row. But Taiwan’s Democratic Progressive Party, which is deeply sceptical of closer ties with the mainland, said last week that Taipei should not work with Beijing over the issue. Beijing also lodged a “strong protest” with Japan’s embassy in Beijing after the landing and reiterated its demand for Japan to stop actions which harmed its territorial sovereignty. The landing came just days after Tokyo deported 14 pro-Beijing protesters from Hong Kong and Macau who had landed on the island. Taiwan has maintained close trade and cultural ties with Japan even though it was a Japanese colony between 1895 and 1945. Like most countries, Tokyo officially recognises Beijing rather than Taipei.

 China*:  Aug 23 2012

China’s southwestern city of Chongqing plans to invest 1.5 trillion yuan (US$236 billion) in seven major industries over the next three years, local media said on Tuesday, the latest large-scale local government spending plan to be unveiled. The China Securities Journal said the Chongqing government plans to invest in a range of manufacturing sectors including electronic communications, automobiles, chemicals and medical equipment. It will also raise spending in research. The investment is part of Chongqing’s five-year economic development plan that runs from last year to 2015, the report said. It did not say how the spending – worth about 150 per cent of the city’s last year total economic output – would be paid for. Nor did it make clear if it was part of a plan to pump-prime China’s economy, mired in its worst slowdown in three years with this year set for its worst annual growth in 13 years at 8 per cent, according to a Reuters poll. No details of plan could be found on the government website. The southern province of Hunan made waves last month after its capital city Changsha announced an 829 billion yuan investment stimulus project. But the plan, worth 147 per cent of the city’s last year economic output, drew scepticism as it was unclear how it would be funded. Despite the evident economic slowdown, China’s central government has been reluctant to authorise a repeat of the nationwide 4 trillion yuan big-bang investment stimulus of 2008/09, as the country is still smarting from the debt overhang left in its wake. Other Chinese cities to have unveiled big spending plans in recent months include Wuhan, Ningbo and Guizhou, according to state news agency Xinhua. Chongqing last year tied with Tianjin in northen China to be the fastest-growing city in the country, when its gross domestic product leapt 16.4 per cent – far ahead of the national growth rate of 9.2 per cent. Chongqing was formerly ruled by Bo Xilai, an ambitious politician fired this year after his wife was suspected of murdering a British man. She was found guilty and given suspended death sentence, which means she likely faces life in prison.

Chongqing Normal University of China and the China-U.S. Center at the United States' Rice University have agreed to strengthen their academic cooperation over the next five years. The two sides signed a memorandum of understanding here Monday to establish an alliance covering research, teaching and training educational personnel. The memorandum was signed by Chongqing Normal University president Zhou Zeyang, Office of Sponsored Research director Melinda Cotten and China-U.S. Center director Mason B. Tomson. "We have signed an agreement today to perform training sessions for advanced educational personnel and high school principals. I believe we enjoy great potential for further cooperation on an expansive array of areas," Zhou said. Mason said this was a really valuable extension of the work of the China-U.S. Center, which had been in operation for about eight years. Philip Bedient, professor of environmental engineering at Rice University, said it was a great opportunity for Rice University to interact again with its Chinese partner. "We are very excited about the training programs that will be forthcoming and the interactions that will take place, both with the high school principals as well as other opportunities to interact with China," Bedient said. "Rice has a long-standing relationship over the years with the China Center. We look forward to a long and productive relationship," he said.

Henan: First cotton pickers' train heads to Xinjiang - The first train carrying more than 900 cotton pickers from Henan province to Urumqi, Xinjiang Uygur autonomous region, departed on August 20, 2012 in Shangqiu, Henan province. It marks the official opening of the transportation process of Henan cotton picking workers. According to the Zhengzhou Railway Bureau, from August 20 to September 11, 23 additional special trains have been arranged for the transportation of cotton pickers. For the convenience of the workers and to save their journey costs, all the trains will leave from worker-concentrated stations such as Shangqiu, Xuchang, Ningling and Lankao. 

Costumes in ethnic fashion festival in China - More than 100 models from China, Mongolia and Russia took part in the festival. Russian models present costumes of ethnic style during an ethnic fashion festival in Erenhot, north China's Inner Mongolia autonomous region, Aug 20, 2012. 

Hong Kong*:  Aug 22 2012 

Hopewell Centre II will make Hopewell one of the biggest commercial landlords in Wan Chai. Hopewell Holdings (SEHK: 0054) aims to book a land revaluation gain of HK$2 billion over the next few years from its new project, Hopewell Centre II. Hopewell managing director Thomas Jefferson Wu said the estimated market value of Hopewell's portion of the site on which the project will be built was HK$4.1 billion. Since the historical book value of the land share was HK$500 million, HK$3.6 billion of value would be unlocked, of which HK$2 billion would be booked into the Hong Kong-listed firm's financial statements in the next few years, Wu said. He said Hopewell would inject HK$4.55 billion into the centre's construction from next year to 2015. "Our major focus in the near future will be Hopewell Centre II." Construction on the project, which has a total investment budget of HK$9 billion, is expected to get under way later this year and be completed in 2018. The 55-floor tower will have a total gross floor area of 101,600 square metres, and is expected to include a conference hotel with 1,024 guest rooms. When completed, the value of the centre will be HK$18 billion, Kim Eng Securities estimates. "The completion of Hopewell Centre II will increase Hopewell's Wan Chai investment land bank from an existing 1 million square feet to 2.2 million sq ft, making it one of the largest landlords in the traditional major commercial district of Wan Chai on Hong Kong Island," a Kim Eng report noted. For the fiscal year ended June 30, Hopewell's revenue dropped 6 per cent to HK$6.56 billion, while net profit fell 35 per cent to HK$3.63 billion. The profit drop was mainly due to a fair value gain of HK$2.26 billion booked in the previous fiscal year. Excluding changes in fair value of property, the firm's core profit rose 11 per cent to HK$1.35 billion. Meanwhile, the net profit of Hopewell's Hong Kong-listed subsidiary, Hopewell Highway Infrastructure (HHI), increased 0.5 per cent to HK$1.02 billion in the fiscal year ended June 30, while the toll-road operator's net toll revenue rose 5 per cent to HK$2.39 billion. HHI attributed the small profit rise to a fall in net exchange gains, which offset rises in toll revenues and interest income. "We are confident in achieving profitability for Phase II West in 2014. Phase III West is planned to open ahead of schedule in the first quarter of 2013 around the Lunar New Year," said Wu, who is also HHI managing director. Phase II West is HHI's operational toll expressway from Guangzhou to Zhongshan, while Phase III West is its planned expressway from Zhongshan to Zhuhai.

Non-executive director Chen Fang-kun says Hontex will hire an investment bank to review if it should continue listing. Shareholders of sport fabric maker Hontex International have approved its HK$1 billion buy-back of shares issued from its troubled 2009 initial public offering. Chen Fang-kun, independent non-executive director at the company, said 99.3 per cent of participants at an extraordinary shareholder meeting yesterday gave the green light to the repurchase scheme. Hontex will pay HK$1.03 billion, or HK$2.06 per share, to buy back all the shares owned by the 7,700 small shareholders, who either subscribed for the IPO or bought after the listing. The offer is equal to its last trading price. In June, a Hong Kong court ordered the company to refund money to small shareholders after the Securities and Futures Commission alleged it had provided misleading information by overstating its profit and turnover figures in its listing prospectus in 2009. The move marks the first time the regulator has sought compensation for investors. Hontex, founded and chaired by Taiwanese Shao Ten-po, runs a factory in Fujian. It listed on Christmas Eve 2009 but the SFC suspended it from trading in March 2010, meaning it has traded for only 64 days. Shao did not attend yesterday's meeting, which was hosted by Chen and fellow independent non-executive director Lu Chien-an. "Hontex is still running normal business operations. We have done our best to protect the interest of small shareholders," Chen said. He said the company would hire an investment bank to review if it should continue listing after the buy-back. About 100 retail investors attended the meeting. Most were happy to get their money back, but some complained of losses as the offer price was below the IPO price of HK$2.15. The shares traded between HK$1.87 and HK$2.63 before the suspension. "It has taken too long for the SFC to resolve the case. The shares traded for less than three months, but I have to wait more than two years to get my money back," an investor said. Another man said he would suffer a modest loss. "It is not a perfect solution but not too bad. At least I can get most of my investment back. The SFC has done a good job asking the company to pay back investors. But the regulator should tighten regulations on listing sponsors further to force them to ensure information in the prospectus is accurate." One woman said she was happy to have her money back. "I want to spend [it] on a good meal." The SFC said it would work with three Ernst & Young partners appointed by the court to handle the refund.

Democratic Party chairman and "super seat" hopeful Albert Ho Chun-yan said he could have done better in declaring his stake in a property rental firm. Ho made the admission after the media criticised him for the second time in recent weeks for his failure to declare his business Albert Ho Chun-yan . But Ho noted that Katsu Investment had been dormant since early 1997 with "no business, no activity and no annual return". It was founded in 1986 and liquidated in 2008. Ho declared his stake when he was first elected as a lawmaker in 1995, but not in 1998 and for his subsequent terms.. Under the rules of procedure of the Legislative Council, lawmakers must declare any beneficial interest in a company's shareholdings of a nominal value greater than 1 per cent of the issued share capital. In May 1996, Ho held half of Katsu's issued share capital, while Orient Treasure held the other half. The Democrat yesterday said a document had been filed with the Companies Registry in May 1998 to declare that Katsu Investment had been dormant since January 1997. "For some reason which I don't know of, the company could not be wound-up until 2008, but from 1998 to 2008 the firm had no business, no activity and no annual return," Ho said. However, Ho admitted that he had been a Katsu director and shareholder until its closure. "So you could say that I could have declared it. It was a grey area … in the future, I will declare more and better." Ho is running for one of five new "super seats" in a citywide ballot on September 9 for the 3.2 million voters who don't have a vote in any other functional constituency. The other candidates include James To Kun-sun, Pamela Peck Wan-kam, Lau Kong-wah, Frederick Fung Kin-kee, Starry Lee Wai-king and Chan Yuen-han. Earlier this month, local newspapers criticised Ho over his "failure" to include shares in Sound Factor Limited in his Legco declaration of interest. Ho countered that he was only a nominee shareholder who would not gain from his stake, and lawmakers were not obliged to declare shares from which they would not derive any benefit. Sound Factor was owned by Nan Hai Corporation chairman Yu Pun-hoi, who has been leasing a HK$15 million building in Prince Edward to the Democratic Party for just HK$20,000 a month.

Lam Seck-chai at Cheung Sha Wan Government Offices, Sham Shui Po, yesterday. He lodged a complaint with the Labour Department in the afternoon. A 78-year-old security guard is seeking compensation of more than HK$222,000 to make up for wages he says he is owed under minimum wage and other employment legislation. Despite the minimum wage law having been in force for more than a year, Lam Seck-chai said his employer paid him less than HK$5,000 a month, or about HK$13 an hour. Lam, who left his job as a security guard in a Sham Shu Po building last month, lodged a complaint with the Labour Department yesterday afternoon. Apart from being deprived of the minimum wage of HK$28 an hour, he said that in the seven years and nine months he had worked under a contract for the Incorporated Owners of Wah Kiu Mansion, he was not permitted any leave. Whenever he took leave he had to pay another person to cover his position. He is seeking more than HK$222,000 for deducted salary, holidays, severance and long service, with help from the Society for Community Organisation. The department said it met Lam yesterday and would help. "I didn't dare complain," he said. "They would have used some excuse to lay me off. There's no other job I can find at this age." Lam, a security guard for 25 years and now on the dole, said a colleague at the building was also being exploited. "But even when officers from the Labour Department came, we wouldn't tell them." The department said it checked work places 45,000 times from May last year, when the minimum wage came into effect. In 131 cases, employers were suspected of not abiding by the new law, but after some follow-up action most of them had paid their employees back the wage discrepancies. In Lam's contract with the Incorporated Owners of Wah Kiu Mansion, it was stated that the contract was "unrelated to any labour laws", and the employee was "not entitled to any right stated in Hong Kong's labour laws", although those terms were void under the law. Lam's last contract was until April, but he worked three months further. Under the contract, his wage was HK$4,750. His pay was raised to HK$5,000 for June and July. His expenses soared after his wife on the mainland was diagnosed with cancer. He owes friends HK$80,000. The owners' corporation could not be reached yesterday while an angry security guard fended off reporters. Society spokesman Ng Wai-tung said the government should consider increasing the penalty of HK$350,000 and three years' imprisonment for violating the minimum wage law.

NBA star Jeremy Lin will make his first appearance in Hong Kong on Friday to help start a new charity basketball programme for underprivileged children. The New World Basketball League - under the New World Springboard sports-training community outreach programme - aims to promote the values of perseverance and resilience among some of the city's most disadvantaged youths. "Rather than donating money, we hope to do something in which we can measure its effectiveness," said Adrian Cheng Chi-kong, New World's executive director. Cheng said the basketball league - like New World's existing swimming academy, mentoring programme and coach-sharing sessions - would help youngsters build confidence, face challenges and learn leadership skills. Cheng said that Lin, 23, who was born and raised in California, shared the programme's vision for helping underprivileged youngsters. Lin has set up his own foundation to reach disadvantaged children and make a lasting difference in their lives. After failing to make much of an impact in his first two seasons in the NBA, Lin became an overnight sensation in February when he came off the bench to lead the New York Knicks on a spectacular winning streak. Lin, whose parents are from Taiwan and whose maternal grandmother is from the mainland, found himself the focus of global attention. The fervour of his supporters worldwide gave rise to what the press dubbed "Linsanity". Instead of a one-off publicity stunt, Cheng said that he hoped to use the opportunity to discuss long-term co-partnership with Lin, who signed a three-year US$25 million deal to play for the Houston Rockets after a knee injury brought an early end to his season with the Knicks. "It would be great if we can send the outstanding children to basketball training schools in the US," Cheng said. "It's surely an incentive for them to improve themselves." The programme plans to start a three-month recruitment phase next month with the help of several NGOs. It aims to take in 150 children aged eight to 11 from low-income families who are receiving either Comprehensive Social Security Assistance or School Textbook Assistance.

Two directors at an engineering firm had been arrested for allegedly offering almost HK$1 million in bribes in relation to a Water Supplies Department project, the Independent Commission Against Corruption said on Monday. Stephen Au Yeung Ching-cheong and Eric Choi Chun-wai, both 58 and directors of Sunshine Traffic Engineering and Contractors Company (STE), had been charged with one joint count of conspiracy to offer advantages to an agent. STE was subcontracted to a project for replacing water works in the New Territories by China National Chemical Engineering Hongkong (CNC). CNC was the main contractor of the project under a HK$163 million term maintenance contract awarded by the Water Supplies Department in July 2007. The company assigned an assistant project manager to oversee and monitor its progress. The charge alleges that between July 2007 and January last year, Au Yeung and Choi conspired to offer the assistant project manager monthly payments of HK$30,000 as rewards for showing or having shown favour to STE in relation to the project. ICAC said the sum involved HK$990,000. The two men have been released on bail until their appearance in Tuen Mun Court on Wednesday.

Kai Fung No 2, the fishing vessel which took a group of Chinese nationals to claim sovereignty of the disputed Diaoyu Islands and is carrying some of them back, is not expected to arrive in Hong Kong until Wednesday due to mechanical problems. It was originally expected to reach the city on Tuesday. The vessel, bringing activists Yeung Hong, Wong Fah-man and Lo Chau, as well as four crew members, back to Hong Kong after they were arrested by Japanese authorities last week, has been forced to halve its speed. However, everyone on board was well and the vessel was still being escorted by a Chinese vessel, said Chan Yue-nam, head of the Action Committee for Defending the Diaoyu Islands. Kai Fung No 2 was now expected to arrive at Tsim Sha Tsui on Wednesday afternoon. On Monday morning, committee chairman Chan Miu-tak said it was unlikely that Chief Executive Leung Chun-ying would meet the vessel when it returned to Hong Kong. Speaking on RTHK, he said these matters of diplomacy were now being dealt with by the central government. Two legal sector candidates also dropped hints on Monday morning that they thought Leung should greet the Diaoyu activists when they arrived in Hong Kong. However they would not commit themselves clearly to a definite stance on the topic. During a radio forum, former Law Society president Albert Wong Kwai-huen and Civic Party candidate barrister Dennis Kwok Wing-hang were asked if Leung should greet the returning activists, amid speculations that the activists’ vessel, the Kai Fung No 2, left Hong Kong waters illegally. Both Wong and Kwok are contesting the legal functional constituency in the upcoming elections in September. Kwok countered such speculation, saying that the Hong Kong marine department did not forbid the boat from leaving Hong Kong. “Kai Fung No 2, as a fishing boat, can leave Hong Kong waters any time without prior application,” he said. Wong, who is keen to dismiss his image as pro-establishment candidate, said the dispute over the Diaoyu Islands “is a big national issue … and a technical [problem] with the law should not be something that the chief executive should be considering”. Following the successful landing on the islands by the Chinese nationals, a group of 10 Japanese activists also landed at the weekend and raised Japanese flags. The Japanese also claim sovereignty to the islands they call the Senkaku Islands. This spurred violent reactions across the mainland. On Sunday, major anti-Japanese demonstrations broke out in several mainland cities, including Guangzhou, Jinan, Hangzhou, Chengdu, Changsha, Wenzhou, Harbin and Shenzhen. Thousands turned out and in some cities they threw rocks and bottles at Japanese restaurants and overturned dozens of Japanese brand vehicles. In Hong Kong about 1,000 people took to the streets in a protest organised by the Hong Kong Federation of Trade Unions. Commenting on the anti-Japan fury, committee member Lo Chung-cheong, one of the Chinese activists who landed on the islands, said the anger was understandable, but had to be guided appropriately. Committee member Tsang kin-shing, widely known as “The Bull” and a former legislator and district councillor, said the committee was planning to mobilise Chinese people around the world to join a massive anti-Japan march on September 18. This is the anniversary of the so-called “Mukden Incident”, a staged event engineered by Japanese military personnel as a pretext for invading the northern part of China, then known as Manchuria, in 1931. Tsang said the march would commemorate the incident and reaffirm China’s bid to regain sovereignty of the Diaoyu Islands. Details of the march would be made public later. Tsang Kin-shing is running for the New Territories West constituency of the Legislative Council Election. Other New Territories West candidates include Leong Che-hung, Alice Mak Mei-kuen, Josephine Chan Shu-ying, Albert Chan Wai-yip, Mak Ip-sing, Lee Wing-tat, Kwok Ka-ki, Michael Tien Puk-sun, Ho Kwan-yiu, Chan Yut-wah, Leung Yiu-chung, Chan Han-pan, Chan Keung, Lee Cheuk-yan and Tam Yiu-chung.

 China*:  Aug 22 2012

China's Li Na beats Germany's Angelique Kerber to claim the ATP-WTA Cincinnati Masters on Sunday. China’s Li Na earned her first title since winning the French Open 15 months ago, beating Germany’s Angelique Kerber 1-6, 6-3, 6-1 to claim the ATP-WTA Cincinnati Masters on Sunday. The 30-year-old Li rallied from a crushing first-set loss with some superb serving as she won 80 per cent of her first-serve points in a dominating third set. This was her first tournament under new coach Carlos Rodriguez, who only came on board mid-week. Li ended her fight-back victory with six breaks of Kerber’s serve from 21 chances, with the fatigued Kerber starting to feel the effects of a leg injury. The Chinese player said she was inspired by Roger Federer’s win earlier in the men’s final. “I wanted to do the same,” she said. “I was feeling OK on court. I wanted to win this title because this year, I got in the final three times but I never won one title. I was really hungry for the title.” Li also paid tribute to her new mentor in her victory speech: “Carlos you are the best.” She needed 100 minutes to oust Kerber and her victory means she will maintain her current ninth world ranking. Kerber “was playing unbelievable in the first set. I was trying to play flat, play fast, but she had no mistakes,” Li said. “I just continued to try, and finally, it worked.” The Chinese number one was playing her second final in as many weeks after losing a title bid in Montreal to Petra Kvitova. “It’s amazing this year.” said Li. “It was great to be in the final and finally win after such a long time. “I was able to recover after a very bad first set and find my game. I hope this is how it’s gonna be with Carlos now.” Kerber is now 2-2 this year finals after winning the Paris Indoors and in Copenhagen and losing after holding championship points at Eastbourne in June. The German player now heads to Dallas for another US Open tune-up event. “I’m very happy that I was in the final, but today she was better than me,” Kerber said.

Shanghai shares slipped on Monday, dragged down by Chinese property counters over worries that an upturn in housing prices may lead to a fresh set of government curbs on the sector. The Shanghai Composite Index closed down 0.4 per cent at 2,107 points, near the day’s highs after plumbing the lowest level since March 2009. The CSI300 of the top Shanghai and Shenzhen listings shed 0.5 per cent. “It’s the case of the Monday blues,” said Jackson Wong, vice-president for equity sales at Tanrich Securities. “Mainland investors are definitely more sensitive to the housing prices, although I think the latest monthly increase is more an effect of interest rate cuts,” he added. Data over the weekend showed China’s home prices rose 0.1 per cent in July from June, a second month of modest uptick that raises the risk Beijing may seek to bolster a two-year campaign to curb housing inflation but which also weighs on the wider economy. The state-run Shanghai Securities Journal reported on Monday that Beijing could move to expand a property tax pilot to include more cities or adjust pre-sales requirements for property transactions. Shanghai-listed Poly Real Estate dived 3.4 per cent to its lowest since April. It is still up 19.8 per cent this year to date, but has lost more than 15 per cent since July 18, when data showed housing prices in China rose for the first time in nine months.

Enjoy sunset in Sanya - People enjoy themselves by the sea in the afterglow at Sanya Bay in Sanya, south China's Hainan Province, Aug. 20, 2012.

Wine producers have applied to the Ministry of Commerce (MOC) demanding investigations into whether European imports are damaging China's domestic market. Wang Zuming, head of the wine division of the China Alcoholic Drinks Association, told Xinhua, that winemakers want the ministry to look into the increasing amount of EU imports and its impact on the domestic industry. EU wine imports surged to 169,114 kiloliters, in 2011, from 35,944 kiloliters, in 2008, at an annual pace of 67.71 percent. In the past four years, its market share in China increased from 4.94 percent to 14.76 percent, Wang said. Almost every Chinese winemaker has felt the impact from the EU, he said. The EU has provided various subsidies to the wine industry, putting Chinese makers at a disadvantage, Wang added. Due to the EU's producing capacity and export potential, Wang argues that this can only have a negative impact on winemakers in China. The EU is the world's largest wine-producing region with an annual output reaching around 16 million tonnes, or 69 percent of the world's total. Winemakers from the EU see the Chinese market as having huge potential. China's wine consumption surged 28.26 percent to 1.55 million kiloliters in 2011, overtaking the United Kingdom to be the fifth largest market, according to data provided by industry. Imported wines accounted for nearly one-third of the market, up from less than 10 percent in 2006. As foreign wine merchants tap into the Chinese market, local winemakers are starting to feel the pressure. The industry's average gross margin slipped to 30 percent from around 40 percent, said State-level Wine Appraisal Judge Sun Fangxun.

Hong Kong*:  Aug 21 2012 

Executive councillor Bernard Charnwut Chan is not keen on the idea of developing Hong Kong into a Chinese medicine hub as it does not have a competitive advantage over the mainland. Chan's comments come after the government announced the setting up of a preparatory task force on a Chinese medicine development committee last week. "We can be the international financial center for China - just like London serves the rest of Europe - and other industries are only supplementary," he told The Standard. "Although the yuan can be freely convertible one day, we still have the competitive advantages on our tax and legal systems." Chan added: "However, when you talk about medical and education hubs, they all require land which Hong Kong lacks. Also, we don't have a competitive advantage on scientific research." Chan, a National People's Congress deputy whose family business is related to insurance, cited himself as an example. "Although the Closer Economic Partnership Arrangement has opened up the mainland market to Hong Kong companies, many of us don't know how to compete there," he said. "We don't have the distribution channel." Chan, 47, is tipped as a future chief executive candidate but said he has no inclination to aim for the top job. "It seems that one needs to give up one's own property and the family business to join," he said. "I can't give them up." He added: "It is very difficult for the government to look for political talents. Professional experts and businessmen would not give up their careers for some middle-rank positions. "And they usually don't know what politics is all about, making it difficult for them to take up leading roles. On the other hand, the public will doubt the capability of the rather junior people who take up political roles. "Passion isn't enough for you to have a successful political career, training is necessary." Chan has sympathy for Chief Executive Leung Chun-ying and his team. "CY is an underdog as he doesn't have a very good relationship with the business sector, which isn't against him but is just taking its time to feel comfortable toward him. "Also, everything has been played up as this is an election year. Public expectation has been raised and they can't wait to see results delivered by him." On some Exco members being outspoken, especially on housing and education policies, Chan said: "I think it is definitely a good thing. We are the trusted partner of the administration and can help gather more views."

Norman Chan says the property market remains red hot and the grip on mortgage lending cannot be relaxed. Norman Chan Tak-lam, the Hong Kong Monetary Authority's CEO, is cautious about risks related to the tough global economic conditions facing the city, as well as the local real estate bubble. "The economic signal is mixed," said Chan. "On the one hand, Hong Kong's economy may be affected by the economic downturns in the United States and Europe. On the other hand, the property market is showing signs of overheating." In an exclusive interview with the South China Morning Post (SEHK: 0583), Chan said he was worried that the city's economy would be affected by the euro-zone sovereign debt crisis and the economic slowdown on the mainland and in the US. "Four years after the global financial crisis, we have seen the US government do a lot to boost the economy, but that has yet to bring back strong economic growth," Chan said. At the height of its recession, the US lost seven million jobs, and two million to three million Americans remain unemployed. The US jobless rate of 8.2 per cent in June improved from 9.7 per cent in January 2010, but it topped the 5 per cent level in early 2008. The euro zone's financial crisis is also showing no signs of a rapid recovery. On the mainland, Beijing has lowered its forecast of economic growth for this year to 7.5 per cent, down from last year's 8 per cent clip. In Hong Kong, more than 230 listed firms have issued profit warnings this year, signalling an economic slowdown, according to Chan. "All these signals are not good, but we cannot loosen our grip on mortgage lending because the city's real estate market remains red hot," he said. Since Chan became the HKMA's chief in October 2009, he has tightened mortgage policy four times. Property transactions and housing values subsequently declined, but they were on the rebound in February. In June last year, the HKMA reduced banks' maximum amount of housing loans for properties valued at more than HK$10 million by 10 percentage points to 50 per cent of their value. For properties worth HK$7 million to HK$10 million, the loan-to-value ratio was lowered to 60 per cent, from 70 per cent. Since then, developers and investors have been urging the HKMA to ease its policy as investment inflows slowed amid the global economic downturn. Hong Kong's stock market, for instance, has seen a 20 per cent fall in its average daily turnover of about HK$56.5 billion in the first half of this year from last year. "What I can say is that there are uncertainties in both our economy and our property market," Chan said. "The HKMA has to closely monitor the situation and make changes when necessary." A prudent monetary policy is required to prevent banks from taking too many risks when the property market is facing a potential downturn, Chan said.

'The Hong Kong men are national heroes' Coming from all walks of life, they assembled via online calls that spread through messaging services and major online chat rooms. The time and route had been discussed and planned in advance - people were told to gather in front of the Saige Plaza on Shennan Boulevard in Shenzhen at 10am yesterday, and they would then march along main roads and past major landmarks. Activists started showing up at 9am. They included private entrepreneurs, tourists, white-collar workers, migrants, students from Shenzhen universities and local teenagers. Soon they numbered nearly 20,000, according to a police source in the city who declined to be named. The gathering was said by several protesters to be in response to what many consider a failure by authorities to protect and support Hong Kong-based activists who went to the Diaoyu Islands in the East China Sea last week and were detained by Japanese authorities. However, local media were banned from reporting on the protest, and journalists were ordered not to take part. "The government did nothing useful and behaved like cowards," said Jia Bin, an IT product salesman. "Chinese people were viewed as weak and powerless until the Hong Kong-based Diaoyu activists landed on an island." Liao Miao, a university student from Xian, Shaanxi province, echoed those sentiments, saying: "The Hong Kong men are national heroes. It's time for mainlanders to stand up." Some protesters even held up pictures of Mao Zedong, saying the former chairman would have taken a harsher stance against Japan in defending China's sovereignty claims over the islands. And not all the participants were peaceful. Some turned over Japanese-made cars in the late morning and early afternoon. And at around 2pm, there was a clash between crowds and police near Shenzhen Stadium when police tried to end the march and disperse the masses. A group of protesters, estimated to number several hundred, managed to break through the police barrier and enter the stadium, where they sang the national anthem loudly in the rain. They were eventually dispersed late in the afternoon.

Five British secondary school students gave the thumbs-up to Hong Kong university education after attending summer courses. Ian Headley, a Brighton College graduate, praised the teaching mode that encourages active participation rather than note-taking. "We have to do a lot of presenting that will obviously help later on in life. The teaching is faster and is more in-depth," Headley said. "There is a greater expectation for students to do independent work, which is different from the seminar-learning basis in the UK." Christopher Simpson, from Glasgow Academy, studied physics at the Hong Kong University of Science & Technology. His course was quite intensive, he said, adding he learned a lot in two weeks. Simpson called Hong Kong an "ideal place" to study. "Most people can speak English, so you can easily communicate. The degree needs to be value-for-money, and it is not expensive to study. Everything students are looking for is here." Summaya Mughal, a Nottingham Girls' High School student, did an economics course at the Chinese University. She believes studying in the SAR would boost her career path, especially since universities here offer internships and doctorates for graduates to pursue. With all the advantages Hong Kong has to offer, its universities are attracting rising numbers of foreign students, the Education Bureau said. 

HSBC is willing to "fight to the death" to prevent British regulators from attempting to force it to stop paying its dividend in order to preserve capital, the Sunday Telegraph reported, citing group finance director Iain Mackay. In a statement to analysts this month, Mackay criticized certain members of the Bank of England's new financial policy committee, alleging that they did not comprehend fully the way capital markets work, the report said. Mackay said: "They [regulators] believe banks are capable of reinforcing their capital by cutting the variable compensation of their employees, by restricting dividends to their shareholders, and by raising capital in the marketplace." But Mackay said such thinking is misplaced. "From [HSBC chief executive] Stuart Gulliver's, and my, perspective, we will fight to the death if they go after our dividends. That is not on." 

 China*:  Aug 21 2012

When Mao Zhenhua founded China's first credit ratings agency 20 years ago his dream was to build it into a mainland Moody's. Now, the chairman of China Chengxin Credit Management, which has thrived in the past few years thanks to China's booming bond market, is taking a step toward going global. The agency just became the first mainland credit ratings business to open an office in Hong Kong, and Singapore is likely to be next. A competitor, Dagong Global Credit Rating, whose international ambitions are reflected in its name, also has applied to Hong Kong securities regulators for a licence to operate in the city. In the short term, the two agencies are eyeing what has been a burgeoning yuan-denominated bond market in Hong Kong, figuring their connections to mainland borrowers and local knowledge give them an edge over more established global rating agencies. Since it was launched in 2007, the so-called dim sum market has surged. Last year, new issues totalled 107.9 billion yuan (HK$131.8 billion), triple the value of new issues in 2010. The number of issuers jumped to 91, including fast-food company McDonald's and heavy equipment maker Caterpillar, from just 16 in 2010, according to the Hong Kong Monetary Authority. Beijing has been encouraging borrowers to tap the Hong Kong bond market for funds, partly to encourage wider international use of the Chinese currency. Besides mainland companies such as Dalian Port and China National Petroleum, banks including Chinese Development Bank and Bank of China have been active issuers. Last year, the Ministry of Finance made a mega-issue of 20 billion yuan in Hong Kong, and in June this year issued a further 23 billion yuan of sovereign bonds. Regulators in Hong Kong don't require bond issues to be rated, and dim sum bonds usually are not. That doesn't seem to bother yield-driven individual investors in Hong Kong. And while the investment criteria of professional investors such as fund managers sometimes require an issue be rated, some are satisfied if the security is listed on the stock market, especially because that makes it more easily tradeable. The Asian Development Bank was the first issuer to list its securities in Hong Kong, in 2010. Today, there are 41 dim sum bonds listed worth HK$66 billion. Hu Yifan, chief economist at Haitong International Securities Group, is less optimistic about the future ratings demand from the dim sum bond market than are mainland credit rating agencies. Besides weak demand, she said, it would be "very hard" for companies such as Chengxin, which aren't as well known as a Moody's or a Fitch, to be widely accepted by investors in Hong Kong. Mao, who has an economics degree from Wuhan University, founded Chengxin in 1992 when he was just 28. His aim was to found a business that was "very popular in mature markets but little known in China". So he hit upon setting up the agency, figuring there would be a need as financial markets developed. Recalling the time he started the business from scratch, Mao smiled, saying: "I was too bold to fear any risks." He did not imagine the business would not make a profit in the first 15 years. To foster a homegrown ratings industry, China requires Western firms such as Moody's, Standard & Poor's and Fitch to tie up with local partners. Chengxin set up a joint venture with Moody's in 2006. China Lianhe Credit Rating, one of Chengxin's main rivals, is 49 per cent owned by Fitch, while Shanghai Brilliance Credit Rating has a technical services deal with Standard & Poor's. Dagong, founded in 1994, hasn't partnered with any foreign investors. "Credit ratings represent a nation's say on its own financial industry", so they need to stay independent, said Chen Jialin, deputy general manager of Dagong's international department. The domestic credit rating business has flourished as the government has encouraged corporate and other borrowers to rely more on the bond market and less on bank loans. As in developed economies, local issuers pay the rating agencies for assessments of their creditworthiness. Moody's tie with Chengxin came after the local company ceased a joint venture with Fitch and International Finance Corp, the investment arm of the World Bank, in 2004 because "almost no bonds were issued" at that time, according to Mao. He said that before Chengxin set up a joint venture with Moody's, his company held a 60 per cent share of the domestic credit ratings market. Since then, Chengxin's market share has fallen to 35 per cent to 40 per cent, while revenue topped 2.5 trillion yuan last year. (The office in Hong Kong is wholly owned by Chengxin and operates separately from the joint venture.) "From a short-term perspective, I'm a loser," Mao said recently. Bringing in Moody's "caused us to lose some clients because our ratings are stricter" than other local rating agencies, he said. "However, it's worthwhile in the long run" because the combination of Chengxin's deep local knowledge and Moody's advanced technology had given the joint venture a competitive edge over local rivals. Moody's officials weren't available for comment. Previously, joint ventures weren't allowed to rate bonds sold by companies listed on the domestic stock markets, though they could rate bonds issued on the so-called interbank market, where banks lend to each other. So Chengxin had a wholly owned unit that rated bonds the joint venture couldn't. But in response to global calls for China to further open its financial industry, Mao said regulators recently gave the green light for joint ventures to apply for a licence to rate bonds issued by stock market listed companies on the mainland.

China's Li Na fought back to beat German Angelique Kerber 1-6 6-3 6-1 and win the Cincinnati Open title on Sunday, ending her 15-month title drought after last year's French Open triumph. Li Na of China holds up the championship trophy after defeating Angelique Kerber of Germany at the women's Cincinnati Open tennis tournament in Cincinnati, Ohio, Aug 19, 2012. The victory was the 30-year-old's sixth career title and ends her run of three defeats in finals this year, including a loss to Petra Kvitova in Montreal last week. The victory also comes after Li teamed up with Justine Henin's former coach Carlos Rodriguez earlier this week. Li won nine straight games from a set and a game down to win the second set and then take a 3-0 lead in the third. Kerber, looking for her third title this year, appeared shell-shocked by the turnaround and hampered by a leg injury and was in tears during discussions with her coach. The win was crucial for the No 10 seed to regain her confidence and form after an unpleasant Olympic trip in London. Li lost her first-round Olympic singles match to Daniela Hantuchova of Slovakia and also fell early in the doubles competition with compatriot Zhang Shuai as they crashed 6-3, 6-1 to Andrea Hlavackova and Lucie Hradecka of the Czech Republic in the last 16. Li, squandering possibly her last Olympics, said she was aware of the importance of the Olympics and admitted she was not at her best in London. She finished fourth at the Beijing Games four years ago.

Taiwanese coastguards said they will next month stage a live-fire exercise in disputed South China Sea islands with new, longer-range artillery and mortars, in a move that risks fresh tensions. The potentially resource-rich sea, home to important trade routes, is an increasingly dangerous flashpoint and there have been a string of recent diplomatic rows over territorial claims. The drill will take place on Taiping Island in the Spratlys, a sprawling group of islands claimed in whole or part by Taiwan, the mainland, Vietnam, Malaysia, the Philippines, and Brunei. Vietnam voiced anger after Taiwan last week moved new weaponry to the island in preparation for the drill, sparking a rebuke from Taipei. "Taiping Island is one of the islands in the area that has long been governed by" Taiwan, the foreign ministry said. "Its sovereignty is indisputable." The drill on the island, the biggest in the Spratlys, involves newly arrived 40-millimeter artillery and 120mm mortars, said United Evening News in Taipei, which also reported that several lawmakers will watch the drill. The range of the mortars is 6.1 kilometers, compared with an existing 4.1 kilometers. All claimants except Brunei have troops based on the archipelago of more than 100 islets, reefs and atolls, which sprawl across a vast area but have a total land mass of less than five square kilometers. South China Sea tensions escalated last month when Beijing announced a new city and military garrison in the Paracel Islands.

Barry Stowe backs Beijing's economic efforts. British insurer Prudential plans to double its sales force on the mainland over the next few years because it believes more Chinese are keen to buy their own health insurance amid growing uncertainties about pension reform. Barry Stowe, Prudential's chief executive officer for Asia, told the South China Morning Post (SEHK: 0583, announcements, news) there was scope to double the number of agents in the world's No 2 economy to 30,000 over the next few years. Stowe joined Prudential, Britain's largest insurer by market capitalisation, in 2006 from American International Group (AIG), a major competitor of the British insurer in Asia, in particular in China. "The health insurance opportunity in China for the mid-term has enormous room to grow," he said. "You know Chinese people have a very high savings rate … but what many people don't understand is that Chinese don't have a safety net; so they need to build a safety net, for example, by buying health insurance on their own." Unlike some welfare states in Europe such as Sweden and Denmark, the public health-care and pension system in China remains underdeveloped. More recently, Beijing has called on people to delay their retirement, which is now typically at age 60, due partly to the slow and less effective reform of the pension system. Some analysts say the pension system may not have enough money to cover everyone's retirement over the next few decades as China is becoming a rapidly ageing society. Stowe, who also sits on the board of directors of Prudential, said many governments in Asia, including Beijing, had already turned to the private sector to work with them to provide a safety net that most of their people could afford. "This is what is happening right now and this is why our sales are strong in Asia and the whole industry keeps growing," he said. Prudential's Asia business has become a major contributor to group revenue. It is now contributing about 50 per cent in terms of sales and 35 per cent in terms of profit. About 10 years ago its profit contribution to the group was only about 10 per cent, Stowe said. In early August, the company posted a higher-than-expected 13 per cent rise in its first-half operating profit, mainly driven by strong business performance in Asia. Even in Hong Kong, a very competitive market for financial products, Prudential recorded a 17 per cent growth. Asked if Prudential was concerned about the economic slowdown on the mainland, Stowe, who has lived in Hong Kong for more than a decade, replied: "Honestly, I have got a lot of confidence that the Chinese government can very effectively manage its economy. "For example, for many years there has been a lot of talk about a property bubble that is about to burst but if you look today, I think the government has managed its way through it. I will say, don't underestimate the Chinese way to manage its economy." He worried more about the West, particularly Europe and to a lesser degree North America. "You hear bad news every day and that causes people in Europe and North America to delay their decisions [to spend or invest]," Stowe said.

The central government has been tolerant of the anti-Japan protests since activists set foot on the Diaoyus, including this demonstration yesterday in Chengdu, Sichuan. The central government is adopting a two-pronged approach to the large-scale anti-Japanese demonstrations in major mainland cities - apart from in Beijing, according to analysts. The government is giving tacit approval to the protests - held in response to Japanese activists setting foot on the disputed Diaoyu Islands, known in Japan as the Senkaku Islands - while refraining from tough diplomatic measures against Tokyo, they say. Zhou Yongsheng, an expert on Japanese studies at China Foreign Affairs University, said yesterday the widespread anti-Japanese sentiment was so strong that even the central government had accepted that the protests could not be contained. However, he said the government would quell violent protests in the run-up to the 10-yearly Party Congress this autumn, when new leaders are named. "That's why the central government chose to let indignant civilians rally in various places to vent their anger," Zhou said, adding that suppression of non-violent protests was unlikely. Chen Ziming, a Beijing-based independent political analyst, said the authorities were happy for the demonstrations to put pressure on Japan. "I think Beijing wants to use the strong patriotic sentiment as a bargaining chip when dealing with the Japanese," he said. However, despite the government's tolerance, Chen said the authorities were prepared to crack down if the demonstrations got out of control. "It will be fine if everything goes smoothly. Otherwise they won't hesitate to crack down immediately," Chen said. He also said a degree of tolerance by the authorities would help them direct attention away from national problems, while making the government appear more open ahead of the 18th Party Congress. These careful calculations of the risks and rewards of the demonstrations, according to analysts, also explain why activists were not allowed to gather in such numbers in Beijing, where the congress will be held. And according to Zhou, the Chinese are not the only ones playing games. Zhou claimed that Japan tacitly allowed the activists to set foot on the islets after officially calling on them not to. "That way, the Japanese side could secure pole position by blaming the Chinese for instigating the conflict." He expected the protests to die down soon as Beijing does not want Sino-Japanese relations to deteriorate further. However, a former director of the Institute of Japanese Studies at the Chinese Academy of Social Sciences said tensions might continue to rise if no diplomatic solution is reached. "How far the disputes go is largely up to the attitude and stance taken by the Japanese side," Jiang Lifeng said. "It is, after all, a dispute triggered by an attempt by right-wing politicians to purchase the islets in Japan."

Anti-Japan fury erupts on mainland - Demonstrations take place in several cities - with 1,000 taking to streets of Hong Kong - as Japanese activists raise flag on Diaoyus. Major anti-Japanese demonstrations broke out in several mainland cities yesterday as Japanese nationalists raised flags on the disputed Diaoyu Islands. Protests took place in Guangzhou, Jinan, Hangzhou, Chengdu, Changsha, Wenzhou, Harbin and Shenzhen. The demonstration in Shenzhen was the largest and turned ugly in the afternoon. Protesters threw rocks and bottles at Japanese restaurants and overturned dozens of Japanese brand vehicles, including one police car. At least three restaurants were severely damaged, with windows and billboards shattered, even though none was actually Japanese-owned. There were no official statistics about the number of protesters, but a Shenzhen police source said almost 20,000 took to the streets during the seven-hour demonstration. The police did not intervene until protesters began to overturn cars. Riot police kept the crowd hemmed in as people gathered in a public square near the Japanese department store Jusco. Traffic chaos was caused when thousands of officers blocked main roads leading to crowded areas. Security guards near Jusco said dozens were detained and claimed some were "roughed up". Reporters from the local media were stopped from reporting on the protests. In Hong Kong, 1,000 took to the streets in a protest organised by the Hong Kong Federation of Trade Unions, marching from Wan Chai to the Japanese consulate in Central. The protests came as 10 Japanese nationalists raised flags on the Diaoyus - known in Japan as the Senkakus - amid intensifying territorial disputes with China. The move further escalates tensions on both sides after 14 activists sailed to the islands from Hong Kong last week. Hong Kong Executive Council convenor Lam Woon-kwong said yesterday the action by Hong Kong activists was "a successful attempt" and showed Hong Kong's civic power. Foreign Ministry spokesman Qin Gang said in a statement yesterday that China strongly opposed the Japanese landing on the Diaoyus and urged Japan to stop seeking to undermine China's territorial sovereignty. Meanwhile, Japan's deputy foreign minister Tsuyoshi Yamaguchi was said to be planning a trip to Beijing to address the escalating tensions. The Japanese ambassador to China, Uichiro Niwa, called China's Deputy Foreign Minister Fu Ying yesterday and urged Beijing to ensure the safety of Japanese nationals and enterprises on the mainland. In Guangzhou, more than 500 protesters gathered outside the Consulate General of Japan near the Garden Hotel. They burned Japanese flags and demanded an apology from the Japanese government. A 24-year-old protest organiser said he started appealing for support on the internet on Friday. "The officials were very nice, helping us to pave ways and plot routes for marching while maintaining order," he said. Additional reporting by Tony Cheung and Joanna Chiu in Chengdu.
Territorial tension - Taiwan's Foreign Minister Timothy Yang Chin-tien summons Japan's representative, Tadashi Imai, to protest against the "provocative" act., In Hong Kong, Executive Council convenor Lam Woon-kwong says action by local activists shows the power of Hong Kong as a civic society. He does not say if Chief Executive Leung Chun-ying will greet the return of Kai Fung No 2 today., In Tokyo, Vice-Foreign Minister Kenichiro Sasae says protests were "regrettable", and urges China to ensure the safety of Japanese citizens., Beijing issues a statement strongly opposing Japanese "rightists" landing on the Diaoyu Islands and urges Japan to end actions that seek to undermine China's territorial sovereignty. The Foreign Ministry lodges "solemn representations" to the Japanese ambassador to China, Foreign Ministry spokesman Qin Gang said in the statement.

A pile of freshly baked savory and sweet pastries attract a crowd of eager regulars at the night market. Eat, Drink and Play - It's all a part of daily life, and probably the best place for visitors to experience a little of local color. Eric Jou tells us more about the ubiquitous night markets of Taiwan where both natives and tourists mingle to shop, have a meal, chat and relax. The night is hot and humid, just like any other summer night at Taipei's Datong district. Thousands are squeezing into a narrow back street off Ningxia Road, and the night is filled with gleeful shouts, beckoning cries and the scent of sizzling food. No, it is not a block party, or a carefully orchestrated public relations event. It's just another normal evening as people gather to celebrate the age-old tradition of the Taiwan night market. From tasty pig innards to oyster omelets and the local version of toad in the hole, the Taiwan night markets draw foodies from the local neighborhood as well as visitors from abroad, especially from the Chinese mainland. These night markets, basically groups of street vendors in any given locality, are a staple of Taiwan nightlife. They offer everything from food to tourist souvenirs and game stalls. "Night markets fill a very important role in Taiwan," says Lin Ting-kuo, head of the Ningxia Road Night Market Association. "In Taiwan, convenience is very important, and the night market offers convenience in many ways, from offering fast and cheap food to hungry businessmen, to providing a nice venue for the family to get out and have fun." Lin says the hospitable nature of the Chinese people in general is part of the reason why night markets have become such an integral part of Taiwan's culture. "Many people head out to night markets and dine directly at the food stands or stalls," says Lin. "In doing so, they can chit-chat with the stall owner, and these conversations give a sense of familiarity and belonging, and that makes night markets places that people feel at home." Lin's Ningxia Road Night Market, like many of Taiwan's night markets, started out as a place where people gathered. Some of the more famous night markets began life on streets in front of temples. In the case of Ningxia Road, the night market began during the Qing Dynasty (1644-1911) when vendors gathered to sell iced tea and various snacks inside what was called the Yuanhuan Gardens. 

Hong Kong*:  Aug 20 2012 

TV host's reminder of father's tragic death - Now TV presenter Brian Chanwas just eight when David Chanperished on a 1996 mission to the Diaoyus similar to that undertaken last week While many Hongkongers wished the eight activists who sailed from Hong Kong to the disputed Diaoyu Islands success in their mission, Brian Chan On-lap had just one hope - that all would "return home safely to their families". Chan harbours tragic memories of a similar expedition in 1996 which claimed the life of his father, the journalist and activist David Chan Yuk-cheung, who drowned after leaping into rough seas with other activists. Now 24, Brian Chan has a burgeoning career as an entertainment anchor for Now TV, but he does not want to connect his own growing fame to his father's death. When asked how he felt when the Kai Fung No2 expedition set off to the Japanese-controlled islands to assert Chinese sovereignty, he was reticent. "I am always on television and I don't want to be constantly talking about my father … because it hurts my mother and sister," he said. Although he was too young to understand why his father died at the time of the tragedy, he began searching his name on the internet as a teenager and finally understood why some considered him a "martyr". "My family and I are proud of my father's life. It definitely makes me sad to revisit memories, but I don't wish to make any political comments regarding the Diaoyu Islands." Brian Chan did admit that learning about his father had left him "inspired by his pursuit of ideals". While he may not share the lofty ambitions of his father, whose passion for politics led him to seek a seat on the Legislative Council, Brian does have aspirations of his own and would love to host an adventure travel show. "I hope to introduce Hongkongers to places around the world through meeting interesting personalities - which is the best way to understand a place." David Chan left behind his wife, Lau Shun-hing, who owns a kindergarten on the mainland, besides Brian and his older sister On-yin, who is studying in London. "When I learned that my father passed away, I became the only male in my family and stepped up to the plate to protect them," said Brian Chan, who was just eight at the time of the tragedy. "My mother protected me when my father first died by not telling me there were a dozen reporters' vans outside our home." He adds: "At this sensitive time now, I can shield my family by responding to media on their behalf."

Volunteers collect pellets that were gathered from Silver Mine Bay Beach on Lantau. About 300 volunteers joined the clean-up yesterday. One brought havoc, the other was a godsend. In an unusual twist, Typhoon Kai-Tak dumped a second wave of plastic pellets onto Hong Kong beaches, giving the army of volunteers who have toiled for weeks another opportunity to keep them from entering the food chain. "In a way, Mother Nature has been good to us," said Gary Stokes from Sea Shepherd, one of the green groups which have been working closely with the government and mainland oil giant Sinopec (SEHK: 0386) - which made the pellets - on the clean-up. About 150 tonnes of the pellets - also known as nurdles - spilled into the sea after Typhoon Vicente swept six shipping containers of them off the deck of a freighter three weeks ago. Sinopec and the government says the pellets pose no danger, but greens say they can become coated with contaminants in the sea and that marine animals may mistake them for food. Stokes said while it might be disheartening to see some of the beaches again covered in tiny pellets, the typhoon had helped flush out pellets trapped along rocky shores, and brought some which had washed out to sea back onto the sand, where they could be collected for disposal. "This weekend is very critical and we are trying to keep the momentum up," he said. The groundswell of action since the first pellets were spotted along Discovery Bay beaches after Typhoon Vicente hit on July 24 showed that Hongkongers were deeply concerned about their environment, Stokes said. Over the past three weeks, hundreds of locals have turned up in droves to spend hours patiently sifting through the sand to separate the pellets. Keilem Ng, 31, a volunteer from green group Eco Marine, was in Chi Ma Wan near Mui Wo on Lantau Island yesterday. "The participation by the public has been wonderful," she said, with about 300 volunteers cleaning up Lantau Island beaches yesterday. About 350 volunteers are expected today at the same beaches. A spokeswoman for Sinopec said the company was working with about 10 green groups and the government to clean up the mess. "We are providing them with industrial vacuum cleaners, power generators and first-aid kits." The company has spent the equivalent of 300 working days in manpower for the clean-up, through staff volunteers and professional cleaners. Ten cylinders to sift the pellets from sand were sent to volunteers in Discovery Bay and on Lamma Island yesterday, with another 10 on the way, the spokeswoman said. The government said it had collected 167.5kg of pellets by 4pm yesterday.

People take part in the Yu Lan Hungry Ghost Festival at Kowloon City's Carpenter Road Park. On a hot summer evening, a crowd gathers around a paper horse as tall as a man to hear a hair-raising tale of the unlikely. The horse, tour guide Anven Wu Yim-chung tells a group of about 20 people, carries an envoy to hell to invite ghosts to earth during the Yu Lan Hungry Ghost Festival, in its second day at Kowloon City's Carpenter Road Park yesterday. It's one of 40 such festivals taking place around town, but beyond the migrants from the northeastern Guangdong city of Chaozhou who keep it alive, few people understand what it's all about. The Conservancy Association Centre for Heritage is hoping to change all that by offering tours for the uninitiated to mark the inclusion of the Hungry Ghost Festival of the Chiu Chow (Chaozhou) community in Hong Kong in the national list of intangible cultural heritage. The Kowloon City festival is one of the biggest in the city and is in its 48th year. The tour party learned about the traditions of the festival, which is based on the premise that ghosts are allowed back in the seventh month of the lunar year to enjoy a slap-up meal and receive a blessing by the Taoist and Buddhist gods. Organisers first invite gods to the festival by bringing statues or religious objects. A blue-faced god of hell, responsible for controlling folk unseen by human eyes, is erected. When the gods are ready, it is time for the ghosts. A paper envoy is sent to hell and on the first day of the month, ghosts can start making applications for permits to go to earth. The ghosts' feast starts off with a ritual which expands their mouths. Gods then hear the chanting of religious scriptures, while humans are entertained by Chiu Chow opera. When the three-day festival ends, the gods are thanked and the ghosts are returned to where they belong. Packs of rice blessed by the gods are given free to the public. The tours are being funded through a HK$2 million donation from the Jockey Club, split between four Hong Kong festivals that made the list of intangible cultural heritage. Wu hopes they will help keep alive an activity that has been in decline in recent years.

All 14 people who sailed to the Diaoyu Islands were sent home by the Japanese authorities without being prosecuted yesterday. They headed back to Hong Kong in two batches of seven, the first arriving by air at 8pm and the second setting sail in the fishing boat that took them to the islands on Wednesday. Escorted by a Chinese vessel, they are expected home early next week. The returning voyagers were greeted in the arrival hall of the airport last night by more than 100 people including their families and members of the Action Committee for Defending the Diaoyu Islands. No senior government officials were seen. "We won't let go of a single bit of our territory. Down with Japanese militarism!" the group shouted, still spirited after 16 hours of detention and a two-hour flight. But they weren't hailing the voyage as a success. "This is not a real victory," activist Koo Sze-yiu said. "Japan is still occupying the Diaoyus. It is the Chinese government that has brought national humiliation by letting go of our territory, while maintaining suppressive rule over the ordinary people." Another activist, Tsang Kin-shing, better known as "The Bull", echoed: "I didn't see the central government offer much assistance. The whole process was a people's initiative." The activists also said they refused to sign documents provided by the Japanese that would make them admit illegal entry. Foreign Ministry spokesman Qin Gang said last night that the detention of the activists by Japan was a "gross violation of China's territorial integrity". He also issued a "serious protest" about the interception of the Hong Kong activists' boat. Qin said China had long advocated the settling of the dispute through dialogue and demanded that Japan stopped taking action that intruded on China's territorial integrity in the interests of maintaining positive Sino-Japan ties. Recalling the approach to the islands, the activists said nine Japanese vessels intercepted their trawler, The Kai Fung No 2, when it was 15 nautical miles from the Diaoyus. "Surprisingly, the vessels left when we were five nautical miles away," Tsang said. Design teacher Lo Chung-cheong said vessel owner Lo Chau threw batteries at the Japanese boats, adding: "We all swore and threw bricks at them. "It was very intense ... I believe the Japanese were scared of us." Later however the fishing boat was sandwiched between two Japanese ships a few metres from one of the islands, at which point seven activists leapt out and swam ashore. Jiang Xiaofeng, of Phoenix TV, one of those who returned yesterday, urged the Japanese government to return his recordings of the journey, which were confiscated. The crew left the city on Sunday for the uninhabited islands, claimed by China, Taiwan and Japan, which calls them the Senkakus. The seven members who returned by air were taken to Naha Airport where they boarded a Hong Kong Airlines flight at 5.15pm yesterday. The other seven were taken to Okinawa's Ishigaki port to recover their vessel and were supplied with food and fuel before being escorted out of port by two coastguard vessels. The Hong Kong government said Beijing would send a vessel to escort the trawler home. The spokesman said the government was "grateful" to the central government for lodging solemn representations with the Japanese government. The decision to deport, rather than prosecute, the 14 activists was made at a special meeting of the Japanese cabinet. Prime Minister Yoshihiko Noda told his ministers: "It is really regrettable that they entered Japan's territorial waters and illegally landed on Uotsurijima, despite our repeated warnings." Uotsurijima is called Diaoyu by China. Japan's Chief Cabinet Secretary Osamu Fujimura later said Japan's coastguard concluded that the group's acts did not obstruct the duties of law enforcement officers, although they threw bricks at a Japanese patrol ship and injured no one. The decision was "based on domestic law and not on emotion", he added. Li Nan, a member of the China Federation of Defending Diaoyu Islands, said : "Japan should not think the whole saga has ended just because the activists have returned home. The Chinese government should also give an explanation to the public on why Japan can illegally detain our citizens."

Chinese Nationals released by Japan police - Seven of the 14 Chinese nationals who were illegally detained by Japanese police when going to the Diaoyu Islands on Wednesday arrived in Hong Kong by plane on Friday. The seven people boarded a plane taking off from Naha airport in southwest Japan at around 6:40 pm local time. The other group of seven has also left Okinawa on their boat before midnight on Friday. They boarded a Japan Coast Guard plane earlier to fly to Ishigaki Island, where their vessel was detained. The 14 Chinese, despite obstruction by Japan Coast Guard patrol ships, arrived at the Diaoyu Islands by a Hong Kong fishing vessel on Wednesday to assert China’s sovereignty over the islands. They were arrested by Japanese police on suspicion of "illegal entry". The flight that carried the five activists and two journalists landed at the Hong Kong airport before 8 pm on Friday. They walked into a cheering crowd at the arrival hall with the national flag and a large banner that said "warm welcome to the Diaoyu warriors". Like other activists, Tsang Kin-shing said they only agreed to reclaim their property, but no one had signed the papers to admit illegal entry of "Japanese soil". "No one signed that paper. We would rather sit there and wait," he said. Despite that, they were eventually released. Charles Lo Chung-cheon, who made his first trip to the Diaoyu Islands, described details of the clash. "It was like war and they rammed our boat many times," he said. He recalled that several vessels of the Japanese maritime guards bumped into their fishing ship one after the other, but they continued to sail forward and responded by throwing stones at the guards, forcing the Japanese vessels to retreat. As they approached the rocky beach, they effortlessly cleared the final hurdle as the guard’s ship had to get out of the shallow waters. Lo said he would like return to the islands. "I’m not sure whether I will get a second chance, but I will take it if I get one," Lo said. Chan Yu-lam, the spokesman for the Action Committee for Defending the Diaoyu Islands, expressed gratitude to the Hong Kong SAR government on ensuring the safe return of the men and boat. Jiang Xiaofeng, a Phoenix TV reporter, urged the Japanese authorities to return seized footage. "History cannot be wiped out. Truth cannot be wiped out," he said upon arrival in Hong Kong. Kai Fung No 2, which carries seven other activists and crew members, left the port of Ishigaki Island before midnight on Friday. The action committee, citing the ship’s captain, said they had to pump water out of the engine room before leaving. The Japanese cabinet announced on Friday morning that it had decided to release all 14 Chinese nationals. Japan’s Chief Cabinet Secretary Osamu Fujimura said the government would not pursue further charges against the activists while denying any political consideration. China’s Foreign Ministry said on Friday that China holds a "firm stance" over the Diaoyu Islands, and any of Japan’s unilateral moves against Chinese nationals is illegal and invalid. "The Chinese government has repeatedly lodged solemn representations to Japan over the illegal detention," Foreign Ministry spokesman Qin Gang said. Experts said that thanks to lessons learned before, Japan has been moving quickly to avoid further damage on its ties with its neighboring country. "Japan could have attacked the activists’ vessel and they could have copied a two-week long standoff in 2010. But it has been forced to calm down by past experience," said Wang Ping, an expert on Japanese studies at the Chinese Academy of Social Sciences. In 2010, Japan arrested Zhan Qixiong, a Chinese fishing ship captain for entering waters near the Diaoyu Islands. Naoto Kan’s cabinet at that time pursued prosecution, which chilled Sino-Japanese relations. The incident ended up with Japan sending Zhan back to China and a freeze of high-level exchanges between the two nations. "The territorial dispute originates from history and is tied to national interest. That is why it is difficult to deal with. But as for the Diaoyu Islands, China is impeccable on both historical and legal bases. So if Japan keeps emphasizing its actual control and domestic law, then China is not afraid of playing tit for tat," Wang said. Japan’s Prime Minister Yoshihiko Noda called the incident "extremely regrettable". Yukio Edano, Japan’s Minister of Economy, Trade and Industry, expressed concern that a sovereignty confrontation could "seriously affect" economic activities between Japan and China. There are voices in Japan calling on the Japanese government to take a tougher position as it has been struggling to cope with island disputes with neighboring countries. Japan threatened Friday to cancel upcoming ministerial talks and take the island dispute to the International Court of Justice to protest recent remarks and actions by South Korean President Lee Myung-bak. Lee recently visited disputed islands called Takeshima in Japanese and Dokdo in Korean and asked the Japanese Emperor to apologize to the Korean people for war crimes. "It is natural for the actual one in control to play hard ball. However, if Japan keeps its stance to refuse dialogue, similar incidents and confrontation will become more frequent and Sino-Japanese ties will be further damaged," said Shen Shishun, an expert on Asia-Pacific studies at Haikou College of Economics in Hainan province. The arrests of activists have prompted protests in Hong Kong and Beijing, which also made Japanese media express worries and doubts about more "excessive movements". Shen said there is a great possibility of actions by Chinese nationals to protect the sovereignty of the Diaoyu Islands becoming regular. "Where the future relations of the two countries is headed is up to Tokyo, whether to keep breaking the status quo or to return to the negotiating table. China does not want to see a future running counter to cooperative ties with Japan," Shen said.

 China*:  Aug 20 2012

The EU is looking to investigate allegedly over-generous state bank loans to Chinese companies such as LDK Solar in Hefei, Anhui province. The Ministry of Commerce in Beijing has been asked to investigate European Union makers of solar panel raw materials for allegedly selling products at below-cost prices and benefiting from banned state subsidies.The request came from four companies, Jiangsu Zhongneng Polysilicon Technology Development, LDK Silicon & Chemical Technology, China Silicon and Daqo New Energy, which account for 80 per cent of mainland polysilicon output. The development is seen as a "tit-for-tat" reaction to a call by European firms led by the German solar panel parts maker Solarworld for the EU to investigate their Chinese rivals over similar allegations. Analysts said the issue was likely to be brought up by Chinese leaders when German Chancellor Dr Angela Merkel visited Beijing late this month or early next month. The EU will decide by mid-September whether to launch an investigation. The recent developments come after the United States' decision in May to slap preliminary anti-dumping duties of between 31 per cent and 250 per cent on China's export of a component called a solar cell, and Beijing's retaliatory decision last month to start an investigation into US polysilicon exports. The solar panel industry is highly internationalised, with firms in developed nations focusing on the technology-intensive manufacturing of polysilicon and the machinery used to make downstream materials including ingots, wafers, modules and cells. This means a full-blown trade war would hurt not only the manufacturers, but also consumers of solar power, through higher equipment and product prices. However, analysts said a trade war would speed up industry consolidation and the rationalisation of excess production capacity. Mainland firms are more competitive on the processing of the downstream materials to make solar panels, as the final product is more labour-intensive. But after a capacity expansion binge in the solar power equipment industry in recent years, particularly in China, and weakened demand growth because of cutbacks in subsidies for solar panel installation in the EU, the world's largest market, the global solar industry sank into massive losses caused by excess supply and falling product prices. Many manufacturers in the US and EU have filed for bankruptcy, and a turnaround in fortunes is not in sight. Sam Wilkinson, a senior analyst at the London-based IMS Research, said: "Although the industry has seen a number of significant exits from the market in recent months, supply of [solar] modules still far exceeds demand, and suppliers are continuing to engage in fierce price competition." Ray Lian Rui, a Shanghai-based analyst at the industry consultancy Solarbuzz, said the EU was likely to agree to Solarworld's request to start an investigation against Chinese firms, because of increasing political pressure from job losses in the industry and the fact that the US had already imposed duties on Chinese firms. The EU has 45 days to decide on whether to open an investigation, which typically lasts a year. He estimated duties imposed by the US would result in US$300 million of annual revenue loss for Chinese producers. However, Lian said, duties from the EU would have a much greater impact since the EU, which buys 60 per cent of total Chinese solar panel parts exports, worth US$35.8 billion a year, is a much bigger market than the US.

Miss China Crowned Miss World 2012 - Yu Wenxia of China waves to the audience after being crowned Miss World 2012 in Ordos, China on Saturday. It was the second time a Miss China contestant was awarded the title. The last time was in 2007 when Zhang Zilin took the honor. The 23-year-old Ms. Yu is a music student who said she wants to become a music teacher. The first runner-up was Sophie Elizabeth Moulds of Wales and the second runner-up is Jessica Michelle Kahawaty of Australia. It was the first time that the Inner Mongolian city of Ordos had hosted the international beauty pageant. The city is part of one of the richest regions in China, thanks to its abundant natural resources. City officials expressed hope that the Miss World event would raise its profile for economic development and tourism. Sanya, a beach-resort city on the southern Chinese island of Hainan, has hosted the contest several times.

China and Costa Rica will look to cooperate on a number of areas including transportation, power, education, science and culture. Chinese Premier Wen Jiabao and Costa Rican President Laura Chinchilla Miranda met in Beijing, on Friday, and outlined how they planned to boost cooperation with each other. The countries will explore ways of working together in transportation, power and other infrastructure development as well as strengthening exchanges in education, science and culture, Wen said. Since establishing diplomatic relations five years ago, the relationship has progressed. "It has not only benefited the two countries and their people, but also contributed to the friendly ties between China and Latin American states," Wen said, adding that the relationship was based on mutual respect. China will implement all the cooperative documents, make use of the bilateral free trade agreement, increase imports from Costa Rica to diversify trade relations and expand investment with each other. The countries signed their bilateral FTA in April 2010, which came into force on August 1, 2011. It has enabled a majority of Costa Rican products to enter the Chinese market, free of duty. China is Costa Rica's second largest trade partner, with trade volume totalling $4.72 billion in 2011. Wen appreciated Costa Rica's active role in supporting China's dialogue and cooperation with the Community of Latin American and Caribbean States. He said the country will work with Costa Rica to create a new chapter of China-Latin America relations. Chinchilla hailed the progress of the relationship and said the free trade agreement has promoted the growth of bilateral trade. She said her country attached great importance to the opportunities provided by China's development and hoped to boost cooperation in economy and trade, infrastructure development, education, culture, justice and science. Premier Wen's policies to enhance Latin America-China relations were mentioned in his speech at the United Nations Economic Commission for Latin America and Caribbean in June. On Friday afternoon, China's legislator Wu Bangguo also met with Chinchilla and called on the two countries to enhance cooperation between legislative bodies. Wu said the two countries' increasing parliamentary exchanges and cooperation played an important role in the development of relations. Wu, chairman of the Standing Committee of the National People's Congress, China's top legislative body, said the NPC attached importance to friendly cooperation with the Legislative Assembly of Costa Rica. The NPC is ready to conduct more exchanges in broader areas with the assembly, Wu said. Chinchilla echoed Wu, and hoped for more visits between senators to help strengthen relations. Chinchilla arrived in Shanghai on Sunday to start her state visit, her first stay in China since taking office in May 2010.

Vegetable factory a farming solution - Yang Qichang, a leading agricultural technology scientist at the Chinese Academy of Agricultural Sciences, checks vegetables growing in a plant factory in Beijing. Countries in East Asia, including China, with limited resources, are looking at "plant factories" - a kind of artificial farm that doesn’t use arable land - as a way to provide adequate food supplies for rising populations. Yang Qichang, a leading agricultural technology scientist at the Chinese Academy of Agricultural Sciences, said plant technology that doesn’t need soil is expected to help countries like China, Japan, and South Korea achieve their ambitious targets of food self-sufficiency in the coming decades. Plant factories, which originated in Japan in the 1970s, are considered a successful way to get high yields via control of growing conditions, such as light, temperature and moisture, in a closed space. Yang, director of the Center for Protected Agriculture and Environmental Engineering at the CAAS, said the advantages of plant factories include their limited demands on the environment and limited need for quality land. Those traits help countries that face shrinking arable land and frequent natural disasters. In a 10,000-square-meter plant factory in the CAAS, vegetables such as lettuce, tomatoes, eggplants and cucumbers - common in a Chinese diet - have been planted in a special nutrient solution. Because they are not grown in soil, the vegetables are beautiful and clean. "Because there is almost no need for agrochemicals, such as pesticides and fertilizers, the vegetables are attractive to people who are concerned about food safety," Yang said. He said growing vegetables in plant factories is a physical process, and the seeds are the same as those sowed in the field, so there is no need to worry about food safety. Yang said vegetables from plant factories now follow the same food safety standards as plants from the field, but generally speaking, they are of higher quality because they contain fewer nitrates and more vitamins. "In China, scientists have gone about as far as they can go with conventional ways on agricultural production," he said. For instance, wheat yield is 4.61 metric tons per hectare compared to the world average of 2.76 tons. Per-hectare rice and corn yields are 6.38 tons and 5.28 tons, compared to the global average of 3.38 tons and 3.41 tons, according to the CAAS statistics. "The room for increasing production seems limited, but not for plants in plant factories," he said. Such an advantage would certainly help China.

President Hu Jintao, right, shakes hands with swimming world and Olympic champion Sun Yang during the commendation ceremony for the Chinese Olympic delegation in Beijing, Aug 17, 2012. Hu praised the squad for its achievement of winning 38 gold, 27 silver and 23 bronze medals and called for more efforts to promote scientific development of sports. The head of the Chinese Olympic delegation, Liu Peng, praised the nation's athletes for achieving outstanding results and displaying positive sportsmanship during the London Games during a summary and commendation conference at the Great Hall of the People in Beijing on Friday. President Hu Jintao, Premier Wen Jiabao and other high-ranking Chinese officials greeted a large number of the country's delegation before the conference. Four years after cleaning up with 51 gold medals in Beijing, China slipped to second with 38 gold, 27 silver and 23 bronze medals, ranking behind the United States, who won 46 gold medals. However, it was China's best finish at an overseas Olympics. "The Games was another demonstration of China's national image and the country's achievements in sports development and reform," Liu said. "The Chinese delegation accomplished its best result at an overseas Olympics, which is quite inspiring and encouraging," he said. "Chinese athletes also enhanced their friendship and communication with athletes from other countries during the Games." More than 390 Chinese athletes took part in 23 events in London and broke six world records and six Olympic marks. Chinese athletes continued to thrive in the country's traditionally strong events such as diving, table tennis, badminton and shooting by overcoming team reshuffles, injuries and rule modifications. They also made breakthroughs in some surprising events, including sailing, fencing and boxing, Liu said at the conference. China had its best performances yet in athletics and swimming, which award 81 gold medals out of the 302 in total. "China only took one gold in athletics and swimming at the Beijing Olympics, and the competitiveness of our athletes in these events was tremendously improved during preparations for the London Games," Liu said. "Athletics and swimming contributed six gold, two silver and eight bronze in London, helping the delegation to accomplish its targets and balance the country's medal-collecting ability in a wider range of events." According to Liu, China claimed titles in eight sports for the first time, and 62 percent of the athletes, who were attending their first Olympic Games, contributed 23 gold medals. Chinese sailor Xu Lijia, who won the country's first gold in the women's Laser Radial class and was appointed as flag bearer for the closing ceremony, said she hoped her achievement would help get more Chinese to understand and enjoy sailing. "I had taken several World Cup titles this year and a runner-up finish in the World Championships. I knew I was capable of winning Olympic gold," said the 24-year-old. "I am satisfied with my performance, and from the perspective of the event, the gold is a considerable boost and inspiration to the development of the sport. I hope sailing will become more readily available to families in China." Xu, a college student learning business administration at Shanghai Jiao Tong University, said she will take a break from the sport and return to campus for two years before beginning preparations for the 2016 Rio de Janeiro Olympics. Zou Shiming, who won his second Olympic title in light flyweight boxing in London, said he was happy his last Games ended on a winning note. "This was my last Olympics, and I may retire after next year's National Games," said the 31-year-old. "I shouldered lots of pressure at the Beijing Games, because it was China's first boxing Olympic medal. "I was quite relaxed before going to London, although a lot of boxers wanted to beat the defending champion," he said. "The victory is a fine ending to my career and also a special gift for my child. I hope he will be inspired by my tenacious spirit and become a brave and responsible person."

Hong Kong*:  Aug 19 2012 

A line-up of models display their charms at the launch of the new Pandora jewellery collection at Azure in Central. To help guests better understand the essence of its autumn-winter collection, Danish jeweller Pandora's retail brand manager Julianna Chu promised a "sensory theme" at the preview. The three new product lines - An Autumn Story, A Christmas Tale and A Love Story - will be rolled out in stages starting from next month. Guests arriving at the event at Azure in Central on Wednesday were first offered a choice of three cocktails. The autumn temptation, a warm cinnamon drink; white Christmas, a vanilla smoothie; and lover's kiss, a pink champagne cocktail, were all concocted for the occasion to echo each line. While some guests tried on the trinkets, others had fun trying their hands at blending a room scent to take home. That was followed by a three-course lunch and catwalk show. The Autumn Story collection has a wild touch, with animal-print Murano glass charms, while the Christmas Tale range has wintery colours such as blue and white. "I love the star-shaped dangling charms from the Christmas Tale line," Chu said. "The gingerbread man charms are lovely, too - they are all hand-painted with enamel details." The Love Story line - designed to be ideal as Valentine's Day gifts - is all about heart shapes and pearls in red and pink.

Plane carrying Chinese activists took off from Japan airport for home - The plane carrying 7 of 14 Chinese activists took off from Naha airport Friday afternoon to fly back to Hong Kong. Seven of the 14 Chinese nationals who were illegally detained by Japanese police when going to the Diaoyu Islands Wednesday arrived in Hong Kong by plane at around 7:50 p.m. local time Friday. The seven people boarded a plane taking off from Naha airport in southwest Japan at around 6:40 p.m. local time Friday. The other group of seven have also boarded a plane of Japan Coast Guard to fly to Ishigaki Island where their vessel was detained and will return later Friday by their boat, according to local media reports. The Japanese Cabinet announced Friday morning that it had decided to release all the 14 Chinese nationals. China's Foreign Ministry said Friday that China holds a "firm stance" over the Diaoyu Islands, and any of Japan's unilateral moves against Chinese nationals is illegal and invalid. The 14 Chinese, despite obstruction by Japan Coast Guard patrol ships, arrived at the Diaoyu Islands by a Hong Kong fishing vessel on Wednesday to assert China's sovereignty over the islands. They were arrested by Japanese police on suspicion of "illegal entry". Police escort Chinese activists at the Naha airport in Okinawa, Japan, who were sent back to Hong Kong on Friday. Fourteen people who sailed to the disputed Diaoyu Islands, including five activists who were arrested on Wednesday after landing on the islands, were repatriated to Hong Kong on Friday afternoon. According to Hong Kong immigration officers sent to Naha, Okinawa in Japan to assist the detainees, seven of the crew members will return to the city by air and the others by sea. The seven catching the afternoon flight include Tsang Kin-shing, Koo Sze-yiu and Lo Chung-cheong from Hong Kong, mainlander Fang Xiaosong and Ng Shek-yiu from Macau who were arrested for unlawful landing. The remaining two are journalists with Phoenix TV. Japanese authorities said those returning by sea were arrested for illegal entry. Seven activists landed on the biggest of the Diaoyu Islands, but the Japanese coastguard said it arrested only five for landing on the island and breaching immigration laws. Nine other people, including the boat’s crew and the two journalists, were arrested at sea on their vessel, the Kai Fung No 2. Japan’s Chief Cabinet Secretary Osamu Fujimura told reporters on Friday that the group threw bricks at a Japanese patrol ship, but no one was injured. He said Japan’s coastguard concluded that the group’s acts did not obstruct the duties of law enforcement officers. The protest group left Hong Kong on Sunday for the uninhabited islands. Their vessel was intercepted several times by Japanese coastguard vessels before the seven activists landed, some of whom tried to plant the national flag and a Taiwanese flag. It was the first time Hong Kong activists had landed on the Diaoyus since 1996. On Thursday Deputy Foreign Minister Zhang Zhijun called for the group’s unconditional release and lodged “solemn representations” with Japan during a phone call to his Japanese counterpart Sasae Kenichiro. The mainland, Taiwan and Japan all claim sovereignty of Diaoyu Islands.

 China*:  Aug 19 2012

Trade between China and the Arab world grew 22 per cent in the first half of the year, despite political turmoil in the energy-rich region. Analysts say Beijing is exploring potential for economic co-operation in the region as some Arab countries undergo reconstruction following civil strife and changes in leadership. Beijing is preparing for the third Sino-Arab economic and trade forum, slated to begin next month in the northwestern Ningxia region, home to more than 10 per cent of China's 20 million Muslims. Trade between China and Arab countries hit US$111.8 billion for the first half of the year, according to Chinese customs yesterday. The 22 per cent increase in growth outpaced the country's 8 per cent growth in overall trade in the same period. Sino-Arab trade reached US$195.9 billion last year, a 34.7 per cent growth over the previous year. "There's great potential for trade and investment between China and Arab countries, as both sides share an interest in further expanding co-operation in various business areas," said Professor Xiao Xian , a leading Middle East expert and vice-president of the Chinese Association for Middle East Studies. Yin Gang , a Middle East expert with the Chinese Academy of Social Sciences, said the political and economic changes in several countries in the region offered new opportunities for Chinese investors. "After such a rapid political change in many countries, Arab governments should focus on economic construction to create jobs for young people. There is a huge young population in these countries. In this regard, China can help and use it as an opportunity," Yin said. Xiao said Beijing wanted to counterbalance US influence in the region. China has replaced the United States as the primary trading partner of many countries, including American allies. As China chases the US' position as the world's dominant trading nation, Beijing has a stake in what happens in almost every corner of the world. However Beijing's policies towards the Arab region have been criticised by the West and several Arab nations. China, along with Russia, has stymied efforts by the UN Security Council to address violence in Syria, vetoing three resolutions over the last year. During the Libyan civil war, Beijing isolated itself internationally by refusing to express support for rebels until after the fall of dictator Muammar Gaddafi. Xiao said Libya had proved an expensive lesson for China, where its losses as a result of the crisis are estimated to run into billions of dollars. The third China-Arab States Economic and Trade Forum will be held in Yinchuan , capital of Ningxia, from September 13 to 17. But organisers said the forum was more significant as a political gesture than for economic benefit. "The investment in organising the forum is high but the direct economic benefit is limited," said Li Chunlei , of the city's propaganda department. "[We see] the political purpose of maintaining friendly relations with Arab states as more important."

A state-owned Chinese firm is in talks to buy some of the African assets of the world’s largest gold miner Barrick Gold Corporation, Beijing’s latest move into the resource rich continent. “Our group is currently having very preliminary contact and discussion with Barrick” on possible acquisition of African Barrick Gold (ABG), an official with China National Gold Group, who declined to be named, told reporters. He did not elabourate on details of the talks but Dow Jones Newswires reported that analysts have estimated the deal could be worth up to US$3.9 billion. In a statement Thursday Barrick confirmed “discussions are at an early stage” with the Chinese company over its 73.9 per cent holding in ABG. Listed on the London stock exchange, ABG owns gold mines and exploration properties in Africa, according to Barrick. Barrick’s equity interest in ABG’s last year production was 509,000 ounces (14.4 tonnes) of gold, and it is expected amount to between 500,000 and 535,000 ounces this year, according to the company. China has been encouraging its companies to invest in overseas mines and other resources to fuel its fast-growing economy. Beijing-based China National Gold is the nation’s biggest gold miner by output and it also mines silver, copper and other metals, it says on its website. Last month, state-owned energy colossus CNOOC (SEHK: 0883) announced a $15.1 billion bid to buy Canada’s Nexen, in what would be the largest-ever foreign commercial purchase by the oil-hungry nation. China’s consumption of gold surged 33.2 per cent last year from 2010 to 761 tonnes, data from the government-linked China Gold Association showed. The majority was sold as accessories to increasingly affluent Chinese consumers, who traditionally deem the precious metal a hedge against inflation.

Hong Kong*:  Aug 18 2012 

A second baby has been found to have an abnormal thyroid-stimulating hormone level after drinking banned Japanese formula. The seven-month-old girl registered a level slightly above the reference range, the Department of Health said last night. Five other samples were found to be normal. After the latest case was reviewed by Hospital Authority specialists and the department, it was learned that the girl has been mostly breastfed and only consumed Morinaga infant formula occasionally. "Given the dietary history, the cause of elevated thyroid-stimulating hormone is less likely due to the formula and the cause requires further investigation," a department spokesman said. The girl is thought to be the second baby to have abnormal levels of the hormone linked to the low iodine content of milk. Also, two Korean infant formula brands - Namyang XO Five Secret 1 and 2 - were found to have iodine content below the international requirement, but show no health risks to infants, the Centre for Food Safety said last night. The center has so far announced test results for 46 infant powders, among which six manufactured in Japan were found to have "rather low iodine content, which may affect the functioning of the thyroid gland of infants solely fed on them." Meanwhile, United States-based Mead Johnson Nutrition said the Centre for Food Safety should adopt Codex food standards rather than those of the World Health Organization. Its global regulatory and nutrition science vice president, Peter Van Dael, said: "Besides adopting the Codex food standards, countries and cities may also adjust the standards according to their own culture."

Phoenix TV demanded yesterday Japan release two of its journalists held along with 12 Diaoyu activists and that their videotapes be returned undamaged. This came as protests were held outside the Japanese consulate in Central for a second day. Mainland reporter Jiang Xiaofeng and photographer Leung Kam-pui from the Hong Kong-based channel were on board the Kai Fung 2 with the activists as it sailed to the Diaoyus. They were arrested after Wednesday's landing on one of the islets. Deputy head of Phoenix Chinese Channel Liu Qingdong said Japan violated press freedom because the journalists were stopped from conducting interviews in "a proper and legal manner." Liu said Tokyo must return the cameras and videotapes undamaged as "the precious materials" marked a historic moment for Hong Kong. Phoenix TV also sent a senior official to Tokyo yesterday morning. Demonstrators vented their anger at the Japanese consulate in several ways. About a dozen members of the pro-Beijing Hong Kong Federation of Trade Unions waved national flags and chanted slogans such as "Get out of our islands" and "Down with Japanese militarism." Four members of the Democratic Party each rolled an egg decorated with a Japanese flag on the ground floor of One Exchange Square, the building where the consulate is based. Another group of seven demonstrators burned the Japanese flag. Fourteen members of the Democratic Alliance for the Betterment and Progress of Hong Kong sang the national anthem. Meanwhile, the Action Committee for Defending the Diaoyu Islands leader, Chan Yue-nam, slammed the DAB as "shameful." Chan said the party has never done anything to support the committee.

Activists carry the national and Taiwanese flags on Wednesday as they land on the island Japan calls Uotsuri, on of the chain called the Diaoyus by China and the Senkakus by Japan. A role to play for HK - Beijing's tacit approval of local activists' travel to the disputed Diaoyu Islands to protest Japan's territorial claims shows that the city has a part in regional diplomacy. The Diaoyu Islands saga shows that Hong Kong has a role to play in China's diplomacy and handling of regional territorial disputes in the East China Sea, analysts say. They say that Hong Kong activists' trip to the disputed islands this week supports Beijing's claim of sovereignty, while avoiding direct confrontation with Tokyo. China's stance on the Diaoyus, which Japan calls the Senkaku Islands, has led to heated exchanges; Beijing responded furiously to Japanese Prime Minister Yoshihiko Noda's recent comments that Japan might buy the islands from their private Japanese owners. Nevertheless, activists on the mainland have been barred from taking strong action. "Given that the previous plans by Hong Kong activists to sail to the Diaoyu Islands were blocked by the authorities, it is fair to say that their recent successful attempt has been approved by Beijing," said Professor Zhou Yongsheng from China Foreign Affairs University. Beijing appears to be showing the world that it is exercising restraint, but it also wants Tokyo to know that it is serious about the matter. "And when Hong Kong activists do that job, China's sovereignty over the islands can still be shown because they are Chinese citizens," Zhou said. "Beijing is subtly telling Tokyo that China does not want confrontation, but Tokyo should not mistake Beijing's attitude as weakness." On Wednesday, Chief Executive Leung Chun-ying summoned Japanese consul-general Yuji Kumamaru to urge Tokyo to release the eight activists who were arrested by Japan's coastguard. That was seen as a sign that Hong Kong was working in concert with Beijing. Shi Yinhong , an international relations professor at Renmin University of China, said the summoning of the consul, as the Foreign Ministry's protest, could influence Tokyo's handling of the matter. Under the Basic Law, Beijing is responsible for foreign affairs issues that involve Hong Kong, but the chief executive can conduct relevant external affairs as authorised by Beijing. A spokesman for Leung's office said it had informed the foreign ministry before summoning Kumamaru. "The arrest of Hong Kong activists by Japanese authorities is a consular matter rather than a diplomatic matter," Shi said. "When Hong Kong residents are involved in trouble abroad, the chief executive has the obligation to make representations to the Japanese consul-general." Leung's action bring to mind his predecessor Donald Tsang Yam-kuen's failed attempts to contact his Filipino counterpart during the hostage crisis in Manila two years ago. When a Hong Kong tour group was held hostage on a coach, an anxious Tsang asked his staff to make two phone calls to Philippine President Benigno Aquino. Both times they spoke to an Aquino aide who did not manage to convey Tsang's message to Aquino. An effort to set up a phone call through the foreign secretary of the Philippines also failed. Aquino later said that he did not expect Tsang to call that day. "Let's clarify. If a Philippine governor suddenly demands to speak with President Obama or President Hu Jintao , that would probably not be allowed," Aquino had said. Veteran China watcher Johnny Lau Yui-siu said it was difficult to make direct comparisons between the two incidents because Leung was summoning a consul-general, not calling a national leader. "We can still say that Leung is handling the matter quite well … it fits the procedure and nature of the matter," Lau said. Ivan Choy Chi-keung, a political scientist at Chinese University, said Leung's handling of the issue was likely to help boost the chief executive's flagging popularity. "Leung is someone who knows how to grasp public sentiment and improve his public image … but the prerequisite is that Beijing has allowed [things to happen this way]," Choy said.

Local mooncake brand Wing Wah could be forced out of the mainland market if it loses a trademark battle in the country's highest court. The case, being heard in the Supreme People's Court, involves a dispute between the 62-year-old Hong Kong firm and Guangdong businessman Su Guorong over the use of the "Wing Wah" trademark and product design on the mainland. It dates back to the 1990s when Su secured the right to use two trademarks on the mainland. He acquired a rounded logo of Wing Wah, written in simplified Chinese characters, from a Shandong sweet factory and registered a trademark, "Wing Wah Moon", in the traditional characters used in Hong Kong. The Hong Kong company, which entered the mainland market in the 1980s, was unable to register a trademark in the name "Wing Wah" as others had already done so. But in 1994 it succeeded in trademarking its package design of two flowers blossoming in front of a full moon. The dispute has dragged on through various courts in the past two decades. In 1999, Foshan city court ruled that Su, by copying the Hong Kong brand's full moon design, infringed the latter's trademark. In response, Su changed the design of his packaging. In 2006, the Hong Kong company noticed that a manufacturer in Zhongshan city, authorized by Su, was producing mooncakes in boxes with a design resembling its own. The two parties again locked horns in the Dongguan city court and the Guangdong high court; both ruled that Su could continue to use the name "Wing Wah" but not in designs identical to the Hong Kong brand. Su secured a retrial in the Supreme People's Court, demanding the full right to use the trademark in whatever designs he wants. If the court rules in Su's favor, Hong Kong's Wing Wah will be banned from selling the festive treat under its name on the mainland and risks losing hundreds of millions of dollars. The company says half of its mooncake sales revenue comes from the mainland. "Many [Hong Kong] businesses are bruised and wounded when they do business on the mainland," Wing Wah co-founder Lau Pui-ling said, adding he felt wronged by Su's legal attempts. Wen Xu, a lawyer representing Lau's company, said there were conflicting laws over protection of a brand name. There is no consensus on who should have the final say: a person who registered a trademark or someone who has used a specific design for a long time with no registration.

Hong Kong activist Koo Sze-yiu protests as he arrives at the port of Naha on Okinawa yesterday in handcuffs, escorted by Japanese police. Japan to deport Diaoyu activists - The 14 Chinese nationals who sailed to disputed islands, including seven protesters who landed, will be sent home without charge, reports say. Japan decided yesterday to deport 14 Chinese nationals, including five arrested after landing on the disputed Diaoyu Islands on Wednesday, amid diplomatic tensions with China, according to Japanese media. The group would not be prosecuted for illegal entry and they were expected to leave Japan this evening at the earliest, the Kyodo News Agency reported. Seven activists landed on the biggest of the islands, called Diaoyu by Chinese. However, the Japanese coastguard said it arrested only five for landing on the island and breaching immigration laws. Nine other people, including the boat's crew and two journalists, were arrested at sea as the vessel, the Kai Fung No2, prepared to move away from the island, the coastguard said. The first five - Tsang Kin-shing, Koo Sze-yiu and Lo Chung-cheong from Hong Kong, mainlander Fang Xiaosong and Ng Shek-yiu from Macau - were taken in handcuffs to the port of Naha by Okinawa prefectural police. "Down with Japanese militarism! Diaoyu Islands are Chinese territory. Get out!" they shouted as they were led ashore. They were detained separately in four police stations for questioning. All denied a charge of illegal entry. The other nine arrested arrived at Naha at 9pm. Coastguard official Yoshiyuki Terakado said Japan would make a decision on all 14 by tonight, but declined to elaborate. The protest group left Hong Kong on Sunday for the uninhabited islands aboard the Kai Fung No2, a fishing vessel. The vessel was intercepted several times by Japanese coastguard vessels before seven activists landed, some of whom tried to plant the national flag and a Taiwanese flag. The mainland, Taiwan and Japan all claim sovereignty of the Diaoyus. They were soon arrested, along with the rest of the party. It was the first time Hong Kong activists had landed on the Diaoyus since 1996. Two immigration officers and an official from the Chinese embassy in Tokyo flew to Naha to see the detainees. Deputy Foreign Minister Zhang Zhijun called for the group's unconditional release yesterday and lodged "solemn representations" with Japan during a phone call to Japanese counterpart Sasae Kenichiro. In Hong Kong, politicians, students and patriotic groups protested in front of the Japanese consulate to demand the release of the 14. Chan Yue-nam, leader of the Action Committee for Defending the Diaoyu Islands, which planned the voyage, said the arrested activists would not recognise any trial by the Japanese government, "as that would mean they acknowledged the legitimacy for the arrest and agreed that the islands belong to Japan". Yang Bojiang, from the University of International Relations in Beijing, said the quick handling of the saga suggested that "Tokyo does not want to have serious confrontations with Beijing … The early, unconditional release of all the activists will keep the shock to bilateral ties at a controllable level". A spokesman for Taiwan's Foreign Ministry, Steve Hsia, said it had asked Japan to release the activists. He was careful not to link Taiwan's call to the mainland's calls for cross-strait co-operation. He said Taipei would continue to secure its sovereignty over the Diaoyus, such as by dispatching coastguard patrol vessels.

Hong Kong After Island Landing: Who You Calling Unpatriotic? A boat that sailed with activists from Hong Kong, center, is surrounded by Japanese patrol boats near the Senkaku Islands on August 15, 2012. On Thursday, local newspapers across the city carried full-page spreads showing photos of Hong Kong activists waving Chinese flags as they waded jubilantly through the water to reach the shores of the Senkaku Islands, which are controlled by Japan but also claimed by China, where they are known as the Diaoyu Islands. Headlines lauded members of the Bao Diao II—or “Defend the Diaoyu II”—as brave heroes. After a crew landed on the islands, singing China’s national anthem, Hong Kong’s microbloggers were likewise quick to erupt in expressions of national sentiment. “Hong Kong people planted the five-starred red flag on the Diaoyu Islands. In the future, who will still dare to say that we Hong Kong people don’t love our country? Today is a day that Hong Kongers should be proud of!” wrote one user on Sina Weibo’s popular microblogging platform. “Who else had the bravery to land on Diaoyu Islands? Only we Hong Kong people had the guts to go do it! Even though we didn’t have any support, our boat landed on the island, and [the crew] even planted a Chinese flag and sang the national song! Please don’t say we don’t love our country!” wrote one microblogger. Though the city’s pan-democrats are often at loggerheads with Beijing, supporters of the Action Committee for Defending the Diaoyu Islands—which backed this week’s voyage—have long included some of the city’s most prominent pro-democratic voices, including radical activist Leung Kwok-hung and Albert Ho, who chairs the city’s Democratic Party. The city’s history of activism surrounding the Senkaku Islands traces back for decades, including marches in the 1990s that numbered in the thousands and boycotts of Japanese products in the 1970s. The 14 members of the crew were arrested by Japanese authorities after they landed and charged with violating immigration regulations. Police will decide within 48 hours whether to send them to immigration control, at which point they can be deported, or to send them to the prosecutors. 

 China*:  Aug 18 2012

The first undersea telecoms cables linking Taiwan and mainland territory have been completed, a company official said yesterday, as ties between Taipei and Beijing continue to warm up. The two fiber-optic cables link the city of Xiamen in Fujian province with the Taiwan-controlled Kinmen island group, which lies just off the mainland coast and around 200 kilometers from Taiwan's main island. The cables will be operational on Tuesday, according to a Chunghwa Telecom official. He said the company had invested around NT$100 million (HK$25.85 million) in the joint venture involving three other mainland telecom operators. The cables are yet another sign of fast improving ties between Taiwan and China. The two split in 1949 at the end of a civil war and the Kinmen island group was often a flashpoint during the Cold War period. Ties have warmed since President Ma Ying-jeou's administration came to power in 2008 on a platform of beefing up trade and tourism links. He was re-elected in January for a second and final term. Kinmen has become a popular attraction for tourists from both sides. 

China's foreign trade will deteriorate over the rest of this year as external demand weakens more than expected amid the escalating European debt crisis, according to the Ministry of Commerce. Ministry spokesman Shen Danyang said yesterday that China faced a bigger challenge to reach its full-year target of 10 per cent growth in foreign trade given the ongoing European doldrums and the global economic downturn. For the first seven months, exports and imports totalled US$2.17 trillion, up 7.1 per cent from a year ago. The gloomy outlook came after customs figures released last week showed that exports almost stalled last month by growing only 1 per cent from a year ago, significantly lower than the 8.6 per cent expected by many economists. Export grew 9.2 per cent in the first half of this year and 20.3 per cent for all of last year. "Right now, the sharp drop in exports to EU countries is the biggest important factor weighing on China's export growth," Shen said. China's outbound shipments to the EU, the largest market for Chinese exports, sank 16.2 per cent year-on-year in July to US$29.4 billion. "With the European debt crisis spreading and the global economy recovering at a slow pace, we expect China's trade situation in the second half will become more severe," the spokesman said. UBS Securities economist Wang Tao predicts exports to grow in the mid-single digits for the rest of this year from a year ago. It is likely more policy easing will be announced soon to arrest decelerating exports, including a reduction in interest rates and banks' required reserve ratio. The export sector is crucial to employment - a big social security concern for the top leadership, which will have a once-in-a-decade transition this autumn. Premier Wen Jiabao vowed to stabilise employment following a trip on Tuesday and Wednesday to Zhejiang province, one of the country's most important hubs for exporters and private businesses. Huang Yiping, chief economist of emerging Asia at international investment bank Barclays Capital, said: "The export slowdown is worrisome for policymakers as exports account for 30 per cent of GDP, and more importantly, the sector is labourintensive. "If the deceleration continues, we are likely to see more material deterioration in job market conditions in the coming months."

A ruling in Luxembourg that gives cheer to China - Herbicide case victory is likely to have far-reaching effects A recent ruling by the European Court of Justice will be a great fillip for companies exporting goods from countries like China to the European Union. On July 19 the court's Grand Chamber in Luxembourg ruled in favor of a Chinese exporter of glyphosate, a basic herbicide widely used in farming. Advocate General Juliane Kokott described the ruling as "of fundamental importance for future trade relations between the European Union and a number of dynamic emerging countries, such as (China)". In its ruling the court dismissed an appeal by the EU Council challenging a ruling by the General Court of the EU in 2009 that annulled anti-dumping duties imposed on Zhejiang Xinan Chemical Industrial Group (Xinanchem). Xinanchem, represented by the international law firm Holman Fenwick Willan, convinced the European Court of Justice that it should uphold the General Courts's ruling that the EU's 2004 decision to maintain the imposition of anti-dumping duties was flawed. The case hinged on whether or not the EU was justified in regarding State control of Xinanchem as a company shareholder as evidence of significant State interference to the extent that the Chinese government was able to manipulate the company's prices, costs and inputs. For many, the subtle difference between State control and State interference may appear trifling, but the commercial implications of this distinction for exporters of goods to the EU can be enormous, and the impact this ruling will have on the future of economic relations between the world's two biggest trading partners should not be underestimated. Xinanchem's exports of glyphosate, with all other exports of the same product from the Chinese mainland, Malaysia and Taiwan, were subject to the imposition of anti-dumping duties on entry to the EU market at 29.9 percent. The EU applies such duties where it finds evidence that exporting producers are damaging its domestic market by selling at artificially low prices. These duties are calculated by deducting the exporters' price of the product on the EU market from the product's price on the exporting producers' home market to generate the "dumping margin". For countries such as China which are considered "non-market economies" for the purposes of international trade law, the EU does not consider prices on the exporters' domestic market valid for these calculations, on the basis that governments in these countries exercise a distorting influence over their national economies. Therefore, in order to obtain a price that it considers valid for the dumping margin, the EU refers to prices of the product on the market of an analogous third country, in Xinanchem's case, Brazil. However, individual exporters have the opportunity to submit an application for "market economy treatment" which, if successful, ensures their exports will be treated as having originated in a market economy country and precludes the recourse to pricing data from a third country in which the product is invariably more expensive, relying instead on the company's own (lower) pricing data, which will lead to a smaller dumping margin, if any. During the course of the original investigation that led to the duties of 29.9 percent, Xinanchem applied for market economy treatment. The EU rejected its application, citing "significant State interference" in the company, which under EU law precludes a grant of market economy treatment. Its ruling was based on the Chinese government's shareholding in Xinanchem, which the EU considered to amount to State control of the company, which in itself the EU concluded constituted significant interference. This was central to the case argued before the European Court of Justice by Xinanchem's lawyers, led by me and my colleagues Folkert Graafsma and Anthony Woolich. We successfully persuaded the court to uphold the General Court's finding that "significant State control" does not automatically amount to the "significant State interference" that will vitiate an application for market economy treatment, thereby requiring the EU to dramatically reassess its approach to deciding such applications. I believe the ruling heralds a highly significant liberalizing step toward improved commercial prospects for Chinese exporters of goods to the EU. The judgment sets a precedent that the investigating authorities in the EU are obliged to follow, and which will lead to an increase in the frequency with which Chinese exporters are granted market economy treatment in anti-dumping investigations. Furthermore, in the longer term if this trend continues, the decision of the European Court of Justice may be a decisive step on the road to permanently changing China's status from non-market economy to market economy. The commercial consequences of market economy treatment are invariably huge and cannot be exaggerated. Some recent examples from other EU anti-dumping investigations show a 10-20 percent difference between the duties imposed on exporters which had been granted market economy treatment and those that had not. So the exporters granted market economy treatment benefit from a considerable cost saving that might otherwise discourage them from continuing to trade in the EU. For countries like China that historically rely on exports to the EU to grow their economies, the consequences of this are commercially vital.
It will become more difficult for the commission to reject claims for market economy treatment by Chinese State-owned entities since mere State-ownership or State-control can no longer in itself constitute a reason for rejecting such claims. China has long contested its status as a non-market economy for the purposes of international trade relations; a statement posted on the Chinese Ministry of Commerce's website in response to the European Court of Justice ruling said that "[f]or a long time, the European Commission has been abusing the discretionary power and misusing relevant laws in its trade investigations, which have led to unjustified trade remedy measures". Recent EU trade defense investigations, which cover anti-dumping, anti-subsidy and safeguard cases, have levied duties against Chinese exporters on the basis of, among other things: a State shareholding, allegations that the State controls the banks that lend to them, the utility companies that supply them with water or electricity, the rent for the land they lease and the price they pay for raw materials. The impact of the court ruling on these commonplace allegations leveled against China remains to be seen, but there can be little doubt that this judgment will dramatically alter the way in which the EU treats State-owned companies in China in general, and will thus have far-reaching effects beyond the factual remit that was being considered in the Xinanchem case. At a time when trade relations between China and the EU have become increasingly hostile, the decision represents a significant step toward international recognition of China's market liberalization and will thus pave the way for the future of trade relations with China on a more even playing field. The author is a partner and EU trade disputes expert at Holman Fenwick Willan, a London-based international law firm. The views do not necessarily reflect those of China Daily.

Hong Kong*:  Aug 17 2012 

Election time means big business for ad companies - Owners of advertising space and printers profit from the millions spent by candidates to boost campaigns. The Legislative Council election may be weeks away, but there's already one clear winner from the contest - the city's advertising and printing industries. Companies have seen business surge amid intense competition between candidates seeking seats in the expanded council, not least those fighting for the five new "super seats", which will be elected by a city-wide ballot for which 3.2 million voters are eligible. "More candidates came early to get their orders secured," New Century Printing owner Walter Wong Tung-wong said. "One super-seat candidate made an order of more than three million copies of their promotional pamphlets." At 20 to 30 cents per copy, such an order could generate almost HK$1 million for his company, Wong said. Two individuals and five slates of candidates are jockeying for the five super seats in the functional constituency for district councils, while formally known as the district council (second) functional constituency, while 21 individuals and 46 slates of candidates are contesting the 35 seats in five geographical constituencies, significantly up on the 55 lists that contested 30 seats four years ago. Polling day is September 9. The expansion of Legco and the creation of the super seats, in which all those without a vote in any other functional constituency will be able to cast ballots, are the result of electoral reforms passed in 2010. The two individuals and five slates running for the super seats are each allowed to spend up to HK$6 million on their campaign, while limits in the geographical seats range from HK$1.6 million to HK$2.6 million, depending on the population of the constituency. The limits for geographical constituencies are similar to those for the last Legco poll. One Civic Party campaigner said costs had increased since the last election. "We had to make our order early and leave more time for the printing process because there are more candidates grabbing the printers," said the campaigner. "Some printers were asked to work for a single political party." Advertising on the city's taxis was also proving more expensive. "In 2008 each taxi ad cost about HK$300 per month but it has doubled to HK$600 this year," the campaigner said. Lai Ming-hung, of the Taxi and Public Light Bus Concern Group, said taxi advertising was more popular with candidates than minibus promotions. "But the drivers will not benefit as the revenue all goes to the taxi owners." A Liberal Party campaigner said the party's spending went mainly on publishing promotional materials and advertisements, but some of the party candidates had bought advertising space on some 200 taxis.

A boy shows off his ticket to the Chinese gold medallists' exhibition, as many others waited in line behind him at City Hall. Fans snap up tickets to see Olympians - Sports lovers flocked to official ticketing outlets on Wednesday morning for a chance to share some golden moments with China’s Olympic champions, but many went away disappointed. Tickets for the Mainland Olympic Gold Medallists Sports Demonstrations went on sale at 10am on Wednesday at City Hall, the Hong Kong Cultural Centre, and Tuen Mun and Sha Tin Town Halls and were sold out by 11am. Many of those lucky enough to get tickets started queueing on Tuesday night or early Wednesday morning. The Chinese medallists will visit the city from August 24 to 26. They will hold demonstration shows at two city venues on the morning of August 25. In the evening of the same day there will be a celebratory extravaganza at Hong Kong Stadium, during which the athletes will interact with Hongkongers. Table tennis and badminton demonstrations will be held in the Queen Elizabeth Stadium in Wan Chai while a diving performance will be held at the Kowloon Park swimming pool. Among the enthusiastic crowd waiting to buy tickets at City Hall was a six-member family from Yuen Long. A woman, who was the first in line, said: “We started queuing at 10pm on Tuesday night. I am curious to see the gold medallists and have up-close contact with them.” She got the tickets she wanted. Age proved to be no barrier for keen sports fans and a number of elderly people joined the queues in the early morning. One 80-year-old man, who starting lining up outside City Hall at 6am, said he and his wife were keen to see badminton champion Lin Dan. “It will be the first time I’ve seen these champions in the flesh,” he said. The Taikoo Shing resident was satisfied with the overall arrangements and said staff were helpful. “When I was tired, a staff member got me a chair,” he said. But not everyone was happy. Latecomers, who queued up after 9am, were upset that they had missed out on such a rare opportunity. “I’m a bit disappointed because I wanted to see the gold medallists,” said an 18-year-old man. “The government should have offered more tickets.” A total of 3,448 tickets were sold at HK$20 each, with each person limited to two tickets. The Leisure and Cultural Services Department said the sports demonstrations would be broadcast on August 25. Tickets for the extravaganza will be available from 43 Urbtix outlets from 10am on Thursday from 10am. There will be 26,500 tickets available at HK$20 each, with a limit of four per person. Subject to availability of the tickets after the first day of sales, the LCSD said internet sales and telephone booking would commence on August 17. The Social Welfare Department will be distributing some tickets to charities and there will be live television broadcasts (SEHK: 0511) of the performance. Chinese athletes won 38 gold, 27 silver and 22 bronze medals in the London Olympics.

Hong Kong Police Adopt Controversial Body Cameras - Hong Kong law prohibits police officers from recording citizens if it breaches the public’s expectation of privacy, generally interpreted as any private space, according to Simon Young, director of the Center for Comparative and Public Law at Hong Kong University. But in public, use of cameras by the police is already common. “It’s not new to see police officers using cameras to film demonstrations,” said Mr. Young. He doesn’t see a problem with equipping officers with cameras but warned that the police “risk invading the privacy” of citizens if caution is not exercised in its usage. For instance, cameras recording an indoor private space from a public space outside could be the basis for a lawsuit, he said. Similar body cameras had been installed by law enforcement officials in the U.K., Scotland and the U.S. Many cop cars in the U.S. have cameras to record traffic stops while Australia and Canada has run trials on these cameras. A police spokeswoman said in an email body cameras “would be used by trained officers in accordance with the law and established guidelines.” She added: “The screen of the camera faces outward and the public will see themselves being filmed while recording. Secret filming will not occur.” Mr. Law also worries that the separate development of facial recognition software, used in conjunction with video cameras, could be used to target activists. Researchers at Hong Kong University are developing software that can be used to detect faces that are disguised or partially blocked from view and return possible matches from a set of photos in a database. “We’ll have the prototype ready six months from now, and it’s up to the police then if they would want to test it out,” said Kenneth Wong, the head researcher for the project. According to Mr. Wong, the police department expressed interest in the research but isn’t involved with the process. The tool could be used by the immigration department to identify criminals at border points. In response to concerns about the possible usage of facial identification software, a spokeswoman said the department “constantly reviews the effectiveness of investigative aids…including various software that might enhance our ability to identify suspects in connection with criminal investigations.”

Hong Kong Activists Claim Success After Senkaku Landing - A fishing boat filled with Hong Kong activists determined to proclaim China’s sovereignty over the contested Senkaku Islands claimed success after landing on the islands’ shores on Wednesday afternoon. By 4:30 p.m., members of the crew had slipped into the waters abutting the islands and begun singing choruses of China’s national anthem as they waded toward the shore. “We have achieved our goal successfully in claiming our sovereign rights to the world. The action exceeds our expectations and we’ve accomplished our objective faster than expected,” said Chan Yu-nam, vice-chairman of the Action Committee for Defending the Diaoyu Islands, as they are referred to in China. Activists said they were successful in bringing five Chinese national flags to the islands, which are located in the East China Sea and controlled by Japan. In addition to China and Japan, Taiwan also claims sovereignty over the islands. Though a number of Chinese activists have previously launched similar excursions to try to reach the islands and proclaim Chinese sovereignty, no Hong Kong activists have been successful in actually reaching the islands since 1996, as Japanese authorities have repeatedly turned such ships back. On Wednesday, as the activists’ boat neared the islands, it was trailed by around 10 Japanese vessels, as well as a helicopter. Japanese authorities broadcasted warnings in both Mandarin and Japanese to the boat, which continued to press forward, even after Japanese authorities began firing water cannons and attempted to board the vessel. The dozen seafarers, who set out Sunday from Hong Kong, celebrated their landing as the culmination of a journey that had earlier been complicated by tropical storm warnings, food supplies lost overboard in choppy waters, and disappointment as hoped-for reinforcement boats from Taiwan and mainland China failed to materialize. Throughout their voyage, the Hong Kong activists were cheered by observers in mainland China, many of whom had followed online the progress of the boat, the Bao Diao II, or the “Defend the Diaoyu II.” “Hong Kong’s defenders of the Diaoyu are truly brave, your countrymen support you,” wrote one user on Sina Weibo’s popular microblogging platform Wednesday. “If I could, I’d also become a member of your boat’s crew.” Founded in 1996, the Hong Kong-based Action Committee for Defending the Diaoyu Islands—which organized this week’s journey—has about 50 members, says member David Ko, who didn’t participate in this week’s trip but says he has previously joined four similar expeditions to the Senkaku, including one involving 20 boats and more than 50 people. That journey took place in 1996, he says, the same year that another excursion resulted in the death of one Hong Kong activist, David Chan, who jumped into the water after the boat was surrounded by Japanese ships and ultimately drowned. Since mainland Chinese have less freedom to independently protest against Japan’s claims over the islands, says Mr. Ko, the burden to do so “falls onto Hong Kong and Taiwan, because we have comparatively more freedom.” Late Wednesday afternoon, Japanese authorities said that five men had been arrested on the islands, while the country’s prime minister Yoshihiko Noda said the landing would be dealt with according to Japanese law.

Five activists in a Hong Kong vessel were arrested on Wednesday after landing on the disputed Diaoyu Islands claimed by China and Japan, Japan’s NHK said. A fishing vessel, carrying around a dozen activists from Hong Kong, Macau and the mainland, was closely tailed by about a dozen Japanese coastguard vessels and pummelled with water cannon, but activists still managed to break through. David Ko, a spokesman for the activists, said at least seven had made it ashore and five had been “held for questioning”. “The men carried red Chinese flags and Hong Kong flags. The boat is a total write-off,” he said. China’s Foreign Ministry said it would lodge a complaint with Japan about the arrests, state news agency Xinhua said. “The Chinese Foreign Ministry ... is contacting the Japanese side to lodge representations over five Chinese nationals’ detention on the Diaoyu Islands,” Xinhua said in a brief report. Earlier, in a satellite telephone conversation with the Hong Kong base, activist Tsang Kin-shing said the Kai Fung No 2 had been surrounded and followed by up to nine Japanese coastguard ships and one helicopter. Tsang said a Japanese coastguard ship, identified as PS16, had started to shoot at their boat with water, while other Japanese ships were making big waves in the sea. The activists from Hong Kong, Macau and the mainland were headed to the disputed islands to claim Chinese sovereignty. They said that tensions were heightening and one Japanese vessel had already issued a warning. Kai Fung No 2 had come under surveillance from Japanese vessels when it was about 90km from the islands – much earlier than expected. ”In the past their vessels would appear and warn us when we were about 30 nautical miles [55 kilometres] from the islands, but this time they showed up in the open sea when we were still 50 nautical miles [90km] away. I believe there will soon be clashes between the two parties,” said Chan Mui-tak, chairman of the Action Committee on Protecting Diaoyu Islands. Chan said he would advise his colleagues onboard Kai Fung No 2 to pay attention to their safety and return if they were attacked by the Japanese ships. “They have made the whole world aware of their protest and they have been to the region too,” he said. According to reports in the Japanese media, the Japanese government is treating the protest as a crisis and warned that any foreign ships entering their maritime jurisdiction without authorisation would be considered illegal entrants and be subjected to arrest. The activists on Kai Fung No 2, who lost most of their rations overboard, were given some food and water last night by Taiwan authorities and then continued their voyage to the islands. They cancelled earlier plans to replenish their supplies at sea off Keelung in northeastern Taiwan. They have also been avoiding calling at the Taiwanese ports for fear of being detained, following threats from the Taiwanese authorities. Their Taiwanese colleagues who had planned to join the protest claimed they were unable to hire a vessel, citing pressures from the Taiwan government. A group of members of the action committee led by Chan paid tribute to those who died during the second world war at the Cenotaph in Central on Wednesday morning, to mark the 67th anniversary of Japan’s surrender. On Tuesday the Global Times said China would be forced to send warships to the islands if Japan intercepted the activists. In Beijing, about 15 activists from a group related to Chan’s held a brief rally in front of the Japanese embassy. They unfurled Chinese flags and held up banners demanding that war be declared on Japan and the islands reclaimed. Two men read out statements that evoked national hatred toward Japanese stemming from the second world war and advocated violence in taking back the islands. One of them called for the annihilation of Japanese in protection of Chinese interests. In Taiwan’s capital, Taipei, more than 100 people gathered outside a Japanese government office to protest what they say are Tokyo’s plans to nationalize the islands.

Standard Chartered Plc has agreed to pay $340 million to settle allegations by New York's bank regulator that it hid transactions linked to Iran. The announcement on Tuesday capped a week-long transatlantic dispute over the US investigation of a British bank and a furore over why New York Superintendent of Financial Services Benjamin Lawsky had acted independently of US federal agencies. The resolution also came after London-based Standard Chartered's chief executive, Peter Sands, flew to New York to take control of negotiations and less than 24 hours before the bank was scheduled to defend itself at a high-stakes hearing. Lawsky on Aug 6 said Standard Chartered had hidden Iran-linked transactions with a total value of $250 billion, calling it a "rogue institution" for breaking US sanctions laws. He also ordered the bank to demonstrate, at a hearing set for Wednesday, why its license to do business in New York should not be revoked. That hearing has been adjourned, Lawsky said in his statement on Tuesday. Lawsky's order on Aug 6 came like a bolt from the blue, the bank said, hitting its share price and bringing top executives hurrying back to London from vacation. Bank of England Governor Mervyn King said that Lawsky was out of step with federal regulators who were already probing Standard Chartered. And Sands strongly denied the allegations, saying illegal transactions totaled less than $14 million. In his announcement on Tuesday, Lawsky said the bank had "agreed that the conduct at issue involved transactions of at least $250 billion." Standard Chartered confirmed that the two sides had agreed the terms of an agreement, including the payment of $340 million. "A formal agreement containing the detailed terms of the settlement is expected to be concluded shortly," the bank said. In addition to the civil penalty, Lawsky said the bank agreed to install a monitor for at least two years to check on money-laundering risk controls in its New York branch. The aggressive stance taken by Lawsky heightened his public profile just months after his agency, the Department of Financial Services, was created by combining the state's banking and insurance regulators. Within minutes of Lawsky's announcement, New York Governor Andrew Cuomo lauded the "effectiveness and leadership" of the new agency. "New York needed a tough and fair regulator for the banking and insurance industries to protect consumers and investors," Cuomo said. "This state and nation are still paying the price for a failed regulatory system and that must not happen again." But by jumping ahead of a two-year federal probe into Standard Chartered, Lawsky has also angered federal regulators. As his negotiations progressed last week and this week, the bank held separate talks with federal authorities. It had hoped to land a deal on both fronts, but Lawsky's solo announcement Tuesday made clear that had not happened. Underscoring a continuing divide between Lawsky and the federal regulators, the Treasury Department issued a short statement saying only that it would keep pursuing its own inquiry and settlement with Standard Chartered. "Treasury will continue working with our state and federal partners to hold Standard Chartered accountable for any sanctionable activity that may have occurred," it said. The US Federal Reserve said it "continues to work with the other agencies on a comprehensive resolution." The Department of Justice declined to comment. In the end, Lawsky's office won a settlement that was on par with fines paid by a handful of other banks that had improperly done business with sanctioned states such as Iran and Cuba. In 2010, Barclays Plc paid $298 million to settle a US probe. Lloyds Banking Group and Credit Suisse Group have previously agreed to pay settlements of $350 million and $536 million, respectively. ING Bank NV also paid a settlement. HSBC Holdings Plc currently is under investigation by US law enforcement, according to bank regulatory filings.

A beaming Lee Wai-sze, Hong Kong's only medallist at the London Olympic Games, arrives home with the rest of the team yesterday to be greeted by Secretary for Home Affairs Tsang Tak-sing (right) and more than 100 flag-waving schoolchildren at Chek Lap Kok airport. Lee won a bronze in the women's keirin track cycling, the city's third ever medal. Olympic cycling star Lee Wai-sze marked her triumphant return to Hong Kong yesterday with a call for more world-class sports facilities, as more than 100 people welcomed home the city's Olympians. Team Hong Kong returned yesterday afternoon after 17 days of competition in London, with children lining up to wave flags and other fans cheering enthusiastically and taking pictures of the athletes. Lee, who took a bronze medal in the keirin at the Games, said her achievement justified the city's investment in sports, but more international-standard facilities would allow her to train at home and spend more time with her family. She also said she hoped the city would improve its sports-science programme. "I hope the medal will make the government more confident in promoting sports in Hong Kong," she said. "We all work very hard, whether or not we get a medal. It's to bring honour to Hong Kong." Lee, who has not seen her family for six months because she spent most of her time training on the mainland, was greeted by her sister and brother. "The first thing I want to do is to have dinner with my family," she said. "I haven't seen them for a long time. I almost could not recognise my brother." When asked what she had given up for sports, she said: "It's my responsibility as a Hongkonger." Vivien Lee Man-wai, Lee's sister, said the family was excited when they watched the race at home. "We shouted and screamed," she said. The family took a picture in front of the television at the moment Lee won. Table tennis player Tang Peng, a member of the men's team that suffered an agonising defeat to Germany in the bronze-medal showdown, thanked Hongkongers who had followed their progress in London, while sprinter Lai Chun-ho said the public's support was encouraging. Lee's coach Shen Jinkang said her next goal should be "changing the colour of the medal" after she won Hong Kong's third medal in Olympic history. He said he was touched by Lee's performance and that she was brave. Lee would be at her peak at the next Olympics in Rio de Janeiro, and if she could maintain her level of performance, she could fight for an even better result, he said. Lee said she would focus on preparing for cycling's world cup after taking a week off. The government will hold a reception for the Olympians at the Cultural Centre today. Certificates of appreciation will be presented to the athletes.

Threat to Tokyo over Diaoyus - Editorial says Beijing will have to send warships if Japan's navy intercepts Hong Kong activists, who are set to approach the islands in fishing boat today. China will be forced to send warships to the disputed Diaoyu Islands if Japan intercepts Hong Kong activists claiming Chinese sovereignty of the islands, an editorial in the Global Times said. The paper, published under the auspices of the Communist Party mouthpiece People's Daily, said it opposed Japan sending Self-Defence Forces against the eight activists. "If Japan does so on a whim, it will force China to send warships to the Diaoyu Islands' waters ... boding ill for East Asian security," it said. The activists, aboard a Hong Kong fishing boat, Kai Fung No 2, are expected to approach the islands - called the Senkakus by Japan - at 11am today - the 67th anniversary of Japan's surrender to Allied powers in the second world war. The activists - who have lost most of their food rations overboard - decided not to approach Keelung port in Taiwan for supplies last night. They earlier called at Taichung port, but the local authorities only gave them water and urged them to leave for Keelung to shelter from a coming storm. Chan Yue-nam, who planned the protest but remains in Hong Kong, said the decision not to restock in Keelung was made after Taiwanese authorities threatened to detain their vessel, which had not applied for a pass to enter the port. He said the storm brewing in the Luzon Strait would have a limited impact on their voyage. The activists are on board the ship with two reporters and four sailors. "We will be the only ones to deal with the Japanese, thanks to the Taiwanese authorities, who did not allow their activists to join," said Chan. A Taiwanese vessel was to have sailed from the port of Kengfeng in the island's northeast yesterday but the trip was called off at the last minute due to "government pressure". "The boat skipper told us at the last minute [that] he could not sail, shortly after we had placed water and other supplies aboard and [were] ready to set off," Hsieh Meng-lin, the leader of six Taiwanese activists, told the South China Morning Post (SEHK: 0583). "I hope [the Hong Kong activists] keep an eye on changing weather conditions and pay attention to safety while claiming our country's sovereignty," he said. Taipei meanwhile renewed its claim to the Diaoyus. "President Ma Ying-jeou has made it clear that the government of the Republic of China [as Taiwan calls itself] will by no means make concessions ... Not even a single inch," a presidential spokesman said. Hong Kong Chief Executive Leung Chun-ying said he hoped the activists would return home safely, but sidestepped questions on whether he supported the protest. The activists succeeded in leaving the city on Sunday, despite a warning from Hong Kong police.

Liu Yang, a crew member of the Shenzhou IX manned space mission, greets Macao residents on Monday. The delegation, which includes the Shenzhou IX astronauts, started their three-day visit to Macao on Monday afternoon. Astronauts wow Macao crowd - The three astronauts who completed China's first manned space-docking mission in June shared their feelings with nearly 1,000 people, including representatives of Macao's technical and educational circles, social groups and college students on Tuesday. Audience members asked more than 140 questions of the Tiangong 1/Shenzhou IX space delegation, which includes veteran astronaut Jing Haipeng, China's first woman astronaut Liu Yang and crewmate Liu Wang. Leading the group was Niu Hongguang, deputy commander-in-chief of the manned space program. Jing Haipeng, who was on the Shenzhou VIII mission in 2008, talked about the differences between the two space missions. Liu Yang shared stories about how she received extra training in order to become an excellent astronaut, and how she had not been anywhere other than home and work for two years. "It demands superlative fortitude to do just one thing in one's whole life," she said, which moved the audience and won warm applause. Lau Si Io, Macao's secretary for transport and public works, said the presentation will give Macao people a better understanding of the country's aerospace technology development. The Tiangong 1/Shenzhou IX space delegation wrapped up its four-day visit to Hong Kong and arrived in Macao to a hero's welcome on Monday afternoon. About 500 students and residents waited for nearly an hour despite showers before the astronauts walked off their ferry at about 4:40 pm. The delegation is expected to leave Macao on Wednesday.

 China*:  Aug 17 2012

China may have slipped to second place in the Olympic medals table, but when it came to online enthusiasm about the Games its microbloggers were second to none. China's main microblogging site, Sina Weibo, said its users posted 393 million messages about the London Olympics over the course of the two-week event, well over double the 150 million Games-related posts on Twitter. China bans Twitter, but its home-grown microblog services, the most popular of which is Sina Weibo, have taken the country by storm as internet access has grown. Drama surrounding star Chinese athletes regularly topped Sina's list of hottest topics during the Games, such as when the swimmer Ye Shiwen broke the world record in the women's 400 metres individual medley only to face accusations of doping. More than 30 million people posted on hurdler Liu Xiang's disastrous performance in the 110m hurdles, when he crashed into the first fence with the same injury that prevented him from taking part in the Beijing Olympics. Many web users praised their country's performance, though there were also allegations of anti-China bias among referees and the Western media, which some web users said had prevented China from defending its place at the top of the medals table. Sina Weibo says it has more than 300 million registered users, but it is not clear how many of these are active. Twitter says it has 100 million active users and does not give a total number of registered users, although the French web consultancy Semiocast said the total number of Twitter users reached 500 million in June.

Kobe Bryant visits China for charity event - US basketball star Kobe Bryant, left, poses for photos with Chinese actress Xu Qing, who is holding up Bryant's gold medal won at the London Olympic Games, at a charity dinner held by the China Soong Ching Ling Foundation in Shanghai, Aug 14, 2012. Donations and proceeds from an auction during the 3rd annual event will be used for communication between children in China and the US in the fields of education, sports, culture and art. It will also help children in lower-middle income families in both China and the US to complete their education.

If Mengniu does buy Modern Dairy, the acquisition would lower the cost of its raw milk supplies and expand its sources, an analyst says. Modern Dairy rises on link to Mengniu - Shares in Anhui-based raw milk supplier jump 10.5 per cent after report of acquisition talks, but the company denies a deal is in the works. China Modern Dairy Holdings rose nearly 18 per cent yesterday on rumours that China Mengniu Dairy (SEHK: 2319), the largest dairy producer on the mainland, intended to acquire the raw milk supplier to beef up its upstream control over the industry. Bloomberg reported yesterday that Mengniu had been in talks with Modern Dairy over a possible acquisition. The news triggered a 17.9 per cent jump in the share price of Modern Dairy before it closed at HK$2.22, up 10.5 per cent. Shares of Mengniu remained flat at HK$22.85. Modern Dairy issued a statement in the afternoon, however, denying any intention of pursuing the deal. "The board wishes to confirm there are no negotiations or agreements relating to intended acquisitions or realisations which are discloseable under … the listing rules," its chairman Deng Jiuqiang said in a filing to the Hong Kong stock exchange. Deng also said the company was unaware of any reason for the stock's increase in price. A spokeswoman for Mengniu said the company had no comment on the news. She confirmed Mengniu was actively seeking different ways to improve the quality of its raw milk, including by acquiring dairy farms. Bloomberg quoted two anonymous sources as saying the acquisition talks involved state-owned food conglomerate Cofco, which holds 22 per cent of Mengniu; and New York-based private equity firm KKR, which owns 24 per cent of Modern Dairy. The report said the talks had stalled amid China's political leadership transition, though a deal was still expected to happen. It said the value of the deal had not been determined. "There are two possibilities if Mengniu pursues such a deal," said Sunny Kwok Yap-sing, an analyst with Guotai Junan International in Hong Kong. "One is that Mengniu is seeking a privatisation of Modern Dairy to speed up its penetration upstream into the industry. The other is Mengniu just takes the deal as an equity investment. The first situation seems to be more likely so far." Founded in 2005, the Maanshan, Anhui-based Modern Dairy had 16 mainland farms as of December and can produce 1,300 tonnes of raw milk daily. Deng and most other management employees were also senior or mid-level executives of Mengniu. For the six months to December, Modern Dairy earned 735.6 million yuan (HK$897.88 million) in revenue, mostly from supplying Mengniu. The Inner Mongolia-based Mengniu, which aims to be among the top 10 dairy firms in the world, has been trying to improve the quality of its goods after scandals involving the company hit consumer confidence in home-made dairy products. In 2008, baby formula from several domestic producers were found to contain the cancer-causing melamine, which killed at least six babies and made 300,000 sick. Mengniu said in June that it would sell a 6 per cent stake to Arla Foods and would receive advice on advance farm management from the Danish-Swedish dairy giant. Kwok said the possible acquisition would help Mengniu lower its cost of buying raw milk and expand its raw milk sources quickly.

Mainland property stocks fell yesterday on speculation that the central government will implement a property tax in more than 30 cities. The Economic Information Daily, a newspaper owned by Xinhua news agency, reported on Monday that the State Administration of Taxation is conducting a six-month course on how to evaluate property tax and officials from local taxation bureaus in more than 30 cities were taking the program. The course is widely believed to be preparing officials for the property tax. The authorities will continue to hold the course for two years, the report said. Shares in Greentown China Holdings (SEHK: 3900) fell 3.9 per cent to close at HK$7.88 yesterday while Evergrande Real Estate dropped 3.2 per cent to HK$3.33. Sino Ocean Land and Shimao Property Holdings (SEHK: 0813) lost 2.65 per cent and 1.73 per cent, respectively. Alfred Lau, property analyst at Bocom International, the investment banking unit of Bank of Communications (SEHK: 3328), said mainland property stocks have been softening since last month as the market has been concerned that the central government might introduce new curbs. "The mainland government will impose the property tax sooner or later. It has already done so in Shanghai and Chongqing but that didn't bring down property prices," he said, adding restrictions on buying second homes have had a much greater impact than property tax. He said he believed the central government was unlikely to introduce any drastic new measures in the property sector ahead of the once-in-a-decade leadership change later this year. "They will only implement the existing measures more strictly." Du Jinsong, research analyst at Credit Suisse, said another factor that affected the stocks was the poor property sales last month. "The market expected mainland developers to record strong property sales in July. However, the figures last month were worse than June's," he added. Greentown China sold a total gross floor area of about 213,000 square metres in July, 48.6 per cent less than in June. The monthly sales of Longfor Properties slumped 32.4 per cent to 3.07 billion yuan (HK$3.76 billion) last month, while Shimao Property Holdings' sales fell 33.42 per cent to 4.02 billion yuan. Du said sales slowed as developers have begun to raise prices. He expected sales to stay at low levels this month but said they would rebound next month as more new residential projects hit the market.

Hong Kong*:  Aug 16 2012 

Astronauts Liu Yang (left), Liu Wang and Jing Haipeng during a tea party with about 180 Hong Kong women in Hung Hom. As astronauts bid farewell, it's all about the women - First woman in space could not help but steal the limelight before leaving HK. China's first female in space and her two colleagues on board the Shenzhou IX rocket bid an apt farewell to Hong Kong yesterday, when it was all about the women. Fresh from her voyage to the Tiangong-1 experimental space station, Major Liu Yang could not help but steal the limelight from Senior Colonel Liu Wang and Senior Colonel Jing Haipeng wherever they went - a fact that did not escape the men. "Wherever we've gone, we've heard: 'Liu Yang, Liu Yang!' Deep down, Liu Wang and I have been envious," Jing said mischievously. His remark came at a gathering of about 180 women, including the chief executive's wife, Regina Tong Ching-yee, and former secretary for justice Elsie Leung Oi-sie, in the Harbour Grand Kowloon hotel. And once again Liu Yang was the star. She was moved to tears as they listened to a recording of the story of how she became an astronaut. She told how she would study late into the cold winter nights at home in Zhengzhou, the capital of Henan. "My mum would sleep with me. Actually she wanted to use her body warmth to warm the bed. So when I went to bed the blanket was all warmed up," she said. She was a bright student and her class teacher signed her up without even asking her, when the first batch of women astronauts was being recruited in 1997, when Liu Yang was about 18 years old. However, she had never been sporty and had to work hard on getting fit. "Each morning I would wake up at 6am and run 7,000 metres," she said. "My hair would become all white, like an old man, with ice stuck to it." Other than working on the next space missions, she said her next target would be to have a child, after her body recovers from the space travel. After the trio sang on stage at the Convention and Exhibition Centre in Wan Chai, Liu Wang gave another demonstration of his musical talent by playing the theme song from a Chinese television drama on his harmonica. He said it was the same one he played over the phone from space to his wife for her birthday on June 21. "I would like to thank my wife for her support," he said, and almost in apology for not being more emotional, he added: "We are not romantic people." However, he said one of his missions in Hong Kong was to get everything on his wife's shopping list, cosmetics and all. He admitted that his mother had initially objected to him becoming an astronaut, as she thought it would be difficult for him to find a wife. She was later persuaded by his teacher. Asked how he had trained his hands to be steady to perform the manual docking, he told how, as a small boy, he used to help his grandmother with needlework. There was a farewell ceremony at Government House with Chief Executive Leung Chun-ying before the delegation headed to Macau for two nights, taking the ferry from Sheung Wan. Niu Hongguang, the manned space programme's deputy chief commander who led the delegation, ensured he would always be welcome in Hong Kong. "Although the visit is short, we are impressed by the charm and beauty of the oriental pearl," he said, "And also the prosperity (SEHK: 0803, announcements, news) and open atmosphere of this metropolis. "For the 15 years since the handover, we have felt the great achievements of Hong Kong and the expectations of Hong Kong people for aeronautic development in China."

Ocean Park rejects claims dolphins are overworked - Chief Allan Zeman says shows would not be run if mammals are stressed; they don't work like humans. Ocean Park has dismissed claims that its dolphins are being overworked and used as a tool to lure more visitors, adding that human work concepts are not applicable to the sea mammals. Chairman Allan Zeman said that if trainers and park veterans thought the shows were too stressful for the animals, they would not be run. Senior curator of marine mammals Wong Hoi-ming, said the dolphins were "playing, not working". "Unlike human beings, dolphins don't have to go to work on time every day and chase deadlines," he said. "They are just singing and playing around." They were commenting on a media report that exhausted dolphins were failing to respond to trainers' orders during shows. The park said the number of presentations in the Ocean Theatre varied from three to six a day according to the number of visitors and seasonal requirements, but no dolphin performed in more than four. The park's six-show schedule operating at present will last until August 27. "We don't do these shows in order to make more money," Zeman said. "Basically we would never do anything to harm dolphins." Rebutting claims that the sea mammals are trained to perform "circus-like" tricks, Zeman said: "The dolphin is just doing what it normally does in its natural state. "We never ask them to jump and catch a ball - things that they normally don't do." But Dr Samuel Hung Ka-yiu, chairman of the Hong Kong Dolphin Conservation Society, said some behaviour was "unnatural" - such as tail-walking, jumping on to the platform and waving goodbye. The park said in a statement that about 60 animal husbandry and veterinary staff took care of the marine mammals - including 29 dedicated to the dolphins alone. "An increased number of presentations does not increase the individual dolphin's daily activities," it said. "The animals' daily activity budgets remain the same, and are closely monitored and managed to ensure their health." But Hung said the measures were only able to monitor the physical fatigue of the dolphins, not their mental fatigue. Seven dolphins take turns in the daily performances, which have been in operation for 36 years. The park said that when a dolphin did not follow a trainer's cue, it could be distracted for multiple reasons, such as hormonal fluctuations during breeding seasons. At yesterday's 12.30pm show, one of the dolphins failed to respond to its trainer's "hand-shaking" instruction. "It's normal that dolphins don't [always] listen to our instructions," said senior marine mammal supervisor, Rosetta Lui Kai-yi, who has been training the dolphins for 26 years. "For example, when female dolphins are on heat, the males will easily get distracted."

Tickets to see some of the Chinese athletes who scored gold in the Olympics perform in Hong Kong will go on sale tomorrow. The announcement came ahead of the return of Hong Kong's Olympic team today. The government said their efforts would be celebrated tomorrow but gave no details, except that Chief Executive Leung Chun-ying would present them with certificates of commendation. The mainland athletes will arrive in the city on August 24, and demonstrate their world-beating diving, badminton and table tennis skills the next day - with the government hopeful of getting some of the Hong Kong athletes involved. On the evening of August 25, a celebratory extravaganza will be held at Hong Kong Stadium. Victor Hui Chun-fui, vice-president of Hong Kong's Sports Federation and Olympic Committee, said that while it was uncertain which of China's gold medallists would be present, he was confident that most, if not all, would come to the city. Hot on the heels of the Chinese astronauts' singing performance at the Convention and Exhibition Centre, Hui revealed the athletes would be demonstrating more than their sporting prowess at Hong Kong Stadium. "Some of them are also very talented at singing too," he said. Tickets to see the athletes in action will be on sale at City Hall, the Hong Kong Cultural Centre, and Sha Tin and Tuen Mun town halls. The badminton and table tennis events will be held at Queen Elizabeth Stadium in Wan Chai, while the diving will be staged at Kowloon Park swimming pool. Tickets for the extravaganza will be available from 43 Urban Ticketing outlets from Thursday. Entry to each event will cost HK$20 and sales are limited to two per person for the sports demonstrations, and four for the extravaganza, which is expected to draw an audience of more than 30,000. Leisure and Cultural Services Department director Betty Fung Ching Suk-yee said the Social Welfare Department would be distributing some tickets to charities so families short on cash can have a chance at seeing the sporting heroes. There will also be live television broadcasts (SEHK: 0511) of the performances. Chinese athletes won 38 gold, 27 silver and 22 bronze medals in the London Olympics, which concluded on Sunday night, the best result outside China. Gold medallists include table tennis players Zhang Jike and Li Xiaoxia, badminton champion Lin Dan and divers Chen Ruolin and Wu Minxia.

As chief executive Stephen Chan Chi-wan has grand plans for Commercial Radio, hoping to involve more listener interaction. The digitalisation of the city's radio industry doesn't need new licences, but rather a new mode of operation and content development combining the best of traditional and new media, Commercial Radio boss Stephen Chan Chi-wan says. "We are not running a radio station. We are running a new media [operation]," chief executive Chan said, explaining why his firm has not joined the rush to seek a 12-year digital audio broadcasting licence from the government. Metro Broadcast is the only traditional radio broadcaster to be granted one of the new licences, with two others going to newcomers, Phoenix U Radio and the troubled Digital Broadcasting Corporation (DBC). Public broadcaster RTHK will also launch digital channels soon, but Commercial Radio withdrew its bid for a digital licence in 2010 and Chan says its future will be in convergence and cross-platform broadcasting instead of traditional radio signals. "Commercial Radio began digitalisation very early on ... there was no need to apply for a new licence," Chan said. Audiences can now access radio broadcasts on the internet and via smartphone applications. Live videocasts of radio programmes are also available online. But the company is now looking at how the web can be used to offer immediate interaction between the station and its listeners. "We will develop new programmes and applications to enable our listeners to start [discussions] on their own topics. They can express their views any time they like. The radio platform will bring these views to a mass audience," Chan said, adding that the plan would even involve a new social network. More details of the station's digital initiatives would be released in the next quarter, Chan said, but he refused to reveal how much money was going into the new ventures. Chan was offered the chief executive position by Commercial Radio's vice-chairwoman Winnie Yu in March, a week after he left TVB (SEHK: 0511), where he had been general manager as well as a popular on-screen talent. He had planned to stay at Commercial Radio for just a few weeks, until Hong Kong's new chief executive was elected, but after Leung Chun-ying won the poll Chan vowed to stay on until universal suffrage was implemented. Chan declined to comment on the troubles of DBC, which is due to go off air next month after major shareholders refused to inject new capital, a move that its co-founder, former Commercial Radio talk show host Albert Cheng King-hon, claimed was politically motivated. He stressed that Commercial Radio's reputation for outspokenness would not be restrained, no matter how much pressure it came under. "We are never worried about this. This radio station has been in Hong Kong for 52 years and we have never succumbed to any kind of pressure," Chan said. "This station has no censorship. The most important thing is, are we doing what we should do, saying what we should say. This station has no censorship. It is this company's station."

Hong Kong activists heading to the disputed Diaoyu Islands to support China’s claim of sovereignty arrived in the city of Taichung in west-central Taiwan on Tuesday afternoon. The crew hoped to re-stock supplies before embarking on the next stage of the voyage. The Hong Kong-registered Kai Fung No 2 carrying eight activists – from Hong Kong, Macau and the mainland – and six sailors and reporters, lost a large proportion of the trip’s food rations overboard when it hit rough seas early in the voyage. The crew felt they would not be able to make it to the islands without new supplies. “They are now waiting offshore for their Taiwanese friends to send them supplies,” said Chan Yue-nam, head of the Action Committee for Defending Diaoyu Islands based in Hong Kong. “We have no idea how long this will take, but, once it is completed, the crew will go straight to the Diaoyu Islands.” Chan had said the group’s counterparts from the mainland and Taiwan would not be joining the trip as authorities refused to let them. The activists aborted a plan to replenish supplies at a port at Penghu county, but gave no reasons. On Tuesday morning Chief Executive Leung Chun-ying said he hoped for a safe return for the activists. Leung said his government would follow the situation closely, but he sidestepped questions on whether he, personally, supported their actions. “I hope they keep an eye on changing weather conditions and pay attention to safety while claiming our country’s sovereignty over the islands,” he said. “I hope they have a safe, smooth trip home.” Leung’s comments came as tensions heightened over the sovereignty dispute. The Global Times under auspices of the mainland’s official People’s Daily warned Japan that China might deploy warships to the area if the Japanese vessels attempt to intercept the activists.

Hong Kong Sails to Defend Islands’ Sovereignty - Activists from the Hong Kong-based “Action Committee for Defending the Diaoyu Islands” shout slogans and wave the Chinese flag on a fishing boat before departing for the disputed Senkaku islands on August 12, 2012. A group of Hong Kong activists climbed aboard a fishing boat this week and began sailing to a set of disputed islands in the South China Sea, live-tweeting their journey as they went. The goal? To plant a Chinese flag in the soil of the Senkaku Islands, claimed by Japan, China and Taiwan and referred to in Chinese as the Diaoyu Islands. Over the years, a number of protest vessels have attempted to leave Hong Kong waters to visit the islands—most recently in January—but have been turned back by local authorities, who have prevented such pilgrimages out of safety concerns. This time, though, the Bao Diao II, or “Defend the Diaoyu II,” ship left Hong Kong’s waters after ignoring government orders to turn around, the city’s marine department said. The ship is stopping first in Taiwan, where it’s supposed to be joined by a companion vessel similarly intent on defying Japan’s claims to the islands, before jointly turning their prows toward the disputed islands themselves. “If Japan’s army has the guts to open fire, television, radios and engines will all come in handy,” the group wrote on their Twitter page after sailing from Hong Kong on Sunday with 14 passengers in tow, including eight members of the Action Committee for Defending the Diaoyu Islands. Most of the passengers were from Hong Kong, with one from Macau and another from mainland China. “Chinese people landing on China’s legal territory is entirely right and proper. We must fight to the end!” the group posted. In a series of updates since, the group has chronicled their ration levels and latest coordinates for fans and uploaded photos of their journey. The activists earned an avalanche of plaudits from mainland observers who are following their journey online. “I support you, you’re the most lovable people,” wrote one user on Sina Weibo, China’s popular microblogging service. “Now’s the time to rise up, we’ve arrived at the most dangerous time, millions of Chinese people must stand up at this moment. Come on! Defeat Japanese imperialism.” The fact that it was Hong Kong and Taiwanese activists sailing together attracted the admiration of a number of users. “I also want to enter a Protect the Diaoyu Islands Association, and be together with my warm-blooded Hong Kong and Taiwanese compatriots…to use our action to protect the spirit of our territory,” wrote another. Hong Kong has a long history of making nautical attempts to deny Japan’s claims to the islands, which are barren and uninhabited but potentially resource-rich. In 1996, after local activists were incensed by Japan’s establishment of a lighthouse on the islands, a group of Hong Kong nationalists attempted to sail there, and one Hong Kong activist, David Chan, jumped into the sea and drowned after their vessel was surrounded by more than a dozen Japanese ships. Similar bands of mainland activists have attempted to land on the islands at least four times since 2003, but each time have been intercepted en route by Japan’s coast guard, according to China’s state-run Global Times. Japan has said that it will intercept the Bao Diao II, if necessary. Tensions over the territorial dispute have lately been on the rise and were further inflamed in May, when Tokyo’s governor proposed that his city buy the islands. Tensions again flared up last month, when Chinese patrol vessels briefly entered waters abutting the island, incensing Japan. On Tuesday, some Japanese social media users expressed frustration with Chinese nationalists’ gambits, saying that the islands were a part of Japanese territory. “Isn’t anyone taking responsibility here? U.S. bases in Japan would actually mean something if we could use U.S. military power,” wrote one user. The Hong Kong activists plan to reach the islands tomorrow, the anniversary of the day that Japan surrendered during World War II.

 China*:  Aug 16 2012

China’s Young Rich: Not Top Students - For Chinese parents who wrack their brains thinking of ways to send their kids to top universities, a recently released wealth list may make them think twice. According to a new list that tracks China’s young and wealthy, none of the wealthiest people born after 1980 graduated from Peking University or Tsinghua University, China’s top two universities. About two-thirds of the rich 32-years-old-or-younger graduated from non-key universities, including vocational colleges. That’s a shift from the previous generation. Among 59 of those on the list born before 1980, five graduated from Peking University and two from Tsinghua. They include big-name entrepreneurs like Robin Li, chief executive of Baidu Inc., a graduate of Peking University, and Charles Zhang, CEO of Sohu.com Inc. of Tsinghua. More than half of billionaires in this age group graduated from first-tier universities in China. This list names the top 100 Chinese multi-millionaires in yuan terms, plus their universities and majors. It was compiled by sdaxue.com, the website of Tiantian Xiangshang Corp., an online company based in China’s Jiangxi province. The company gathered information of individuals’ wealth from prominent rich lists including those from Forbes China Rich List and Hurun China Rich List , among others, while adding the educational background of those on the list. The list ranks the wealthy by age. Ding Shiyuan, born in 1990, is the youngest person on the list. He graduated two years ago from a local vocational college in Shenzhen, and his event organizing business, Dingding Culture Industry Development Co.,LTD, has given him wealth of 12 million yuan ($ 1.8 million), according to the list. “Major and university are not symbols of success. What makes me successful is working hard and being realistic,” Mr. Ding told China Real Time. Younger members of the list also mostly lack foreign education. Only six out of 100 people on the list have overseas experience in Japan, the U.S. or the UK, the list says. To be sure, the list – like all accountings of the wealthy — likely has serious gaps. For example, neither the Forbes not the Hurun list are comprehensive given how difficult it can be track wealth, particularly in China. The list also is heavily weighted toward those whose wealth comes from publicly listed companies, which report financial data that private companies don’t have to. It doesn’t appear to track wealthy Chinese who have left the country. And, of course, it doesn’t track those whose wealth comes from official or public positions. It also doesn’t take into account the future wealth of graduates of top schools or foreign-educated graduates, who could come to the list in increasing numbers as they grow older. Majors of the rich vary, ranging from veterinary medicine and logistics to computer technology. About half of the people on the list are involved in information technology, online game and software development, and most of them studied related majors in universities. The list indicates that while many older wealthy became their own boss 10 years after graduation, many young entrepreneurs started only three to five years after graduation. “We note that many Chinese young entrepreneurs are following their peers in America by starting up early their during university years or even dropping out school to focus on business, ” said Chen Jiangping, product manager of sdaxue.com, who is in charge of compiling this list. “This list aims to provide an interesting reference for university applicants and those who are interested in China’s higher education and wealth,” said Mr. Chen.

Asian top beer festival kicks off in Qingdao China. Actresses dressed in colorful clothing from Brazil dance samba at the 22nd Qingdao International Beer Festival in the coast city in Shandong province on Aug 11, 2012. The festival, the biggest in Asia, attracted more than 300 beer brands from 16 countries all over the world. Actors dance at the 22nd Qingdao International Beer Festival in the coast city in Shandong province on Aug 11, 2012. 

Construction workers on Tuesday laid the last piece of a railway that will link southwest China's Yunnan province with the Association of Southeast Asian Nations countries. The Yuxi-Mengzi Railway has a total length of 141 km with a designed maximum speed of 120 km per hour. It passes through 35 tunnels and crosses 61 bridges, which together account for 54.95 percent of the line's total length. The railway is part of the eastern line of the planned Pan-Asia Railway network, an international railway project that will also consist of central and western lines. Funded by the Ministry of Railways and the Yunnan government, the railway has a total investment of 4.5 billion yuan ($709.78 million). The railway is expected to become operational later this year and will boost land transportation between China and ASEAN countries. The Pan-Asia Railway network is designed to start in Kunming, capital of Yunnan, and pass through the cities of Yuxi, Mengzi and Hekou in Yunnan to connect with Vietnam, Laos, Thailand and Singapore.

Chinese manufacturer Chery Auto remains a leading firm with overseas markets after exporting more than 110,000 vehicles in the first seven months of the year. Chery Auto spokesman Jin Yibo said, on Tuesday, the company exported 112,014 automobiles from January to July, compared with 88,835 for the same period last year, up 26.1 percent year-on-year. Chery's automobile exports, account for more than a third of the country's total passenger vehicle exports in the first half of the year, Jin said. The Wuhu-based company in east China's Anhui province set a full-year export target of 170,000 units at the beginning of the year. "Judging from the overseas sales in the first seven months, Chery is set to fulfill the export target this year," Jin said. He said with the adjustment of the Chinese economy this year and the declining demand in overseas markets, export growth in industries had fallen sharply. However, China's vehicle exports, led by companies such as Chery Auto, has achieved substantial growth to buck this trend, Jin added. Chery has 16 overseas assembly plants to produce customized vehicles for its customers. It has 1,153 dealers overseas, selling its automobiles in more than 80 countries and regions.

A section of the "Underwater Great Wall" in Kuancheng county of Hebei province on Aug 13. In 1975, the government built the Panjiakou Reservoir in Kuancheng county, therefore water inundated a section of the Great Wall there which is 500 years old. Because of drought and an increase in the use of water, the water level at the Panjiakou Reservoir fell more than 10 meters and part of the "Underwater Great Wall" emerged. However since July, the heavy rain has again raised the water level to the highest it has been in ten years and the Great Wall again is submerged. Uniquely, it is the only place where the Great Wall dips underwater. 

Hong Kong*:  Aug 15 2012

The MTR Corporation (SEHK: 0066) on Monday announced a 33.2 per cent drop in unaudited net profits for the first six months of the year, ending on June 30. Hong Kong’s underground mass transit railyway operator made no initial explanation of the losses. The calculation of share earnings is based on the weighted average of 5,785.70 million shares in issue during the period versus 5,775.57 million shares the same period a year earlier.

Standard Chartered and New York state regulators have discussed a settlement amount to resolve an inquiry into whether the British bank’s records improperly hid transactions tied to Iran even as the bank prepares for a hearing to defend its New York license, according to sources familiar with the situation. The dual tracks highlight the uncertainty of the situation facing Standard Chartered as it enters a second week at odds with New York’s Department of Financial Services, which alleged August 6 the bank hid transactions tied to Iran. The state agency, headed by Benjamin Lawsky, ordered the bank to explain why it shouldn’t lose its license at a hearing scheduled for Wednesday. Standard Chartered vehemently disagrees with the agency’s allegation the bank improperly processed US$250 billion tied to Iran, which Lawsky cited in his order issued August 6. The heart of his order, however, alleges the bank violated state laws when it concealed records of transactions from bank examiners. The talks could still collapse, and the hearing also could be postponed to allow more time for negotiations, according to the sources familiar with the matter. The bank, meanwhile, already was co-operating in a separate probe dating to 2010 that included the US Justice Department and Manhattan district attorney. That investigation is aimed at determining whether Standard Chartered violated US sanctions laws and a settlement discussion has been occurring separately from the state discussions. A settlement with New York would end a period of turmoil for the bank and law enforcement officials and likely would result in a multimillion-dollar fine for Standard Chartered. A settlement with federal officials also could result in a multimillion-dollar fine. Officials for the Justice and Treasury departments and the Manhattan district attorney either weren’t available for comment or declined to comment. Lawsky’s order cited communications between Standard Chartered officials about the reputational and legal threats to the bank if it kept doing business with Iranian clients. Spokespersons for Lawsky’s department and Standard Chartered declined to comment. Faced with similar accusations, some banks prefer to quietly settle. Barclays, Credit Suisse, Lloyds Banking Group, J.P. Morgan Chase and ING Bank had agreed in prior years to settlements totalling nearly US$2 billion into how those banks allegedly processed money or assets tied to sanctioned countries. Standard Chartered, by comparison, said last week that Lawsky’s “interpretation” that the bank had improperly handled Iranian transactions was “incorrect as a matter of law.” Lawsky’s office alleged the bank had hidden from regulators some US$250 billion in improper transactions tied to Iran. The bank said that total amount that didn’t adhere to US sanction laws was less than US$14 million. More recently, the bank has gone quiet. Chief executive Peter Sands was scheduled to appear on CNBC on Thursday but that appearance was postponed. The network said at the time the bank had emailed to say Sands couldn’t appear because of “logistical reasons.”

Tickets to see performances by the Chinese athletes who scored gold in the London Olympics will go on sale this week, although the list of visiting athletes has yet to be confirmed. The government said on Monday afternoon that the Chinese athletes would arrive in the city on Friday, August 24 and on Saturday, August 25 there would be demonstrations of diving, badminton and table tennis in the morning, and an extravaganza in the evening. Some of the medallists would also attend sharing sessions with young people. Victor Hui Chun-fui, vice president of Sports Federation and Olympic Committee, said while it was uncertain which of the 38 gold medallists would be present, he was confident that most, if not all, of them would come to the city. He said the list should be ready in one or two days. The public could start buying tickets for the demonstrations on Wednesday at City Hall, the Hong Kong Cultural Centre, and Sha Tin and Tuen Mun Town Halls. Tickets for the extravaganza would be available from 43 Urban Ticketing outlets from Thursday. Tickets will cost HK$20 and sales are limited to two per person for the demonstration shows, and four for the extravaganza at Hong Kong Stadium, which will see an audience of more than 30,000. The badminton and table tennis events will take place at Queen Elizabeth Stadium in Causeway Bay, while the diving will be staged at Kowloon Park swimming pool. Leisure and Cultural Services Department director Betty Fung Ching Suk-yee said 500 tickets for the demonstration shows would be distributed to organisations serving the needy through the Social Welfare Department. For the extravaganza, those organisations would also receive 3,600 tickets. There will be live television broadcasts (SEHK: 0511) of the performances, and the government would try to involve local athletes in the shows, permanent secretary for home affairs Raymond Young Lap-moon said. According to Hui, the athletes will demonstrate more than their sports talent in the variety show. “Some of them are also very talented at singing too,” he said. Young said government officials would receive Hong Kong’s Olympic athletes at the airport on Tuesday. A celebration event would be held on Wednesday, where chief executive Leung Chun-ying would present them with certificates of commendation. Chinese athletes won 38 gold, 27 silver and 22 bronze medals in the London Olympics which concluded on Sunday night – the best result outside China. Gold medallists include table tennis players Zhang Jike and Li Xiaoxia, badminton champion Lin Dan and divers Chen Ruolin and Wu Minxia.

The High Court on Monday approved the eviction of protesters camped outside the HSBC bank headquarters in the city, in a major blow to the last outpost of the “Occupy” movement in Asia. “The defendants can’t provide sufficient reason to continue to live on the property so the court has decided to allow the plaintiff to take back the property,” magistrate Reuden Lai said. The camp sprouted at the landmark HSBC tower in central Hong Kong 10 months ago, weeks after thousands of people pitched tents in New York’s Zuccotti Park demanding an overhaul of the rules of global capitalism. Similar camps sprang up in dozens of countries worldwide, but most have petered out since police forcibly dismantled the New York tent city in November last year. The High Court gave the protesters 14 days to leave the courtyard of the bank’s downtown office tower, after which HSBC would be entitled to reclaim the site. Only a handful sleep at the camp overnight, and during the day there are rarely more than 10, according to witnesses and bank officials. Even so, their tents, personal belongings and banners denouncing capitalism have become a fixture – some say an eyesore – at the HSBC building in one of Hong Kong’s most exclusive shopping and financial districts. “We welcome the decision of the court and look to the occupiers to follow the terms of the court order,” HSBC spokesman Gareth Hewett told reporters. HSBC, Europe’s biggest bank, brought its case against the “occupiers of the ground floor” of its Asian headquarters, along with three individuals it identified as the ringleaders of the protest. Defiant protester Tam Mei-kam, 89, said: “They can try all they want, I won’t leave.” But fellow occupier Ho Yiu Shing said he would “find another suitable place” to continue his protest. London-based HSBC was spared the worst of the 2008 global financial crisis and did not receive one of the US government bailouts that spurred the original New York Occupy movement. But it has recently been fined and forced to apologise for failing to apply anti-money laundering rules in transactions that US lawmakers say benefited Iran, terrorists and drug dealers. The banking industry’s reputation has also been damaged by revelations of interest rate fixing at British lender Barclays, as well as US allegations that another British firm, Standard Chartered, acted as a “rogue bank” by violating financial sanctions on Iran. Standard Chartered denies the allegations.

Shenzhou-9 astronauts arrive in Macao for visit - Astronauts Jing Haipeng, Liu Wang and Liu Yang, who successfully completed China's first manned space docking mission, arrived in Macao Monday for visit.

‘Dazzling from Space’: Astronauts Sing Hong Kong’s Praises - From left, Chinese astronauts Liu Yang, Liu Wang and Jing Haipeng sang as they attended a variety show welcoming the astronauts of the Shenzhou-9 space mission during their four-day visit in Hong Kong on Aug. 11. Even from space, Hong Kong’s bright neon lights are impressive, said China’s three astronauts who were back down on earth and visiting the city this weekend. “The gorgeous lights of Hong Kong are dazzling from space,” said Liu Wang, 43, one of the three astronauts on the Shenzhou-9 spacecraft that docked with China’s Tiangong-1 space laboratory in June, marking China’s fourth manned space mission since 2003. The team that also includes Jing Haipeng, 45, and Liu Yang, 33, China’s first female astronaut, are on a four-day publicity tour of the city. It is the group’s first trip outside mainland China since landing their capsule in Inner Mongolia after a 13-day voyage. The whirlwind tour adds a distinctly local twist to the typical post-flight victory lap. Where American astronauts might celebrate their journeys by waving at the masses from atop a parade float, China’s space travelers courted Hong Kong residents by singing and reciting poems on TV – a nod to the city’s penchant for celebrity variety shows. But if the visit was meant to be entertaining, it also had political ends. China says the space missions are to boost national pride and increase patriotism among not just its own citizens, but also those that reside in its special administrative regions, Hong Kong and Macau. “We developed the manned space program just to satisfy our own needs,” Wang Zhaoyao, director-general of China Manned Space Agency, said in June after the crew from Shenzhou 9 landed back on Earth. China is a little late to space. The third country to have sent citizens into the cosmos, it is planning to send its first man to the moon in 2025, more than half a century after the U.S achieved its lunar landing. (The U.S hasn’t made much progress in human space flight since then, having ended NASA’s expensive and risky space shuttle program last year in favor of sending robots to Mars.) In the future, China would “need comrades from Hong Kong, Macau and Taiwan to take part” in its space program, said Niu Hongguang, the deputy chief commander of the country’s manned space engineering program last Friday. With relations sometimes tense between Hong Kong and China, Beijing has sought to create closer ties with the locals through campaigns aimed at promoting good relations. For the visiting astronauts, that task meant singing the city’s praises. “I spent my vacation in Hong Kong with my wife and son in 2010,” said Mr. Jing. “Before I headed off to Hong Kong, they came forward to ask me, when I would bring them to Hong Kong again, because they like Hong Kong so much.” Mr. Liu, meanwhile, said he planned to spend time in the shoppers’ paradise purchasing a list of items his wife told him to procure. “I hope to make some time for a lot of shopping and make some real contributions to Hong Kong’s prosperity,” he said. All three astronauts sent a thank you message prior to their arrival. “We appreciate the concern and support of our Hong Kong and Macau fellows regarding our motherland’s space technology industry,” the message said, sounding a note that was repeated throughout their encounters with the public.

On the last day of their four-day visit to Hong Kong on Monday, the three Shenzhou-IX astronauts who performed China’s first manned space docking mission, shared stories about their families with representatives from the city’s women’s groups. Senior Colonel Jing Haipeng, Senior Colonel Liu Wang and the first Chinese woman in space, Major Liu Yang talked to a morning tea gathering of about 180 women, including the chief executive’s wife Regina Tong Ching- yee and former secretary for justice Elsie Leung Oi-sie, in the Harbour Grand Hotel, Kowloon. During the event Liu Yang shed tears while listening to a recording of her story of how she became an astronaut. She thanked her parents for their care and support. Jing said Liu Yang always took good care of them. He said throughout their visit to Hong Kong he could see how much people liked Liu Yang. “Wherever we went, we heard, 'Liu Yang, Liu Yang!’ From deep in our hearts, Liu Wang and I were envious and jealous,” he said mischievously. Liu Wang showed the group his musical talent by playing a song from a Chinese TV drama on his harmonica. He said it was the same one he played over the phone from space to his wife for her birthday in June. The delegation toured Victoria Harbour and learned about the latest harbourfront developments. During their Hong Kong visit, they have also spoken to school children and university students as well as visiting tourist sites and opening an exhibition on the mission at the Science Museum. They will attend a farewell ceremony at Government House on Monday afternoon before leaving for Macau. On the last day of their visit in Hong Kong on Monday, China’s first female astronaut and the other two astronauts shared their families’ stories at a tea gathering with women’s groups in the morning. Major Liu Yang shed tears while listening to a recording which told her story of becoming an astronaut. She thanked her parents for their care and support. Senior Colonel Jing Haipeng said Liu Yang always took care of them such as their meals. During this visit, he found that people liked Liu Yang a lot. “Wherever we went, we heard, “Liu Yang, Liu Yang!” From deep in our hearts, Liu Wang and I were envious and jealous,” he said mischievously. Senior Colonel Liu Wang played a song from a Chinese TV drama with his harmonica, the one which he played for his wife for her birthday over the phone while he was in space in June. The three met around 180 women including the chief executive’s wife Regina Tong Ching- yee and former secretary for justice Elsie Leung Oi-sie in a hotel ballroom. The delegation toured Victoria Harbour and learned about the latest harbourfront developments. They will attend a farewell ceremony at Government House before leaving for Macau, concluding their four-day visit.

 China*:  Aug 15 2012

Tang Wei models for jewelry designed by herself - Chinese actress Tang Wei was invited by jewellery brand Forevermark to design jewellery, which was themed as "A Promise Shared."

Taiwan plans to slash the number of advanced fighter jets it has been seeking from the United States from 66 to 24, apparently due to budget constraints, reports said on Monday. Taipei applied in 2007 to buy 66 F-16 C/D fighters, which have better radar and more powerful weapons systems than its current F-16 A/Bs, in response to the mainland’s perceived military threat. Washington in September last year said it had agreed to upgrade Taiwan’s F-16 A/B fleet in a US$5.85 billion (HK$5o billion) deal but it held off on the sale of new jets. President Ma Ying-jeou has repeatedly urged Washington to reconsider selling new jets to Taiwan. Local media reported on Monday that Taiwan had renewed the call during the just concluded “Monterey talks” in the United States, the highest-level annual meeting between US and Taiwanese military officers. “But the number of desired F-16 C/Ds has fallen to 24, down from 66 when the Taiwanese delegates put forth the proposal,” the Taipei-based China Times quoted an “authoritative military source” as saying. The defence ministry dismissed the report. The Liberty Times, another Chinese-language broadsheet, also ran a similar story. The newspaper quoted its source as saying the military could hardly afford another fleet of 66 F-16 C/Ds following the costly F-16 A/B upgrade plan. But legislator Lin Yu-fang from the ruling Kuomintang party told the China Times that military authorities might have cut their demands to leave the door open to buying more advanced F-35s in the future. Although the upgrade package was less than Taiwan had hoped for, it triggered an angry response from Beijinf, which warned that Sino-US military ties would be hurt as a result. The mainland military is gaining a decisive edge over Taiwan, but US arms sales to the island make Beijing’s superiority less crushing than it otherwise would be.

Hong Kong*:  Aug 14 2012 

Titan's businesses range from fuel trading to transport, refuelling, onshore and offshore fuel storage, and shipbuilding and repairs. A five-year asset marriage between United States private equity firm Warburg Pincus and fuel supply and logistics group Titan Petrochemicals, founded by Fujian businessman Tsoi Tin-chun, is close to ending in a divorce. As with so many failed marriages, the squabbling over a division of assets has been going on behind the scenes for months. And, in the meantime, each side has found a new partner who is eager to lay their hands on the spoils. Back in March 2007, Warburg signed a deal to pay Titan US$175 million for an 18 per cent stake in the group, plus a 49.9 per cent stake in China StorageCo, a fuel storage joint venture set up with Titan which owned the balance of the shares. Titan contributed onshore storage facilities while Warburg injected funds into the venture. The deal helped debt-laden Titan lower its financing costs, since it borrowed US$400 million in 2005 by selling bonds that carried a hefty interest rate of 8.5 per cent. It also helped fund StorageCo's planned US$1 billion capital outlays on four onshore fuel storage projects. Warburg chose to put most of its money in StorageCo, in which it bought convertible preference shares and convertible notes totalling US$210 million. It also bought US$40 million of convertible preferred shares in parent firm Titan. That proved to be a shrewd move. The storage operations turned out to be the only bright spot for Titan Petrochemicals, generating pre-tax profit of HK$50.6 million last year, compared to a profit on the group's fuel supply business of just HK$3.1 million, a loss on offshore fuel storage of HK$133.8 million, a loss on oil transport of HK$191.8 million, and a loss on shipbuilding of HK$213.6 million. The 2008-09 global financial crisis took a heavy toll on the health of the group's oil trading and transport industry and in December 2009, Titan was forced to restructure US$315 million of convertible bonds issued in 2005. After sweetening the offer terms twice following insufficient support from bondholders, it managed to complete the restructuring in July 2010. To further lighten its debt load and raise funds for debt repayment and construction of its onshore storage infrastructure, it struck a deal in December 2010 to sell its shipyard in Quanzhou, Fujian province, for HK$1.8 billion. But the buyer, Grand China Logistics, part of state-owned HNA Group, failed to complete the deal after making a provisional payment of HK$913 million and is seeking a court order in Shanghai to recover the HK$913 million and cancel the deal. The development resulted in Titan defaulting in March this year on its repayment obligation on its restructured debt. The default led to a request from Warburg for payment on the bonds it was owed and since the cash-strapped Titan was unable to do so, Warburg obtained a court order in the British Virgin Islands last month to appoint liquidators to wind up StorageCo. It also sought another court order in Bermuda to appoint a provisional liquidator to wind up Titan - and this case will be heard on Thursday. Titan's default also saw Warburg exercise its right to raise its stake in the joint venture StorageCo to 50.1 per cent from 49.9 per cent in May this year. People familiar with the situation said Warburg then unilaterally moved in mid-June to take over StorageCo by appointing a new board of directors and taking possession of the company chop needed to authorise all transactions and agreements, much to the anger of Titan's management. Neither party was willing to comment on these developments. On July 19, Warburg, through its associate firm Saturn Storage, filed a writ in the Hong Kong High Court, alleging it had been damaged by the actions of Tsoi, Titan, Titan's president Patrick Wong Siu-hung, and chief financial officer Allen Tu Chung-to. Saturn claimed the parties caused the unauthorised execution and concealment of 1.48 billion yuan (HK$1.81 billion) of debt guarantees from StorageCo. Meanwhile, rivals were circling for the disputed assets. On Wednesday last week, Titan said Guangdong Zhenrong Energy, 44.3 per cent-owned by Titan's customer, state-owned oil and commodities trader Zhuhai Zhenrong, offered to buy 90 per cent of Titan. Guangdong Zhenrong last Wednesday also offered to buy StorageCo's four storage farms and related facilities for up to US$145 million. A day later, Warburg said it had formed a joint venture with Titan rival Guangzhou-based SouthernPec, which aims to submit a restructuring plan and a bid for StorageCo through its liquidators. No bid price and restructuring terms were given. According to an analysis by FTI Consulting seen by the South China Morning Post (SEHK: 0583), most bondholders are expected to retrieve between 5 per cent and 10 per cent of their investment if all of Titan's assets are sold via the liquidation process, without investment from a white knight. FTI was hired by Titan to provide bondholders estimates of payments they may receive under different restructuring scenarios. Ten years after he founded Titan in 2002, 49-year-old Tsoi stepped down last month and became a non-executive director. During his tenure at the top, Tsoi, who speaks with a heavy Fujian accent, preferred to let his more internationally exposed lieutenants, such as former chief executives Zheng Dunxun and Barry Cheung Chun-yuen, and president Wong be the frontmen answering questions from journalists, analysts and investors. "Tsoi is very generous when it comes to hiring the best talent in the industry," a former Titan manager said. "He is also very decisive when it comes to making key decisions. But his problem was that he was overly ambitious on the pace of Titan's expansion and he was too hands-on, which meant the talent of his most senior managers was underutilised." Zheng was a former chief executive of state-owned oil trading giant Sinochem. Cheung was an ex-chief executive of London-listed mainland energy firm Fortune Oil. Tsoi could not be reached for comment.

Unfazed by rising rents, Gap sees Chinese shoppers at stores like this one in Beijing as the key to growth. Gap, the iconic American fashion brand, is set to expand by almost one new store a week in Hong Kong and on the mainland over the next six months - despite rapid rent rises that have forced some retailers to close their stores. Shanghai-born Redmond Yeung, president for greater China at Gap, told the South China Morning Post (SEHK: 0583) in an exclusive interview that he aimed to open 20 more stores in Hong Kong and on the mainland over the next six months, which would bring its total number of stores in China to 45. Gap is joining a new wave of expansions by international brands in Asia, and China in particular, including Abercrombie & Fitch, Burberry and MaxMara. It comes at a time when a slow economic recovery in the United States and a worsening debt crisis in the euro zone have forced Western consumers to tighten their spending. Last week, Abercrombie & Fitch launched its first store in Hong Kong's Central district, where the American fashion label agreed to pay more than US$1 million in monthly rent for its store. "This [China] is a market for us in terms of international expansion. It's a cornerstone market where Gap must be," said Yeung, who held senior positions at American retail giant Best Buy and fashion firm Ports before he became the top boss for China at Gap in early 2010. At present, sales in Asia contributed about 8 per cent to Gap's group revenue, Yeung said. To support its fast expansion in China, the San Francisco, California-based company would add 1,500 employees, mostly store staff, in the next six months in China, he said. Currently, Gap has about 2,000 staff in China. "In mainland China, our consumers are growing so fast … I think that means there's still a lot of room for us to grow," he said. When asked if senior Gap executives might see fast-rising rent as the main challenge to its business growth in China, Yeung said: "Everybody wants to get a prime location. The way the market always goes is in cycles. There are some cycles that are very expensive." "As long as there are still people who pay the rent, there must be a reason. It's all about supply and demand. Retailers and landlords always have a love-hate relationship," added Yeung, who grew up in Hong Kong and Canada. In this latest round of competition among international companies for business expansion in China, some have been losers and were forced to close their stores as they could not afford the high rent, which would eat into most of their profits. Earlier this year, British fashion brand Burberry replaced struggling mobile phone maker Nokia as the tenant in a prime location in Causeway Bay, one of Hong Kong's busiest shopping areas that is popular among mainland tourists. Yeung said Gap was "comfortable so far" with its business performance in China. "If you look at what we did in the last 20 months, the performance of our stores allows us to feel very comfortable to expand further," he said. "If you look at the next six months … at that speed, without reasonable success, no one will invest [in more stores] so I can tell we are very happy with the performance of our stores." Gap is not alone in the rate of its expansion. Luigi Maramotti, chairman of Italian fashion brand MaxMara, said last month that he believed Chinese consumers were now better able to afford luxury products, thanks to the country's fast economic growth in the past decade. MaxMara also planned to grow in China by at least one new store a week over the next six months, he said. Gap's Yeung said that about 26 per cent of the company's products were made in China and then sold worldwide. He believed Gap would at least maintain that ratio of products being made in China, despite rising labour costs in the world's No2 economy. "China is improving. The products coming from China are getting better and better. There are not a lot of places in the world which have the capability and volume that you can have in China. So China is not going to go away," he said.

Hongkongers have so much to be thankful for, so why don't we show it? A string of international surveys released over the past 18 months have trumpeted the advantages of living in such a great city. And one expert believes that if only residents could actually start to believe all the hype, they would feel much happier in themselves. According to recent polls, Hong Kong has the most competitive economy in the world, with a relatively safe society. And Hongkongers lead long, healthy lives and enjoy a great deal of individual freedom. Hong Kong was even crowned "the most liveable city" on the planet this year despite sky-high rents and pollution. But still we seem to frown more than smile. The city lurks in 95th place in terms of our life satisfaction in a United Nations Human Development Report. And the New Economics Foundation seems to agree with this assessment. It said although our score of 5.6 out of 10 on its Happy Planet Index is higher than the world average of 5.28, it is a sad total given our longevity and GDP per capita. Dennis Ng Wang-pun, chairman of the Promoting Happiness Index Foundation, believes the answer is to be more positive. "Of course there are issues and problems, but they will always be there," Ng said. "I think that if Hongkongers focus more on the positive aspects of our society, we can be happier with ourselves and achieve so much more." Hong Kong is still the world's most competitive economy, according to the World Competitiveness Yearbook, maintaining its top position from last year. The city also topped the World Economic Forum's Financial Development Index - an annual assessment of financial systems - last year, replacing the United States at No1. And for the 18th year running, the Heritage Foundation ranked Hong Kong top for economic freedom. The city has also been given straight A grades this year by the Economic Intelligence Unit for its low-risk economic and political environment. It also ranked us the most liveable city last month - liveable, but expensive. As stated by the latest Prime Office Occupancy Costs survey, it has the world's priciest offices. Residential rental is equally high, with the global consultancy ECA International calculating that a three-bedroom apartment in Hong Kong costs an average of US$11,810 a month. This has given the city the "Most Unaffordable Housing" title, according to Demographia. But if you can afford Hong Kong, you should be safe living here. According to the United Nations Office on Drugs and Crime, the city boasts a homicide rate of less than 0.00003 per cent per year. And despite a daily diet of car exhaust and factory fumes, the life expectancy of Hongkongers - at an average of 82.8 years - puts the city second out of 187 countries, says the UN Human Development Report. While these global surveys generally paint a reasonably rosy picture of Hong Kong, it must be kept in mind that no matter how detailed a survey may be, reality may be different. "It depends on how you interpret it," said Lui Tai-lok, Professor of Sociology at the University of Hong Kong. "Each ranking has different criteria, and a high ranking is not always a good thing. "For example, Hong Kong ranked first in economic freedom. This shows the government doesn't interfere with business a lot. "But does that mean it's easier for businesses to succeed in Hong Kong? Not necessarily." Perhaps the reason Hongkongers aren't as happy as they should be is that they don't get enough sex. According to the latest Durex Global Sex Survey, Hongkongers have sex less than twice a week - and only 29 per cent of the respondents are actually satisfied.

Marathon reading sessions by book lovers until as late as 5am and some also snoozed. The Sunday run at the Eslite bookstore kicked off with a midnight talk by film director Pang Ho-cheung. Nestled comfortably in an armchair, Nick Liao Liqin was curled up with Rudyard Kipling's The Jungle Book. While this may not be a novel sight, Liao was not wiling away an afternoon at home - he was at a bookstore, and it was 5am. Welcome to the new Eslite store, three storeys and open round the clock from Thursdays to midnight on Sundays. The South China Morning Post (SEHK: 0583) spent the night yesterday and found a mixed crowd of hardcore book lovers, insomniacs and curious customers. Taking up 41,000 sq ft at the new Hysan (SEHK: 0014) Place shopping mall in Causeway Bay, Eslite is the Taiwanese firm's first foray overseas. With the city often derided as a "cultural desert", there have been concerns that there are not enough avid readers to sustain a round-the-clock bookstore, which has proved a runaway success across the strait. Liao, a 26-year-old financier based in Shanghai who visits Hong Kong regularly, arrived at midnight and stayed for five hours. "I read The Jungle Book in Chinese when I was young, and now I want to read it in English," he said. "I hope to finish reading the whole book here." By 5am, drowsiness caught up with him and he never got to read the book cover to cover. It went back on the shelf. "It's nice to have other people accompany you in reading," said Liao, who is a fan of the Eslite store in Taipei. "If I am out late in Taipei, I like to end the night tranquilly by visiting the bookstore." Others were more excited by the store's stylish design. At 3am, the shop proved the perfect setting for an impromptu pictorial by 10 staff from a fashion store across the street. One of them, Winnie Chan Wing-tung, admitted they wandered in looking for food: "All of us like to grab a meal after work and we thought they might have a restaurant here." She quickly added: "But we're here for the books too, of course." While 24-hour eateries like McDonalds in Hong Kong are often teeming with sleeping customers who linger overnight, the Post only spotted three customers in Eslite happily snoozing away mid-read. There were also plenty of couples of all ages strolling through the aisles holding hands or reading together. Carlos Ngan Ka-ho and Ivy Chong Tsz-yan, both 26, decided to visit the store at midnight after dinner. Ngan, a landscape architect, was thrilled to see a range of books related to his profession - which are rarely available in other stores. "I think most people are here for the novelty because it's not like you see such crowds at stores like Page One," Chong said. Husband and wife Lee Mang-wah and Chan Suk-ching, meanwhile, enjoyed a midnight reading of history books. They said they were pleased to find that the store had seating - a rarity for Hong Kong booksellers. "It was still quite hard to find a place to sit, but Hongkongers are very resourceful - there are people sitting on the edge of the shelf," said the amused Lee. "People here are really here for the books; you can tell by the long queue at the cashier. This is easily the best book store in Hong Kong." Perhaps the most telling measure of the crowd last night came during the store's first midnight meet-the-artists session, where cultural critic Ma Ka-fai conversed with film director Pang Ho-cheung. As crowds flocked, one man stood on his tiptoes to see what was going on. "Ka-fai who?" he said before leading his girlfriend away. The store's 24-hour sessions are on a trial basis until September 16.

A Hong Kong police superintendent has died while competing in New York City's first Ironman triathlon, after struggling in the swimming leg of the three-stage race in the Hudson River. New York City Police said a 43-year-old contestant had died. The Hong Kong Police Force yesterday confirmed the man who died on Saturday was Andy Naylor and sent condolences to his family. It confirmed Naylor was on leave to attend a sporting event in New York. New York media reported that the competitor "experienced distress" during the 4.8-kilometre swim in the Hudson River at the start of the day-long competition. Naylor was pulled out of the water and taken to hospital, but did not survive. The organisers said the cause of death was unknown. An autopsy was planned, a US news report said. Just a week ago, Naylor and friend Paul Dingley won the longest kayak leg of the TEVA Kayak 'n' Run series in Sai Kung. The pair powered their way around Shelter Island to win the race in two hours, two minutes and 18 seconds, setting a course record. Naylor is survived by his wife and three daughters. The family plans to hold the funeral in Britain, followed by a memorial in Hong Kong, according to a message from Naylor's wife Lynn, which circulated among their friends online. "It gives me some comfort that Andy died doing something he loved but we will miss him sorely," she wrote. According to online site LinkedIn, Naylor, from Wales, joined Hong Kong Police in 1992. He was stationed at the headquarters in Admiralty in the criminal intelligence bureau and had been in the special duties unit. Dingley said he learned the news yesterday from other friends in Clear Water Bay, where Naylor and his family lived. "The news was shocking as Andy was one of the best Hong Kong athletes," Dingley said. "Andy was extremely active and sporty, and he loved to help people. He was a loving father and was very committed to his work. He made Hong Kong his second home."

China's Ye Shiwen wins the 400 metres individual medley. Hong Kong cyclist Lee Wai-sze with her keirin bronze medal. The curtain came down on the London Olympics last night, with both China and Britain hailing the 30th summer Games the "best ever" - for different reasons. Sports minister Liu Peng praised the China team's achievement, which saw it finish second behind the United States in the medals table. "We have achieved the best ever Olympic result outside China and our athletes have also set six world records," said Liu. "We have maintained our advantages in traditional strongholds, while also making breakthroughs in some other up-and-coming events." China won a record 51 gold medals in Beijing four years ago and claimed 38 in London. Twenty-seven of those were won in table tennis, badminton, diving, gymnastics, weightlifting, shooting and trampolining - all areas where the country has previously shown its strength. But China also won five gold, seven silver and six bronze medals in sports such as sailing, fencing, boxing, taekwondo, cycling, shooting, wrestling and synchronised swimming. "The structure of our gold medal sports is also changing, as we won eight new gold medals which we have never achieved before," said Liu, head of the China delegation. Hong Kong Olympic Committee honorary secretary-general Pang Chung was delighted with the performance of the city's team, highlighting the bronze medal won by cyclist Lee Wai-sze in the women's keirin. In 2008 under the slogan "One World, One Dream", Beijing delivered a "truly exceptional" Games in the words of International Olympic Committee president Jacque Rogge. Four years on, London more than lived up to its motto: "Inspire A Generation". British Prime Minister David Cameron called the Games the "best ever", while Rogge said the IOC was "very happy , very satisfied". Security woes were overcome, traffic and transport nightmares never materialised and Britain had its biggest medal haul since 1908. Usain Bolt anointed himself as a living legend with three gold medals; Michael Phelps ended his long career as the most decorated Olympian in history; British poster girl Jessica Ennis became a global phenomenon with her heptathlon victory; double amputee Oscar Pistorius ran with carbon blades; and American Manteo Mitchell ran with a broken leg. Female athletes took centre stage in a way they never had before. Packed houses turned out to watch the new event of women's boxing. And women from Saudi Arabia, Qatar and Brunei competed for the first time. After a closing ceremony, when artists including The Who and the Spice Girls were due to power through a playlist of great British music, London passed on the Olympic torch to Rio de Janeiro. As Games hosts, China and Great Britain both exceeded their medal expectations, and Brazil will be hoping for the same in four years' time. But before then, the host city, like London, must resolve a range of issues - in Rio's case, traffic gridlock, slum violence and the need for new accommodation and infrastructure.

 China*:  Aug 14 2012

Taiwanese coastguards said they will next month stage a live-fire exercise in disputed South China Sea islands with new, longer-range artillery and mortars, in a move that risks fresh tensions. The potentially resource-rich sea, home to important trade routes, is an increasingly dangerous flashpoint and there have been a string of recent diplomatic rows over territorial claims. The drill will take place on Taiping Island in the Spratlys, a sprawling group of islands claimed in whole or part by Taiwan, the mainland, Vietnam, Malaysia, the Philippines, and Brunei. Vietnam voiced anger after Taiwan last week moved new weaponry to the island in preparation for the drill, sparking a rebuke from Taipei. "Taiping Island is one of the islands in the area that has long been governed by" Taiwan, the foreign ministry said. "Its sovereignty is indisputable." The drill on the island, the biggest in the Spratlys, involves newly arrived 40-millimeter artillery and 120mm mortars, said United Evening News in Taipei, which also reported that several lawmakers will watch the drill. The range of the mortars is 6.1 kilometers, compared with an existing 4.1 kilometers. All claimants except Brunei have troops based on the archipelago of more than 100 islets, reefs and atolls, which sprawl across a vast area but have a total land mass of less than five square kilometers. South China Sea tensions escalated last month when Beijing announced a new city and military garrison in the Paracel Islands.

Headline-grabbing billionaire Chen Guangbiao appeared on mainland television at the weekend with a sledgehammer and a new business plan: selling air. Wearing a white sleeveless shirt, the eccentric chief executive of a recycling company swung the hammer and smashed about a dozen electric bicycles powered by batteries containing lead. Before long, the bikes were in several pieces, and the head of Jiangsu Huangpu Recycling Resources, whose nickname is "Low Carbon Chen", explained that the stunt was designed to raise awareness about the dangers of pollution from the widely-used bicycle batteries. "[The batteries are] like nuclear weapons that release invisible nuclear radiation," Chen told Jiangsu TV. He then discussed how he plans to bottle fresh oxygen - collected from remote areas such as Shangri-La , Yunnan , and Jinggangshan , Jiangxi - and sell the bottles for between four and five yuan (HK$4.9 and HK$6.1). It was unclear how much air each bottle will hold, but Chen said they were designed using special technology and that he was able to take a few breaths from a single can. The bottled air will be available in Beijing, Shanghai and Guangzhou - notorious for their poor air quality - from September 17, which is National No-Driving Day. Last year, Chen performed a similar stunt ahead of the day by destroying his Mercedes-Benz. Chen was clearly confident his plan would pay off, as he told the television station that it wouldn't be unreasonable to expect annual sales of 100 million yuan. Also a philanthropist, Chen said the move would give jobs to thousands of people in places where the clean air is collected, as he would pay locals 0.10 yuan for each bottle filled. The bottles will be labelled "Chen Guangbiao, Good Person" - which he has trademarked. Chen became a national celebrity after donating 180 million yuan to help victims of the Sichuan earthquake in 2008.

Playwright Sha Yexin at home in Shanghai. Political reform and freedom of speech are imminent on the mainland, renowned playwright Sha Yexin has told the South China Morning Post (SEHK: 0583). Sha, 73, was in Hong Kong last month to promote a rerun of his play I am Chairman Mao's Bitch, which the Spring-time Experimental Theatre is showing later this month. Sha, known as a forthright voice on cultural and political affairs, said most of the plays in the mainland over the past 40 years lacked quality, with good works appearing only occasionally. "The main reason is there is no freedom of literary creation in China," he said. Culture was a political tool in authoritarian regimes such as China, he said. Under such a system, "true culture is almost impossible". People working in the cultural sector, especially the outspoken ones, are often under strict government control, he said. Many writers are not allowed to publish their works, or are arrested for fabricated crimes, while some writers are forbidden from leaving the country. Writer and political activist Liu Xiaobo , winner of the 2010 Nobel Peace Prize, has been imprisoned since 2009 for his role in drafting Charter 08. Signed by 1,000 people across the country, it calls for democracy and human rights in China. "The arrest and imprisonment of Liu is wrong," said Sha, a signatory of Charter 08. "It highlights the importance of having democracy in China as soon as possible." In an environment where culture is pressed into the service of politics, some writers will be silenced and prevented from publishing their works, Sha said. Others will find platforms overseas to express themselves. Sha was born in Nanjing , Jiangsu province, and moved to Shanghai aged seven. He graduated from the East China Normal University, and did postgraduate studies at the Shanghai Theatre Academy in 1961. He joined the Shanghai People's Art Theatre in 1963 as a playwright and became its dean in 1985. He was appointed vice-chairman of the Shanghai Playwrights Association in 1991. Sha is currently honorary vice-chairman of the China Drama and Literature Society. Many of his works are banned on the mainland, including one of his most controversial plays The Imposter ( If I were Real). Based on a true story, the play examines corruption within the Communist Party after the end of the Cultural Revolution. It opened to wide acclaim in Shanghai in 1979, but has never been officially performed on the mainland due to its critical take on the party. I am Chairman Mao's Bitch, which focuses on the relationship between Jiang Qing and her husband Mao Zedong , was written in 1991 but only arrived in Hong Kong in 2010. Sha said he was not discouraged by bans on his works on the mainland. "I am thankful for the [censorship] system," he said. "Dictatorship makes me independent; authoritarianism makes me devoted," he said. Sha said writers had to guard their spiritual freedom. "No matter how cruel the suppression is, writers have to insist on writing what they want to express," he said. "The ones who should be fearful are not writers but those in power," he said. "History has shown that a dictatorship will always be eliminated in time." Sha said there were signs of reform in the mainland's political system, citing the ideas of Guangdong party chief Wang Yang and the fall of former Chongqing party boss Bo Xilai. Wang is widely seen as a reformist within the party. "We must abandon the idea that people's happiness is granted by the party and government," he said in May. It would have been impossible to state such an argument previously on the mainland, Sha said. Bo was removed from his post as Chongqing party secretary in March and later stripped of Politburo membership for "serious breaches of party discipline." He was said to have run roughshod over the rule of law in a controversial anti-triad campaign. Although Bo's fall presented a crisis, Sha said it showed political reform was possible. "The fall of Bo has revealed a little crack in the iron wall," he said. It demonstrated that the unity and harmony the party has stressed as paramount had started to crumple, he added. The public had grown intolerant of government corruption and ineffective anti-graft campaigns, he said. "There are voices within society that say it is imminent that China will change," he said. Many mainlanders are taking to the internet to express their discontent, triggering an unprecedented response from the government to block information it deems undesirable. Sha said internet censorship was a feature of China "in transition" from an authoritarian regime to a more democratic political system. "Now is the time when old things are not completely eliminated and new things have not yet emerged," he said. "But at least there are many open ideas on the internet." The government has tightened its hold on the flow of news in the lead-up to the party's 18th national congress, at which new leaders will be chosen. Sha said it was hard to predict how Xi Jinpin and Li Keqiang , who are expected to take over as president and premier, will lead. "I'm not familiar with the political figures in China. They dare not say in public what they really think," he said. "If the choice by the party is correct it will be good for the people; if not, it will be a disaster," he said. "I hope Xi and Li can be more open than the current leaders and bring good change to China," he said. "But right now I remain cautious."

Hong Kong*:  Aug 13 2012 

Hong Kong-listed Prudential, Britain's biggest insurer by market value, is still weighing the option of moving its headquarters to the city after reporting first-half profit rose a better-than-expected 13 per cent driven by strong earnings from Asia. Operating profit climbed to £1.16 billion (HK$14.08 billion) in the first six months of the year compared with £1.03 billion a year earlier. Hong Kong, which was the largest Asian market for Prudential last year, lost out this year to Indonesia but group chief executive Tidjane Thiam said the city remained important. "Hong Kong, the mainland and other Asia markets are important markets for Prudential," Thiam said in a teleconference yesterday. "We believe our business in Hong Kong and Asia would continue to deliver growth for our shareholders over the long term." Prudential, which listed its shares in both London and Hong Kong, in March was reportedly considering moving its headquarters from London to Hong Kong to escape tough new capital rules for European insurers. A new regulation, Solvency II, to be implemented in 2014 requires insurers to hold extra capital, which may force Prudential to keep billions of pounds of extra capital against its US-based Jackson National Life if it remains domiciled in Europe. Thiam said if negotiations about Solvency II could not be resolved, the new regulation would be too onerous and Prudential could consider moving elsewhere. Hong Kong could be an option, he said. He said, however, that talks were going on and might result in a positive outcome. The insurer would prefer to stay in London. "We are happy to be in London as that would make our life easy," Thiam said. In the first half, the company's Asia business delivered a 21 per cent rise in operating profit and achieved a 18 per cent rise in new business profit. In the United States, Jackson delivered operating profit of £442 million, a 30 per cent increase from a year earlier, but British operating profit remaining flat at £353 million. Prudential, which gets 80 per cent of its revenue from outside Britain, is midway through a plan to double its 2009 Asia profit and boost cash generation by next year. "We remain on track to achieve these objectives despite the challenging macro-economic conditions," he said. "Clearly, as a large insurance company with a substantial balance sheet, we are not immune to these conditions. However, we manage our business so that it is resilient in times of economic stress."

Hong Kong's economy contracted 0.1 per cent in the second quarter, reversing the 0.6 per cent quarter-on-quarter growth in the first three months of the year. The contraction, attributed mainly to the worsening euro debt crisis and slower recovery in the United States, prompted the government to lower its forecast for Hong Kong's economic growth this year to 1 per cent to 2 per cent, down from 1 per cent to 3 per cent. Government economist Helen Chan, who presented the latest half-yearly economic report yesterday, said Hong Kong had been hit by a dive in exports. "The negative spillovers from the sluggishness of the advanced economies to Asia have … turned increasingly visible," Chan said, "Amid mounting headwinds to the global economy, the external environment would thus remain difficult and continue to overshadow Hong Kong's export outlook in the near term." Total exports of goods dipped by 3.9 per cent in the second quarter, in contrast to the 2.1 per cent growth in the preceding quarter, according to seasonally adjusted figures. Hong Kong's exports and imports are predominantly re-exports to and from the mainland. Chan said the economic outlook for the euro zone remained dim. The overall jobless rate across the nations using the common currency was 11.2 per cent, according to June figures. The worst is Spain, where almost one in four people are out of work. A Hang Seng Bank (SEHK: 0011, announcements, news) analysis, released yesterday, also said external demand was the key factor in determining the pace of the recovery for Hong Kong, which is a heavily export-reliant economy. "Our expectation is for a moderate recession in the euro zone and a sub-par expansion of the US economy in the second half," said the Hang Seng Bank report. "It is unlikely we will see visible recovery in our major export markets any time soon." But an HSBC analysis was less pessimistic. "Hong Kong has sufficient domestic oomph to steer clear of recession this year. We retain our forecast for GDP to expand by 3.1 per cent this year and 5.3 per cent in 2013," it said. Chan yesterday declined to discuss the GDP forecast for 2013, but agreed that the domestic sector had displayed resilience. Private consumption expenditure grew by 3.7 per cent in real terms over a year earlier, on the back of stable job conditions and improved incomes. Hong Kong remained in a state of full employment, with the jobless rate falling further to 3.2 per cent in the second quarter, from 3.4 per cent in the first. In June, around 92,900 private sector job vacancies were posted by the Labour Department, up 26.3 per cent over a year earlier. Average monthly earnings for full-time employees, excluding overseas maids, rose by 4.8 per cent year on year in the second quarter. In the property market, Chan warned investors to stay alert for a possible bubble. Residential property prices turned more steady towards the end of the quarter.

The waterfront site can accommodate nine towers. Cheung Kong (Holdings) (SEHK: 0001) has surprised the market by acquiring a residential site on the Tsuen Wan waterfront for HK$9.631 billion, substantially more than industry expectations. This was the second time the MTR Corp put up the "TW5 Bayside" site, located atop Tsuen Wan West train station, for tender. It was first released for bidding at the end of last year, but was withdrawn as the offers submitted by the three bidders were seen as too low. Because of that poor response, surveyors lowered their expectations to HK$8.49 billion, or HK$3,788 per square foot. Cheung Kong, however, made an offer of HK$4,308 per sq ft plus 5 per cent of the total net profit, outbidding five other suitors. Not only is the offer price higher than market expectations, it is 37 per cent more than the going rate for a nearby site without a sea view that the Chinachem Group bought earlier this year. "There has been no change in the property market [compared with eight months ago]. The price comes as a surprise," said Vincent Cheung Kiu-cho, national director of Greater China at Cushman & Wakefield. "If they want to secure a 20 per cent profit margin, the selling price has to reach at least HK$9,100 per sq ft, which is 7 per cent higher than the average price of the flats with a sea view in the area. So Cheung Kong's bid reflects its confidence that property prices won't fall in three years", about the time necessary for development. Eric Yuen Chi-fung, head of research at brokerage house GuocoCapital, was also at a loss to explain why Cheung Kong forked out so much for the site. "Perhaps they are really optimistic about the market outlook or maybe they see earnings potential on the project that we didn't. But I don't think investors will think the price is attractive." Victor Li Tzar-kuoi, deputy chairman of Cheung Kong, said they were happy to have bagged the project as it was a rare waterfront site. "Every flat could enjoy a sea view. That was a determining factor of the [land] price." Executive director Grace Woo Chia-ching said the development cost would be about HK$7,000 per sq ft, including the land price, interest rate and more than HK$2,000 per sq ft of construction costs. The total investment could cross HK$20 billion. The 460,699 sq ft site can accommodate nine towers with a total residential floor area of 1.8 million sq ft and commercial floor area of 436,480 sq ft. It can yield up to 2,384 flats, of which more than half will be smaller than 538 sq ft. Cheung Kong owns a nearby project with 1,720 flats that it will launch this year. Li said the company would continue to explore more opportunities locally. "We would definitely study the potential of investment opportunities in Hong Kong." Meanwhile, the Urban Renewal Authority invited 18 developers to bid for a commercial-residential project in Mong Kok's "Sneaker Street". The tender will close on September 12. The 26,673 sq ft site, near the Macpherson Playground, is bounded by Sai Yee, Nelson and Fa Yuen streets.

Amy Loo Sze-ki waits at the Sai Wan Ho Maternal and Child Health Centre yesterday for her seven-month-old daughter, Bernice Lam, to have a blood test. Another Japanese baby milk brand, Meiji, has been found to contain too little of the nutrient iodine, the Centre for Food Safety said yesterday. Four samples of baby formula failed to meet World Health Organisation standards in tests by the centre: one under the Meiji brand, two from Morinaga and another from Wakodo. Other products produced under the latter two brands were revealed on Wednesday to be deficient in iodine. A lack of iodine can harm the development of the thyroid gland and affect brain function. The centre urged parents not to feed their babies formula from the three brands. Babies fed on the Morinaga and Wakodo brands started having blood tests to check their thyroid function yesterday at the city's 10 Maternal and Child Health Centres. Nearly 100 babies have been signed up for the tests. While the risk of brain damage due to iodine deficiency is low, many parents queuing for blood tests at the Sai Wan Ho health centre said they had stopped feeding their babies formula from Wakodo and Morinaga. "I'm not sure which one I'm going to use now, but it's definitely not going to be a Japanese brand," one parent said. One Japanese mother who has lived in Hong Kong for three years said she started using Wakodo because her friends were using it. "I only found out two days ago from watching the news that Wakodo was not good enough for my son," she said as she signed up to have her month-old child tested. A father, Benny Wong, criticised doctors at the centre as "inexperienced and unprofessional", claiming it took them five minutes to find a blood vessel in his seven-month-old son's leg and they had to take three different samples. The government is offering tests only for babies aged up to eight months, saying the risk for older children is small. But lawmaker Fred Li Wah-ming said the government should extend the tests. Li met health minister Dr Ko Wing-man yesterday to push for legislation to close loopholes which exempt infant formula from nutritional labelling rules. He said: "The government has been promising to review the need to pass a law for baby food since 2005, but the plan still failed to materialise." The Centre for Food Safety said all Japanese formula for infants up to six months that were available locally had been tested for iodine. Japanese brands had a 24.7 per cent share of the infant formula market before the earthquake and tsunami last year, which crippled a nuclear power plant and led to radiation leaks that prompted many Hongkongers to avoid Japanese goods for a time. Paediatrician Yu Chak-man said most Japanese formula brands did not comply with the WHO standard because Japanese babies may receive more iodine from other sources. Most Japanese formula sold in Hong Kong is imported on the grey market - by legal distributors, though not approved by the manufacturer. Dr Hon Kam-lun, professor of paediatrics at Chinese University, said: "It may be a good time to educate parents not to buy infant formula in the grey market ... and [with instructions that] are written in languages unknown to them."

From left, Liu Yang, Liu Wang and Jing Haipeng after arriving by plane. Wearing blue jumpsuits, astronauts Liu Yang, the nation's first woman in space, and Liu Wang, were thrilled to be greeted by hundreds of flag-waving children who gave them a heroes' welcome at Hong Kong airport yesterday. The pair, along with fellow astronaut Jing Haipeng, carried out China’s first manual space docking mission in June. They are on a four-day visit to the city. Scientists from Hong Kong could be headed into space to join their compatriots aboard China's planned space station, it was revealed yesterday - as the country's first woman astronaut arrived in the city. Niu Hongguang, deputy chief commander of the country's manned space engineering programme, said the mainland did not have enough astronauts to operate the planned space station, so "we need comrades from Hong Kong, Macau and Taiwan to take part in it". Niu was in the city yesterday at the invitation of Chief Executive Leung Chun-ying and headed a delegation of about 40 key commanders, astronauts and designers. They are the men and women behind China's first manned space docking mission between the orbiting experimental space station Tiangong-I and the Shenzhou-IX spacecraft in June. "We will need engineers to do experiments, and we are discussing how to pick, nurture, and train space travellers like these," Niu said. The Chinese space station proper will be an artificial satellite placed in low earth orbit which will be launched "around 2020". It will be used for a range of scientific experiments conducted in a "freefall" space environment. The three astronauts involved in the recent mission made their first public appearance in the city at a press conference at the Hong Kong Convention and Exhibition Centre in the afternoon. China's first woman in space, Liu Yang, said she cherished her experience of working and living in space. "Deep inside, I now feel confident and powerful," she said. "I think female astronauts will be indispensible to any future space explorations." Astronaut Liu Wang recalled one experience: "We flew past Hong Kong many times on the spacecraft. We really wanted to see how it looked from 300 kilometres above. It was very beautiful." He said his wife had given him a list of things she wanted him to buy for her and his daughter. "I hope to buy many things, and contribute to the Hong Kong economy in the most practical way," he said. The third member of the crew, Jing Haipeng said it was his third trip to the city. "I'm in Hong Kong to see all of you ... every time I'm here I feel your love and care for me," he said. The astronauts attended a welcome dinner hosted by the Hong Kong government at the Wan Chai convention centre last night. Today they will speak to primary and secondary school students about their space experiences.

 China*:  Aug 13 2012

China's exports were up by just 1 per cent last month, the lowest growth since November 2009, as demand from Europe faltered. With imports also rising at a slower pace, pressure mounted on Beijing to take further measures to support the economy. Customs data released yesterday showed that July exports edged up just 1 per cent from a year earlier to US$176.9 billion, missing economists' expectations and also sharply below June's 11.3 per cent growth. Imports climbed 4.7 per cent, compared with a 6.3 per cent rise in June and a 12.7 per cent increase in May. As a result, the trade surplus shrank 16.8 per cent from a year earlier, to US$25.2 billion. Trade had been affected by "the downturn and slow recovery of the global economy, with Europe being the hardest hit" due to the sovereign debt crisis, Deputy Commerce Minister Gao Hucheng said yesterday. He added that while China's trade faced challenges, he remained confident the target of 10 per cent growth in exports and imports this year would be met. "The set of weak macro data puts more pressure on the government to loosen policies," Zhang Zhiwei, chief China economist with Japanese securities brokerage Nomura International (HK), said. Zhang flagged possible further cuts to banks' reserve requirement ratio - the proportion of deposits a bank must keep in cash - and to interest rates, but said policymakers may be cautious about lowering borrowing costs due to "high concerns" about stoking a property bubble. HSBC economists Sun Junwei and Qu Hongbin expect the central bank to cut interest rates by a quarter of a percentage point and banks' reserve ratios by a full percentage point in the third quarter. "The next cut is likely to come as soon as this weekend," they said. Easing inflation may give the central bank more room to add liquidity to the economy. Consumer prices rose 1.8 per cent in July from a year earlier, the smallest rise in 21/2 years. The central bank has cut interest rates twice this year but has held off from cutting banks' reserve ratios since the last reduction in May. Customs data showed exports to the European Union, China's largest trade partner, dropped 3.6 per cent in the first seven months, compared with a contraction of 0.8 per cent in the first half, implying a 16 per cent slump in July from a year earlier, Citigroup economists Ding Shuang and Shen Minggao said. The weakness in exports, if it continued, might raise the chances of China stopping the yuan's appreciation against the currencies of its major trade partners, Citigroup said. Seasonally adjusted, China's imports recorded a sizeable drop of 5.8 per cent in July from June. The contraction was sharper than June's 0.6 per cent fall from May. "Sluggish domestic demand remains the main drag to the weaker import growth, besides still cooling external orders," HSBC said. Amid concern about the slowdown, the benchmark Shanghai Composite Index fell 0.24 per cent to 2168.81 yesterday, snapping a five-day rising trend.

Watsons China recalled its own brand of a whitening facial mask across the mainland following a claim that it caused a woman's death. The woman, 42, from Fuzhou, Fujian province, saw her whole body turn red and her lips turn black after using Watsons' White Pearl facial mask on Tuesday. She died in a hospital, fjsen.com a key news portal in Fujian, reported. In a statement posted on its official Sina Weibo account, Watsons China confirmed that the woman had used the product. More than 900,000 boxes of three masks had been sold since 2010. Watsons China, the largest health and beauty chain on the mainland, said it had not received any complaints about allergic reactions related to the mask. But the company decided on Tuesday to temporarily pull the product from its stores, including its online shops at Taobao.com and has removed it from its official website. The product met national quality standards and passed a toxicological risk assessment conducted by a third-party testing agency in Europe, the company said. "There is no evidence to show any connection between the death of the customer and this product," it said. The Fuzhou Food and Drug Administration said it had received a report about the mask, and said the case was still under investigation. The mask, produced in Guangdong, contains substances including arbutin and hydrolysed pearl solution, which are both used to lighten the skin tone. Sun Jianfang, a professor of dermatology at the Chinese Academy of Medical Sciences, said he was unaware of any similar case in medical literature. Sun said the autopsy should reveal if the victim suffered from another medical condition that had not been diagnosed. A spokeswoman for Watsons in Hong Kong said the White Pearl facial mask was not sold in the city, and that there was no evidence so far linking the woman's death to the product. Still, she said all products related to the mask had been taken off the shelves in China and would be tested.

Hong Kong*:  Aug 12 2012 

Laws on the nutritional labeling of baby food will be introduced "as soon as possible" in response to the panic over formula from Japan that contains less iodine than is recommended. Parents scrambled to get their babies tested for thyroid problems after it was revealed the formula contained just one- third of World Health Organization recommended iodine levels. About 59 mothers sought appointments yesterday at 10 Maternal and Child Health Clinics for their babies to undergo blood tests after bottlefeeding on Morinaga and Wakodo infant formula. A Department of Health hotline, on 2125-1111, had also received 2,389 inquiries. Authorities issued the alert on Wednesday after releasing the results of tests on 14 brands of formula. Centre for Food Safety assistant director Miranda Lee Siu-yuen said the government will legislate on nutritional labeling for baby food as soon as it can. Center controller Gloria Tam Lai-fan told an RTHK radio program yesterday: "We suspect that the Japanese population may have a far higher iodine level and that's why they may not need too much iodine in their formula." Tam went on: "We notice that the maternal iodine level in their diet is higher than in Hong Kong, their iodine in water is higher plus the fact that breastfeeding by Japanese mothers is more prevalent and lasts longer." Morinaga Corporation released a statement claiming it has not exported its infant milk powder to Hong Kong, indicating those available here are parallel imports. The milk powder is produced according to national standards and since the Japanese obtain a high level of iodine from seaweed, the company is not allowed to add more. Just five cans of Morinaga milk have been collected so far. About 40 cans of Wakodo Infant Formula have been registered and they will be collected through a door-to-door service tomorrow. About 200 cans that have been brought in as parallel imports have also been registered. However mothers should take the formula back to the shop where they bought it.

Cheung Kong (Holdings) (SEHK: 0001), the property developer founded by Asia’s richest man, Li Ka-shing, said on Friday it had won a tender from mass transit railway operator MTR Corporation (SEHK: 0066) to build the property above a rail station in Hong Kong, paying HK$9.6 billion (US$1.24 billion) for the land. Managing director and executive deputy chairman Victor Li, the elder son of the company’s 83-year old founder, announced the tender win for the Tsuen Wan project at the company’s headquarters, adding it would spend more than HK$20 billion (US$2.6 billion) on the project. The MTR had withdrawn the tender in January when bidders failed to meet its reserve price of HK$10 billion. Developers have grown cautious on land purchases with Hong Kong prices at some of the highest levels in the world.

Hong Kong’s trade-dependent economy shrank 0.1 per cent in the second quarter from the first three months of the year, weighed down by a drop in exports, in a further sign that cooling demand in China and Western countries is taking a toll on the Asian financial centre. Economic slowdowns in Europe, the United States and China have weighed on Hong Kong’s exports, which fell 4.8 per cent in June, while global market turmoil caused by the euro zone debt crisis has depressed activity in the city’s stock market and financial services sector. Hong Kong’s exports and imports are predominantly re-exports to and from mainland China. The seasonally-adjusted, first-quarter data was weaker than the median forecast of five analysts who saw GDP growing 1 per cent from the previous quarter. On a year-on-year basis, economic growth edged up 1.1 per cent, compared with a revised 0.7 per cent expansion in the first quarter. “We’ve seen lacklustre trade data in July coming from China, Korea and Taiwan. Some of the PMIs in global markets also doesn’t look too good and hence, Hong Kong’s third-quarter figures won’t look too good,” said Kevin Lai of Daiwa Capital Markets, adding he expects a 0.5 per cent contraction quarter-on-quarter in the third quarter. “Other than weak external trade, there was also some inflationary pressures, which may ultimately dampen domestic consumption.” The government also revised down its full-year forecast for economic growth to 1-2 per cent from 1-3 per cent, down sharply from a 5 per cent expansion last year, as the euro zone crisis and sluggish global growth sap demand for exports. Slower growth could add to challenges facing the city’s new leader, Leung Chun-ying, who has pledged to help low-income earners and increase housing supply. The government raised its forecast for full-year headline consumer price inflation to 3.7 per cent from 3.5 per cent, while underlying inflation was revised to 4.3 per cent from 4 per cent. Hong Kong consumer prices rose 3.7 per cent in June from a year earlier, easing from a 4.3 per cent increase in May. The government has said inflation should decelerate further in coming months due to a slowing domestic economy and moderating imported inflation. The data came as China said on Friday its July exports rose just 1 per cent from a year earlier, well below forecasts and underlining weak demand from major trading partners. The Chinese data cast doubt on whether its economy would rebound in the third quarter, as some analysts had expected. Taiwan on Monday posted a fifth straight month of decline in exports in July, dragged down by double-digit drops in shipments to China, Europe and the United States. Hong Kong’s jobless rate held steady at 3.2 per cent for April-June, although the outlook is overshadowed by a new batch of fresh graduates and school leavers and whether the market can absorb them. Global economic turmoil has also weighed heavily on Hong Kong’s markets, with the volume of initial public offerings down 70 per cent in the first half of this year to $4.3 billion from last year, according to Thomson Reuters data.

Jing Haipeng, commander of the Shenzhou-9 spacecraft, shakes hands with wellwishers at Hong Kong airport on Friday. The three astronauts who took part in China's first manned space docking mission arrived in Hong Kong for a four-day visit on Friday. Jing Haipeng, Liu Wang and the country’s first spacewoman Liu Yang touched down at Hong Kong International Airport with a 40-member delegation shortly before noon. They were welcomed by students presenting them with flower bouquets, by Chief Secretary Carrie Lam Cheng Yuet-ngor and a crowd waving the Hong Kong and China flags in the arrivals hall. The delegation includes key commanders and designers of the manned space programme. They all contributed to the success of the docking mission, between the Shenzhou-9 spacecraft and the orbiting Tiangong-1 space labouratory, in June. They will meet the media on Friday afternoon. On Friday evening, the delegation will attend a welcome dinner hosted by the Hong Kong government at the Hong Kong Convention and Exhibition Centre. On Saturday they will speak to local primary and secondary school students about their space experiences. In the afternoon, they will attend the “Hong Kong Welcomes the Delegation of Shenzhou-9 Manned Spaceflight Mission Variety Show” at the convention centre, with 2,000 spectators. On Sunday, the astronauts will tour the city and open a space exhibition at the Hong Kong Science Museum. They will then speak with university students. On their final day, Monday, the astronauts will attend a tea gathering with the women’s sector, to be broadcast live on RTHK’s Putonghua channel. One of the four lucky pupils was Monica Cheung Man, 13, a primary six pupil at Tung Chung school who presented a bouquet to Liu Yang. Cheung arrived with a pen in her pocket, intending to ask the female astronaut for an autograph. To her delight, each of the four pupils were given an autographed photo of the three astronauts. Before meeting the astronauts, Cheung was so excited that she “couldn’t really sleep”, and calmed her nerves by chatting with her father. She said the spacewoman has a warm smile. “I didn’t get a chance to chat with her, but if I could – I’d ask her what are the challenges in being a woman in space,” she said. Leung Siu-tong, the principal of Tung Chung school, said the school had been invited by the Home Affairs Bureau to select pupils to welcome the astronauts. Around 50 pupils from the school stood at the arrival gate waving the Chinese and Hong Kong flags. Cheung and her three classmates were selected for the task of personally greeting the astronauts because of their interest in space expeditions and fluency in Putonghua. The school had previously been selected for the send-off ceremony when President Hu Jintao left from the airport on July 1, after his visit to Hong Kong, Leung said. His school will introduce the new moral and national education curriculum this September. Leung said chances to meet famous national figures offer rare opportunities for pupils to learn about China. “It’s only after the handover that Hongkongers have been able to experience events like this,” he said. “These activities can inspire pupils to take an interest and relate to Chinese affairs.” The national education curriculum at his school will be “knowledge-based”, he said.

Secretary for Development Paul Chan Mo-po speaks to the media at Central Government Offices. Embattled Development Minister Paul Chan Mo-posaid on Friday that he had told the truth in his earlier comments about subdivided flats owned by a company that his wife controlled. Chan, who fought back tears at times during a press conference on Friday afternoon, said he had not known – until recent media inquiries – that two flats in Tai Kok Tsui and Jordon had been illegally subdivided. He said that when Harvest Charm Development (HCD) – in which his wife was a shareholder – bought the flats in 1994 and 1996, “partitioned rooms” in one of the flats had already been sublet. But that involved no illegally subdivided flats, he said. “Subleasing in old tenement buildings usually involve partitioned rooms, which are an entirely different issue from subdivided flats,” he said. He added that the subdivision work was done later, by the principal tenant. Chan first responded to the subdivided flats issue on August 3, saying that neither he nor his wife, Frieda Hui Po-ming, knew about the “rental arrangements” of the flats owned by HCD. But he raised suspicions, two days later, when he issued another statement, at midnight, responding to fresh media reports suggesting that he knew about subleasing – and unauthorised subdivisions – in the flats. Chan said on Friday he regretted that his statements had caused confusion, which he had not intended. “What I said in the statements issued on August 3 and 5 are the truth,” he said. He has been facing calls to make a full explanation about the flats and to clear up doubts about apparent contradictions in his accounts. His statements on Friday came after Executive Council convener Lam Woon-kwong urged Chan to “grasp the last chance” to clear his name. Amid mounting pressure on him to step down, Chan, appointed on July 11 to replace disgraced Mak Chai-kwong, said he would stay on. “I kept thinking back and forth and have no peaceful sleep in the past two weeks. I understand the public’s concern, their expectations and criticism. I listen to them humbly,” he said. “Looking forward, I will devote all my heart and efforts to serving in the capacity of development secretary to live up to their expectations.” Chan also responded to accusations that he aimed to attract less media attention by releasing his second explanation at one minute to midnight on Sunday. He said the whole matter occurred a long time ago, so it took him considerable time to make contact with Harvest and gather information. Chan’s predecessor, Mak, resigned only 12 days into his tenure when he was arrested by anti-corruption officials over alleged abuse of a government housing allowance.

 China*:  Aug 12 2012

Shoppers check out the racks at the Forever 21 flagship store in Beijing on opening day. Forever 21, a US fashion retailer on its way to becoming a global brand, says the global economic slowdown will not hamper its expansion in China, where it plans to open more shops. The brand opened its first mainland shop in Beijing apm, a shopping mall managed by Sun Hung Kai Properties (SEHK: 0016) in the Wangfujing shopping area, on Wednesday. Thousands of people, many from neighbouring cities including Tianjin, packed the store to snap up clothes, shoes and accessories in the four-storey, 25,000 square foot shop. Larry Meyer, executive vice-president of Forever 21, said the company would open another big store in Shanghai in a couple of months, and was also looking for other locations around the country. "We've been in the fashion industry for 28 years, and economic cycles have been part of our life. We will not downsize our expansion plans due to the economic slowdown," he said. "Our focus … is to find great locations for new shops." Forever 21, best known for its fast-changing styles and low prices, is one of the top five fashion retailers in the United States by revenue. Last year, it posted revenue of US$2.22 billion, selling most of its products at below US$60. The firm operates in places including South Korea, Japan, Austria, Belgium, Spain and Britain. Most of its stores cover more than 10,000 square feet and are found in core shopping areas of a city. In January, the brand opened its first store in Hong Kong, in Causeway Bay. Jimmy Wong, executive director of Sun Hung Kai Real Estate Agency, said the retail market in mainland China was still strong compared to other countries. "Many foreign retailers we have been in talks with show a strong intention to open shops in Asia, a place where they know they can make money," he said. The Beijing apm, with a floor area of 1 million sq ft, draws about 100,000 shoppers a day. Wong expects the daily customer traffic to double by the end of the year. Turnover at the mall was expected to grow 80 per cent to 2.7 billion yuan (HK$3.31 billion) from a year earlier, he said.

Commuters pile onto a train at Dawanglu during rush hour on Beijing's metro system, which moves more than seven million passengers a day. Beijing Infrastructure Investment, which invests in and builds the capital's metro railway, says it will spend 55.87 billion yuan (HK$68.49 billion) on 10 metro rail projects from next year to 2015. The state-run company will issue two billion yuan of one-year bonds to fund the construction of at least six metro lines, adding to its mounting debt. The city plans to build 660 kilometres of metro rail lines by 2015, which would account for most of Beijing's traffic flow, according to the bond prospectus. Beijing has 372 kilometres of metro rail lines, making up 14 lines serving an average of more than seven million passengers a day, the city government says on its website. The system is the world's fourth-largest urban metro rail network, and another 296 kilometres are under construction, it adds. "The current scale of Beijing's metro railway lags behind the city's urban scale and the growth of cars. The number of cars in Beijing is growing very quickly, putting great pressure on the traffic," said Wang Jiangyan, executive director of the Sustainable Transportation Centre, a non-governmental organisation in the capital city supported by the US Energy Foundation. The prospectus says: "Beijing's traffic congestion problem is worsening. The plan to greatly develop public transport will resolve the city's transport problems." However, Beijing Infrastructure's prospectus warns that because construction will be substantial "the company's funding gap is rather large, which may result in a sharp increase of the company's debt". Beijing Infrastructure's debt ballooned from 67.81 billion yuan in 2009 to 135.46 billion yuan in 2011, while its gearing ratio increased from 48.2 per cent in 2009 to 60.52 per cent on March 31, according to the prospectus. It said debt from 2012 to 2013 is expected to increase. The firm posted a net profit of 878.46 million yuan last year, but recorded a net loss of 43.71 million yuan in the first quarter of this year. As of March 31, it suffered a net operating cash outflow of 2.54 billion yuan. But the Beijing municipal government's financial strength is robust and capable of supporting the city's infrastructure investment, according to a report by China Chengxin International, a Chinese credit rating agency 49 per cent owned by Moody's. Last year, Beijing's fiscal revenue was 300.6 billion yuan, 27.7 per cent higher than 2010 and triple its fiscal revenue in 2005, according to Chengxin. The municipal government is the dominant source of funding for the city's infrastructure and as the city's main infrastructure investment arm, Beijing Infrastructure enjoys strong financial support from the city government, says Chengxin.

CPI hits 30-month low amid easing calls - Rise in fuel prices announced as growth measures loom on horizon - Policy fine-tuning should be cautiously rolled out to prevent a rebound in prices, experts said, after inflation hit a 30-month low in July and stoked speculation of aggressive easing. Meanwhile, the National Development and Reform Commission announced on Thursday that the retail price of gasoline would rise by 390 yuan ($62), and diesel by 370 yuan, a metric ton from Friday. The consumer price index, a major gauge of inflation, rose 1.8 percent year-on-year last month, the slowest pace since February 2010, the National Bureau of Statistics said on Thursday. The rate was 0.4 percentage point lower than in June and marked the fourth consecutive monthly fall. "The falling CPI increases pressure on the government to further loosen monetary policy to restore growth," said Jin Linbo, vice-president of the National Academy of Economic Strategy at the Chinese Academy of Social Sciences. "But this will not be an easy job, as further easing, if not appropriately applied, will lead to a bubble. Authorities have to be very cautious about each step they take," Jin said. Chen Daofu, policy research chief at the Financial Research Institute at the State Council's Development Research Center, said the government should not rush into another interest rate cut when inflation concerns remain high among consumers. "A better choice would be to lessen administrative controls, such as further widening the room for floating interest rates." The People's Bank of China, the central bank, lowered interest rates twice in the past two months to bolster the world's second-largest economy, which reported the slowest expansion in three years in the second quarter at 7.6 percent. However, a recent report by the central bank said the marginal effect of policy relaxation is declining and it could lead to a rebound in inflation. "Bank reserve cuts and open market operations will be the main tools adopted in the near future," Chen said. Liu Ligang, head of China economics studies at the Australia and New Zealand Banking Group, estimated that bank reserve requirements will be cut this month, and two more cuts are likely this year. "Although there are still possibilities for further interest rate cuts, it might not be the best medicine for a cooling economy," Liu said, explaining that the economy will face even bigger challenges if interest cuts lead to a rebound in housing prices. "Retreating CPI in the short term doesn't rule out long-term inflationary pressure," said Zhang Monan, an analyst with the State Information Center. "Structural inflation, pushed up by the re-evaluation of assets and rising labor costs, continues to pressure companies and consumers," she said. In a breakdown of July's index, food prices, which account for nearly one-third of the CPI, edged up 2.4 percent from a year ago, compared with 3.8 percent in June. The increase was mainly driven by vegetable and fruit prices, as rain and flooding affected production in many areas in the traditional peak supply season. Pork prices saw a rise of 18.7 percent year-on-year. Meanwhile, charges for domestic and maintenance services went up 10 percent year-on-year. Transportation and communication are the only category in the basket to see their prices fall from a year ago. Fuel prices were down 4.4 percent year-on-year after three price cuts this year.

Hong Kong*:  Aug 11 2012 

Celestial Pictures, the Hong Kong entertainment company that owns the Shaw Brothers Film Library, has started offering selected titles to the iTunes Store, weeks after Apple rolled out the service in Hong Kong, Macau, Taiwan and nine other markets across Asia. The South China Morning Post (SEHK: 0583) broke the news in June that Celestial, a wholly owned subsidiary of Malaysian media conglomerate Astro Holdings, was in talks with Apple to bring its prized Chinese content to Apple’s online digital media store. The first Shaw Brothers titles to debut on the iTunes Store are: The 36th Chamber of Shaolin, starring Gordon Liu Chia-hui; Out of The Dark, with Stephen Chow Sing-chi; and Behind the Yellow Line, starring late Canto-pop star Leslie Cheung Kwok-wing. In Asia, the iTunes Store offers more than 20 million songs and music videos, and a range of films. Prior to Apple’s deal with Celestial, most of the films available at the Hong Kong iTunes Store were from the big Hollywood studios:20th Century Fox, Paramount Pictures, Sony Pictures Home Entertainment, The Walt Disney Studios and Warner Bros Pictures. Ross Pollack, the chief executive of Celestial, said the company aimed to open the doors of Apple’s digital media store for a global audience of smartphone, media tablet and internet-connected television users to download Shaw Brothers’ iconic films onto their devices. “I think it’s fantastic that Apple is doing this because consumers across Asia need more legitimate digital platforms to access and pay for high-quality content,” Pollack said in a recent interview. Celestial’s Shaw Brothers Film Library is widely recognised as the world’s largest collection of Chinese films. It consists of 760 films from the 1950s to the 1990s that have all been re-mastered and preserved in digital format. These include some of the best martial arts films in cinema history. “Fans of Shaw Brothers movies can now enjoy these movies on iTunes through a Mac or PC, iPhone, iPad or iPod touch,” said Gigi Ko, the director of distribution at Celestial. “We hope to attract a whole new group of fans by exposing them to these cinematic gems.” The purchase price, as an example, for the standard-definition version of The 36th Chamber of Shaolin on the iTunes Store is HK$78, while renting it will cost HK$18. A high-definition version of this film is also available for rent at HK$28. Pollack said Celestial was “working out a release schedule on the iTunes Store with Apple to make sure that we can quickly get as many films as possible available on the platform”. An Apple spokesman said during the iTunes Store launch in June that the company was “looking to add more content”, especially now that the service was available in more locations across Asia. “The catalogue is growing all the time,” the spokesman said. He added that independent filmmakers and music labels are encouraged to make use of the iTunes Store as a platform to promote and market their work. The iTunes Store currently does not offer Chinese-language TV programmes from the big local networks and television series producers. Apple, the world’s largest technology company, introduced its online digital media store in April 2003, but until June 27 it was available in just three Asia-Pacific markets - Japan, Australia and New Zealand.

Illegal excavation work on this site at Sai Wan sparked concern, leading to the proposal to incorporate it into the country park. A private enclave on Sai Kung's remote and scenic Tai Long Wan coast could be incorporated into the surrounding country park early next year, after government advisers endorsed the proposal. The development comes two years after the surroundings of a beach at Sai Wan were partially defaced by illegal excavation on private land in the area, sparking concern over protection of the site. District councillors and residents of Sai Wan village have been opposing the country park plan, saying it would restrict villagers' rights. But the Country and Marine Parks Board, under the Agriculture, Fisheries and Conservation Department, yesterday unanimously endorsed invoking statutory procedures to incorporate the enclave into the Sai Kung East Country Park as soon as possible. A new draft map of the park will be prepared and gazetted for a two-month public consultation, after which the Chief Executive in Council must make a decision within six months. Board chairwoman Professor Nora Tam Fung-yee said she hoped the first part of the procedure could be finished by next month, so the 16.5-hectare site could become part of the park as soon as possible. Also endorsed at yesterday's meeting were the incorporation of one hectare at Kam Shan into the Kam Shan Country Park and 19 hectares at Yuen Tun into Tai Lam Country Park. The endorsements followed scrutiny of private enclaves adjacent to or surrounded by country parks, prompted by a row over the excavations at Sai Wan. Sai Kung District Council expressed strong opposition to the Sai Wan plan in a consultation in February, urging the government to respect villagers' private property rights. But the government said designating the area as country park would improve management of the site and enhance its overall conservation and landscape value while in turn "improving the local economy of the area". Francis Chau Yin-ming, a district councillor and convenor of a task force to address the rural community's concerns, said villagers would prefer the site to be zoned for village development. They also hoped that transport to the area - now possible only by sea or via a narrow track - could be improved. "But at the same time, they were not sure if the government could handle it, as resources for country parks were limited," he said. Sai Wan village head Lai Yan said villagers had lost confidence in the department's management after numerous complaints about rubbish on the beach drew no response. He said rubbish on the beach was only removed infrequently, making the environment unpleasant. "From what we can see, the department is doing a bad job," he said "We don't dare hope for anything when the area [becomes] country park." Lobby group Designing Hong Kong welcomed the board's decision, but was concerned about the continuing processing of applications to build village houses. It also worried about 34 similar enclaves that were still without protection.

The government has decided to shelve its long-discussed proposal to build a piazza to replace the Tsim Sha Tsui ferry pier's bus terminus, blaming technical difficulties and public opposition. The demolition plans were approved by the Legislative Council seven years ago but were delayed after members of the public and activists pressed for the "historical" structure to be preserved. The original plan to relocate the terminus to Mody Road was revised last year. Instead, officials proposed building a smaller hub at the present waterfront location, reducing the size of the planned piazza by 40 per cent. Leslie Chan Ka-long, chairman of Our Bus Terminal, a group that has opposed the redevelopment plan since 2008, welcomed the government's decision, saying the terminus should stay because of its historical value and practical uses. "This is a victory for all the citizens and councillors who signed our petitions, who took part in our protests and who pointed out [the] government's fault," he said. The redevelopment plan had elicited 7,000 opinions. The Commerce and Economic Development Bureau said the public and district council strongly opposed the plan due to concerns about delays to traffic and commuters. A bureau spokesman said the plan was scrapped because the piazza would bring limited economic benefits, as the area was already a developed tourist spot, particularly with the presence of the 1881 Heritage dining and shopping complex. He also said redeveloping the terminus was never a feasible option in the first place. "The works departments discovered that the foundation of the existing pier would not be able to support substantial renovation and expansion." Chan said the government should have known about this problem a long time ago. However, Paul Zimmerman, a district councillor and CEO of Designing Hong Kong, said the bus terminus and adjacent pier were badly in need of renovation. "Right now it looks like a third-world, dilapidated area. It's dead," he said. "[The problem] is [due to] the inability of the government to respond adequately to public input and to work with the public to come up with a good plan." The government's latest decision on the piazza means the terminus will remain the last stop for all 15 bus routes it serves. A Star Ferry spokesman said any decision on the terminus would have little impact on the company's separate renovation plans for the pier. While keeping the terminus is convenient, Tsim Sha Tsui district councillor Derek Hung Chiu-wah has expressed dissatisfaction with the sudden halting of the HK$270 million redevelopment plan. He said the government had wasted time and money, including that spent on a newly built terminus in Mody Road. Chan said his group would press the Antiquities and Monuments Office to declare the whole area spanning the hub, pier and clock tower a heritage site. Only the clock tower has been declared a monument.

Worried mothers hurried to government health centres on Thursday to book check-ups for their babies, after health officials warned that two brands of Japanese infant formula were deficient in iodine. Ten maternal and child health centres are providing free thyroid tests for infants, from one to eight months old, who have been drinking Wakodo and Morinaga brands of formula. An iodine shortage can harm the thyroid gland and affect brain function, health officials said. Tests by the Centre for Food Safety found that if used as suggested on their labels, the two products would provide a daily iodine intake lower than the World Health Organisation’s suggested amount. The two brands have been taken off store shelves. In the Wong Tai Sin child health centre, one mother booked a check-up for her three-month-old son, who has consumed Wakodo since birth. She doubted her son had suffered any consequences, but still wanted a check-up to ensure he was safe. The test findings worried some parents who once fed their babies with the brands but have since changed to other food. One mother was refused an appointment for her 20-month-old son at a health centre in Fanling. The doctor “told me [a check-up] is unnecessary because my baby has started eating solid food, and can absorb iodine from that,” said Leung Shan, 33. She fed her son Wakodo for seven months after his birth, then stopped about a year ago out of fear that Japanese milk powder might be contaminated by radiation from last year’s tsunami and nuclear disaster. Leung may take her son to a private hospital for a check-up, she said.

Sinopec's Vice President Zhang Guoming said on Thursday the oil giant would set up a HK$10 million fund to help clean up 150 tonnes of plastic pellets washed ashore on Hong Kong beaches last month. Sinopec (SEHK: 0386) has promised to set up a HK$10 million fund to help clean up 150 tonnes of plastic pellets that marred Hong Kong beaches and fish farms last month. The mainland oil giant admitted late on Wednesday that it owned the plastic pellets lost overboard in six shipping containers, when Severe Typhoon Vicente struck the city two weeks ago. Spokesman Lu Dapeng said at a press conference on Thursday afternoon that the fund would be used to locate and retrieve a missing container that fell into the sea and to clean places littered with the pellets. “No matter what party is eventually held liable if legal action is taken, the company is willing to pay in advance for the costs involved in recovering the pellets and the clean-up,” he said. Lu also said the company would co-operate with environmental groups and government departments in the clean-up. On Wednesday, the government vowed to track down those responsible. The Department of Justice and the Marine Department were working to determine how six containers carrying the pellets fell into the sea, and to learn the details of the deal between the pellets’ buyer and the shipping company. Lawyers say both the shipping agent and the owner could be held liable for the spill. Asked if the company would compensate Hong Kong fish farmers affected by the spill, Lu said it was too early to talk about compensation before liability was established. The company’s pledge came as volunteers and government workers continued to clean the beaches. Wong also said more divers had been deployed to monitor waters near major beaches, and that no abnormal conditions had been reported so far. Officials say the pellets, normally used to make plastic products, are harmless, but green campaigners say they may absorb contaminants and enter the food chain. After a visit to a Lamma Island beach where cleaning was under way on Thursday, Secretary for the Environment Wong Kam-sing said the government was still studying how to handle the recovered pellets. He said dumping them at landfills would be the last option, which the government would seek to avoid.

 China*:  Aug 11 2012

Multiple high-speed railway lines in operation or under construction in China have “grave” quality problems, a state  newspaper said on Thursday, a year after a deadly crash sparked public outrage. The Southern Metropolis Daily, citing an internal Ministry of Railways report, said cracks had been detected in tunnels, some of which had been built without the steel bars needed to reinforce them. Wiring at the Wenzhou South Station, which is on the line where the deadly bullet train collision took place in July last year, was also discovered to be substandard. At least 40 people were killed and hundreds injured in the July last year accident, which has since been blamed on design flaws and poor management. It followed the dismissal of former railways minister Liu Zhijun in February last year. He is facing prosecution for corruption after reportedly taking bribes of more than 800 million yuan during his time in office. China’s high-speed rail network, the largest in the world, has been plagued by graft and safety scandals following rapid expansion. The newspaper, which has a reputation for its outspoken reporting, said the railways ministry had ordered “complete correction” to the shortfalls by certain deadlines that should “leave no more potential risks”. In March, a section of a new high-speed railway in central China’s Hubei province collapsed following heavy rainfall. Opened to passengers only in 2007, the high-speed rail system grew rapidly thanks to huge state funding and had 8,358 kilometres of track at the end of 2010. China’s state auditor said last year that construction companies and individuals siphoned off 187 million yuan (US$29.4 million) in funds for the construction of the flagship high-speed railway line between Beijing and Shanghai.

Beijing envoy Chen Yunlin (left) shakes hands with Chiang Pin-kung, chairman of the Taiwan-based Straits Exchange Foundation at a meeting in Taipei on Thursday. Taipei and Beijing signed a landmark investment pact on Thursday as hundreds of protesters voiced their anger over the island’s ever-closer economic ties with its giant former foe. China’s chief negotiator Chen Yunlin and his Taiwanese counterpart Chiang Pin-kung put their names to the long-awaited deal, which will provide a legal umbrella for Taiwanese companies operating in China. “It’s extremely important not only for Taiwan’s investment and trade links with the mainland, but also for bilateral ties as a whole,” Chiang told reporters after signing the agreement. “It will also provide different ways to protect Taiwan’s business interests in the mainland when disputes take place.” The agreement includes safeguards against sudden expropriation of property and also gives individual investors some protection in the case of legal problems with authorities. Chen and Chiang also signed a co-operation pact to speed up customs procedures in the hope of boosting two-way trade. The two deals follow the sweeping 2010 Economic Co-operation Framework Agreement (ECFA) that eased tariff restrictions and gave trade a major push. But those who oppose closer ties with China fear the pacts will strengthen Beijing’s hold over the island. Protesters have been tailing Chen since his arrival on Wednesday. Police estimated close to 700 gathered in the streets of Taipei, including several hundred members of the Falungong spiritual movement, which has been banned in China for more than 12 years. About 1,300 police officers were posted around the meeting venue, a landmark hotel on a hill overlooking Taipei. Barbed wire was rolled out and police prevented a small truck covered in anti-China banners from approaching the building. “I oppose the deals because China is trying to control Taiwan’s economy so it can rule Taiwan,” said protester Chen Che, demonstrating with about 50 others at a museum several hundred metres from the hotel. “The deals have political purposes and they are steps towards unification. I’m worried about Taiwan’s future if the government sells out to China like this. Without democracy we have nothing.” A spokeswoman for the pro-independence Taiwan Solidarity Union party said earlier this week that Beijing had not respected any of the pacts it had signed so far and questioned why more agreements were being made. Ties have improved markedly since Ma Ying-jeou became Taiwan’s president in 2008 on a Beijing-friendly platform, leading to the signing of 18 agreements, including Thursday’s, between the two sides to boost trade and civil exchanges. The mainland is Taiwan’s largest trade partner and more than 80,000 Taiwanese companies now operate there, where they have invested more than US$100 billion over the years. It is the eighth time in four years that Chen and Chiang have met for talks that would have been unthinkable a decade ago but have now become almost routine. Thursday’s meeting could be their last, with observers expecting the 70-year-old Chen to retire after a change of leadership in Beijing this year and next.

"Playing Dragon and Phoenix" was made by Beijing Watch Factory for the luxury market. The nation's master watchmakers were late entrants in the luxury market and though they had high hopes of competing with the Swiss, the reality is more mixed. Wang Kaihao reports in Beijing. The old Soviet-style Beijing Watch Factory was erected in Changping district more than 50 years ago. A giant statue of former chairman Mao Zedong stands at the front gate. "It's almost the same as the day I first came here," says Xu Yaonan, 78, a watch movement designer who has worked at the factory since 1962, after graduating from Tianjin University. He majored in horologe machine manufacturing in the department of precision instruments. "The watch manufacturing industry had just started in China at that time. We all wanted to make a contribution to the country." China made its first watch, in 1955, in Tianjin. Watch factories mushroomed nationwide in the following years and Beijing Watch Factory was founded in 1958. In June, China Horologe Association (CHA), the official organization supervising the development of the industry, presented the title of "Chinese Watch and Clock Masters" to 12 people nationwide for the first time in the Great Hall of the People. Xu is one of nine "master watchmakers". As the son of a clock repairer in his hometown of Wuxi, Jiangsu province, Xu grew up with watch making gadgets, which made him decide to follow in his father's footsteps. "Everyone in the factory was so disciplined and we had a very ambitious slogan: 'The watch won't leave the factory if it fails to catch up with (those made in) Switzerland." Xu joined a delegation for a light industry exhibition in Poland, East Germany and Romania in 1964, and was proud to see Chinese watches appreciated by visitors for the first time. He was a member of a 15-people panel to design a "national unitary watch movement" in 1967. The brass movement with a diameter of 26.5 mm and a thickness of 4.4 mm was put into mass production in 1970s and is still made at some factories today. A watch was one of the san da jian, or "big three pieces" (the others were a bicycle and sewing machine) that symbolized high living standards for ordinary Chinese families in the late 1970s. A Beijing-brand watch sold then for about 110 yuan, which was about two months salary for Xu at that time. Xu says there were more than 3,000 employees at the factory in the early 1980s, and the only way you could get a job then was through personal connections. Miao Hongbo, 47, is the general manager of the factory and says when he arrived in 1986, its heyday had just passed. "The Japanese quartz watch came in and the whole industry began to go downhill," says Miao, looking sullen. "Mechanical watches were no longer the first choice for timing." The factory had to rent land to neighboring schools to make ends meet in the following years. Meanwhile, many other manufacturers failed to pass the test of time. Zhang Yamin, 58, is the former deputy head of Hefei Watch Factory in Anhui province. His factory spent large amounts of money introducing instruments from Switzerland in the mid-1980s but the expansion led to overcapacity and a switch to making quartz watches was made around 1990. "But we couldn't keep down our costs as low as our Japanese counterparts'. The factory didn't have enough creativity and it got worse and worse." The factory limped along for another decade and finally disbanded in 2005. Zhang now runs a watch-repair store. According to CHA Vice-Chairman Zhang Hongguang, the country had 38 mechanical watch factories that could produce their own movements in the 1980s, but the number is just nine now.

The nation's master watch and clock makers have emerged from a difficult decade to make the most of the luxury market. Wang Kaihao reports in Tianjin. Staring at the microscope and testing tiny details - Yang Zuobin, 63, devotes his mind to the miniature world of mechanical watch movements. Yang has been at Sea-Gull Watch Group for 42 years. The factory is in Tianjin, the birthplace of China's first watch in 1955. He was honored as one of 12 "Chinese Watch and Clock Masters" selected by the Chinese Horologe Association in June, and has the title "chief technician" at work. "I am only a worker, not an engineer," he says, humbly. "I didn't make them, but assembled them." In 2011, he assembled the first watch on the Chinese mainland that combines three major symbols of a high-end mechanical watch: tourbillon, minute repeater and calendar. An anonymous businessman from Xiamen, Fujian province, bought it for 1.28 million yuan ($201,000), the most expensive domestic watch ever sold. It is a complex and small machine containing 435 components. "Putting these components together takes days, but I have to spend months adjusting the movements and erasing errors." Yang began assembling watch movements in 2004, when he was supposed to retire. He had planned to open a repair store in a supermarket after retirement, but his stall was cancelled right before he moved in. "When I was at a loss thinking about what I would do in the future, the managers asked me to return to the factory and assemble watch movements." Sea-Gull began producing its high-end movements in 2002. However, it lacked skillful assemblers. "Even the tourbillon is not that puzzling," Yang says, referring to one of the most complicated elements in luxury watches. "Though I had never seen it before, I soon understand its structure." "Maybe that's because I've been dealing with machines for a long time. No matter how complex a watch is, it is a machine." He entered the factory in 1970 after studying machinery for five years in a technical school, and worked for eight years on a lathe, until he transferred to be a machine repairer for 15 years. "I try to love whatever I do. I have strong vanity because I always want to be top at whatever work I do." Yang accidentally came into possession of a textbook on how to repair watches from an abandoned library during the "cultural revolution" (1966-76). He began to tinker with watches in his spare time for relatives. He is proud of experiencing the golden age of Chinese watches in the early 1980s, though he faced a bleak future when the factory and watch industry as a whole was hit by quartz watches. The factory authorities announced on Chinese New Year of 1992 that workers would be temporarily laid off. "I was not in the mood to celebrate New Year and I immediately decided to have a secondary occupation to make ends meet," Yang says. On that year's Lantern Festival, he brought some watch-repair tools and rode a bicycle on the street while his family members went to see their relatives. "I stopped half an hour later and found myself in the countryside," he recalls. "I went to the nearest village. The village head was very happy and used the loudspeaker to gather all the villagers and bring their broken watches." That was his first repair job, for which he earned 22 yuan - his salary was no more than 200 yuan - and ended up fixing all the villagers' watches that week. He went on to eight neighboring villages for two months until factory manufacturing resumed and he became a mold repairer. However, his enthusiasm for watch repairs was not to be extinguished. He went to a canteen at Tianjin University near the factory every noon to fix watches for the students, and continued going to the countryside on weekends. "I hope those students remember me," he giggles. "The watches accompanied them through their final exams." His part-time campus repair shop lasted for a decade, until the canteen was demolished in 2001. He says those years of viewing all kinds of watches helps his work today. He moved to the after sales department in the factory to fix watches in the last few years before his "retirement" in 2004. When he worries about the future of watch making, his work colleague Zhao Guowang, 34, who designed the blueprint of the 1.28-milliom-yuan watch, offers hope.

Hong Kong*:  Aug 10 2012 

Cathay Pacific staff work at the first class desk at Hong Kong airport. Cathay posted a first-half net loss of US$121 million on Wednesday, citing weakening demand. Cathay Pacific Airways (SEHK: 0293), the world's largest air freight carrier, posted its worst first-half loss since 2003, hurt by high fuel costs, weak cargo demand and fewer premium passengers, pushing its shares down as much as 7.7 per cent. Cathay, among the worst-hit airlines during the 2003 outbreak of Severe Acute Respiratory Syndrome (SARS), is now grappling with economic uncertainty in Europe and the United States that has weighed on passenger and cargo traffic, and hurt some of the big players such as regional rival Singapore Airlines. “Its stock is likely to come under pressure in the short term as analysts are expected to downgrade full-year earnings estimates for the company,” said Steven Leung, sales director at brokerage UOB Kay Hian. Cathay, which also competes with Australia’s Qantas Airways, reported a net loss of HK$935 million (US$120.6 million)for the six months ended in June, underlining how sagging demand and high oil prices are taking their toll on the industry. The earnings lagged an average forecast of a HK$122.5 million profit from six analysts polled by Reuters and compared with a profit of HK$2.81 billion (US$359.9 million) for the same period a year earlier. The loss was Cathay’s worst for a first-half period since the outbreak of SARS hit the city in 2003, when it posted a first-half loss of HK$1.24 billion. Cathay said demand for cargo shipments in the first half remained weak, with routes to Europe particularly sluggish due to the region’s deepening debt crisis, resulting in a 7.6 per cent drop in freight revenue to HK$11.9 billion (US$1.53 billion). Cathay’s cargo unit, which accounted for 24 per cent of revenue, shipped 10 per cent less freight in the first six months of the year due to weak demand in its key markets, including Hong Kong and China, as a global economic slowdown cut consumer demand for electronics and other manufactured goods from Asia. The cargo slump also hurt Cathay’s cargo joint venture with Air China (SEHK: 0753), contributing to a HK$167 million loss from associates to Cathay during the first half. The Hong Kong-listed airline said it expected the cargo market to improve, but did not provide a time frame. Industry executives and economic analysts generally see airline cargo traffic as a leading indicator of the airline business, as well as an overall reflection of global trade. Cathay posted its worst ever six-month loss in the second half of 2008, with a HK$7.9 billion loss due to hefty fuel hedging charges. Fuel costs rose 6.5 per cent from a year earlier and accounted for about 42 per cent of the carrier’s total operating costs. Aircraft maintenance expenses rose 23 per cent. The carrier’s realised profit from hedging activities fell 59 per cent from a year earlier, while passenger yields rose just 1.2 per cent. Cathay said premium class yields remained under pressure in the first half and it highlighted a drop in demand for corporate travel from Hong Kong, saying employees of major corporations were travelling less. It did not provide details. Passenger traffic at Cathay, which is 45 per cent-held by Swire Pacific (SEHK: 0019) and about 30 per cent-owned by Air China, rose 8.6 per cent in the first half, although the company remained under pressure from competition from Middle Eastern carriers and budget carriers. Shares of Cathay fell as much as 7.7 per cent after the results were announced and stood at HK$12.14 at 1.46pm, down 6 per cent and lagging a 0.2 per cent drop in the benchmark Hang Seng Index. Cathay, which has a market value of US$6.6 billion, flagged disappointing interim earnings in May amid high jet fuel prices, weak cargo demand and increasing competition. Singapore Airlines, the world’s No. 2 carrier by market value, said in July it swung to a quarterly profit but warned that earnings at its cargo and passenger units remained under pressure.

Yeo Peck Leng, founder and supervisor of the Almitas Academy, at the school's North Point premises. Small school takes a national stand - Almitas Academy - which initially had just two pupils, the founder's sons - will tackle national education, but in its own way, as it takes in 11 new entrants. An "alternative" private primary school started last year by a mother for her two children will be incorporating the controversial subject of national education in its curriculum as it welcomes more pupils - Yeo Peck Leng, founder of the Almitas Academy, said she felt the subject was "very important", teaching pupils to respect the country. Yeo, from Singapore, who is the wife of executive councillor Bernard Chan, said the civic education she received as a student had built her sense of belonging to the country. She felt the subject was necessary because "this generation already thinks Hong Kong is a part of China". She said: "My older son would ask me and his dad sometimes, why we would say 'going back to the mainland', when we travel. "He said it's like as if we were going to a foreign place, while Hong Kong is a part of China. Hong Kong and the mainland are integrating, so there's an even greater need to learn about the country." Private schools are not required to provide the subject, which is due to become compulsory in public primary schools in 2015 and in secondary schools in 2016. Yeo's two sons were the first Almitas pupils last year and next month there will be 11 new pupils. Their elder son Brandon, 12, will attend an international secondary school, while brother Bradley, nine, will remain at Almitas with his new schoolmates. Yeo said she had always felt it was important to offer national education in the school, even before it became a heated topic, but did not formally incorporate it into the curriculum until more students joined. She said Almitas focused on "individualised teaching", and would take material from history books after studying government guidelines. But national education would not be a stand-alone subject when the term starts next month. She said it would be incorporated into Chinese language lessons, touching on the "history and facts" and "looking at the country from various points of view". On sensitive issues, such as the Tiananmen crackdown, she said the school would need to study further to see whether inclusion was suitable. Yeo added: "We want to bring opportunities so education can be offered in a way that could be against the norm. We would like to take up challenges." The pupils are aged from six to 12, with about a third of them having special needs. Most are from Hong Kong, but some are also from the mainland, Korea and the United States. Although the school emphasised parental involvement, Yeo said it accepted some students with working parents and was making special arrangements for them. Staffing levels will remain the same, with two full-time language teachers and a few part-time ones. The Christian school, which focuses on building character and teaching Bible-based values, is looking to expand. It took several months to get the government permits required to operate at a temporary site, and Yeo said it would probably take more time to secure a permanent site. Its current campus in a commercial building in North Point can accommodate only 30 pupils. Controversy erupted when a Beijing loyalist group sent national education textbooks to various schools recently. Teachers, parents and school sponsoring bodies said the material was biased and could "brainwash" pupils. A rally organised by secondary school students, parents and the Professional Teachers' Union against national education attracted tens of thousands of protesters last month.

Former Civic Party member Paul Zimmerman said on Wednesday he would back Frederick Fung Kin-kee in the contest for a "super seat" in next month's Legislative Council election. The September 9 Legco poll gives most of the electorate – all those without a vote in any other functional constituency – a vote for one of five new seats that will represent the district councils constituency. The Democratic Party is fielding two slates, headed by party chairman Albert Ho Chun-yan and member James To Kun-sun. Fung is the only other candidate from the pan-democratic camp, facing challengers including Lau Kong-wah from the Beijing-loyalist Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) and Chan Yuen-han from the Federation of Trade Unions. Zimmerman called on pan-democratic supporters – except those backing the Democratic Party, who will support Ho or To – to vote for Fung, to make sure the pan-democrats win three out of the five “super seats”. He urged pan-democrats not to cast blank votes. “A blank vote is a wasted vote. We [need every vote to make sure] Fred gets in. If they give a wasted vote, they vote for [the DAB’s] Starry [Lee Wai-king]; if they give a wasted vote, they vote for [independent candidate Pamela Peck Wan-kam].” Fung believes Zimmerman, a Dutch-born Southern District councillor, can help him gain support from professionals, expatriates and other voters on Hong Kong Island. However, Fung voted in favour of the administration’s electoral reform package in 2010, breaking with the Civic Party and Labour Party, who voted against it. Fung does not think that will cost him support from pan-democrats in September, “The time is past for explaining about the 2010 decision,” he said. “As for the way ahead, I think all pan-democrats have the same goals – genuine universal suffrage for the chief executive and Legco in 2017 and 2020. So we have to ask – how can we can make sure we win three ‘super seats’ and have at least 24 pan-democrats in the next Legco.”

Chief Secretary Carrie Lam Cheng Yuet-ngor and Secretary for Food and Health, Dr Ko Wing-man (right ) visits fish breeding raft in Chi Ma Wan, Lantau Island, on Wednesday. The government is gathering evidence to establish legal responsibility for the 150 tonnes of plastic pellets that washed onto Hong Kong’s shorelines during Typhoon Vicente last month, Chief Secretary Carrie Lam Cheng Yuet-ngor said on Wednesday. The Department of Justice and Marine Department were working to determine how, and where, six containers of plastic pellets fell from a cargo ship into the sea on July 23, she said. This information will be crucial in determining whether Hong Kong can take legal action to hold any parties responsible, officials said. Lam said the two departments were looking into who owned the pellets and the ship. She made the comments after she and Secretary for Food and Health Dr Ko Wing-man visited fishing grounds in Chi Ma Wan, a bay on the east coast of Lantau Island, to assess the spill’s impact. Traces of pellets were found in the stomach of one fish, from a fish farm, that was shown to Lam. More of the plastic turned up in the stomachs of two fish collected on Tuesday by the Agriculture, Fisheries and Conservation Department, in waters off Ma Wan and Cheung Sha Wan. Lam said the government would consider offering assistance to fish farms whose fish were directly affected by the spill. “If the fish farms’ production is found to be affected by the spread of the plastic pellets in the coming few months, we will make some arrangements to [compensate] them,” she said. Despite government reassurances that the pellets are not toxic, many fish farmers and shoppers fear the particles will contaminate or affect the health of local fish. Environmental groups are concerned about the pace of the clean-up, saying it will take a long time to retrieve the tonnes of pellets that have washed ashore, especially on the city’s southern coasts. They fear that decisions about disposing of the plastic – possibly involving finding a recycler – will take a long time, too.

Hong Kong’s Book Scene Gets a Boost - At first glance, Hong Kong seems an enviable hub for bibliophiles: It’s home to a buzzing book fair, a well-regarded literary festival, two creative-writing programs and Asia’s most prestigious literary prize. But in terms of bookstores, it has so far lagged behind other Asian cities such as Tokyo, Taipei and even Bangkok. That may be about to change with the arrival of Eslite, a Taiwanese bookstore chain famous not only for an extensive collection of books but also in-house art galleries, cultural events, designer products and cafés. On Saturday, Eslite opens in Hysan Place, a mall in Hong Kong’s Causeway Bay district. The three-story shop will stretch to 41,000 square feet, making it the city’s largest bookstore, and will stock some 100,000 titles that readers can browse and buy seven days a week. On Thursdays, Fridays and Saturdays, the store will be open 24 hours a day—perfect for night owls in a city that doesn’t sleep. Eslite was founded in 1989, the year after Taiwan’s military dictatorship lifted a ban on newspapers and magazines, and it went on to become a patron of the island’s cultural renaissance. Its 48 branches host more than 3,000 activities a year, including lectures, readings, concerts and art exhibitions. Founder Robert Wu, who ran a successful catering business before opening the first Eslite on Taipei’s Dunhua Road, kept the bookstore afloat for 17 years before it became profitable in 2006. “Eslite is a cultural phenomenon,” he said in Hong Kong at the Design for Asia Awards last December. “It’s all about the people, the place, the culture.” Eslite will mark its entry into Hong Kong with two exhibitions and 30 activities over the next month, including sessions with local authors such as cultural critic Ma Ka-fai and a concert with singer-songwriter Chet Lam. Like its flagship branches in Taiwan, the Hysan Place location will include a music and video boutique, stationery, a teahouse, a coffee shop, an art gallery and an event room. English- and foreign-language books will make up 40% of the selection, compared with 15% at most Taiwan stores. Meanwhile, the store’s opening has prompted other local bookstores to up their game with renovations and an expanded selection. Commercial Press, Hong Kong’s biggest bookstore chain, has retrained staff, renovated its Causeway Bay branch and doubled its selection of English-language books. Though Eslite’s expansion has garnered buzz, some cultural critics are greeting the chain with ambivalence. Au Wai-lin, founder of Hong Kong journal “C for Culture,” worries about its impact on independent bookstores, which specialize in nonmainstream books and titles banned in mainland China—genres that Eslite has excelled at selling in Taiwan. “It may be an exciting event for many people and most of the media coverage is positive,” says Ms. Au. “But what I’m concerned about is it’s probably [leading to] a crisis of the existing local bookshops.” Others take a rosier view. “In general I think it’s a good thing, because they will be hosting lots of cultural activities, which could help the cultural scene in Hong Kong,” says Daniel Lee, co-owner of Hong Kong Reader, a Mongkok bookstore that holds regular discussions and readings. “We see more and more people into reading,” he says. “More people are paying attention to politics and social issues, and when people want to do something about it, they need to read about it first.”

 China*:  Aug 10 2012

China now top export destination for USA: 420 of the 435 congressional district recorded larger numbers of good sold to China. All but 15 of the 435 districts represented in Congress recorded larger numbers of goods sold to China than to other export markets in 2011, according to a leading business group. The US-China Business Council, which represents US companies that do business with China, also found that in 418 of those 420 congressional districts, the growth in exports to the country hit triple digits between 2002 and 2011. "Exports to China contribute to America's economic recovery and support good jobs for American workers. "China is the third-largest US export market and continues to provide growing opportunities for US businesses, large and small," said the council's vice-president, Erin Ennis. Canada and Mexico are the top two US export markets, largely due to their proximity to the United States and participation in the North American Free Trade Agreement. From 2000 through 2011, US exports to Canada increased by $102 billion, followed by China ($88 billion), Mexico ($86 billion) and Brazil ($28 billion), the business council's report said. To add jobs, President Barack Obama in January 2010 introduced a plan to double US exports by 2014, which will require annual growth of at least 15 percent on average for five straight years. Tuesday's report by the council noted that China is the only large US export market that has exceeded this goal in the past two years. The top three districts that export to China in 2011 were Washington state's 4th Congressional District ($3.3 billion), Louisiana's 5th ($3.1 billion) and Oregon's 1st ($1.5 billion). Their chief exports include agricultural products, computers and electronics, chemicals, waste and scrap. Broken down by state, Washington had five of the top 10 exporting districts, followed by Louisiana with three. "Congressional districts in states as diverse as Colorado, Nevada, Ohio, Michigan, Pennsylvania, Virginia and Wisconsin also benefited from rapidly increasing exports to China — including exports of manufactured goods such as electrical equipment, machinery, computers and electronics, transportation equipment, and other high-end products," Ennis said. Despite the rapid improvement, China was the destination of only 7 percent of US exports last year. For China, the United States is only the fifth-biggest source of imports, according to the US Trade Representative's Office. To maximize exports, the US-China Business Council suggests in its report that Washington policymakers increase the capacity and resources of trade-promotion agencies such as the US Commercial Service, the US Export-Import Bank and the Trade Representative's Office while providing more support to local-level exchanges between the two countries. The Chinese government has said that US controls on the export of technology products are the main constraint on trade with China. Former US Treasury secretary Henry Paulson wrote in his recent report A New Framework for US-China Economic Relations that the US should be more open to Chinese investment, grant China market-economy status on a sector-by-sector basis and reform its outdated export-control system.

 

Chinese Wu wins Olympic women's taekwondo gold - Chinese Wu Jingyu beat Spain's Yague Enrique Brigitte to win the Olympic women's 49kg class taekwondo gold medal in London on Wednesday. China wins table tennis men's team gold in Olympic Games - China took home the men's table tennis team gold medal here Wednesday, making a clean sweep for the second consecutive Olympics.

The government will again purchase frozen pork to stabilize the market, as high hog production has led to falling prices, the country's price regulator said Monday. Due to a slack season and continued overproduction, pork prices have shown signs of sliding and likely remaining low for a period ahead, the National Development and Reform Commission said in a statement on its website. The statement advised farmers to weed out low-yield reproductive pigs and optimize the production structure to reduce losses. Pork prices have generally shown a declining trend this year. In April, the hog-to-corn price ratio, a major indicator of the sector's profitability, fell under 6 to 1, the break-even point for farmers. To avoid drastic price fluctuations, the government then initiated a round of frozen pork purchases. Price drops narrowed in May and reversed to moderate gains in June and July. Food prices have a one-third weighting in the calculation of China's consumer price index, the major gauge of inflation, with pork prices being an important component. The country's volatile hog market has made the government's price control efforts extremely difficult over recent years. Pork prices were the main driver of the sky-high inflation figure last year.

Mainland negotiator arrives in Taipei for cross-Strait talks - Chen Yunlin, president of the Chinese mainland-based Association for Relations Across the Taiwan Straits, arrived in Taiwan Wednesday afternoon for a new round of talks.

A telegraph pole is blown over in typhoon-hit Xiangshan county, Zhejiang province on Wednesday. Typhoon Haikui struck China on Wednesday, packing winds of up to 110km/h, prompting officials to evacuate nearly 2 million people and grounding hundreds of flights to and from Shanghai and other cities. More than 1.5 million people in the eastern province of Zhejiang and 252,000 residents of outlying parts of Shanghai were evacuated after Haikui landed early in the morning, causing flooding and stranding hundreds of people, Xinhua news agency reported. At least 34 flights from Hong Kong to Shanghai, Hangzhou and Ningbo were cancelled on Wednesday due to the powerful typhoon, according to the Hong Kong Airport Authority. The affected flights were operated by Cathay Pacific (SEHK: 0293), Dragonair, Air China (SEHK: 0753), Hong Kong Airlines, Hong Kong Express, Shanghai Airlines and Juneyao Airlines. More than 500 domestic and international flights to and from Shanghai’s two airports, Hongqiao and Pudong, have been cancelled as of 10.30am, the Shanghai Airport Authority said on its microblogging account. China’s top three carriers – Air China, China Eastern Airlines (SEHK: 0670) and China Southern Airlines – have also cancelled all flights to and from Hangzhou and Ningbo, both south of Shanghai, until noon, they said. No ships had been allowed in or out of Shanghai’s ports, the world’s busiest by container volume, since Tuesday night, an official at the Shanghai Water Authority said. Another key port in Ningbo, in Zhejiang province, has also been shut. Some trains to and from Shanghai, the country’s commercial hub, have also been cancelled. The city’s financial markets remained open, however. By late evening, the centre of the typhoon is expected to have moved northwest although wet and windy conditions are likely to persist. Typhoon Haikui made landfall early on Wednesday morning in Zhejiang province south of Shanghai, after authorities moved more than 1.5 million residents out of the path of the storm, the official Xinhua news agency said. The storm had cut off electricity to nearly 400,000 households in Zhejiang province, Xinhua said. In Ningbo city two houses collapsed including a workers’ dormitory but firefighters rescued all twelve trapped people, it said. Haikui did not make a direct hit on Shanghai, but officials warned the biggest impact might be from rain and wind later on Wednesday as the typhoon moved northwest through Zhejiang into Anhui province. Shanghai raised its most severe typhoon signal, red, shortly before midday on Wednesday and urged people to stay home. The central government was forecasting up to 400 millimetres of rain for some regions affected by the typhoon. The Shanghai stock market opened for trading as usual, but flights at the city’s two airports were halted and some long-distance train services in eastern China were suspended, reports said. Construction sites and public parks were ordered to be shut. “The biggest influence of Haikui should occur today with large gales and heavy downpours,” Xu Ming, a researcher with the city’s weather bureau, told the Shanghai Daily. Haikui is the third typhoon to hit China in a week, after two battered other parts of the country over the weekend, killing 23 people, Xinhua reported earlier this week. Typhoon Saola left 14 dead in the central province of Hubei while nine people were killed in the northeastern province of Liaoning by Typhoon Damrey, it said.

Guangzhou: labor shortage haunts small factories - Since the growth of the economy growth has slowed, small factories based in one of the urban villages of Guangzhou, Guangdong province have suffered a serious shortage of workers. The factories are often nearly empty with only a few workers present. Many employers have to recruit people from the streets every day. Due to labor mobility, recruitment has become a daily task for small factories.

Hong Kong*:  Aug 9 2012 

Standard Chartered Bank on Tuesday rejected allegations from US regulators that it hid US$250 billion in transactions with Iranian banks for almost a decade in violation of US sanctions. The bank’s shares plunged 14.9 per cent to HK$160.10 at the close of trade in Hong Kong and opened 15.7 per cent lower in London after New York state regulators branded the lender a “rogue bank”. In the latest US move against foreign banks dealing with Iran, the Department of Financial Services threatened the London-based giant with fines and the suspension of its licence. The DFS said Standard Chartered systematically disguised foreign exchange deals with Iran that potentially opened the US banking system to terrorists and criminals. But Standard Chartered said it “strongly rejects ... the portrayal of facts as set out” by the DFS. “The group does not believe the order issued by the DFS presents a full and accurate picture of the facts,” group secretary Annemarie Durbin said in a statement to the Hong Kong stock exchange. Standard Chartered was ordered to appear on August 15 to explain the “apparent violations of law” and demonstrate why its licence to operate in New York should not be revoked. “For almost 10 years, SCB schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least US$250 billion,” the regulator said. Standard Chartered falsified transaction reports and obstructed oversight “in its evident zeal to make hundreds of millions of dollars at almost any cost”, it added. The transactions mainly involved US dollar transfers for state-owned Iranian banks, including the central bank, that fell under US controls aimed at undermining Tehran’s alleged nuclear weapons program. The activity “left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes”, it said. There was also evidence of possible illegal transactions with Libya, Myanmar and Sudan while they were under US sanctions. The bank, which focuses on Asia, the Middle East and Africa, said it was surprised at the claims as it had informed US agencies in 2010 that it had voluntarily launched an internal compliance review. It said the review “did not identify a single payment on behalf of any party that was designated at the time by the US government as a terrorist entity or organisation”. The bank also said it had stopped all new business with Iranian customers more than five years ago. “The group takes its responsibilities very seriously, and seeks to comply at all times with the relevant laws and regulations,” Durbin said. “We intend to discuss these matters with the DFS and to contest their position.” The bank could face steep fines if found guilty. Justin Harper, market strategist for IG Markets in Singapore, said being tagged a “rogue bank” by a US regulator was a severe blow. “They have got a good reputation in the industry which will be tarnished by these accusations, whether they prove accurate or not,” he told AFP. But Kathy Lien, managing director at the New York-based BK Asset Management, said she doubted the bank would be brought down by the scandal. “At worst, they will get a slap on the wrist and pay a fine,” she said. In July, a US Senate report accused London-based HSBC of concealing more than US$16 billion in sensitive transactions with Iran and Mexican drug lords over 2001-2007. And in June ING Bank was fined US$619 million for its role in processing US$1.6 billion through the US financial system for Cuba, Iran, Myanmar, Sudan and Libya. The New York regulator said Standard Chartered’s illicit Iran business involved thousands of U-turn transactions, in which dollar-denominated payments and transfers are routed into and then out of the United States by non-US entities. Such deals involving Iranian institutions were strictly limited, and more recently completely banned, under US sanctions against Tehran. But the regulator, citing internal Standard Chartered documents, said the bank’s London office routinely stripped the transactions of any signs that Iranian banks were involved. “Senior SCB management knowingly embraced the bank’s fraudulent U-turn procedures,” the department said. The bank’s attitude was captured in a comment from a group executive director, as related to the New York regulator by an officer of Standard Chartered’s New York branch. Using vulgar language, he purportedly asked: “Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?” In a statement accompanying an interim profit result last week, chief executive Peter Sands lauded the bank’s “culture and values”. “We are selective and turn things down that we don’t understand, or don’t like the look of,” he said.

Property tycoon Henry Cheng Kar-shun came to the defence of the besieged development chief on Tuesday, saying people should not make a fuss about Paul Chan Mau-po’s link to illegally subdivided flats. The chairman of New World Development said the current criticism of Chan over the issu e was like “picking out bones in an egg” – a Chinese expression meaning to deliberately find fault. “It was a very small matter that happened 20 years ago. Picking it up now and using it to attack [Chan] will be unfavourable to Hong Kong’s governance,” Cheng said. Pressure is mounting on Chan to step down after he backtracked on earlier statements that he knew nothing about illegally subdivided flats owned by a company controlled by his wife. Critics question his integrity and authority as the head of a policy bureau in charge of combating illegal structures and subdivided flats across the territory. Cheng said people should look to a bureau head’s future contribution in office, instead of looking back, when evaluating his suitability for the position. “Personally, I think he is more than fit for the position,” Cheng said. Chan was appointed on July 30 to replace Mak Chai-kwong, who resigned on July 12 – less than two weeks into his term – when he was arrested by anti-corruption officials over alleged abuse of a government housing allowance.

An Emperor’s Secret Garden Draws Hong Kong Crowds - A hanging panel with inlaid stones depicting bird and flower scenes from the Qianlong period. It’s not often that the normally sleepy Hong Kong Museum of Art hosts crowd-pulling, blockbuster exhibitions, but visitors to its current show, about a Qing Dynasty monarch’s retirement palace in Beijing’s Forbidden City, are likely to find themselves jostling for elbow space. “A Lofty Retreat from the Red Dust: The Secret Garden of Emperor Qianlong” provides a rare glimpse of the aesthetic and religious passions of a figure often seen as China’s greatest emperor, who ruled for the better part of the 18th century. According to the museum, more than 2,500 people per day have flocked to the exhibition every weekend since it opened in late June, with total attendance now approaching 80,000 visitors – unusually large for a city where respectable daily attendance figures tend to be in the hundreds. “Secret Garden” comprises some 90 sets of objects on loan from Beijing’s Palace Museum collection, with 19 of them on view for the first time outside the Forbidden City. Though a handful have recently traveled overseas – to three U.S. museums, including the Metropolitan Museum in New York – this is the first time an Asian institution has dedicated an exhibition to Ningshougong (Tranquility and Longevity Palace), in whose grounds and pavilions Qianlong imagined he would spend his old age contemplating art and immortality. In reality, however, he stayed in the main palace of the Forbidden City and exercised political power even after he abdicated to his son in 1796. He used Ningshougong, which he personally designed, for special occasions. Whereas the U.S. displays focused on furniture and architecture, including ornate cabinets and screens and trompe l’oeil perspective paintings, the Hong Kong show, which marks the museum’s 50th anniversary, emphasizes Qianglong’s legacy as an arts patron and collector as well as his interest in Buddhism and culture. “We wanted to stress how the garden expressed the inner longings and aspirations of the emperor who wanted to live like a recluse-scholar,” says Hong Kong Museum of Art curator Rose Lee. “It reflects the intimate world of the emperor, unveiling his thoughts, instead of looking at the grand and monumental.” Works are displayed in an installation that recreates the feel of a Beijing garden, complete with flooring that imitates Ningshougong’s stone. Highlights include a set of 16 wood screens, each over 2 meters tall, depicting Buddhist arhats in jade and painting; elsewhere, four ink-on-silk scrolls picture Qianlong hunting on horseback, a reminder of the era’s collaborations with Europe – the figures, detailed in colored ink and possibly painted by Italian Jesuit court artist Giuseppe Castiglione, are set against classic landscapes in traditional Chinese brushwork by an anonymous local painter. Also on view is a technically brilliant ceramic vase with an enamel mouth and a revolving interior, categorized as a Class-A national treasure in China. “He liked this kind of special things,” notes Ms. Lee. While efforts have been made to render the exhibition’s complex themes accessible to a wide audience, not all are successful – for instance, where a round silk portrait of a young Qianglong in his studio is flippantly likened to “an Emperor in Cosplay” in the exhibition’s brochure. A scholarly and informative exhibition catalog, 286 pages long, is available in the museum store. The museum believes the exhibition’s success is fueled by “the imperial touch” and the high prices that royal objects command at auctions in Hong Kong, the world’s third-largest auction market. Meanwhile, Qianlong himself has enduring star power, having presided over an apex of China’s political and economic power and expansion. Back in Beijing, Nishougong’s gardens are currently undergoing a restoration sponsored by New York’s World Monuments Fund. Once completed in 2019, it is unlikely that the exhibition’s paintings, ceramics, scholarly items and architectural elements will be allowed to travel again en masse. “A Lofty Retreat from the Red Dust: The Secret Garden of Emperor Qianlong” is on display at the Hong Kong Museum of Art through Oct. 14.

 China*:  Aug 9 2012

China's Xiang Liu, left, crashes into the first hurdle and drops out in the heats of the men's 110m hurdles at the Olympic Stadium in London on Tuesday. At right, is Hungary's Balazs Baji. Chinese athletics icon Liu Xiang suffered more Olympic pain on Tuesday as he crashed out in the opening round of the 110 metres hurdles. The 29-year-old - who four years ago withdrew from the event in front of his home crowd before the opening heat - hit the first hurdle with his left leading leg and crashed to the floor. Liu, who had been affected by back and foot problems in the past month, eventually got up and hopped down the track to be embraced by his fellow competitors. He was helped off the track by Britain’s Andy Turner and Spain’s Jackson Quinonez. Liu’s dream of winning gold in front of his home crowd at the Beijing Olympics had ended in one of the great Olympic anti-climaxes as he turned up for his heat but failed to clear a hurdle hindered by his Achilles tendon injury.

DreamWorks Animation SKG Inc. on Tuesday signed plans with Chinese partners to build a $350 million movie studio in Shanghai to capitalize on the success of its Kung Fu Panda film franchise as the studio looks to build up its presence in a fast-growing Chinese movie market. The studio will be 45% owned by the California animation company, with the remainder held by media-related companies controlled by the Shanghai government. The partners also plan an entertainment zone that could bring the total investment to 20 billion yuan (US$3.14 billion) to be largely funded in China.

Silver screen, golden sheen - The movie-going frenzy in China has attracted investment in the cinema business. Investors are pouring money into the cinema business, and the cash is likely to keep on coming - As Hollywood filmmakers scratch their heads over what they can do about flat box-office takings in much of the world, the business is booming in China. More than eight new cinema screens are being opened a day in the country, faster than anywhere else. This roaring success can be attributed to the moneyed middle class in China who have taken to movie-going as they spend their hard earned cash on leisure. Flushed with this success and flush with the cash windfall it is bringing, industry insiders are confident that this building spree will continue and that China will replace the United States to become the world's largest cinema market in 10 years or less. "China is undergoing a cinematic growth spurt, driven by the country's soaring box-office takings and people's savvy of a better movie-going experience, such as a throbbing soundtrack and a cozy cinema environment," says Gao Jun, a veteran filmmaker who has worked in the country's film industry for more than 20 years. He is also a former deputy general manager of New Film Association, one of China's oldest cinema chains. At the end of last year there was a record 9,286 screens in China, compared with 1,500 in 2002, EntGroup Consulting Group, an entertainment industry consultancy in Beijing, says. The number is expected to reach 11,800 this year, with the number of theaters rising 20 percent to 3,370. Li Qiang, an analyst with EntGroup, says this theater building wave will continue over the next three to five years as more movie theaters are designed in smaller cities where people are gradually adopting cinema-going as a leisure pursuit. "State-of-the-art theaters are replacing humble movie houses not only in wealthy urban centers such as Beijing and Shanghai, but also in some bustling small cities, where we will install more screens in the future," Li says. Gao says that while more investors are piling money into the business, there is no risk of oversupply and China still has a long way to go to catch up with the US in screen numbers and the number of screens per person. "Despite the strong growth, China's cinema market is still far from being saturated. As there is only one screen for every 220,000 inhabitant in China compared with one for 9,000 in the US, the business has plenty of room to grow." This huge untapped market together with China's movie-going boom opens up several noteworthy investment opportunities, prompting Chinese movie studios and cinema chains to ramp up cinema construction to capitalize on the potential growth. Shanghai United Circuit Co Ltd, one of the largest cinema circuits among the country's 39 cinema chains, has taken the lead in this market expansion. It has attracted more private investors to join its cinema construction in recent years, and 60 new franchised cinemas opened last year alone. "Our brand name has attracted a lot of private capital to join us, allowing us to experience a growth peak last year," says Xu Xiaoping, the company's general manager. The company has 200 cinemas and 1,000 screens in more than 80 cities in 22 provinces and autonomous regions. Box office generated from cinemas affiliated to the company accounted for 11 percent of market share last year, making it China's second largest cinema chain. Xu says many movie theater outfits in China have a certain degree of government ownership, but the movie boom has lured more private developers to invest in cinema chains by joining the large ones, and her company welcomes the investment from private developers. This year her company will open at least another 30 franchised cinemas, most in the affluent Yangtze River Delta. Xu says building a cinema is not cheap, each costing between 30 million yuan ($4.7 million, 3.9 million euros) and 50 million yuan in larger cities such as Beijing, Shanghai and Shenzhen, and perhaps half that in smaller cities. The newest ones are usually equipped with the latest in technology, such as Dolby DTS sound systems and 3D screens, and some may even have the IMAX projection system. "Cinema building needs huge investment, and the participation of more private investors will give us the money to build new cinemas, and in return we could offer them our experience in running cinemas," Xu says, adding that open franchised cinema has already become one of the key ways for major Chinese cinema chains to expand. "It usually needs at least two to three years for a cinema chain to cover costs, but franchised cinemas reduce the investment risk, and that's why they are becoming more popular." Apart from taking in private capital, Shanghai United Circuit is preparing to seek financing by launching an initial public offering on the Shanghai Stock Exchange next year, which Xu believes will greatly boost the company's development. Cheng Guangyan, general manager of the marketing department of China Film Cinema Investment Co, says successfully running a cinema depends not only on sufficient money flow, but on the choice of location. Apart from a city's cultural center, a shopping zone is a preferred location, she says. "Fancy movie theaters are being built as part of the wave of shopping malls springing up around the country, because commercial real estate can bring cinemas constant streams of potential customers." Most Chinese moviegoers are 15-35 years old, she says, and they happen to be the biggest consumers in shopping centers. "In recent years, with more shopping malls popping up in smaller Chinese cities to match the growing purchasing power of locals, more cinema chains have entered the market," Cheng says. "At present, movie theaters are still in short supply in some second- and third-tier cities, particularly in western China, where most local cinemas are timeworn and outdated." She says the skyrocketing rent in first-tier cities has also forced investors to shift their focus to build theaters in second- and third-tier cities. "The movie box office has experienced substantial growth in recent years, driving up the rent in first-tier cities like Beijing and Shanghai. Some big shopping districts may even charge a movie theater tens of millions of yuan in rent, and that has increased the theaters' investment risk in big cities." Cheng says China Film Cinema Investment began to tap the market in smaller cities several years ago, and about half of the company's cinemas are now located outside Beijing, Shanghai, Guangzhou and Shenzhen. "Years of operation prove that cinema-going enthusiasm for residents living in those cities are very high and keeps rising," Cheng says. "With the exorbitant rents in big cities, it will be faster to recover investment in small and medium-sized cities." Her company will increase its number of screens to between 800 and 1,000 and the number of cinemas to 100 by 2014, she says. But Cheng warns that despite the rising demand for entertainment in more Chinese cities, cinemas are not risk-free investments, and rapid expansion also means high risk, especially for those who lack experience in running cinemas. In addition to developing the domestic market, Chinese enterprises have also taken steps to tap the overseas cinema chain market. In May, Dalian Wanda Group Corp Ltd, China's largest cinema developer by box-office receipts, bought the world's second-largest theater chain, AMC Entertainment Holdings Inc, for $2.6 billion, expanding into the US and creating the world's biggest cinema owner. He says China's cinema industry will have at least 15 years of stable growth and that the number of Chinese cinema-goers will some day exceed the total population of the US. However, with the competition among theaters becoming more intense, more small theaters may be taken over in the future. At the same time, the types of cinema will be subdivided. "In Beijing in recent years several membership-based art cinemas have emerged," Gao says. But Gao says the key to the development of China's cinema chains lies in the development of domestic films. "The development of Chinese cinema chains should not rely too much on Hollywood movies."

Hong Kong*:  Aug 8 2012

Fifteen years of free education for every child before 2017 - that is the hope of education minister Eddie Ng Hak-kim. Ng said the government plans to set up a commission to study the framework and mode for subsidizing early childhood education as early as the end of this year. The secretary for education said he held several meetings with various school-sponsoring bodies to exchange views on the issues a month after assuming the post. Chief Executive Leung Chun-ying pledged in his election manifesto to introduce 15 years of free education. "The sector has provided suggestions that they hope the mode for the government to subsidize early childhood education will become more diversified," Ng said. In an exclusive interview with Sing Tao Daily, sister newspaper of The Standard, Ng said the government will establish a broadly representative commission to study the mode for subsidizing early childhood education and the framework on teachers' salaries in the sector at the end of this year or early next year. Ng said the controversy of the introduction of national education this year, and the march by up to 90,000 parents and their children along with teachers and older students against the government's move has not undermined his determination to serve as education chief. The government promised to set up a body with broad representation to monitor the introduction of the subject and Ng stressed that various stakeholders, including representatives from Scholarism, the Professional Teachers' Union and parents' groups will be invited to join the body. The Professional Teachers' Union earlier said it will mobilize teachers to boycott classes on September 3, the first day of term, if the government refuses to withdraw the subject in the new school year. It is hard to estimate how many schools will join at this stage, but the union said it will summon support from education bodies and school principal groups. Ng said he realized the importance of communicating with various stakeholders but that he will always give priority to students' interests when considering the implementation of policy.

More than one million elderly are now able to travel on most bus and MTR routes for just HK$2 a trip. The leap in numbers came yesterday with bus companies jumping on the bandwagon of the concessionary fare scheme, announced by the previous administration in October and kicked off by the MTR Corp in June. With the expansion, the cheap fare now applies to travel on Kowloon Motor Bus, New World First Bus, Citybus and Long Win Bus, with the exceptions being racecourse-bound and A-prefixed buses headed for the airport. On New Lantao Bus routes, the concession begins in the first quarter of next year. Chief Executive Leung Chun-ying, who visited Shau Kei Wan bus terminal yesterday with Secretary for Labour and Welfare Matthew Cheung Kin-chung, said the scheme's introduction 1 months ahead of schedule represents a bit of goodwill from the government. Leung said the fare concession allows the elderly to go out more frequently to see friends and relatives, and to lead a more active lifestyle. Some elderly people said, however, that, contrary to the official line of timeliness being touted, the scheme came a little too late for them to enjoy its full benefits. "I'm glad the scheme has been expanded," said a Shau Kei Wan resident named Lui. "But I am 88 years old now. I don't go to work and it is sometimes difficult for me to go around. So I can't really benefit from it. I only travel occasionally to have lunch with friends." His views were shared by 70-year- old Lee, another infrequent traveler. "I can't say I will travel more because of the scheme because I travel only when I have to," she said. "The scheme may help the elderly to save some money, but it makes no difference to me." Others were more optimistic and said they had been looking forward to the scheme's expansion. "Of course I'm happy. I like saving money because every little bit counts," said Mrs Ho, an 82 year old. Another 82-year-old, Chan, said he is very pleased as he likes to travel around to buy specialty food items from different areas. "I live in Ap Lei Chau and I like to shop here in Shau Kei Wan. Sometimes, I even go as far as Sheung Shui just to buy soy sauce. "I travel a lot, and the scheme helps me to save money. It's not a lot, but at least it's something." For Citybus routes, those aged 60 to 64 who are using Octopus cards for the elderly should switch to personalized cards to continue to enjoy the concessionary fare on Sundays and public holidays as well as the half-fare discounts on weekdays. The administration said the expanded scheme would benefit 1.1 million citizens. This will cost HK$230 million in subsidies this year and HK$400 million next year. The scheme will be in place for at least three years before a review is conducted.

David Garrett describes Entaste's model as akin to Bloomberg's. Entaste, a specialist provider of digital data and software applications to the wine industry, has established its new headquarters in Hong Kong from Argentina to help expand the wine market across China. "We moved our headquarters here because mainland China and the rest of Asia are where growth is happening for the US$200 billion-a-year global wine industry," Entaste chief executive David Garrett said. "This is where the most competitive wineries in the world want to get a bigger market share." According to this year's report by International Wine and Spirit Research, the mainland is now the world's fifth-largest consumer of wine behind the United States, Italy, France and Germany. Garrett described Entaste's role as a "cloud services provider" of essential wine information sought by consumers, while the major wineries receive vital local consumption and distribution data they can analyse. Cloud computing enables companies to buy, lease, sell or distribute over the internet a vast range of software, business systems, data and other digital resources as an on-demand service, like electricity from a power grid. Entaste provides upscale restaurants and wine stores with an information-rich database of digital wine lists that are accessible online via Apple's iPad and other media tablets, so consumers can learn more about the wines they buy. "We take all this information from the wine producers and provide it free to these fine-dining restaurants and wine shops so that their customers have a great wine experience," Garrett said. Entaste delivers the information and pricing on a custom-designed interface based on the specific requirements of each restaurant or wine shop. "Not only are the software and services free, we also provide or subsidise the hardware in a lot of cases," Garrett added. He expected Entaste to be in about 80 restaurants in Hong Kong, 40 in Shanghai and 80 in Beijing this year. One high-profile user of its "wine pads" in Hong Kong is Cafe Gray Deluxe on level 49 of The Upper House hotel in Admiralty. By January 2014, Entaste's network wine-pad users are forecast to be about 2,000 restaurants worldwide. Its digital wine lists are accessible in English, Spanish, Portuguese, French, Japanese, Korean, simplified Chinese, German and Russian. "We make our money by dealing with wineries," Garrett said, describing Entaste's model as akin to providing "a Bloomberg terminal for wineries", where its paying subscribers can see exactly what is happening in the wine market "in real time". US media company Bloomberg provides its terminals to professionals in finance and other industries to access real-time market data around the world. "From the information we provide, wineries can analyse demand, distribution, pricing and other statistics," Garrett said. Entaste expected to have about 2,000 wineries, many from Europe, as subscribers by January 2014, compared with more than a dozen at the end of June.

Tourists, businessmen and overseas Chinese nationals were among the first non-residents to open yuan deposit accounts with Hong Kong banks this week. Starting from Wednesday, in the latest move to support the city's bid to become an offshore centre for the yuan, the Hong Kong Monetary Authority (HKMA) said local banks could open yuan accounts for non-residents, who were also free to buy unlimited amounts of the currency. Bankers said they expected the service to eventually become popular among long-term investors interested in taking an exposure to yuan-denominated products, who could now use Hong Kong as a base for their investments. "We have so far seen customers from a mixture of backgrounds opening yuan accounts," said Nixon Chan, head of retail banking and wealth management at Hang Seng Bank (SEHK: 0011, announcements, news) . "Tourists from several different countries, overseas Chinese visiting Hong Kong, and some businessmen who have operations or trade relations here were among the first non-residents to open accounts." Until this week, only Hong Kong identity card holders could open yuan accounts in the city. But the HKMA, the city's de facto central bank, announced that non-residents could also open yuan accounts from August 1, in a bid to attract overseas investors to trade yuan products here. The three note-issuing banks - HSBC, Standard Chartered Bank, and Bank of China (Hong Kong) - as well as Hang Seng Bank and some private banks rushed to offer incentives, mostly high interest rates, to compete for non-resident business. Chan said the non-resident yuan account customers could exchange other currencies into yuan deposits as well as invest in a range of yuan products in Hong Kong. "We believe they might be interested in yuan-denominated dim sum bonds, yuan funds and yuan structured products," he said. "Later on, when we have more yuan shares trading in Hong Kong, we believe non-residents will be interested in investing in these assets as well." The yuan is not yet fully convertible, but Beijing has gradually relaxed the rules since 2009 to encourage the use of the currency to settle trade accounts and for investment globally. Not all non-residents are interested in the new services though. Kenny Wong, a visitor from Britain, said: "I am not really that interested because I do not travel to China that often and I do not see currency as my preferred way of investment." Ikuko Goto, director of the Japanese services group of Deloitte's in Hong Kong, said Japanese banks had begun promoting yuan accounts to their customers at home, and Japanese tourists to Hong Kong could open yuan accounts in the city. Anthony Muh Yi-tong, chairman of the Hong Kong Securities Institute and a veteran fund manager from New Zealand, said he would tell his relatives and friends in New Zealand about the new move. "I am going to tell them the rules have changed. It would be good for my friends and family from New Zealand to be able to trade these yuan products here." Several private bankers said overseas Chinese from Southeast Asia would be interested in using Hong Kong as a hub to invest in yuan products. Claude Haberer, head of Asia wealth-management operations at Swiss private bank Pictet, said non-residents had shown an interest in opening yuan accounts here. "When the US dollar and the euro are showing high volatility and fundamental economic weakness, the yuan will be seen as a safe haven," Haberer said. "Offshore yuan accounts and related investments - bonds in particular - have become basic products a Hong Kong-based private bank must offer." Hong Kong also has to compete with other markets that also want to become offshore yuan centres. In London, Bank of China and Bank of East Asia (SEHK: 0023) branches offer high interest rates and fee waivers to attract investors to open yuan accounts, and for the some 600,000 overseas Chinese and students living in the city, opening yuan accounts in the banks' outlets in Chinatown is easier than doing so in Hong Kong. London had over 100 billion yuan (HK$122.60 billion) on deposit in customer accounts in the city, compared with about 556 billion yuan in Hong Kong in June. Louis Tse Ming-kwong, director of VC Brokerage, said many Southeast Asian investors invested in the Hong Kong stock markets and they might be interested in opening yuan bank accounts here. "However, we do not have many yuan shares listed here yet. I think only those overseas investors who want to bet on the long-term valuation of the yuan would be interested in opening accounts in Hong Kong." The yuan exchange rate has been largely unchanged versus the US dollar in the first half of this year, in contrast to its 30 per cent appreciation since 2004. The value of yuan deposits in Hong Kong in June was down 11 per cent from a peak in November. But Hang Seng Bank's Chan said those non-residents who had already opened yuan accounts in the city were taking a longer term view. "The non-residents who buy yuan today are not expecting to have a quick return tomorrow. Many are prepared to invest for the long term."

Swimmers enjoy the Jockey Club's Yan Oi Tong complex at Tuen Mun. An audit discovered huge water wastage at public swimming pools. More than one million litres of fresh water are going down the drain at five public swimming centres every day, the city's first audit of water use at government amenities has revealed. The report, commissioned by the Water Supplies Department for five swimming complexes operated by the Leisure and Cultural Services Department, has sparked calls for better management of the facilities to minimise wastage. The figures suggest that up to six million litres of water are being used and lost each day at the Leisure and Cultural Services Department's swimming facilities. Worried environmentalists have demanded the release of the full study so water consumption can be monitored better. Conducted between the middle of last year and early this year, the audit examined water consumption at five pool complexes in Fanling, Kowloon Park, Kowloon Tsai, Morrison Hill and Sha Tin. The pools use 1.3 million litres of water every day, according to the report. The outdoor Sha Tin Jockey Club pools are the most wasteful, according to the report, using an average of 1,310 cubic metres per day. That includes water used in showers and toilets as well as water for replenishing the pool, and filter backwash and cleansing. That's the equivalent of half the water in an Olympic-sized pool being wasted every day and based on a standard non-domestic charge of HK$4.58 per cubic metre, the cost would be HK$6,000 per day. The Sha Tin complex consists of seven pools, including a main pool, a secondary pool, one training pool and two teaching pools. But only 990 people swam there on an average day in the peak summer swimming season in 2010. The means every visitor to the complex used an average of 1,323 litres of water on every visit - about six times the daily amount of fresh water a Hongkonger uses. According to best practice guidelines issued last year by the Australian utility Sydney Water, a swimming pool complex's water efficiency is considered to be poor if the average water use per swimmer is more than 60 litres. Best practice is to use less than 20 litres of water per swimmer, the utility said after studying more than 40 aquatic centres. The Water Supplies Department declined to comment on whether the usage was above the international norm. "It is not appropriate to benchmark the usage against [that of] overseas, since the water consumption level varies with service levels, operating environment, patronage rate, design and maintenance requirements," a spokesman said. At Morrison Hill in Causeway Bay, there are just four pools and only 300 cubic metres of water is used daily on average, although an average of 2,200 people swim there. It is a stark contrast to the Sha Tin pools. Brian Lam Wai-ping, a swimming pool contractor with experience in public pools projects, said the usage figures were exceptionally high. "If the figure is accurate, I am very surprised and puzzled by that. How can that be?" he said. Lam said many outdoor pools, like those in Sha Tin, suffered due to water evaporation. A poorly maintained pool could have leakage issues too, he added. While the Water Supplies Department refuses to break down how the water was used or lost, the Sydney utility's audit of 10 pools there last year found that pool replenishment and filter backwash generally accounted for about 36 per cent of water used. About 22 per cent is lost to leakage while 35 per cent is used in the showers and toilets. Chan May-ling, chief executive of Friends of the Earth, called for a full disclosure of the audit results. "This will introduce a healthy competition among the pools to reduce consumption," she said. Cheng Cho-kwong, chairman of Sha Tin district council's sports and community development committee, also urged the pool's operator to "study why the water consumption is at such a level". The Leisure and Cultural Services Department said the audit yielded some recommendations for improving the water efficiency at the pools, including regular monitoring, the replacement of inefficient designs and practice, the replacement of aged filters and use of water jets instead of hoses for poolside cleaning. The Water Supplies Department said it was developing a best practice guide for pool operation. Last year, about 9.5 million people visited the city's 41 public swimming complexes. Estimates from the audit suggest at least 6 million cubic metres of water are used by these complexes on an annual basis, constituting half of the 13.5 million cubic metres used by the Leisure and Cultural Services Department. 

Gold shipments from Hong Kong to the mainland fell 10 per cent in June from the previous month to 67,747kg, the Hong Kong Census and Statistics Department said on Monday. The department also said 26,997kg of gold entered Hong Kong from China in June, down 9.4 per cent on the month, which brings the net gold exports from Hong Kong to China to 40,750kg. Gold consumption usually slumps during summer months in China, before picking up around September ahead of a week-long national day holiday in the beginning of October, dealers said. Stagnant price performance of gold, which has been seesawing between US$1,530 an ounce and US$1,640 since May, has also tempered investor interest in bullion. China, the world’s top gold producer, has overtaken India as the biggest gold consumer since late last year.

 China*:  Aug 8 2012

A model poses with GM's Cadillac Escalade SUV at the Guangzhou International Automobile Exhibition. US automotive giant General Motors said on Monday that its sales in China surged to a record 199,503 vehicles in July, defying a market slowdown and moves by a major Chinese city to limit car numbers. GM’s sales in China – the world’s biggest automotive market – rose 15.1 per cent in July from the same month last year, it said in a statement. For the first seven months of this year, the carmaker sold more than 1.6 million vehicles in China, up 11.7 per cent year-on-year. China’s nationwide vehicle sales slowed last year after the government rolled back purchasing incentives and some cities imposed limits on car numbers to ease traffic congestion and cut pollution. China’s overall vehicle sales rose just 2.5 per cent to 18.51 million units last year, compared with an annual increase of more than 32 per cent in 2010. More Chinese cities have recently called for limiting car numbers to improve congestion problems. Guangzhou in July set rules to limit the number of cars through a quota on the number of vehicle number plates made available by the government. The northern city of Xi’an also said last week that it is soliciting public opinion on planned regulations to cap the number of cars in the city, though it gave no details on how. But foreign brands have managed to buck the slowing trend with better brand recognition and perceptions of better quality among domestic consumers. GM sold more than 2.5 million vehicles in China last year.

A tale of two Asian nations - Lenovo's latest ultrabook is available for customers in a Lenovo exclusive store in Bangalore, India. IDC predicted India's PC shipments will reach 16.78 million in 2016 from 10.6 million last year. How China and India compare economically, demographically - China and India are the two countries most often compared with each other among the economic grouping known as BRIC nations - Brazil, Russia, India and China. Many are speculating which of the largest and second largest populous nations will become the winner in the information technology era. Comparing the two countries' gross domestic products, average annual per capita incomes, PC shipments, basic infrastructure and IT spendings, China nearly always comes out on top. "India's PC market development is at least five years behind China," said Amar Babu, managing director of Lenovo India, who has been working in India's IT industry for more than 23 years. However, even though the Chinese economy historically has outpaced India's by just about every measure, who will win the IT war in the future? Similarities - As the only two countries in the world with populations exceeding 1 billion, China and India share many common points. Surging GDP growth, an emerging middle class, rising urbanization, increasing small and medium-sized enterprises and the number of female company owners have all provided big opportunities for the two countries' information technology development. Both of the countries have sustained the world's highest annual GDP growth in the past 10 years - 9 percent for China, about 7 percent for India. After the 2008 financial global crisis, the two have been said by global financial experts to be "among the world's most successful in weathering the challenges of the global economy's great recession". According to the most recent censuses of each nation, China's National Bureau of Statistics reported that there were 1.266 billion people in China in 2000 while the Registrar General and Census Commissioner of India said the country had 1.029 billion in 2001. However, according to the International Monetary Fund, China's GDP was $6,988.47 billion in 2011 while India's was only $1,843.38 billion. The figures and data showed that back in 1990, China and India's annual average per capita income were both around $350 - with India's slightly higher. The situation started to change after that. In 2009, the gap increased to $2,410 per person, but the order was reversed. The annual average per capita income in China reached $3,590 in 2009, while India's was only $1,180 in the same year. Income differences - The economic growth and situation are like barometers to a country's IT spending and development. Comparing the two countries' economic figures and IT spending, India is far behind the Middle Kingdom. According to the IMF, India's level of income per capita in 2009 was achieved by China nine years ago. However, the organization did not say Indians will necessarily be as wealthy as Chinese people are now in the next nine years. China's exports made up about 35 percent of GDP compared with only 24 percent for India in 2008. Because of the GDP difference and economic gap, according to the US-based IT research company IDC, China's IT spending is about four times more than India's, at about $30.2 billion in 2011 and expected to grow at an average annual rate of 21.3 percent to $65.3 billion by the end of 2015. In the personal IT market, the gap is even more significant. Taking the PC market for example, China's shipments were about seven times more than India's in 2011. PC shipments were 10.6 million units in India in 2011 and about 73 million units in the Chinese market. "IDC data indicate that India's PC market size in 2011 is similar to China's in 2002. Even five years later, the India market will still stay at China's 2004 level," said Wang Jiping, senior research manager of IDC China. "In recent years, more and more companies have asked the questions: 'Is India really the next China?'" In 2004, China's PC shipments were 18.2 million units. The company predicted India's PC shipments will reach 16.78 million in 2016 from 10.6 million last year. China's National Bureau of Statistics data show that the urban population in the nation currently accounts for about 51 percent of the total population. Compared with 2000, the number increased about 14 percentage points. However, in 2011, India, with about 247 million households, had an urban population of about 30 percent. "With an urban population smaller than China and an even sharper gap between rich and poor, the development difference between the two countries is accelerating," said Wang. Economically speaking, the IT industry has become one of the biggest economic growth drivers for India. According to Prashant L. Rao, the editor of India's long established IT publisher Express Computer, the SME slice of the Indian PC market works out at about 27 percent of the total PC market. According to a survey made by the International Labour Organization, the average monthly salary was $295 in India last year and $656 in China. A child's chance of surviving more than five years after birth is the same in India today as it was in China in the 1970s. During the financial crisis, more so than with China, India's domestic economy provided a cushion from external economic pressures. Private domestic consumption contributed 57 percent of GDP in India compared with only 35 percent in China. Despite this, "potential IT purchases are significantly less than in China," said Wang. International firms There are many Lenovo Group stores - the biggest Chinese PC company - in India. However, there is not a single Indian PC exclusive store or Internet mobile maker in China. Last year, the top two PC vendors in India were Dell Inc with 16.4 percent market share and HP with 12.8 percent. In the first quarter of this year, Lenovo became the largest PC company in the Indian market for the first time. Dell entered India in 1998, six years later than it entered the Chinese market, and built its first factory in the nation in 2007. China, as the largest market for Dell outside the United States, contributes about 10 percent of Dell's global sales now, while India contributes about 2 percent and is in the No 10 slot, according to Amit Midha, president of Dell Asia-Pacific and Japan, chairman of Dell global emerging markets. At Dell's Dell Women's Entrepreneur Network event which was held in New Delhi from June 17 to 19 this year, he mentioned that although the investment Dell puts into the Chinese market is more than it puts into the Indian market, it employs three times more people in India than in China. That is because the employees not only service the Indian market but also the US market. Currently the company has 27,000 employees in India and can cover 88 percent of the nation with sales and delivery. HCL, the largest local PC maker in the Indian market, has never entered the Chinese market. Economies - India has been one of the fastest growth trade partners with China in the last few years. In 2011, bilateral trade between China and India reached $78.9 billion in infrastructure, finance and technology, said Peng Gang, commercial counsellor of China's embassy in India. As a consequence of the global financial crisis, exports of both countries have encountered difficulties, causing GDP growth to slip. India's GDP growth was 5.3 percent in the first quarter of this year, the lowest in the past 10 years, as was China. The common point between the two economies is that they have a huge domestic demand. Peng said that the Indian government has enforced many policies and rules to boost domestic demand. However, compared with China, India's economy doesn't depend on exports that much. Languages - IDC data shows that because India's official languages are Hindi and English, in the past 10 years India IT services have made rapid progress. "Service outsourcing is the most impressive industry in India worldwide," Wang said. He mentioned that India IT services and software were almost double the size of China's. Spending on operations management software is higher in India, with China measuring 59.2 percent of India's output in 2011.

Ownership of about 78 percent of China's collectively-owned rural land had been clarified by the end of June in a government campaign to protect farmers' land rights, the country's land watchdog said Sunday. Local authorities should step up their efforts to certify ownership of all collectively-owned land in the countryside by the end of 2012 as planned, the Ministry of Land and Resources said in a statement on its website. Vice-Minister Hu Cunzhi warned that authorities should not approve the expropriation or transfer of collectively-owned rural land that remains unidentified as of the end of this year. The lack of legal proof of who owns rural land has left farmers' interests poorly protected. Land in China's countryside is either state owned or collectively owned. The government proposed a plan in 2010 to identify and register the ownership of all collectively-owned rural land by the end of 2012, in a bid to better protect the interests of its 680 million farmers.

US' 2 trade remedy actions against China - On July 31, the US Department of Commerce and US International Trade Commission both decided to take trade remedy measures on the drawn stainless steel sinks and tapered roller bearings imported from China. A trade remedy is when a domestic industry of a country is facing an unfair import action or being damaged by the impact of imports, and the government of the country gives the industry supports or remedies. Main modes of the trade remedy include anti-dumping, anti-subsidy and supporting measures. On July 31, the US Department of Commerce said in a preliminary judgment that the drawn stainless steel sinks produced in China had received governmental subsidies and the subsidy rates were between 2.12 percent and 13.94 percent. According to the latest schedule, the US Department of Commerce and US International Trade Commission will also make final judgments in October and November of 2012. If both organizations make positive judgments, the US Department will order the US Customhouse to impose anti-subsidy taxes on products of same kinds imported from China. In March 2012, a US kitchen and bathroom supplies company lodged an accusation against China by saying that Chinese enterprises received government subsidies and were dumping goods in the United States, and therefore anti-subsidy and anti-dumping investigations were launched. The judgment made by the US Department of Commerce on July 31 is the judgment on the anti-subsidy investigation but has yet to make a judgment on the anti-dumping investigation.

Hong Kong*:  Aug 7 2012 

Hong Kong's Jiang Tianyi (back, left) and Leung Chu-yan on their way to victory over Japan's Seiya Kishikawa and Koki Niwa in London. Hong Kong boosted their hopes of winning another medal as the men's table tennis team upset third seed Japan to reach the semi-finals. Yesterday's narrow 3-2 victory put Hong Kong one step closer to a second Olympic medal after Lee Wai-sze's bronze in the women's keirin on Friday. "We won't think about the medal yet as we still have one more tough hurdle to overcome," said coach Chan Kong-wah. "We were the underdogs against Japan as we haven't beaten them since the 2008 Olympic Games, but today our excellent fighting spirit has taken us all the way through and we must keep this attitude. "Today's performance was close to perfect as we knocked one of the favourites out of the tournament. "But every match is different. We cannot be getting too excited and have to keep the correct mentality when we start in the semi-final." Hong Kong had second singles Tang Peng to thank with the on-fire player bringing victory almost single-handedly with two points in the best-of-five match. Having suffered a surprising defeat in the singles second round to an Iranian, Tang was a different player as he first defeated Seiya Kishikawa and then Koki Niwa in the all-important final rubber match, both 3-1. In the doubles Jiang Tianyi and Leung Chu-yan prevailed over Kishikawa and Niwa, also 3-1. "People have to wait for four years to take part in the Olympic Games but it takes me seven years," said the 31-year-old right-hander, referring to his move from mainland China to Hong Kong, which required him to fulfil the seven-year residency requirement. Tang and Jiang moved to Hong Kong in 2005 and are making their Olympic debuts. "I don't want to give up the chance easily because I have been waiting for so long for the Games and there will be no fallback if we lose to Japan. "In fact, the defeat in the singles was not too bad as it has allowed more time to heal my shoulder injury so that I can be fit for the team event." Coach Chan paid tribute to Tang's performance and veteran Leung as well, while asking Jiang to take more chances in the semi-finals. "This is the first Olympics for both Tang and Jiang and they are deeply impressed by the atmosphere of such a big event, which in turn, has pushed them to work harder," he said. Hong Kong will be up against either South Korea or Portugal in the semi-finals.

Financial Secretary John Tsang Chun-wah said yesterday that 860 flats will be ready for sale in 2016 as part of the Home Ownership Scheme. The three-tower-block project in Tsuen Wan was slated to be on land formerly occupied by factories and represented a step towards realising the government's pledge of converting more industrial sites for residential use, Tsang said in his official blog yesterday. The flats are to be built on Sha Tsui Road opposite the New Haven private development. "Demand for factory buildings has decreased [since most factory production has migrated to the mainland]. Some of the factory sites are easily accessible and they are ideal locations for residential development," Tsang said. Another method being considered to increase housing supply was to build more flats on top of or near train stations, he added. Tsang promised the government would spare no effort in identifying sites suitable for residential use, disclosing that the government had been looking into the development of potential plots covering a total of 2,500 hectares. "It is about one-tenth of the developed land of Hong Kong," Tsang said. He said he appreciated residents' concerns that building more flats near their homes could possibly block their views or affect air circulation in their areas, but he called on people to be more tolerant. "Land resources are scarce. There is a need for the government to make the best use of suitable land to build residential units after striking a balance for all concerned," he said. "Sometimes, we may not be able to fully meet all of the demands of local residents." Increasing land supply is one of the major policy objectives of Chief Executive Leung Chun-ying. He has also pledged to carry on an initiative of his predecessor Donald Tsang Yam-kuen, who last year announced the resumption of the HOS programme to help lower middle-income families own homes. Sites in Sha Tin and Yuen Long have also been identified for the scheme. On Saturday , Housing Minister Professor Anthony Cheung Bing-leung said the government would launch a long-term review of housing needs over the next 10 years.

Advanced building materials have come a long way, but Hong Kong scientists are now hoping to create an even "smarter" material that can keep the temperature inside buildings stable despite the change outside. Researchers at the Hong Kong University of Science and Technology, led by visiting assistant professor Ben Chan Yui-bun, hope to create an insulation system that can help regulate the conditions inside a building and achieve a 20 per cent saving in energy. "Basically, it's like the skin of a building," said Chan, from the HKUST's civil and environmental engineering department. "In Hong Kong, we need cooling rather than heating, but most buildings in Hong Kong adopt insulation technologies from the US or Europe, which don't suit Hong Kong's weather conditions." Chan's insulation system includes a regular insulation panel and two aluminium panels. It also features two layers of material that can self-regulate temperature. "It's a smart material that will melt at a given temperature. Right now it's solid, but if we increase the temperature, it will become liquid and, in the process, absorb energy," Chan said. The inner layer has a melting point of about 20 degrees Celsius, meaning it can delay temperature increase and keep it at a cool 20 degrees, a comfortable room temperature. The outer layer, outside the insulation panel, has a melting point of 40 to 60 degrees Celsius and can significantly slow down the heat before it arrives at the insulation panel. Given that buildings are the worst culprits when it comes to energy consumption in Hong Kong - a report by the Census and Statistics Department shows that they account for 89 per cent of the electricity consumed, with ventilation and air conditioning taking up 48 per cent - the new system could significantly cut energy consumption and greenhouse gas emissions. A layer of carbon fibre reinforces the aluminium panels, allowing them to span a longer distance. "When it spans longer, there is less heat lost from window frames and sealants," Chan said, and that can significantly increase the energy efficiency of the system. A simulation shows the system can cut energy consumption by 15 per cent, but Chan is confident the final product will achieve 20 per cent. The team considered thousands of materials and came up with the current components after about a year's research. The research had a grant of US$500,000 from Rusal, a Russian aluminium company.

Chan Yun-cheung, who became head of the Geotechnical Engineering Office this year, is responsible for raising life-saving landslide alerts. The special office has been fortifying the city's slopes for 35 years. Just before 1am on Tuesday, July 24, as hurricane-force winds from Typhoon Vicente cut a swathe of destruction through Hong Kong, Chan Yun-cheung's mobile phone rang. He jolted awake to answer the call. It was the Hong Kong Observatory - which had hoisted typhoon signal No10 at 12.45am - updating Chan, 59, on the tropical storm's path and the rainfall predictions. Moments later, Chan made a decision that would affect every person living in the city. Chan, as head of the Geotechnical Engineering Office (GEO) based in Ho Man Tin, decides if a landslide warning will be issued. And at 1am that evening, he raised the alarm. As torrential rains battered the city - marking the first time the No10 signal was hoisted since Typhoon York in 1999 and the 14th since 1946 - dozens of people were injured, hundreds of flights were cancelled or delayed, thousands of trees were uprooted and land transport was brought to a standstill. In ensuing days, as the city cleaned up, many complained about having to sleep in the MTR overnight after trees had fallen over tracks, among other horror stories. But as the rain and winds subsided and people returned to work, one fact remained: no one had died. This is thanks in part to the efforts of the GEO, which has reduced the risk of deadly landslides like those brought by typhoons and heavy rainstorms in previous decades. Chan says that once the landslide warning is activated, a team of eight to 10 staff monitor the situation at an emergency control centre. "They are ready to go out to inspect landslides with the highways, water supplies, lands or drainage departments - whoever it might be - and see what needs to be done, and to stop people from getting hurt." Having detailed and accurate data from the Observatory has made Chan's job much easier, he says, compared to when the warning was first introduced in 1984. "In those days, we didn't have the radar or satellite pictures. Now it's much easier to discuss the warning." The alarm is activated when the number of possible landslides hits 15. This is calculated by the rain that has already fallen, the predicted rainfall and the number of man-made slopes covered by the rainfall. During the most recent typhoon, geotechnical engineers predicted 100 landslides. Just 27 occurred with no fatalities. The number of deaths from landslides has been 20 times lower over the past 30 years, as the population grew by 40 per cent. This dramatic drop has been credited to the work of the GEO, which was established as a unit of the Civil Engineering and Development Department in 1977, five years after a series of fatal landslides that were triggered by rainstorms, and a year after Tropical Storm Ellen left scores of people dead. Since its founding, the office has spent HK$15.5 billion on slope stabilisation works and it now has about 750 staff, of which 200 are engineers. The office's first priority was to upgrade high-risk man-made slopes in developed areas and near major transport corridors. Many slopes near hospitals, schools and public housing areas were fixed. Between 1979 and 1985, every piece of land in Hong Kong underwent a geotechnical area study which resulted in a ranking of how suitable each area was for development. Today, every slope in Hong Kong is checked each year, with a professional assessment every five years. A turning point for the GEO was in 1994, when a tragic landslide at Kwun Lung Lau in Kennedy Town killed five people and prompted a Legislative Council inquiry. The investigation found that a retaining wall which was meant to be four metres thick was just 75cm thick, causing the wall to collapse during the downpour and leaving five victims buried under tonnes of mud. "This was a hard lesson learned because as we conducted the investigation, we realised there were ample signs of a potential landslide," such as water seepage and slope degradation, Chan said. "People were not aware of the danger. And when the rainfall intensity subsided a little bit, people started walking out to eat and it was then that the landslide occurred, and it really hurt." The same year of the Kennedy Town tragedy, work began on a comprehensive catalogue of the city's slopes and by 1998, the database was complete with about 50,000 slopes in its register. Currently, it holds information about the city's 60,000 man-made slopes, of which one third are privately owned, while the remainder belong to various government departments. The office's work includes preventing landslide risk in new developments, reducing risk in existing developments and educating the public. Between 1977 and 2010, about 4,600 man-made slopes were upgraded under the landslip prevention and mitigation programme, with substandard inclines stabilised with soil nails or retaining walls. Jim Chi-yung, a professor of geography at the University of Hong Kong, said such use of synthetic materials meant more accurate risk assessments. "Our city is so close to nature that if something happens in nature, it affects people and property. Some people may not be happy about the transformation of greenery into concrete but it's difficult to calculate the strength of tree roots gripping soil," he said. During the wet season, which typically runs from May to September, the risk of landslides increases, especially if a rainstorm or typhoon happens over areas with man-made slopes or natural hillsides. But since there have been fewer and fewer major landslides in recent years, Chan says Hongkongers have become less vigilant. Even with strong fortifications in the city, there are still some risks. "There are fewer eye-catching landslides - that is to say they are not happening so much over roads or causing buildings to be evacuated," the GEO chief said. "But with climate change, we have evidence that the rainfall has been increasing and is more erratic. There may be dry periods for longer [periods], but then the rain that falls can be so excessive that it can give you a nasty time. So we've got to prepare people for this. "We should not let people think the system is perfectly safe because there will always be landslides. And especially when we are dealing with Mother Nature, there is immense room for surprises, so the last thing we want is for people to be complacent." Chan links this sense of complacency to the fact that landslide risk from existing slopes has dropped to one-quarter of what it was in 1977, when the GEO stepped in. "We have somehow established a name in this profession and people dealing with slope safety issues," he said. Government engineers from Taiwan, Malaysia and South Korea visit the office to learn about the city's slope management system. "But we are not doing things for the sake of being at the forefront. We are doing things to make the best use of the resources available," Chan added. Chi-yung, the professor, mirrored Chan's concerns about complacency. "With the most recent [typhoon], there were a few injuries but no casualties, so we have done a lot to prevent disasters affecting people. "Compared with many other cities, where the impact of natural disasters causes fatalities, we manage to keep it very low in Hong Kong." However, he adds: "We have to remind people that some decades ago, people were very worried about rainstorms and typhoons. Those worries have now been alleviated … but landslides can kill a lot of people if it happens in the wrong place, especially in Hong Kong where it's high density [in terms of population]."

Olympic bronze-medal winner Lee Wai-sze will inspire thousands to take up cycling, especially with the HK$600 million Tseung Kwan O velodrome opening next year, coach Shen Jinkang predicted yesterday. The 25-year-old shot to fame on Friday night when she came third in the women's keirin final at the London Games - winning only the third Olympic medal for Hong Kong since their first participation at the 1952 Helsinki Games, and first in cycling. "This is not the end of the story," Shen said. "I'm sure Lee's bronze medal success will inspire thousands of youngsters to take up cycling, as it proves Hong Kong athletes can now win an Olympic medal in the sport. "With the completion of Hong Kong's first velodrome next year, when our riders will no longer have to train on the mainland, I am confident the sport will have a good future. Before we could only focus on a few track cycling events because we did not have a big squad. This is going to change in the next couple of years." The Tseung Kwan O velodrome was first planned after Hong Kong cyclists won two gold medals at the 2006 Doha Asian Games. "This is a great moment for Hong Kong," said an elated Timothy Fok Tsun-ting, president of the Hong Kong Olympic Committee, of Lee's performance. "She has done us proud and she showed a lot of courage, coming from behind after losing in the first heat." Lee showed great mental strength after a slow start to the event to win her repechage (a heat used in keirin giving cyclists a second chance to reach the next stage), qualify for the final, then mix it with the best to finish third behind Great Britain's Victoria Pendleton, dubbed "Queen Victoria" by the English media, and China's Guo Shuang. "I never panicked, even though it was not the best start, because I knew I had the quality to win through the repechage," said Lee, a devout Christian who started full-time training in 2004 after finishing secondary school. "Before the final, I thought I could win because I have beaten the five others before, but I knew I had to settle for third place after going into the last bend. "This is an important race because it has proven I am among the best in the world. Hong Kong athletes should try their best and they can also be as successful as me." She put her name alongside Hong Kong's other Olympic heroes - windsurfer Lee Lai-shan and table tennis pair Li Ching and Ko Lai-chak. The medal will also bring Lee Wai-sze benefits, including a cash reward of HK$750,000 through the Hang Seng Athlete Incentive Awards Scheme.

One of the RS3-SX body-cameras that will be tried out by the Hong Kong police. Police will wear body-cameras - HK force to trial mini-surveillance devices to deter offenders and raise conviction rates despite privacy fears - Frontline police officers in Hong Kong will be fitted with body-cameras after recent complaints about their handling of demonstrators. As part of a three-month trial, an undisclosed number of officers in the specialist police tactical unit and key Kowloon West emergency units will be fitted with the mini-cameras as early as this week. The controversial move has sparked privacy fears but the force hopes it will cut crime, raise conviction rates and tackle a growing "complaint culture'' in the city. It is also hoped the cameras will work both ways, deterring potential offenders while keeping officers in line as they interact with the public in heated situations. The RS3-SX devices are about the size of a cigarette packet and are clipped to police uniforms. They are made by the British company Reveal Media and sell for HK$6,800 each. If the trial period is a success, it is understood police chiefs want to buy 7,000 cameras, roughly enough for every officer in a three-shift day. Similar cameras are already being used by police in the UK and US. Police in Western Australia and Queensland decided to not use them after trial runs because of privacy concerns. Andrew Shum Wai-nam, of the Civil Human Rights Front, an umbrella organisation for more than 40 non-governmental groups in Hong Kong, said: "It is worrisome. The police force's job is undeniably to keep the city safe and to stamp out crime, but it is not acceptable to do it at the expense of destroying people's privacy." He is concerned that video footage would be used to identify protesters and that the mere presence of the cameras could create a climate of fear. An insider with knowledge of the plan said the cameras would be turned on only during major incidents and in situations when it was "deemed necessary''. They would be turned off during routine police work. Footage would not be kept for more than 30 days, unless required as evidence in court. One veteran officer welcomed the new initiative, saying it would boost evidence-gathering capabilities. It would also act as a deterrent because with the camera turned on, people would think twice about escalating a potentially confrontational situation. "I think it would help calm things down. It's also good for the public as it would mean police won't overreact if it's all going to be recorded on video. They'd have to be sure to follow the appropriate protocol, so it works both ways." The cameras have sound, video and camera functions and officers will wear them clipped on their lapels. They have a front-facing screen, a memory of up to 32GB, weigh 140 grams and have a maximum battery life of more than eight hours. The Grampian police force in Scotland reported that more than 90 per cent of prosecutions using footage taken by video cameras worn by officers led to early guilty pleas and a higher conviction rate. However, officers had to be fully trained on how to use the device and follow strict guidance. Any recording not required for evidence or other policing purposes was destroyed. Legislator James To Kun-sun expressed worries. He said: "The incidents which would benefit from video footage are few and far between, and not enough to justify having surveillance like this. "[To adopt this] is a big change in policy. Even the police admitted that 99 per cent of protests in Hong Kong are completely peaceful, so how often would we need to 'monitor' situations? Most of the time, it's unnecessary ... If the police wanted, they could just carry a normal video cameras on protests." To said that while it's not illegal to take videos and photos in public spaces, using the taxpayers' money for "something unnecessary" is a waste. A police spokeswoman said the force had always used hand-held devices to record cases relating to public order and "for investigation and evidentiary purposes". She said advances in technology meant that many police forces overseas had adopted body-cameras with good results. She confirmed that the Hong Kong force was "investigating the possibility of adopting such body-cameras". She added that all officers would be fully trained and adhere to strict rules when using them in public.

Controversial police estimates of turnouts at major protests and marches are scientific, the head of police operations insisted yesterday. "There are no political considerations behind the figures," director of operations Paul Hung Hak- wai said. "We count actual numbers of how many people pass our counting devices." There have been persistent criticisms that police tend to underestimate turnouts for the June 4 candlelight vigil, July 1 rally and the series of anti- national education marches. Estimates differ widely from protest organizers' numbers. Unlike other academic bodies whose turnout figures are worked out statistically, Hung insisted the force has always provided "actual numbers." He said demonstration turnouts only matter in police deployment and decisions on security arrangements, and so are used mainly for internal references and not usually made public. Hung also said it was a fair decision for the police to use a fire extinguisher-like pepper spray against crowds demonstrating during the visit of President Hu Jintao on June 30. "Have you seen press reports that some tried to break through giant barricades before we used larger pepper spray?" Hung asked. The larger sprays were used after verbal warnings and warning banners were unfurled, and after protesters were undeterred by smaller pepper sprays, he said. "I assure you the difference between the two types of pepper spray was only in their appearance," he said. Hung spoke at a press conference reviewing crime figures for the first half of the year, when overall crime was largely stable at about 37,500 cases.

Local retail sales came in for a better- than-expected 11 percent gain in June from a year earlier to hit HK$34.8 billion as buying by both locals and visitors rebounded, the Census and Statistics Department said yesterday. Earlier, experts had forecast a 8.2 percent hike in total retail sales. Sales grew by 8.7 percent in May. By volume, sales rose 8.5 percent in June - sharply higher than the 5.7 percent jump in May. The jump in retail sales was attributed to "resilient local consumption demand and also to the rapid rise in visitor arrivals in June," a government spokesman said. But, going forward, sales are expected to slow due to the global economic uncertainty. The spike in retail sales came on the back of a 30.7 percent jump in the number of mainland visitors, which hit 2.5 million. By volume, sales of consumer durable goods saw the biggest growth at 103.3 percent, followed by a 40.4 percent gain for motor vehicles and parts. However, sales of furniture and fixtures fell 8.2 percent, while jewellery, watches and clock sales declined 3.1 percent. "Slowdown of furniture [demand] is partly due to easing transaction in the property market in June. And economic uncertainties have affected mainlanders' spending particularly on luxury items," said HSBC senior economist George Leung Siu-kei. Separately, other data showed receipts of local restaurants rose a mere 4.2 percent in value during the second quarter from a year back. "This reflects hikes in menu prices as well as rising rental pressures," Leung said.

Li Ka-shing, Hong Kong's richest man, yesterday kept his lips sealed on the new government led by Chief Executive Leung Chun- ying despite being asked by reporters. Neither would Li comment on the national education issue, simply saying he prepares materials to teach his family to be patriotic but will not make them public. Political analysts believe a rift between Li and Leung has not yet been bridged. At the Cheung Kong results announcement yesterday, Li remained silent when he was asked repeatedly to comment on Leung. He was asked whether Leung is trusted by the people and whether any more changes in the secretary for development hot seat will bring investment risks in the property market. "I haven't met [Secretary for Development Paul Chan Mo-po], so I cannot comment on him," Li said. "We all want Hong Kong to have the rule of law, and Mr Leung also pledged to abide by the Basic Law, so we should trust him." Leung's first month in office was chaotic as he faced two major protests, and Chan's predecessor Mak Chai-kwong stepped down after being arrested in connection with abusing civil service benefits. Chan himself is linked to a property that is said to be illegally subdivided. Li openly endorsed Leung's main rival, Henry Tang Ying-yen, during the election in March, even after Beijing signaled that it favored Leung. Ivan Choy Chi-keung, senior instructor in politics at Chinese University, noted that since the election Li has not had a positive word to make about Leung. "Li may not publicly criticize him because President Hu Jintao has called for the city's support for Leung, but clearly the discord between the two has not been resolved," he said. But Li has supported the government in building more public housing. He said the government should make a decision by itself on Home Ownership Scheme flats, adding much of the tax revenue is from real estate. Li's son and Cheung Kong heir, Victor Li Tzar-kuoi, said the government will need to take care of the biggest landlords in Hong Kong - meaning the families who own the flats they live in. The elder Li also refused to comment on the implementation of national education, but he said he imposes it at home. "I'm very serious about national education," he said. "I made speeches to my sons and grandsons, teaching them to love their country whatever circumstances they are in." But he refused to say whether he will let his grandsons and granddaughters study in local schools and receive national education in line with the government curriculum. Finally, Li said he does not see home prices - now at an all-time high - going down.

We're on the money and ready to roll, says the boss of Hong Kong's long- delayed cultural hub. And it's happening this month. The chief executive of the West Kowloon Cultural District Authority, Michael Lynch, said the future cultural hotspot is in the black to the tune of HK$2 billion - and that should be music to the ears of government. Lynch, who took over the still- unbuilt cultural district a year ago after the shock resignation of his predecessor, Graham Sheffield, said: "We've always said we're in a great position. The government gave us HK$21.6 billion, we've now got over HK$23 billion still left because we've been able to invest the money." The former chief executive of London's Southbank Centre, who also ran the Sydney Opera House, told The Standard the return was made over the past three years. "Half sits with the monetary authority and the rest is allocated to a range of non-risky investments, including renminbi," he said. The cushion means the authority can keep going and look at the plan for an underground car park and competitions to choose the architects for its five major venues. The authority is in negotiations with the government on funding - estimated last year to be HK$4 billion - to build the car park and greener facilities. The parking will be on top of the underground five-level West Kowloon Terminus, a 13-hectare transportation center from which a high-speed rail service will connect Hong Kong to the mainland, and is expected to be completed in 2015. The next 12 months will see a buzz of activity. Work on what Norman Foster's master plan called the "Great Park" will start this month after the Leisure and Cultural Services Department hands it over. "We're in the process of establishing a nursery on the site to grow trees and see which trees are going to work best," Lynch said. Bicycle lanes in the park will be ready this year. The park will host music festivals, a winter carnival and a four- week Bamboo Theatre project. The park is next to Victoria Harbour - "probably the most beautiful site, next to Sydney Opera House" - and will have hills, a lot of artworks, and two venues called No 2 and No 3, where concerts and outdoor activities can be held for up to 5,000 people. And five architects who have been shortlisted to design the Xiqu Centre on Canton Road are in town this week for the first time. Next month the authority will open the competition for the design of the 60,000-square-foot M+ museum. The winner will be named by next June. And in an artistic coup, M+ has won a donation of 1,463 works of Chinese contemporary art worth at least HK$1.3 billion from former Swiss ambassador to China Uli Sigg. "We just signed our first agreement to lend some of it [the Sigg collection] to one of the major Australian galleries, the National Portrait Gallery in Canberra," Lynch said. He is all too aware of the skepticism surrounding the cultural hub, amid a credibility crisis for Chief Executive Leung Chun-ying, who was linked to a conflict of interest over a design competition. "There's not much I can do about what happened 10-15 years ago," Lynch said. "The interest of the new government is pretty much aligned with my own in that we want to move this project substantially between now and 2017."

 China*:  Aug 7 2012

The largest bank in the US by market capitalisation has an ambitious hiring plan - mainly for Hong Kong and the mainland - at a time when its rivals are shedding staff. Wells Fargo, the largest bank by market capitalisation in the United States, aims to grow its revenue at a double-digit pace annually over the next three years in China, despite increasing concerns about the country's slowing economy. John Rindlaub, president for the Asia-Pacific region at Wells Fargo, told the South China Morning Post (SEHK: 0583, announcements, news) in an interview that while the weaker global economy had prompted some foreign financial institutions in Asia to lay off staff or even close offices, the present environment gave the bank a rare opportunity to grab some top talent. Earlier this year, loss-making Royal Bank of Scotland sold its Asian equities business to Malaysia's CIMB Group. More recently, Piper Jaffray decided to close its Hong Kong office to refocus on its home market in the United States. "Many US company CEOs tell us that maybe 10 years ago the story in China was all about manufacturing in China, and then exporting to the US; and now the story in China is that they still manufacture in China" but sell to local Chinese consumers, said Rindlaub, a veteran banker who was appointed the top boss for Wells Fargo in Asia last year. "It is a growing opportunity for many US companies" to sell in China, he added. "We're not going to leave here. In fact, we are still hiring." China is the world's No2 economy, behind the US. It has also become the economic engine of Asia, replacing Japan as its economy stagnated in the past decade. Beijing's official target for this year calls for the economy to grow by 7.5 per cent. Rindlaub said the bank had an ambitious hiring plan to support the expansion of Wells Fargo's clients - mainly US companies doing business in Asia, especially in China, Singapore, and South Korea, and an increasing number of Chinese customers that want to take their businesses beyond the mainland. But Wells Fargo would not be pursuing retail banking business in Asia, he said. Wells Fargo - widely considered an industry winner after the 2008 global financial crisis wounded many other big players such as Citigroup and Bank of America - plans to increase its headcount in Asia by 10 per cent over the next three years, mostly on the mainland and in Hong Kong. Many of the hires will be for sales and trading, foreign exchange, loans, asset management, client relationship management and products, said Rindlaub, who was based in Hong Kong as head of Bank of America's business in Asia in the early 1990s. In Asia, Wells Fargo has offices in 14 locations with 4,200 staff in total, including 740 in Hong Kong, which serves as its regional head office. In late 2008, at the height of the financial crisis, Wells Fargo acquired Wachovia in a nearly US$13 billion deal that took their combined headcount in Asia to about 1,000 in 2009. Rindlaub said Wells Fargo's own analysis indicated that more than 100 Chinese companies provided a "fit" with the financial services it could offer, and were ready to invest in the United States - particularly in energy and real estate.

China's Lin Dan races off court in delight after overhauling Lee Chong Wei in the final of the men's badminton singles yesterday to become the first man to defend the title. Lee had raised Malaysia's hopes of a first Olympic gold medal when he won the opening set, but Lin dug deep for a 15-21, 21-10, 21-19 victory. China's men's doubles Cai Yun and Fu Haifeng then sealed the first ever clean sweep of all five Olympic badminton titles when they beat Danes Mathias Boe and Carsten Mogensen in two sets.

Gan performs at the Lady Gaga Nightclub in Shenzhen. Nobody special - Internet creation Gan Lulu has become notorious for her risque dresses and nude pictures. But whether you love her or hate her, it's getting difficult to ignore her. She's "the most gorgeous, sexy and amazing baby!" enthuses the MC introducing her, and when Gan Lulu takes to the stage of Shenzhen's Lady Gaga Nightclub, a deafening barrage of yells and whistles suggests that, right here, right now, and for this overexcited crowd, she is all of those things. Clad in a skin-tight, high-neck golden jumpsuit covered in studs and ultra-high heels, she waves to her fans, but whether she can see them through dark glasses and dense cigarette smoke is unclear. "Follow your dreams, be confident, work hard and you will succeed one day," she yells. The 300-square-metre nightclub - which was until recently known as The Den and is in Pinghu, in industrial Longgang district - is packed with young people; some stand on the marble tables to catch a glimpse of the controversy-ridden 27-year-old. "Forget about all the ridicule. If it's gold, it glitters," she continues, referring either to herself or her outfit - perhaps both. As always, her mother, Lei Bingxia, is nearby, standing at the front of the audience. "She feels safe and sure of herself when I'm around," Lei says. Gan and her 49-year-old mother have been the subject of online debate since Valentine's Day last year, when Lei posted on the internet a 40-second clip of her daughter naked in a bathroom. Lei claimed she filmed the footage in order to find a husband for Gan but many people believe it was blatant self-promotion. And some have even speculated about whether they are even mother and daughter. "It does not mean I'm stressed out by the attacks and sneers online and want to put on a brave face," says Gan, when asked about the words of encouragement she bestowed on the Lady Gaga audience. "Actually, the more attacks there are, the more famous you become, so it's all good as long as you are not breaking the law, acting immoral or doing anything bad. This is the reality in China. "I'm always super-confident and like to encourage the young people here to be the same. But of course, I want to relaunch myself as a positive and self-made type of girl," she adds. The pair have survived a barrage of criticism over the nude clip, which has, inevitably, been dubbed "Bathroomgate". Not only that, but they have kept the discussions heated by posting more content online - a picture of mother and daughter in bed together wearing short, lacey nightgowns; another showing Lei touching a naked Gan's breasts; and another involving a third woman in a scene resembling pornography - all of which some of the more salacious-minded internet commenters have taken to indicate an incestuous relationship. In late April, Gan was invited to model at the Beijing International Automotive Exhibition (Auto China 2012). Her sponsor was not disappointed; Gan bared a great deal of flesh. Her appearance sparked another firestorm of online debate; some web users claimed the event had become more of a "breast show" than a motor exhibition. Even the capital's Ethics Office weighed in, issuing a notice that said some of the outfits worn by the models had a "negative social impact". "The dress she wore at the car show was not from us," says Qi Li, from motor website www.chexun.com Gan's sponsor. However, commentators note, the sponsor must have endorsed the outfit. A month later, at the Kitchen and Bath Expo in Shanghai, an undeterred Gan appeared in an even more outrageous outfit, this one almost baring her crotch. "I was in the same exhibition hall as the famous Taiwan pop star Wang Leehom, so I had to think of something really different," Gan says. "It turned out to be a big success. All the male audience came to cheer for me." Gan claims she designs 90 per cent of the risque dresses she wears but last month, when she appeared at a motor show in Kunming, Yunnan province, it did not take long before people were pointing out that three of her outfits resembled ones worn by Lady Gaga. "I have never copied Lady Gaga," she likes to say whenever the American performer is mentioned. "Actually, Lady Gaga is the Gan Lulu of the West." Gan forces the point home when repeating this line in Shenzhen by pumping her fist in the air. It draws applause and cheers from the floor of the nightclub named in Gaga's honor. Tonight, Gan is earning 100,000 yuan (HK$122,600) for singing three songs and finishing the show in a sexy outfit. She takes off her glasses and starts her first song, the self-penned Love You. It isn't pretty. Gan grew up in Shangcheng, a small rural town in the inland province of Henan. When she was little, she says, her mother took her to a blind fortune-teller, who said Lulu would become a celebrity when she grew up. Her childhood dream was to take her mother to visit Tiananmen Square and buy a car and house for her in Beijing, but that was easier said than done when you lived in a town so remote it wasn't even on a railway line. Although her father, Gan Dexuan, has a stable government job, Lulu says she had new clothes only at Lunar New Year. "At the age of 12, I was as tall as my mum and I had to wear her old clothes," she says. Gan Lulu says her father made her wear a pair of old, leaky rubber boots and when it rained her feet would get soaked. In her teens, Lulu's rebellious nature began to surface. She cut holes in her jeans and wore them at school without her parents knowing. She scoured every shop in town to get a pair of high-heel shoes, she says, money apparently less of a problem by then. "I gave the teachers nicknames and wrote love letters to the boys," she says. "All the teachers hated me. "My dad wanted me to be at the top of my class, but I was always at the bottom," she says. "I was really bad at science. I had to cheat to pass the tests." Without finishing high school, she joined the many drifters in Beijing looking for opportunities in the film industry. "I was single-minded at the time, believing that being an actor in films could bring me fame," she says. "On film sets, I was bullied and even followed the unspoken rule to get a role." The "unspoken rule" in the film industry is generally understood to mean sleeping your way into a job. "I was confident of my good looks and body shape and believed opportunities would soon knock on my door. But no matter how hard I tried, I was never given a good role," Gan says, adding that she once spent three months rehearsing a part, only to have the director cut her scene to a single shot of her back. In 2009, Gan was given a small role in the Dayyan Eng-directed film Inseparable, which stars big shots such as Kevin Spacey and Daniel Wu Yin-cho. "But still when I walked down the street, nobody recognised me." The motor industry, however, has given Gan an altogether smoother ride.

Hong Kong*:  Aug 6 2012 

More than 60 per cent of China Development Bank's bonds sold this year went to investors in Europe, the Middle East and Africa. China Development Bank listed six billion (HK$7.36 billion) worth of yuan-denominated bonds on the Hong Kong stock exchange yesterday, giving investors an opportunity to trade securities with a maturity of up to 20 years. The so-called dim sum bonds are listed on the Hong Kong stock exchange and also carry maturities of three years, five years and 15 years. The bank's issue takes the number of yuan-denominated bond listings since 2007 to 41, worth 50 billion yuan. It is expected to boost Hong Kong's offshore yuan market and diversify the bond pool. "CDB's bond listing will enhance yuan liquidity in Hong Kong," said Charles Li Xiaojia, chief executive of the Hong Kong Exchanges and Clearing (SEHK: 0388). Li said the exchange would continue to improve and simplify listing procedures for dim sum bonds. The bonds were sold through three issuances this year, the latest taking place last week when the bank sold 2.5 billion yuan worth of bonds with three-year and 20-year tenors. More than 60 per cent of CDB's bonds sold this year were allocated to investors in Europe, the Middle East and Africa. Central banks around the globe are increasingly holding yuan-denominated assets to diversify their foreign-exchange reserves. "The response we received shows investors' confidence in China's long-term economic stability," said Wang Tong, deputy general manager of global markets at Bank of China (Hong Kong), which managed the bond sale. The Agricultural Development Bank of China became the first issuer to list yuan bonds in 2007 in Hong Kong. The Ministry of Finance, Baosteel and several mainland banks have followed suit. CDB issued its first offshore yuan bond in 2007. Since then, the bank has issued bonds worth a total of 19 billion yuan in Hong Kong. Investor enthusiasm for the mainland currency and related products has declined since November, with yuan deposits in the city falling for five straight months as hopes for its appreciation faded. Deposits picked up again in June by 0.7 per cent from a month earlier to 557.7 billion yuan. The yuan spot rate has depreciated about 1.5 per cent against the US dollar in the first half of this year. Nathan Chow, a DBS bank economist, said he did not expect the yuan to depreciate drastically against the US dollar. Compared with other economies, he said, China's mid- to long-term economic prospects were positive.

Eslite, the Taiwanese bookshop chain famous for its extensive collection as well as its shops and galleries, is expected to make a splash when it opens what will be Hong Kong's biggest bookshop in Causeway Bay on Saturday next week. Taking up three floors of the new Hysan (SEHK: 0014) Place mall, Eslite's local outlet, its first outside Taiwan, will occupy 41,000 square feet. The previous biggest bookstore, the 32,000 sq ft Xinhua Book City on Leighton Road, closed in 2008. Eslite will attract not only book lovers. Trendy youngsters and tourists are also drawn to its 50 outlets in Taiwan, which are renowned for their exquisite souvenirs and stationery. Its flagship Taipei outlet, a popular stop for Hong Kong tourists, attracts 10 million visitors every year. Never has a Taiwanese chain as big as Eslite joined the Hong Kong book scene. Members of the local book trade are wondering whether it will boost or hurt the more than 100 bookshops already in the city. Even veterans of the profession are divided in their expectations, as it has been more than two decades since the arrival of a new competitor in the Chinese-language book market. English-language booksellers will not be spared either, as mainly Chinese-language booksellers plan to improve their presently small English-language offerings to expand their customer base. "No one can stay away from change when a mega player enters the market," said Steven Luk Kwok-sun, the director, general manager and chief editor of the city's biggest bookseller, Commercial Press. Over the past century, the mainstream book market has been dominated by three players - Commercial Press, Chung Hwa Books and Joint Publishing. Together, they run 43 bookshops and have been on friendly terms. They are the core members of Sino United Publishing, an alliance of local publishers and retailers. Commercial Press and Chung Hwa started business on the mainland in 1897 and 1912 respectively, adding a Hong Kong branch a decade later. Joint Publishing, founded in Hong Kong and the youngest of the three, is 64 years old. It moved its base to the mainland in 1949. The trio's supremacy was challenged in the 1980s when Singapore's Popular bookshop chain joined the fray. By incorporating stationery sales and offering lighter choices of books instead of hardcore academic ones, Popular found its niche and has since opened 18 outlets. Another change at that time was the proliferation of "second-floor" bookshops, which are smaller businesses located in commercial buildings. The small shops tended to be more liberal and specialised in their book collection than the big three. They also imported many books from Taiwan, the freest Chinese-language publication hub at that time, as formal channels to import books from the mainland had yet to be established. More overseas and cross-border chains have tapped into the local market since the 1990s, but they stayed away from direct competition. For instance, Singaporean Page One, Australian Dymocks and the Philippines' Metrobooks focus on English works. Mainland player Xinhua focused on the market for books in simplified Chinese, but its Leighton Road outlet closed after encountering Hongkongers' aversion to simplified Chinese characters. However, the entry of a strong competitor could change the equilibrium in the book market. The obvious change will be an increase in the volume and variety of book collections, brought to market by Eslite and its local rivals. With its large floor space in Hysan Place, strong financial backing and close ties with Taiwanese publishers, Eslite will be able to bring a large number of cross-strait publications to Hong Kong, including rarer titles that have not been seen, trade veterans say. Lam Pik-fun, general manager of Luck-Win Book Store, says Eslite has been strong in introducing readers to new authors. "It organises 'author weeks' during which a specific writer is introduced to shoppers. There are also promotions for specific genres, with each book accompanied by detailed recommendations written by staff," Lam said. Such promotional activities would help broaden readers' interests and build up demand for a diversified book collection. Small, upper-floor bookshops had made similar attempts, but the scale was much smaller, usually restricted to one or two authors at a time, she says. More overseas classics, including those from the English world and beyond, would make their way into the local market in the form of translated works, said Ms Cheng, the manager of Causeway Bay Book Shop, who has spent 18 years in the trade. "Taiwan has excelled in the field of translated classics. Mainland publishers are catching up in speed and variety, but still lag when it comes to the standard of translations," she said. Young readers, especially activists who are involved in social movements, might have the chance to see more translations of classic texts on political theory, says Jimmy Pang Chi-ming of publisher Subculture. The city's three oldest book chains are Beijing-friendly, as their mainland bases and local outlets maintain strong links despite their separate ownership. They refrain from publishing or marketing politically sensitive books, Pang says. "Unlike Hong Kong's big three, Eslite from Taiwan will not face any political pressure for its book selection," Pang said. "The leftist camp is quite nervous that Eslite will bring in the Taiwanese mentality. What if they sell books by the Dalai Lama which talk not about religion but independence [for Tibet]?" he said. It remains unclear if Eslite will offer any controversial books, but the firm has been in touch with Pang and the manager of Greenfield, a bookshop known for publishing and selling books banned on the mainland. Eslite also plans to open outlets on the mainland in two years' time. Facing competition from Eslite, mainstream bookshops are now seeking to review their strengths and weaknesses. Chung Hwa has made a five-year plan to target different audiences with a professional and specific book collection, starting with a comic shop in Mong Kok to draw young readers. Commercial Press, strong in academic books, has reopened its long-standing four-storey outlet in Causeway Bay. The renovated shop has a bigger English-language section which occupies the entire basement - ready to compete with Eslite and Page One. It opened another outlet across the street, selling only educational books, earlier this year. Commercial Press director Luk says that local readers are diverse and demand both Chinese and English texts. Although Eslite excels in translated works, it has less experience with English-language books, which have never been its focus in Taiwan, Luk says. "Taiwan publishers do translations for even Polish or Czech works. But is there a demand for them in Hong Kong?" Luk said, adding he doubted there was. He also disputes claims that Commercial Press stayed away from politically sensitive books. "As a publisher, our focus is on language and educational books. On the retail level, however, managers make individual decisions on the local book collection. They are free to choose any book that sells well." Chan Man-hung, vice-chairman of Sino United Publishing, says the number of bookshops in Hong Kong has risen by a third over the past decade. He is confident that local big names will be able to maintain their market share, thanks to their professional judgments of the books on offer and quick response to market trends. The biggest competitor for local operators is not Eslite, but shops selling all types of tourist merchandise. Every two or three years, property owners will raise the rent for shops, Chan says. Or they will demand that bookshops move to quieter areas, increasing the burden on operators who frequently pay for renovations. "One fourth of Commercial Press's outlets has to move every year," he said. Small bookshops operating in Eslite's vicinity expect intensive promotional and joint-marketing activities by various chains. Whether they can be sustainable remains to be seen. A Sun Hung Kai Properties (SEHK: 0016) study which polled 800 people in June found that 41.8 per cent of respondents did not have a reading habit, being too busy with work, study or other distractions. Respondents each read an average of 1.9 books in the six months prior to the survey. Lam of Luck-Win, who saw the number of upper-floor bookshops growing from a handful in the 1990s to about 10 recently, says Eslite could draw more readers to Causeway Bay. They may spill over to neighbouring shops when they search for deeper discounts, she says. Eslite's trendy image and cultural activities might prompt youngsters to start reading mainstream books. Once they form the habit of reading, they might eventually look for more specific works in upper-floor shops. "Middle-class professionals used to form our customer base. Many of them left before the handover ... much time is needed before another group of readers are nurtured," Lam said. Cheng of Causeway Bay Books, which operates on Lockhart Road, is less optimistic: "Youngsters are more interested in playing games on iPhone than reading ... secondary school students just aren't willing to pay for books not mandatory in the curriculum." Efforts by Eslite will hardly reverse the trend, she says. Furthermore, the government has been unhelpful in fostering a reading culture. "It is meaningless for the government to appoint someone who is not experienced in books or performing arts to head the Cultural Bureau [a new bureau that has yet to be approved by the Legislative Council]," Cheng said.

Environmental researcher and democracy activist Christine Loh Kung-wai is strongly tipped to become undersecretary for the environment. Green activists welcomed the choice of the former lawmaker, but said she would have to quit her role as chief executive of public-policy think tank Civic Exchange if she joined the government to avoid a conflict of interest. Loh, a lawmaker in the 1990s, has for the past decade focused on environmental and social policy research. She is regarded as a pan-democrat - a rarity in the government - because she founded the Citizens Party and championed democratic reforms. Ivan Choy Chi-keung, a political scientist at Chinese University, believes Loh's track record as an advocate for universal suffrage may help boost the image of Chief Executive Leung Chun-ying's administration. Loh remained tight-lipped yesterday. "Whatever question you ask me, I will only say 'no comment'," she said. Spokesmen for the Environment Bureau and the Chief Executive's Office also declined to comment. "The selection process for the undersecretaries is still in progress and will be announced in due course," the government said. It is understood that Loh was offered the post of environment secretary by former chief executive Donald Tsang Yam-kuen in 2007, but it was strongly opposed by some Beijing-loyalist groups. Loh was tipped as a candidate for the post earlier this year, but Leung appointed architect and Green Building Council member Wong Kam-sing instead. In June, Loh denied that she had applied for the job. Leung's aides failed to find candidates for the position, and for undersecretary posts at four other bureaus, and so restarted the recruitment process. A person familiar with the situation yesterday confirmed that Loh was offered the job, but said it was not certain that she would get it. An environmental activist, who declined to be identified, said Loh was capable and had extensive research experience in environmental policy. She was also willing to listen to others, the activist said, adding: "I think she can match well with Wong." Greenpeace campaign manager Gloria Chang Wan-ki said: "I think she is very experienced and capable ... but if she is appointed, she should consider giving up her think tank role because it may lead to a conflict of interests." Civic Exchange's financial sponsors include power firm CLP. The Environment Bureau's responsibilities include monitoring power companies.

The fledgling Digital Broadcasting Corporation will go off the air next month - after only three months in operation - amid accusations of "politically motivated" suppression. Station co-founder Albert Cheng King-hon said yesterday the station was popular but had to shut down because a major shareholder - Beijing-loyalist Wong Cho-bau - refused to top up his investment because of political reasons. "We have been doing well," said Cheng, a critic of Chief Executive Leung Chun-ying's administration and a former legislator. "We have so far invested HK$150 million and we just need an additional HK$50 million. We can break even in about a year. "But Wong has kept saying we should fold. I heard the Beijing liaison office does not like us. "If the shareholders don't inject money, there is nothing we can do but cease operations." Cheng said his outspokenness might have angered Beijing and the Leung administration. He was widely reported to be a supporter of Henry Tang Ying-yen, Leung's rival in the chief executive election. Wong came to public attention earlier this year for offering a bargain lease on a luxury Shenzhen penthouse to then-chief executive Donald Tsang Yam-kuen. Wong says he wants to cut his losses on his investment in the broadcaster. He is understood to have received support from some shareholders, including Bank of East Asia (SEHK: 0023) chairman David Li Kwok-po, Executive Councillor Professor Arthur Li Kwok-cheung, and VTech Holdings (SEHK: 0303) chairman Allan Wong Chi-yun. Commenting on those initial investment losses, Cheng said: "Even an idiot knows you can't make quick money by investing in a media company. It takes time." "Our [staff members] understand the real situation well, and I have told them that we should feel honoured, though defeated." About 100 workers will lose their jobs, and HK$10 million has reportedly been set aside for their severance pay. DBC would have no trouble paying the staff's August salaries, Cheng said. Cheng was a host of Commercial Radio's current affairs talk show Teacup in a Storm until 2004, when his contract was terminated amid political pressure from Beijing. Cheng later became a legislator. DBC had its soft launch in September last year and began full operations in May. A spokesman for the Commerce and Economic Development Bureau, which oversees broadcasting, declined to comment on Cheng's claim of political interference.

At least four people who attended a dinner that left the chief executive's election campaign embroiled in rumours of triad links are among 130 arrested in an anti-triad crackdown. The meeting in February between rural leaders and Leung Chun-ying's campaign aides became an election issue due to the presence of controversial businessman Kwok Wing-hung, known as "Shanghai Boy". Kwok and fellow diner "Little Boy" Cheung Chuen-hon are understood to have been arrested, as were rural leaders Tsang Shu-wo and Tang Lai-tung, who are campaigning for Chan Keung in the Legco elections. Police launched a two-day operation on Wednesday, targeting crimes including the laundering of HK$300 million. Some 200 police officers raided 21 locations, arrested 130 people and seized HK$8 million in crime proceeds, including HK$3.4 million in local and foreign currencies, 11 watches and two cars. The officers were from the organised crime and triad bureau (OCTB), the narcotics bureau and the New Territories North region. Anti-triad operations on such a scale are rare in the New Territories. The raids were part of a joint operation with Macau and Guangdong police against the triad groups Wo Shing Wo and 14K, both active in Yuen Long district. Prominent office bearers are believed to be among those arrested. Police denied the operation had anything to do with the elections, although some rural politicians believe there could be indirect links. OCTB Superintendent Lau Shu-sing said police started their investigation late last year, and intelligence showed that HK$300 million was being laundered by the two sophisticated, mid-sized gangs over the past two years. "There is intelligence suggesting that a group of triads used their own accounts and accounts of their wives and mistresses to launder a large amount of money," Lau said. Chief Superintendent Kwok Ho-fai said police were investigating whether the money laundering involved any property investments. "The triad personalities obtain their profits from illegal activities such as [running] gambling dens and then investing the money to buy expensive items, creating an illusion that they get the profits from lawful means," Kwok said. Some 110 people were arrested in four gambling dens. Police said the dens were making HK$100,000 a day for the two gangs. The 84 men and 46 women, aged 30 to 69, were detained on suspicion of money laundering, running illegal gambling and vice dens, and selling illicit fuel. Some of those arrested remained in police custody. The operation was still under way and police did not rule out more arrests. However, Kwok denied media reports that rural leader Leung Fuk-yuen was among those arrested. Nor was Leung asked to help with police inquiries, Kwok said. Leung said he was taking legal advice over the reports. Meanwhile, Yuen Long police are investigating an unrelated complaint from Leung Che-cheung, who is running in New Territories West in the Legislative Council elections next month. Leung, a member of the Democratic Alliance for the Betterment and Progress of Hong Kong, thought there could be indirect links to the elections. The candidates running for the New Territories West constituency include Kwok Ka-ki, Chan Han-pan, Tam Yiu-chung, Alice Mak Mei-kuen, Mak Ip-sing, Michael Tien Puk-sun, Leung Yiu-chung, Lee Wing-tat, Josephine Chan Shu-ying, Albert Chan Wai-yip, Lee Cheuk-yan, Tsang Kin-shing, Chan Yut-wah and Junius Ho Kwan-yiu.

Medal winners for the Keirin Olympic cycling competition show off their hardware at the Velodrome in East London on Friday: silver medalist Guo Shuang of China, left, gold medalist Victoria Pendleton of Britain, centre, and bronze medalist Lee Wai-sze of Hong Kong. Lee Wai-sze punched the air and smiled the smile of a gold-medal winner – it didn’t matter to her that it was only a bronze. The 25-year-old handed Hong Kong its first ever Olympic medal in a cycling event – and only its third Olympic medal ever – when she finished third to Victoria Pendleton of Great Britain and Guo Shuang of China in the women’s keirin final at the velodrome in London on Friday. “I’m very excited,” Lee said. “Last year my coach helped me make progress. We all worked really hard and that’s why we’ve got this breakthrough. I was feeling very confident and I believed I could win a medal.” The performance was greeted with joy and relief by Hong Kong officials – joy that it ended an eight-year wait and relief that Hong Kong will not return empty-handed like they did from Beijing, thus justifying the government’s increased support for the sport. “This is a great moment for Hong Kong,” said an elated Timothy Fok Tsun-ting, president of the Hong Kong Olympic Committee. “She has done us proud and she showed a lot of courage, coming from behind after losing in the first heat.” Hong Kong’s other Olympic medals are Lee Lai-shan’s gold in windsurfing at Atlanta in 1996 and a silver for table tennis pair Li Ching and Ko Lai-chak at Athens in 2004. Coach Shen Jinkang, who has transformed Hong Kong into a powerhouse in Asia, was a little more subdued, believing Lee has the talent to win gold. “I think she could have got a silver or even the gold medal,” Shen said. “Sometimes she wasn’t brave enough to seize opportunities. I’m glad but not completely satisfied. There won’t be a huge celebration for us because I was expecting a better result.” The keirin is an unpredictable and physical event where riders line behind a pace motorbike called a derny. Riders can jockey for position behind the derny but are not allowed to pass it. The race then turns into a massive sprint when the derny leaves the track with two-and-a-half laps to go. Two years ago, the government identified four elite sports at the Hong Kong Sports Institute as priority targets, giving badminton, table tennis, windsurfing and cycling extra funding. Lee’s bronze medal is at least some vindication the money has been well spent. HKSI chief executive Trisha Leahy, who was also among the Hong Kong cheering squad at the velodrome, said the result had set another benchmark for Hong Kong. “Lee has shown that Hong Kong athletes have the ability to compete against and beat the world’s best. She has set a benchmark and this should be an ongoing expectation for us,” Leahy said. “Credit must go to coach Shen and government support has been central to the establishment of a comprehensive elite training delivery system for the associations and, in particular, the priority target sports funding has been essential to this result. It proves that strategic funding in the right areas, at the right time, can produce world-class results,” Leahy said. Lee made it known that she had become a world-class athlete when she beat gold medalist Pendleton 2-1 in the Olympic test event to take a World Cup sprint bronze in the same arena in February. After moving a step closer to an historic cycling gold for China, Guo is hoping for better when she begins the sprint events on Sunday. “I can’t say we’re not disappointed, but I feel we’ve made tremendous progress. Hopefully, we’ll go one better next time,” Guo said.

 China*:  Aug 6 2012

The Chairman Mao Memorial Hall and the Monument to the People's Heroes are likely to be included in the UN application for world heritage status, according to an official from the Dongcheng district Culture Commission in Beijing. The ancient block commonly known as the "Central Axis", which authorities intend to include in their application for Unesco world heritage status, covers a 7.8-kilometre strip between the Yongding Gate, the reconstructed former front gate of the outer section of Beijing's old city wall, in the south to the Drum Tower in the north. Beijing started its application process last year, but the plan previously only covered buildings from the Ming and Qing dynasties. It is now being recommended the Chairman Mao Memorial Hall, commonly known as the Mausoleum of Mao Zedong , and Monument to the People's Heroes be included. Wei Ruifeng, a deputy director of the Dongcheng District Culture Commission, said both structures should be listed despite them being only a few decades old. "Both structures constitute heritage and a heritage site does not have to be 100 years old to qualify as a world heritage site," Wei said. He cited the example of the Sydney Opera House, which opened to the public in 1973 but was included in the World Heritage list in 2007. However, heritage authorities have remained tight-lipped over how many sites will actually be included in the application and if the mausoleum and the monument would be listed as well. Professor Lu Zhou, director of the Institute of Architectural History and Historical Conservation at Tsinghua University, earlier told the Beijing Times that 22 sites including Mao's mausoleum and the monument were likely to be included. The matter has drawn criticism on the internet. One commentator, citing the political upheavals and mass deaths under Mao's rule, said a site housing the late leader's body should never be part of honoured monuments but rather a reminder of national shame. A blogger under the name of Yi Daochan said that if Mao's mausoleum were included, an otherwise promising bid would fail because worship of the body of a political figure was at odds with the Unesco charter on heritage.

Coach Li Yongbo watches a singles match on Thursday. Mainland media turned on the nation's state-run sports system in the aftermath of the match-throwing scandal at the London Olympics that saw star badminton players Yu Yang and Wang Xiaoli disqualified. Many commentaries blamed a fixation on accumulating Olympic gold as the cause for the players' performance on Wednesday during the women's doubles competition. Yu and her playing partner Wang were among four women's doubles teams ejected for trying to lose their final matches in the round-robin stage of the competition to secure more favourable opponents in the later knockout rounds. Yu later announced she was quitting the sport, and head coach Li Yongbo made a public apology through Xinhua, saying the behaviour of his team reflected the shortcomings of the new rules, but emphasised that was no excuse. In yesterday's Oriental Morning Post, prominent commentator Liu Hongbo said sports authorities were so anxious for gold they had no problem sacrificing deeper values. He drew a comparison with how the government pursued economic growth no matter the cost to public health or the environment. In a commentary titled "Medals mania and GDP worship", Liu said the only goal under the national sports system was for athletes to bring home gold. "Athletes have been separated from their families and the real world. They are kept in the dark even if their family members are in critical condition or have died," Liu said. Liu was apparently referring to diver Wu Minxia, who came first in synchronised diving at the London Games. Her family decided to wait until after the competition to inform her that her mother had contracted breast cancer and two of her grandparents had died a year ago, according to a report in the Shanghai Daily. Liu continued: "Losing a match will be called 'humiliating'. Winning silver will be commonly described as 'failure to achieve gold'." He pointed to reports in mainland media of the government organising viewing parties in the hometowns of Olympic athletes. If they failed to win a medal, the audiences disbanded, leaving the athletes' parents alone. The Today Morning Post ran a similar commentary on the pressures the athletes faced. "Under China's current system, the number of gold medals is the gross domestic product of sports. Gold medals translate into honour, positions, cash, cars and houses." In the China Youth Daily, commentator Cao Jing took Yu and Wang to task for playing like amateurs. "From the perspective of Yu, Wang and their coach, nothing is more important than winning gold. "China's national badminton team is already used to not playing their best in less important matches or even withdrawing from matches. Winning gold becomes their excuse to do so."

Hong Kong*:  Aug 5 2012

Astronauts who took part in China's first manned spaceship docking will arrive in Hong Kong for a four-day visit next week, the government said on Friday. The three crew members of the Shenzhou-IX space mission — Jing Haipeng, Liu Wang and the country’s first female astronaut, Liu Yang — will visit the city next Friday. The Shenzhou-IX spacecraft docked with the Tiangong-1 space module on June 24, a landmark step in the country’s programme to build a space station by 2020. The 40-strong delegation will be led by Niu Hongguang, deputy commander of China’s manned space programme, and include key commanders and designers of the Shenzhou-IX mission. A government spokesman said they would meet the media and attend a welcome dinner hosted by the government upon their arrival. They will meet local secondary and primary schools students during a sharing ses sion, and attend a variety show at the Convention and Exhibition Centre on the second day. Another sharing session will be held on third day at Chinese University where the delegation will talk about Shenzhou-9 and China’s aerospace science. Women’s groups will have a chance to learn Liu Yang’s experience in becoming China’s first spacewoman at a tea gathering on the fourth day. 神九太空人景海鵬、劉旺、劉洋將隨天宮一號與神舟九號載人交會對接任務代表團於本月中旬訪問香港。代表團並會於13至15日到訪澳門。據了解,代表團將在港澳進行近一周的訪問活動。屆時,本港民眾有望近距離目睹三名神九太空人風采。 港人對載人航天工程,特別是太空人情有獨鍾,神五太空人楊利偉,以及此後的神六、神七太空人團隊都曾在香港引爆「航天旋風」。載人航天工程和太空人團隊,亦是歷來都把訪問香港作為巡訪的首站,熱切回應港人的支持和關心。 神九太空人自6月底從天宮一號目標飛行器返回地面,經過為期兩周醫學隔離期,目前恢復良好。7月27日,中共中央總書記、國家主席胡錦濤等中央領導人,在人民大會堂會見了神九太空人及載人交會對接任務的參研參試人員代表。 預料訪港4日 - 依照中國航天員科研訓練中心的規劃,3名太空人在7月底已完成恢復療養,進入動態健康觀察期。這期間,相信可進行訪問、交流等活動。結束3個月的觀察期後,太空人將逐步開始恢復正常訓練。  消息透露,神九太空人將與天宮一號與神九載人交會對接任務代表團10日先抵香港,進行為期4日的訪問。之後再應澳門特別行政區政府邀請,於8月13日至15日到訪澳門。代表團由團長、中國載人航天工程副總指揮牛紅光率領,其他成員包括航天員景海鵬、劉旺和劉洋,以及載人航天工程相關系統的負責人等。  據了解,神九太空人訪問港澳期間,將出席特區政府歡迎晚宴、載人航天工程報告會,並與學生代表互動座談。本報翻查過往太空人訪港紀錄,發現上述時間安排,與此前神五、神六、神七太空人訪港行程基本相似。

New development secretary Paul Chan Mau-po said on Friday neither he nor his wife knew anything about the alleged illegal subdivisions in properties owned by a company in which she holds shares. Chan was responding publicly for the first time to claims he and his wife illegally subdivided two flats in Kowloon and rented the units out. Chan said neither he nor his wife Frieda Hui Po-ming was in charge of daily operations at Harvest Charm Development, which owns the two flats in Tai Kok Tsui and Jordan. “I knew my wife had properties in Tai Kok Tsui and Shanghai Street. But I knew nothing about the rental arrangements made by this company,” Chan said. “The company’s rental businesses have been managed by another shareholder,” Chan said, without identifying anyone. He said he had served as a director only in the company’s early days and quit the position in 1997. He said he had never been a shareholder while his wife is a minor shareholder but has no controlling power. “My wife had not known or approved any subdivision works in the flats,” he said. “She had no knowledge of the alleged illegal subdivision works and the operations of subdivided flats.” Chan said Hui would now ask Harvest Charm to take back the flats and rectify them. She would also sell all her shares in the company to ease public concern. Chan’s responsibilities include supervising the Buildings Department and tackling subdivided flats – which have been linked to a series of fatal fires in recent months. He was appointed to replace Mak Chai-kwong, who resigned after being arrested by anti-corruption officials 12 days into his term over alleged abuse of a government allowance. In the past two days, officers from the Buildings Departments have inspected the two flats as part of their investigation. Chan said the department’s investigators would treat the case impartially and he would not intervene in their probe. He also said claims that his wife avoided tax arising from the sale of another flat were untrue. But he did not elaborate, saying his wife would explain later.

Police said on Friday they had arrested 130 people – including key members of two triad gangs – for money laundering involving HK$300 million and other organised crimes in the past two days. The gangs allegedly operated illegal gambling dens, ran vice premises, sold illicit fuel and were involved in other triad-related activities in the New Territories, police said. The arrested people were 84 men and 46 women aged between 30 and 69. They were arrested on 21 locations in the New Territories during the operation that began early on Thursday. A large amount of cash, worth HK$3.4 million in both Hong Kong and foreign currencies, as well as two cars and 11 luxurious watches were seized, police said. These items were alleged to have come from crime proceeds. Chief superintend Kwok Ho-fai from the Organised Crime and Triad Bureau said the crackdown was part of cross-border cooperation with Macau and the mainland targeting triad crimes. Kwok rejected suggestions made by a Chinese-language newspaper on Friday that some of the arrested people were involved in offences related to September’s Legislative Council elections. The Apple Daily said the arrested people included prominent rural leaders including Leung Fuk-yuen and Kwok Wing-hung or “Shanghai boy” who were involved in a scandal over the presence of crime figures at a dinner for the election campaign of Chief Executive Leung Chung-ying. “Our operation purely targets triad activities,” Kwok said. He said the operation was still under way on Friday and refused to disclose the background of the arrested people.

A model shows exhibition goods at a news conference held by the Hong Kong Trade Development Council on Aug 1, 2012. The council announced that the Hong Kong Food Exhibition, Hong Kong International Tea Exhibition and International Modern Chinese Medicine and Healthcare Products Exhibition will be held from Aug 16 to 20. 

Hutchison Whampoa Chairman Li Ka-shing (Right) looks at his son Victor during a news conference announcing Hutchison Whampoa Ltd's interim results in Hong Kong August 2, 2012. Hong Kong 'priority choice' for Li Ka-shing's investment - Tycoon bullish over biz prospects of his companies in next 5 years. Tycoon Li Ka-shing is confident that all companies controlled by his family will grow over the next five years, provided that the global economic conditions do not deteriorate further. "Unless there is (a) war or other huge unpredictable events happening in Europe, I am sure that the group's infrastructure, ports and telecommunication businesses will fare 100 percent better in the next five years," Li said at a press conference on Thursday. "We exercise prudential management to guard (against) any unpredictability in the external macroeconomic environment," he said after announcing the interim results of his flagship companies Cheung Kong (Holdings) Ltd and Hutchison Whampoa Ltd. Hutchison Whampoa, the ports-to-mobile phones conglomerate, which has operations in 53 countries and employs more than 260,000 people, posted a 13 percent jump in recurring profit to HK$9.8 billion ($1.3 billion) from the HK$8.7 billion a year ago. That exceeded the market median expectation of HK$9.55 billion. The conglomerate announced an interim dividend of HK$0.55 per share, which remained unchanged from a year ago. However, the conglomerate's net profit for the six months ended June plummeted 78 percent to HK$10.2 billion from the HK$46.2 billion a year ago due to a lack of one-time asset disposal gain. Last year's net profits were boosted by the spin-off its port assets in Hong Kong and southern China through the IPO of the HPH Trust, which raised HK$37.2 billion. "In the first half, deteriorating economic conditions affected many of the markets and geographies in which we operate to varying degrees," Li said. "However, the group is well positioned for continued growth and will continue to invest and expand its core businesses." Li also reiterated that the group would continue to invest in business projects in Hong Kong and the mainland. "If I could earn $100 overseas but only $80-90 in Hong Kong, I would still choose to invest in Hong Kong, as I love this place. I will consider Hong Kong as my priority choice in making investments." Meanwhile, Cheung Kong (Holdings)'s first-half recurring profit also beat analyst estimates as rental income and the value of its investment properties increased. Stripping out the property revaluation gains and the Hutchison Whampoa's profit contribution, Cheung Kong (Holdings)' underlying earnings dived 9 percent to HK$7.5 billion which was still better than the median market forecast of HK$4 billion to HK$6.6 billion. Cheung Kong (Holdings) will pay an interim dividend of HK$0.53 per share, the same as a year earlier. However, the developer's net profit tumbled 54 percent to HK$15.4 billion from the HK$33.2 billion in the first half of 2011, while earnings were boosted by a HK$18.6 billion one-time gain, Cheung Kong (Holdings) said in a statement. "With a net debt to net capital ratio of 6.1 percent as at June 30, Cheung Kong (Holdings) is poised to continue to bid for more land parcels in Hong Kong in the future. The company's land bank is sufficient for residential project development up to the next four years," Li said. In July, the Cheung Kong (Holdings) had sold nearly 7,000 residential flats in Hong Kong, Macao, Singapore and the mainland that contributed nearly HK$32.4 billion cash inflows to the company. Hutchison Whampoa shares have risen 5.5 percent so far this year, compared with a 6.8 percent decline in the benchmark average. Hutchison Whampoa's Thursday share price slumped 1.15 percent to HK$68.65 a share. Meanwhile, Cheung Kong (Holdings) closed 1 percent lower to HK$102.3 per share on Thursday. The share prices have risen 11 percent this year, the second least in the seven-member Hang Seng Property Index, which gained 13 percent.

 China*:  Aug 5 2012

Chinese Demand Apology for Ye Shiwen - China’s Ye Shiwen poses with her gold medal for the women’s 200-meter individual medley swimming final at the 2012 Summer Olympics in London. Chinese passions for champion swimmer Ye Shiwen continue to roil the nation’s social-media sites on Thursday, including mounting calls for those who have questioned her performances to apologize. Ye scored successive wins in both the 400- and 200-meter individual medley races earlier this week, setting two new Olympic records and one new world record. That prompted John Leonard, the executive director of World Swimming Coaches Association, to say her record-breaking Saturday performance was “disturbing.” On Tuesday, he added that either it was “the greatest swim in history” or “something that is not correct.” Chinese Internet users have since insisted Mr. Leonard say he’s sorry – and they’re becoming rather insistent. In an unscientific poll conducted by the Chinese-language online edition of The Wall Street Journal, 92% of 6,653 voters voted in favor for an apology. “An apology is very much required – this is a gross violation of [Ye’s] reputation,” said one user of the Sina Weibo microblogging service. Many users echoed the same opinion. Ye herself seemed unfazed Thursday, writing on her verified Weibo account: “Today, I have completed all my races! I am very grateful for all the support I have received, including those who doubted me in the Western media! Thank you again for all the support!” But one prominent online figure in China took what he later said was a step too far in the quest for an apology. Lee Kaifu, the former president of Google China, midmorning on Thursday posted Mr. Leonard’s home address on Weibo, where he has 15 million followers. In the post, Mr. Lee urged people to contact the coach to ask for an apology, though he added the importance of employing a “civilized” manner in the quest for an apology. Mr. Lee later deleted the post, but not before it had been captured and spread around the Internet. In an email to The Wall Street Journal, Mr. Lee stated he “felt outraged” after reading Mr. Leonard’s “unfair accusations” and sent an email to Mr. Leonard asking for an apology. He explained his Weibo post was an attempt to enlist others to reach out to Mr. Leonard. Mr. Lee concluded his email apologizing again for his actions. But also added: “I sincerely hope that John would also consider an apology to Ye Shiwen.”

Acting Budget Director Jeff rey Zients with Deputy Secretary of Defense Ashton Carter (right) testifi es before the House Armed Services Committee hearing on defense cuts on Capitol Hill in Washington on Wednesday. US Asia-Pacific strategy 'not about China' - Fresh from a visit with allies in Asia, a top Pentagon official on Wednesday dismissed concerns that the US' strategic rebalance of the Asia-Pacific region is intended to counter a rising China. "This rebalance is not about any single country or group of countries. It is not about China or the United States. It's about a peaceful Asia-Pacific region, where sovereign states can enjoy the benefit of security and continue to prosper," Deputy Secretary of Defense Ashton Carter told a crowd at the Asia Society in New York. "We seek to strengthen our very important relationship with China, and believe that China is key to developing a peaceful, prosperous and secure Asia-Pacific region," he said. Carter, who just returned from a 10-day trip to the Asia-Pacific region with stops in India, Japan and the Republic of Korea, described the rebalance as one of the most prominent and important areas of US strategy. Since US President Barack Obama announced the new defense strategy in the Pentagon in January, many top US officials — Obama, Secretary of State Hillary Clinton and Defense Secretary Leon Panetta — have visited Asia. The US is committed to developing a sustainable military-to-military program with the Chinese to improve mutual understanding and reduce risk, Carter said. "The leaders of both countries have spoken to their respective militaries and said we don't want a zero-sum or less than zero-sum game. The Chinese leaders said exactly the same thing and we hear that," he said. Vice-President Xi Jinping paid a visit to the Pentagon during his trip to the US in February while Defense Minister Liang Guanglie visited the US in May, the first by a Chinese defense minister in nine years. It's impossible for Washington to neglect cooperation with China in the region, but its increasing military disposition and intensive drills that excluded China have harmed mutual trust, said Shen Yamei, a researcher on American studies with the China Institute of International Studies. Washington's closer military ties with its Asian allies, especially with countries that have competing territory claims with China, have aroused concerns about US interference in regional issues. The US position on freedom of navigation, including the South China Sea, is not to take sides in territorial disputes, Carter said. But he noted that Washington will take sides with a collective approach to common problems, without clarifying which issues he was referring to. Carter also said the US leverages "multilateral forums, like ASEAN, to address international law and norms issues, like the excessive claims being made on the South China Sea", without mentioning whether the South China Sea isles claimed by both China and the Philippines fall into a mutual defense treaty signed between Washington and Manila in the early 1950s. Bonnie Glaser, a senior fellow at Center for Strategic and International Studies, said last week that the US has been careful not to state that the disputed area falls under the treaty. "We don't want to alienate China. The goal is not to have a zero-sum competition between the US and China in the region," said Glaser, admitting that the US is in a dilemma when different groups of countries have different hopes for the US in the Asia-Pacific. While some have questioned the US' capability to accomplish its strategic rebalance given the poor economic and tight budgetary situation, Carter expressed confidence that the US will have the resources to accomplish all of the tasks. The US often begins its strategic shift with strong military investment instead of consolidating economic or political ties, Shen said. "Once the regional tension escalates, Washington's interference will be logical and feasible."

Hong Kong*:  Aug 4 2012 

Property developer Cheung Kong (SEHK: 0001) said on Thursday its first-half net profit slumped 54 per cent from a year ago, due partly to falling income from property sales. The cornerstone of billionaire Li Ka-shing’s business empire said its net profit for the six months ended June 30 fell to HK$15.46 billion (US$1.99 billion) from HK$33.26 billion a year earlier. Revenue was 32 per cent lower at HK$17.72 billion from HK$26.10 billion, it said in a statement to the Hong Kong stock exchange. “During the period, residential property prices remained stable in Hong Kong on the back of solid demand from end users,” the company said. But in the mainland, it said property prices and sales were “below expectations as the property market correction has continued”, amid a broader slowdown in Chinese economic growth. Prices of residential apartments have been falling in Hong Kong, with sales worth HK$31.8 billion in July representing a 6.7 per cent fall from the previous month, according to official figures released earlier on Thursday. The earnings contribution to Cheung Kong from 49.97 per cent-owned conglomerate Hutchison Whampoa (SEHK: 0013) climbed 12 per cent to HK$5.10 billion from HK$4.56 billion, the company said. Cheung Kong has invested heavily abroad as it seeks to broaden its earnings base outside of Hong Kong, which has provided it with a springboard into China. A consortium led by Li agreed last month to buy British gas distribution company Wales & West Utilities, which supplies 7.4 million customers in Wales and southwestern England. The group’s ports division started commercial operation of two new deepwater berths last year in the Port of Felixstowe, the largest UK container port, and acquired operating rights to four berths in the United Arab Emirates. The 84-year-old tycoon has dismissed suggestions that he is about to retire, but in May he confirmed that his eldest son, Victor Li Tzar-kuoi, will eventually control Cheung Kong. Li, who’s businesses employ 270,000 people in 53 countries, was named the richest man in Asia by Forbes magazine with a fortune estimated at US$25.5 billion. Cheung Kong shares fell 1.06 per cent to HK$102.30 at the close of trade in a broadly weaker market, before the results were announced.

Chief Executive Leung Chun-ying will postpone his maiden policy address from October to January, saying he wants more time to consult newly-elected legislators on his blueprint. A government spokesman on Thursday said this year saw the change of both the government and legislature, and Leung aimed to consult legislators to be returned in next month’s election on his policies. The next Legco term will begin on October 1, the day after the current Legco term ends. “It is our wish to foster a constructive partnership with Legco on the formulation of the policy address,” the spokesman said. “In order to allow sufficient time for a full-fledged consultation with members of the new term LegCo, the Chief Executive will deliver his first policy address in January next year,” he said. Chief Secretary Carrie Lam Cheng Yuet-ngor said on Thursday afternoon the date was set for January 16. The deferral comes as Leung and his cabinet members are embroiled in a string of scandals and controversy. His first development minister, Mak Chai-kwong, resigned 12 days after taking office and was arrested over corruption charges for alleged abuse of a government allowance. Paul Chan Mau-po, who was appointed Mak’s successor on Monday, is being investigated by buildings officials – whose department he supervises – over claims his wife illegally subdivided properties. Leung himself is also facing calls to explain six illegal structures found at his home and to drop plans to launch the national education curriculum in schools. In an article published in eight Chinese-language newspapers on Thursday, Leung called for different sectors to unite so that Hong Kong could focus efforts on economic issues. Leung said his government must first strive for economic development. “For the government to work, it must have the space, energy and time to plan for how to make use of opportunities and overcome external deadlocks,” Leung said. The government said the delayed policy address would not affect the announcement of measures he pledged earlier to improve people’s livelihood. Such measures would be announced when ready, instead of waiting for the address, he said. Despite delaying the policy address, Leung still plans to address Legco on October 17. The government spokesman said Leung would elaborate on his governance concepts, review his work in the first three months and outline his policy directions and work priorities for next year. The policy address is traditionally announced in early October each year to lay down the government’s plan for the next 12 months. The only exceptions were the three years from 2002 when former chief executive Tung Chee-hwa changed it to January. It reverted to October under Tung’s his successor, Donald Tsang Yam-kuen, in 2005.

Elaborate menus for junk trips now include deep-fried treats, delicious salads and barbecues. Finger food such as dips with healthy dippers are perfect for all-day snacking, while prawns make a luxury treat. Junk catering is taking a step up. Elaborate menus now include fresh pasta dishes, Mediterranean classics and onboard barbecues. Those sailing out in the evening can even try squid fishing and have their catch barbecued for them. Whatever the menu, junk trips are a quintessentially Hong Kong experience and have an enduring appeal. For Rose Torrance, who receives about 10 junk trip invitations over a typical summer, such cruises represent "a small part of a decadent lifestyle that's affordable". Kiri Sinclair has her own take on why junk trips are so popular. "Hong Kong has the unique advantage of being a mega city surrounded by natural beauty. Junks allow easy and fun access to the outer reaches [or even inner reaches] of the countryside, with spectacular views and a day on the water," she says. Cruising to a picturesque spot where the water is clear, the wine and beer are flowing and the company is enjoyable are the key to junk trips' appeal. But between the swimming and sunning, there's eating. For Sinclair, the food should be easy to nibble on. "Lots of finger food is essential. People like to nibble all day. Dips with healthy dippers like carrots are a treat. Pre-prepared sandwiches and pasta are easy to eat. I also love a seafood barbecue." Charlotte Bliss, a junk food regular, likes easy snacks such as crisps, quesadillas and pizza. "Tasty salads are appreciated," she says. Torrance prefers to bring her own food and wine on a cruise, rather than have it supplied. "I like to eat well when I'm on a junk. As long as the food is tasty and of good quality, I am not picky." If you want someone else to do the work, there are plenty of catering options, including three new players on the market. Irene Moore was so sure she had discovered a niche that she gave up her job as an accountant to launch her business, Lazydays, which offers both the craft and the catering. "I found that there was a gap in the market where I could combine the three things I enjoy the most: cooking, sailing and entertaining." Attention to detail and a little added luxury were missing, according to Moore. "It's often the small things that are missed on traditional junk trips," she says. "It's the small things that make the difference. For example, our menu features the best ingredients and everything is made fresh on the boat, even the pasta. We only serve craft beers and ales, as well as brand-name spirits, and I like to make frozen cocktails from fresh fruit during the trip. Plates, glasses and cutlery are used, not the flimsy disposable paper plates and plastic cutlery typically found." She adds that unlike other junk experiences, "we realise that not everyone wants a beer at 10am". So they offer gourmet teas and have a coffee machine onboard. "You can have a gourmet cuppa from freshly ground beans to go with our breakfast of bacon butties and cinnamon rolls," Moore says. The catering can get elaborate, even ritzy. At night, Moore offers a full sit-down dinner service with tailored menus, from a simple three-course affair to a more elaborate six-course meal. Moore's repertoire includes five-spice duck breast with citrus-fennel salad; monkfish, mussels and clams with saffron broth and fresh linguine, and chocolate fondant puddings with home-made orange ice cream. Lunch is also a world away from sandwiches and curry puffs. Moore offers whole roasted joints (rib-eye, leg of lamb) and chilli and lime king prawns. Side dishes include white bean, red pepper and mint salad, and citrus salad with feta and olives. The options don't end there - sample menus also include breakfast options, all-day nibbles, a selection of desserts such as lemon meringue pie, and afternoon snacks including samosas and cheese puffs. Other options include a do-it-yourself barbecue, with Moore providing meat and seafood for guests to barbecue themselves, plus side dishes and salads. At night, squid fishing is possible, with the catch barbecued on board the vessel by Moore. This is served aboard an 18-metre, triple-decker motor cruiser with three outdoor decks. Bringing in your own caterer is another option. Two French restaurants, Chez Patrick and Monsieur Chatté, have just begun to provide such a service. "We want the food to stand out and not be the usual junk buffet. Our chef service assists clients by explaining the buffet options and guiding them in their choice," says Chez Patrick managing director Daniel Schneersohn. The catering arm of Chez Patrick provides not only standard and custom menus but can also supply chefs, waiting staff and a hostess. Menus are varied, with a broad choice from French and Italian deli classics. Cold dishes include the summery Mozzarella and tomato with balsamic caramel sauce; buttery smoked salmon, cold cuts, quiches, terrines and foie gras. Hot dishes include coq au vin, a range of pastas and roasted ham. Brittany blue lobster and other premium seasonal ingredients take menu options to a luxury level. For those who like a hands-on approach there is also a barbecue menu that includes meat and seafood and home-made sausages. Wines are also available. Monsieur Chatté introduced junk menus in response to many inquiries by regular customers. Three menus are available and items can be changed to meet requests, with the food delivered to the pier. The food is classic French fare that can be served cold, such as quiches and tarts, cheese and charcuterie platters, salads and cakes and pastries. An aperitif set that includes olives, tapenade and nuts is also available, as are wines, beers and soft drinks. Managing director Jean Yves Chatté says: "Customers will get fresh products, prepared specially for them in our kitchen, with the usual French touch." Sinclair, who averages eight junk trips each summer, says: "I love being on the sea. The idea of a group of friends going out together for a day of swimming and food on the open water is magic. It's a chance to catch up and to feel like you've left the city behind for a mini holiday. My parents had a boat when I was a baby. I've been out on Hong Kong waters my whole life." She has also enjoyed catering by more established operators, particularly Jaspa's Junks. Torrance is a fan of Jaspa's and Delicious Catering. Both operators emphasise international flavours. Delicious customers tend to order assorted sandwich platters (chicken tandoori, char-grilled vegetables, smoked salmon with all the trimmings); salads (Caesar, classic Greek, Parma ham with wild rocket); roast chicken; egg noodles with barbecue pork; vegetarian pasta; and chocolate cake and fresh fruit platters. Delicious can provide just the junk (or cruiser), or an all-inclusive package that includes the boat, food, an open bar and staff. Jaspa's international choices include hits such as lamb koftas, chicken satay, vegetarian mousaka, beef tenderloin, salmon with white wine sauce, salads and chocolate cake. Perhaps their customers are more interested in the drinks. Communications manager Nikki Sayell says: "We have a reputation for being a party boat. This is so true, as your glass will never be empty." Jaspa's provides junk-only or junk and catering on weekdays. At weekends, it provides the boat and food package only.

Lenders are offering incentives - mainly high interest rates - to lure non-residents, who can now open yuan accounts in Hong Kong. Hong Kong lenders are getting ready to battle it out for non-residents who want to open yuan bank accounts in the city. Non-residents were allowed to open yuan accounts from yesterday. The three note-issuing banks - HSBC, Standard Chartered Bank and Bank of China (Hong Kong) - as well as Hang Seng Bank (SEHK: 0011) and some private banks rushed to offer incentives, mostly high interest rates, to compete for non-resident business. Previously, anyone without a Hong Kong identity card was barred from opening yuan accounts here. But the Hong Kong Monetary Authority, the city's de facto central bank, announced last week it was lifting the ban to attract overseas investors to trade yuan products here. Hang Seng Bank has offered a special 6.38 per cent interest rate for one-week yuan deposits. HSBC is offering a rate of up to 2.9 per cent for 12-month yuan deposits, while Standard Chartered Bank is offering 2.8 per cent. The typical interest rate on yuan deposits is about 1.5 per cent, while Hong Kong dollar deposits are set at almost zero. All three lenders said non-residents opened yuan accounts yesterday at their respective banks, but each declined to give details about the account holders. Yuan deposits in Hong Kong in June stood at 557.7 billion yuan (HK$684.08 billion) down 11 per cent from the peak in November 2011. The decline is due to the fact that many investors believe the value of the Chinese currency this year will be flat against the US dollar, in contrast to its 30 per cent appreciation since 2004. The yuan is not yet fully convertible, but Beijing has gradually relaxed rules since 2009 to encourage the use of the currency to settle trade and for investment globally. Claude Haberer, head of Asia wealth-management operations at Swiss private bank Pictet, said non-resident private bank clients would definitely be interested in opening yuan accounts in Hong Kong. "The yuan is becoming an international currency. It is also stable and linked to the strongest large economy in the world. When the US dollar and euro are showing high volatility and fundamental economic weakness, the yuan will [increasingly] be seen as a safe haven," Haberer said. "Offshore yuan accounts and related investments, bonds in particular, have become basic products a Hong Kong-based private bank must offer." Under a Beijing rule, from 2004 Hong Kong residents were allowed to open yuan bank accounts. They can only exchange up to 20,000 yuan a day but can remit 80,000 yuan a day back to the mainland. Non-residents aren't subject to an exchange cap, but they are prohibited from sending money back to the mainland.

Bread dumped in July by ParknShop, before the expiry. The two largest supermarket chains - ParknShop and Wellcome - have acted on criticism of their record on food waste, with one donating items to the needy and another in talks with a leading food bank. But green campaigners say the two chains, which came under fire in May after they were discovered to be throwing away huge quantities of edible food, should do more. In an industry first, ParknShop has partnered with Food Angel, a redistribution program created by the Bo Charity Foundation in March last year. Since early last month, eight ParknShop stores in Chai Wan have been donating up to 10kg of fruit, vegetables and bread every day to Food Angel, which turns them into hot meals to be handed out in Chai Wan and Sham Shui Po. The pilot program started at the Island Resort superstore in Siu Sai Wan. ParknShop, Wellcome and the city's other main supermarket chains, Jusco and CR Vanguard, have faced criticism after Friends of the Earth conducted research that showed the stores were throwing out 29 tonnes of edible food every day instead of giving it to food banks. A spokeswoman for ParknShop said yesterday there were no immediate plans to roll out the program to all its stores - it has about 250 branches under its own name and other brands such as Taste and Great - because it needed to do more research. The chain also limits the types of food donated, with staff choosing fruit and vegetables that are slightly damaged. Food that was thrown out because it was close to reaching its expiry date was not part of the program, the spokeswoman confirmed. "For other products, we are still studying the feasibility," she said. At present, the amount of food not yet past its sell-by date that is thrown out citywide would feed 48,000 families of three for a day. The agreement includes a clause that protects ParknShop from liability in the event of anyone getting sick from a donated meal. Meanwhile, a spokeswoman for Wellcome said last night it was partnering with Feeding Hong Kong to launch a pilot food donation program. She could not provide a start date but said the plan was in final stages of discussion. A spokeswoman for Jusco said: "After contacting more than 10 food banks and food waste recyclers, we are still studying a feasible way to handle the food waste." Friends of the Earth environmental affairs manager Michelle Au Wing-tsz said she hopes ParknShop's actions will spur other supermarket chains to donate their excess food. "We urge Wellcome and Jusco to speed up their discussions," Au said. The group's research found each supermarket in Hong Kong throws out about 134kg of food every day, with one-third being edible goods. Diana Man, Food Angel operations director, said it was also in talks with CR Vanguard on donations of food that were damaged in transit. Robin Hwang, executive director of charity Foodlink, spoke about the city's wasteful habits at a TEDx talk yesterday on charities' able impact held in Wan Chai last night and welcomed ParknShop's actions. "It's a step in the right direction and hopefully, the other supermarkets will be more willing to donate," she said.

The new-look Commercial Press store in Causeway Bay is set to take on its Taiwanese challenger. Commercial Press, the city's biggest bookstore chain, is speeding up improvements ahead of competition from Taiwan. The chain is renovating stores and is also upgrading staff with the introduction of an internal exam. The moves come as Eslite, one of the biggest Taiwanese chains, prepares to open its first Hong Kong branch later this month. Renovations of Commercial's four-storey book centre in Causeway Bay, which has operated in Yee Wo Street for 28 years, have been completed. The revamped store was soft-launched yesterday and will officially reopen tomorrow. Each floor is assigned a category, with English books in the basement, best-sellers and new books on the first floor, humanities on the second floor and children's books on the top floor. The number of Chinese titles has increased by a third, to 80,000, while the number of English titles has doubled to 25,000. More staff have been taken on and will specialise in specific categories, making suggestions on which books to buy and helping to organise themed showcases on each floor. Dr Steven Luk, Commercial's director, general manager and chief editor, said senior staff members were being tested for their knowledge of books and management skills. Questions include: "When was Charles Dickens born?" and "If a bookstore can put only three works by William Shakespeare on shelves due to space limitations, which should be chosen?" The company said training was stepped up because of a lack of cultural knowledge among staff. "Someone told me frankly that she used to work for ParknShop. She shifted to our store due to our more regular working hours," Luk said. Apart from nurturing more expertise among its employees, the chain established a team a year ago to co-ordinate sales of stationery. "They will go to stationery trade fairs in Japan ... and seek direct imports into Hong Kong," he said. During the first month of the Causeway Bay store's reopening, a discount of 10 per cent would be offered, Luk added Commercial's Tsim Sha Tsui flagship store is also featuring sharing sessions with such figures as Tung Yuan-fang, the widow of scientist-writer Chen Chih-fan, as well as the chief curator of the Museum of History, Susanna Siu Lai-kuen, and fashion designer William Tang Tat-chi. Due to space limitations, sharing sessions for more than 70 people have to be held in the Tsim Sha Tsui branch instead of the Causeway Bay shop. But book signing and reading activities can take place in the Yee Wo Street shop. Commercial Press opened an outlet across the street from the Yee Wo Street store at the start of the year solely for the sales of educational books - mainly textbooks and reference books. Luk said: "The diversification has allowed us to add more adult books to Yee Wo Street. The corridors can become more spacious too."

 China*:  Aug 4 2012

Disgraced Chinese Yu Yang has decided to quit badminton while national officials have told their Olympic team leaders and disgraced players to make a public apology for throwing matches at the London Games. Yu was among eight women’s doubles players expelled from the Games on Wednesday. The others were team mate Wang Xiaoli, South Korean pairs Jung Kyung-eun and Kim Ha-na, and Ha Jung-eun and Kim Min-jung, plus Greysia Polii and Meiliana Jauhari of Indonesia. “This is my last competition. Goodbye Badminton World Federation (BWF), goodbye my beloved badminton,” Yu wrote on her Tencent (SEHK: 0700) microblog. “We ... only chose to use the rules to abandon the match. “This was only so as to be able to compete better in the second round of the knockout (stage). This is the first time the Olympics has changed the (event’s format). Don’t they understand the harm this has caused the athletes? “You have heartlessly shattered our dreams,” said Yu. “It’s that simple, not complicated at all. But this is unforgiveable.” Yu and Wang were the top-seeded pair. The eight players were turfed out of the Olympics by the BWF for throwing matches in a bid to secure more favourable draws later in the tournament. The sight of four pairs deliberately easing off disgusted a crowd of 4,800 packed into Wembley Arena expecting to see the best of badminton’s best. Instead the fans were treated with disdain as the Chinese, Korean and Indonesian players sprayed hopeless shots into the net and beyond the lines. Their antics were also beamed around the globe to a disbelieving audience. The Xinhua state news agency said Chinese officials were demanding their disgraced players make a public apology. “The delegation has already severely criticised and educated the responsible badminton leaders, team and relevant players and demanded they profoundly recognise the seriousness and the harmfulness of this matter, reflect deeply on it, publicly apologise and resolutely prevent such incidents from happening again,” Xinhua quoted an unnamed spokesman as saying. Li Yongbo, chief coach of the Chinese badminton team, said the poor behaviour of his players reflected the shortcomings of the new regulations in the sport. “I feel that no matter whether it is the rules or something else, that’s no excuse,” said Li. “The key point is we did not behave professionally as athletes and did not treat each match seriously. “We didn’t strive with all our might in the Olympic way. From that point of view we really didn’t grasp this point thoroughly ... as chief coach I really feel I must say sorry to fans and viewers nationwide,” Li told Xinhua. The issue has generated heated debate on Chinese microblogs. While some people said the players deserved to be thrown out, others expressed sympathy. “They should certainly be punished but the burden should not fall on those two players. The trainer was the mastermind behind this. The players are only scapegoats,” wrote one user on the Twitter-like Sina Weibo.

Fishermen in Hainan and Guangdong provinces have resumed their seafaring operations after the annual fishing ban in the northern South China Sea was lifted on Aug 1. From midday Aug 1, more than 14,000 fishing boats registered in Guangdong province and about 9,000 ships in Hainan province will head out to the South China Sea.

A spokesman for China's Ministry of Foreign Affairs on Thursday refuted the US State Department's criticism of its religious freedom situation. "The Chinese people are best qualified to judge China's religious situation," spokesman Hong Lei said, urging the United States to discard prejudice, respect the facts and view China's policy on religion and its religious freedom situation in an objective and impartial way. The Chinese government protects citizens' freedom of religious belief in accordance with the law, he said, adding that people of all nationalities in the country are lawfully guaranteed full freedom of religious belief. Hong urged the United States to stop using religious issues to interfere in China's internal affairs and not act in ways that damage bilateral relations, mutual trust and cooperation. The US State Department on Monday criticized China and some other countries' religious situations in its annual report on international religious freedom.

The ice-breaker Xuelong, or "Snow Dragon", built by the Ukraine, is the nation's sole ship currently conducting Antarctic missions. China is making a big push to get an ice-breaker for Antarctic research built and steaming towards the South Pole within three years. The State Oceanic Administration (SOA) signed a contract with a Finnish ship designer in Beijing on Tuesday for the vessel. It requires the blueprints to be ready in seven months and construction to be completed by 2014. Aker Arctic, based in Helsinki, will charge more than €5 million (HK$47.6 million) for a preliminary design of the ship. Details, such as the layout of pipes, and electric and communication cables, were still to be worked out by Chinese designers, according to the company press release. The price was considered by some domestic ship designers to be high, but the government said it was fair because they wanted the work done quickly. An official with the SOA's polar exploration office said China was in desperate need of a ship for its Antarctic missions, which were being conducted solely by the Xuelong research vessel at present. Xuelong is an ice-breaking cargo ship built by the Ukraine. "It is great for cargo but inherently unfit for future missions," the official said. China must have a new ship to compete with developed countries such as the United States in the Antarctic, he said. "When finished, it will go to the Antarctic with Xuelong. With two ships, our presence at the South Pole can be significantly increased. We can carry more people, more materials and more equipment to our permanent stations." With a length of 120 metres, maximum breadth of 22 metres and draught of 8.5 metres, the ship will carry a crew of 90 and be able to break through 1.5 metres of level ice at between two and three knots. The vessel will incorporate advanced scientific equipment, according to Xinhua. It will have a laboratory with nearly 600 square metres of floor space and a large outdoor platform for experiments, observation and sampling. The biggest difference from Xuelong is that the ship will be able to break the ice by moving either forwards or backwards. However, China has no plan to challenge Russia's dominance at the other pole in the Arctic. Proposals to build a nuclear-powered ice-breaker were rejected by the government because it would upset Moscow, the official said. A nuclear-powered ice-breaker is needed for winter trips to the Arctic because the thickness of the ice increases to more than five metres and requires tremendous power to break. China would never build such a vessel or conduct such a voyage, because the "Arctic is Russia's turf", he said. Instead, the new ice-breaker, which has not been named, will mostly carry out ice-breaking expeditions to the Antarctic, where the ice is only about a metre thick. Some scientists have high hopes for the new vessel. Zhao Jun , assistant professor with SOA's Second Institute of Oceanography, who went to the Antarctic on the Xuelong last year, said that that vessel was excellent, but scientists were hoping for a ship designed exclusively for research. "The room for laboratories on board Xuelong is relatively small. Some large research equipment can't fit in, and some sensors cannot be mounted on its hull," the researcher said. "I hope the new ship can give us more room to conduct experiments and make it more convenient to conduct observations and obtain samples." After the government released the bidding offer, many designers replied but none were from China, according to the official. "I am not surprised because China has never designed and built an ice-breaker. It will take too much time to start everything from scratch. We can't afford the loss of time in a race so tight," he said. The ship will be built entirely by a Chinese shipyard. China has the world's largest ship-building capacity and the ice-breaker could be completed in a matter of months, "probably faster than it takes to design because we have many master shipbuilders", he said.

Hong Kong*:  Aug 3 2012 

Hong Kong's Yip makes Olympic final eight - Yip Pui-yin in action during her last-16 singles badminton match at the Olympics Games in London on Wednesday. Unseeded Hong Kong badminton ace Yip Pui-yin on Wednesday advanced to the last eight of the Olympic badminton competition. Yip recovered from a first set lost to France's Pi Hongyang to win her last-16 women’s single match at Wembley Arena 13-21, 21-12, 21-5. This will be Yip’s first major quarter final appearance after losing in the last 16 of the last three world championships. It was her second win over a seeded player in this competition. Two days ago, she defeated eighth seed Sung Ji-hyun of South Korea in the group stage. Yip said on Wednesday that before coming to London, she never thought she would be able to beat two seeded players. “After such a crucial performance, I think I am getting close to my best form." Yip, who has now equalled the best performance of a Hong Kong shuttler at the Olympics, will face an even bigger challenge in her next match against third-seed Li Xuerui of China. Yip, who has received a lot of support from Hong Kong through social media over the past few days, said “their support has pushed me work harder and I don’t want to let them down." Yip has also received a lot of support from her parents who came to London to see her perform. "Now they will have to extend their stay to watch my next game," she added.

New World Development will terminate the lease with Sogo department store at its Tsim Sha Tsui underground shopping centre as it prepares to redevelop the site. The developer yesterday announced that the two companies had agreed to terminate the lease with effect from February 15, 2014. Sogo will move out of the shopping centre in two stages. It must vacate part of the space for New World Development by December 1, and the final area by February 2014. New World Development will redevelop the three-storey shopping centre, formerly the Amazon, at 12 Salisbury Road when it becomes vacant. The shopping centre has a gross floor area of approximately 115,000 square feet. In 2005, the developer agreed to lease the space to Sogo for 15 years, with the monthly rent for the first 10 years to be equivalent to 6 per cent of the turnover of Sogo. The property was completed in 1997 and is the only underground shopping centre in Hong Kong. But access, which is via a tunnel, has made it difficult to attract shoppers. To improve rental income and vacancies, the developer had changed the concept of the shopping centre several times - from international brands to an amusement park called Teddy Bear Kingdom. Joe Lin, senior director of retail services at property consultancy CBRE, said the redevelopment was an attempt to create synergy with the nearby New World Centre. The complex, which is on the waterfront, is being redeveloped into a 63-storey office, hotel and shopping centre. "Currently, the underground shopping centre is isolated from the other projects. It also relies on tour buses to bring tourists and hasn't attracted many local shoppers," he said. "I think the developer will try to redevelop New World Centre and the underground shopping centre into a large commercial project similar to Harbour City in the district. They will target local shoppers and tourists at the same time."

Alexandra House is seen by one property analyst as "the jewel in the crown" of Hongkong Land's portfolio in Central. Hongkong Land, the biggest landlord in Central, has reportedly rebuffed a record-breaking offer of HK$15 billion for its Alexandra House office building in Central. An investor offered that amount, which works out to HK$45,041 per square foot, for the building in Des Voeux Road Central through an investment bank, a Chinese-language newspaper reported. The offer surpasses the HK$27,100 per sq ft Agricultural Bank of China paid for 50 Connaught Road Central, a new office building, in May. A spokesman for Hongkong Land declined to comment on the report yesterday and said the company still owned Alexandra House. A person familiar with the company said it is unlikely to sell the building. "They own 12 commercial properties in Central, and Alexandra House is one of the important ones," he said. "It is located in the heart of their Central portfolio and Hongkong Land's pedestrian bridge system. "Also, they just rebranded the shopping space at Alexandra House, The Landmark, Chater House and Prince's Building as a a luxury retail brand called 'Landmark'." Alexandra House is surrounded by the other three buildings. The 37-storey grade A office tower with a retail podium was built in 1976 and has a floor area of about 370,000 sq ft. The retail podium is fully occupied and has been leased to well-known international brands such as Prada, Burberry, Dolce & Gabbana and Ermenegildo Zegna. Property agents said most of the office space is leased, with only one small unit available at present. Lee Wee Liat, head of property research at BNP Paribas Securities (Asia), said it was a good offer but the buyer would get a rental yield of only 3 per cent. "I don't think Hongkong Land will sell Alexandra House. It is like the jewel in the crown of the developer's portfolio," he said. "I think the landlord is looking for long-term investment. The building is very precious. The site in the core Central area is very rare." One property agent said the offered price might not be that attractive given the retail podium of the building was so valuable. Despite the outlook for the office market being uncertain, Gary Fok, senior director at property consultant Cushman & Wakefield, said investors are still interested in acquiring office buildings in Central because of the tight supply in the area. "There will be a lack of new supply of commercial sites in Central in the near future," he said. Grade A office rents in Central softened in the first half owing to the weak global economy. Fok said grade A office rents in the area have dropped 10 per cent so far this year, the sharpest decline among the city's main business areas. His firm expects office rents to drop a further 8 per cent by the end of this year as the demand for space continues to fall. Lee also holds a pessimistic view regarding the market outlook for office properties. "There will be more investment banks such as Royal Bank of Scotland surrendering their office space in Central," he said. "The vacancy rate in Central will increase to more than 10 per cent. It will lead to a fall in office rents as a result." He expects Central's office rents to drop 10 per cent a year from this year to 2014. However, retail rents will continue to rise, he said.

Record 292 sign up for Legco poll - With nominations over, a fierce fight looks in store for directly elected seats and five new 'super seats', but in the functional constituencies it's another story. A record 292 candidates will battle it out for just 54 seats in next month's election for the expanded Legislative Council. As the two-week nomination period closed last night, 219 candidates had signed up to fight for the 35 directly elected seats. They will run on 69 slates, up from the 53 which contested the last election, when only 30 seats were available. The most intense race will take place in New Territories East - where 74 candidates on 20 lists will battle for nine seats. Some 16 slates will fight for nine seats in New Territories West and 14 lists will contest seven seats on Hong Kong Island. But much attention will focus on the political heavyweights battling it out for the five new "super seats" in the functional constituency for district councils - so called because they will be elected by a city-wide ballot of the 3.2 million voters without a vote in any other functional constituency. The pan-democratic and Beijing loyalist camps are both seeking to win three of the five seats. The Democratic Party is fielding its chairman, Albert Ho Chun-yan, and lawmaker James To Kun-sun on separate slates, while Frederick Fung Kin-kee of the Association for Democracy and People's Livelihood will also run. They will take on Federation of Trade Unions honorary president Chan Yuen-han and the Democratic Alliance for the Betterment and Progress of Hong Kong vice-chairman, Lau Kong-wah, as well as a DAB slate headed by vice-chairwoman Starry Lee Wai-king. Wan Chai district councillor Pamela Peck Wan-kam will run as an independent, but the Dutch-born Southern district councillor Paul Zimmerman, who has quit the Civic Party, confirmed he would not run. Seven slates will contest the "super seats". In some geographical constituencies, bigger parties are planning to run more than one slate, hoping to take advantage of a quirk in the electoral system which can make it easier for a party to elect lawmakers on separate slates rather than electing more than one lawmaker on a single slate. Under the list system used in the city, the top candidate on a slate is elected if their vote reaches a minimum quota, based on the number of votes cast and the number of seats available. The second candidate on a list is elected if the votes left over after the quota is deducted also reaches the quota. But most of those elected will not reach the quota and seats will be filled according to which slate has the next most votes. This gives highly organised parties an advantage as they can effectively split votes between lists. The DAB is running the most candidates, with three slates in New Territories West and two each in New Territories East and Hong Kong Island, with 56 candidates in total. The party fielded only one slate per constituency and 32 candidates in 2008. The Democratic Party, which enjoyed success by fielding split lists in the two New Territories constituencies four years ago, will put up 36 candidates on eight slates in geographical constituencies. The Civic Party will field 10 candidates for the directly elected seats and two for functional constituencies. Both parties will compete for support with the radical pan-democrats People Power and the League of Social Democrats, which will field their own lists in geographical constituencies. As nominations closed last night, another record was set as 16 candidates secured functional constituency seats after being nominated unopposed, up from 14 four years ago.

Birth ban will leave HK with fewer workers - Census projections show zero quota on mainland mothers having babies in city means population will age rapidly, with half aged over 50 by 2041, worse than Japan today. A ban on mainland women giving birth in Hong Kong will leave the city with fewer workers to take care of a rapidly ageing population in future, the latest projections from the Census and Statistics Department show. Half of the city's population will be over the age of 50 by 2041, the projections show, and the population profile will be even older than in countries, such as Japan, already coping with the problems of ageing. While he was still chief executive-elect, Leung Chun-ying announced in April that there would be a quota of "zero" for mainland women to give birth in the city's hospitals from next year, with an exception for those women married to Hong Kong men. The decision proved popular with Hongkongers, who fear the influx of mainland mothers will increase competition for health care and education, but the department says the ban, if extended for the next three decades, will leave the city with 330,000 fewer workers than it had previously expected. "The decline in workforce, compared to the projection two years ago, is a result of the zero quota and the rising number of elderly [people]," the department's deputy commissioner Leslie Tang said yesterday. "I do think the government should get prepared for the problem [of an ageing population]." The previous projection put the workforce in 2039 at 5.47 million, from a population of 8.89 million. The figures released yesterday put the workforce in 2041 at 5.14 million, from a population of 8.47 million. The city has long had one of the lowest fertility rates in the world. Hong Kong women typically have just one child, while an average of 2.1 children per woman are needed to keep a population steady. There have been a series of warnings about the risk of an ageing population this year. In February, a government manpower study showed the city faced a labour shortage by 2018, while the government's Steering Committee on Population Policy said in May that the city would have to consider raising the retirement age (there is no statutory retirement age in the city). More than 40,000 babies were born to mainland women in Hong Kong last year, with mothers-to-be drawn to the city by the high quality of its health care and the prospect of permanent residency for their children. Tang says previous studies have shown that 98 per cent of mainland women who give birth in the city take their child home shortly after the birth. Some 49 per cent planned to return the child to the city, in most cases before the age of six. The department expects the annual intake at kindergartens to increase by 20,000 by 2016 as a result of the influx, while the number of primary-school pupils is expected to rise by 85,000 in 2019. If its projections are accurate, there will be 645 economically inactive people - children and retirees - for every 1,000 workers by 2041, up from a record low of 333 today. If domestic helpers are excluded, the 2041 figure is 712 per thousand, against 352 per thousand today. The situation would be even worse than it is in Japan now, where there are 565 dependents per 1,000 workers, and also in European countries such as Sweden, Denmark and Britain, where every 1,000 workers support more than 500 dependents. Figures released by the department last week showed that the city's women now live longer than anyone else in the world, and the projections suggest that the trend towards longer life will continue, with life expectancy for women hitting 90.8 years, from 86.7 last year. For men, the figure would rise from 80.5 years to 84.4. Previous government projections have been criticised as inaccurate. Tang said the latest ones were not a precise forecast of what would happen and assumed the government would stick with present policies. "Our approach is internationally recognised," he said. Tang said there was still time to deal with the ageing population, as the city's dependency ratio would not return to its 1980s peak for years. But Professor Paul Yip Siu-fai, a population expert at the University of Hong Kong, said the comparison with the 1980s was inaccurate, as most economically inactive people then were children. "We had more teenagers moving into the workforce in the 1980s. Now we face a situation where many middle-aged people will become elderly. We have no chance of reducing the dependency ratio in this case." Yip criticised the ban on mainland mothers. He advocates quotas for educated mainlanders to have children here and join the workforce. He also called for more investment in education to boost productivity.

J.Crew Brings Its Brand to China - U.S. Retailer Dips Toe in Market Used to Luxury European Logos and Showing Signs of a Slowdown. After withdrawing from Japan four years ago following a botched expansion, J.Crew Group Inc. now is wooing someone new in the region: the sophisticated Chinese consumer. The U.S. clothing retailer, known for its cashmere cardigans and Capri pants, will dip its toe into Hong Kong and Beijing this autumn when it debuts its clothes at Lane Crawford—Asia's version of Barney's New York. J.Crew is scouting stand-alone retail space in an upmarket Hong Kong mall, with plans to open next year and is looking at opening stores in mainland China, according to Chief Executive Mickey Drexler. The company, which is based in New York, also is looking at a possible return to Japan. Mr. Drexler was to fly to Tokyo on Tuesday for meetings and to scout out real estate. J.Crew's move comes, however, when the once torrid China luxury market is starting to show signs of a slowdown. It isn't clear whether the U.S. line will be well-received in China, where consumers favor luxury European brands and logos. The late entrance of U.S. retailers into China means they have to try harder to build brand recognition and loyalty. "It is easy for a Chinese consumer to understand Gucci, 'It is expensive, so it must be good, and you must be someone if you have it.' How does a Chinese consumer understand the history and lifestyle that [a U.S. brand] represents?" said Franklin Yao, chief executive of consultants SmithStreetSolutions. That said, U.S.-based clothing retailers such as Gap Inc. and Levi Strauss & Co. have fared well with Chinese consumers, who have been looking for midrange, high-quality clothing, including from European brands Zara and H&M. China has become a key component of Gap's growth strategy. J.Crew this year started shipping online orders to more than a hundred countries as a way to test the markets. Hong Kong, Japan and Australia are now among J.Crew's top five international e-commerce markets. Mr. Drexler, who ran Gap for much of the 1980s and '90s, said J.Crew is in no hurry to expand internationally and that he would wait to see its stores open in Hong Kong and London next year before considering his next steps. "We don't have a grand plan for opening X%," he said. Building brand recognition in Asia, particularly in China, will be a challenge. J.Crew must compete with dozens of midtier international clothing names already in the market. Pricing is an issue for new brands entering China, Mr. Yao said, especially with the advent of international shipping from e-commerce sites and the growth of Chinese travelers shopping abroad. "You need a more sophisticated consumer, someone who can make the distinction between spending $150 for a pair of pants compared with $80," said Torsten Stocker, the head of the consumer group at consulting firm Monitor Group. "These consumers are emerging in China, but it's not as obvious as it is in markets like Hong Kong or Singapore." To address the challenge, J.Crew recently hired a head of international marketing from handbag maker Coach Inc., COH -22.81% one of the most successful U.S. fashion names in Asia. Coach on Tuesday reported that its profit rose 24% for the quarter through June, driven in large measure by a 60% sales gain in China. Mr. Drexler believes Asian customers will be attracted to J.Crew's high-quality apparel. "We offer an alternative that's not being offered in the marketplace today," Mr. Drexler said. Unlike other U.S. retailers seeking international exposure to mitigate slowing growth at home, J.Crew has been expanding steadily. It plans to open 42 stores in North America this year, bringing its store count to around 400. "We're not here because we are running out of places to go in America. We have so much organic growth there," Mr. Drexler said. Private-equity firm TPG Capital LP invested $560 million for an 85.2% stake in J.Crew in 1997 and set out to revive the company to take it public. But efforts to boost earnings and raise brand recognition didn't work. The retailer went through three chief executives and heavy discounting before Mr. Drexler joined in early 2003. J.Crew in 2005 turned its first profit in five years, and Mr. Drexler presided over a successful initial public offering a year later. J.Crew was taken private by TPG and Leonard Green & Partners LP last year. It was Mr. Drexler's decision to pull its shops out of Japan, at the time J.Crew's only market outside North America. "Tokyo reflected the same issues we had in America but trying to do something in America and fixing Tokyo at the same time was impossible," he said. What J.Crew won't repeat is expanding abroad with local partners, a strategy that was unsuccessful in Japan. "We like control.…We have the capital to do it, and I don't want to visit a store where I have to discuss with…my partner what I like or don't like about my store." "I don't consider this a huge risk at all and if, in fact, we didn't succeed in Hong Kong, life goes on. We'll figure out alternatives," Mr. Drexler said.

Gambling revenue in Macau, the world’s largest gambling market, inched up 1.5 per cent in July from a year earlier, the slowest growth since the financial crisis in 2009 as a tropical storm reduced visitor numbers, compounding subdued demand from mainland gamblers. July’s revenue was 24.58 billion patacas (US$3.08 billion dollars), though still ahead of analyst expectations and up from 23.3 billion patacas in June, government data showed on Wednesday. Analysts had forecast July growth to be flat or down 1 per cent year-on-year. Macau’s once turbo-charged gambling industry has seen demand falter as the tiny enclave’s key customers, super-rich VIP gamblers, have increasingly felt the impact of a slowing Chinese economy and rising credit difficulties. Typhoon Vicente, one of the most severe tropical storms to hit Hong Kong and Macau in more than a decade, struck in the third week of July, halting ferry services and transport for more than 24 hours and resulted in a loss of at least 700 million patacas for Macau’s casinos, analysts estimate. Heavy rainstorms and flooding in Beijing and large areas of China also weighed on travel numbers in the region. Macau, seen by many investors as a play on China’s macro-economy, was one of the world’s fastest-growing economies last year with gaming revenue reaching US$33.5 billion, more than five times that of Las Vegas. Yet Macau has lost some of its lustre, with Hong Kong-listed shares of casino operators down 20 to 30 per cent since the start of May. Analysts are mostly cautious on the outlook for future growth and have been revising down their estimates. Gambling revenue growth this year was projected to reach 20 per cent but more recent estimates have put the figure below 10 per cent. Fitch Ratings recently said it had revised its this year Macau industry revenue growth forecast to 10-12 per cent from 15 per cent, “reflecting our more cautious view with respect to the near-term impact of the slowdown in China. This is our second downward revision over the last couple of months.” Second-quarter earnings for Las Vegas titans Steve Wynn of Wynn Macau and Sheldon Adelson’s Sands China came in worse than expected. Adelson remarked in a recent conference call that a single quarter of bad earnings did not indicate a trend, and that Asia’s gamblers were not changing their gaming habits. Grant Govertsen, an analyst at Union Gaming in Macau, said he expected the market to register low-single-digit growth in August before jumping back to double digit growth in September due to a more favourable comparison base year-on-year. “All in, we are expecting third-quarter gross gaming revenue growth in the mid-single-digits. Looking further out, we expect full-year this year GGR growth to reach the teens.”

 China*:  Aug 3 2012

Chinese communications giant Huawei Technologies on Wednesday responded to US hackers' claims that its routers were easily cracked, saying its security strategies were rigorous. The annual DefCon hackers’ convention in Las Vegas on the weekend was shown how to slip into networks through some Huawei routers, which Recurity Labs chief Felix “FX” Lindner described as a “gift” to the hacker community. Huawei routers, equipment that connects networks to the internet, are widely used in Asia, Africa and the Middle East and the company has been striving to gain ground in US and European markets, according to Germany-based Recurity. Lindner and his teammate Gregor Kopf said they were troubled that Huawei had not issued security advisories about its routers to warn users to take precautions. “These machines have serious security issues,” Kopf told reporters. “In my eyes, the greatest danger is that you don’t know how vulnerable it is. You’re left in the dark.” Kopf said that once attackers slipped through the routers they could potentially run amok in networks. In response, Huawei issued a statement saying it was aware of “media reports on security vulnerabilities in some small Huawei routers” and was trying to verify the claims. “Huawei adopts rigorous security strategies and policies to protect the network security of our customers, and abides by industry standards and best practices in security risk and incident management,” it said. The company said it had a “robust response system to address product security gaps and vulnerabilities”. Huawei, founded by a former People’s Liberation Army (PLA) engineer, has established itself as a major force in the global telecoms industry where its technology is widely used to build mobile phone networks. But it is also battling an image problem in the broader technology market due to its perceived close ties with the Chinese state. It has recently been blocked from bidding for contracts on Australia’s national broadband project, reportedly due to concerns about cyber security. The company has in the past also run afoul of US regulators and lawmakers because of worries over its links with the Chinese military – fears that Huawei has dismissed.

Chinese pair enter men's table tennis semis at London Olympics - China's Zhang Jike and Wang Hao cruised into the men's singles semifinals at the Olympic table tennis tournament on Wednesday. China grabs four golds on day 4 of London Olympics - China took four golds on Day 4 of the London Olympics, bringing the total gold medals to 13. China still ranks first in the medal tally.

Senior Chinese feel the pinch in US - Chinese-Americans play mahjong in a senior citizen's center in the northern California city of Stockton. Early every morning, Chinese-American Ma Shunchang goes to Jene Wah, the biggest senior citizen's center for Chinese residents in the northern California city of Stockton. He reads a Chinese newspaper and plays poker or mahjong with other seniors before lunch. But on this particular day, he is not in the mood to enjoy afternoon activities and hurries home early. The 75-year-old senses the anger on the streets of Stockton, where crime, unemployment and suicide rates continue to climb in what is now the largest US city ever to file for bankruptcy protection. In the past three years, the city has dealt with a total of $90 million in deficits partly by making drastic cuts in the police and fire departments, even as residents say they must deal with frequent break-ins and robberies, a climbing murder rate, homelessness and plummeting property values. "In recent months, some robberies even took place during the daytime. Some of my Chinese friends were robbed of their gold necklaces on the street," said Esther Tse, executive director of the senior center, who moved to Stockton with her husband and daughter from Hong Kong about six years ago. The government used to help pay for the lunches of about 1,500 people who came to the senior center every month, and every senior needed to pay just $1.75, she said. Now the number of seniors coming has decreased to about 600, and the government has reduced the center's budget, she said. While bankruptcy may embarrass a city and make it less attractive to businesses and investors, Stockton officials believe it might be a quick way to a return to better fiscal health, and force bondholders, creditors and unions to sit down and negotiate changes. "We can't reduce our services anymore, and we cannot reduce police and firefighters and services like that, so we were forced to file for bankruptcy" on June 28, Connie Cochran, the city's public information officer, told China Daily at Stockton City Hall. "We have been working with our largest creditors and our bond companies. We will be working with (the US) Bankruptcy Court to negotiate the debt we have and to recover from this," she said. "It might take a few years." She said the budget crisis is related to the city's general fund, whose expenses include police, fire protection and administrative functions. The general fund gets its money in part from local and sales taxes. While residents can see the increase in violent crime, discontinued recreation programs and reduced library hours, Stockton still offers services such as water and road construction. Those funds are not part of the city's financial woes because government cannot use that money to solve its general fund problems, Cochran said. "When we have fewer services, it is difficult for our citizens. Government bankruptcy can protect the services we provide and not have to reduce the money further," Cochran said. She said the city still offers businesses a good location, with its freeways, waterways and ports. "The challenge we are facing right now is when people and business come, they want a quality of life for their employees," Cochran said. John Reynolds, executive director of Stockton Shelter for the Homeless, said that of the 1,123 people who have sought help in the shelter this year, only 28 were Asian-Americans. According to registration data, 38 percent of the homeless in the shelter are Hispanic and 30 percent are black. "Asians account for only 1 percent, and most of them are Cambodians or Vietnamese," Reynolds said. "Chinese are not in our shelter." The government bankruptcy filing hasn't affected Chinese-Americans' lives in the short term because they don't overspend on their credit cards, they save money and offset their small salary by living economically. But keeping a job has been the biggest concern for Chinese-Americans in Stockton. Esther's husband used to have a job in the prison department in Sacramento, California's capital, but he was laid off two years ago. "Many government hourly jobs are lost as a way to keep more people employed, but everyone has lower pay because of the reduced hours," she said.

Hong Kong*:  Aug 2 2012 

Hang Lung warns over tumbling China economy - The current state of the economy is more complicated than in 2008, making it more difficult to predict the direction of the property market both in Hong Kong and the mainland, Hang Lung chairman Ronnie Chan Chi-chung warned yesterday. "Many people said the current economic situation in China is better than that of 2008-2009," Chan said. "I don't agree. The economy has tumbled fast and capital injection is the only means to save it," he said, adding the European and US economic malaise is also hurting China. Even though Chan's flagship - Hang Lung Properties (0101) - has HK$29 billion cash in hand, he remains cautious on further land acquisitions in China. But he is still keen to invest in built-up property in the mainland as it offers 8-9 percent return, or double that of Hong Kong. "It's difficult to tell whether the local property market has peaked," said Chan, stressing his firms will only buy land when the market declines to a very low level. In the first half, the underlying net profit at Hang Lung Properties soared 72 percent to HK$2.52 billion from a year ago. The firm will pay 17 HK cents as an interim dividend. Total turnover in the first six months of the year soared 60 percent to HK$4.23 billion. Rental turnover from Hong Kong properties rose 4 percent to HK$1.48 billion while that from mainland assets jumped 22 percent to HK$1.47 billion. In Hong Kong, the sale of nine units at The HarbourSide and 108 flats at The Long Beach residential project contributed a total profit of HK$798 million. Hang Lung also gained HK$220 million from the sale of two well-priced non-core investment properties during the period. Hang Lung Group (0010), meanwhile, saw a 52 percent increase in its underlying net profit to HK$1.43 billion. It will pay an interim dividend of 19 HK cents.

Several core supporters of losing chief executive candidate Henry Tang Ying- yen will return to the Legislative Council unchallenged. Abraham Shek Lai-him, Jeffrey Lam Kin-fung, Leung Kwan-yuen, Lam Tai- fai, Vincent Fang Kang and Tommy Cheung Yu-yan were the only candidates for their functional constituencies when nominations closed yesterday. They are among 16 candidates in 14 functional constituencies who will be running uncontested. The others include Heung Yee Kuk chairman Lau Wong-fat, Chan Kin-por, Wong Ting-kwong and Ip Kwok-him. Some analysts said Chief Executive Leung Chun-ying is deliberately allowing Tang's supporters to get back into Legco to show Beijing that he is trying to forge unity among pro-establishment politicians. But others do not agree, as some Tang supporters, such as finance-sector lawmaker David Li Kwok-po and Philip Wong Yu-hong of commercial (second), are not seeking reelection. These seats will be filled by unchallenged Leung supporters - with Bank of China (Hong Kong) Trustees chairman Ng Leung- sing replacing Li and barrister Martin Liao Cheung-kong replacing Wong. "Sometimes it is just a misunderstanding that a certain camp is replacing another. In fact, Li told me that he wants me to run," Ng said. And political analyst Johnny Lau Yui-siu voiced doubts over whether Leung is deliberately letting several Tang supporters return to the legislature. "From CY's perspective, no matter what camp they are from, it should be fine as long as they are pro- establishment," Lau said. "Those from Tang's camp will not cause problems for CY's government. Only the pan-democrats will." Analyst Sing Ming said maybe Leung could not find enough capable candidates among his supporters to replace those of Tang.

Hong Kong is set for its most hotly contested Legislative Council election with 219 candidates on 69 tickets competing for 35 geographical constituency seats. This means an average of six candidates will contest each seat on September 9. Sixteen candidates in functional constituencies were returned unopposed when nominations closed yesterday. Sing Ming, an associate professor in social science at the Hong Kong University for Science and Technology, said despite the current controversy over the introduction of national education lessons and scandals hurting Chief Executive Leung Chun-ying, the establishment camp looks likely to win at least half, and up to two thirds, of the 70 seats. That, he said, is because candidates from the pan-democratic camp are "not united and are competing against each other in several geographical constituencies. "This means that even with a likely increased turnout - because of the scandals - their supporters will be split. So they could lose out." The voter turnout rate for geographical constituencies in the 2008 election was 45.2 percent. "In the past, pro-establishment parties were successful in dividing votes among candidates," Sing added. "And since the last election they have increased their spending to enhance services for residents in various districts." New Territories East will see the most fierce contest in a geographical constituency, with eight candidates vying for one seat. Among those chasing it are Democratic Alliance for the Betterment and Progress of Hong Kong member Gary Chan Hak-kan, Liberal Party honorary chairman James Tien Pei-chun and vice chairwoman Selina Chow Liang Shuk- yee, Democratic Party vice chairwoman Emily Lau Wai-hing and incumbent Wong Sing-chi, and the Civic Party's Ronny Tong Ka-wah. "It will be an uphill battle for pan- democrats to win at least one-third of seats," Wong said. "The pro-establishment camp has revamped strategies and fielded a large number of newcomers on separate tickets to win more seats. "What the pan-democrats can do is avoid attacking each other and do their best to secure the support of swing voters." Seventy-four candidates on 20 lists and 55 candidates on 16 lists will contest the New Territories East and New Territories West geographical seats, respectively. There are 21 candidates on 10 lists running in Kowloon East and 31 candidates on nine lists in Kowloon West. And on Hong Kong Island there are 38 candidates on 14 lists. Only 142 candidates submitted nominations to contest 30 geographical seats in the 2008 election.

New vice-chairwoman and chief executive Rose Lee Wai-mun says the bank will continue to adopt a prudent approach. Hang Seng profit up 14pc as bad debts rise - HK-based lender beats market expectations of H1 results but sees 57.6 per cent increase in bad debts due to credit downgrades of corporate clients. Hang Seng Bank (SEHK: 0011) has reported better-than-expected growth in first-half net profit, but its bad-debt provision also rose substantially. The Hong Kong-based subsidiary of HSBC yesterday posted a 14 per cent profit gain to HK$9.3 billion, driven by growth in traditional lending and trading, which was partly offset by a 5 per cent drop in fee income as investors pulled back investments amid volatility. But the bank still beat market expectations of 5 to 10 per cent growth. Announcing the results for the first time, new vice-chairwoman and chief executive Rose Lee Wai-mun said the first-half result was satisfactory, but she warned of tougher times ahead. "The second half is full of uncertainties that will be a challenge to the banking sector … The euro-zone crisis won't be solved in the near term, while banks will have to offer higher interest rates to compete for deposits, particularly yuan deposits. We will continue to [be prudent]." Lee said Hang Seng had very little European sovereign debt exposure and had stopped investing in Europe. But a high bad-debt figure cast a cloud over the otherwise strong results. Bad debts rose 57.6 per cent to HK$249 million because of credit downgrades of some corporate clients. Bad-debt provision for individual firms rose even more sharply, by 661 per cent, to HK$128 million. Lee, however, said: "Bad-debt provisions rose because of a low base last year. Bad debts represent only 0.33 per cent of our total loans, which is at a very low and healthy level. China's economy may slow down a bit but there is no widespread credit-quality problem on the mainland." Ben Kwong Man-bun, chief operating officer of KGI Asia, said that Hang Seng Bank focused on Hong Kong and the mainland, it was less affected by the euro-zone crisis. "However, the sharp growth in its bad-debt provision is alarming and shows its Hong Kong and mainland clients are suffering as a result of the economic slowdown in the US and Europe." Lee, a China adviser at HSBC, took over the helm from Margaret Leung Ko May-yee, who retired in May. She has vowed to expand Hang Seng's mainland business. The mainland represents 23 per cent of pre-tax profit, up from 18 per cent last year. With earnings per share of HK$4.87, the bank announced a second interim dividend of HK$1.10 per share - bringing first-half dividends to HK$2.20 per share. Total loans grew 5 per cent in the first half to HK$506.6 billion, driven by increased corporate lendings, residential mortgage and mainland loans, while deposits rose 4 per cent. Hang Seng benefited from a wider net interest margin - the gap between its funding cost and the price it charges clients - which stood at 1.85 per cent in the first half, up 10 basis points from a year earlier. Lee admitted banks might need to pay more for deposits in the second half. Total net interest income rose 8.29 per cent to HK$8.29 billion and trading income rose 26 per cent to HK$1.17 billion.

Hong Kong's population is expected to increase by 1.4 million to 8.47 million in 30 years, according to latest government projections released on Tuesday. The Census and Statistics Department said the population was estimated to grow at an average rate of 0.6 per cent yearly from now to mid 2041. The rate would initially climb to 0.8 per cent from now to 2021, but would slow to 0.4 per cent in the decade leading to 2041 due to an expected increase in deaths upon ageing, the department said. Life expectancy in Hong Kong will continue to increase. The department estimated that the average life expectancy for men would reach 84.4 years in 2041, up from 80.5 last year, while the figure for women would increase to 90.8 years from 86.7 years. Deputy Commissioner for Census and Statistics Leslie Tang said ageing in the population would become more serious in the coming 30 years when a decline in the fertility rate was expected to continue. Tang said people aged 65 or over would comprise 30 per cent of the population in 2041, up from 13 per cent last year; whereas the proportion of people aged under 15 would fall from 12 per cent to 9 per cent. On the other hand, the city’s fertility rate would decrease from 1,204 to 1,151 in 2041. On the city’s sex ratio, the department estimated that the number of men per 1,000 women would fall further from 876 last year to 788 in 2026, and 712 in 2041. The department said the ratio for the age group 25-44 was in particular expected to be greatly affected by the presence of foreign domestic helpers comprising mostly younger females. But excluding the foreign domestic helpers, the ratio would still trend down from 948 last year to 867 in 2026, and further to 786 in 2041.

Hong Kong Hopes to Revive Cantonese Opera - Chinese Cantonese opera singers perform during the Tin Hau Festival in Hong Kong in April. Cantonese opera may be viewed by some as past its heyday, especially with the younger generation, but Hong Kong is hoping to change that. Ever since Cantonese opera was declared an “Intangible Heritage” by UNESCO in 2009, the local Hong Kong government has tried to boost public interest in the art. The Chinese Opera Festival, a yearly event organized by the city, is on until Aug. 5. The festival features the different branches of Chinese opera including Cantonese opera, which has been around since the late 13th century, when the art migrated from the north of China to the south, where most Cantonese speakers reside. Operas often contain plots that depict Chinese history, myths or famous classics. Lyrics play a far more important role than the music itself. Visually jarring, actors are dressed in decorative costumes with their faces painted in bright colors. While the images may attract some audiences, the script may not. The three-hour plays include extensively long poems spoken in Cantonese. The art form is a difficult one to master. Actors have to be precise and detailed with their dialogue and pitches, spending hours perfecting their falsetto and mastering the different types of face makeup for characters of different rank and personality. “It’s hard as it is a complicated form of art and requires a lot training,” said Eliza Li, 34, a local performer. Amid slow ticket sales, high rents and waning interest from the public, opera isn’t as prosperous as as it was when it was the primary source of entertainment for locals. “If you go to watch a Cantonese opera now, you see mostly people with gray hair,” said Louis Yu, director of performing arts for the West Kowloon Cultural District. In February, the city’s last permanent home to the art, Sunbeam Theatre in North Point, was almost shut down after the owner raised the monthly rent to 1 million Hong Kong dollars (US$129,000). The venue’s resident actors performed what they thought would be their “last show” before its closure but a last-minute deal brokered by a well-known local opera singer saved the theater. “It’s not like back in the 50’s when you see more than 10 opera houses in Hong Kong,” said Mr. Yu. “The owner has wanted for several years to turn the theater into a shopping mall.” Earlier this year, the government converted Hong Kong’s oldest pre-war theater building, Yaumatei Theatre, from a rundown movie house to a venue for Cantonese opera. The government is also reserving two more locations that will showcase opera: Ko Shan Theatre and the Xiqu Center, both located in Kowloon. “Chinese opera is not mainstream entertainment,” said Ms. Li. Mr. Yu agrees. “We have seen an increase in audience but it’s an increase among middle age people.” The festival will run the Cantonese opera “Justice Bao” from July 27-29.

Hong Kong’s Gender Gap Grows - Girls browse books downtown in Hong Kong on July 18, 2012. Women in Hong Kong looking for romance can’t turn to the latest government statistics for inspiration. According to official figures, the city’s gender imbalance is currently the worst on record: Hong Kong’s sex ratio is 876 men for every 1,000 women. One in five women born today in Hong Kong can expect to remain single for the rest of their lives, says Paul Yip, a demographer at the University of Hong Kong. “And the situation will get worse,” he says. “You can see already that the number of singletons in Hong Kong has gone up.” In 2011, there were 209,000 women living alone in Hong Kong, a figure that’s more than doubled since 1996. A number of dating agencies have lately sprung up to service Hong Kong’s lonely female hearts, alternately offering overseas matchmaking trips and high-priced dinner parties promising to help Hong Kong women meet eligible foreigners. The city’s gender imbalance also inspired the launch of one recent reality TV show, “Bride Wannabes,” which followed a group of 30-something Hong Kong women on their quest to find a husband, stopping at cosmetic surgery clinics and submitting to various coaching from dating ‘experts’ along the way. Today, Hong Kong’s sex ratio is the most skewed the city’s clocked since it was first officially recorded in 1961, when the number of men in Hong Kong slightly eclipsed the number of women. In recent years, though, the sex ratio has flipped, as rising numbers of Hong Kong men have pursued marriages across the border in mainland China, where women are seen as more pliant and less choosy than their Hong Kong counterparts. An influx of mostly female domestic helpers from the Philippines and Indonesia—there are currently some 300,000 in town—has also helped deepen the city’s gender imbalance. When domestic helpers are removed from the calculation, Hong Kong’s sex ratio stands at a more balanced (if still lopsided) 948 men per 1,000 women. By contrast, mainland China is home to many more men than women: there, the UN reports, the sex ratio is 108 men per 100 women, thanks to the one-child policy and a traditional preference for sons. A number of enterprising dating companies have tried to capitalize on this imbalance—for example, by setting up Hong Kong women with mainland men. According to the city’s deputy commissioner for census and statistics, Hong Kong’s sex ratio will likely grow more exaggerated in the coming decades, widening to 788 men per 1000 women by 2026 and 712 per 1000 women by 2041. Given how well-educated and financially independent many of them are, Hong Kong women are famously “selective and very picky” when it comes to choosing a partner, says Mr. Yip. Still, he says, high rates of singlehood are ultimately about a shortage of men. “Even if they lower their standards,” he says of Hong Kong women, “many still won’t find husbands.”

 China*:  Aug 2 2012

The United States has named China as one of eight "countries of particular concern" in its annual report on religious freedom issued on Monday. Critics have hit back at the report, claiming the US is interfering in the internal affairs of other countries in the name of religion. US Secretary of State Hillary Clinton said on Monday that the report "sends a signal … that the world is watching". "It also provides information to help us and others target our advocacy, to make sure we reach the people who most need our help," Clinton said. A Xinhua News Agency commentary published on Tuesday accused the report of being "nothing but a political tool used by the US government to exert pressure on other countries, mostly deemed as its rivals". Four Asian countries — China, Myanmar, the Democratic People's Republic of Korea and Uzbekistan — were among eight nations designated as "countries of particular concern" on religious freedom. Eritrea, Iran, Saudi Arabia and Sudan were also named. The report is largely based on unconfirmed media reports and groundless allegations from outlawed groups and organizations with an ulterior motive, the Xinhua commentary said. By blaming China for "marked deterioration" in religious freedom, the report apparently ignored the basic facts and realities in China, which has made utmost efforts to defend religious freedom and the right to express religious belief on condition that laws are respected, it said. Contrary to the report's claims that "increased restrictions on religious freedom" led to at least 12 self-immolations in 2011 in the Tibet autonomous region, these incidents were in fact part of the Dalai Lama clique's scheme to internationalize the Tibet issue, according to Xinhua. Only a few members from banned cults and illegal extremist religious organizations, which engage in illegal or separatist activities under the guise of seeking religious freedom, have been punished in China strictly in accordance with the laws, Xinhua said. The US State Department has been issuing to the Congress the annual Report on International Religious Freedom, which covers nearly 200 countries and territories, since 1999, under the International Religious Freedom Act of 1998. Releasing the report "will only backfire by creating more suspicion and distrust rather than fostering mutual understanding and improving relations with other countries", said the Xinhua commentary. "Equality and mutual respect have been the cornerstones for building nation-to-nation relations, but the United States has shown no respect to others by imposing its own standards on religious policies, regardless of the differences in history, cultural tradition and economic and political realities," it said. Niu Jun, an expert on US studies at Peking University, said that conflict between China and the US on religious issues has been a "chronic problem" between the two countries, which have different political systems. The US has been issuing such reports annually for many years, but "not all of the information in the reports is precise and some is far from the real situation of China's religious reality", Niu said.

View of Ming dynasty-style gardens at the Chuo Cheng Villas project. A luxury Chinese-style garden villa project in Suzhou, Jiangsu province, has been launched in Hong Kong, with the biggest unit going for a whopping 500 million yuan (HK$608 million). The Suzhou developer, Zan Wei Realty, kicked off the sales push yesterday for the Chuo Cheng Villas project, a cluster of 28 villas. The biggest one covers 43,040 square feet and comes with a 6,000 sq ft private garden. Its 500 million yuan price tag translates into 11,617 yuan per sq ft. The other villas range from 7,104 sq ft to about 14,000 sq ft, each comprising a private garden of at least 3,000 sq ft. These villas start from 50 million yuan. As the villa complex is built on a site that once used to be part of the Humble Administrator's Garden in the city centre, the project has adopted the architectural style of the Ming dynasty. The developer will accordingly build pavilions, bridges and a maze of fish ponds in each garden. The villas provide separate living rooms for male and female occupants, private swimming pools, and indoor parking spaces for three to nine cars. Zan Wei marketing director Tu Haijing rejected suggestions that Hong Kong was picked as the first city to launch the project because mainland home purchase restrictions had kept local buyers away. "We will launch our project in Shanghai in August and then in other mainland cities. Shanghai is one of the major markets we are targeting," she said. The firm has appointed Savills to handle overseas sales. Alan Chiang Sheung-lai, head of residential property at DTZ on the mainland, said there had been a spurt of similar projects in Jiangsu and Zhejiang provinces, where the historical backdrop lent itself to period design. Such projects attracted local private companies, which bought the units to receive clients or house top executives, Chiang said. "But corporate demand has dried up of late with credit tightening." As the mainland government has stopped approving villa developments, Chiang said he expected their value to appreciate.

Shipping lines and freight forwarders are poised to benefit from cargo growth with Africa, whose second-largest trading partner is China. Loan deals to buoy China-Africa cargo - Bilateral trade is on the rise and freight volumes are set for a further boost with the announcement of US$20 billion in Chinese financing for the continent. Beijing's pledges to provide US$20 billion in new loans to Africa are set to boost cargo volumes for shipping lines, airlines and freight forwarders. They also come on top of massive growth in Chinese imports into countries such as Nigeria and South Africa over the past decade or so. In South Africa, the proportion of Chinese imports grew from 5.3 per cent in 2000 to 19.2 per cent in 2010, reaching a total value of US$10.8 billion. At the same time, China increased its proportion of imports into Nigeria to 17.5 per cent from 12.6 per cent over the decade to 2010, according to figures from data company CEIC and other organisations. Exports from Africa to China grew 39 per cent last year to US$93.2 billion from 2010. In the first four months of this year, they climbed about 24 per cent to US$38.2 billion from the same period a year earlier. "China is Africa's largest trading partner after the European Union," said William Tang, managing director of Far East business for South Africa's Barloworld Logistics. Tang said the latest three-year loan deals, which President Hu Jintao announced at the Forum on China-Africa Co-operation in Beijing nearly two weeks ago, "is very good news for us". "A lot of the industry investment by Chinese companies is in energy and construction," which required heavy machinery and equipment, Tang said. And, because it involved project cargo shipments, it would provide "a lot of opportunities for us". "We are also seeing Chinese companies investing in projects across a range of industries, including aviation and manufacturing throughout Africa," Tang said. "Demand for Chinese goods and products has also grown among African consumers. "One of my visions in growing Barloworld Logistics is trying to enlarge the footprint in China." The firm already has offices in Hong Kong, Shanghai and Guangzhou, while China is the biggest revenue generator for the South African-headquartered group whose businesses also include mining equipment and vehicles. Tang said Barloworld Logistics, which derives about 60 per cent of its China revenues from air shipments and 40 per cent from ocean cargo, was already considering opening an office in Shenzhen. The firm is also seeking to expand its existing operations in central and southern African countries, including Zambia, Malawi and Botswana. Safmarine, the South African shipping line subsidiary of Maersk, has recently introduced three 4,500 teu (20-foot equivalent unit) container ships to boost the trade for refrigerated products between West Africa and Asia, especially China. But, while the growth in imports and exports between China and Africa is well into double digits, there are potential bottlenecks. A survey of South African businesspeople about supply chains published in April shows the biggest obstacle to growth is the shortage of skilled people coupled with red tape and the high cost of doing business, including transport-related expenses.

Noted film director Zhang Yimou was paid 2.5 million yuan (HK$3.06 million) for his involvement in an 18.5 million yuan promotional video for the Railways Ministry that has further cast the office in a negative light amid mounting public criticism, mainland media reported yesterday. Both Zhang and the ministry came under fire last month when the National Audit Office criticised the five-minute film, Chinese Railways, for its poor quality and high cost, and for not going through the proper tender process. On July 2, Zhang denied directing the video. However, yesterday he admitted signing a contract in January 2010 with Beijing-based production company Xinshike, and receiving the money as payment for directing the short film that cost 18.5 million yuan, according to a report in the Economic Information Daily. The ministry has come under fire for corruption and non-transparent management since the graft-ridden downfall of its former minister, Liu Zhijun , last year, with several other railway officials also detained. Neither Zhang nor anyone at the Railways Ministry were available for comment yesterday. The newspaper quoted a source at Xinshike as saying that the ministry "just wanted to use Zhang to direct the video, so it let our company reach him directly". The source, who was not identified, said the video cost 7 million yuan to make after Zhang's payment - on which the company paid taxes - with much of the remainder paid as bribes and kickbacks. The report did not say which officials at the ministry may have accepted kickbacks, but soon after the revelation by the government auditor, the newly appointed deputy director of vehicles for the ministry's Transport Bureau, Liu Ruiyang , came under investigation earlier this month. Liu's wife, Chen Yihan , who worked at the ministry, was also being investigated. She used to be deputy chief of the Railway Ministry's publicity department, before being promoted to deputy secretary general of a cultural department. Zhang also said he had signed a second contract a year after the first stating that Xinshike could not use his name for promotional purposes. Liu Zilong , a Shenzhen-based activist lawyer, commented on the scandal, saying: "The ministry should launch a further investigation and offer the public details about [its] relationship with the production company. If the company is found to have been involved in bribing officials to win the bid for the video, Zhang's pay would also be unlawful." Independent producer Li Wenling said: "Zhang should be ashamed if he directed a video with such terrible standards."

Sailors on the Zheng He in Guayaquil port, Ecuador. The Chinese navy must prepare itself for new challenges and accept a greater role in international peace-keeping missions as the nation's power and influence expand in global affairs, a senior naval officer said yesterday. Vice Admiral Ding Yiping , deputy commander of the navy of the People's Liberation Army, told China National Radio that China's rise would be accompanied by the need to engage more in keeping the peace on regional and global stages, as well as carrying out more humanitarian missions. "Clearly, China will have to assume the duties of a responsible power," Ding said on Sunday, ahead of the PLA's 85th anniversary tomorrow. "The international situation at present is very complicated, and maritime security also faces new challenges. These place new and higher requirements on our navy. "[We] must further strengthen our ability to complete a wide range of military missions, and to make more contributions as guardians of the country's marine interests, rights and security." He said there was a lot of room for hardware advancements. "For a navy that aspires to reach farther, it must solve a series of problems, such as its capabilities in surveillance and early warning, secured communications, guiding and positioning, logistics and so on, in waters far away from home." Although the Chinese navy had learned a lot during escort missions for commercial fleets in the pirate-plagued Gulf of Aden in the past few years, Ding said they still lagged behind other major navies. "Compared with the world's naval powers, [especially] those navies with hundreds of years of history, there are considerable and obvious gaps. "Our navy's ability to deploy to faraway waters is still limited by our capability [in terms of hardware development and science and technology]," he said. Ding said the Chinese navy now only executes United Nations-authorised non-combat missions in specific waters, to ensure maritime safety and protecting strategic sea lanes. Separately, the Ministry of National Defence has denied speculation by some Middle East media that China may send naval ships to Syria for joint war games, after an Egyptian newspaper reported a Chinese warship was seen in Egypt's Suez Canal. "The destroyer Qingdao and frigate Yantai are respectively scheduled to visit Ukraine and Romania from [today] to August 4, following their completion of escort missions in the Gulf of Aden and Somalia waters," a ministry spokesman told the South China Morning Post (SEHK: 0583, announcements, news) , adding that there was "no such thing" as any joint war games. Meanwhile, China News Service reported that the country's first and unnamed aircraft carrier - built using the hull of an unfinished Soviet carrier, the Varyag - completed its longest and ninth sea trial yesterday and returned to its port in Dalian, Liaoning. The report said the latest trial lasted about 600 hours in the Bohai and Yellow seas. The first test run, in August last year, lasted five days, and later runs ranged from 11 to 15 days.

China will hike railway spending by 64 billion yuan (US$10 billion) to 580 billion yuan this year, the Ministry of Railways said, updating an investment plan published earlier this month. The 12.4 per cent increase from an initial 516 billion yuan of planned spending will see about 470 billion yuan spent on infrastructure, a rise of 15.8 per cent from the original July 3 plan, according to a bond prospectus issued on www.chinabond.com.cn the government’s bond issuance website. The increase comes as Beijing has made a priority of fast-tracking of infrastructure projects to support a slowing economy - dented by deteriorating demand from debt-ridden Europe and lacklustre US consumers - that is on course for its slowest full year of growth since 1999. The government said on Monday it would make investments in key projects in a bid to encourage private sector finance to play a greater role in developing vital industry sectors including railways, utilities, finance and healthcare. The announcement, made after a regular cabinet meeting, follows rules issued by China’s top economic planning agency – the National Development and Reform Commission (NDRC) – to open up strategic industries presently dominated by state-owned companies to the private sector. China may also allow the heavily-indebted ministry to sell land alongside railways to ease cash flows, according a report on Tuesday in the Economic Information Daily, run by Xinhua news agency, that quoted NDRC officials. China’s Ministry of Railways is the country’s largest seller of bonds after the treasury. It suffered a loss of 7 billion yuan (US$1.1 billion) in the first quarter, local media reported, after steep debt repayments of more than 28 billion yuan depleted its cash holdings.

China's unmanned space module, stands in the vertical assembly factory at the Jiuquan launch centre in Gansu province. China will next year attempt to land an exploratory craft on the moon for the first time, state media reported, in the latest project in the country's ambitious space program. China’s third lunar probe will blast off in the second half of next year, the state Xinhua news agency reported late on Monday. Other reports said it would land and transmit back a survey of the moon’s surface. If successful, the landing would be China’s first on the lunar surface and mark a new milestone in its space development. It is part of a project to orbit, land on and return from the moon, Xinhua said. China said in its last white paper on space it was working towards landing a man on the moon, although it has not given a time frame. Beijing sees its multi-billion-dollar space program as a symbol of its rising global stature, growing technical expertise, and the Communist Party’s success in turning around the fortunes of the once poverty-stricken nation. It kicked off in 1999 with the launch of the unmanned Shenzhou-1. Two years later, Shenzhou-2 lifted off carrying small animals, and in 2003, China sent its first man into space. Since then, it has completed a space walk in 2008 and an unmanned docking between a module and rocket last year. Most recently, a 13-day voyage of the Shenzhou-9 spacecraft became China’s longest-ever space mission and was notable for including the nation’s first woman astronaut among its three-member crew. The crew also achieved China’s first manual docking with an orbital module, the Tiangong-1, a highly complex manoeuvre first conducted by the Americans in the 1960s and essential to building a permanent manned space station. Next year’s planned lunar probe launch will follow the Chang’e 1 in 2007 and Chang’e 2 in 2010, both named for the Chinese goddess of the moon. Xinhua quoted the State Administration of Science, Technology and Industry for National Defence as saying the project was proceeding smoothly.

Hong Kong*:  Aug 1 2012 

Call for strike has few backers - Principals and school officials show little support for a union proposal that teachers protest over national education by boycotting lessons in September - A union's call for teachers to stay away from classes in September as a protest against the national-education curriculum has gained little support from principals and school sponsoring bodies. Last night the Professional Teachers' Union passed a resolution to mobilise teachers to boycott classes on September 3, the first day of term, if the government refuses to withdraw the subject in the new school year. Fong King-lok, an executive committee member of the union, said it was hard to estimate how many schools would join at this stage, but the union would summon support from education bodies and school principal groups. The subject will be introduced in primary schools at the start of the new term, despite a protest by tens of thousands of pupils, parents and teachers on Sunday. Many schools have already decided not to introduce the subject, which the government says will engender national pride but critics fear will be used for "brainwashing". And principals say any form of strike will deprive children of an education. Timothy Ha Wing-ho, education adviser to the city's Anglican Church, the Sheng Kung Hui, has reservations about a strike, saying it would be hard for parents to settle their children at a school that joined a strike. The 50 primary schools sponsored by the church will not introduce national education in September. Over a third of primary schools citywide say they will not implement the subject yet. "All our teaching schedules have been fixed already," Ha said. "When school starts, we'll have meetings with principals and teachers to discuss what we are going to do about national education." Liu Ah-chuen, chairman of the Subsidised Secondary Schools Council, asked: "What is the rationale for a strike if the subject will not be offered? A strike affects students' rights, and it is up to each school's management committee to make a decision." The subject will be introduced in secondary schools next year on a voluntary basis. It will be compulsory at primary level from 2015 and in secondary schools from 2016. The chairman of the Subsidised Primary Schools Council, Sin Kim-wai, sees no need for drastic action and believes schools will enjoy flexibility in how they offer national education. He thinks it is best taught as part of civic-education classes. "Schools have always enjoyed autonomy in implementing Education Bureau guidelines. As for the idea of a strike, we need to make sure students understand the meaning of it." On a radio programme yesterday, Eva Chan Sik-chee, convenor of another co-organiser of the march, the National Education Parents' Concern Group, said the turnout showed the issue had really angered people. Police said 32,000 people marched from Victoria Park to Admiralty. Organisers put the figure at 90,000. Chief Secretary Carrie Lam Cheng Yuet-ngor said after the march that a body with "broad representation" would be established to monitor the introduction of the subject. But a member of the parents' group, So Pui-kin, dismissed the new committee as "just a public-relations tactic ... to put out the fire". Groups involved in the march have ruled out getting involved with the committee. A caller to the radio station said Chinese people had an obligation to build a national identity. Otherwise, they might "become defectors". But Andrew Shum Wai-nam of an alliance against national education said Hongkongers had long been patriotic - as shown by the large turnouts at the annual June 4 vigil.

Staff of Hong Kong Airlines at the company's counter at the airport yesterday. Hong Kong Airlines pledged yesterday to take on more staff amid rumours of an imminent strike by angry workers still battling with a backlog of passengers from last week's typhoon. In a letter to the staff of Hong Kong Airlines and its sister company Hong Kong Express, president Yang Jianhong said management understood how hard they had been working. He promised to hire more staff, to ease workloads and hinted at more "allowances" for employees, without being specific. Yang's message came as media reports yesterday said a large group of employees had suddenly taken leave on Friday, that 50 went on strike and the slowdowns would continue yesterday. But yesterday's predicted slowdown failed to occur. Airline employees were angered after being swamped by furious passengers when flights were delayed or cancelled because of Typhoon Vicente, which struck the city on Monday night last week. Amid cancelled and delayed flights, the passenger backlog persisted all last week. Some employees reportedly had to work for more than 30 hours continuously. On Saturday night, one frustrated passenger splashed liquid on an attendant. Yang's announcement blamed the overwhelming workload on a change in its ground service company and the effects of the typhoon. The companies had been taking steps to reduce the number of delayed flights, he said, "but unfortunately a huge storm, Vicente, messed up our plan, making the situation even worse". His letter continued: "The management understands very well about the hard work of the frontline workers." Yang added that some staff members had voluntarily joined frontline workers to help them. "We all know staff are the company's most important assets. "The company is willing to listen to the demands of all employees, and we are very willing to accept your demands and suggestions." Yang said the company had started recruiting and would eventually raise its manpower by 15 to 20 per cent. Li Wing-foo, chairman of the Hong Kong Airport Ramp Services Employees Union, said that on Saturday evening, the airline's service counters had their lights turned off and nobody was processing the waiting passengers. Police were on hand to keep order, said Li, who had heard of no further strike plan. A 31-year-old woman was arrested for assault on Saturday night after she splashed liquid on an attendant. The airline said yesterday that only a few ground staff members had taken sick leave, and there were no signs that employees were taking leave in a co-ordinated fashion. The company had received no notification of a strike and services were returning to normal, it said. As of 3pm yesterday, only three flights were facing delays of more than an hour, a spokeswoman said. But later in the day the airline announced the cancellation of two flights, one today and one tomorrow, because of another typhoon approaching Taiwan. At the airline's check-in counters at 10am yesterday, a long queue of about 100 passengers was waiting, but there was no sign of disorder as airport security guards and police officers kept watch. The airline had opened all its check-in counters, to speed up the process. An airline counter worker said she did not know of colleagues who took sick leave to protest about the workload due to the typhoon. Two Hong Kong residents waiting for a flight to Bangkok yesterday said they were satisfied with the speed of the airline's check-in service. 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.

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.

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 

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 

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 s