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

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Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)

成功之道 武进制造 Wujin - Changzhou - Jiangsu Province - China 

  Year of the Snake - February 10 2013 -  Dance w/ Firework 

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

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

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.

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

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

Hong Kong*:  January 1 2013

Pro-government rally draws thousands in support of CY (By Stuart Lau) Pro-Leung Chun-ying marchers start their rally in Victoria Park on Sunday. Chinese national flags are no longer synonymous with anti-Japanese protests on the mainland after hundreds of Hongkongers marched with the banners and expressed support for the embattled chief executive on Sunday. The national emblem was accompanied by Hong Kong flags and nonstop chanting as backers of Leung Chun-ying braved cold weather for the rally. The afternoon march, organised by Caring Hong Kong Power, took place ahead of a Civil Human Rights Front protest scheduled for Tuesday to demand that Leung step down. That march is expected to have 50,000 participants. On Sunday, police said 2,400 participants showed up at the starting point; organisers said as many as 40,000 attended. Marchers were predominantly elderly and middle-aged people. Two journalists were reportedly assaulted by a Leung supporter. Organisers said the rally served as a counterbalance against the pan-democrats’ repeated attempts to overthrow the chief executive. Leung’s opponents accused the group of shifting attention away from what they call a major issue – the chief executive’s credibility. Leung has been embroiled in a scandal over illegal structures at his house on the Peak after admitting mistakes in handling the issue. Critics have cast doubt on his integrity, and his popularity has remained low. A Leung supporter, retiree Liu Shing, called on pan-democrats to stop magnifying trivialities, saying on Sunday: “The government should focus on solving social issues.” Another marcher, Jenny Lam, said: “I want a harmonious society, but politicians did everything to stop the government from functioning properly out of their own interest. This is intolerable.” Before the march began at Victoria Park, Now TV cameraman Lau Ka-wo was hit in the head and his equipment was damaged; his colleague, reporter Chau Chi-wing, was injured in his right eye after his glasses had been pulled off, the television station said in a statement, which also condemned the violent acts. The group marched from Victoria Park to government headquarters in Admiralty. Some heckled bystanders. “You’re a traitor, a stooge,” some were heard shouting. 

Taiwan holds first Chinese music concert amid anti-Beijing protests (By Agence France-Presse in Taipei) Singer Wang Leehom, pictured in November, was one of about 60 performers who was a part of the Chinese Music Chart concert on Saturday. Thousands of music fans packed a Taipei stadium to watch the island’s first concert staged by Chinese singers and rock bands, reports said on Sunday, in the latest sign of warming cross-strait relations. The concert organised by the Chinese Music Chart, dubbed China’s Grammy Awards, saw some 60 bands and singers from the mainland, Hong Kong and Taiwan perform before screaming fans on Saturday, but also drew dozens of anti-China protesters. They chanted pro-independence slogans and waved anti-Beijing banners outside the stadium, television reports showed, but were unable to interrupt the concert which included performances by Chinese singer Han Geng and actress Zhang Ziyi. Without the prior approval of Taiwanese authorities, organisers of the Chinese Music Chart unilaterally announced in November that an award ceremony would be held in Taipei for the first time after it was set up in 1993. The plan drew fire from the opposition, prompting the Chinese award organisers to change the award presentation ceremony to a concert at the demand of Taiwanese authorities. The concert “is part of Chinese communist... tactics against Taiwan people and we’re here to voice our desire that we don’t want to be ruled by [Beijing],” said protester Tsai Ting-kui, according to the Liberty Times. Beijing still insists Taiwan is part of China even though the island has ruled itself for more than 60 years after their split in 1949 at the end of a civil war. But ties with China have improved markedly since Ma Ying-jeou of the China-friendly Kuomintang came to power in 2008 on a Beijing-friendly platform. He was re-elected in January for a second and final four-year term.

200,000 village houses face warnings on illegal structures (By Olga Wong) Claim by rural leader as deadline for declaring unauthorised building works approaches and officials prepare to launch enforcement action - Illegal structures at Ho Chung New Village in Sai Kung. Buildings Department officers will this week begin handing out as many as 200,000 warnings and demolition orders to the owners of village houses with illegal structures. It marks the start of a crackdown on unauthorised additions to homes that could take as long as 10 years. Most villagers appear to have spurned the government's offer to register illegal structures in return for a temporary reprieve from enforcement measures. By the middle of this month just 11,000 had signed up to a scheme under which they can keep their homes unchanged, subject to five-yearly checks. It's not known how many village homes have illegal additions. The Heung Yee Kuk, the lobby group for indigenous New Territories villagers, estimates that 35,000 homes have unauthorised structures. But rising rural leader Junius Ho Kwan-yiu believes the figure could be as high as 200,000. A specially formed "village house section" in the Buildings Department, with a director, 40 staff and an annual budget of HK$36 million will tackle the illegal works. The department has made it clear enforcement action will be taken once the deadline for registration passes on Tuesday. In most cases, warning notices telling owners to demolish illegal structures will be handed out first. If the owners fail to comply, demolition orders will be issued. Democratic Party legislator James To Kun-sun said the tremendous manpower and public money involved underscored the fact that the growing number of illegal structures in the New Territories had become a major social issue. To said there were questions the public needed to discuss. "Does our society want to spend hundreds of millions of dollars on clearing the structures or on health care services by adding a few more beds in hospital?" he asked. "The enforcement takes time, but it isn't insoluble." Choy Kin-kuen, president of the Hong Kong Institute of Engineers and a retired senior Buildings Department official, said the enforcement action must go ahead. "It is unhealthy to see those structures surrounding our living space," he said. "They should be cleared, especially when urbanites are questioning if preferential treatment is given to villagers. The dilemma is that it involves a huge cost." The Buildings Department declined to say whether it would outsource the job of identifying and inspecting illegal structures, as has happened in the past. Since 2001, the government has undertaken to clear 800,000 unauthorised structures identified as dangerous in urban areas, but it has so far cleared only half of them. As the spotlight fell on illegal structures beyond urban areas, rural leaders put up a fight to try to stop a similar crackdown, even calling for a blanket amnesty in New Territories villages. The issue has led to an urban-rural divide and has even split the rural authority itself. While the kuk's leader, Lau Wong-fat, urged villagers to report their structures, Ho, chairman of its Tuen Mun rural committee, advised the opposite. Ho, a lawyer, said the register would become a record of villagers' violation of building rules. Sources close to the three professional institutes - for architects, surveyors and engineers - say they are unlikely to back Ho's proposal to legalise some of the structures.

 China*:  January 1 2013

Chengdu aims to be world’s next Silicon Valley (By Agence France-Presse in Chengdu) Workers at a new Apple store in Chengdu, in southwest China's Sichuan province. Between one-third to one-half of the iPads sold worldwide are assembled in Chengdu. Entrepreneurs in China’s southwest are dreaming of turning the city of Chengdu into the world’s next Silicon Valley as the government encourages more investment outside the booming coastal regions. Small start-ups as well as big-name western companies have flocked to the metropolis of 14 million people, attracted by cheap labour costs and favourable government investment policies and hoping to tap into China’s rapidly expanding consumer market. And the Silicon Valley dream is becoming reality as the city, already a hi-tech manufacturing hub, seeks increasingly to become a magnet for software development and innovation. Between one-third to one-half of the iPads sold worldwide are assembled in Chengdu, while computer giant Intel makes up to half of its chips in the city. Far from the booming coastal regions, Chengdu can offer perks through the government’s “Go West” development programme, with incentives for start-ups such as one-year interest-free loans. So far it has attracted about 29,000 companies to its 130-square-kilometre “hi-tech development zone”, including about 1,000 foreign enterprises. Chengdu is also developing a nearby “Software Park” as the city aims to go beyond manufacturing and become a centre of innovation. At Chinese start-up GoodTeam, a software engineer shows off his latest creation: a game in which players try to place a bottle into the mouth of a baby. The application is being developed for pre-schoolers between one and three years old, the age at which children in Chengdu begin to toy with computer technology. Founded in 2009, the start-up employs 32 people and has seen strong growth in the gaming market, with most of its applications used on mobile telephones. “In July 2009 we had about five downloads a day, today we have more than 100,000 a day for each game. We are confident in the market,” said Liu Jia, a GoodTeam manager. “Since we started we have survived three crises but it has been the hi-tech zone that has sustained us by allowing us to borrow money.” With five nearby universities focusing on science and technology, cafes and restaurants around the development zone have become networking hotspots for software programmers. “The best reason [to come to Chengdu] is the education environment. The region has great universities,” said Xiong Jie, the director of Thoughtworks, which runs an internet site for a group of Australian insurance companies. “Only China and India have this talent pool. We have grown very fast, we started with zero people in April and now we have 50.” The company plans to add at least 30 more workers next year and all will likely be aged under 30, he said. The zone boasts Chinese technology companies like Lenovo, Huawei, ZTE and the Taiwan electronics giant Foxconn, as well as internet portals Tencent and Alibaba. Foreign companies include Texas Instruments, Intel, Fujitsu, IBM, Hewlett Packard, Microsoft, Sun, SAP, Ubisoft, Siemens, Motorola, Nokia, Ericsson, Alcatel and Dell. Chengdu highlights the changing nature of the technology scene in China, where Beijing, Shanghai and the metropolis of Shenzhen have long been the centre for the country’s IT industry. Multinationals have traditionally set up in those areas, initially making products for export but increasingly tapping into the country’s lucrative domestic markets. Sales revenue for Chengdu’s information technology sector neared 36 billion euros (HK$369 billion) last year, with 20 million computers produced and production capacity four times that. In 2012, production capacity was set to surpass 100 million, with more than 50 million computers delivered, while by 2015 capacity is expected to reach 150 million tablets and 80 million laptop computers. “Although the speed of growth has slowed everywhere, for us the loss has been minimal,” said Tang Jiqiang, the Chengdu hi-tech’s zone’s director of strategy. “We have seen growth slip from 25 per cent to 23 per cent.” Overall, Chengdu expects economic growth of 13 per cent this year, down from around 15 per cent in recent years, but still well above the expected national average of about eight per cent. Gao Wenshu, an expert on labour economics at the Chinese Academy of Social Sciences in Beijing, said Chengdu’s skilled labour force could help it emulate Silicon Valley. But the city offers relatively low wages compared to Beijing, Shanghai and Guangzhou, and the challenge will be attracting and keeping an innovative workforce. “I don’t think the local salary level can meet the high-salary demands technology specialists seek,” Gao said.

Monitoring to force China to come clean on air pollution (By Li Jing) Intensive monitoring in mainland cities will curb the manipulation of data on air quality - More data will be available on air quality in cities. Environmental experts say real-time air quality updates mandated to start in 74 mainland cities on New Year's Day will leave local officials less room to manipulate data and hide the country's worsening pollution problem. They said hourly readings - already provided as a trial in a dozen cities, including Guangzhou, where they began on Friday - were a first step towards improving transparency and holding the government accountable for promises to clean up the air. Data will not only be released more frequently but will cover three more pollutants than at present, including ozone and smog-causing fine particles, and set tougher standards for the existing three pollutants - sulphur dioxide, nitrogen oxides and large particulate matter. Experts, however, warned that much more action would be necessary to reduce pollution. The reporting changes were announced on Friday by the Ministry of Environmental Protection, which said data collected from 496 monitoring sites would be available online and through smartphone apps. Experts cautioned that the tougher standards would lead to a sudden decline in the air quality ratings of many cities, as it would be harder for officials to achieve a "blue-sky day", when air is designated as good. Zhao Hualin, the ministry's director of pollution prevention, said recently that about 70 per cent of mainland cities would fail to meet the new standard for PM2.5 - microscopic airborne particles less than 2.5 microns in diameter, which can pose serious health risks because they can enter the bloodstream and lodge deep in the lungs. The Nanjing Municipal Environmental Bureau said on its official Weibo account on Friday that the city would see only about 220 blue-sky days a year under the new system, as opposed to 314 days under current standards. Greenpeace campaigner Zhou Rong said the existing air quality appraisal system requires only 12 hourly readings when calculating the daily average. The new system would require at least 20 hourly readings to get a more accurate average and prevent manipulation. "The monitoring results at any given site could vary greatly at different hours within a day, so there was a loophole for modifying readings," she said. Zhu Jianping, the ministry's deputy director of monitoring, told the Southern Weekly that some city governments had distorted readings to make their air quality appear worse so they could get pollution treatment funding from Beijing.

Sina reshuffle focuses on Weibo (By CHEN LIMIN and GAO YUAN) Sina Corp, the Chinese Web portal operator, has announced a major restructuring of its business, attaching greater importance to its micro-blogging service as competition from rivals heats up. The company has now made Weibo one of two major business divisions, consolidating functions that used to be scattered across different departments. Charles Chao, chairman and CEO, told employees by email on Friday that Sina's organizational structure needed to change "to respond to competition in a mobile era". "We need to have a strong sense of crisis and change quickly," he added, emphasizing that its strategy in 2013 would put "mobile first", while improving overall efficiency. Within the reshuffle, Wang Gaofei, who used to head Sina's wireless business, will take charge of micro-blogging operations, reporting directly to Chao, which analysts viewed as highly significant. Sina has been feeling pressure, particularly from WeChat, a mobile messaging service developed by Tencent Holdings Ltd, China's largest Internet company by sales. Hong Bo, a Beijing-based IT analyst and founder of consultancy company IT5G, said: "Wang's appointment as head of the Sina Weibo means the company can improve communication." Previously, Weibo was operated by two departments. Applications running on mobile devices were controlled by its wireless business department, while services on personal computers were provided by the micro-blogging unit. Sina launched Weibo in August 2009, and by the third quarter of this year, the company claimed it had more than 400 million users, with about half of its traffic generated by mobile users. Its advertising revenues doubled in the quarter, compared to the second quarter, said Chao, without disclosing the exact number. But while Sina's stock rose to a high of $142 in the US market April 2011, driven by huge investor confidence, its current price of around $47 reflects growing investor concern that the service hasn't generated revenues as quickly as expected. Chao admitted earlier that Sina had been aware of WeChat's growing mobile users, and that it would accelerate moves to deliver a profit. On Dec 11, it joined hands with AutoNavi Holdings Ltd, China's biggest navigation provider by market share, to bring more location-based services to mobile users. Then on Dec 20 it announced Weibo would be selling smartphones made by local cellphone maker Xiaomi Corp, using a self-developed online payment platform.

Beijing puts four subway lines into operation (By Xinhua) People wait on a platform at the Dongsi Station of the newly-opened subway line 6 in Beijing, capital of China, on Dec 30, 2012. Beijing put four subway lines into operation on Sunday, part of the city's efforts to expand rail transit to ease severe traffic congestion. The new lines bring the number of subway lines in Beijing to 16, with a total length of 442 kilometers, according to authorities.

Hong Kong*:  Dec 31 2012

Rush for subsidised flats in Tsing Yi, but repayments are a worry (By Olga Wong and Lo Wei) A showflat of Greenview Villa in Cheung Sha Wan which is a subsidised Housing Society project in Tsing Yi. Eligible buyers rushed to join a ballot for new subsidised flats in Tsing Yi yesterday even though the mortgage payments could eat up at least half their monthly income. They were seeking homes in the Housing Authority's Greenview Villa Estate, in which flats are being offered at a 30 per cent discount. They range in size from 420 sq ft flats costing as little as HK$2.4 million to 700 sq ft flats for HK$5.1 million. The society received 600 applications yesterday for the project, the first opened for sale under the government's My Home Purchase Plan, of which 350 were from single people. Many applicants were young couples; some parents returned forms for their children. Monetary Authority guidelines for properties priced under HK$7 million say banks should not make a loan for which repayments exceed half the buyer's monthly income, or more than 60 per cent of income if interest rates were to rise two percentage points after purchase. The plan was conceived as a rent-to-buy scheme but was turned into a direct- sales scheme after Leung Chun-ying was elected chief executive. The rent-to-buy element is under review. The sales became more attractive when the society said it would provide guarantees for buyers to obtain mortgages of up to 90 per cent of the price from banks. Individuals with a monthly income of HK$25,000 or less and households with a monthly income of no more than HK$40,000 are eligible. Applicant Fred Yeung Tsz-yin, a clerk in his early 30s who rents a private flat in an old building, said he and his wife, with an income of HK$20,000 a month, hoped to buy in Greenview Villa even though it meant they could no longer afford to have a baby. "The rent keeps rising and we cannot continue to rent a flat in the long run," he said. The rent takes half their monthly income and he expects their expenses to rise by a third if they buy. Prices at Greenview Villa, a three-block estate with 988 flats expected to be completed by 2015, work out to HK$5,841 to HK$7,402 per square foot of saleable area, which excludes shared space and facilities. Yeung said the prices were similar to those for private second-hand flats. "This estate is new and the location is good, accessible by MTR." He said buying the flat would pose a heavy financial burden. "I hope the chief executive will reconsider the rent-to-buy scheme. I don't have much cash in hand and this requires a large sum of capital to start off." Another applicant, Joey Lam, plans to move in with her husband and two children, aged one and three. She said the family had income of about HK$30,000 a month and might have to cut extra-curricular activities for their children to save money. University student Roger Sung, 23, came with his father. "It's about time to purchase a property," he said. Applications are open until January 18 and ballot results will be announced in February. Greenview Villa is the first residential property development in the city at which flats are being sold by saleable area only rather than by gross floor area.

Macau-Hong Kong ferry collision injures 27 (By Johnny Tam and Jolie Ho) The TurboJet ferry involved in the collision with a marker buoy on Saturday parked at the Hong Kong-Macau pier in Macau after the incident. Rescuers remove an injured person from the ferry involved in a collision with a bouy in Macau waters. After the incident, the ferry was towed back to a Hong Kong-Macau pier Macau Harbour. Twenty-seven people were injured, four seriously, when a TurboJet jetfoil ferry leaving Macau for Hong Kong collided with a marker buoy on Saturday. The seriously injured are a 6-year-old boy, a pregnant woman and two males, one of whom has a fractured pelvis. The Macau authorities said on Saturay that 27 injured people - aged between aged between four and 60 - were admitted to the Centro Hospitalar Conde de São Januário for treatment. Those with non-serious injuries were mostly treated for mostly for minor abrasions and bruises. Lam Son, senior technical officer of the Maritime Administration in Macau, said the ferry was not speeding at the time of the collision, but that visibility was low - only 0.8 nautical mile. The ferry, which left Macau at 12.15pm, hit the No 5 marker bouy after deviating from its normal course at approvimately 12.30pm. At 1pm, the vessel was towed back to the Macau Maritime Ferry Terminal with minor surface damage, reaching the pier at 1.30pm, at which time rescue workers boarded the vessel to treat the injured. Ferry service, which was suspended for 45 minutes because of the collision, resumed at 1.30pm. Shun Tak Holdings, operator of 24-hour ferry service between Hong Kong and Macau under the brand name TurboJet, said on Saturday that a total of 177passengers and 8 crew members were on board the ferry involved in the incident.

Ban on protest stalls remains (By Dennis Chong) Police claim that Tuesday's march against the chief executive poses a higher risk to public safety than the annual July 1 demonstration - Police yesterday said a surprise ban on roadside political stalls along the route of a protest against Chief Executive Leung Chun-ying on New Year's Day was the result of an assessment which found the rally posed a higher risk to public safety than the annual July 1 march. And they insisted the ban would remain - despite the pan-democrats earlier calling the ruling detrimental to democracy and vowing to defy it. They were only told of the unusual ban earlier this month. Cheng Yiu-mo, Senior Superintendent of Hong Kong Island, said in a press conference yesterday: "On this occasion, the circumstances are very special … after a professional risk assessment, we consider it is necessary to impose the conditions." The force cited an ongoing product fair - the Hong Kong Brands and Products Expo - at Victoria Park, where the protest will start, as well as "special circumstances" of a public holiday where tourists are expected to pack the city's streets. "Certainly if we find street stations causing obstruction, we will first advise that they be removed. If the persons concerned do not listen to the advice, then we will take appropriate action," Cheng said. "Of course, arrests [would be] one action but only under exceptional circumstances." At least six other rallies will be held on New Year's Day, including one organised by Falun Gong and another by democracy activists. Supporters of Leung also plan to gather at Tamar, where the anti-Leung protest is scheduled to end. Cheng said he was confident that no clashes would erupt between protesters although he refused to say how many police officers would be deployed. He said that during this year's July 1 protest "the risk was certainly not as big". "There was no Hong Kong expo and it was not New Year's Day. Also there were no back-to-back protests." The Independent Police Complaints Council said last night it would be observing police conduct on Tuesday. The developments came as the chief executive's approval rating dropped below the 50-point pass mark for the third time since he took office in July. Leung scored 48.9 out of a 100-point scale in a Chinese University survey conducted from December 18 to December 22 in which 758 adults were interviewed by telephone. The rating was down 1.1 point from a similar survey in November and slightly higher than the record-low 48.8 points recorded in September. Researchers at the university's Hong Kong Institute of Asia-Pacific Studies said Leung lacked public trust after the scandal over unauthorised works at his Peak home. Leung has apologised and promised to rectify the problems by the end of January.

Star-studded drugs and assault scandal grows (By Vivienne Chow and Joyce Man) Kenny Wee Ho: his restaurant has a notice about the CCTV cameras. The fallout over the alleged existence of a video showing celebrities taking drugs at a restaurant has just escalated - with the boss of the restaurant Kenny Wee Ho suing TV actor Oscar Leung Lit-wai for making defamatory statements. It follows earlier demands from celebrities said to be present at the scandal-hit dinner for Wee to stop making defamatory statements. Now, Wee, the husband of 2006 Miss Hong Kong contestant Suki Chui Suk-man, is accusing Leung of making offending statements some time around December 6. The statements that Wee alleges are defamatory cannot be published for legal reasons. They were made after allegations that comedian Eric Tsang Chi-wai had slapped Wee in a row at a wedding reception at the Marriott Hotel on December 5. Tsang was arrested last week for common assault and criminal intimidation. He was released on bail and ordered to report back to police in mid-January. Wee had demanded an apology from Leung regarding his comments by noon on Monday. This apparently failed to materialise, and Wee then filed his claim for unspecified damages at the High Court on Thursday. "The defendant published the statements maliciously which were false and defamatory," Wee's lawyers wrote in the court filing. Wee is also seeking an injunction to stop Leung making any more defamatory statements about him. A TVB spokeswoman said that the TV station had no comment as the issue was under investigation. Born in 1979, Leung is the nephew of Shaw Brothers kung fu star Bryan Leung Ka-yan. He joined TVB in 2004 playing mostly supporting roles. Just this month, he won the TVB Most Vastly Improved Actor Award for performances including the portrayal of a man caught in Hong Kong's housing crisis in the drama series L'Escargot. The legal action is the latest development of an ongoing scandal involving a string of celebrities who were allegedly captured on CCTV consuming what was suspected to be illegal drugs at a dinner party in Wee's Taiwan Yiping Huadiao Chicken restaurant in Causeway Bay. It came to light last month when Wee commented on the alleged footage. On December 5, Canto-pop star Eason Chan Yik-shun and his actress-turned-fashion guru wife Hilary Tsui Ho-ying - who was allegedly at the dinner party - held a press conference to deny Tsui was a drug abuser. That same night, Wee reported to the police that he was slapped by Tsang at a wedding party. A week later, Tsui, together with actress Josie Ho Chiu-yee and other stars who allegedly attended the dinner, demanded Wee refrain from making further defamatory claims. Wee obliged. Tsang was arrested on December 19. On the same day, the board of Wee's restaurant, which is headquartered in Taiwan, said in a statement that CCTV cameras have been installed in the restaurant since it opened to protect customers' safety and any footage was the restaurant's property. The statement did not elaborate on the video rumours. A notice to the same effect was placed in a prominent spot at the restaurant's reception.

Trawling ban threatens local fish balls and shrimp paste (By Cheung Chi-fai) Lam Law-ping is reluctant to import fish-ball ingredients from the mainland. The ban on trawling in Hong Kong waters could result in the loss of two local delicacies - fish balls and shrimp paste - those in the industry warned. The owner of a popular shop that sells quality home-made fish balls, using local supplies, said his business would close if he cannot find affordable substitutes. And a veteran fisherman said locally made shrimp paste had already vanished. The trawling ban, intended to save remaining fish stocks in Hong Kong waters, comes into effect on Tuesday. Lam Law-ping, who has owned the Tak Hing fish ball shop in Kowloon City for 20 years, said he relied on local trawlers to supply him with enough lizardfish and conger-pike eels to produce about 70 catties (42,000 grams) of hand-made fish balls a day. He also produces a larger amount using machinery. "It is going to affect us greatly. In the worst case, we might have to close down our business," said Lam, who nonetheless supports the trawler ban because it will make fishing sustainable. Lam is one of the few fish ball makers who still insist on producing the popular fare locally instead of buying cheaper versions from the mainland. "We are making a meagre profit now but still we don't want to import mainland fish balls because it is against our conscience. We only sell fish balls that we know what they are made of." The right mixture of meat from lizardfish and eels produces the best taste and texture, said Lam. Without a local supply, he would consider buying frozen fish or fresh supplies from the mainland. But the former option means the loss of freshness, while the latter will mean higher prices as demand increases. Equally vulnerable is Tai O village's famous shrimp paste industry. The five remaining shrimp trawlers based at the 300-year-old Lantau village will cease operating under the ban. Industry insiders say the locally made red-brick-coloured paste has already gone for good. The shrimp fishing season ended in the summer and the stock of paste has sold out. It is made from a particular shrimp species, collected just above the seabed. But many such pastes - produced elsewhere and branded as Tai O's - are still being sold. Ng Kwun-yau, a 69-year-old fisherman born in Taishan and raised in Tai O, said: "Many places in Guangdong name their shrimp pastes after Tai O, and some of them are available in the village. But the authentic paste has already disappeared." Ng said the Tai O shrimp paste tasted better and had finer texture than the mainland product. The heritage foods have been in a long decline because of never-ending infrastructure projects, Ng said. "We used to trawl where the airport sits today. Now we have moved to places like the Brothers Islands and Yam O, but these places are now also heavily polluted and the number of shrimps has shrunk drastically." Dr So Ping-man, assistant director of the Agriculture, Fisheries and Conservation Department, said the ban would have only a minimal, temporary impact on local food production.

13pc of ocean-going ships registered with low-sulphur scheme (By Keith Wallis) Proportion of container vessels signing up to cleaner fuel programme higher, at almost 1 in 4 - An average of 13 per cent of ocean-going ships calling at Hong Kong each day have registered with the government's low-sulphur fuel incentive scheme, which aims to cut pollution from vessels, a South China Morning Post investigation found. The percentage is higher for massive container ships using Kwai Chung container port. The survey showed almost one in four container ships using Kwai Chung registered with the Environmental Protection Department (EPD) programme, launched at the end of October. Former Marine Department director Roger Tupper was surprised the figures were so high. The Post investigation, which tracked vessel arrivals and departures over a week, found around 70 large container ships, tankers, general cargo vessels and cruise liners visited Hong Kong each day. Of these about eight or nine are signed up to the scheme, which will cost the government HK$260 million over three years. Around 550 ships were registered with the EPD scheme up to mid-December, of which 192 had made a total of 460 calls at Hong Kong by the end of November. Some HK$2.45 million in port dues had been waived, according to a department spokeswoman. Operators of ships registered under the scheme receive a 50 per cent cut in port-related fees if the vessels burn low-sulphur fuel while berthed in Hong Kong. But the scheme has been criticised, as the rebate only offsets between 30 and 45 per cent of the increased cost of using the more expensive low-sulphur diesel. The scheme also sidesteps a key demand from environmentally aware shipping lines for government regulations mandating the use of low-sulphur diesel. Civic Exchange, the public policy think tank, said marine sources of sulphur dioxide emissions accounted for 519 premature deaths a year in the Pearl River Delta, including 385 in Hong Kong. Some 75 to 80 per cent of all emissions come from container vessels, it said. The Post found that some shipping lines are enthusiastic supporters of the EPD scheme, registering massive fleets even though they face higher costs. These include Orient Overseas Container Line, Maersk Line, CMA CGM and Hapag-Lloyd. But other container lines, like Singapore's APL, have either yet to register any ships or have registered just a handful, even though they were signatories to the Fair Winds Charter, a voluntary industry initiative to use low-sulphur fuel in Hong Kong. While the EPD has introduced its incentive scheme, regulations have yet to materialise. Veronica Booth, Civic Exchange senior project manager, said: "It's government's job to regulate. [The maritime sector has] put its money where its mouth is through participating in the Fair Winds Charter. It's government's turn now."

 China*:  Dec 31 2012

China firm to acquire major African iron ore mine (By Associated Press in Beijing) Chinese state media say a Chinese company is finalising the acquisition of an Australian mining firm that controls a major iron ore mine in west Africa, a move that would give China a stronger role in setting global iron ore prices. The official Xinhua News Agency, citing officials from Hanlong Group, says Hanlong will complete the acquisition of Sundance Resources Ltd. for 45 Australian cents (50 cents) per share by March 1. Sundance controls the Mbalam iron ore mine, which straddles Cameroon and the Republic of Congo. Xinhua said Saturday that Hanlong is investing US$5 billion to develop the Mbalam project — most likely in partnership with Chinese state-owned companies — and build a 550-kilometre railway and a shipping port. China is eager to acquire overseas resources to feed its growth.

China sets first-half rare earth export quota for next year (By Agence France Presse in Beijing) Samples of rare earth elements are converted to glass discs at the Molycorp Minerals Mountain Pass Mine in California. China on Friday announced its export quota for rare earth resources for the first half of next year amid declining prices and weak demand in the global market. China produces more than 95 per cent of the world’s rare earths, 17 elements critical to manufacturing everything from iPads to low-emission cars. The country has set production caps and export quotas on rare earths, saying it aims to protect resources and the environment in an effort to promote sustainable development. But China’s control over the sought-after resources has sparked a dispute with major trading partners. The government will initially allow exports of 15,501 tonnes of the resources in the first six months of next year, the Ministry of Commerce said in a statement. The quota accounts for roughly half of the full-year limit of 30,966 tonnes for this year and will be split among 24 domestic producers, the ministry said. The announcement came after China’s largest rare earths producer, Baotou Steel Rare-Earth, on Tuesday said it would suspend some of its production for a third month in an effort to stem falling prices. The price of praseodymium-neodymium oxide, a rare earths compound used for ceramics and magnetic materials, has slid to around 300,000 yuan (HK$373,058) per tonne, less than one fourth the level at the highest point last year, China’s official Xinhua news agency said on Tuesday. China grants two batches of export quotas on rare earth resources each year but the quota has not always been met due to flagging global demand. The country only exported 13,014 tonnes of rare earth ores, metals and compounds in the first 11 months of this year, less than half of the full-year quota of this year, according to customs data.

China sets date for 12th National People’s Congress (By Agence France Presse in Beijing) Visitors with the national flags in hands pose for photos on the Tian'anmen Square. China has fixed March 5, next year, as the date it will convene a key legislative session, state media reported on Friday, with new Communist Party chief Xi Jingping set to become president during the two-week meeting. The date for the start of the first annual session of the 12th National People’s Congress (NPC) was approved at an NPC Standing Committee meeting on Friday, the official Xinhua news agency reported. The announcement comes after the Communist Party in November chose current Vice President Xi to take over the reins of the ruling party from current President Hu Jintao. That was the first step in China’s highly choreographed once-a-decade leadership transition that sees the party change leaders first, with state positions, including president, premier and other key posts, filled at the NPC several months later. Xi is set to be formally selected as president during the NPC session, while Li Keqiang, another top party official, is slated to become premier, replacing Wen Jiabao, the positions’s current occupant. Xinhua said the legislative session would last about two weeks and would also deal with other important matters including approving a draft plan on national economic and social development for next year. The announcement of the start of the next NPC comes after November’s party congress, which had been expected some time in October, was delayed amid an internal party scandal involving disgraced politician Bo Xilai. Bo, the former party boss in the central mega-city of Chongqing, was once seen as a candidate for promotion to the party’s top echelons but was brought down by murder allegations against his wife that came to light after his police chief sought refuge in a US consulate. Gu Kailai, Bo’s wife, was later given a suspended death sentence -- a judgment commonly commuted to a life sentence -- for fatally poisoning British businessman Neil Heywood. Bo has been formally expelled from the party and is in custody awaiting trial for alleged corruption and abuse of power. The months-long controversy exposed deep divisions in the party’s top leadership ahead of the sensitive power transition, as Bo had influential patrons and a following among left-leaning members.

Chen Deming: China trade may show slowest growth - 6pc - since 2009 (By Victoria Ruan) Commerce minister's prediction of 6 per cent growth this year would be the mainland's slowest since 2009, when trade slumped by 13.9 per cent - Chinese Minister of Commerce Chen Deming. Mainland imports and exports will likely rise about 6 per cent this year, the slowest annual increase since the global financial crisis and far below the official target of 10 per cent growth. Commerce minister Chen Deming has repeatedly warned the country may miss its trade target this year amid a faltering recovery in the West and a domestic economic downturn. The forecast 6 per cent growth would be the worst since 2009 when trade slumped 13.9 per cent. According to a report posted on news portal Sina, Chen told an annual commerce work conference held yesterday that imports and exports grew 5.7 per cent in the first 10 days of December, compared with the same period last year. Mainland trade climbed 5.8 per cent in the first 11 months from a year earlier. The year-on-year trade growth accelerated to 6.4 per cent in the second 10-day period this month, partly because companies boosted activities in anticipation that some favourable trade policies would expire by the end of this year, Chen said. However, he noted "abnormal factors" behind the acceleration, such as an unusual surge in mid-December trade between the mainland and Hong Kong. In Hong Kong, where 90 per cent of trade is for transit, discrepancies between export data and its imports from the mainland amounted to more than US$54 billion, Chen said. "Therefore, we can't rule out that some local governments may have inflated their data," he was cited as saying, without elaborating. An official statement posted on the ministry's website later made no mention of Chen's forecast about 2012 trade growth or the comment about trade with Hong Kong. Instead, the statement said mainland trade would exceed US$3.8 trillion this year, while exports would account for 11 per cent of the world's total. Huo Jianguo, president of the Chinese Academy of International Trade and Economic Co-operation, believed the mainland trade situation may improve next year but that the "general environment would remain difficult". The State Information Centre, a think tank under the National Development and Reform Commission, recently forecast mainland exports may climb 8 per cent next year while imports may grow 7.8 per cent. The euro-zone economy will stay "on the edge of recession" in 2013, the institution said. The US economy may recover, boosting demand for Chinese exports, but trade frictions with China may intensify, it forecast. Chen estimated mainland foreign direct investment would reach US$110 billion this year, against US$116 billion last year. Outbound investment from non-financial companies will likely exceed US$70 billion this year, he said. Next year, Chen said the ministry will study policies to boost consumption focusing on durable goods like electric appliances and cars. It will also develop online shopping and support sales of environmentally friendly products. The ministry plans to stabilise exports and increase imports of goods such as energy, resources products and key components. Beijing will also slowly open up education, health care, finance, and telecommunications to foreign investors.

Vice-FM says US must be 'objective' (By Zhao Shengnan) A senior diplomat on Friday urged the United States to take "an objective and impartial position" in Asia-Pacific affairs amid the increased engagement between Beijing and Washington in the region. Addressing the Lanting Forum in Beijing, Zhang Zhijun, vice-foreign minister, said China and the US need to work to ensure that dialogue and cooperation outweigh frictions and differences in Asia-Pacific. Zhang made the remarks against the backdrop of the US' Asia "pivot" policy. While the US said it remains neutral on the territorial disputes in the region, it has become increasingly involved in disputes between China and some of its Asian neighbors. For instance, Washington has said that China's Diaoyu Islands fall under the US-Japan security treaty. According to Zhang, China respects the legitimate interests of the US in the region and welcomes its constructive role, but the US also needs to respect China's interests and concerns in the region. The two sides need to increase candid discussions on issues concerning the region and their respective Asia-Pacific policies so as to boost mutual understanding, expand common ground, steadily promote cooperation and appropriately approach and manage differences, Zhang said. "As far as the differences and frictions between countries in the region are concerned, we hope the US will take an objective and impartial position instead of siding with one party or doing things that are of disservice to settling the issue," he said. The Asia-Pacific region should not be an arena for China-US competition. Instead, it should be a grand stage for China-US cooperation, Zhang said. China-US ties aren't stable enough because sensitive issues keep surfacing, said Wu Xinbo, a scholar on China-US studies and associate dean of the School of International Relations and Public Affairs at Fudan University. China and the US should have more dialogue on profound topics, including whether the world should have one epicenter or several, whether the world should follow only one development model or several models, and whether all countries should strive to maximize their own interests or work to balance the interests of all stakeholders, Wu said. Wu proposed that the two countries enhance economic and global cooperation and reduce differences on ideology. At the Lanting Forum, Zhang also urged the new Japanese government to overcome difficulties in its relations with China and to "face up to history and reality" and strive to get bilateral ties back to normal. China-Japan relations hit their lowest point in years in September after Tokyo's illegal "purchase" of China's Diaoyu Islands. New Japanese Prime Minister Shinzo Abe took over on Wednesday. The Cabinet he has unveiled, which includes ultra-conservative politicians, has raised concern in China and South Korea. Zhang said China is "highly concerned" about "certain political movements" inside Japan and hopes Japan can follow a peaceful path. According to Zhang, since there are prolonged disputes over issues of territorial sovereignty and maritime rights in Asia, those involved should refrain from taking action that may expand or complicate the disputes. Instead, China will act to ensure that its development brings more benefits to neighboring countries and contributes even more to common development and cooperation in Asia, Zhang said. Liu Jianfei, deputy-director of the international strategy studies institute under the Party School of Central Committee of Communist Party of China, said that China wants the rest of the world to benefit from its development, but not at the cost of sacrificing its own interests. "Other countries should not misinterpret China's friendly wishes or infringe the country's interests," Liu said. It is also unfair to shield the real troublemakers and to criticize China for upholding its legitimate interests, said Liu, calling on all Asian countries to take the responsibility for the continent's stability and prosperity.

Hong Kong*:  Dec 30 2012

Kam Kee Café, Peking Restaurant pushed out by soaring rents (By Jennifer Cheng) Last orders after more than 40 years for two local eateries pushed out by skyrocketing rents - Chan Gui-chou, 91, owner of the Kam Kee Café in Shau Kei Wan, clears up after closing the doors for the last time. The restaurant has served locals for four decades but is the latest victim of skyrocketing rents. Kam Kee Café in Shau Kei Wan was swiftly emptied of furniture and appliances yesterday after selling its final milk tea on Wednesday. Two old-style Hong Kong restaurants that have served diners for more than 40 years closed this week due to soaring rents. The 45-year-old Kam Kee Café, a Cantonese-style eatery in Shau Kei Wan, served the last cup of its famous milk tea on Wednesday after the rent was increased by 150 per cent. Over in Jordan, the 42-year-old Peking Restaurant will serve the last of its popular Peking duck and Shandong roast chicken tomorrow. While the entrance sign said the restaurant was closing because the lease had expired and staff would not divulge details, a long-term customer said the closure was due to soaring rent. At Kam Kee Café, 91-year-old owner Chan Gui-chou and his wife, in her 80s, were philosophical as their restaurant was taken apart piece by piece. "There is no banquet under heaven that never ends," said Chan's wife, using a Chinese saying. "We heard that the new owner bought the property for HK$30 million so it's not a surprise that they've pushed up the rent." They do not plan to reopen in a new location. The Post earlier reported that the property owner wants to increase the rent for the 650 sq ft premises from HK$20,000 to HK$50,000 from January. It left a lasting impression on 25-year-old Wei Kai-cheng, a civil servant from Taipei, when he tried Kam Kee's condensed milk and peanut butter toast with cold milk tea for the first time a few years ago during a vacation. When Wei heard Kam Kee was closing, he made a trip to Hong Kong to savour this local fare one last time. But he was disappointed to learn the eatery had already stopped serving yesterday. "The flavour of the tea is much stronger at Kam Kee compared to other places," Wei said. "When you walk in, the interior makes you feel like you are travelling back in time." It does seem that time has been standing still at Kam Kee. The menu bears a six-digit telephone number of a type not used since the 1980s. At Peking Restaurant, Carmen Lau So-man, who works at garment maker TAL Group, ate with her colleagues and took photographs inside the restaurant. "My company has had a close relationship with the restaurant, having hosted New Year staff dinners here for the last 30 years," she said.

Bangladesh consulate 'close to a deal' on domestic helpers (By Phila Siu) Bangladesh's envoy says his office is 'very serious' about an agreement with local agencies to recruit domestic workers in his country - Ashud Ahmed, Bangladesh's consul general. Bangladesh's diplomatic representative in Hong Kong says his consulate is close to reaching an agreement with local employment agencies on recruiting domestic workers in the South Asian country to work in the city. The proposed agreement anticipates plans by both Philippine and Indonesian authorities to discourage their citizens from working as domestic helpers abroad, including Hong Kong, which employs more than 300,000 helpers from the two Southeast Asian countries. Ashud Ahmed, Bangladesh's consul general, confirmed yesterday that he and his officials had been in talks with the employment agencies and that he was confident an agreement was near. "I think it will be very soon, maybe around two to three months," Ahmed said. "We are thinking about it seriously … and we think that Hong Kong has a strong rule of law [to protect Bangladeshis]." He said that training was essential to ensure that Bangladeshis could work competently in Hong Kong, given the differences between the two places in way of life and language. However, Joe Chow Kui-kuen, the head of Asosiasi PPTKI Hong Kong, an organisation which represents 200 employment agencies in the city, said the talks had snagged on the issue of who would train the workers. The Bangladeshi government wanted the agencies to help co-ordinate official training programmes in Bangladesh, but the agencies had reservations about doing so, Chow said. "If we have to co-run the programmes with the [Bangladeshi] government, it will be hard to guarantee the quality," Chow said. "That's because if we think the programmes are not good enough, it will be hard for us to negotiate with the government." The agencies have instead proposed managing the programmes jointly with private training companies in Bangladesh, but they had yet to reach an agreement on this point, he said. In August, Chow said that the Hong Kong government had been involved in the talks with the Bangladeshis on the matter, and that "as far as I know, success is near". Yesterday he said that talks with the consulate began about six months ago. Bangladesh's labour department was involved but not Hong Kong's, he added. The Immigration Department does not ban Bangladeshis from working as domestic helpers in Hong Kong, as it does in the case of Vietnam, Nepal and Cambodia, as well as the mainland. Chow believes that an arrangement with Bangladesh will help to avoid a shortage of domestic workers that will occur once the Philippine and Indonesian plans, scheduled for 2017, take effect. He predicts that, with a population of about 160 million, Bangladesh could send up to 5,000 helpers to Hong Kong in the first year, rising to 10,000 by the third year. They would be attracted by the city's minimum wage of HK$3,920 a month, he added. As of July, there were 149,009 Filipino and 152,557 Indonesian helpers in Hong Kong, accounting for almost 98 per cent of the domestic workers in the city.

Asia Weekly names Diaoyu voyagers 'people of the year' (By Peony Lui) Eight Diaoyu activists from Hong Kong, Macau and mainland are featured on cover of Asia Weekly as 'persons of the year' for 2012. Hong Kong fishing vessel Kai Fung No 2 docks at a public pier at Hong Kong's Victoria Harbour. Vessel owner Lo Chau. Yeung Hong speaks to the media after the expedition. Eight activists from Hong Kong, Macau and the mainland who sailed to the Diaoyu Islands to claim them for China appeared on the cover of Asia Weekly as “people of the year”. Lauded as national heroes in the Chinese-language magazine are captain Yeung Hong, vessel owner Lo Chau, Tsang Kin-shing, Koo Sze-yiu, Wong Fah-man, Lo Chung-cheong, Ng Shek-yiu from Macau and Fang Xiaosong from the mainland. The activists have “changed the course of history in China, as well as the power structure in Asia” by their “fearless determination, passion, wisdom and action", said the report. A total of 14 people embarked on a voyage aboard fishing vessel Kai Fung No 2 on August 12 to assert Chinese sovereignty over the disputed islands. They made a triumphant return to Tsim Sha Tsui 11 days later after encountering drama with Japanese authorities near the islands. Seven members of the group managed to land on the main island and pitch China's national flag - the first time since 1996. All seven were profiled by Asia Weekly; Wong, who stayed on the boat, was commended for carrying the national flag. Asia Weekly's first 2013 edition commended their efforts and briefly profiled each of the eight activists. The 4,500-word report took Kai Fung No 2 as a point of departure and touched on issues such as patriotism, the wave of anti-Japan mass protests in mainland cities in September, cross-strait relations and Sino-Japan relations. “The voyagers presented a pure patriotic emotion,” said the report. “Although the activists are from the grass roots, they were able to sail across the waves of political diplomatic storms.” They “overturned Japan’s practice of nationalising the Diaoyu Islands”. The report also made comments about China’s patriotism. “More and more internet users are starting to question the level of corruption hidden beneath the surface of China’s ‘patriotism’.” “How can we talk of China’s patriotism when the sons and daughters of high officials are all shunning their obligations and enjoying their lives overseas?" In September, tensions over China and Japan's competing territorial claims on the Diaoyus spilled over into rowdy anti-Japanese protests in mainland cities. Beijing clamped down on the rallies soon after. The Asia Weekly report coined the term “rational patriotism” and rendered the violent protests in September to have “polluted the purity of patriotism”. It concluded that the voyage embodied “new hopes for China’s national sovereignty, dignity and political reform”, and that “Kai Fung No 2 unquestionably remains in everyone’s heart”.

The Hang Seng Index crept to its highest close in 18 months on Friday, as investors rotated into Chinese non-financial counters after Beijing raised hopes of quicker sector reforms. Hang Seng tests fresh 17-month high.

Hong Kong's exports of goods rise 10.5 pct in November (Xinhua) The value of Hong Kong's total exports of goods rose 10.5 percent from a year ago to 307.8 billion HK dollars (about 39.7 billion U.S. dollars) in November, the city's statistics department said here on Thursday. The value of re-exports increased 10.7 percent to 302.6 billion HK dollars, and the value of domestic exports fell to 5.1 billion HK dollars. The value of imports of goods rose 9.0 percent to 351.8 billion HK dollars in November, bringing the trade deficit to 4.1 billion HK dollars. A government spokesman said that merchandise exports rebounded notably in value terms in November over a year earlier, after a modest fall-back in October, and the fluctuating reflected a continued unsteady external trading environment. The spokesman said the fragile fundamentals of the advanced economies will continue to weigh on their final demand in the near term, and Hong Kong's export outlook remains challenging. For the first 11 months of 2012, the value of total exports of goods in Hong Kong rose 1.9 percent from a year ago, with the value of re-exports climbing 2.2 percent and the value of domestic exports falling 11.7 percent. Concurrently, the value of imports of goods rose 3.2 percent, bringing the trade deficit to 429.9 billion HK dollars in the first 11 months.

 China*:  Dec 30 2012

Beidou launches navigation data for Asia-Pacific region (By Minnie Chan) Satellite navigation network launches tracking data for Asia-Pacific region in warning to GPS - Ran Chengqi, the spokesman for the Beidou Navigation Satellite System. The Beidou satellite navigation network began offering positioning data yesterday for the Asia-Pacific region - a milestone in Beijing's bid to challenge the US-controlled Global Positioning System (GPS). The move comes exactly a year after authorities provided the first satellite location information to civilian users on the mainland using the second-generation Beidou Navigation System (BDS). Expanding into the Asia-Pacific region - from Afghanistan to the Western Pacific and Mongolia to northern Australia - puts the system on track to claim 15 to 20 per cent of the GPS-dominated domestic market by 2015, said Ran Chengqi , a BDS spokesman and director of the China Satellite Navigation Office. Beijing aims to have BDS serve 70 to 80 per cent of the domestic market by 2020, when it is expected to become China's first global navigation system. An early version has been used by traffic control systems in more than 100,000 vehicles in nine provinces and cities. "We are stepping up efforts to turn BDS into an international system, which will be commonly used by civil aviation, maritime and mobile communication organisations," Ran said. The central government has spent billions on the system and in the coming decade plans to invest over 40 billion yuan (HK$49 billion) more, Ran said. By 2020, Beidou is expected to comprise a network with 35 satellites, providing Chinese military and civilian users around the world with positioning, navigation and timing services. An estimated 95 per cent of global-positioning equipment on the mainland still relies on GPS data, Xinhua said. Meanwhile, the output of the country's navigation service sector is expected to top 120 billion yuan this year. "We are encouraging our potential clients to use both BDS and the GPS system, as Beidou is compatible with other networks," Ran said. He acknowledged that the relatively high price of Beidou receiver chips would remain a barrier to commercialising the system, even though he said its technology was more advanced than that used by GPS, Russia's Glonass and Europe's Galileo. "Since Beidou is a budding business, there is a gap between our system and GPS as well as other overseas peers, with prices being the biggest difference," Ran said. Increasing the number of BDS users would help bring down the price. Satellite expert Wang Xudong , an adviser to the central government, said Beidou would eventually be cheaper than GPS if it becomes commonly used in mainland mobile phones, cars and public transport.

China launches rival GPS satellite system (By Agence France-Presse in Beijing) China has launched commercial and public services across the Asia-Pacific region on its domestic satellite navigation network built to rival the US global positioning system. The Beidou, or compass, system started providing services to civilians in the region on Thursday and is expected to provide global coverage by 2020, state media reported. Ran Chengqi, spokesman for the China Satellite Navigation Office said the system’s performance was “comparable” to GPS, the China Daily said. “Signals from Beidou can be received in countries such as Australia,” he said. It is the latest accomplishment in space technology for China, which aims to build a space station by the end of the decade and eventually send a manned mission to the moon. China sees the multi-billion-dollar programme 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. The Beidou system comprises 16 navigation satellites and four experimental satellites, the paper said. Ran added that the system would ultimately provide global navigation, positioning and timing services. The start of commercial services comes a year after Beidou began a limited positioning service for China and adjacent areas. China began building the network in 2000 to avoid relying on GPS. “Having a satellite navigation system is of great strategic significance,” the Global Times newspaper, which has links to the Communist Party, said in an editorial. “China has a large market, where the Beidou system can benefit both the military and civilians,” the paper said. “With increases in profit, the Beidou system will be able to eventually develop into a global navigation satellite system which can compete with GPS.” In a separate report, the paper said satellite navigation was seen as one of China’s “strategic emerging industries”. Sun Jiadong, the system’s chief engineer, told the 21st century Business Herald newspaper that as Beidou matures it will erode GPS’s current 95 per cent market share in China, the Global Times said. Morris Jones, an independent space analyst based in Sydney, Australia, said that making significant inroads into that dominance anywhere outside China is unlikely. “GPS is freely available, highly accessed and is well-known and trusted by the world at large,” he told reporters. “It has brand recognition and has successfully fought off other challenges.” Morris described any commercial benefits China gains as “icing on the cake” and that the main reason for developing Beidou is to protect its own national security given the possibility US-controlled GPS could be cut off. “It’s that possibility, that they could be denied access to GPS, that inspires other nations to develop their own system that would be free of control by the United States,” he said. “At a time of war you do not want to be denied” access, he said. The Global Times editorial, while trumpeting Beidou as “not a second-class product or a carbon-copy of GPS” still appeared to recognise its limitations, at least in the early stages. “Some problems may be found in its operation because Beidou is a new system. Chinese consumers should ... show tolerance toward the Beidou system,” it said.

Shanghai set for new visa plan (By WANG YING and SHI YINGYING in Shanghai) Tourists from 45 countries will be able to enjoy a 72-hour visa-free stay in Shanghai with all-round customized traveler services, sources said on Thursday. Starting on Jan 1, tourists from 45 countries who have third-country visas and plane tickets can apply for a transit without a visa application in Shanghai. The city is the second on the mainland after Beijing to launch the new visa plan to boost tourism. Shanghai-based China Eastern Airlines has planned a full package of services to make the three-day stay enjoyable for foreign passengers, sources from the company said. "We have packaged our tickets with services including hotel reservations, car rentals, and one- to three-day tours. International travelers will be able to book all these services from our service hotline or our overseas sales offices," said Zhang Qing, deputy senior manager in the marketing development department of China Eastern Airlines' marketing and sales committee. Booking services will be offered in several different languages, Zhang said. The visa-free policy is expected to enhance the development of Shanghai as an international city, and stimulate the city's tourism industry, analysts said. Shanghai already has a program that allows passengers from 32 countries to have 48-hour visa-free stays in the city. "The prolonged stay period will enable travelers to have leisure time in Shanghai and other cities in the Yangtze River Delta region," said Gao Jianrong, deputy general manager of Pudong passenger services center from China Eastern Airlines' ground service department. Nearly 500,000 international passengers traveling by China Eastern Airlines have made transits in Shanghai this year, and the amount of transit passengers is expected to grow in 2013, Zhang said. "I think it's a good improvement because our visa policy couldn't keep up with the needs," said Jiang Yiyi from the China Tourism Academy. "Our neighbors in Southeast Asia, such as Malaysia and Thailand, have been loosening their visa policies to attract more tourists in recent years." "Even Japan started to do it after the earthquake," she said. Jiang also called for new measures including a more relaxed duty-free policy. "I often find myself stuck at the airport with boring delays when I transit in Beijing or Shanghai," said Matt Hodges, a British national who works in Seoul. "I was thrilled when I heard that I can now leave the airport, or even extend my layover for a few days, without having to pay for an expensive visa." Hodges said that many of his foreign colleagues have taken two-day trips to Chinese cities, and they're excited about the new policy. "It'll definitely give local tourism a boost," Hodges said. Veronika Karausova, a financial analyst at KPMG in Yekaterinburg, Russia, said the new visa policy is a step forward for China to further develop international relations. "This policy will be well received by all travelers to China, especially businessmen. I am certainly looking forward to making the most of it in 2013," Karausova said. James Macdonald, head of UK-based real estate adviser Savills Research China, predicted that lots of tourists, especially ones from the US and Europe, will want to stay longer than three days. "I believe the biggest impact will be on the meetings, incentives, conferences, exhibitions industry, as it will make it easier to organize events in China while inviting attendees from overseas. This should boost the hotel industry as well as demand for conference facilities in Beijing and Shanghai," Macdonald said. Shanghai's visa-free policy was first introduced in 2000. The 24-hour visa-free stay is available to all transferring international passengers passing through the city while the 48-hour policy applies to visitors from 32 countries including the United Kingdom, the United States, Japan, Singapore, Germany, France, Hungary and Switzerland.

Lang Lang's performance marks theatre anniversary (China Daily) Renowned pianist Lang Lang performs at the National Centre for the Performing Arts (NCPA) in Beijing on December 27. The performance is part of NCPA Fifth Anniversary Piano Concert. Lang was the first Chinese pianist to perform for president of the United States. 

China "not fear troubles" regarding Diaoyu Islands: official (Xinhua) Vice Foreign Minister Zhang Zhijun said Friday that China will neither create nor fear any troubles concerning the Diaoyu Islands. He made the remarks in response to a question concerning China-Japan relations at the eighth Lanting Forum. Zhang said the Diaoyu Island and its affiliated islets are inherent parts of China's territory, and Chinese government and its people's determination to safeguard the country's territorial sovereignty is firm. "We hope for a stable and peaceful surrounding environment, we will not create troubles, but we definitely not fear any trouble," Zhang said. China believes the two sides should manage the issue through talks and consultations to avoid escalation, he said. "We hope the Japanese side can face history and reality and make correct decisions in order to properly handle the issue," he said, adding that stable and healthy bilateral relations are in the interests of the two countries and the region. Zhang added that China has recognized that some officials in Japan's newly established cabinet have shown willingness to boost bilateral ties, adding that China hopes Japan's new government can improve ties and properly handle differences. Zhang said China has paid great attention to the development of Japan's domestic politics and hopes Japan will follow a path of peaceful development, which he described as the premise of Japan's constructive role in maintaining regional peace and stability.

Hong Kong*:  Dec 29 2012

Right on track (By Eddie Luk) The new bullet train service between Guangzhou and Beijing arrived right on schedule yesterday - but it is not likely to get Hong Kong travelers too fired up, travel agents say. The first train from Beijing pulled into Guangzhou North Station at 4.59pm yesterday - just eight hours after it left Beijing. Many train enthusiasts and commuters, including Hongkongers, rushed to take the first train, which left Beijing at 9am. But agents say eight hours is still too long to attract Hong Kong vacationers, who do not mind paying more to fly. Experts expect only a small number of Hong Kong travelers, mainly lovers of train journeys, to be enthusiastic about taking high-speed trains from Guangzhou to Beijing. Hong Thai Travel Services director Jason Wong Chun-tat said his agency has no plan at this stage to organize mainland tours using the high-speed trains. "We believe the majority of Hong Kong travelers still prefer taking flights to Beijing," Wong said. "It will take too long to travel from Hong Kong to Guangzhou and then board the high- speed train to Beijing." Miramar Travel general manager Alex Lee Chun-ting said his agency will consider organizing tours using high- speed trains though it expects the number of travelers to be small. "Generally, mainland tours last for several days," he said. "It will be a waste of time to take the train and we believe most customers are willing to pay more to fly to their destinations. "There are many high-speed train routes in the mainland should Hong Kong travelers want to enjoy the experience. They don't need to spend eight hours traveling to Beijing." Former Travel Industry Council chairman Ronnie Ho Pak-ting said he believes local travel agencies may not be interested in high-speed train tours as most local travelers still prefer taking flights. An hour after the first train left Beijing yesterday, another train left Guangzhou for Beijing. However, the train from Guangzhou was delayed for almost an hour as it traveled slower on the section at Shijiazhuang city in Hebei because of snow and ice. The train, which left Guangzhou at 10am, arrived in Beijing at 6.55pm. After yesterday's opening of the 2,298-kilometer line, rail officials said the route - which also links other key cities and provinces, including Shijiazhuang, Hebei, Henan and Wuhan - will boost economic development in several regions and the Pearl River Delta. Since the cost of a ticket for the world's longest bullet-train ride ranges from 865 yuan (HK$1,074) to 2,972 yuan, some mainland air companies have slashed prices of short-haul flights to less than 200 yuan. Flights from Beijing to Guangzhou, which take less than three hours, cost 1,800 to 2,000 yuan. One mainland commuter, surnamed Wang, said: "I'm thrilled with the opening of the new rail link. The price of high-speed train tickets is still attractive and much lower than the air fare. "I believe that the new rail link will become popular for mainlanders who need to travel from Beijing to various southern cities." A Hong Kong traveler surnamed Chiu, who immigrated to Canada, said he returned 10 days ago to be on the first train from Beijing. He said the seats are comfortable with plenty of leg room. But some passengers complained of having to eat cold lunch boxes at prices from 15 to 45 yuan and being unable to connect on their computers through WiFi. State media reported that December 26 was chosen to start the Beijing- Guangzhou service to mark the birth of Mao Zedong in 1893.

$70m flat deal avoids hefty stamp duty (By Victor Cheung ) Buyers of luxury homes are becoming more and more comfortable dodging the stamp duty with deals done through company transfers - and the market is seeing the largest such transaction since the punitive tax came into force in late October. A unit at The Cullinan above Kowloon Station changed hands for HK$70 million, market rumors said. The price of the 2,070-square-foot apartment - flat A on the 79th floor of the Sun Sky section - translates to HK$33,816 psf. The deal is set to be done by a change of ownership and director of the company that owns the property, agents said. The stamp duty is not applicable to buyers for such deals - otherwise, the 15 percent levy would have translated into HK$10.5 million in extra cost. Instead the parties would need to pay only the 0.2 percent stamp duty for the change in ownership of the company, which amounts to HK$140,000. The company bought the flat in September 2010 for HK$51 million. The potential transfer would result in a HK$19 million windfall by holding it just over two years. If the company had been required to pay the tax, the profit for its owner would have shrunk by more than half to less than HK$9 million, excluding fees. The Real Estate Developers Association has appealed for a waiver of the stamp duty for local company-buyers who hold homes for the long term, but the government will not compromise. Agents said while most high-end home owners hold the properties under shelf companies, they rarely buy them through company transfers because that involves enormous risks, such as taking over hidden debts. Instead they set up fresh companies and buy them. But more buyers opted for the company-transfer option, while trying to conduct more thorough due diligence to make sure the shelf company is "clean" with the implementation of the stamp duty. "The tax is obviously a driver," a senior agent said. "It means a lot of money, and all of them are try to get around it." The market has not seen any "real- name" deals since the implementation of the stamp duty, but earlier this month another unit was sold for HK$38 million through a corporate transfer. Meanwhile, at The Latitude in San Po Kong, Kowloon, a unit recently changed hands for HK$15 million, or HK$11,538 psf, also through a corporate transfer.

Veterinary surgeon shortage 'poses threat to public health' (By Emily Tsang) 'Shameful' shortage of care experts on farms due to city's lack of a training school may lead to rise in animal-related diseases, experts say - Dr Jane Gray, chief veterinary surgeon for the Society for Prevention of Cruelty to Animals (SPCA). A severe shortage of veterinary surgeons in Hong Kong is hitting farmers and posing a threat to public health. The crisis has been caused by a lack of veterinary training in the city and the fact that more than 90 per cent of the 400-plus vets practising in Hong Kong care for household pets. The issue has emerged at a time when the World Health Organisation (WHO) is warning of a mounting threat to humans from animal-related diseases. Veterinarian and infectious disease specialist Howard Wong Kai-hay said: "Hong Kong may be one of the few places in the world where we raise livestock and produce meat without [the supervision of] veterinarians. "That is pretty shameful ... especially when we require meat from other countries to meet high standards." Wong, who is City University's life science programmes director, said Hong Kong sat in a part of Asia where many diseases emerged and needed more animal care experts and academic research on the topic. "We are way behind time," he added. And Dr Jane Gray, chief veterinary surgeon for the Society for Prevention of Cruelty to Animals (SPCA), said: "There is definitely a lack of veterinary training in Hong Kong. The region is a hotbed for disease and more should be done about public health issues involving animals." The WHO warned recently that 70 per cent of emerging diseases were animal-related. Director-general Dr Margaret Chan Fung Fu-chun warned of a growing trend of deadly illnesses - such as Sars and bird flu - jumping from animals to humans. With no veterinary school, local people wanting to pursue the career must train overseas and many stay to practise in the country of their qualifications. Of 650 vets registered in the city, only about 400 practise here. This means there are just 68 veterinarians per 1 million population, compared to 281 in Japan and 332 in Australia. Adding to the pressure is a growing trend for pet ownership with the numbers surging 40 per cent to 415,000 last year. Agriculture and fisheries lawmaker Steven Ho Chun-yin said: "There are not enough vets in the city and most vets are keener to run private pet clinics than work on the farm." Ho said most of the 70 local farms were without resident veterinarians for their average daily output of 255 pigs and 10,300 live chickens. If there is an outbreak of disease, farmers have to alert the Agriculture, Fisheries and Conservation Department (AFCD), which will send a veterinarian. But Ho said a resident vet would be able to detect early symptoms that farmers might not identify. City University, which wants to establish the city's first veterinary school in 2014 - including a training farm, hospital and laboratory - submitted a new proposal to the University Grants Committee on December 10. It will be considered in January. Gray said while the SPCA had no trouble recruiting, it had difficulty retaining experienced staff. The AFCD, which employs 25 vets, has five vacancies but says it has no recruiting problems.

Number of quality migrant applicants rises 10pc in Hong Kong (By Simpson Cheung) Mainlanders account for the most, according Immigration Department's latest figures - Student Katy Tam (left) and Qi Jia, a former national figure skater who moved here as a quality migrant in October. Hong Kong has seen an increase of nearly 10 per cent in the number of well-qualified people who want to live here, says the Immigration Department. Most of those approved were from the mainland. In the first 11 months of the year, 1,834 people applied for admission under the Quality Migrant Admission Scheme - 9.5 per cent more than in the whole of last year - the department said. Since 2006, the department has approved 2,392 applications - 77.6 per cent of them from the mainland. The programme was set up to attract highly qualified people without the prior offer of employment required for a normal working visa. The city issued 30,557 visas last year under the general employment policy. The quality migrant scheme worries some commentators because of the large proportion of mainlanders. Civic Party lawmaker Claudia Mo Man-ching said it showed a worrying trend of "mainlandisation" in Hong Kong. "It is not surprising that mainland China has more talent given its 1.3 billion population, but I feel uncomfortable about the overwhelming figure," she said. The next top sources of migrants are the United States, Australia and Canada - each accounting for 2.9 to 3.7 per cent. Qi Jia, 28, first runner-up in the 2004 Asian Figure Skating Trophy championship, was admitted under the scheme for her sporting achievements. Immigration figures show that more than half of those admitted as quality migrants were working in industries already well developed, such as finance, accounting, information technology, trading and commerce. Mo said Hong Kong should admit quality migrants in areas where talent was scarce, such as the cultural and scientific sectors, to avoid competition with locals. But assistant immigration director Chan Man-lang rejected claims the quality migrants were taking jobs from local talents. "We do not see any Hongkongers with good qualifications who cannot find a job because of this [scheme]," he said. Marjorie Yang Mun-tak, chairwoman of an advisory committee that vets applications, said more effort could be put into attracting talents from a broader variety of industries.

Huge crowds expected for New Year's Eve fireworks (By Johnny Tam) Police are bracing for about 100,000 people to flock to the Victoria Harbour waterfront to watch the New Year’s Eve countdown fireworks display on Monday, they said on Thursday. To ease crowd movements, police will close several streets to vehicles in Tsim Sha Tsui, Central and Wan Chai at various times of the evening. In Tsim Sha Tsui, the Hung Hom Bypass, Salisbury Road, Canton Road and other main roads will be closed to traffic from 7.30pm. The Star Ferry Terminus and Kowloon Park Drive will be closed off at 8pm. To let the crowd disperse after the event, Granville, Mody and Kimberley roads in Tsim Sha Tsui will be closed from 11.30pm. In West Kowloon, Austin Road West and the Nga Cheung Road flyover will be closed after 10.30pm. On the Hong Kong Island side, Expo Drive in Wan Chai will be closed to traffic from 9pm. After the event, Convention Avenue will be closed from 11pm. In Central, areas near the ferry piers will be closed to traffic from 6pm. Roads in Lan Kwai Fong will be shut down in stages from 6pm. Roads will also be closed around Victoria Park and Times Square in Causeway Bay. Other roads may be closed for emergencies. Police are urging members of the public to take public transport to these areas on Monday evening. “[Most of the lines of] the MTR will be in service overnight, so the public should use the public transport system,” said Peter Ip, chief inspector of enforcement and control for Hong Kong Island traffic. He appealed to the public not to drive after drinking or taking drugs.

 China*:  Dec 29 2012

Food takes a back seat on high-speed train from Guangzhou to Beijing (By Mimi Lau en route from Guangzhou to Beijing) Hungry passengers made to wait on inaugural trip from Guangzhou to Beijing - Passengers wait outside the ticket gate in Beijing before boarding the sleek train on what is the world's longest high-speed railway route. The new high-speed train between Guangzhou and Beijing made its public debut yesterday. It cut travel times between the cities from 24 hours to about eight, but most of the conversation on board was less about the speed of the train than the sluggish food service. A reporter and photographer from the South China Morning Post boarded the G80, which left Guangzhou South Railway Station at 10am yesterday for Beijing, travelling at 300km/h for most of the 2,298-kilometre trip. Another train left Beijing for Guangzhou. The world's longest high-speed train service, it was scheduled to arrive at Beijing West Railway Station at 5.59pm but was delayed by an hour due to snow in Henan , just before arriving at Zhengzhou East Railway Station, which reduced the train's top speed to 185km/h for a good hour in the afternoon. With about 1,000 passengers on board, there was only one dining carriage with 38 seats and four attendants scrambling to heat lunch boxes in four microwave ovens at lunchtime. Disgruntled passengers had to line up for hours for lunch boxes costing 15 yuan (HK$18) to 45 yuan. The Post journalists had to wait for 2-1/2 hours, only getting lunch at around 2.40pm after being spotted by railway officials anxious to avoid poor reviews. Many other passengers were still queuing for lunch at 3.30pm. While high-speed train travel is no longer a novelty on the mainland, following the opening of the Wuhan -Guangzhou line in 2009, the opening of the Beijing-Guangzhou service is noteworthy because it will put the mainland's high-speed rail technology to the test in a range of climate conditions. To many, the 865 yuan fare for an eight-hour train journey might not compare that favourably to the cost of air travel, but the new line is a blessing to residents of the many smaller cities between the two metropolises. Ren Haicheng, 59, from Baoding, Hebei , was travelling with her two daughters, both doctors - one working in Guangzhou and the other in Beijing. "I suffer from motion sickness," she said. "It took me two days and one night on a conventional train to see my elder daughter and another 24 hours for the other one so I often stocked up on motion sickness pills, but now they are only eight hours apart on a comfortable train journey. I'm really thrilled." One of the youngest passengers onboard was a two-month-old girl from Beijing. "High-speed rail is effective and the change of air pressure is kinder to a baby's eardrums," her grandmother said. "She hasn't cried at all and the train has been running for two hours already." The train can also be caught from Shenzhen North Railway Station. Before the Shenzhen-Hong Kong leg of the high-speed line is completed in 2015, Hongkongers can take a subway train from Futian to Shenzhen North after crossing the border at Lok Ma Chau. All tickets for second-class seats from Guangzhou to Beijing were sold out but there were plenty available in first class and business class. First-class tickets cost 1,383 yuan and business class ones 2,927 yuan.

China factory profit growth jumps as recovery builds (By Reuters in Beijing) Annual growth of China’s industrial profits quickened to 22.8 per cent in November from October’s 20.5 per cent, official data showed on Thursday, reinforcing signs of a steady economic recovery thanks to pro-growth policies. Chinese industrial firms made 638.5 billion yuan (US$102.4 billion), China’s National Bureau of Statistics (NBS) said in a statement published on its website, A second month of strong double-digit profit growth reinforces the view of analysts that China’s economy has gathered momentum in the fourth quarter. Factory profits rose only 7.8 per cent in September from a year earlier. Among 41 sectors surveyed by the bureau, 30 reported rising profits in the first 11 months, led by a 62.9 per cent jump for power generation firms, a 16.6 per cent rise for food processing firms and 11.5 per cent for telecommunications equipment makers. But some sectors are still struggling, with profits of ferrous metal smelting firms tumbling 47.9 per cent while earnings of chemical companies falling 10.1 per cent. In the first 11 months of this year, losses among oil processing, coking and nuclear fuel processing firms were more than four times larger than what they lost a year earlier. Industrial profits in the first 11 months of this year totalled 4.66 trillion yuan, up 3 per cent from a year earlier, the bureau said. For the January-October period, profits had been up only 0.5 per cent from a year earlier. China’s factory output, meanwhile, is on course to grow 10 per cent this year from last year, the country’s industry minister Miao Wei said on Thursday. The industrial sector could contribute 40 per cent of the country’s economic growth this year, Miao said at the ministry’s annual work conference. The delivery of exported industrial goods this year is likely to grow 6.9 per cent from a year ago, he added. The ministry also pledged to cut energy and water consumption for each unit of industrial value-added by 5 per cent and 7 per cent respectively next year, according to Xinhua. China’s economy is strengthening in the fourth quarter, following seven straight quarters of slower growth, thanks to new pro-growth policies rolled out by the government in recent months, including approvals for US$157 billion worth of infrastructure projects. According to a Reuters poll, China is on course to achieve growth of 7.7 per cent this year, the slowest full year of expansion since 1999. Chinese leaders have promised to maintain a “prudent” monetary policy and pro-active fiscal policy next year, leaving room for manoeuvre in the face of global economic risks while deepening reforms to support long-term growth.

Cast members promote new comedy film "Odyssey" in Beijing - The new fantasy comedy film "Odyssey", directed by Stephen Chow and Derek Kwok, will be released during the Spring Festival of 2013.

A couple takes photo with black-headed gulls in Kunming, capital of Southwest China's Yunnan province on Dec 27, 2012. 

80 million fly through airport (By XIN DINGDING) Beijing Capital International Airport welcomed its 80 millionth passenger this year on Wednesday, reaching its designed capacity five years ahead of schedule. It remains the world's second-largest airport in terms of passenger traffic, trailing only Hartsfield-Jackson Atlanta International Airport in the United States, which handles nearly 90 million passengers a year. Passengers wait in lines to check in at Terminal 3 at Beijing Capital International Airport earlier this year. Wang Yi, the 80 millionth passenger at the capital airport this year, arrived on a China Southern Airlines flight from Guangzhou at noon. When asked how he felt about the airport, he said it is "a little bit crowded". Industry insiders said "crowded" will be the word that passengers think of when they walk into the capital airport, before the second capital airport of Beijing opens around 2018. The airport estimated it will handle 81.6 million passengers this year. It took just two years for the number of passengers to increase from 70 million a year in 2010 to 80 million this year, and the airport estimates that the yearly total will exceed 90 million by 2015. The second capital airport, which is expected to divert much of the growing traffic, will not open for another five or six years, according to Li Jiaxiang, head of the Civil Aviation Administration of China. "We have to come to a point that, whether willingly or not, we must come up with new plans to solve the problem along with the rapid growth of air traffic," Zhang Guanghui, general manager of the capital airport, said on Wednesday. He said the airport is currently "researching what resources, both in the air and on the ground, can be used". He said the capital airport was designed with a fourth runway, which can increase passenger capacity by at least 10 to 15 percent. But due to the limited airspace available to civil aviation, building the fourth runway has not been on the airport's agenda. Ouyang Jie, a professor at the Civil Aviation University of China who specializes in airport studies, said the three runways at the capital airport have almost reached their maximum capacity due to the limited airspace. "Adding a fourth won't help with the traffic pressure, because without enough airspace, planes won't be able to take off or land on the additional runway," he said. "The airport's infrastructure will have no problem handling 90 million or more passengers a year in the coming years, but the airport will have to sacrifice its service quality," he said. He suggested the capital airport divert some of its domestic passenger traffic to neighboring airports, such as Tianjin or Shijiazhuang. It's a feasible option because the airports in the two cities are connected to Beijing by high-speed trains with only an hour's travel time, he said. But industry insiders said the market may not accept the arrangement, and most passengers may not opt for flights to Tianjin or Shijiazhuang instead of Beijing. Zhang, the airport's general manager, said the airport is planning to use an idle section in the third terminal building that was originally reserved for handling international travelers. The section will be used next year to handle the overflow in domestic air traffic.

Beidou system starts service in Asia-Pacific (Xinhua) China's domestically-produced navigation system aims to take 70 to 80 percent of the now GPS-dominated domestic market by 2020, a spokesman for the system said Thursday. We hope industries based on the BeiDou Navigation Satellite System (BDS) will hold 15 to 20 percent of the market share by 2015, according to BDS spokesman Ran Chengqi, also director of the China Satellite Navigation Office, at a press conference on the official launch of the system. China successfully launched another satellite into space for its indigenous global navigation and positioning network at 11:33 p.m. Beijing Time Thursday from the Xichang Satellite Launch Center in the southwestern province of Sichuan. Ran announced that the BDS began providing positioning, navigation, timing and short message services to civilian users in China and surrounding areas in the Asia-Pacific region on Thursday. Ran said the general functionality and performance of the BDS is "comparable" to the GPS system. He further explained that the BDS open service is currently available and features positioning accuracy of 10 meters, velocity accuracy of 0.2 meters per second and one-way timing accuracy of 50 nanoseconds. The BDS offers more conveniences for navigation system users with equipment that is compatible with multiple navigation systems, as they will no longer have to rely on a single service, said Ran. A 2011 report said 95 percent of satellite navigation equipment in China relied on GPS services, while industrial statistics show that the total output of China's navigation service sector will top 120 billion yuan (19.2 billion U.S. dollars) in 2012. China launched the first satellite for the BDS in 2000, and a preliminary version of the system has been used in traffic control, weather forecasting and disaster relief work on a trial basis since 2003. 

US surpasses EU as biggest buyer of Chinese exports (By Zheng Yangpeng) The United States surpassed the European Union in the first 11 months of 2012 to become the largest buyer of Chinese exports, according to data released by the Commerce Ministry on Tuesday. The value of US trade with China increased by 8.2 percent year-on-year to reach $438.62 billion, according to the ministry. At the same time, China's exports to the US increased by 8.2 percent to $319.4 billion, and its imports from the US went up by 8.1 percent to $119.2 billion. China's trade surplus with the US has also increased in the year, going from $148.3 billion in the first nine months to $200.3 billion in the first 11 months. The EU, for its part, saw its trade with China decline. In the first 11 months of the year, its trade with China decreased by 4.1 percent year-on-year, and its imports from China dropped to $302.3 billion. Japan's trade with China also dropped by 2.9 percent year-on-year during the period. Even so, China's total foreign trade was up in the first 11 months of the year, increasing by 5.8 percent to $3.5 trillion, although that rate of increase was far below the goal of 10 percent set at the beginning of the year. And trade with the US has not been as vigorous in recent months as it was earlier in the year. The past two months have seen it slow below the 9.1 percent year-on-year rate of increase it showed in the first nine months. Zhou Shijian, a senior trade expert at Tsinghua University, blamed the slower trade on the US' sluggish economic recovery. The US economy grew by 2.7 percent in the third quarter of the year. Yet many expect the rate to be slower in the fourth quarter, as the country braces itself for going over the "fiscal cliff", a combination of deep cuts in government spending and tax increases that are scheduled go into effect early next year. "US consumers see an uncertain economic future and are tightening their purse strings," Zhou said. Even so, he said, the US is doing much better than the EU or Japan. Zhou forecast that trade between China and the US will continue to increase next year, saying the US economy is recovering, though at a slow rate. Wang Li, a researcher with the Ministry of Commerce's International Trade and Economic Cooperation Institute, said US controls on technology exports remain an obstacle to trade with China. During a meeting last week of the China-US Joint Commission on Commerce and Trade, the US pledged to respond to China's concerns about fair treatment for direct investments in the US, controls on technology exports and various visa matters. In the first 11 months of 2012, US' actual investment in China increased by 11.6 percent from a year earlier to hit $2.4 billion. During the same period, China approved the establishment of 1,180 US-funded companies, down 8.9 percent year-on-year. By the end of November, the cumulative direct investment from the US had reached $70 billion. China remains a small investor in the US, having put $8.6 billion worth of investment into the country by November.

China on guard against Japanese jets near Diaoyu (Xinhua) China's Defense Ministry on Thursday said the Chinese military "closely monitors" and is "highly vigilant" concerning relevant Japanese Air Self-Defense Force activity in the airspace over the Diaoyu Islands. Ministry of Defense spokesman Yang Yujun made the remarks at a press briefing while commenting on Japanese fighter jets' recent interception of a Chinese marine surveillance plane patrolling areas around the Diaoyu Islands. "We will decisively fulfill our tasks and missions while coordinating with relevant departments such as maritime supervision organs, so as to safeguard China's maritime law enforcement activities and protect the country's territorial integrity and maritime rights," Yang said. Yang said it is "justifiable" for the Chinese military to provide security in waters under China's jurisdiction, and other countries are "in no position" to make irresponsible remarks in this regard. "China-Japan defense relations are an important and sensitive part of bilateral ties, and the Japanese side should face up to the difficulties and problems that currently exist in bilateral ties," Yang said. He also called on Japan to take concrete steps to properly handle relevant issues and maintain the overall situation of Sino-Japanese ties. Media reports say Japan's Air Self-Defense Force sent F-15 fighter jets to the area on Saturday to intercept a Chinese marine surveillance plane bound for the Diaoyu Islands in the East China Sea.

Hong Kong*:  Dec 28 2012

Six new residential sites for 3,000 flats to go on sale (By Reuters in Hong Kong) The government on Monday announced plans to boost land supply in the coming quarter, with the construction of 3,000 new apartments, in a bid to cool the city’s overheating property market. Hong Kong has seen prices rise 20 per cent this year, surpassing peaks in 1997, which was the height of a property bubble. Over the past few years, the government has unveiled measures to try to curb home prices, including increasing stamp duties for short-term transactions, taxing overseas property buyers and increasing land supply. On Monday, the government said it would tender six plots of residential land for 3,000 flats in the final fiscal quarter, which ends in March. “This number is the highest flat production in the current financial year and shows the government’s determination to increase housing supply,” Secretary for Development Paul Chan Mo-po told reporters. The government sold 18 sites for 5,100 apartments in the first three quarters of the current fiscal year, Chan said, implying that it supplied an average of 1,700 apartments per quarter. Rising property prices make housing increasingly unaffordable for local residents and pose a risk to the domestic economy policy challenges to the government. The International Monetary Fund warned earlier this month that the sharp run-up in Hong Kong’s home prices raises the risk of an abrupt correction and the government should take further measures if necessary to contain the situation. Chan said two of the six land plots to be supplied in the January-March quarter will be for building apartments that only can sold to Hong Kong citizens. “Given that land resources is a scarce commodity in Hong Kong, the priority is to always give the top priority to Hong Kong citizens,” Chan said.

 China*:  Dec 28 2012

China calls on Japan's Abe to meet 'half way' to fix ties (By Agence France-Presse in Beijing) China called on new Japanese Prime Minister Shinzo Abe on Wednesday to meet Beijing “halfway” to try and improve relations that have been hurt by a debilitating territorial dispute. “We hope the new Japanese administration will meet the Chinese side halfway and make concrete efforts to overcome difficulties in bilateral relations,” foreign ministry spokeswoman Hua Chunying told reporters. She added such efforts were needed “so as to push bilateral relations back on to the normal track of development”. Hua was speaking after Abe was selected Wednesday as Japan’s prime minister by the lower house of parliament following victory by his Liberal Democratic Party in elections earlier this month. “We are ready to work with the Japanese side to push forward the steady and sound development of bilateral relations,” Hua said. China and Japan are at odds over small islands in the East China Sea that both claim, though Japan controls. China calls them the Diaoyu Islands, while Japan refers to them as the Senkaku Islands. Tensions have mounted this year, with Japan recently scrambling fighter jets after a Chinese plane flew near the territory. Hua reiterated China’s position on the dispute, calling the Diaoyu Islands “China’s inherent territory,” while adding that Beijing wants to resolve the dispute “through dialogue and negotiation.” “The pressing task for Japan now is to show sincerity and take concrete actions to overcome the current situation and improve bilateral relations.” Separately, China’s official Xinhua news agency carried a commentary expressing hope that Abe’s election could herald the beginning of better relations. “It is hoped that Abe ... could view Japan-China ties from a long-term and overall perspective and steer Tokyo’s diplomacy toward the consolidation of regional peace and stability,” the commentary said. It emphasised the important economic relationship between China and Japan, the world’s second- and third-largest economies, respectively, and noted that Abe wants to improve Japan’s slumping economy. “For an export-oriented economy like Japan, to regain growth means strenuous work to bolster its stagnant domestic market and expand overseas trade as well,” Xinhua said. “However, the prospect would be something hard to come by should Tokyo choose to play with fire amid simmering tensions not only with China but also with other neighbours like South Korea and Russia.”

Hong Kong*:  Dec 27 2012

Green group launches Christmas tree recycling effort (By Jennifer Ngo) Ricky Fan, chairman of Hong Kong Environmental Protection Association. People who buy wooden Christmas trees will have a chance to recycle them for free this year. The Hong Kong Environmental Protection Association has booked two trucks to collect unwanted trees beginning two weeks after Christmas. Hongkongers can call the association, at 8201 0030, to book a space on the trucks on a first-come-first-served basis. The trees will be taken to the recycling centre in Tuen Mun. The association calculated that about 2,000 trees were imported to Hong Kong this Christmas from Europe and North America. “According to our research, most Hongkongers feel that a synthetic Christmas tree is not much different from a real one, and would not affect the holiday spirit,” said Ricky Fan Hai-tai, chairman of the association. “So we suggest people could use a plastic one, which can be reused. For those who still prefer a real one, we’d suggest picking smaller ones and recycling them later.” The association said the Hong Kong Shanghai Bank of China had the biggest Christmas tree in the city – about nine metres high– which is only one of three in its halls and lobbies. “HSBC had the biggest tree in the city for the past few years as well, but after the holidays, there were all just dumped at the landfills,” said Fan. The association had enquired about the Christmas trees, but HSBC has yet to reply. “North American and European countries had started wood recycling over 20 years ago, it’s surprising how Hong Kong has yet to start the discussion,” said Fan. The city throws out about 1,000 tonnes of wood each day, accounting for 8 per cent of total waste, the association said. Most of it comes from construction projects, and under a proposed waste disposal levy, some of the cost of disposing of it is expected to be passed onto the public.

HK suspends import of poultry products from Germany (By Xinhua) Hong Kong suspended import of poultry products from Schleswig-Holstein, Germany, the city's government announced Saturday. According to the Center for Food Safety (CFS) of the Food and Environmental Hygiene Department of Hong Kong, the Center has suspended processing applications for import of all poultry and poultry products, including poultry eggs, from the Province of Schleswig-Holstein with immediate effect until further notice. A CFS spokesman said, "The decision was made after receiving notification from the World Organization for Animal Health about an outbreak of low pathogenic avian influenza H5 in a farm detected in Schleswig-Holstein." "We are seeking further information from the relevant German authority and will closely monitor the situation," he added.

 China*:  Dec 27 2012

China harshens tone towards Japan over Diaoyu dispute (By Peony Lui) Photo taken on a marine surveillance plane B-3837 on Dec. 13, 2012 shows the Diaoyu Islands and nearby islands. China continued its hard line on its claim to disputed islands in the East China Sea, threatening Japan with more retaliation and talk of war in an editorial in Monday's Global Times, an influential daily tabloid under the auspices of the state-controlled People’s Daily. Despite attempts by incoming Japanese premier Shinzo Abe to mend ties by sending envoys to China, the editorial opined that Abe's “hawkish stance will not change, nor will the right-wing tendency of the Japanese society". Military posturing over the Diaoyu Islands intensified last week when Japan scrambled F-15 fighter jets after a Chinese plane entered the disputed area for the first time. “Strategists believe that although neither [Japan nor China] has the will to fight a war, the Diaoyu dispute could be the trigger. Once the dispute intensifies into a war, the sentiments of the public from both countries may explode, which will result in larger-scale military clashes,” the editorial said. There is deeply rooted resentment against Japan among the Chinese public that “once ignited, will have incredible power”, said the Global Times. “If China’s marine surveillance aircraft is downed during its confrontation with Japan’s fighter jets, the Chinese public will demand the government to take revenge at any cost. An apology will not be enough. The public will expect a Japanese jet to be taken down in retaliation,” it said. The editorial maintained that Japan’s “provocation in the islands” is a “direct challenge to China’s reputation and dignity". China faces the dilemma of becoming “the world’s laughing stock”, or going forwards and facing military confrontation with Japan. “Going forwards is the only choice for the Chinese government,” the editorial said. It continued that the Chinese government should require Japan to “pay the same price” for its actions. The editorial also pointed a finger at the United States. “We should make our bottom line clear to Japan and the United States, so that the Japanese public understands that they cannot escape Chinese retaliation and punishment if they cause any loss of China.” If the attitude of retaliation escalates into a large-scale war, “it will be the fate of the Chinese nation, neighboured by Japan”, the editorial said. “We have no choice but to go into this disaster designed by the United States together with Japan.” “Our short term goal is to make sure that Japan pays more than China,” the editorial concluded. The Global Times is known for its pro-government stance and nationalistic approach in foreign affairs reporting. Its English-language version is seen as more progressive. A toned-down version of the editorial was also posted on the Global Times’ English-language website.

China may extend real name policy to internet access (By Reuters in Beijing) An internet identification law "should escort the development of the internet to protect people’s interest", said the People's Daily. China may require internet users to register with their real names when signing up to network providers, state media said, extending a policy already in force with microblogs in a bid to curb what officials call rumours and vulgarity. A law being discussed this week would mean people would have to present their government-issued identity cards when signing contracts for fixed line and mobile internet access, state-run newspapers said on Tuesday. “The law should escort the development of the internet to protect people’s interest,” Communist Party mouthpiece the People’s Daily said in a front page commentary, echoing similar calls carried in state media over the past week. “Only that way can our internet be healthier, more cultured and safer.” Many users say the restrictions are clearly aimed at further muzzling the often scathing, raucous – and perhaps most significantly, anonymous – online chatter in a country where the internet offers a rare opportunity for open debate. It could also prevent people from exposing corruption online if they fear retribution from officials, said some users. It was unclear how the rules would be different from existing regulations as state media has provided only vague details and in practice customers have long had to present identity papers when signing contracts with internet providers. Earlier this year, the government began forcing users of Sina Corp’s wildly successful Weibo microblogging platform to register their real names. The government says such a system is needed to prevent people making malicious and anonymous accusations online and that many other countries already have such rules. “It would also be the biggest step backwards since 1989,” wrote one indignant Weibo user, in apparent reference to the 1989 pro-democracy protests bloodily suppressed by the army. Chinese internet users have long had to cope with extensive censorship, especially over politically sensitive topics like human rights, and popular foreign sites Facebook, Twitter and Google-owned YouTube are blocked. Despite periodic calls for political reform, the ruling Communist Party has shown no sign of loosening its grip on power and brooks no dissent to its authority.

China on alert for Japanese fighter jets over East China Sea: spokeswoman (Xinhua) China is on alert after Japan dispatched fighter jets to airspace over the East China Sea, a Foreign Ministry spokeswoman said Tuesday. Hua Chunying made the remarks at a daily news briefing. Media reports say Japan's Air Self-Defense Force sent F-15 fighter jets to the area on Saturday to intercept a Chinese marine surveillance plane bound for the Diaoyu Islands in the East China Sea. "As far as I know, China's marine surveillance plane you mentioned has been conducting routine patrols in airspace over the East China Sea," she said in response to a journalist's question. "The Chinese side is highly concerned with, and alert to, Japan sending the Air Self-Defense Force jets," said the spokeswoman, adding that China had lodged solemn representations to Japan over the issue. "The Chinese side will pay close attention to Japan's intentions," she added.

People play at the Harbin Ice and Snow World in Northeast China's Heilongjiang province on Dec 23, 2012.

Legend signs a county partner to develop kiwi fruit (By Cai Xiao) Legend Holdings Ltd signed an agreement with a county government in Henan province to develop a kiwi fruit business, the first agricultural program revealed by the group, the Beijing Morning Post reported on Dec 25. Beijing Huaxia Liancheng Fruit Co Ltd, a subsidiary company of the group, will invest its first 150 million yuan ($24 million) in planting and then seek market share at home and abroad. The kiwi fruit carried by the group will be at least 50 percent less expensive than those of global brands of the same quality. The paper said the kiwi fruit planting area in China accounts for 60 percent of that in the world, and its production is 40 percent of the global total. But the value of kiwi fruit in China is only 3 billion yuan, 8 percent of the global total, which means the investment opportunity in China has great potential.

Railway to create network of 'city clusters' (By WEI TIAN) The world's longest high-speed rail service, which starts between Beijing and Guangzhou on Wednesday, is expected to bring huge economic prosperity to towns and cities along its route, creating what officials are calling world-class "city clusters" across Central China. A high-speed train for the Beijing-Guangzhou route is set for test operation in Beijing on Saturday. Opening of the line will not only benefit towns and cities along its route but also release huge cargo transport capacity. Designed to carry passengers at an average speed of 300 km per hour, the high-speed link will cut travel time between the country's capital and the southern economic center to about eight hours. There will be 35 stops along the way, including major cities such Shijiazhuang, Zhengzhou, Wuhan and Changsha, and the route will cut through areas with a combined population of 300 million to 400 million. "Opening the route will not only bring these cities closer, but will generate business for many different supporting facilities, promoting change in their growth patterns for years to come," said Wang Mengshu, an academic at the Chinese Academy of Engineering. He said GDP growth in many of those areas had been independent of each other in the past, and relied mainly on real estate development and automobile sales, both of which had been run inefficiently while consuming massive resources. Better access to fast railway links will now mean improved cargo transportation between factories in various cities, leading to greater expansion of support facilities, Wang said. "Railways will indeed become a way to increase prosperity for so many industries," he added. Wang calculates that a 600-billion-yuan ($96 billion) annual investment on railway construction could generate 3,000 kilometers of railway a year, which in turn could raise the country's annual GDP growth by 1.5 percentage points, and create more than 6 million jobs. He said the country's tourism industry was likely to be one of those to most benefit from the high-speed rail development, and many in the sector have already been preparing to take advantage of the opportunities. For instance, at Shijiazhuang Railway Station in the capital of Hebei province, which is the nearest major city to Beijing on the line, two new squares are being built together with a tourist center. "The goal is to promote one-day trips, and to try to convert 'passing-by' passengers into 'staying over' passengers, which will really help boost the local catering and hotel industries," said Wen Hao, the director of the city's tourism office. Apart from increasing the flow of people into the cities, the railway will also greatly increase freight traffic, he added. Although largely being seen as a passenger line, Wu Ruliang, director of the Logistics Association of Hubei Province, said his industry will benefit greatly from the new high-speed link, and expects the cost of express delivery to drop by at least 50 percent as a result of its opening. Officials from the Ministry of Railways have said the new route will release cargo transport capacity on the old line between Beijing and Wuhan by 20 million tons a year. Wu added that with 95 percent of highways and 65 percent of class-A roads now installed with toll gates, the logistics industry will view rail transport as an altogether more appealing prospect than road from now on, given that toll costs currently account for a third of all logistics costs. "The opening of the service means the logistics industry will enter a new era of high-speed rail transport," Wu said. Xiao Jincheng, the director of Land Development and Regional Economy Research Institute under the National Development and Reform Commission, added that Shijiazhuang will be brought much closer to the economic region dominated by Beijing as a result of the new link, given that it will now be just an hour away from the capital. It will be one of many locations along the route to benefit from the development of what officials are calling "city clusters". One of the largest will be created along the Beijing-Wuhan section — the Central Plain area which ties in the city of Wuhan with Changsha, Zhuzhou and Xiangtan. Analysts believe the area could become as economically important as the Pearl River Delta, Yangtze River Delta, and Bohai Economic Rim. Xiao said conditions are perfect for many cities in the central regions to grow into truly world-class city clusters, but that the satellite cities surrounding Wuhan and Zhengzhou also need to keep pace. Yang Xiaohua, a researcher with Hubei Academy of Social Sciences, added that Wuhan, in particular, will be fashioned into a hub for the country's high-speed passenger transport network, given its location right in the heart of the network. His expectations echoed the development plan for the central regions, published by the State Council, which aims to build Wuhan and Zhengzhou into national transport hubs. "The central region city cluster may turn into a new growth engine for China," Yang said.

Hong Kong*:  Dec 26 2012

Six new residential sites for 3,000 flats to go on sale (By Reuters in Hong Kong) The government on Monday announced plans to boost land supply in the coming quarter, with the construction of 3,000 new apartments, in a bid to cool the city’s overheating property market. Hong Kong has seen prices rise 20 per cent this year, surpassing peaks in 1997, which was the height of a property bubble. Over the past few years, the government has unveiled measures to try to curb home prices, including increasing stamp duties for short-term transactions, taxing overseas property buyers and increasing land supply. On Monday, the government said it would tender six plots of residential land for 3,000 flats in the final fiscal quarter, which ends in March. “This number is the highest flat production in the current financial year and shows the government’s determination to increase housing supply,” Secretary for Development Paul Chan Mo-po told reporters. The government sold 18 sites for 5,100 apartments in the first three quarters of the current fiscal year, Chan said, implying that it supplied an average of 1,700 apartments per quarter. Rising property prices make housing increasingly unaffordable for local residents and pose a risk to the domestic economy policy challenges to the government. The International Monetary Fund warned earlier this month that the sharp run-up in Hong Kong’s home prices raises the risk of an abrupt correction and the government should take further measures if necessary to contain the situation. Chan said two of the six land plots to be supplied in the January-March quarter will be for building apartments that only can sold to Hong Kong citizens. “Given that land resources is a scarce commodity in Hong Kong, the priority is to always give the top priority to Hong Kong citizens,” Chan said.

Liquor board seeks medical backing for upstairs bar controls (By Patsy Moy and Stuart Lau) Liquor regulator calls on doctors to support plan for tighter limits on bars in high-rises, which may pose a fire risk for intoxicated patrons. With few examples to draw on from overseas, the government has turned to the medical profession to back its plan to control the numbers in upstairs bars. The lack of international cases to refer to for safety regulations in bars located above ground level has made the ongoing review more difficult, one official said. "Having bars located inside high-rises is unique to Hong Kong. They're [usually located] on the ground floor in other places," the official said. "Without an international reference, it's difficult to determine a standard to set limits on patron numbers." The Liquor Licensing Board contacted the Medical Association last week to ascertain how upstairs bar patrons who had been drinking would react in an emergency situation such as a fire. The findings will be used to justify its plan for tighter crowd control measures. Medical Association vice-president Dr Chow Pak-chin confirmed it had received a letter from the liquor board seeking opinions on the issue. Chow, who backs tighter controls on patron numbers in upstairs bars, warned that impaired judgment and loss of balance after consuming too much alcohol could put drinkers at risk during a fire in one of the high-rises. "Patrons who are drunk won't be able to escape as easily if there's a fire. In that situation, they wouldn't be able to use elevators so they would have to negotiate the stairs - that could be very dangerous for people who have been drinking," Chow said. "As doctors, we are concerned about public health and safety. There is an urgency to work out the safety measures before we have a tragedy," he said. Chow said men should not drink more than three to four units of alcohol per day, while women should stop at two to three units. Secretary for Food and Health Dr Ko Wing-man called for tighter restrictions on numbers after participating in a spot check of bars in Central and Tsim Sha Tsui conducted by the Liquor Licensing Board last month. At present, the board specifies a capacity limit in its licence conditions for all pubs and bars, but it varies. There is also no fixed standard for determining the limit. In a reply to the South China Morning Post, the board said that when determining the limit it would also "take into account the assessment from the Buildings Department on the adequacy of the means of escape and other related considerations". Moves to restrict the numbers have been strongly opposed by bar owners, who say business is tough enough as it is. One trade association warned bars would simply start operating illegally if the government stepped up restrictions on patron numbers. The official told the Post any move to tighten controls would only apply to upstairs bars, mainly because of the fire hazard issue, adding that drinks were often left in stairwells, cluttering the exits. Tsim Sha Tsui is home to most of the city's upstairs bars, many of them jam-packed with patrons on weekends and holidays. Kit Lau, who runs an upstairs bar on Austin Road, Tsim Sha Tsui, said: "We've seen business slump 10 to 15 per cent a year since I got into the industry 15 years ago." Chin Chun-wing, vice-chairman of the Bar and Club Association, said the industry was already self-regulating. "The government should wait [two to three years] to see if it reduces complaints," Chin said. "I'm worried more bars will start operating illegally if the government pushes through stricter rules."

Zhang Xiaoming: A hawk or dove to Hong Kong? (By Lauren Ho) Zhang Xiaoming knows Hong Kong well and some fear he will tighten the mainland's grip, others say that it is too early to tell - Beijing's new top representative in Hong Kong, Zhang Xiaoming, caused a stir last month when he accused "external forces" outside China of meddling in Hong Kong's elections. In a study guide to the report of the Communist Party's 18th congress, and published in the pro-Beijing newspaper Wen Wei Po, Zhang called on Hong Kong to pass the controversial national security law required under Article 23 of the Basic Law, "in due course". Some critics had feared that the Basic Law could be used to suppress organisations which disagree with the government and his remarks outraged pan-democrats in Hong Kong, who took the report as a sign the central government will tighten its grip on the special administrative region. Having spent 26 years on Hong Kong affairs, Zhang, 49, is one of only a handful of mainland officials with an encyclopedic knowledge of the city's inner political workings. However, he wasn't always into politics. A friend remembers that in his younger years Zhang was more interested in Cantonese dramas than current affairs. "Cantonese television series were very popular when China opened up in the 1980s," said a well-placed source. "Zhang and his colleague Xu Ze [were hooked on] TVB and ATV series rented from video shops." But by the time Zhang took over as director of the central government's liaison office in Hong Kong last week, he was an expert on the Basic Law, Hong Kong's mini-constitution, and had more experience in the city's affairs than all his predecessors. Beijing-friendly businessman Chan Wing-kee, a Hong Kong delegate to the Chinese People's Political Consultative Conference standing committee, called Zhang "smart" and "pragmatic", recalling an encounter a few years ago. "Zhang was taking a business trip in Guangdong and asked if I could arrange a day tour for him and his colleagues to my lychee garden in Dongguan ," Chan said. The next day, Zhang and his colleagues set off in an old 14-seater van. "In the middle of the journey, a loud sound came from the back. One of the tyres was flat, so Zhang went out and fixed it on the roadside. Lucky enough, they still got a good yield in the end." Chan sees Zhang as a "driving force" in Hong Kong. "The Beijing leadership has been under a paradigm shift and the ruling elites are a lot younger than the past generations. It draws a close to old people politics," he said. For Executive Councillor Cheng Yiu-tong it is too early to say whether Zhang is a hawk or a dove, but others hope he can bring change to Beijing. However, if the Central Government decides to tighten its grip on Hong Kong, Zhang will have little choice but to follow suit. Zhang began his career at the State Council's Hong Kong and Macau Affairs Office in 1986, after graduating from Beijing's Renmin University with a master's degree in criminal law. In his 26 years at the office, he served under directors including Lu Ping , Liao Hui , and Wang Guangya . He also sits on the Basic Law Committee under the National People's Congress Standing Committee. His experience of Hong Kong's constitutional affairs is expected to stand him in good stead when the city battles out how to elect the chief executive by universal suffrage - expected in 2017. Zhang has already witnessed Hong Kong undergo a monumental change. In 1996 he joined Lu Ping at several consultation forums in Hong Kong, before the 1997 handover. Zhang was assigned to receive petition letters at the forum. When he filled his predecessors' shoes, he was described as "firm" and "decisive". Another challenge came, in 2003, when the government proposed Article 23 in the Legco. It sparked an intense debate, with protesters fearing the loss of their freedom of speech. Zhang was chief of a research unit to Liao Hui at that time. His boss was keen to get the bill passed. Zhang, in charge of overseeing growing tensions in society, was obliged to support Liao. On July 1, more than half a million people took to the streets of Hong Kong to protest against the Article 23 legislation. It attracted the attention of international media, making the Hong Kong crisis an issue high on the agenda of the mainland leadership. Vincent Lo Hong-shui, Shui On Group chairman, who has known Zhang since 2003 when he sat on the Preparatory Committee which oversaw Hong Kong's handover, says Zhang's experience works in his favour. Lo said: "Zhang was the right person to head Beijing's liaison office. Leung's administration is facing daunting challenges, Zhang can better grasp the sentiments of Hongkongers and explain Beijing's policy to [them]." When veteran diplomat Jiang Enzhu arrived in 1997 to become the first director of the Central Government's liaison office in Hong Kong, he described the city as an "abstruse book" from which he would strive to learn. As Premier Wen Jiabao last week highlighted six areas for Leung and his administration to resolve, maybe Hong Kong today is an even harder book to read.

Coldest Christmas Eve in 12 years to bring hardship to Hongkongers in poverty (By Johnny Tam and Jennifer Ngo) Plunging temperatures raise concerns for city's 1.2 million people in poverty, with community group handing out free hot meals and clothes - An elderly man sleeping rough prepares for Christmas under the West Kowloon Corridor in Yau Ma Tei. A family enjoys the decorations at Ocean Terminal. Hong Kong is facing its coldest Christmas Eve for 12 years, raising the prospect of a bleak festive period for the city's estimated 1.2 million people living in poverty. The Observatory warned the minimum temperature could fall to as low as 10 degrees Celsius in urban areas - the coldest since 10.6 degrees in 2000. Forecasters issued a frost alert for the northern New Territories but said temperatures would rise tomorrow to about 13 degrees. The Society for Community Organisation (SoCo) expects to hand out more than 200 hot meals in Sham Shui Po today. On Friday's winter solstice - an important traditional festival for families - more than 200 people turned up for free hot meals given out by the non-profit-making society, even though only 100 tickets were issued. "I know it is going to be cold, but I have to work no matter how cold it is," said a 70-year-old Sham Shui Po resident, who called herself Mrs Mak. She works as a cleaner in Tsim Sha Tsui and said she could not afford the loss of a day's wages by taking Christmas day off. It is estimated about 17 per cent of Hong Kong's population of some seven million struggled with poverty in the second quarter of this year in a sign of the city's widening wealth gap. To help the poor and needy, SoCo is giving out free pizzas and down jackets tonight in Sham Shui Po. According to the government website, 13 centres will be opened around the city to provide shelter from the cold. SoCo's Ng Wai-tung said: "Numbers turning up for free meals have increased in recent years." He said the widening wealth gap had forced significantly more elderly people and poor families with small children to line up on the streets of Sham Shui Po during the festive season for just a warm box of food. Premier Wen Jiabao told Chief Executive Leung Chun-ying in Beijing last week he should consider poverty and an ageing population as foremost among the top six issues facing the city. But Ng doubted the government's sincerity in tackling such issues. "The government has yet to put a universal pension scheme on its agenda for discussion. It's disappointing," he said. "It's especially hard during the holidays, when they see families gathering for meals and going Christmas shopping while they have nothing and no one to celebrate the festival with them. It's such a stark opposite." Ng said SoCo was giving out more free meals, warm clothes and other necessities because of the greater need among the poor this year. Another youth organisation, the Federation of Youth Groups, mobilised more than 500 teenagers yesterday to deliver "gifts" - including daily necessities such as shampoo and toothpaste - for the second year running to families in the city's poorer districts. Andy Ho Wing-cheong, co-ordinator of the federation, said: "We hope love and care can be brought by our teenagers to over 1,000 families in need, so that they can feel the festive atmosphere too."

 China*:  Dec 26 2012

Revealed: secrets of ancient Chinese medicinal herb (By Agence France-Presse in Paris) Scientist in the United States on Sunday offered a molecular-level explanation for how a Chinese herbal medicine used for more than 2,000 years tackles fever and eases malaria. The herb is an extract of the root of a flowering plant called blue evergreen hydrangea, known in Chinese as chang shan and in Latin as Dichroa febrifuga Lour. Chang shan’s use dates back to the Han dynasty of 206BC to 220AD, according to ancient documents recording Chinese oral traditions. In 2009, researchers made insights into its active ingredient, febrifuginone, which can be pharmaceutically made as a molecule called halofuginone. They found that halofuginone prevented production of rogue Th17 immune cells which attack healthy cells, causing inflammation that leads to fever. A study published in the journal Nature on Sunday found halofuginone works by hampering production of proteins for making “bad” Th17 cells, but not the “good” ones. Specifically, it blocks molecules called transfer RNA (tRNA), whose job is to assemble a protein bit by bit, in line with the DNA code written in the gene. As for malaria, halofuginone appears to interfere with the same protein-assembly process that enables malaria parasites to live in the blood, the study said. “Our new results solved a mystery that has puzzled people about the mechanism that has been used to treat fever from a malaria infection going back probably 2,000 years or more,” said Paul Schimmel, who headed the team at the Scripps Research Institute in California. Halofuginone has been tested in small-scale human trials to treat cancer and muscular dystrophy. Drug engineers also eye it as a potential tool for combatting inflammatory bowel disease and rheumatoid arthritis, which are also autoimmune diseases.

Policies aired to boost food security and avoid overreliance on imports (By Mandy Zuo) Growing enough to feed everyone on mainland is increasingly difficult, but officials seek to raise output to avoid over-reliance on imports - Policies aimed at improving food security were mapped out at the Central Rural Work Conference over the weekend. Henry Kissinger once said: "Control the food and you control the people." With the largest population in the world and a growing demand for food, China has made boosting agricultural production a priority for decades. If China controls its own food supply, it is less likely to be controlled by external forces, or so the thinking goes. At the annual Central Rural Work Conference over the weekend, policymakers mapped out wide-ranging policies aimed at improving food security. Among other things, the government intends to let farmers earn "reasonable profits" and provide more subsidies to help them build a stable workforce in rural regions. But participants acknowledged the task of meeting the country's demand for food was becoming more difficult. Unlike the late 1990s, when food was abundant, the country now faces domestic shortages of certain agricultural products. In the first 10 months of this year, the country's agricultural trade deficit grew to a record high of US$41 billion, up nearly 60 per cent from the same period last year according to the Ministry of Agriculture. Imports of staples are growing at a striking pace - twofold in wheat, threefold in rice and fourfold in corn. Agriculture Minister Han Changfu said yesterday the task of providing an adequate supply of safe food would be "very tough" in the years ahead, when agricultural production is expected to cost more, carry higher risks and face greater challenges in terms of resources and the environment. A Xinhua report from the conference - chaired by State Council secretary general Ma Kai, a newly appointed member of the Politburo - called for more investment in agriculture to boost productive capacity. Professor Zhu Qizhen, from the China Agricultural University, said that although official data shows nine consecutive years of record grain output, the mainland has "very limited potential for more bumper harvests" owing to its limited supply of arable land relative to its large population. "It will trigger global food price spikes if China buys 30 per cent of its food from overseas," he said. The central leadership, apparently aware of the problem, instructed local governments at the weekend conference to encourage more diversity in their agricultural sectors, allow larger scale family farms and co-operatives, and to accommodate large agricultural companies. Current farming profits are too low to make farmers focus on the fields, Zhu said. On average, farmers make a net profit of just 1,770 yuan (HK$2,170) per hectare of wheat; 5,565 yuan per hectare of rice; and 3,945 yuan per hectare of corn, according to Ministry of Agriculture data. Dr Li Guoxiang, of the Chinese Academy of Social Sciences, noted that the conference also said that local governments "must not obstruct or force" farmers to trade their plots to others for farming purposes. He said that the policy aimed to make it easier for farmers to participate in large-scale farming on a voluntary basis. As a lot of farmers left rural regions to work in cities, more specialised, commercialised and vertically integrated farms should be established, Li said. Authorities vowed to narrow the gap between rural and urban residents by keeping the annual rate of income growth in the countryside at a minimum of 7.5 per cent. "For the future years, farmers' income should grow at the same pace of that of urban residents - and better, faster than that of urban residents," a Xinhua report from the meeting said. Professor Zheng Fengtian, from Renmin University, said raising grain prices was the ultimate solution to the problem. "Currently, they're kept too low in order to not affect overall consumer prices," he said. China's agriculture deficit has been widening steadily since the country joined the World Trade Organisation in 2001.

The key to tea (By Sun Ye) Zhou Yutong may not be familiar with every tea produced in China, but she comes pretty close. This young tea sommelier brews a pot for Sun Ye. You shouldn't ask her which is the best tea in town. Zhou Yutong believes the best tea for you is the tea you like best. The 24-year-old Zhou calls herself a "tea-maker" while others prefer to address her as the "tea-master". At the Four Seasons Hotel in Beijing, they call her their tea sommelier. Zhou Yutong says the best tea means finding the blend that makes you happiest. Zhou believes there should be no favorites when it comes to drinking tea and the young lady from Heilongjiang province adds there is only the right choice at the right time - in drinks as in life. "There is only the tea that suits you and is good for you. The key is this, look for the tea that makes you happy," she says. For the moment, she is happy where she is, in charge of the Tea Garden at the newly opened Four Seasons Beijing. This is the fourth place she has managed, and the softly lit wooden setting with its tea menus carved on wooden plaques reflects her philosophy of "natural simplicity". Her expertise with tea is so impressive that Zhou's boss Alexander Lahmer, the director of food and beverage at the Four Seasons, has complete faith and trusts the Tea Garden to her. Knowledge did not come easily for Zhou. In her seven-year quest, real insight into tea did not arrive until 2011. When she was younger, tea was something that was unattainable. "My father used to keep the cans on the shelves, out of reach. I think that was what made tea appealing to me in the first place." She studied teaching Chinese as a foreign language at college in 2007. At that time, tea was first used as a teaching prop in class, before it developed into a real interest. In her words: "I combed all elements of traditional Chinese culture and felt tea was the thing for me." Zhou then delved into all the literature she could find on tea, and took up tea drinking. "Half a small cake of Hunan bailiang black tea a day kept me warm, refreshed me and kept my weight down." She also started learning and practicing the art of the tea ceremony as an unpaid volunteer at a Harbin tea shop. "While my friends were out doing part-time jobs and earning money, I was working at a tea-shop without pay, just to be able to observe." She then studied under Han Yihai, the national senior tea master, and tea took on new meanings. "My first lesson with my master was not about tea rituals, but about living life and respecting its timing. It's the same. He showed me there was no such thing as must-drink or must-do. He always gave me choices and let me follow my instincts. That's how you make peace with yourself and the world." The renewed understanding changed how Zhou looked at things. "I used to ask for the best of everything. But then I learned to respect whatever comes my way," she says. "I see her becoming calmer and much more settled. She's already the brightest of all my students, with a very rare gift of understanding the profound," Han says. Han still keeps track of his student's progress. "I think she's on the way to really knowing the Taoism of tea." In 2011, during Harbin's deep winter and over pots of dahongpao oolong tea with her master, Zhou learned about Chinese traditions, the rituals, the distribution of tea varieties and about tea house management. She gradually realized that her life would be devoted to tea, and her mission would be to help people understand and enjoy the beverage. She is also working hard at understanding what her guests need, perhaps even before they realize what they want themselves. "Choosing the proper tea is like interacting with people. Tea caters to your palate, cares for your mood, relaxes you and cheers you up. You just have to know what's right." She looked at me and picked a tea with leaves that resembled silvered needles for its soft, "peaceful" flavor - a calming infusion for a novice with a short attention span. Zhou is not just a tea sommelier, she is also an uncanny judge of character.

Japan'to send Diaoyu envoy' (China Daily) Japan's incoming Prime Minister Shinzo Abe will send a special envoy to China, media reports said, amid tension over the Diaoyu Islands. Beijing blasted controversial provisions on Sunday in a defense bill passed by the US Senate, which acknowledges "the administration of Japan" over the islands and urges arms sales to Taiwan. Observers said that Abe's gesture does not mean any concessions on the islands are in the offing. The bill passed in the US Senate, they added, will fuel regional instability and damage trust-building efforts between China and the US. Abe, leader of Japan's Liberal Democratic Party will become prime minister on Dec 26. He is considering sending LDP Vice-President Masahiko Komura, head of the Japan-China Friendship Parliamentarians' Union, to China. "Abe's envoy plan is simply posturing, rather than an act of sincerity,'' said Lu Yaodong, from the Institute of Japanese Studies at the Chinese Academy of Social Sciences. Ties were soured in September after the Japanese government illegally "purchased" part of the Diaoyu Islands. Abe declared on Saturday that he would postpone his campaign proposal of sending government personnel to the islands, Japan's Kyodo News Agency said. The Japanese Air Self-Defense Force sent fighter jets on Saturday to an area some 100 kilometers north of the Diaoyu Islands after a plane of China's State Oceanic Administration was spotted patrolling, according to the Japanese Defense Ministry. On Friday, Chinese marine surveillance vessels patrolling the waters around the islands found six Japanese coast guard ships illegally entering the area, and demanded they leave at once. Lu said Tokyo's hard line "has been and will be consistent". Feng Wei, a specialist on Japanese studies at Fudan University in Shanghai, estimated that Abe's incoming Cabinet will not make a major concession due to support both within the country and from the US. The US Senate passed the 2013 Defense Authorization Act on Friday by 81 votes to 14. It now awaits the signature of US President Barack Obama. Though the US takes no position on the ultimate sovereignty of the Diaoyu Islands, section 1286 said "it is the sense of Congress that'' it "acknowledges the administration of Japan'' over them. And section 1281 said, "it is the sense of Congress that ... the president should take steps to address Taiwan's shortfall in fighter aircraft, whether through the sale of F-16 C/D aircraft or other aircraft of similar capability''. Foreign Ministry spokeswoman Hua Chunying said on Sunday that China is "deeply concerned and firmly opposed" to the contents concerning China in the act. Hua said the Treaty of Mutual Cooperation and Security between the US and Japan is a "bilateral arrangement in a specific historical time'', and such a pact should not harm the interests of any third parties including China. Dong Manyuan, vice-president of the China Institute of International Studies, said the bill shows bipartisan consensus on the islands as well as Obama's increased determination to focus more on Asia in his second term. Tao Wenzhao, a professor of US studies at the Chinese Academy of Social Sciences warned that the bill sends "erroneous signals to right-wing radical Japanese politicians who are yearning for more support from Washington to rein in China, and are undermining the strategic trust between Beijing and Washington". As for the act's arms sales proposal, Hua, the ministry spokeswoman, said China is firmly opposed to arms sales to Taiwan by any country. Dong said the arms sales issue is not an isolated case and outside forces may be attempting to undermine rapidly developing cross-Straits ties. Orville Schell, director of Center on US-China Relations at Asia Society in New York, said: "My reading of the Obama administration is that they don't want this (tension between China and the US) to escalate out of control.'' The US is deeply dedicated to working out a better relationship with China, Schell added.

Kerry positive for China-US relations (China Daily) The diplomatic wisdom of incoming US Secretary of State John Kerry is expected to improve China-US relations, as the Obama administration seeks to rebalance its Asian strategy during the president's second term. President Barack Obama on Saturday nominated Senator Kerry, the son of a diplomat, as his next secretary of state to replace Hillary Clinton, and commentators say that given his track record and reputation, his appointment is almost certain to be confirmed. Among the challenges facing Kerry will be to improve ties between China and the US, which have worsened since Washington's rebalancing policy in the Asia-Pacific region, experts said. "China-US ties have deteriorated through a series of high-profile measures by the US aimed at rebalancing, especially the over-emphasis of military action, which triggered great antipathy from China," said Ruan Zongze, a US studies researcher and the deputy director of the China Institute of International Studies. Kerry supported the Trans-Pacific Partnership trade agreement, to "balance China's economic influence in the region" in a speech at the Center for American Progress before President Hu Jintao's visit to the US in January 2011. "Some called this intensified US engagement in Asia a hedging strategy, an insurance against the possibility of China emerging as a regional hegemony. "Frankly, I don't care what we call it. I just think it makes sense that we ought to do it", he said then. During the address he appealed for maintaining a cooperative attitude toward China, rather than one that treated China as an enemy or the cause of US domestic problems. "If China succeeds in rebalancing its economy, then the global economy will benefit and so will we," he said. "If China fails — or worse, if we cut ourselves off from China in a misguided attempt to 'contain it' as some have suggested — then we will all suffer. And even though we can't call China an ally today, we simply cannot treat it as an enemy." Ruan views Kerry as professional, calm and pragmatic, and expects him to initiate strategic dialogues between China and the US, which will wield positive influence on Sino-US relations. As the new secretary of state, and a supporter of the Asian rebalancing strategy, Kerry would be less aggressive than his predecessor Clinton, said Jin Canrong, an international affairs professor at Renmin University of China. In an era when being secretary of state is increasingly about style as much as substance, many foreign-policy experts said the five-term senator and quiet negotiator is expected to return the office to a more traditional version of diplomacy, according to The Christian Science Monitor. The Vietnam veteran, who was critical of the war after he returned home, lost to US president George W Bush in the 2004 election. He has represented Massachusetts in the senate since 1985, and has served as chairman of the Senate Foreign Relations Committee for decades. During his first term, Obama sent Kerry around the world on his behalf numerous times, particularly to Afghanistan and Pakistan. He also helped prepare the president for his live TV debates during this year's election, and won praise from Obama for his sharp national security-focused speech at the Democratic National Convention in August, when he told delegates: "Ask Osama bin Laden if he's better off now than he was four years ago."

Hong Kong*:  Dec 25 2012

Wenzhou's May Zheng eyes Hong Kong despite high stamp duty (By Paggie Leung) Wenzhou resident goes against the trend, saying restrictions at home force her to look elsewhere - May Zheng, a Wenzhou citizen, is still considering buying a flat in Hong Kong despite the extra stamp duty imposd on non-residents. May Zheng is a rarity among Wenzhou citizens. The 25-year-old is still considering buying a flat in Hong Kong despite seeing the property market in her hometown collapse. "Since we are homeowners already, we cannot buy more flats in our hometown Wenzhou because of the government's purchase restrictions," Zheng said. Zheng said she and her husband spent about 6 million yuan (HK$7.38 million) for a 200-square metre, or 2,153 sq ft, new home in Wenzhou this year after marrying. Their parents are flat owners too, so their families are not eligible to buy another residential property in Wenzhou owing to restrictions imposed by the government in an attempt to cool soaring property prices. Because Zheng's husband often travels to Hong Kong for work and she is considering studying for a master's degree in the city, Hong Kong offers an ideal location for the couple to buy another flat - despite the city's government imposing a hefty extra stamp duty on non-residents. "It's better to buy a property than to rent one," Zheng said, adding that her family also helped her buy a flat in Shanghai when she worked there before. Based on the value of Hong Kong properties belonging to her mainland friends, she expects to pay about HK$40,000 per square foot, for a total of about HK$10 million. She acknowledged that her plan went against the trend, with people in Wenzhou no longer travelling to Hong Kong or other cities to buy properties because they are "liquidity-tight and are tied up with many properties already". She admitted that the 15 per cent buyer's stamp duty imposed by the Hong Kong government in October would dampen her enthusiasm, but it would not put her off entirely. "Of course it would be best if we don't need to pay the new tax, but I think we still prefer to live in our own flat in Hong Kong [rather than renting]," she said. "Perhaps we will look for a cheaper one so we will be levied less." Edward Cheung Siu-chuen, a director of realtor 18 Property Agency, echoed her view. His company, which has offices in Hong Kong and second-tier mainland cities such as Haikou , shut down its offices in Wenzhou in June because it was struggling to find buyers. "People there don't have much spare money now. Some of them even have to sell their cars and diamonds to repay their debts," the agent said. Cheung said one Wenzhou businessman, who ran a financing firm, had to sell his Hong Kong flat and Bentley car. Another two Wenzhou buyers fled despite paying deposits for properties worth more than HK$7 million each in Hong Kong. Wu Yuanzong, a property agent in Wenzhou who used to take groups of up to 20 investors to Hong Kong every two weeks to buy flats, has seen business dry up steadily. "Now only those who are planning to give birth to babies in Hong Kong and have business there may consider Hong Kong properties," he said. Chen Yongfeng, Wenzhou Real Estate Developers Association's deputy chairman, said the 15 per cent buyer's stamp duty had driven remaining Wenzhou buyers away from the Hong Kong market. "The new tax has significantly affected buyers' sentiment about going to Hong Kong. Even Wenzhou developers can't earn a profit as big as 15 per cent," he said.

Macau's St Paul's School biggest in region to fully embrace e-learning (By Lana Lam) Region's first school set to switch almost entirely from 'chalk and talk' to computers; it couldn't happen in Hong Kong, its head laments. Pupils of St Paul's School in Macau use tablet computers in what will be the region's largest paperless school. A school in Macau with more than 3,000 pupils is set to become the largest paperless school in the region, outpacing e-learning efforts in Hong Kong. St Paul's School principal Alejandro Salcedo said planning for the ambitious project started almost a decade ago and would be fully implemented next year. That's when every student from Primary Four to Form Six will be learning in an e-classroom, with tablet computers and interactive lessons replacing textbooks and blackboards. Kindergarteners and those in the first three years of primary school will still use textbooks. "We are the only school like this in Asia and Europe," Salcedo said of the project's scale. He estimated 50 million patacas had been spent on the project since 2009, with 15 million patacas in government funding this year. While government support for e-learning is strong in Macau, Salcedo believes such a project would have failed in Hong Kong, where he lived for 13 years and worked as a principal for six. "This would have been impossible in Hong Kong but the education system in Macau is completely different," he said. "Macau is small but the support from the Education Department is huge. Here, principals have the freedom to say how they will develop the school and the system is more school-based." Salcedo said three Hong Kong principals had approached him for advice on implementing e-learning on a large scale. In May, a survey of 167 Hong Kong schools by the eLearning Consortium of parents, publishers, educators and IT specialists found that most only had basic digital facilities. This was the situation Salcedo found 15 years ago when he joined government-run St Paul's. "We were not offering students anything related to the 21st century because we were using the grammar school way of teaching and learning: the talk and chalk," he said. "So we had to adapt our school to society and, in fact, we should outpace society because we are educating the ones who are going to lead society." English teacher Sue Tai was one of the first teachers to teach under the new system. "I was scared but it was a chance to change," she said. "I've been teaching for more than 10 years and I felt exhausted. An e-classroom is more flexible and students like learning on the computer, but the most significant change is the learning attitude." For mother Diana Ian, the impact on her 12-year-old son Vincent Lo - a Primary Four student, who has reading and writing disabilities - is already obvious. "Before, he just wasn't interested in studying, but now he is using a computer, learning is fun," she said. "He comes home from school now and opens up his computer to study. Before, he was bored by books. This is already a big change."

Visitors flood into Hong Kong as locals hope to flee chill (By Jennifer Cheng) Arriving and departing passenger traffic was busy but orderly at Hong Kong International Airport yesterday as the Christmas holidays began in earnest. Today will be the busiest day, with 1,067 flights scheduled, while almost 18,500 flights will be handled over the two weeks until January 7. Hong Kong has been infected with the travel bug this holiday season, with immigration staff expecting to handle 8.65 million journeys - most via the land crossings. The estimate covers the periods from December 21 to 26 and December 30 to January 2, and, if met, will mark an 11 per cent rise from last year. Most travellers - an estimated 75 per cent - will travel to and from the mainland, with the Lo Wu border control point the busiest. The number of outbound travellers by land reached its peak yesterday, with about 384,000 people departing Hong Kong. The number of inbound travellers is expected to be heaviest on December 26, at about 391,000. The Civil Aviation Department said that between Friday and January 7 Hong Kong International Airport would handle 18,440 flights, 6 per cent more than in the same period last year. The airport will be busiest today, with 1,067 flights, 29 more than last year. Those flying out will leave behind a chilly Hong Kong, with temperatures forecast to drop to 10 degrees Celsius tomorrow and 13 degrees on Christmas day in urban areas, and lower in the New Territories. In all, the airport will handle an additional 250 flights. Taipei this year is again the destination with the highest number - 84 - of additional flights. Traveller Kelvin Lei Chun-ran, a financier, said the main draw was the cheap air fare. "When I am sick of Hong Kong, I jump at any opportunity to go on vacation," said Lei, who was on his way to catch a HK$2,500 round-trip flight to Taiwan on China Airlines. The travel bug was apparent on the Airport Express train heading into the city. Pearline Vijayakumar, 19, and six relatives travelled from Singapore to spend the holidays in Hong Kong. As the train pulled out of the airport, some of them stood up excitedly to snap pictures of the Lantau peaks behind Tung Chung. "We don't have mountains in Singapore," she said.

Leung Chun-ying ends virgin duty visit to Beijing with low-key talk (By Colleen Lee in Beijing and Tony Cheung) Wang Guangya (left), Director of the Hong Kong and Macao Affairs Office, and Hong Kong Chief Executive Leung Chun-ying. Chief Executive Leung Chun-ying yesterday ended his maiden duty visit to the capital by meeting the director of the State Council's Hong Kong and Macau Affairs Office for talks described as low-key. His meeting with Wang Guangya was held at the Diaoyutai State Guesthouse, where Leung stayed. As with his predecessors' duty visits, Leung's meeting with the director, which lasted more than an hour, was held behind closed doors. But a source familiar with the arrangements said: "The chief executive reported Hong Kong's situation to director Wang, who raised some 'demands of the central government'." The source did not elaborate on those demands made, and said Wang had yet to plan a visit to Hong Kong in the near future. Wang was among the officials who sat in on Leung's meetings earlier with Communist Party General Secretary Xi Jinping, President Hu Jintao and Premier Wen Jiabao. Leung had no public engagements on his final morning in Beijing, and arrived back in Hong Kong at about 4pm. He left the airport without taking questions from reporters. Leung had throughout his visit appeared more reticent than his predecessor Donald Tsang Yam-kuen, who would engage with the media. His answers were generally brief and he largely read from a script. Asked on Friday why Beijing-loyalist former lawmaker Lau Kong-wah was the best person for the job of undersecretary for constitutional and mainland affairs, Leung said simply: "Well, he's the best person." When asked to comment on the two officials expected to take charge of Hong Kong affairs after March, he said Vice-Premier Zhang Dejiang and Politburo member Li Yuanchao were "very familiar with Hong Kong's situation". Bombarded with questions about whether the controversy over the illegal structures in his homes at The Peak and in Stanley was mentioned in his meeting with Xi, Leung said simply: "No." Pressed further, he added: "It did not come up." In contrast, Tsang tended to take more questions from the media and give longer answers when he went on his duty visits. Leung also did not visit any ministries while in Beijing, in contrast to predecessors Tsang and Tung Chee-hwa, but he did take time out to meet Hong Kong businessmen working there.

 China*:  Dec 25 2012

Taste of travelling on Beijing-Guangzhou high-speed railway - China is set to open the world's longest high-speed railway on Dec. 26, linking Beijing and the southern economic center of Guangzhou.

Profile photos: Xi Jinping: Man of the people, statesman of vision - He now leads the 91-year-old CPC, the world largest political party with more than 82 million members, as it rules China, the world's second largest economy.

Kerry selection bodes well (By Chen Weihua in New York) China hands in the United States interpreted President Barack Obama's nomination on Friday of Massachusetts Senator John Kerry for secretary of state as a positive sign for Sino-US relations. Bonnie Glaser, a senior fellow with the CSIS Freeman Chair in China Studies, said Kerry has had significant experience dealing with Asia in general and China in particular. US Senator John Kerry (D-MA), Chairman of the Senate Foreign Relations Committee, speaks to reporters about the attack on the US consulate in Benghazi, on Capitol Hill in Washington, in this file photo on Dec 19, 2012. "He has visited China many times. I think he has a very good grasp of all the issues that fall under US-China relations," Glaser said. "So there is already some good groundwork for the two countries to work together." Steve Orlins, president of the National Committee on United States-China Relations, said as chairman of the Senate Foreign Relations Committee, Kerry understands China. "He has had a fairly positive and constructive view of US-China relations. I believe his appointment as secretary of state will certainly maintain the relationship and has the possibility of improving the relationship," Orlins said. Meanwhile, Cheng Li, director of research and a senior fellow at the John L. Thornton China Center in the Foreign Policy Program at Brookings, believes Kerry's approach to China will differ somewhat from his predecessor Hillary Clinton, who is expected to step down in January. He will place more emphasis on cooperation with China, rather than uniting other Asian nations against it, Li predicted. Kerry will also be able to better explain US policy on China to Congress, Li said, adding that Kerry has met Chinese leaders such as Xi Jinping and Li Keqiang and established good relationships with them. Kenneth Lieberthal, also a senior fellow in foreign policy at Brookings and a former special assistant to the US president on national security, emphasized the respect Kerry commands in the Senate. "It's not a requirement for the position but it's always helpful because a lot of decisions on Capitol Hill could have an impact on US foreign policy," he said. Lieberthal said that privately Kerry feels politics is the art of the possible. "So if you want to understand what can be done, you've got to not only understand what your own interests are, but to understand the interests of the other side." "I would think that bodes well for him being an effective secretary of state, as well as in dealing with China," Lieberthal said. "He has no clear record in terms of the issues we now confront with China, especially the bilateral issues, but he is someone who will handle things in a very professional way," he said. Lieberthal cautioned Kerry would be reading from the same page as the US president. "Ultimately President Obama makes policy on China," he said. Orville Schell, director of Asia Society's Center on US-China Relations described Kerry as part of the "best tradition of level-headed, well-informed and judicious American foreign policy leaders". "He speaks fluent French, has traveled widely and understands the evolving world. Although he does not know China well, he has a keen sense of its importance in our 'new world' and to the US," Schell said. "While he will be a welcome voice of reason and pragmatism, should he become secretary of state, he will, like Hillary Clinton, also be someone with a keen sense of American values." In a speech to the Senate in October 2011, Kerry said: "China is an important partner of the United States in a lot of ways. It's also a major investor in the United States. So I don't think we are here to rupture that relationship. I think we are here to send a message to the Chinese about the urgent need to repair it." In announcing his nomination on Friday, Obama described Kerry as someone who knows well the "responsibility to use American power wisely, especially our military power."

French wine a Chinese entree (By Ye Jun) Chinese people's understanding of French products has grown over the years, to the point where they know the country offers more than just red wine, snails and foie gras, says Cecile Bassot, managing director of Sopexa. "When I first arrived in 1997, Chinese consumers could only understand and accept red wine," says Bassot. "But now they have learned about white and rose wines and recognize the differences between the wine regions." Bassot has visited China more than 20 times and since 2009, she has helmed Sopexa, a company promoting Gallic food, wine and lifestyle. Recently, Bassot attended a grand tasting of Union des Grands Crus de Bordeaux in Beijing to organize a training course for Chinese wine educators. The aim here is to coach locals about French wine and it is one of about 2,000 promotional activities held annually by Sopexa. Bassot thinks China is among the countries that are able to quickly assimilate foreign ideas and products. "Chinese customers have a wish to discover new things. They have a gift of understanding foreign products, especially French wine." The 46-year-old believes China and France are similar in that they have a rich culinary tradition and this is the basis for mutual understanding. According to Customs France, the country was the No 1 European exporter of agri-food products to China in 2011. The $3.1 billion of agri-food products included wine, liquors, meats, dairy products and spices. China is France's sixth biggest wine importer by volume. Bassot, however, insists there is still potential for further growth in the China market. "Chinese people have a high awareness of food quality and hygiene. At the same time, French people have strict controls when it comes to food safety. Both French and Chinese parents are very careful when it comes to choosing what to feed their children," she says. "French products have established themselves in China as being of good quality, diversity and safety. In addition, more Chinese people are going to France for vacations and their understanding of French culture is becoming deeper." While French chefs in China have helped a great deal to promote the country's culture, other French products are doing well, such as kids' products, chocolate and jams. "Although France is known for luxury goods, others goods are affordable, such as ham, cheese, sausages and daily comestibles," she says. While French wines account for 47 to 48 percent of China's imported wine market, it faces increased competition from New World wines (Wines produced outside the traditional wine-growing areas). But Bassot is confident of the future. "French wines have their own advantages, namely their diversity in terms of grape varietals, and different production origins," Bassot says. "French wine can satisfy the needs of different customers in China, both in the low-end and high-end market, at restaurants, as gifts, and at wedding ceremonies." Since Sopexa entered China it has organized many events, such as the annual French cultural festival, but is now extending its efforts in both the major cities and provincial areas. "We hope we can become a benchmark in the industry. We plan to cooperate with local institutions in the future and promote better mutual understanding between cultures. This is the basis of Sopexa's future development," Bassot says. Besides French and European products, Sopexa also promotes Japan's culinary culture in France, and has developed the AOC system in Poland. Bassot says she also hopes that Sopexa will work with Chinese companies in the future to promote Sichuan's chili, the country's beer and tea.

Hong Kong*:  Dec 24 2012

Thousands flock to show flats for subsidised Greenview Villa (By Thomas Chan) Thousands visit show flats for first development being offered under 'My Home Purchase Plan' - The queue was long at the Greenview Villa sales office in Cheung Sha Wan. Flats at the first estate being sold under Hong Kong's "My Home Purchase Plan" are seeing an overwhelming response from potential buyers, some of whom say they may purchase a unit for their adult children. The Hong Kong Housing Society will in 2015 offer 988 flats at the subsidised Greenview Villa in Tsing Yi, the first under the plan, to individuals with a monthly income of HK$25,000 or less, and to households with a monthly income of HK$40,000 or less. The flats are priced from HK$5,841 to HK$7,402 per sq ft in terms of saleable area - a 30 per cent market discount. Before show flats were opened to the public at 10am yesterday, about 50 people had already lined up at the sales office in Cheung Sha Wan. Among them was a mother helping her two children find an affordable flat. "Flats on the private property market are so expensive, [my children] can't afford them," she said. "They aren't eligible to apply for public housing either. I will help them with the down payment. But how much we will pay depends on the interest rate after two years." Thousands of people were estimated to have visited the show flats. Oliver Law Lin-fat, senior manager of planning and development at the Housing Society, estimated that the offer would be 10 times oversubscribed. Some prospective buyers, however, said the estate's management fees were higher than those at private properties. The fees, in terms of saleable area, are at HK$2.3 to HK$2.4 per sq ft. For example, a flat of 535 sq ft will result in fees of HK$1,284. The society's chairman, Marco Wu Moon-hoi, said: "The rate we quoted is based on saleable area, while the common practice in the private sector is based on gross floor area. The rate, therefore, needs to be adjusted." The estate is also the first residential property in the city to provide flat details in terms of saleable area only, and not gross floor area. A law that comes into force next year requires property developers to list flat details in terms of saleable area, not gross floor area, when marketing them. Gross floor area includes the saleable area - the internal flat area plus balconies but minus bay windows - plus a share of the common areas and facilities. Grace Chan, who is considering buying a flat with her boyfriend at Greenview, said: "It helps me better understand how much I will pay for each actual square foot." People can submit applications from Friday to January 18. Meanwhile, housing minister Professor Anthony Cheung Bing-leung said yesterday the Housing Authority would allow 5,000 eligible people to buy second-hand Home Ownership Scheme flats at a discount, starting in January next year.

Cash dam reopened to flush out hot money (By Eric Ng) Monetary Authority steps in again to sell down local currency, bringing total injections in last two months to more than US$13.8b - The Monetary Authority has been pouring Hong Kong dollars into the market to maintain the city's currency peg. The city's de facto central bank again sold down the Hong Kong dollar yesterday to maintain the currency peg to the US dollar as so-called hot money continued to pour in. In the latest intervention, the Hong Kong Monetary Authority (HKMA) sold HK$5.04 billion of Hong Kong dollars in exchange for foreign currencies, to keep the Hong Kong dollar from strengthening past the upper end of the 7.75-7.85 permissible trading band with the US dollar. Analysts said the massive money inflow into Hong Kong was caused by the ultra-loose monetary policy in debt-laden United States and the European Union, where central banks have been buying government bonds and mortgage-backed securities to maintain ample money supply and keep borrowing costs low. Through this so-called quantitative easing, the Western governments hope to stimulate economic growth and cut unemployment. "The trend of hot money inflow will not change in the short term, especially after the US government's stepping up of the quantitative easing programme," AMTD Financial Planning general manager Kenny Tang Sing-hing said. "Now that Japan has chosen a new prime minister, it is also widely expected to engage in similar operations to stimulate its moribund economy." According to Reuters data, the equivalent of US$13.83 billion in Hong Kong dollars has been injected into the market since October 20. After the latest intervention, the sum of balances on clearing accounts maintained by banks with the HKMA will rise to HK$255.85 billion on December 27, indicating a continuing rise in the supply of Hong Kong dollars. Analysts said the incoming funds were expected to be invested in assets seen as providing better returns than elsewhere in the world, especially Hong Kong and mainland shares, following Hong Kong's clampdown on property speculation. In addition to buying Hong Kong-dollar-denominated mainland stock funds, overseas investors can also gain exposure to the mainland stock market by converting Hong Kong dollars into yuan and buying yuan-denominated stock funds under the renminbi qualified foreign institutional investor scheme. Since higher stamp duties were imposed on home purchases by nonlocal and corporate buyers, prospects of further price gains in property had dimmed after soaring some 20 per cent in the past year, Tang said. "Despite substantial gains of late, Hong Kong and mainland shares are still attractive compared to US and European stocks," he said. He predicted the Hang Seng Index will touch 26,000 next year. The index yesterday closed 0.7 per cent lower at 22,506.29 points. Hong Kong and mainland stocks are fetching just under 12 times earnings, compared to 14.7 times of US stocks and 18.5 times of European ones, according to Bloomberg data. After gaining 25 per cent from a low of 18,056 in early June, the Hang Seng Index will meet major resistance at the 23,000 level before the year-end, Amicus Asset Management director Conita Hung Lai-ping forecast. She said the bull run would continue in next year's first half but concerns over inflation and a slowdown in the economy were likely to result in a correction in the second half.

Wen highlights top six problems in Hong Kong for Leung Chun-ying (By Colleen Lee in Beijing and Tony Cheung) Leung urged to focus on key areas including poverty, housing, environment and the elderly - Leung Chun-ying briefs Wen Jiabao in Beijing in what was probably a swansong meeting for the outgoing premier. Premier Wen Jiabao has urged Chief Executive Leung Chun-ying to address problems in six areas including housing, poverty and the city's ageing population. President Hu Jintao also had a message for Leung on the second day of his first duty visit, offering some rare praise. He said Leung and local authorities had "faced many kinds of problems" and he "affirmed" their efforts in sorting out housing and poverty problems of public concern. In probably their swansong messages to Leung, both Hu and Wen expressed full confidence in Hong Kong's future despite challenges and affirmed the Hong Kong government's work since the 1997 handover. "The global financial crisis is not yet over. The economy is now facing strong downward pressure," Wen said. "The SAR government has to particularly pay heed to, and properly solve, livelihood problems such as employment, prices, housing, poverty, the environment and the ageing population, which are matters of practical interest to our Hong Kong compatriots." When Donald Tsang Yam-kuen visited Beijing as chief executive he was told on two occasions, in 2005 and 2009, to resolve conflicts in Hong Kong. Both Hu and Wu will step down in March. Hu told Leung: "Since the inauguration, you and the new Hong Kong Special Administration Region Government have faced many kinds of problems, but you take the bull by the horns, and are progressive and striving, which shows a good attitude." On Thursday, Communist Party leader Xi Jinping , who will be the next president, said Leung's administration was "progressive, striving, pragmatic and promising". Hu said the city's government "have insisted on the policy vision of putting livelihood issues first and pouring every effort in solving housing and poverty problems of public concern", which he said had "gained people's recognition". He added that Beijing affirmed and supported the work of Leung and his administration. Leung has been under relentless attack in Hong Kong. Last month he survived a motion of no-confidence in Legco over illegal structures at his homes that critics say have undermined his integrity. On the "one country, two systems" formula, Hu said it had been a "huge success" and "Hong Kong will certainly have a better tomorrow" if it continued to adhere to the principle and the Basic Law. Leung expressed his gratitude for Beijing's support and pledged to build a better Hong Kong. He also disclosed that Wen had told him the central government "will certainly take policy initiatives to develop Hong Kong as a yuan clearing platform more soundly". Veteran China watcher Johnny Lau Yui-siu said that the six problems mentioned by Wen showed that "the deep-rooted conflicts in Hong Kong have not been fundamentally solved". "Wen was only citing problems and did not mention the result and outcome of anything Leung has done," he said. At Xi's reception of Leung, Hu was accompanied by the Politburo members expected soon to take charge of Hong Kong affairs - Zhang Dejiang and Li Yuanchao.

8.65 million passengers to move through Hong Kong this festive season (By Jennifer Cheng) Inbound passengers to peak at 391,000 on Boxing Day - Passengers checking in as they leave Hong Kong during the Christmas period. Hong Kong is expecting to see 8.65 million passengers move through its sea, land and air border control points this Christmas and New Year, which is 11 per cent higher than last year’s festive season. These are the figures estimated by the Immigration Department this week, which regards the holiday season as between December 21 to 26, and December 30 to January 2. Most of the passengers – an estimated 75 per cent - will be making use of the land border control points which serve people travelling by train or vehicle. The number of outbound passengers using land boundary control points will reach its peak today (Saturday) with around 384,000 passengers departing Hong Kong. The highest number of inbound passengers is estimated to be on December 26 Boxing day with around 391,000 people. The land boundary control points are situated in Lo Wu, Hung Hom, Lok Ma Chau, Sha Tau Kok, Man Kam To and Shenzhen Bay. Lo Wu Control Point, which shares a border with Shenzhen, will be busiest in the festive season, with an estimated daily average of 306,000 people travelling via the control point.

 China*:  Dec 24 2012

Baoshan takes stake in PetroChina pipeline (By Eric Ng) Baoshan Iron & Steel buys a minority stake in the construction of a west-to-east natural gas pipeline, a move aimed at expanding steel pipe sales - The 5,220-kilometre pipeline will stretch from Xinjiang Uygur autonomous region in the northwest to northern Guangdong. Baoshan Iron & Steel and its parent Baosteel Group have agreed to invest a total of 10 billion yuan (HK$12.3 billion) to take a minority stake in PetroChina's third west-to-east natural gas pipeline construction. Shanghai-listed Baoshan, one of the mainland's largest steel smelters, said its board has agreed to take a 12.8 per cent stake in the project, which requires it to invest eight billion yuan of equity capital. The move is aimed at expanding steel pipe sales. Baosteel Group will take a 3.2 per cent stake and invest two billion yuan of capital. The project entails a 5,220 kilometre pipeline stretching from Xinjiang Uygur autonomous region in the northwest to northern Guangdong province, as well as eight branch and sub-branch lines. The projects' estimated cost of 116 billion yuan will be funded by 62.5 billion yuan of shareholders' capital. "Baoshan's participation in the project will help strengthen our strategic co-operation with [PetroChina], and establish a stable supply chain relationship," Baoshan said in a statement. Baoshan sold 730,000 tonnes of steel pipes in the first half, or 6.2 per cent of its total sales volume. The segment earned a gross profit margin of 11.1 per cent, the highest among the company's seven segments. The firm's overall margin is 6.4 per cent. Steel pipes, used in many areas including gas pipelines, were also the only segment that saw higher margins in the half. UOB Kay Hian Securities senior analyst Helen Lau said Baoshan's participation can help secure orders for its steel pipes although it is not clear whether the orders are subject to tendering. In addition, Baoshan can also share the pipeline's future profit. According to Baoshan, the board has approved the investment despite a cut in the pro- ject's estimated return on investment to 8 per cent from 10 per cent. Despite its relatively small volumes, gas pipeline is a high growth segment for the steel sector, as Beijing plans to raise the length of the nation's major gas pipelines by 110 per cent by 2015 from 40,000 kilometres in 2010. Oversupply and weak demand have caused many mainland steel makers to suffer. For instance, Baoshan's operating profit slid 48.8 per cent to 4.14 billion yuan in the first half of the year from a year earlier. PetroChina's first west-to-east pipeline linking Xinjiang and Shanghai was completed in 2004, and the second one connecting Xinjiang and Hong Kong has recently been finished. Both were wholly owned by PetroChina. It took only a 52 per cent stake in the third pipeline.

KFC was supplied chicken tainted with antibiotics (By Reuters in Shanghai) KFC was supplied with chicken on the mainland that contained excessive amounts of antibiotics. Fast-food chain KFC was supplied with chicken on the mainland that contained excessive amounts of antibiotics, a report said yesterday. The finding by the Shanghai Food and Drug Administration (SFDA) said eight of the 19 batches of chicken samples sent by owner Yum! Brands to a testing laboratory in 2010 and 2011 contained overly high levels of antibiotics, the SFDA said in a statement on its website. An investigation is under way to determine whether Yum! Brands took corrective measures at that time, and the company, based in the US state of Kentucky, may face harsh penalties if the probe showed laws had been violated, the SFDA said. Shares in Yum! Brands have slumped 4 per cent since Tuesday, when CCTV reported that poultry suppliers in Shandong province had fed chickens with antiviral drugs and hormones to accelerate their growth. The SFDA is looking into the CCTV report and has not released its findings yet, but authorities in Shandong have already shut two chicken farms, including one that supplied KFC and McDonald's, the official Shanghai Daily newspaper reported. Officials at Yum! Brands could not be immediately reached for comment. KFC's subsidiary in China has pledged to co-operate with the authorities, while McDonald's wrote on its official microblog that its chicken and raw materials pass through independent, third-party laboratory tests. The KFC finding deals a blow to its reputation on the mainland, where it is facing fierce competition from the likes of Taiwanese-owned fried chicken chain Dico.

China's internet is open, UK ambassador tells BBC (By SCMP) Liu Xiao Ming told Newsnight's Gavin Essler that there was a "misperception" about the internet in China - China's ambassador to the UK, Liu Xiao Ming, was quizzed by BBC's Newsnight on internet restrictions. China's ambassador to the UK defended the country's internet crackdowns on Friday during an interview with the BBC. Liu Xiao Ming told Newsnight's Gavin Essler that there was a "misperception" about the internet in China and the way the Communist Party dealt with it. He also denied that it was difficult for Chinese bloggers to publish their opinions because of crackdowns on free speech. Asked by Essler whether he thought the internet was 'a bit of an irritation' to the government, the ambassador said: "I think there is a misconception about the internet and development in China. "In fact, the Chinese are very much open in terms of the internet. In fact, we have the most number of internet users in China today." He added that in China "every day there are hundreds of thousands of comments made by bloggers" but said it was the government's job to "regulate the users for the protection of the safety of the internet to ensure that healthy content is available and unhealthy content should be removed". This week the debate over whether China was cracking down further on internet users was ignited again after the People's Daily - a government mouthpiece - ran three editorials warning of the dangers of the internet. The pieces were seen by many as a signal of a further crackdown on virtual private networks - VPNs - that allow users to avoid restrictions on internet use. They were published as internet users and businessmen in China speculated that a recent upgrade to the Great Firewall was now automatically detecting and blocking VPNs. During the Newsnight interview, Essler continued to press Liu Xiao Ming on the issue, suggesting that China's new rulers were stifling the "free exchange of information" simply because they "do not like certain ideas". The ambassador replied: "If you are in China and can get connected to the internet I think you can get all kinds of opinions. It's much open. A lot of things can be debated including politics and economic and cultural affairs. "I think you have to have a big picture of the development of the internet back in China."

Leaders 'value US relations' (By Li Xiaokun) Chinese leaders as always highly value ties with the United States, Vice-Premier Wang Qishan told US President Barack Obama in Washington on Thursday. Obama told Wang he is expecting an early meeting with China's top political leader Xi Jinping. Vice-Premier Wang Qishan (second from left) meets US President Barack Obama in Washington on Thursday. The first meeting between a Chinese official and the US president since the leadership transition in China came the day the US House of Representatives passed the $633 billion Defense Authorization Act of 2013. The act contains sections about arms sales to Taiwan and supporting Japan's so-called administration right of the Diaoyu Islands, two moves China sees as harming its core interests. This reflects Washington's two-way China policies, experts said, adding the anti-China group in the US political field might shadow relations after leadership transitions in both countries. Wang was in the US for the 23rd Session of China-US Joint Commission on Commerce and Trade. He stressed the importance of building a new type of relations between major countries and called for both sides to "accumulate positive energy". Against the backdrop of the global economic downturn, Obama said, promoting energetic and effective economic relations is still the core of US-China relations. Tao Wenzhao, a professor on US studies with the Chinese Academy of Social Sciences, said Wang's call for accumulating "positive energy" for China-US relations echoes similar remarks earlier this month by Xi when meeting former US president Jimmy Carter. "That showed the coherence of the Chinese leadership on US policies," he said. Wang wrapped up his three-day visit to the US on Thursday. During the trade talks, Chinese and US officials agreed on a number of measures, including a US pledge for fairer treatment of Chinese investment in the US and further relaxation of its technology export controls. When addressing the session, Wang urged the US to end political scrutiny of Chinese investors. He said that US residents are not asked similar questions about their political involvement when investing abroad. "How can you check if they belong to the Communist Party or other parties?" In October, the US accused two Chinese telecom equipment manufacturers, Huawei Technologies and ZTE, of posing a potential threat to US national security due to possible influence on the companies by Chinese authorities. On Thursday evening, the US House of Representatives passed the Defense Authorization Act of 2013, and the Senate is expected to pass the Pentagon budget on Friday. The budget contains two controversial sections relating to China. The two clauses are both written as "sense of Congress," which means they have no binding power over the president. The first said "it is the sense of Congress that ... the president should take steps to address Taiwan's shortfall in fighter aircraft, whether through the sale of F-16 C/D aircraft or other aircraft of similar capability." The other section said "it is the sense of Congress that" although the US side takes no position on the ultimate sovereignty of the Diaoyu Islands, it "acknowledges the administration of Japan" over them. Earlier this month, Foreign Ministry spokesman Hong Lei said the US has repeatedly stated that it will not take sides on territorial disputes between China and Japan, and it "should not send out signals that conflict with each other". At a news briefing earlier this year, Hong urged "some US lawmakers" to get rid of their Cold War mentality and stop pushing for arms sales to Taiwan and interfering in China's internal affairs. In recent years, China-US military exchanges have run into several interruptions caused by US arms deals to Taiwan. Obama's high expectations on relations with China and the irritating Pentagon budget, coming on the same day, is a typical reflection of Washington's two-way China policies, said Liu Hui, another scholar of US studies at the Chinese Academy of Social Sciences. "Despite negative factors, China-US relations will arduously move ahead after the leadership transition," he said.

Hong Kong*:  Dec 23 2012

Machinery giant CMEC soars on local debut (By Reuters in Hong Kong) Chairman of CMEC, Yang Wansheng. Write body CMEC shares soars 18pc on debut after US$500m IPO Reuters in Hong Kong China Machinery Engineering Corp (CMEC) jumped as much as 18 per cent in its stock market debut in Hong Kong on Friday after a US$500 million initial public offering, in a rare bright spot this year for the region’s equity capital market. Shares in the Chinese state-owned contractor rose to HK$6.32 in early trading and climbed as high as HK$6.35, compared with a 0.55 per cent decline in the benchmark Hang Seng index. The company priced its IPO last week at HK$5.40, the top of a HK$4.10 to HK$5.40 per share indicative range. Beijing-based CMEC’s debut caps a difficult year for equity capital markets in Asia ex-Japan, with issuance in the region down 17.4 per cent this year to US$168.6 billion, a second straight year of declines, according to Thomson Reuters data. IPOs in Hong Kong, which led the world for two straight years in 2009 and 2010, slumped 56 per cent to about US$7.5 billion. CMEC secured US$165 million from five cornerstone investors, including newly listed People’s Insurance Company (Group) of China Limited and locomotive maker CSR (Hong Kong) Company, helping bolster demand for the stock. The company plans to use 90 per cent of the IPO proceeds to fund 11 international engineering contracts, mostly in the power sector, with the remainder set aside for working capital and general corporate purposes, according to its prospectus. ABC International, BOC International, CIMB Securities and ICBC International jointly managed the IPO.

Xi Jinping backs Hong Kong chief executive Leung Chun-ying in Beijing (By Colleen Lee in Beijing) President-to-be backs HK leader and says key is to accurately implement 'one country two systems' and respect Basic Law. Chief Executive Leung Chun-ying and party leader Xi Jinping shake hands before their meeting in Beijing yesterday. Party leader Xi Jinping gave his backing to embattled Leung Chun-ying yesterday as the chief executive made his first duty visit to Beijing. Accompanied by all the major present and future officials in charge of Hong Kong affairs, Xi told Leung his administration was "progressive, striving, pragmatic and promising". He said: "You have a heavy workload and it is exhausting. The central government affirm your work and will continue to firmly support [the SAR government] to rule in accordance with the law. "I can tell you all here that the central government's ruling policy of Hong Kong and Macau has remained unchanged," he said, referring to concerns over whether the recent party leadership reshuffle might affect the policy. "The key is to comprehensively and accurately understand and implement the one country, two systems as well as respect and safeguard the Basic Law." The meeting on Leung's first day in Beijing came amid mounting calls in Hong Kong for him to step down, with pan-democratic lawmakers agreeing to jointly table an impeachment motion. It also offered clues to the new line-up of mainland leaders who will sit in a leading group on Hong Kong and Macau affairs. Zhang Dejiang , newly promoted to the Politburo's Standing Committee, sat closest to Xi. Li Yuanchao , a member of the Politburo and a top candidate to become vice-president in March, was also present, as was Liao Hui , who has held sway over the city's affairs for more than a decade. Liao's former secretary Zhang Xiaoming , who has just been made head of the central government's liaison office in Hong Kong, also attended the meeting, together with the State Councillor and Politburo member Liu Yandong . Xi's message to Leung seems to be a step forward compared with what President Hu Jintao told chief executive Tung Chee-hwa in 2004. Hu at the time said Hong Kong needed to "accurately understand" the "one country, two systems" formula. Leung thanked the central government for its support, adding that the nation's development blueprint outlined at the 18th party congress last month was very encouraging. Zhang is expected to be the new leader of the leading group on Hong Kong and Macau affairs in March. Since 2007 it has been chaired by Xi, who takes over as president in March. In introducing Zhang to Leung, Xi stressed Zhang was "very familiar with Hong Kong affairs". The day-to-day operation of the group is likely to be handled by Li. After the meeting, Leung said the controversy over his illegal structures was not mentioned.

HKMA defends Hong Kong dollar peg, sells HK$5b (By Reuters in Hong Kong) The HKMA headquarters in Central in Hong Kong. The Hong Kong Monetary Authority (HKMA) stepped into the currency market on Friday, selling HK$5.038 billion (US$650 million) in Hong Kong dollars as the local currency repeatedly hit the strong end of its trading range. According to Reuters data, the latest intervention will lift the aggregate balance – the sum of balances on clearing accounts maintained by banks with the HKMA – to HK$255.85 billion on December 27. The cumulative amount of Hong Kong dollars injected into the market since October 20 is US$13.831 billion. The Hong Kong dollar is pegged at 7.8 to the US dollar but can trade between 7.75 and 7.85 to the US currency. Under the currency peg, the HKMA is obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85 to keep the band intact. The currency traded at 7.7500 against the US dollar at 6.15pm. Government data showed on Friday that Hong Kong posted a HK$37.9 billion (US$4.89 billion) balance of payments (BOP) surplus, representing 7.2 per cent of GDP, for the third quarter of 2012.

Wen urges CY Leung to tackle social problems (By Colleen Lee) Chief Executive Leung Chun-ying and Premier Wen Jiabao in Beijing on Friday. China’s outgoing premier urged Chief Executive Leung Chun-ying to address problems in such areas as housing, poverty and Hong Kong’s ageing population, during Leung’s maiden duty visit to Beijing. On Friday morning, the second day of Leung’s visit, he met Premier Wen Jiabao – who is set to step down in March – in Zhongnanhai, Beijing’s leadership compound. They last met in April, when Wen presented Leung with his official appointment as chief executive. Wen said: “The global financial crisis is not yet over. The economy is now facing strong downward pressure. The SAR government has to particularly pay heed to, and properly solve, livelihood problems such as employment, prices, housing, poverty, the environment and the ageing population, which are matters of practical interest to our Hong Kong compatriots.” Beijing “supports the SAR government to rule in accordance with the law”, Wen said, stopping short of praising Leung personally. As he did when he met Leung in April, Wen spoke of the need to maintain a clean government and maintain unity in society. “I totally believe that under the SAR government’s leadership, Hong Kong compatriots will remain united. Hong Kong will certainly continue to move ahead with economic growth, social developments, a clean government and improvements in people’s livelihood,” he said. Wen also affirmed the city government’s work over the past 15 years, despite challenges. “Since Hong Kong’s handover, under the SAR government’s leadership, Hong Kong compatriots have been proactive, striving and working hard when facing problems. On areas like the economy and society, it has made great accomplishments. It deserves full affirmation,” he said. Wen was accompanied by Liu Yandong, a deputy head of the central government’s leading group overseeing Hong Kong and Macau affairs, and Zhang Xiaoming, the new director of Beijing’s liaison office in Hong Kong, in the meeting. Leung will meet outgoing President Hu Jintao in the afternoon and speak to the press tonight.

Film review: CZ12 (By Andrew Sun) Jackie Chan's recent roles have required noticeably less action and more acting. But if you think that's a tacit admission that his formula of slapstick and stunts had run its course, forget it. He's not quitting without one last kung fu kick at the genre. Unfortunately, that effort is the sad and sorry CZ12, his 101st movie. Inspired by news about the auction of Chinese national treasures that Beijing wants returned, the silly adventure about recovering lost historic artefacts feels as fake as the zodiac bronzes used in the film. Reprising the adventurer/thief role he first played in 1987's Armour of God, JC (the character's name) is hired to steal animal head relics that once were displayed in the Summer Palace in Beijing. Along the way, he encounters a greedy collector (Oliver Platt) forging fakes, bumbling and accident-prone French folks, some pirates, and a beautiful antique activist (Yao Xingtong) who gets him to grow a conscience. Not that any of this plot nonsense bears any relevance. CZ12 lumbers like a cheap DVD knock-off of one of his old classics. It's no fault of Chan's ageing body that the film feels so plodding and awkward, but everything to do with his lack of finesse as a writer, director and more. According to the Guinness World Records, Chan holds 15 job credits, the most ever on a single film (including silly ones like gaffer and catering co-ordinator). Well, the results of his scattered attention shows. CZ12 is like watching a former star athlete struggle in a meaningless game. Sure, there are occasional flashes, but it can't compare with the glory days. Instead, there's much vanity and demagogic agenda on show. The needlessly complicated narrative gives Chan excuses to use elaborate props and unusual settings for his stunts. The 58-year-old is still incredibly agile but there's no thrill in watching him climb another wall, spar with another martial arts champion, or even don a roller suit to luge down a mountain road. Where the film starts to become agitating is when actors deliver lectures on the moral proprietary of countries to regain their pillaged antiques. Entire pages of pedantic dialogue sound like they were scripted by a government official. Kwon Sang-woo is wasted in a typical second-banana role, while Platt is lightweight as the film's heavy. Striving for global appeal, Chan also ends up with a multilingual mess as actors juggle Cantonese, Putonghua, English and French - often in a single scene. But the default dialect is Putonghua. Perhaps that's a hint of where Chan's loyalty now lies.

Defeated DAB lawmaker appointed to government (By Lai Ying-kit) Former DAB lawmaker Lau Kong-wah. Veteran politician Lau Kong-wah, who lost his Legislative Council seat in September’s election, was appointed Undersecretary for Constitutional and Mainland Affairs on Thursday. Lau, a former vice-chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, would assume office on Friday, the Chief Executive’s Office announced. The 55-year-old lost a Legco seat he had held for 14 years following his defeat in September’s election. He came sixth in the contest for the five newly-created “super-seats” in the functional constituencies. Lau is one of the Beijing loyalists that is particularly unpopular among supporters of pro-democracy groups. This is partly because he began his political career in a pro-democracy party but then left it and joined the DAB, the city’s large pro-Beijing party. Shortly after September’s poll results were announced, a Facebook page was created to mark his defeat attracted nearly 16,000 “likes” within a matter of hours. Up to 100 users even held a party outside Lau’s former district council office in Sha Tin to “celebrate” his defeat. Beside Lau’s appointment, the government also appointed two political assistants on Thursday. Henry Ho Kin-chung, a public relations manager at the University of Hong Kong, will become political assistant for development on December 27. Ho, 40, has been a senior manager at the University of Hong Kong’s communications and public affairs office. Michelle Au Wing-tsz, a manager at green group Friends of the Earth, will become political assistant for the environment. She will take up office on January 14.

Xi Jinping praises Leung's 'proactive' administration (By Lai Ying-kit) CY Leung shakes hands with Communist Party leader Xi Jinping in Beijing. Xi Jinping, general secretary of the Communist Party of China Central Committee, meets Hong Kong Chief Executive CY Leung in Beijing. Communist Party leader Xi Jinping on Thursday said the central government would continue its support for Chief Executive Leung Chun-ying’s administration, and praised his work as “proactive” and “pragmatic”. Xi made the remarks during a meeting with Leung in Beijing. Leung is on his first duty visit to the capital as Hong Kong’s leader. Xi, who took over Hu Jintao as the communist party’s general-secretary in last month’s leadership reshuffle, assured Leung that Beijing would continue to support his administration in Hong Kong. “The new SAR administration led by Leung has been proactive and pragmatic. It has a heavy workload and it has been working hard,” said the vice-president, Xi, who is likely to become president next year. “The central government recognise your work and will continue to firmly support your administration,” he told Leung. The assurance comes at a time when Leung and his cabinet have been beleaguered by a series of controversies – including the scandal surrounding illegal structures found in his houses on The Peak. Since taking office in July, Leung has faced calls to step down and other challenges. He has survived a vote of no confidence in the Legislative Council and a motion to launch a special investigation into his illegal structure scandal. An impeachment motion against him also is looming up after pan-democratic legislators initiated such proceedings on Thursday.

 China*:  Dec 23 2012

Chinese consume one quarter of world's luxury goods, says report (By Peony Lui) A woman shops in a Louis Vuitton store in Shanghai. Chinese consumers are buying one quarter of the world’s luxury goods, according to Bain & Company’s China Market Study (2012) annual report, Caixin reported on Thursday. Chinese consumers going abroad - Despite a recent slowdown in domestic luxury goods consumption to 7 per cent in 2012, overseas consumption of luxury goods by Chinese nationals grew by 31 per cent, according to Bain & Company. Mainland Chinese luxury goods consumption in Hong Kong slowed down to a growth rate of 10 per cent, while Macau still enjoys a rapidly growing luxury market, the report revealed. Driven by the combined effects of a weak euro and a tourism boom, overseas consumption accounted for 60 per cent of China’s total luxury goods consumption in 2012. Despite the slowdown of luxury goods consumption at home, China has replaced Japan as the second largest luxury goods market in the world, second only to the United States. In addition, Chinese nationals have become the largest luxury goods consumer group in the world, buying approximately 25 per cent of global luxury goods. Changing preferences, but a market still going strong - Bain & Company predicted that despite challenges and uncertainties in the overall business environment, China will see improved growth in its domestic luxury goods market in 2013. The current slowdown in market growth provides an opportunity for major brands to assess and adjust their strategies. Formulating a more holistic approach will become an important issue, said the report. As China’s retails market matures, there will be changes and segmentation in the behaviour of Chinese consumers. Beijing and Shanghai have seen a gradually declining preference for big luxury brands. Consumers in these cities are turning to more unique, high-quality and low-key luxury products. The report found that 65 per cent of consumers in Beijing and Shanghai intended to buy fewer products with an obvious trademark. As a result, foreign luxury brands will slow down their expansion plans in China and brand name retail stores will be more selective when choosing store locations. Brands entering the Chinese market relatively late will still maintain rapid expansion plans, according to the report. The internet, smartphones and tablets have become increasingly important marketing tools for luxury brands, which are starting to tap into a variety of social media to enhance the online customer experience. “China’s luxury consumers are transcending their ‘show-off’ mentality,” said Bruno Lannes, Bain & Company’s global partner, chairman of Greater China consumer goods, retail and luxury goods business, and author of the report. “Brands will face greater pressure in the Chinese market in the future. They need to provide more relevant products to Chinese consumers in order to stay competitive, rather than relying solely on their luxury status.”

China and US agree on major trade measures (By Chen Weihua in Washington and Bao Chang in Beijing) Washington talks highlight 'importance of relationship' Chinese and US officials agreed on a number of measures, including export controls and investment, during trade talks in Washington. The US pledged to address concerns over fair treatment for Chinese investment in the US, and China vowed to strengthen protection of intellectual property rights, at a meeting of the China-US Joint Commission on Commerce and Trade in the US capital on Wednesday. The US also agreed to further relax technology export controls. China vowed to pursue a more open government procurement process and not require foreign companies to transfer technology as a precondition for market access. Wang Qishan, the vice-premier who headed the Chinese delegation, said the economies of China and the US have become "interdependent and inseparable". Wang described the two economies as "highly complementary and neither can thrive without the other''. Global economic recovery will be sluggish over the next five years, Wang said, and this means that ties will be of greater significance. China has made tangible progress in addressing US concerns over IPR protection, technology transfer, government procurement and market access, he said. Washington has started to address Chinese concerns on FDI in the US, export controls and visa issues. Wang described the talks as "effective and fruitful''. The world's two largest economies are now each other's second-largest trading partners. In 1983, when the talks were launched, bilateral trade was less than $5 billion. It is now approaching $500 billion. Acting US Secretary of Commerce Rebecca Blank agreed that relations have never been more important, especially after November's leadership transition. "We are entering a unique moment in which we can work together to ensure the long-term and short-term goals of our relationship," she said. US Trade Representative Ron Kirk, who is expected to leave the Obama administration in January, praised Wang for his leadership and devotion to better trade relations. "Our presence demonstrates that our two countries can work hard to resolve trade and investment issues through engagement and dialogue at the highest level," he said. But real success will be achieved by delivering tangible results, he said. Minister of Commerce Chen Deming described the talks as "achieving positive results". He pledged China will step up the IPR law enforcement, including the software used by State-owned enterprises, banks and government entities. He said both countries have pledged to fight protectionism. He expressed concern at the US Department of Commerce announcing on Tuesday it would levy high tariffs on wind towers imported from China. According to Chen, more than 20 topics were discussed at the meetings on Wednesday. The US hopes to increase beef exports to China while China wants to boost poultry exports to the US. "American companies continue to see progress as a result of this high-level engagement," John Frisbie, president of the US-China Business Council, said. The council represents some 240 leading US companies that do business with China. He Weiwen, co-director at the China-US-EU Study Center of the China Association of International Trade, said China and the US have made progress in protection of intellectual property rights. "However, it's not easy to remove divergence on some key points. Therefore, seeking common ground is the way to tackle the problem," he said. Mei Xinyu, a researcher at the International Trade and Economic Cooperation Institute of the Ministry of Commerce, urged Washington to widen access to Chinese investment as "it generates job opportunities".

China’s Focus Media agrees to buyout for US$3.7b (By Reuters in New York) Display-advertising provider Focus Media Holding is being bought for about US$3.7 billion in what will be the largest ever private equity deal in China. Display-advertising provider Focus Media Holding said it had agreed to be acquired by a consortium led by Carlyle Group for about US$3.7 billion in what would be the largest ever private equity deal in China. Leveraged buyouts backed by foreign private equity firms have been few and far between in China, a country famous for its capital controls and restrictive regulations. At least two thirds of Focus Media shareholders must now approve the deal. Focus Media, which operates advertising screens in offices, elevators and supermarkets across China, has faced persistent allegations from short-seller Muddy Waters that it overstated its assets and overpaid for acquisitions. This did not faze Carlyle and some of China’s top private equity funds, which made an offer for the company in August together with the chief executive of the company, Jason Nanchun Jiang. The offer of US$27.50 per American Depositary Share represents a premium of 15 per cent over Tuesday’s closing price and a 17.6 per cent premium over the company’s closing price on Aug. 10, the last trading day before a takeover bid was announced. Focus Media ADSs jumped as high as US$26.17 on the news and ended trading on Wednesday up 6.7 per cent at US$25.52. “Based on our well-documented conclusions of fraud and self-dealing, investors are clearly better off with Focus Media no longer participating in US capital markets. We note that many pension funds and endowments will presumably be the new owners of this company when the deal closes,” Muddy Waters said in a statement. A spokesman for Carlyle, which counts pension funds and endowments among its investors, declined to comment. There have been several suspect companies that have gone private with bank support (in China), but entirely from Chinese banks and mostly from a single Chinese policy bank, China Development Bank. This time we see western banks. That is a surprising and ominous development SYDNEY-BASED HEDGE FUND MANAGER AND BLOGGER JOHN HEMPTON Chinese conglomerate Fosun International, which together with Jiang owns about 35.5 per cent of Focus Media, backs the deal and will become part of the consortium taking over the company once the transaction is complete, Focus Media said. The consortium also includes FountainVest Partners, CITIC Capital Partners and China Everbright. The deal is expected to close during the second quarter of 2013, Focus Media said. Focus Media also said it had suspended its previously announced share repurchase program and dividend policy as part of the agreement. Carlyle, a pioneer of private equity in China with about US$4 billion invested in more than 60 deals in the country by last August, is not a stranger to controversy when it comes to financial reporting of the Chinese companies it invests in. It seized the headlines last year after fraud allegations were levied at China Forestry Holdings and China Agritech in high profile accounting-related cases, dealing a blow to the Washington DC-based firm’s image. China Forestry’s shares are still suspended while China Agritech was delisted from Nasdaq in May 2011. Private equity funds have been picking over hundreds of Chinese firms listed in the United States, looking for viable takeover targets, but until now the deals have mostly been below US$1 billion due to difficulties in getting financial backing. Funding for buyouts of Chinese companies is done through offshore holding companies but many banks will not finance such deals due to the risk of non-payment. In this case, however, Bank of America, Citigroup, Credit Suisse, UBS and Deutsche Bank have agreed to join Chinese banks in providing US$1.53 billion in debt for the transaction. “There have been several suspect companies that have gone private with bank support (in China), but entirely from Chinese banks and mostly from a single Chinese policy bank, China Development Bank. This time we see western banks. That is a surprising and ominous development,” said hedge fund manager John Hempton of Sydney, Australia-based Bronte Capital, who has been blogging prolifically about Focus Media.

Visa policy to lure extra 2m overseas tourists (By Zheng Xin and Xin Dingding) Beijing officials are expecting at least 2 million more overseas visitors to the capital next year as a result of their decision to ease visa requirements for foreigners from Jan 1. The new policy, which will permit visitors from 45 countries to spend 72 hours in the city without a visa, is aimed at attracting more airport transit passengers, according to Wang Yue, deputy director of the Beijing Tourism Development Committee. "Last year, we had 5 million transit passengers coming into Beijing, and they simply went through the airport without entering the city. "Our research shows that at least half of them would have liked to leave the terminal and tour the city, but the visa policy in the past blocked them from doing that," Wang said. The new policy is expected to increase hotel bookings, as well as boost restaurant and shopping income. Wang said city tourism officials will be working hard to make sure what's on offer will appeal to the new generation of short-term foreign visitors. To make it easier for them to explore the city, information desks have already been established around the capital as well as at the airport. More printed information, including travel directions to famous places of interest will be available on flights, Wang said. Yang Yang, general manager of Spring Tour Beijing, said his agent is about to offer two- to three-day visitor packages. "But we'll have to wait and see what kind of places these transit passengers want to visit during such a brief stay, and what future confirmation times are likely to be," he added. Tourism officials have revealed details of a special "countdown ceremony" being planned to take place at the capital's Summer Palace, considered the largest and best-preserved imperial garden in China, to celebrate the arrival of 2013 on the evening of Dec 31. The ceremony, starting at 10:30 pm, will feature various performers and be capped with a huge fireworks display at midnight, Wang said. "It's a new idea to celebrate with a New Year countdown party in the imperial garden. "But it's the perfect chance to introduce Beijing's tourism and cultural resources to the world, especially as these new visa regulations come into force." Wang said compared with other international tourist destination cities, Beijing still has work to do to fully develop its tourism resources and strengthen its image. New Year's Eve countdown celebrations have become popular in many cities, attracting huge tourism numbers around the holiday season.

Xi'an prepares for Beijing-Guangzhou high-speed rail (China Daily) The Beijing-Guangzhou high-speed rail will begin service on Dec 26 and will connect the Zhengzhou-Xi'an high-speed rail, which has been in operation. This will shorten the travel time from Beijing to Xi'an, capital of Northwest China's Shaanxi province, to four hours and 40 minutes. New attendants who will serve on high-speed trains from Beijing to Xi'an receive training in Xi'an, capital of Northwest China's Shaanxi province, on Dec 19, 2012.

China launches traditional medicine resource center (Xinhua) The China Academy of Chinese Medical Sciences on Tuesday established a research center for traditional Chinese medicine (TCM) resources. Research results are expected to help government and TCM industry have better understanding of the distribution, production, environmental issues and overexploitation of materials for TCM, which will benefit the protection and sustainable utilization of the medicinal resources. Wang Guoqiang, vice health minister and director of the State Administration of TCM, said TCM resources have become increasingly scarce due to profit-driven overexploitation, which has wasted and damaged rare medical resources. He identified a lack of overall planning in exploitation and protection, which should be based on scientific research and survey, as an outstanding problem for the development of TCM. China last year conducted a nationwide survey of TCM resources, which covered the distribution, production, and natural environment for TCM materials. Wang said the new center will carefully analyze the survey results to come up with advices to the industry's policy makers. TCM originated in ancient China and has evolved more than 2,000 years. Practitioners use herbs, acupuncture, massage and other methods to treat a wide range of illnesses. Medicinal plant elements and extracts are largely used. But in some cases animal parts and minerals are also adopted.

Wang lauds US trade ties (By Chen Weihua in Washington) China's Vice-Premier Wang Qishan speaks at a dinner ceremony hosted by the US businesses on Wednesday in Washington shortly after the conclusion of the 23rd session of the China-US Joint Commission on Commerce and Trade, a major forum to address bilateral trade and investment issues. Vice-premier positive about ties but urges fair FDI treatment Senior Chinese and United States officials struck a positive note on Wednesday in discussing their bilateral trade and investment ties after each country went through leadership changes in recent weeks. The two sides announced progress in the 23rd session of the China-US Joint Commission on Commerce and Trade held in Washington on Wednesday. The JCCT is a major forum to address bilateral trade and investment issues. While the US has agreed to further relax export controls of high technology to China and address Chinese concerns over what it perceives as unfair treatment to Chinese foreign direct investment in the US, the US has been given promises by China to strengthen the enforcement of intellectual property rights laws and to discontinue the requirement that foreign companies transfer technology as a precondition for market access. Vice-Premier Wang Qishan, who headed the Chinese delegation of ministers and vice- ministers, said the JCCT since his first attendance in September 2008 has been based on cooperation and tackling challenges together. "It has done its best to prevent the politicization of economic and trade issues and to protect the interest of people in both countries," Wang said. Related: Locke urges continuity in Sino-US relations He said China has made tangible progress in addressing US concerns on IPR protection, technology transfer, government procurement and market access, while the US has started to address Chinese concerns over Chinese FDI in the US, export controls and visa issues. Wang, who was elevated to the seven-member Politburo standing committee in the 18th Party Congress a month ago, described the recent JCCT sessions as "effective and fruitful and have written a splendid page in the history of China-US economic and trade relations". "The momentum of cooperation between China and the US in economic and trade areas such as investment, finance and tourism has been strong and has brought concrete benefits to people in both countries," he said. The world's two largest economies are now each other's second largest trading partners. In 1983, when the JCCT was first launched, bilateral trade was less than $5 billion. It is now approaching $500 billion, an increase of 100 fold. Wang described the two economies as "highly complementary" where "neither can thrive without the other". "I am fully confident in the future of China-US economic and trade ties," he said. In a dinner hosted by the US business community on Wednesday, Wang said the global economy during the next three to five years will still experience gradual growth. "This has made China-US economic relationship especially important," he said. He quoted Xi Jinping, the newly elected Party chief, in saying that both sides must "foster positive energy in developing China-US ties." "My visit this time is exactly to add to this positive energy," Wang said. "Our relationship, particularly commerce and trade relations, has never been more important. And the JCCT has been important to this growth (of bilateral trade)," Acting US Secretary of Commerce Rebecca Blank said. "We are entering a unique moment in which we can work together to ensure long-term and short-term goal of our relationship," said Blank, referring to the US presidential election and China's 18th Party Congress, both of which took place last month. US Trade Representative Ron Kirk, who is expected to leave the second Obama administration in January, praised Wang for his leadership and participation in every JCCT session and Strategic and Economic Dialogue since President Barack Obama took office in 2009. "Our presence demonstrates that our two countries can work hard to resolve bilateral trade and investment issues through engagement and dialogue at the highest level," he said. Related:Locke urges continuity in Sino-US relations But he said true success for the JCCT is to deliver measurable results that will help stabilize bilateral trade and investment ties. The two sides signed two agreements on Wednesday: a report on statistical discrepancies on merchandise trade and an MOU on support of trade cooperation between the two nations. China's Minister of Commerce Chen Deming also described the JCCT session on Wednesday as "reaching multiple consensus and achieving positive results". He pledged China will step up the enforcement of its IPR laws, including the software used by State-owned enterprises, banks and government entities. Chen said he had yet to see any US action being taken to relax export controls to China and to treat Chinese FDI fairly. He said both sides have pledged to fight protectionism, expressing his concern to the US Department of Commerce announcement on Tuesday to levy high tariffs on wind towers imported from China. In discussions about agriculture, the US seeks to expand beef exports to China while China wants to beef up poultry exports to the US. "American companies continue to see progress as a result of the high-level engagement from the JCCT meeting," John Frisbie, president of the US-China Business Council, said in a statement on Wednesday. The council is an organization representing approximately 240 US companies that do business with China. "JCCT meetings have been one of the principal vehicles for addressing specific issues in the US-China commercial relationship over the past three decades. It is important in this transition period for both governments to ensure that the JCCT continues to play an important role," Frisbie said.

Hong Kong*:  Dec 22 2012

Luxury shoemaker Roger Vivier takes a step back in time with exhibition (By Vivian Chen) Roger Vivier shoes commemorating Queen Elizabeth's diamond jubilee, encrusted with more than 3,500 gems. French shoemaker Roger Vivier is bringing an exhibition to town that could make its followers shriek with excitement. Footwear from the luxury brand's archives will be displayed in the atrium of the Landmark mall in Central from January 13 to 18. The more than 20 exhibits showcase different eras since Roger Vivier's founding in the 1920s, including shoes made for Christian Dior and Yves Saint Laurent in the 1950s and '60s and pairs made especially for actresses Catherine Deneuve and Elizabeth Taylor. A recent highlight is a pair called "A Queen Forever" by creative director Bruno Frisoni, to commemorate Queen Elizabeth's diamond jubilee. The shoes need their own security detail as they are encrusted with more than 3,500 diamonds, totalling 55 carats. Classics from the archive include a pair of black satin pumps with a small heel and adorned with a ribbon and rhinestones, made for Taylor in 1963, and a pair of Mask sandals designed in collaboration with Yves Saint Laurent in 1967. The exhibition is travelling to Shanghai and Shenyang before stopping off in Hong Kong.

Hong Kong probes UBS over rate rigging claims (By Agence France-Presse in Hong Kong) Hong Kong's de facto central bank said it is investigating Swiss banking giant UBS. Hong Kong’s de facto central bank said on Thursday that it would probe Swiss banking giant UBS over claims of possible rigging of Hong Kong’s interbank offered rate (Hibor). “The HKMA has commenced an investigation with a view to ascertaining any misconduct committed by the bank in relation to HIBOR submissions,” the Hong Kong Monetary Authority said in a statement, adding it had received information of possible misconduct. The HKMA said it will work with overseas regulatory authorities to gather information and “consider further actions that need to be taken” pending the findings of the investigation. The move comes a day after UBS agreed on Wednesday to pay US$1.5 billion in fines to national regulators in three countries to settle accusations that it tried to manipulate interest rates. The probes by Swiss, British and US regulators revealed evidence of massive misconduct in the setting of the London interbank offered rate (Libor), a global reference that affects products from student loans to mortgages.

Zhang Xiaoming vows to safeguard Hong Kong prosperity (By Lauren Ho) Liaison office's new director says he will implement central policies prudently - The new director of Beijing's liaison office in Hong Kong has started the job pledging to "prudently implement" the central government's policies in Hong Kong while giving "unswerving support" to the Hong Kong government in line with the Basic Law. Zhang Xiaoming, who earlier caused a stir by alleging "external forces" were meddling in Hong Kong politics, said he would safeguard the city's long-term prosperity and stability. Speaking to liaison office staff on Tuesday, the 49-year-old former deputy director of the Hong Kong and Macau Affairs Office also thanked Beijing for its confidence in giving him the job, which he said would help him to understand the city. A source familiar with Leung Chun-ying's duty visit to Beijing, which starts today, said the chief executive was scheduled to meet Communist Party general secretary Xi Jinping this afternoon. Xi is expected to succeed Hu Jintao as president in March. Leung will be received by Hu and Premier Wen Jiabao tomorrow. Zhang also commended former chief Peng Qinghua , who has been appointed the new Guangxi party committee secretary, and deputy Li Gang , who is set to take over the Macau liaison office, for their work. Li will appear in the ceremony today marking the 13th anniversary of Macau's handover. Zhang, who has worked at the Hong Kong and Macau Affairs Office for 26 years, is also a member of the Basic Law Committee of the National People's Congress Standing Committee. Peng said he believed his successor could consolidate the work of the Hong Kong office and drive innovation, while an emotional Li said Hong Kong had become his "second home". In a statement yesterday, Leung said Peng had actively co-operated with the Hong Kong government and supported its work in accordance with the Basic Law. He believed Zhang could further promote exchanges and communication between the mainland and Hong Kong. Exco member Cheng Yiu-tong said it was too early to say whether Zhang was a "hawk or a dove [...] But he has extensive knowledge of the important issues in Hong Kong in the past years".

Wellcome throws Christmas cake-off for sick children (By Lo Wei) Wellcome supermarket throws baking party for children with heart disease, showing its commitment to festive family values - Four-year-old Kwok Ka-wun (left) and three-year-old Johnny Cheung and his brother Sunny (right) made chocolate creations. While festive shoppers sweep food off store shelves in preparation for holiday feasts, a supermarket chain has demonstrated its sense of family values by hosting a Christmas party for sick children and their families. A team of volunteers from Wellcome supermarket's staff hosted a Christmas party on Saturday, making cakes with 12 children with heart disease, and their families. Noise and laughter filled the room as the children and their families, helped by Wellcome volunteers, squeezed out icing to decorate chocolate cakes. "I'm so happy today because it's my first time to make a cake," said nine-year-old Sunny Cheung Chun-ho. He was recently discharged from a nine-month hospital stay after heart surgery. The families are all being helped by the Children's Heart Foundation (CHF), one of the 18 beneficiaries of this year's Operation Santa Claus (OSC) fundraising drive. "We are eager to make children happy," said Wellcome's chief executive Choo Peng Chee at the event. "These children are a bit less fortunate, and it's good to bring them out. This activity is an extension of the values we've been faithful to over the years." OSC is a charity appeal jointly organised by the South China Morning Post and RTHK. It is raising funds for a CHF hostel, located next to Queen Mary Hospital, which provides lodging for parents of hospitalised children. Wellcome wanted to support CHF's work because of its focus on helping the families of children with congenital heart diseases, said Choo. Wellcome says it has promoted family values in other ways, including inviting the relatives of warehouse staff to visit the workplace. "The warehouse may be a boring place to visit, but the purpose is to show their families what their parents do, and to see how tough a day at work is," said Choo. In May, Wellcome volunteers held a workshop to teach disabled children how to shop in a supermarket. "In addition to our time at work, we also like to help people in the community," volunteer Mandy Lam Yan-yu said. Timsik Man, a social worker with the children's foundation, said supporting families like Cheung's is important since a child's lengthy hospital stay can exhaust parents and affect siblings.

World's 'biggest floating book sale' anchors at Ocean Terminal Hong Kong (By Christy Choi) The Logos Hope makes waves selling books and Bibles to fund its Christian outreach program - The Logos Hope mascot and Santa Claus welcome a young shopper to the book sail, which boasts over 5,000 tomes. A ship billing itself as the world's largest floating book fair will be docked at Ocean Terminal for the next three weeks. The Logos Hope, a former ocean-going ferry, carries thousands of tomes around the world, selling books in various ports to help fund its outreach program, which brings Christian volunteers to people in need. For a donation of HK$10, the public can explore the ship and learn about life on the high seas for the 400 volunteers, who come from over 45 countries. "We all join for different reasons, but the main goal is to do something for others," said Dawid Jankowski, 23, a Polish volunteer who has been working on the ship for over two years. Most of the all-Christian crew serve for two years, going from port to port selling books, volunteering at local organisations, such as elderly homes and hospitals, and even helping rebuild storm damaged villages. "World's largest floating library arrives in Hong Kong" Video by Hedy Bok Its destinations in the past two years include the Philippines, Singapore, Malaysia, India and Sri Lanka. Operated by the German Christian non-profit group GBA Ships e.V. since 1970, the ship doubles as a ministry for Christian volunteers. As well as book sales, it is funded by sponsorship from family, friends and communities. The books on board are either donated or bought in bulk from publishers and retailers in the United States and Britain. About two-thirds of the titles are non-religious and include items such as medical texts, dictionaries, hobby books, classics and children's books. "The books we don't feel Jesus would want us to share get filtered out by volunteers," said Tom Dyer, 57, the ship's captain. That did not seem to bother shoppers on Tuesday afternoon. "It's OK because not all the books are religious," said visitor Chrissy Mo, 33. The ship is open until December 30 (closed on December 24, 25). Books cost HK$5-HK$200.

Flag raising ceremony held to mark 13th anniv. of Macao's return - The flag raising ceremony is held at the Golden Lotus Square in Macao, Dec. 20, 2012, to celebrate the 13th anniversary of Macao's return to the motherland.

 China*:  Dec 22 2012

China closes chicken farm supplying KFC, McDonald's after chemicals report (By Reuters in Shanghai) A KFC advertisement in Beijing. KFC’s Chinese subsidiary has pledged to work with authorities. Food safety authorities have shut down two chicken farms in eastern China, including one that supplied Yum Brands’s KFC and McDonald’s, the official Shanghai Daily reported on Thursday. The closures come after a report by state television earlier this week that some poultry suppliers in Shandong province had accelerated the growth of chickens by using chemical-laced feed. The two slaughterhouses in Shandong have been ordered to halt production and seal all raw chicken products until samples can be tested, the newspaper said. The paper, citing a report from Shandong’s animal husbandry and veterinary bureau, said the “relevant people responsible for these farms have been detained by police or are under further investigation”. Officials at the bureau could not be reached by Reuters for comment. The Shanghai Food and Drug Administration (FDA) is also conducting tests on poultry supplied to a Yum Brands logistics centre in Shanghai, according to the official Xinhua news agency. Results from this test are expected as early as Thursday, the Shanghai Daily said. KFC’s Chinese subsidiary has pledged to work with authorities, while McDonald’s wrote on its official microblog that its chicken and raw materials pass through independent, third-party laboratory tests. China has been trying to stamp out health violations that have dogged the country’s food sector and includes reports of fake cooking oil, tainted milk and even exploding watermelons. In 2008, milk laced with the industrial chemical melamine killed at least six children and sickened nearly 300,000. Yum Brands warned in November that it expects sales at established restaurants in China to fall 4 per cent in the fourth quarter, despite an improvement in economic indicators such as consumer confidence and retail sales.

Anger as Qing seal sold off - The state cultural authority criticized a French auction house for selling a historic seal allegedly looted by foreign troops in the 19th century. The State Administration of Cultural Heritage said it opposes and condemns the sale of relics illegally taken out of the country, the Beijing News reported yesterday. The government reserves the right to reclaim any artifacts confirmed to belong to China and hopes foreign organizations involved comply with international conventions. French auction house Artcurial sold the seal for 1.1 million euros (HK$11.32 million) in Paris, despite threats of legal action alleging it may have been stolen from Beijing in 1860. The green jade seal, dating from the Qianlong period (1736-95), sold to an unidentified telephone bidder for more than five times the estimate. The Association for the Protection of Chinese Art in Europe had urged Artcurial to withdraw the seal from the sale, saying it was among 1.5 million relics stolen when Beijing's Summer Palace was pillaged by Anglo-French troops. Artcurial says the seal comes from the personal collection of a French family who had owned it since the end of the 19th century. The association said it had already mandated a lawyer to "take all legal action," including filing a criminal complaint for theft and receiving stolen goods, if the sale went ahead.

Villagers make lanterns for Spring Festival in Xianju county's Yaxi village, Zhejiang province. The village is well-known for its lanterns, which are sold in more than 20 provinces across China and in Southeast Asia. Its sales of lanterns in 2012 are expected to be 80 million yuan ($12.7 million). 

China, US kick off annual trade talks (Xinhua) China and the United States on Wednesday kicked off in Washington the plenary session of the annual trade talks to deepen bilateral trade and business ties. Visiting Chinese Vice-Premier Wang Qishan co-chaired the 23rd Session of China-US Joint Commission on Commerce and Trade (JCCT) with Acting US Commerce Secretary Rebecca Blank and US Trade Representative Ron Kirk. The global economy is still facing severe and complex challenges, and the only certainty among the uncertainties is that the sluggish global economic recovery would continue for a long time to come, Wang said in his opening remarks to the plenary session of the 23rd Session of China-US JCCT. To foster economic growth and job creation should be a top priority for all countries, Wang stressed. Chinese Minister of Commerce Chen Deming (C) speaks as Chinese Vice Foreign Minister Cui Tiankai (L) and Chinese Vice Minister of Industry and Information Technology (MIIT) Liu Lihua listen during a news conference at the 23rd session of the China-US Joint Commission on Commerce and Trade (JCCT) in Washington December 19, 2012. The JCCT is one of the pillars of the stability in the relationship between the United States and China, Kirk said in his opening remarks. The United States and China are now the two largest economies in the world, and the bilateral relationship, particularly the bilateral trade and commerce relationship has never been more important, Blank said in her opening remarks. Blank called on both sides to use the platform to advance progress towards a balanced and ever growing trade and investment relationship. China told US trade negotiators that Beijing would do more to protect intellectual property rights and combat piracy by promoting the use of legal software, China's commerce minister told reporters. Minister Chen Deming said that while Beijing agreed to address those longstanding US complaints, American officials promised to address China's demands for greater exports of US high-technology products and to facilitate more Chinese investment in the United States. Established in 1983, the JCCT is a platform for China and the United States to promote trade relations and address issues of mutual concern. The 22nd Session of China-US JCCT was held in China's southwestern city of Chengdu in November, 2011.

Xi vows to continue improving Russia ties (By By ZHOU WA) Party chief Xi Jinping greets Boris Gryzlov, chairman of the United Russia party’s supreme council, in Beijing on Wednesday. Xi highlighted the importance of further developing ties as he met a number of political leaders from Russia. China's Party chief guaranteed on Wednesday that Beijing will not change its diplomatic priority of developing Sino-Russian relations, as the third meeting of the dialogue mechanism between the countries' two ruling parties took place in Beijing. Xi Jinping, China's top political leader and head of the military, told the representatives from Russia's ruling party, United Russia, that the new Chinese leadership will not change its friendship policy toward Russia and its strategy to develop preferential Sino-Russian ties. China sees Russia as one of its most important strategic partners and will favorably maintain and develop the comprehensive Sino-Russian strategic partnership, he added. With his remarks, Xi sent a clear signal to the Russian ruling party that the two nations' sound bilateral relations will continue under the new Chinese leadership, said Xing Guangcheng, a Russian studies researcher at the Chinese Academy of Social Sciences. Meanwhile, ruling-party representatives from China and Russia exchanged their views on national development and party-building during their meeting on Wednesday morning. Expanding the parties' exchanges on state management and party building is in line with the needs of the two countries' development, said Wang Jiarui, head of the International Department of the CPC's Central Committee, the Party's central leadership. The dialogue has become a platform for the parties to discuss strategic issues and is important to bilateral cooperation, he said. Boris Gryzlov, chairman of United Russia's Supreme Council, said the Russian party is willing to enhance exchanges with the CPC and deepen their cooperation in various fields. At the meeting, representatives from China and Russia attached great importance to building inner-party democracy and fighting corruption. Inner-party democracy plays an important role in the unity within the Party, said Chen Baosheng, vice-president of the Party School of the CPC Central Committee, a training base for China's top Party leaders. The CPC has made reforms on the election of Party leaders and introduced a competitive election mechanism that made the election of cadres within the Party more transparent, he said. To boost inner-party democracy, Chen said, the CPC also opened more of the Party work to the public and optimized the news briefings of governmental institutions. Inner-party democracy and competitiveness are the key guarantee to the progress of the Russian ruling party, said Andrei Klimov, a member of the Supreme Council of United Russia. According to Klimov, members of the ruling party will discuss proposals at the inner-party clubs — an open and progressive platform for party work. An Ling, a leader from the CPC's top anti-graft body, introduced China's anti-corruption work to the Russian representative, emphasizing the importance of public supervision and re-adaptation of power distribution. Seeing corruption as a threat to Russia's development, representatives from United Russia also talked about its anti-corruption work at the meeting. Representatives from the two ruling parties exchanged views on the media's role in national and party development and the training and selection of cadres. These topics highlight the challenges facing the two ruling parties, and such party-to-party exchanges show that the interparty cooperation between the two countries has deepened in recent years, Xing said. The dialogues enrich their ties and cooperation, and indicate that the political foundation between the two countries has expanded, he added. The dialogues were launched in Beijing in June 2009, and the second meeting was held in Moscow in March 2010. Xi vows to continue improving Russia ties

Hong Kong*:  Dec 21 2012

Action taken over police handling of Li Keqiang visit (By Simpson Cheung) Chairman of Independent Police Complaints Council Jat Sew-tong speaks at a press conference in Wan Chai on Wednesday. A senior superintendent and a chief inspector were found neglecting their duties for failing to reveal their identities before removing a man who was wearing a T-shirt commemorating the June 4 Tiananmen crackdown during Vice Premier Li Keqiang’s visit last year. The two officers who would receive “verbal advice”, were among 13 police officers to be punished for their faults during Li’s visit to Hong Kong last August, the Independent Police Complaints Council said as it revealed its final report on the complaints received during the visit. A total of 16 complaints, consisting some 40 allegations, were made against the tough security arrangements made by police for the vice premier’s visit in 2011. Wong Kin, a resident of Laguna City in Kwun Tong, was removed by force by five officers from police’s VIP protection unit on August 16 last year as he appeared outside his home in block 26, wearing a T-shirt with the words “Vindication for June 4th” printed on the back. He complained that the officers had assaulted him, causing injury to his right arm and shoulders, and the allegations were found “non-perusable” by both the police’s Complaints Against Police Office and the council. But subsequent investigations found that two officers who removed him did not display their warranty cards before taking action. Wong said he was disappointed about the findings, saying as it was merely a PR stunt to release such a report. “It is such a big matter, but only two officers will be ‘advised’. It seems no one needs to be held accountable,” he said. The report quoted the two officers as saying that they did not reveal their warrant cards because of the need to act quickly, but Wong did not accept this excuse. “Officers were investigated by police… yet, the council only monitored the procedure. Do you think the probe is independent? Such a result was to be expected,” he said. He insisted police officers had injured him, but admitted that he had not given any statement to the police as he was going to apply for legal aid to sue the police for compensation. He feared that any statement given to the police would affect any potential legal proceedings. The report recommended that there should be better communication between frontline officers and the central command unit, as well as clearer guidelines for officers. It also recommended enhancing communication between police, members of the public and the press at such events. The police watchdog also said on Wednesday it had received a total of 2,840 reports of complaints against police in the 12 months to March 31 – down 20.6 per cent from the same period the previous year. The complaints were investigated by the Complaints Against Police Office and endorsed by the IPCC. The IPCC vetted 3,145 complaints in the same period, including some held over from the previous year. They covered 6,239 allegations of misconduct. Many of the allegations vetted by the IPCC – 2,910 cases – concerned neglect of duty. There were 2,271 complaints about misconduct, improper manner and use of offensive language, while 417 involved assault. In one case, a sergeant was found not at fault in an allegation that he poked a finger into a reporter’s eye outside the Central government liaison office in 2010. In the same period the previous year, the IPCC received reports of 3,576 complaints.

Rita Fan retains NPC seat despite reduced support (By Colleen Lee) Rita Fan Hsu Lai-tai speaks to the media at the National People's Congress on Wednesday. Political heavyweight Rita Fan Hsu Lai-tai suffered a reduced victory in Wednesday’s election of local deputies to the national legislature, when her support dropped by nearly one-fifth compared to the previous election. Thirty-six Hong Kong deputies to the National People’s Congress were elected from among 52 candidates, at the Hong Kong Convention and Exhibition Centre on Wednesday morning. Among the winners, 17 are newcomers – four more than in the previous poll, in 2008. Among the winners, 13 are newcomers – the same number as in 2008. There are 1,620 electors, but only 1,488 took part in Wednesday’s vote. Fan, an incumbent NPC Standing Committee member, retained her seat with 1,155 votes – or 79 per cent of the 1,461 valid votes cast. That was 19.2 percentage points lower than her vote share in 2008, when she won an overwhelming 98.2 per cent of 1,138 valid votes. Each voter must pick 36 candidates on the ballot. Asked if she was disappointed by the result, Fan said: “I could only try my best. I did not manage to call all election council members before polling day. I didn’t do well enough.” She said she would keep speaking from her heart, despite suggestions that her outspokenness might have weakened her support. Lawmaker Martin Liao Cheung-kong, of the Chinese General Chamber of Commerce, won the most support with 1,403 votes.

Star-studded 2012 TVB Anniversary Awards - Take a look at the female stars at the red carpet of 2012 TVB Anniversary Awards.

 China*:  Dec 21 2012

China criticises French Qing dynasty seal auction (By Agence France-Presse in Beijing) China’s state cultural authority criticised a French auction house for selling a historic seal allegedly looted by foreign troops in the 19th century, state media reported on Wednesday. An unidentified official from the State Administration of Cultural Heritage said China opposes and condemns the sale of cultural relics illegally taken out of the country, the Beijing News reported. The government reserves the right to reclaim any artefacts confirmed to belong to China and hopes foreign organisations involved comply with international conventions, the official said. French auction house Artcurial on Monday sold the seal for 1.1 million euros (US$1.4 million) in Paris, despite threats of legal action alleging it may have been stolen from Beijing in 1860. The green jade seal, which dates from the Qianlong period (1736-95), was sold to an unidentified telephone bidder for more than five times the estimate. The Association for the Protection of Chinese Art in Europe (APACE) had urged Artcurial to withdraw the seal from the sale, saying it was stolen when Beijing’s Summer Palace was pillaged by Anglo-French troops. Artcurial says in its catalogue that the seal, 2cm high by 4.5cm long, comes from the personal collection of a French family which has owned it since the end of the 19th century. APACE said it had already mandated a lawyer to “take all legal action”, including filing a criminal complaint for theft and receiving stolen goods, if the sale went ahead. The Old Summer Palace, or Yuanmingyuan, was pillaged by a joint British and French military expedition during the second Opium War on October 18-19, 1860. The event is seen in China as a national humiliation at the hands of Western armies. Beijing estimates that at least 1.5 million relics were looted at the time.

Chinese farmers turn to e-commerce to sell medicinal herbs (By SCMP) Farmers in Guanyeping village, in China's Henan province, are using e-commerce via Taobao to sell herbs for Chinese medicine, significantly improving their standard of living. Du Qianli is the founder and owner of Gift of the Mountain Products Company, the first Taobao shop selling organic herbs gathered from Taihang mountain. It is an isolated mountain where about 100 poor farmers scratch out a living growing wheat and corn -- just as their families have done for generations. As the video shows, villagers now supplement their meagre income by foraging in the surrounding forests for medicinal herbs and plants such as forsythia and hawthorn, which are used in Chinese medicine. The video was courtesy of Alizila News. Taobao and Alizila News are owned by Alibaba Group. A full text version of the story can be found here.

Hong Kong*:  Dec 20 2012

China Mobile plans to acquire more radio spectrum in Hong Kong (By Bien Perez) China Mobile, the world's largest wireless network operator, plans to secure more radio spectrum in Hong Kong to expand its local and cross-border operation of high-speed mobile services. The Beijing-based company, which had 703.47 million mobile subscribers as of October 31, expects to take part in the Hong Kong government's auction in the first quarter next year of radio frequency licences to operate 4G mobile services in the 2.5-gigahertz-to-2.6GHz bands. It also plans to submit a bid for available 3G radio spectrum. The government is considering several options on how radio spectrum in the 1.9GHz to 2.2GHz bands will be assigned when the existing 3G frequency assignments expire in October 2016. "Both these [future] bids are significantly important to our business," China Mobile International chairman and chief executive Tiger Lin Zhenhui said yesterday. China Mobile International, a subsidiary of China Mobile, was established in December 2010 to oversee the carrier's operations outside the mainland. Its local unit, China Mobile Hong Kong, has been active in acquiring 4G frequency licences in the city. In January 2009, China Mobile Hong Kong paid HK$494.7 million to acquire a chunk of spectrum in the 2.6GHz band to start developing its city network. It paid HK$170 million in February to add radio spectrum in the 2.3GHz band for this network, which was unveiled in April. Based on technology called Long Term Evolution (LTE), 4G networks have theoretical web download speeds of up to 100 megabits per second. The fastest 3G networks run at 42Mbps.

Lai Sun Development promises more partnerships (By Sandy Li) Ex-Sun Hung Kai Properties chairman Walter Kwok is in a joint venture with Lai Sun. Lai Sun Development hinted yesterday that its partnership with Sun Hung Kai Properties' ousted chairman Walter Kwok Ping-sheung to develop a HK$6 billion residential project on a recently acquired site in Tseung Kwan O could be the beginning of more partnerships. Deputy chairman Chew Fook Aun said the group might form joint ventures with different partners in bidding for sites and developing projects in Hong Kong and on the mainland. Asked if there had been any discussions with the eldest Kwok brother over further co-operation, he said: "We will consider any opportunities if they arise. In fact, various companies have expressed interest in forming alliances with us ever since we became more active in land acquisitions. We are open to all options." The group's mainland property unit, Lai Fung Holdings, has attracted offers from a number of parties interested in jointly developing its proposed Creative Culture City in Hengqin's cultural and creative zone in Guangdong province. Chew said the details of the project had not been finalised but the estimated total investment in the 1 square kilometre mega project would be about 10 billion yuan (HK$12.3 billion). Last month, Lai Sun made its first land acquisition by forming a 50-50 joint venture with Walter Kwok and outbidding five others for the Tseung Kwan O residential site with an above-expected price of HK$2.83 billion. Including land costs, Lai Sun said the total investment cost would be HK$6 billion. Chew said the group's cash flow and bank loans available for land replenishment together amounted to HK$10 billion. He said the group would expand its investment property portfolio so as to build a source of stable, recurrent income. He expected the company's rental income to rise to HK$600 million if two of its 50-per-cent-owned commercial projects - CCB Tower in Central and another commercial development in Tsim Sha Tsui - were fully let out in the next two to three years. As of July, Lai Sun's rental income amounted to HK$400 million. "With a strong recurrent income, we hope our shareholders will start receiving dividends in 2014," he said. In an expression of confidence in Lai Sun, chairman Peter Lam Kin-ngok has increased his stake to 50.04 per cent, from 48.07 per cent, buying up shares between 18.9 HK cents and 31.1 HK cents since November 1.

'Flu fighter' Tsang bids farewell to CHP (By Lai Ying-kit and Emily Tsang) Leung Ting-hung named new head of disease prevention centre - Thomas Tsang Ho-fai, outgoing controller of Centre for Health Protection (CHP). An epidemiologist will become the new head of the government’s disease prevention centre, succeeding outgoing chief Dr Thomas Tsang Ho-fai, the government confirmed on Tuesday. Dr Leung Ting-hung, now head of the Centre for Health Protection’s surveillance and epidemiology branch, will take over from Tsang on December 29. The announcement was made by the Department of Health in a statement responding to media enquires. Tsang tendered his resignation in September, citing personal reasons, following 20 years in public service. A close friend said the 46-year-old wanted to give himself a break after a long period of hard work. Dr Tsang has been head of the Centre for Health Protection since 2009 but was already well known for his star role during the severe acute respiratory syndrome (SARS) pandemic in 2003. He was nicknamed "Superdetective Fai" for his exhaustive efforts tracking the source of infection, leading his team to the Metropole Hotel in Kowloon following the trail of a patient who unwittingly helped spread the deadly virus worldwide. It killed 299 people in Hong Kong. Before that he took a lead role in the battle to contain an outbreak of bird flu in 1997. In the year he became controller of the Centre for Health Protection he had to take on flu - and his image as "the flu fighter" grew. His replacement Dr Leung, 55, is a former deputy director of the Health Department. He was responsible for the anti-smoking legislation in 2007, which extended no-smoking areas to restaurants, bars and indoor entertainment facilities. He joined the CHP in 2007 to oversee epidemiological investigations into disease outbreaks, and conduct surveillance and control of communicable diseases.

Cathay boss stands firm on pay dispute ahead of talks (By Phila Siu) Chief executive stays firm on offer to flight attendants but stresses airline remains open-minded in seeking common ground - Cathay Pacific is seeking common ground with its flight attendants union even though its already rejected offer of a 2 per cent pay rise is "very much" a final decision, chief executive John Slosar said. In an interview yesterday on the eve of talks resuming with the union today, Slosar said he could not describe himself as positive that the dispute over next year's pay rise and other matters could be resolved within a few days as negotiations had not yet started. But he stressed that the airline would be open-minded in an effort to reach common ground. "If you go back and look at the past, things can normally get resolved quickly," he said. His comments came as the union also criticised the airline for its announcement that cabin crew flying to Riyadh would not get a night's rest in a hotel there, instead having to rest in-flight on the journey back to Hong Kong. The union said this would be exhausting for the crew, and criticised the airline for announcing such an "inhuman" measure ahead of today's negotiations. The pay dispute was sparked after the airline announced on November 30 that its flight attendants would get a 2 per cent pay rise next year instead of the 5 per cent the union had sought. The 6,000-strong Cathay Pacific Flight Attendants Union has threatened industrial action - a work-to-rule or limited services - before Christmas, escalating to a strike on New Year's Eve. Asked if the 2 per cent offer was final, Slosar said: "Very much so. We've already announced that for all our Hong Kong-based staff, and we're certainly not going to change it for this group or that group." The union has also called for the scrapping of a cross-base flying scheme for cheaper non-local cabin crew it fears will gradually replace local crew. Slosar said 60 per cent of the foreign-based cabin crew were actually Hong Kong identity card holders who needed to stay overseas for reasons such as that their families were there. He fended off claims that overseas cabin crew were cheaper, saying that while those in Thailand were, those in countries like Canada and Britain were not. He also rejected criticism that the airline was lowering outport allowances - paid to cover flight attendants' expenses during overseas stays between flights - saying the average allowance had gone up by 9.6 per cent this year. On the union's demand for suspension of "red-eye flights" - when cabin crew had to work overnight with only about one hour between shifts - Slosar said there were only about three such flights in a day. He said he hoped the union would not take industrial action. "We take very seriously the need to get customers to their destinations," he said.

 China*:  Dec 20 2012

Liu's return sees China Gas soar (By Eric Ng) Stock of mainland gas supplier has risen so much it is now unattractive, analysts say, just months after the managing director rejoins the firm - Liu Minghui has not disappointed the market since he was reinstated as managing director of China Gas in August. But after soaring 35 per cent in the past month, the company's shares had become unattractive, analysts said. Two months after Liu retook the helm, the firm, one of the mainland's largest gas distributors, signed a preliminary agreement with former hostile takeover bidder China Petroleum & Chemical (Sinopec) on potential joint ventures in liquefied petroleum gas (LPG) retailing and vehicle and vessel liquefied natural gas refuelling. Liu was previously removed from the board while being investigated for alleged embezzlement of the company's assets. However, Shenzhen police decided not to prosecute because of a lack of evidence. The deal with Sinopec came on the same day as the takeover bid by Sinopec and ENN Energy, a rival of China Gas, lapsed. Some analysts believe an LPG joint venture is unlikely, given that LPG distribution is an unattractive business, and wonder if the framework co-operation agreement is a face-saving exercise after the hostile bid collapsed. Others say the vehicle and vessel refuelling venture could be lucrative, as it is expected to be a high-growth business. China Gas reported last month a better-than-expected 116 per cent year-on-year jump in net profit to HK$808 million for the first half, triggering a rally in its shares. Less than three weeks after the interim results, the firm unveiled on Monday a US$400 million acquisition of the gas assets of a rival, London-listed Fortune Oil, controlled by Liu's Hong Kong businessman ally Daniel Chiu Tat-jung. Liu and Fortune have a joint venture that owns 18.4 per cent of China Gas. The assets to be acquired include piped-gas distribution projects in 11 cities, liquefied natural gas refuelling projects for buses and vessels in northeastern China and ports along the Yangtze River, and a project to produce gas trapped between coal seams in Shanxi province. UOB Kay Hian Securities analyst Shi Yan said the refuelling business had high growth potential and complemented China Gas and Sinopec's potential joint venture. UBS' head of global utilities research Stephen Oldfield said in a research note that the coal seams gas project's output ramp-up would provide a key near-term earnings growth driver for the Fortune assets being bought by China Gas. China Gas' shares underperformed those of its peers for almost two years amid prolonged infighting on the board, police investigations of its top managers, antagonistic shareholders' meetings and a drawn-out hostile takeover bid. They have now risen from HK$4.50 a month ago to close at HK$6.06 yesterday. "We think the planned co-operation with Sinopec on liquefied natural gas and this acquisition are both positive, but the share price has risen 49 per cent since the end of October, and we think it is fully valued," Oldfield said.

Foreign direct investment in China forecast to remain steady (By Victoria Ruan in Beijing) Ministry rules out sharp fall as mainland is still one of the main destinations for multinationals - Foreign direct investment flowing into the mainland will remain steady rather than fall sharply next year as the economy continues to recover, the Ministry of Commerce says. Ministry spokesman Shen Danyang made the forecast yesterday after data showed foreign direct investment fell 5.4 per cent from a year earlier to US$8.29 billion last month, widening from a decline of 0.24 per cent in October. In the first 11 months of the year, foreign investment dipped 3.6 per cent to US$100.02 billion. Shen acknowledged that global investment had been diverted to many other countries in recent years, partly because of rising costs on the mainland. However, he said China would remain "one of the main investment destinations" for multinationals as the domestic market had huge potential with supply of "relatively high labour quality" and favourable economic fundamentals. Leaders at the Central Economic Work Conference kept the country's initial target for next year's economic growth unchanged at 7.5 per cent but lowered the inflation target to 3.5 per cent from 4 per cent this year, Bloomberg reported yesterday, citing unnamed officials briefed on the matter. Observers had widely expected the new leadership to keep the growth target unchanged to signal policy stability. Investment from the United States rose 6.3 per cent in the 11-month period from a year earlier to US$2.9 billion, while investment from Japan grew 11.3 per cent at US$6.6 billion. Inflows from the European Union fell 2.9 per cent to US$5.8 billion. Shen noted the acceleration in retail sales, which grew 14.9 per cent last month. "The contribution from consumption to economic growth in the first three quarters exceeded contributions from investment for the first time since 2006," he said. The ministry said retail sales would grow 14.3 per cent this year. However, trade growth still faced challenges because of the bleak external environment, Shen said. Outward investment by non-financial companies remained strong, rising 25 per cent in the January-November period to US$62.5 billion. Beijing has been encouraging companies to invest abroad after foreign-exchange reserves ballooned by more than tenfold in the past decade to more than US$3 trillion. In the first 11 months, mainland firms' direct investment in the US reached US$1.1 billion, up 13 per cent from a year earlier, Shen said. He urged the US to reduce discrimination against investment from China by making security reviews "open, fair and transparent". At the annual trade talks in the US starting today, Vice-Premier Wang Qishan would discuss with his US counterparts issues including easing barriers on investment and exports, Shen said.

Beijing confirms Zhang Xiaoming and Hu Chunhua in top regional positions (By Mimi Lau in Guangzhou and Minnie Chan) Zhang Xiaoming and president's protégé Hu Chunhua take up top regional positions - The new face of Beijing's leadership in the region came into focus yesterday as Zhang Xiaoming was appointed head of the central government's liaison office in Hong Kong and Hu Chunhua was named to lead the economic powerhouse of Guangdong. Hu - a top protégé of President Hu Jintao and the second-youngest member of the new Politburo - was officially appointed to replace Wang Yang at the helm of the southern province, a post long seen a stepping stone for future leaders. The former Inner Mongolia party chief's promotion was one of five provincial party posts announced by the Central Committee's Organisation Department yesterday. Four of the five, including Hu Chunhua have served in roles in the Communist Youth League, a core power base for the outgoing president. In addition, the State Council promoted Zhang, the deputy director of its Hong Kong and Macau Affairs Office, to lead its liaison office in Hong Kong. His predecessor, Peng Qinghua, is widely tipped to take up a regional government post on the mainland. Just a few weeks ago, Zhang drew outrage with a newspaper commentary accusing external forces of interfering in Hong Kong's elections and calling on the city government to pass the controversial national security law required under Article 23 of the Basic Law "in due course". The selection of the 49-year-old Hu to replace Wang was announced by Communist Party Organisation Department chief Zhao Leji during a meeting of senior Guangdong cadres yesterday. Wang, 57, is expected to move into higher office. Hu Chunhua has sometimes been called "little Hu" due to his shared surname with the president and the similar track of their political careers. Both began their rise in the Youth League and spent time in Tibet. In part, because of that pedigree, the younger Hu has been seen as a front runner to join the Politburo's elite Standing Committee during the next national leadership election, in 2017, when five members will reach retirement age. Meanwhile, Wang Jun, 60, who was made deputy party secretary of Shanxi last year, will replace Hu Chunhua in the top post in Inner Mongolia. Wang's job is expected to be taken up by Li Xiaopeng, son of former premier Li Peng. He has been promoted to vice-party secretary of Shanxi. Dr Peng Peng, a researcher with Guangzhou Academy of Social Sciences, said Hu Chunhua's priority would be avoiding economic stagnation and continuing the reform work praised by new party chief Xi Jinping during his tour of the province this month. "We will need to wait for his first meeting in Guangdong to unveil his policy direction," Peng said. "But his open-minded reputation and relatively young age give us every reason to remain optimistic over the new leader." In a departure from tradition, Wang wrote a farewell letter to internet users. "Thank you for all your criticisms, opinions and suggestions to Guangdong party committee, provincial government and myself," he wrote. Xia Baolong, 60, has been appointed party secretary of Zhejiang province, where he has served as governor since January. He replaces Zhao Hongzhu . Wang Rulin, 59, will replace Sun Zhengcai as Jilin party chief. Zhao Zhengyong, 61, was promoted to top spot in Shaanxi province.

Hu Chunhua named new Guangdong party chief (By Reuters in Beijing) Hu Chunhua, former party chief of Inner Mongolia. China announced on Tuesday the appointment of rising star Hu Chunhua as Communist Party boss for the Guangdong province, the country’s richest and most liberal province. Hu will take over from reform-minded politician Wang Yang, who undertook restructuring the economy away from an export-driven model and grappled with rising social tensions among migrant workers. Hu’s appointment was announced in a brief statement carried by the official Xinhua news agency. It said Wang Jun will replace Hu as party chief in Inner Mongolia. But the article did not say where Wang Yang, seen by many in the West as a beacon of political reform, will be moved to. Reuters reported last month that Hu, the former Inner Mongolia party chief, was tipped to take over as party chief in Guangdong. Hu, 49, is part of the so-called “sixth generation” of potential national leaders born in the 1960s, after the generations headed by Mao Zedong, Deng Xiaoping, Jiang Zemin, Hu Jintao and Xi Jinping. Hu Chunhua spent two decades in restive and remote Tibet, where he learned to speak Tibetan, rare for a Han Chinese official. While there, he came under the wing of Hu Jintao, the outgoing president. The two Hus are not related despite sharing a family name. In Inner Mongolia, Hu Chunhua, also known as “Little Hu”, has been referred to as a future president. While there, Hu Chunhua oversaw rapid economic growth and dealt successfully with protests last year by ethnic Mongols. Hu Chunhua came to Inner Mongolia following a brief stint in Hebei, the arid province which surrounds Beijing, where he was rapidly moved after a scandal over tainted milk in which at least six children died and thousands became ill. Hu Chunhua remains something of an enigma, even in China. He has given few clues about his deeper policy beliefs. One of the best known things about him is that he does not appear to dye his hair jet black like many politicians. In meetings with the public, Hu Chunhua comes across as low key and self effacing, in line with an image of a loyal, humble Communist Party member. People who have met him describe him as relaxed, easy-going and spontaneous, unlike stiffer party leaders. Despite having a reputation as more of a moderate and a reformer, Hu Chunhua sent back to jailed Inner Mongolia’s most notable Mongol dissident, Hada, almost as soon as he completed a 15-year sentence for separatism in late 2010.

BYD to make electric buses in US (By LI FANGFANG) The Chinese battery and electric vehicle producer BYD Co Ltd will establish its first wholly owned manufacturing plant overseas in 2013, going to the United States to produce electric buses, a company executive has said. The factory will be in California, in an exact location to be announced in March or April, Xinhua News Agency cited Li Ke, BYD senior vice-president, as saying. An electric car produced by BYD Co Ltd is exhibited at an auto fair in Detroit, the United States. The company will establish its fi rst wholly owned overseas manufacturing plant in the US in 2013, a company executive has said. Speaking in Los Angeles, Li said the Warren Buffett-backed company will put the plant into operation in 2013 and will be able to produce 50 to 100 buses there in 2014. "Starting in 2015, the production capacity will exceed 500 vehicles." Li said managerial and other positions at the plant will be filled with local residents, but some of the parts and production lines used there will come from China. BYD's K9 electric buses, which have already passed road tests, will carry a price of $550,000 to $600,000 each. They will come to the US market in March and first be used at Apple Inc's headquarters in Cupertino, California; at Los Angeles International Airport; and at Stanford University, said Li. The Shenzhen-based company last week signed a joint venture agreement with a Bulgarian company to set up its first factory to assemble electric vehicles in the East European country. Situated near the country's capital, Sofia, the plant will mostly produce electric cars and buses. Starting in February, it will roll out 50 to 60 of the company's K9 electric buses each month, said Alexander Usachev, CEO of BYD's Bulgarian partner Bulmineral Ltd. The operation will be further expanded by adding BYD batteries and LED lights to the products made there. The move to Bulgaria comes as a result of BYD's ambition to use local production to bring its electric buses to more European countries. The company has signed agreements to export the vehicles to the Netherlands, Finland and Denmark. Besides Europe, BYD also has agreements with local governments in Singapore, Uruguay, Canada and the US over the use of its buses in public transportation. According to electric vehicle geographic forecasts recently released by the US-based market research and consulting firm Pike Research, California will remain the main market for electric vehicles in the US in the next eight years. After that time, 25 percent of the electric vehicles sold in the country are expected to be sold in that state. By the same date, the number of electric vehicles sold in California's main cities is expected to make up 4.5 percent of all of the passenger vehicles purchased in the state. For the US market as a whole, the current comparable figure is 1 percent. Analysts said local government policies in California will help BYD establish a presence in the state. In China from 2010 to 2011, BYD saw its sales slump from 520,000 vehicles to 448,500 vehicles. And the company's passenger vehicle business remained mired in the first half of this year, showing an 11 percent year-on-year sales decline. But its electric vehicle business, especially its buses and taxis used in "green" public transportation, has started to show signs of improvement. The Shenzhen government recently said 50 percent of the buses in the southern city will be powered by new sources of energy by 2015, and all of the taxis there will be electric cars by the same year. Analysts said those changes will help BYD, the dominant player in the city's electric public transportation industry, collect 36.5 billion yuan ($5.85 billion) in additional revenue in the next three to five years, an amount equal to 75 percent of its total revenue for 2011. The city plans to add 8,000 energy buses and 15,000 electric taxis to its fleet in the next three to five years.

Economy may suffer as rich look overseas (By By CHEN XIN in Beijing and YU RAN in Shanghai) Investment immigration has 'potential to damage growth' The growing number of Chinese opting for investment immigration could damage employment and rural economies in their homeland, a new report warns. Wealthy Chinese are increasingly eying opportunities to move capital abroad, according to the 2012 Annual Report on Chinese International Migration released on Monday. About 50 percent of investment immigration projects each worth $500,000 in the United States are being pitched by agencies in China, Qi Lixin, chairman of the Beijing Entry and Exit Service Association, was quoted as saying in the report. Immigrant investors in China are mainly private business owners, self-employed groups and senior corporate management staff aged 35 to 55, said the report, released by the Center for China and Globalization and the Beijing Institute of Technology. "The private economy contributes more than 60 percent of China's GDP and it absorbs a majority of employees. So if private business owners emigrate with their capital, it would mean less investment in the domestic market, so fewer jobs would be created," said Wang Huiyao, director of the Center for China and Globalization. Investment immigration also brings proportionally bigger economic losses in less developed areas than in big cities because the economies in those areas are mainly bolstered by the private sector, the report added. In 2011, more than 150,000 Chinese emigrated to destinations such as the United States, Canada, Australia and New Zealand, it said. The United States was the top destination for Chinese immigrants and some 87,000 permanent residence permits were granted in 2011. Of these, 3,340 were approved through investment. A dairy production investment project in South Dakota attracted $30 million from 60 immigrant investors and created 878 jobs, said the report.

Hong Kong*:  Dec 19 2012

Bosses force chauffeurs to park illegally, say police (By Clifford Lo) Police efforts to unclog the congested streets of Central by nearly doubling the number of parking tickets issued have been obstructed by chauffeurs unwilling to incur their employer's anger by moving along, as ordered. The defiant drivers waiting outside offices or eateries say they would prefer to get a fine - which their owners would happily pay - rather than move, a police officer said. "They tell our frontline officers that they have no choice. 'You ticket me; my boss will pay. If I don't wait here, my boss will yell at me'," he said. "There are a lot of wealthy people in Hong Kong, and a fine means nothing to them." Central and Western District councillor Cheng Lai-king agreed, saying "for them, paying such a fine is just like paying a car-park fee". Parking tickets cost between HK$320 and HK$450. Cheng and the police agree "bosses' cars" worsen traffic congestion in Central during peak hours. Police have launched a publicity campaign with the slogan "Wait for your car. Don't get your car to wait for you." Police have also written to property management companies, seeking their help to pass the message to tenants. The number of parking fines in Central is up 93 per cent to 73,058 this year. The force's assistant Central district commander for operations, Superintendent Eric Leung Yan-kit, said the sharp increase was the result of tougher enforcement. "Those who break traffic regulations will be ticketed. If necessary, vehicles will be towed away. Police will not exercise discretion," he warned. Leung said the crackdown had improved traffic flow in the district. Also adding to Central's traffic woes are drivers of armoured security vans abusing their restricted-zone parking permits.

West wing given top heritage status, made historic building (By Lai Ying-kit) The Antiquities Advisory Board has given the city’s top heritage classification to the west wing of the government’s former headquarters in Central. The Antiquities Advisory Board has given the city’s top heritage classification to the west wing of the government’s former headquarters in Central at a meeting on Monday. The block was saved from demolition when the government abandoned a plan to redevelop it into commercial buildings, in a U-turn decision two weeks ago. At Monday’s meeting, the board voted to give the 53-year-old building a grade one status – up from its grade two status. Twelve members voted for grade one while eight voted to maintain grade two. There were two abstentions. Grade one means a building has outstanding merit and should be preserved if possible. Grade two indicates a structure of special merit that should be “selectively preserved”. Under a government plan announced early this month, the block will be used as offices for the Department of Justice and international legal organisations. The latest grading has brought the west wing into line with the main and east wings of the former government complex. Outgoing board chairman Bernard Chan said the members’ vote reflected the public’s hopes over the building’s fate. The west wing was given grade two status by the board in June – which would not necessarily stop its demolition – to make way for a 32-storey commercial building. At that time, the government said the west wing had lower historical value than the main and east wings of the complex.

Hong Kong's 1st zero-carbon building - Photos taken on Dec. 17, 2012 show Hong Kong's first zero-carbon building ZCB in Hong Kong, south China. The building will be opened to the public on Jan. 5, 2013.

Swiss watch brand Parmigiani opens outlet in Central (By Vivian Chen) Parmigiani chief executive Jean-Marc Jacot was in Hong Kong for its pop-up store opening in Central. Many luxury brands strive for stock-market listings to facilitate expansion, but not Swiss luxury watch brand Parmigiani. "What's more important than being independent is not to be listed," said Jean-Marc Jacot, chief executive of the brand. "Because as long as we are not listed, we are not pushed by shareholders to produce more pieces and faster. Luxury goods need time to make. You just can't rush it." The executive was in town on Friday for a lunch at the Peak Suite of the Four Seasons hotel, followed by exclusive cocktails at the brand's pop-up shop in Central's Emperor Watch & Jewellery. To celebrate the opening of the pop-up shop, a range of pieces from its Atelier Collection were shipped to Hong Kong for the first time. "We created this collection to cater to those who want something different from everyone else," said Jacot, who flew in from Zurich especially for the event earlier that morning. "We try to make pieces in small quantities. We are only able to do that because everything is done in-house. Imagine if you go to a supplier and ask for just one dial, they probably wouldn't bother because of the high cost." Following Parmigiani's well-received collaboration with the makers of the Bugatti Veyron sports car in 2006, Jacot announced a collaboration with a gun manufacturer based in northern Italy which is to be launched in the first quarter of next year. "It's very interesting, as the way they make guns in the factory is very similar to the way we make watches," Jacot said. "It's all about the craftsmanship."

'Women to play bigger role' in accounting (By Enoch Yiu) Female Li & Fung director breaks glass ceiling to be industry body's president - The first woman to break through to become president of the Hong Kong Institute of Certified Public Accountants says women are poised to play an increasingly important leadership role in the accounting industry. "In recent years women have come to account for about 65 per cent of all new members joining the industry," Susanna Chiu said after she was elected to the top post on Friday night. Chiu, a director of Li & Fung Development (China), has volunteered on various committees at the institute since 1993, has served on its council since 2004, and has been vice-president for the past two years. Her win followed a keenly contested election, she said, in which she had to lobby hard for votes to beat rival candidate, Clement Chan Kam-wing, the Hong Kong managing director of international accounting firm BDO. She also ran for the presidency last year but lost to Ernst & Young's Asia-Pacific financial services leader, Keith Pogson. The institute, set up in 1973, issues accounting licences, sets industry standards, and regulates the city's 33,000 accountants. A new president is elected every year by its 22 council members. Chiu said she did not think gender discrimination was the reason why it took so long for a woman to become the organisation's head. "In the old days there were simply not so many women working in the accounting profession. Even now, though more women are entering the profession, some are not keen to contest senior positions. But this is changing as we see more female accountants becoming partners or directors of companies," she said. There are equal numbers of male and female members of the institute but only 30 per cent of partners in the industry and 10 per cent of directors of listed companies are women. Hong Kong Exchanges and Clearing said on Thursday that from September next year it expected listed companies to have more women on their boards. It also wanted company boards to reflect a wider range of ages and backgrounds, saying the firms would have to explain if they failed to meet the requirement. A Credit Suisse Research Institute report issued in August said companies with at least one woman on their board had a 4 per cent higher average return on equity. Chiu said she supported the HKEx's move and that women could give more balance to board decisions. She said that as president she wanted to expand the institute's membership and work with mainland accounting authorities to give institute members more opportunities on the mainland. "China's development will be a key focus of the [institute's] development plan over the next five years," Chiu said.

Hong Kong team second in Jupiter's moons race (By Jolie Ho) Only Italians top them in plotting a spaceship's course for planned 2020 mapping exercise - The Hong Kong team that took on the "almost impossibly complicated" challenge to plot a course to map Jupiter's four largest moons are (from left) Lawrence Chu Kin-chiu, Professor Wong Kwok-yee, Hermanni Heimonen, Dr Yam Chit Hong, Cathie So Tsz-yan; Professor Chan Kwing-lam and Alan Leung Kai-yin. A University of Science and Technology team has beaten top international competitors in a contest to calculate a complex satellite trajectory around Jupiter's four main moons. The four Hongkongers' entry took second place in the 6th Global Trajectory Optimisation Competition, organised by the Jet Propulsion Laboratory of NASA, beating teams of aerospace researchers and engineers worldwide. The challenge accepted by 34 teams was to calculate a spaceship trajectory, flying from Jupiter, to pass near Jupiter's four largest moons - Io, Europa, Ganymede and Callisto - and map all their surfaces. The spaceship has limited fuel and a time limit of four years. Some commentators called the challenge "almost impossibly" complicated, yet the teams had just one month to study the problem and calculate their answer. The Hongkongers scored 308 points of the maximum 324, finishing just three points behind the winning team from Italy. The Hongkongers, all second-year physics students, were delighted to beat teams from the US Aerospace Corporation and Beijing's Tsinghua University, among others. "I have been interested in space ever since I was small, but the stars are very far away," said team member Lawrence Chu Kin-chiu, 22. "This project makes me feel like I have a closer relationship with the cosmos." Cathie So Tsz-yan, 19, said: "I set aside my dream of becoming an astronaut when I was younger, but now I'm starting to think maybe I could engage in relevant work in this field." The contest divided each moon into 32 "faces", much like the segmented surface of a soccer ball, for a total of 128 faces. The Hongkongers' orbit visited 115 of them, on 141 fly-bys. The trajectory from Italy mapped each moon in turn, in contrast to the Hongkongers' strategy of switching from moon to moon and back again. The contestants' work may be used in the 2020 Europa Jupiter System Mission, a joint Nasa-ESA effort, to explore Europa. "Scientists are interested in knowing about [Europa] because there may be water under its ice, which means life may exist," said Yam Chit-hong, at the university's Centre for Space Science Research, who led student team. The centre's director, Professor Chan Kwing-lam, said the government had not done enough to support space science. "The aerospace industry in China is now at its threshold ... if Hong Kong can train capable talents in this field, they can have opportunities [to enter state-level laboratories]," he said. The story was amended on 17 December, 2012 for the following corrections: the competition in the story was organised by the Jet Propulsion Laboratory of NASA, not jointly by NASA and ESA; the students from Hong Kong University of Science and Technology were collaborating with five researchers from the ESA in the competition; the spaceship trajectory should be "flying from Jupiter" instead of from the Earth. 

Leung defends request to Beijing for views on residency (By Stuart Lau, Joyce Ng and Christy Choi) Chief executive says gaining clarification from NPC will address 'root of the problem' and says city must tackle legal issues - Chief Executive Leung Chun-ying yesterday defended his government's controversial decision to ask the Court of Final Appeal to seek Beijing's opinion on the city's residency laws. He suggested this would address "the root of the problem" of pregnant mainlanders coming to the city to give birth. In a radio programme, Leung did not comment explicitly on court cases which involve two right-of-abode cases. But he said: "I have managed to stop private hospitals taking in mainland mothers giving birth. Now how do we address the root of the problem? We have to work on the legal aspect." The other case involves foreign domestic workers seeking permanent residency, to which they are not entitled under current law. Leung did not seek to explain the Department of Justice's submission to the court last week. But his comments were seen as a clear reference to its request to the court to seek clarification from Beijing of its 1999 interpretation of the Basic Law's provision for permanent residency. The clarification is being sought because the NPC's 1999 interpretation was not followed by the top court in its judgment in 2001 which granted residency to children born to mainland parents in Hong Kong. The decision to request the court seek a clarification is controversial because it brings into question the independence of Hong Kong's judiciary from both the Hong Kong and mainland governments, and more broadly whether the city will retain its relative autonomy in domestic affairs. But Leung said: "We respect judicial independence and this is one of Hong Kong's core values." A ban on maternity wards accepting reservations from non-local mothers starts on January 1. Critics said Leung's comments took into account the sensitive timing of the request to the court. Liberal Party lawmaker James Tien Pei-chun said: "The administrative measures could be challenged in court. This is, I think, the biggest reason why the government resorted to asking for [Beijing's clarification]." Law professor Eric Cheung Tat-ming, of the University of Hong Kong, said the recent administrative measures adopted against pregnant mainlanders appeared to be a success, raising questions as to whether it was worth risking damage to the city's rule of law by seeking a National People's Congress ruling. "This shows the government is determined to have the 2001 judgment overturned, one way or another," Cheung said. Meanwhile, migrant workers denounced the attempt to obtain Beijing's intervention on their residency claims. During a protest in Central on labour rights issues, Dolores Balladares, of the Asian Migrants Co-ordinating Body, said: "We are surprised at the action ... It's the issue of the fundamental rights of all people in Hong Kong ...Why not wait for the Court of Final Appeal?"

 China*:  Dec 19 2012

Director calls for new China film rating system (By Peony Lui) Xie Fei in an interview with the Atlanta Chinese Film Society. Famous Chinese film director Xie Fei published an open letter on the internet on Saturday, making a case for the replacement of China’s current censoring mechanism with a motion picture rating system. “To move from the current administrative review system to a rating system that allows for a self-governed and self-disciplined film industry, bound by legal restrictions and administrative supervision,” said Xie in the letter. He rendered the current mechanism “outdated” and maintained that a rating system is the key to a vibrant film industry and cultural scene in China’s market economy today. With a set of clear legal restrictions and institutional enforcement, film producers can be their own “gatekeepers who are responsible for the society and legal consequences,” he said. The full version of Xie’s letter was later reposted by the Chinese Film Directors Association on Weibo, With no rating system in place, films in China must be deemed suitable for all audiences in order to be screened according to a set of guidelines approved by the State Council in 2006. Xie disapproved of the ambiguity in the review process and criticised the frequent departure of administrative practices from the Constitution law. Xie is the artistic adviser for a film currently under inspection. The film was picked out due to screen representations of controversial military leaders Lin Biao and his son, as well as themes of homosexuality. Lin died in 1971 when his plane crashed on the way to Mongolia, after what believed to be a failed coup against Mao. He was officially condemned as a traitor by the Communist Party. Xie pointed out that Lin Biao had appeared in other films before, and challenged the inconsistency of the evaluation criteria. He also maintained that homosexuality is a part of the society and “deserves to be respected by law and the public.” “Our current review system is not the rule by law, but the rule by man, something that we wanted to end a long time ago,” said Xie. Xie is a world-recognised Chinese film director, as well as a professor at his alma mater, the Beijing Film Academy. He was the director of award-winning films Black Snow and Woman from the Lake of Scented Souls. His open letter caused considerable reaction from internet users. Many show support for his cause, although grim about the feasibility of his proposal. “To abandon the current system means decentralisation. For government officials, decentralisation means ‘bloodletting’ – you might as well take their lives,” comments one Weibo user. Another recalls the recent CCTV broadcasting of the long-censored dystopian film V for Vendetta traditionally seen as an epitome of democracy. Yet others separate censorship from a rating system. “For some reason I feel like motion picture rating and film censorship are two different things. Anyway, I still support the imposition of a rating system – parents will not have to worry about their kids watching inappropriate films anymore,” says one internet user.

Overseas tourists to Beijing were down 8.9 percent year on year in November, as the sluggish global economy has hampered travel demand, the municipal tourism committee said Monday. Last month, the Chinese capital accommodated 411,000 overseas tourists who stayed in the city for at least one night, the agency said in a press release. There were 353,000 foreign tourists, down 10 percent year on year, and tourists from Hong Kong, Macao and Taiwan dropped about 1.3 percent to 58,000. During the January to November period, the city received 4.68 million overseas tourists, down 3.2 percent year on year. During the first 11 months, tourists from the United States, Japan, the Republic of Korea and Russia declined 4.3 percent, 12 percent, 17 percent and 1.2 percent, respectively. However, Germany, which has issued a better performance than most amid the global economic turmoil, contributed 11.4 percent more tourists year on year, it said. Amid the latest efforts to boost tourism numbers and revenue growth, Beijing announced early this month that it will start a 72-hour visa-free stay policy for citizens from 45 countries in 2013.

China faces no big pressure for aggressive easing: central bank (By Reuters in Sanya, China) Wu Xiaoling, a former vice central bank chief and now senior lawmaker, sees scope to further liberalise bank lending rates in 2013 by lowering the floor for borrowing costs. China faces no big risk of an inflation rebound in 2013, nor any major pressure to ease monetary policy aggressively next year, a senior central bank official said on Monday. “I feel that there is no evident pressure for the central bank to take aggressive easing policy,” Jin Zhongxia, head of the financial research institute of the People’s Bank of China, told Reuters on the sidelines of a forum in Sanya on the southern island of Hainan. “I think we will not see a big inflation rebound in 2013,” he said. On Sunday, Chinese leaders promised to maintain a “prudent” monetary policy and pro-active fiscal policy in 2013, leaving room for manoeuvre in the face of global economic risks while deepening reforms to support long-term growth. The central bank cut interest rates in June and July and has lowered bank reserve requirement ratios (RRR) three times since late 2011 to free an estimated 1.2 trillion yuan ($190 billion) for lending as part of a year-long programme of policy fine-tuning. It has since held off on more aggressive easing, opting instead to pump short-term cash into money markets to ease credit strains, a move analysts say reflects Beijing’s concerns about a flare-up in property prices and consumer inflation. Annual economic growth dipped to 7.4 per cent in the third quarter, the weakest pace since the depths of the global financial crisis in early 2009, but growth has been picking up steadily since October thanks to a raft of pro-growth policies. Annual inflation quickened to 2.1 per cent in November from a 33-month low of 1.7 per cent in October, which analysts said dimmed the chance for more monetary policy easing as the economy recovers steadily. Separately, Wu Xiaoling - a former vice central bank chief and now senior lawmaker - told the Sanya forum on Monday that there was scope to further liberalise bank lending rates in 2013 by lowering the floor for borrowing costs. Such a move, following on from an initial liberalisation in the summer, could stimulate borrowing and bolster the economy. But Wu cautioned about moving too quickly on a further liberalisation of deposit rates. “As for deposit rate, we should keep the ceiling control in place for a while. Of course we should allow a wider upfloating range for deposit rates, but we cannot do that very quickly, because we have to avoid excessive competition among financial institutions.” The PBOC liberalised the interest rate environment with its June and July cuts to give commercial banks more room to set both lending and deposit rates competitively. The new rules allow deposit rates to be set as high as 110 per cent of the benchmark rate, while the rate on new loans can be as low as 70 per cent of the official borrowing cost. A rush to allow fully competitive, differentiated rates to attract depositors could lead to a price war for capital among China’s banks. The rise of wealth management products in recent years, that pay higher rates of interest than regular deposits and allow banks to use the funds for lending, has created fierce competition in the sector and raised concerns among some analysts and ratings agencies about the risks they might create. Many economists say the reduction in the officially guaranteed spread between lending and deposit rates hurts bank profitability.

Hong Kong*:  Dec 18 2012

Lynn Xiong Dailin coy on Aaron Kwok Fu-shing romance (By Vivian Chen) Lynn Xiong talks gift ideas during her Ultima II cosmetics advertisement shoot. Celebrity model Lynn Xiong Dailin is in high spirits these days, especially after spending a holiday in the Maldives with actor-singer Aaron Kwok Fu-shing, long rumoured to be her boyfriend , but no, they still haven't officially acknowledged their relationship status after all that. With Christmas looming, Xiong said she was hunting for gifts for her "good friend". "I think Christmas is the most special day in a year," she said recently while shooting a campaign for cosmetics brand Ultima II. "It's a romantic day, though I have to spend it at work this year." The beauty said she had prepared cosmetics and beauty products for her girl pals, but nothing materialistic for her boyfriend - she is planning on making him a scrumptious Christmas dinner. For her own Christmas gifts wish list, Xiong said what mattered was her boyfriend's effort, not the price tag. Instead of receiving actual gifts, Xiong hopes for opportunities to further develop her entertainment career in the years to come, especially in films.

Division in Legco may hit universal suffrage, Leung says (By Joyce Ng and Lauren Ho) Chief executive says divisions in Legco create difficulties in obtaining a two-thirds majority that could hinder major electoral reforms - Chief Executive Leung Chun-ying yesterday said political divisions may undermine hopes of directly electing the chief executive by 2017 and choosing all lawmakers by universal suffrage in 2020. He said that with a divided legislature, it was difficult to win a two-thirds majority to push through major changes. Speaking at a "meet the public" forum organised by RTHK, he was addressing a question on how he would achieve direct election of the chief executive and the Legislative Council, and especially the abolition of the council's functional constituencies. He said: "It's not a matter of whether the government has the determination to do that. "The Basic Law says that any big changes in Legco will have to be supported by a two-thirds majority. Now we have 70 lawmakers, getting the two-thirds is quite difficult." Leung said it was "a big challenge" for him to lobby political parties to win backing for his policies. He said: "When you've won support from two parties and go on to the third party, it says something - and then the first party changes views again." The government has stated its goal is to elect the chief executive and the legislature by universal suffrage in 2017 and 2020 respectively. Civic Party leader Alan Leong Kah-kit said the chief executive's words on universal suffrage were "disheartening". He said: "He ignored the important fact that he is occupying the pivotal position to bring about consensus ... I wouldn't be surprised if one day he really used this as an excuse for not pushing forward the reform." Emily Lau Wai-hing, newly elected Democratic Party chairwoman, said Leung had a duty to communicate to Beijing the people's wish for universal suffrage. She said this was "very clear" and warned: "He'd better not lay the blame on lawmakers." The RTHK "Voices From the Hall" forum was a relatively peaceful assembly compared with recent meetings Leung had attended, which were punctuated by loud protests inside and outside the venues. Leung's audience was made up of 95 people - more than one third of whom were aged 40 to 59 and another third over 60 - who had been invited by the University of Hong Kong's public opinion programme to attend the session as an audience representative of the city's age and gender structure. They were asked to pose questions concerning three issues - the economy, livelihood matters and politics. Answering calls for more affordable homes, Leung appealed for public support for increasing building intensity in certain areas, saying some public housing projects often met resistance from people who didn't want their views blocked. Leung also said he would review the town planning process, which was too lengthy for changing land use for building homes. He said his first policy address next month would offer a five-year blueprint with a focus on housing, poverty, an ageing society and the environment. He dismissed the idea of handing out cash to all citizens, saying public money should be given only to the needy. He also admitted the controversy over his illegal structures had caused distress to the administration. Kent Ip Chun-keung, 28, who did not have a chance to ask a question about universal suffrage, said the audience was "rather mild" towards Leung. He said: "I am scared if this is really a miniature of the society. "Our society is old but there are many twenty-somethings who are vocal about policy and reform."

Hague Conference office not a gift for Hong Kong from Beijing, says official (By Austin Chiu) The world's leading organisation on private law, the Hague Conference, has dismissed a mainland official's claim that its opening of an Asia-Pacific office in Hong Kong was a "gift" from Beijing. Hans van Loon, secretary general of the Hague Conference on Private International Law, said the city was chosen purely for its judicial autonomy and separation of powers. Its Hong Kong office opened last week. "I think we should stick to the fact that there has not been a bid or something like that," Van Loon said. "It has nothing to do with politics. It is simply a question of the reality here and making the best informed professional choice." Huang Huikang, director general of the Foreign Ministry's Department of Treaty and Law, said last week that China had pulled out all diplomatic stops and lobbied to bring the legal body to the city. He said it could be seen as "a gift" from Beijing to mark the 15th anniversary of the handover. But Van Loon said: "We raised the issue because we felt the need for a presence [in the region]. It was the initiative of the Hague Conference." The Hague Conference, of which China is one of 72 members, is the world's foremost organisation for cross-border co-operation in civil and commercial legal matters. Van Loon also said Hong Kong did not beat Singapore in the selection of an Asian base because the city state was not a member. He said Hong Kong was chosen because it had "such an excellent reputation for good administration of justice and the superb quality of its judiciary". "Last but not least is the 'one country, two systems' principle," Van Loon said. "Hong Kong has a very impressive tradition of an autonomous and well-functioning legal system, legislature and administration, which are traditionally well separated," he said. Among other benefits, the Hague Conventions remove red tape in recognising diplomas and birth certificates internationally. Amelia Luk, of the Department of Justice, said Hong Kong also benefited from the convention on child abduction. This allows states to join forces to stop a divorced parent from taking a child away from a member country without permission.

The people suffer when there's too much politicking (SCMP Editorial) Secretary for Labour and Welfare Matthew Cheung Kin-chung. Finally, there is good news for our elderly citizens. In a dramatic turnaround nine days ago, a means-tested HK$2,200 monthly allowance for those aged 65 and above was passed after the government changed its tactics in the legislature. Lawmakers were first asked to approve funding for new civil service posts to operate the scheme. The actual expenditure on the allowance will be passed later as part of the government's budget next year. By changing tactics, Secretary for Labour and Welfare Matthew Cheung Kin-chung effectively ended 29 hours of filibustering by "Long Hair" Leung Kwok-hung. The government says the approval for the new posts implies support for the allowance. Subject to the budget's approval next year, and to a means test, some 290,000 old people are expected to get the handout from April. The rebel lawmaker has already vowed to try to block the budget with similar tactics. First raised by Chief Executive Leung Chun-ying in his election platform, the old-age living allowance is no doubt a welcome step to help the needy. It should have been approved expeditiously when tabled to Legco two months ago. Unfortunately, some lawmakers withheld their support, hoping to force the government to drop the means test for the allowance or ease its terms so more old people benefit, and introduce a universal pension scheme. Since the handout will date back to the month it is approved, the delay means two months of allowance foregone for the elderly. That a simple and straightforward goodwill initiative by the new leader has turned into a political tussle with the new Legco is regrettable. Lawmakers are understandably frustrated by their limited power to shape public policy. Some may, therefore, try to advance their cause by exploiting the rules of procedure. While some of the issues behind the stand-off are worthy of public attention, the filibuster appears to have brought nothing more than frustration and delay. Political gain has to be weighed against the consequences. In the case of the old-age allowance, it is the loss not just of two months' allowance for the elderly but also civil service efficiency, and the delay in approving funding for other pressing matters. By putting politics ahead of livelihood issues, rebel lawmakers are turning their backs on the people. Taking things to the extreme may only provoke fatigue and outrage. In the end, it's the image and reputation of the legislature that suffer.

Hong Kong Figures reveal thousands from ethnic minorities have won naturalisation (By John Carney) Official figures reveal that thousands from city's minorities have won citizenship since handover - Despite a rash of complaints that Hong Kong's ethnic minorities are being discriminated against when they try to become naturalised Chinese citizens, new official figures reveal that thousands of Pakistanis, Indonesians, Indians, Vietnamese and Filipinos have been granted the status. The figures published this week cast a different light on some recent high-profile cases, which appeared to show that getting naturalisation as a Chinese citizen was virtually impossible. In one recent case, Professor Shekhar Madhukar Kumta from India was denied Chinese citizenship in September, despite 23 years' residence in Hong Kong and extensive contributions to his field locally and on the mainland. Kumta, 55, the assistant dean of Chinese University's faculty of medicine, has also worked at Prince of Wales Hospital. However, figures for applicants naturalised as Chinese nationals from the July 1997 handover until last month show that the Pakistani, Indonesian, Indian, Vietnamese and Filipino nationalities are the top five for becoming naturalised citizens. In total, 3,411 Pakistanis won approval from Beijing for naturalisation out of the 4,536 who applied from July 1997 to last month. During this period, 3,786 Indonesians applied and 3,399 were granted naturalisation, while 2,487 of the 3,224 Indians who applied were approved. The top countries after this were Vietnam (1,593 applied; 1,115 approved) and the Philippines (570 applied; 387 approved). A government spokesman said the figures proved that each case was treated on its individual merits, and that no matter what country people were from, no prejudice was involved when making a decision. "We have a set of criteria that must be met if a person applies for Chinese naturalisation. If all these criteria are met successfully, then there is no reason why a person cannot get Chinese naturalisation without any problems," the spokesman said. Tsim Sha Tsui-based immigration consultant Richard Aziz Butt, who specialises in naturalisation and passport issues for the city's ethnic minorities, still had reservations. "Many people apply for naturalisation, but when they don't get it, they are given no reason as to why, so they have no way of rectifying the problem when they reapply," he said. Butt also said that it could take up to two years before a decision was made, and an applicant's situations could change within that time - affecting their application. "I know that in some cases, it only takes two weeks for mainland authorities to get these applications and make a decision. Why, then, does it have to be dragged out for so long?" he said. "It's like they are delaying making a decision, so that something can happen within that time frame to give them a reason not to grant naturalisation."

 China*:  Dec 18 2012

Big winners tipped amid mainland's urban shift (By Enoch Yiu) Construction and retail sectors expected to be among beneficiaries of Beijing's economic drive to boost domestic demand and expand cities - Construction, commodity and retail stocks were likely to be the biggest winners from Beijing's economic policies next year, analysts said. Promoting domestic consumption and urbanisation would be key themes on the mainland next year, Xinhua said after the country's annual economic policy-setting conference yesterday. Christopher Cheung Wah-fung, legislator for financial services in Hong Kong, said urbanisation could mean villages being transformed into urban areas as well as more people moving from the countryside to live in the city. "In both scenarios, we can predict there would be more building construction and more demand on resources. This would boost stocks in construction, property, commodities and retail," he said. Brett McGonegal, chief executive of Reorient Financial Markets, said urbanisation was critical to boosting domestic demand. "As China continues to transition from a low-cost-labour and export-driven economy to a domestic-demand-driven economy, the establishment of larger urban centres is crucial," McGonegal said. "As cities expand, so too does housing, schooling, health care and physical infrastructure, thus increasing capital expenditure. This is a critical phase of development, as it spurs personal consumption and government expenditure." McGonegal said the growth would benefit sectors such as heavy machinery, cement, housing and commercial property developers, retailers and luxury goods makers. Alex Lee, from investment management firm BEA Union, said the transition of the economy from capital spending to consumption would create both losers and winners in terms of stock prices. "During the early phases of China's industrialisation, a ramp-up in infrastructure and utilities occurred, and the nation was commodity-intensive for base metals such as steel, iron ore and cement, which were the clear winners," Lee said. "As China shifts towards consumption, other metals - such as aluminium, copper, nickel and tin - should benefit more, as the 'wealth effect' will boost consumption of cars, electronics and electricity." Charles Somers, a portfolio manager with British fund house Schroders, said the food industry would be among the beneficiaries of urbanisation and higher domestic consumption. "Many more mainlanders have been moving to cities and growing richer," Somers said. "When people get wealthier, they tend to eat better and eat more meat and dairy products. They also dine out more." In the next five years, food consumption on the mainland is expected to grow by 8 per cent per year, while spending on dining out is expected to rise 18 per cent per year. Somers sees this was good news for fertiliser makers and meat producers. He said restaurant operators and manufacturers of agricultural machines or fertiliser would benefit, as well as dairy producers, since people in cities ate more dairy products. "People in urban areas spend more on dining out at restaurants, entertainment, travel and luxury goods," Somers said.

Britain looks to Chinese tourists for Christmas cheer (By Agence France-Presse in London) A Chinese customer shops at Harrods department store in London where department stores are working hard to attract Chinese shoppers. With their shelves spilling over with festive goodies, London’s department stores are working hard to attract Christmas shoppers – but Chinese visitors are the particular target of a charm offensive. Hotels, retailers and the government are stepping up efforts to woo big-spending Chinese visitors in a bid to bounce back from Britain’s longest recession in half a century. Congee and dumplings are on the breakfast menu at enterprising hotels, major London stores have installed Chinese bank card terminals, and Mandarin-speaking staff are on hand to help out with the Christmas shopping. Britain is courting Chinese travellers not only because they are a rapidly growing market – they made an estimated 70 million overseas trips last year, up 20 per cent in just a year – but because they are serious shoppers. “My goodness, they spend,” said Patricia Yates, director of strategy for the VisitBritain tourism authority. “The average Chinese visitor spends about three times as much – as the average visitor to Britain,” she told reporters. “So they’re very welcome by the retail industry at the moment, who have seen domestic demand soften.” Purveyors of luxury goods in particular have welcomed affluent Chinese visitors with open arms. The renowned Harrods department store, in London’s exclusive Knightsbridge district, now has 70 Mandarin-speaking staff and more than 100 China Union Pay terminals allowing direct payment from Chinese bank accounts. A Harrods spokeswoman said jewellery and watches, fashion and fine wines were top of the shopping list for many Chinese customers. “They seek out the very latest, limited edition and exclusive products,” she told reporters. Beneath the twinkling Christmas lights on London’s central shopping artery Oxford Street, too, Chinese shoppers were on the lookout for designer items. “We think London is the capital of fashion,” said Harry Gao, a fashion student from the eastern Chinese city of Wenzhou, who was wrapped up against the drizzle in a fur coat and gold trainers. “Lots of famous designers are from the UK. It’s lots of fun.” ‘Our European rivals do much better than us’ A record 149,000 Chinese visitors came to Britain last year, bringing some 240 million pounds to the struggling economy. But Britain’s share of the coveted Chinese market is poor compared to several competitors in mainland Europe including France, which welcomed nearly a million tourists from China last year. “We know that our European rivals do much better than us,” Yates admitted. “We really want to break the Chinese market.” The complex British visa system is frequently blamed for the shortfall. While Chinese tourists can visit 26 European countries on a single “Schengen” visa, a trip to Britain requires a separate visa involving lengthy forms in English as well as additional costs. Interior minister Theresa May confirmed on Wednesday that the government is looking at expanding online applications and making some visa forms available in Mandarin, as well as introducing an express service for premium travellers. Meanwhile, the government is throwing 8 million pounds at luring an additional 233,000 Chinese visitors a year by 2020, and VisitBritain sent its biggest-ever delegation to Shanghai last month to drum up business. Over a Chinese breakfast of congee (rice porridge), steamed buns and warm soya milk at London’s Landmark Hotel, marketing manager Yan-ping Mew said he has had “very good feedback” since the meal became available to guests earlier this year. The hotel also recommends smartphone apps to help Chinese guests navigate London and allocates them room numbers traditionally seen as lucky, such as those on the third or eighth floor. “The Chinese tend to be slightly more superstitious,” Mew explained. He added that while many Chinese guests come to London to shop, they also want to see the sights and, in some cases, visit prospective universities for their children. Yates also insisted that Britain had more to offer than shopping. “There’s the history and tradition of our royal family with palaces that you can go and see, great museums that have world-class treasures,” she told reporters, adding that the London Olympics had been “an amazing showcase”. 

A power transmission line connecting Xinjiang with other areas in northwest China will be completed in June next year, three months ahead of schedule, as the main construction work concluded on Saturday (Xinhua). The 1,099-km line of 750 kv started construction on May 13 with an investment of 9.56 billion yuan (1.5 billion U.S. dollars). Upon its the completion, the line will carry wind and solar-generated electricity in Jiuquan of Gansu Province, Hami of Xinjiang, and Qaidam Basin in Qinghai Province to the rest of the country, the State Grid Corporation of China (SGCC) said on Saturday. The line will increase Xinjiang outward power transmission capacity to 5 million kilowatts, or 40 billion kilowatt hours a year, according to the SGCC. It will also ease power shortage in Qinghai. Power grid in Xinjiang was first connected with Northwest China Grid in 2010 with a similar route, which has provided 6.35 billion kilowatt hours for central and northern China by the end of November, equivalent to carrying 3 million tonnes of coal to thermal power plants in the areas. Another 800-kv power transmission line running from Xinjiang's Hami to Zhengzhou of Central China's Henan Province is being built.

Students are Shandong China mourn shooting rampage at an elementary school in Newtown, Connecticut. 

US expresses concern as Diaoyu Islands sovereignty dispute escalates (By Agence France-Press in Washington and Minnie Chan) Washington urges Beijing to avoid actions that will intensify stand-off with Tokyo over islands - The United States has officially voiced its concern to Beijing after a Chinese maritime surveillance plane flew over the Diaoyu Islands in the East China Sea, over which both China and Japan claim sovereignty. "It's important to avoid actions that raise tensions and to prevent miscalculations that could undermine peace, security and economic growth in the region," US State Department spokesman Patrick Ventrell said on Friday. China and Japan have long disputed the sovereignty of the islands, which Japan calls the Senkakus. The US made clear that its "policy and commitments regarding the Senkaku Islands are long-standing and have not changed," Ventrell said. Although the US maintains that it takes no side in the territorial dispute, Washington has said that it believes the island chain is covered by its security pact with Tokyo. Japan scrambled eight F-15 fighter jets on Thursday after the China Marine Surveillance aircraft flew over the Diaoyus, which Tokyo called the first incursion into its airspace by a Chinese state aircraft since the Japanese military began monitoring in 1958. The Chinese Foreign Ministry on Friday said that Japanese fighter jets "had invaded China's territory airspace over the Diaoyus", adding that it was necessary to send marine surveillance planes over the islands to safeguard their sovereignty. "China's maritime surveillance plane flying over the Diaoyu islands is completely normal," Foreign Ministry spokesman Hong Lei said. US affairs expert Shi Yinhong, of Renmin University, said Ventrell's remarks spoke to Washington's concern about a possible military confrontation between China and Japan. "It looks like the US is partial to the Japanese side, but it aims to prevent any possible confrontation or even military conflict from taking place," Shi said. Meanwhile, CCTV yesterday broadcast excerpts of an interview with Masato Kitera, a career diplomat who will head to Beijing on December 25 to replace outgoing Japanese ambassador Uichiro Niwa. "My job is to improve Japan-China relations, and then deepen them," he said.

Hong Kong*:  Dec 17 2012

Hong Kong Wing Lee Street's last working letterpress saved for posterity (By Amy Nip) After six decades the last working printer on historic Wing Lee Street is saved for posterity - The Original Heidelberg Cylinder Letter Press Machine is moved from the closing Wai Che Printing Company yesterday. The last letterpress printing shop on Wing Lee Street, where the award-winning Echoes of the Rainbow was filmed, has fallen victim to advances in technology. The Sheung Wan street, which has one of the city's last remaining clusters of Chinese-style tenements, was once home to 11 printing shops. While the street was saved from redevelopment in 2010 following calls for its preservation in the wake of the film's success, the old-fashioned printing shops established there several decades ago have failed to stand the test of time. Lee Zak-yue, 83, had mixed feelings yesterday as he watched the heavy Original Heidelberg Cylinder Letter Press Machine removed from his shop, lifted by a crane onto a truck. While Lee's six-decade printing career came to an end with the closure of his Wai Che Printing Company yesterday, there was a bright side. The machine will avoid the landfill and instead find a new home at Youth Square in Chai Wan. It will be part of an exhibit on printing from late January to early February of next year. "I spent more than HK$100,000 on the machine," Lee said. "Buying a printing machine at that time was like buying retail space on the ground floor nowadays." Letterpress printing, which has been in use in the West since the 15th century and in China since about 1040, involves locking movable type into a bed, inking it, and pressing paper against it to form a print. Design of printed materials is done by manually arranging letter punches, and an alphabet of such letters can be found in Lee's shop. The slow speed of letterpress printing put it at a big disadvantage to offset printing, which took off in the 1950s. It now involves computerised design, and transfers images from metal plates to paper without touching it. Lee said his letterpress machine would be a tribute to the golden days of commercial printing. "I've found it a good home, and people will have the chance to see it," he said. Lee will also host workshops at Youth Square next year, teaching young people about traditional printing.

China's global investment may hit US$2 trillion by 2020 (By Stephen Quinn) Chinese investment overseas is part of a 'transformation' of its economy that could see global investment worth up to US$5 trillion by 2020, an Asia Society audience heard - China has invested US$7 billion in the United States so far this year, with another US$7 billion announced, Daniel Rosen, a senior US businessman and academic, told the Asia Society in Hong Kong on Friday. Rhodium Group, a consulting firm where Rosen is a partner, predicts that China's global investment will reach US$1 trillion to US$ 2 trillion by 2020. This is a relatively conservative projection compared with some more bullish forecasts which put the number as high as US$5 trillion. Rosen is a former White House advisor on international economic policy and a member of the Council on Foreign Relations. He also serves on the board of America's National Committee for US-China Relations. Rosen was speaking at the launch of a new Asia Society commissoned report on Chinese investment. Rosen also spoke with the Post's Stephen Quinn about the strategy behind China's foreign investments. 

Promise of hot money heats up Hong Kong shares (By Jeanny Yu and Ray Chan) With US now pouring billions of dollars more into quantitative easing each month, the Hang Seng Index hits highest level in 16 months - Hong Kong's benchmark Hang Seng Index increased 160.40 points to close at 22,605.98 points on Friday. Hong Kong stocks hit a 16-month high yesterday on speculation more hot money would flow into the equity market after the United States announced further quantitative easing. In the latest sign of escalated capital inflows, the Hong Kong Monetary Authority stepped into the currency market for the seventh time this week, selling HK$3.1 billion as the local currency hit the strong side of its trading band. The de facto central bank has injected a total of US$12.03 billion since October 20. Hang Seng Index Norman Chan Tak-lam, chief executive of the HKMA, said it was still capable of injecting more funds to maintain the peg against the US dollar. Speaking on a visit to Beijing, he also warned investors to prepare early for the potential withdrawal of funds from the markets as the US was expected to wind down its quantitative easing in 2015. The benchmark Hang Seng Index gained 160.4 points, or 0.71 per cent, to finish at 22,605.98, the highest level since August last year. Turnover rose to a one-week high of HK$72.3 billion. The US Federal Reserve announced its fourth round of quantitative easing on Wednesday, expanding its bond-buying programme to US$85 billion a month. Shares got a further boost when HSBC's preliminary December manufacturing purchasing managers' index came in at a 14-month high of 50.9. from the onshore market. On top of that, the Shanghai Composite Index had its sharpest one-day gain in three years, jumping 4.3 per cent yesterday. Liquidity in the mainland markets will benefit from revised regulations posted yesterday on the State Administration of Foreign Exchange's website: sovereign wealth funds, central banks and monetary authorities can now exceed the US$1 billion limit that still applies to other qualified foreign institutional investors. Chan Ka-keung, Hong Kong's Secretary for Financial Services and the Treasury, said the probability of hot money flows into the city's property market was low, especially after the government rolled out a buyers' stamp duty in October that should dent demand from offshore investors. Market experts are widely expecting capital inflows to focus on more liquid assets for higher returns, such as equities. "Rising liquidity is no doubt helpful, and I see this trend continuing in the short term, as there are still some quality cyclical shares to attract them to the Hong Kong market," Baring Asset fund manager Khiem Do said. Hot money would continue to be allocated to banks, insurers and raw materials firms that had been undervalued in the first three-quarters of the year rather than to local blue chips, he said. Financials were yesterday's biggest gainer. China Life rose 2.3 per cent to close at HK$24.05 and Ping An gained 3.5 per cent to HK$62.95. China Longyuan Power lost 5.4 per cent to finish at HK$5.23 following a share placement plan. Ryan Tsai, senior investment strategist for Greater China at Coutts, said: "Fund inflows to the Asian market will accelerate in the coming six to 12 months, reversing what was seen last year." With a potential cyclical recovery on the mainland, Hong Kong equities would be among the best assets to be in, Tsai said. A total of US$43.3 billion has entered Asia-Pacific markets (excluding the mainland and Malaysia) this year as of December 1, UBS data shows. That is a sharp turnaround from a net capital outflow of US$14.4 billion from the region last year.

High steaks (By Rebecca Lo) OBE's organic beef is very lean, with the fat on the outside - unlike Wagyu beef which is marbled throughout. Happy cows give the best meat, and in Australia's arid Channel Country, the free-roaming animals choose their own diet. Rebecca Lo finds out why it is some of the purest protein you can get in Hong Kong. Dalene Wray says she is just glad to be where it is happening. In 2011 the general manager of Queensland's OBE Organic made Hong Kong her permanent home with her husband and daughter, after a stint in Beijing in 2009. At the same time, she also set up the company's regional head office here to nurture new markets with her USDA organic certified beef. "Living in Australia, it's hard to spot trends by only visiting this region," Wray explains. "There is so much opportunity to learn every day through conferences and events that may only happen once a year in Australia." Wray is a firm believer in living and eating healthy. She comes from four generations of farmers and grew up in Birdsville in Australia's Channel Country with 250 sq km of semi-arid grassland as her backyard. This vast area stretches from Queensland to certain parts of South Australia, the Northern Territories and New South Wales. Her father, David Brook, is OBE's group chairman. "We have 35,000 heads of cattle, about one head per square kilometer," she says. "The country is so arid that there is actually very little grass. My mother and father are both pilots - we have two planes to round the animals up with four to six people on the ground." Due to its bare 120 mm of annual rainfall, cattle raised in the Outback are not subjected to as many parasites as in wetter climes. "There is less disease," Wray says. "The cattle choose their own diet. Channel Country is a unique region with plants that have special tastes, like our salt brush and pepper grass. If the cattle feel like going for a protein bush, they are free to do so. In a feed lot, the animal has no choice." Wray is quick to point out that while organic products may not be more nutritious than their big corporation counterparts, that shouldn't be the reason for the choice. "Our beef tastes like how meat is meant to taste," she says. "It doesn't need sauces; just salt and pepper. My favorite way to enjoy it is when my husband cooks it for me on the barbecue." "The meat can be considered the opposite of Wagyu. Instead of the fat being marbled throughout, it is on the outside, making the red meat very lean. We have held tastings with local chefs and all have liked our products so far. People choose organic because it is guaranteed not to have bad things in them." She has recently hosted Chinese organic inspectors in the Outback and aims to be certified by the end of this year to begin selling OBE products in China. "Certification is a challenge," she admits. "Every country has different standards. Since China (the mainland) doesn't accept Australian standards, we had to fly them over so that they can inspect our products and resources themselves." For the past six years, OBE products have been available in Hong Kong through upscale supermarkets, and although Wray has only launched OBE in the Middle East this year, she is already witnessing very positive response. "The population is huge in the Middle East and there's only a four-hour time difference," she says. Sales to Southeast Asian markets, such as Malaysia and Indonesia, are also increasing because OBE beef is halal, or slaughtered according to Muslim requirements. Wray believes that through working with local chefs, she can have a better understanding of how her products can be integrated into local dietary demands. In the end, she says, it is all about offering more choices to educated consumers. "I don't want to make people feel guilty for not eating organic," she says. "I understand that it can be expensive. Organic eggs, for example - I think they taste better and I feel better giving them to my daughter. Everyone should have choice in their lives and they can make their own decisions about how they want to eat."

 China*:  Dec 17 2012

Apple's iPhone 5 may not be a hit in China (By Agence France Presse in San Francisco) Concerns that the latest iPhone may not be a hit in China caused Apple shares on Friday to extend their slide from a record high price hit in September. A customer stands in front of ad boards of Apple's iPhone 5 at a telecom retail store in Nanjing. Concerns that the latest iPhone may not be a hit in China caused Apple shares on Friday to extend their slide from a record high price hit in September. Apple shares were down 3.76 per cent to $509.79 at the close of the Nasdaq exchange, with the price eroding further in after-hours trades. Stock in the iPhone, iPad, iPod and Macintosh computer maker have lost more than a quarter of their value since topping $700 per share in September as the iPhone 5 was poised to launch in the US and a half-dozen other countries. The latest bite out of Apple shares came as the iPhone 5 made a lackluster debut in China and an analyst reported that Apple has cut orders for smartphone parts. “Based on our survey, we believe the sale of iPhone 5 is unlikely to be successful in China,” said a note from TH Capital. The note said Apple’s sales channel in China “has room for better optimization of sales and service” and that the “high price of iPhone 5 turns people away.” Jefferies analyst Peter Misek scaled back estimates for iPhone sales, saying “component suppliers have seen large order cuts as the assembly bottleneck has not improved as much as hoped... We had thought Apple would be further along the assembly ramp at this point and believe Apple will see extra charges due to the excess component inventory.” Some financial analysts on Friday scaled back their predictions of how high Apple stock will rise but still expected it to gain ground. Previous iPhone model launches in China were met with stampedes by eager buyers and the emergence of a black market for the coveted Apple gadgets. The iPhone 5 reception was subdued; with some analysts suspecting prices for Apple’s unabashedly premium products was scaring away customers.

China to open 1st subway across Yangtze River on Dec. 28 - Subway Line No.2 is the first subway line of Wuhan city, also the first subway line across the Yangtze River.

Chinese President Hu Jintao on Saturday sent a message of condolences to U.S. President Obama following the shooting incident at an elementary school in U.S. state of Connecticut Friday. 

New role models (By Yao Jing) Chinese models, increasingly popular at home and abroad, are set to receive a boost from international modeling agencies. International agency beautifully poised to present changing face of chinese fashion and commerce - It may be some time before the catwalks of Shanghai and Beijing reach the showy heights of Paris or Milan, but with the country's increasing commercial power and influence, China's fashion models are grabbing a greater part of the international spotlight. As foreign companies flock to China to sell their luxury products, and Chinese companies expand overseas to promote their brands, there is a growing demand for local models who can deliver an eye-catching presentation of goods, be they cars, cosmetics or clothes. Virtually any product can benefit from a model. In the past two weeks, there has been an end-of-the-year extravaganza of events in China competing to meet that demand. On Nov 30, the 20th New Silk Road Model Competition was held in tropical Sanya, Hainan island, by China's best-known model management agency New Silk Road, followed the day after by the 24th Miss Model of the World International Grand Final in Shenzhen, and the 29th Elite Model Look world finals in Shanghai. Tellingly, although the Elite international model agency has been holding its audition finals in China since 2004, it only opened an office in Shanghai a year ago. "It is our first parent company agency in Asia," says Stefania Valenti, CEO of Elite World, who was in Shanghai for the final. "Elite is also the first international model management company to set up in Shanghai." Out of 40 Elite agencies around the world, only seven are fully owned by the company. The newly-appointed Valenti, the first woman to lead the group since it was founded 40 years ago in Paris, says revenue in the model management sector in the US and Europe increased 20 percent year-on-year in 2012, but she predicts the company will gain 20 percent of its total global revenue from China in the next three years. The company reported almost 40.5 million euros ($52.3 million) in modeling revenues last year. Confronted with the slowdown of the fashion industry in the West, Elite is hoping to strengthen its global assets by moving from traditional markets to newly emerging markets, especially China. "We have gained some revenue from our Elite Model Look contests here in past years as we expanded into China in 2004," Valenti adds.

Hong Kong*:  Dec 16 2012

A dream ride in Paris leads to marriage for Connie and Hiram (By Vivian Chen) A carriage ride down the Champs-Elysees, a candlelit dinner and a proposal written in rose petals lead Connie to wed fellow banker Hiram - Connie and Hiram feel their relationship is as fresh today as when they met. When Connie Chue saw the horse-drawn carriage parked in Paris' Place Vendome last year, she could not help dreaming of her fairy-tale moment. Little did she realise that the dream was about to come true thanks to her prince charming, Hiram Ip. The investment bankers registered their marriage on December 1 at St John's Cathedral in Central. They are hosting a banquet tonight in the ballroom of the Four Seasons hotel to celebrate with more than 300 guests. Connie and Hiram, the son of former economic development and labour secretary Stephen Ip Shu-kwan, had been dating since 2003. Hiram sprung a surprise marriage proposal while they were on holiday in Paris last year. He booked a carriage, knowing that keen photographer Connie would not be able to resist having her picture taken with it. "I thought the carriage was a tourist attraction at first, but then the horseman handed me a shoe and said I could only ride in the carriage if the shoe was my size. I was thrilled to find it was exactly my size," Connie said. The shoe was bound to fit; it was part of Hiram's plan. They took a ride down the Champs-Elysees, where hundreds of tourists took photos of the carriage and cheered the happy couple. Connie thought that was going to be her only surprise of the night, after Hiram failed to propose during the carriage ride and the candlelit dinner that followed. However, when they got back to their hotel suite, there was another surprise. The room had been decorated with red panels and, on the bed, rose petals spelled out "Marry Me". Connie said yes immediately. "It was a truly magical night. I still don't know how he managed all that right under my nose," she said. The couple first met in 2001 when they were working at Morgan Stanley. Hiram was just an intern at the time. "Connie was the first person I met in the office," he said. "She was this petite girl tucked away at the far corner of the office, but I immediately wanted to get to know her. I still remember what she wore that day." They did not hook up immediately as Hiram was still at university in England. But the seeds of their love were sown. They kept in touch when Hiram returned to England, and he would ask her out every time he was back in town. When he came back for good, after graduating in 2003, Connie was the first person he called. As soon as they started dating, they knew they were right for each other. "I felt very comfortable and at ease around him," Connie said. "To me, this is how a Mr Right should be. We share whatever is on our minds. We have supported each other through the different stages of our lives, grown stronger and become better people together." Hiram said Connie was his dream girl right from the start. "I think our relationship is as fresh today as it was 10 years ago," he said. "Connie has the sweetest smile that shines from the bottom of her heart." Connie said: "I like the intellectual type and Hiram is certainly that. He's spontaneous and appreciates the little things that I do for him." The couple will head to South America for their honeymoon, to visit Patagonia, the Galapagos Islands and Bolivia.

Top judges may face conflict of interest over residency ruling (By Austin Chiu, Joshua But and Ng Kang-chung) Two of the top judges who will decide whether to ask Beijing to clarify a previous interpretation of Hong Kong's residency laws were involved in the original case. Mr Justice Patrick Chan Siu-oi and Mr Justice Robert Ribeiro, permanent Court of Final Appeal judges, were on the bench when the court decided in 2001 to grant residency to children born in the city regardless of their mainland parents' immigration status. This means that if the court accedes to the government's suggestion that it refer the issue back to the National People's Congress Standing Committee, the pair will be involved in a decision that could result in their own earlier ruling being overturned. Chief Justice Geoffrey Ma Tao-li also represented the government in the case that resulted in the 1999 interpretation. The historic links have raised questions about whether there is any conflict of interest, actual or apparent, and whether the judges are under pressure to make the decision. At issue is whether the opinions of the pre-handover Preparatory Committee in 1996, that Chinese citizens born when either or both parents resided lawfully in Hong Kong and were permanent residents, formed part of the 1999 interpretation and is therefore binding on the courts. If it is, children born in Hong Kong to mainland parents who are not permanent residents will be denied residency, contrary to current practice. The government suggested on Wednesday that the top court, which decided in 2001 that the Preparatory Committee's opinions were not binding, should ask Beijing to clarify the matter. Law professor Eric Cheung Tat-ming said there was little problem for the three judges hearing the case as long as Chief Justice Ma declared if he knew any sensitive information relating to the previous case. But he criticised the government for putting pressure on the judges to overturn their own decision. Cheung said the court would have to decide whether there was a mechanism under the mini-constitution to seek clarification of an interpretation. He said there was not. The court would also need to decide whether right of abode was an internal affair and an interpretation from Beijing was therefore not necessary. Cheung said it was an internal matter because the provision was in Chapter 3 of the Basic Law. Seeking the clarification might open the floodgates to more intervention by Beijing, he said. But Alan Hoo, chairman of the Basic Law Institute, said right of abode was not part of the city's autonomy. He said, however, that the central government had no further role in the right of abode issue, as it had interpreted the law in 1999, and there was no legal basis for it to clarify this. Cheung criticised the government for suddenly withdrawing a concession made in the 2001 case to the effect that the Preparatory Committee's 1996 opinion did not form part of the interpretation. Based on that concession, the court ruled in favour of children born to mainland parents. "It is difficult to speculate, but probably Beijing thinks that Hong Kong people are less hostile to interpretation so it allows Leung Chun-ying's administration to withdraw the concession," Cheung said. Executive Councillor Regina Ip Lau Suk-yee said she did not believe the government would seek an interpretation if the top court refused to refer the case. Hoo said the government should unseal the documents of the Sino-British Joint Liaison Group from 1993 so that the legislative intent of the laws on right of abode could be known. "I do not understand, and it is not logical, that the Department of Justice surrendered in the 2001 case by accepting that [the 1999 interpretation] was non-binding," he said. "It was not based on legal principles, but was probably a political position." He warned that there could be a further constitutional crisis if the government failed to explain its stance towards the Basic Law. "Is interpretation [by Beijing of the Basic Law] an eternal crusade?" he asked. "It is dividing society and creating unnecessary tensions."

Beijing picks Hong Kong liaison office spokesman Li Gang as Macau chief By SCMP) After nine years at central government liaison office, Li Gang is promoted in recognition of hard work and handling of tough issues in city - Li Gang, deputy director and spokesman of the central government's liaison office in Hong Kong, will become Beijing's top representative in Macau early next year. Beijing sources confirmed to the South China Morning Post yesterday that the promotion was in recognition of Li's work in the city. It comes as part of the reshuffle of officials with Hong Kong and Macau responsibilities after the 18th party congress. Li's position in Hong Kong gives him the rank of deputy minister in China's political hierarchy, but being head of the Macau office would elevate him to minister. His experience in handling tough issues in Hong Kong is seen as having equipped him to cope with the various challenges Macau is facing. The former Portuguese colony is looking to diversify its economic development from its traditional casino business. It is not clear who will succeed Li as the Hong Kong office spokesman. The office is headed by Peng Qinghua , with seven deputies. At the end of the party congress last month, Li, 57, was re-elected as a member of the party's Central Commission for Discipline Inspection. Veteran political commentator Johnny Lau Yui-siu said while the chief posts were usually filled by Central Committee members, Li's experience as deputy head of the Hong Kong office made him a suitable choice for the Macau job. "The Macau office is relatively relaxed compared to the troubles you face on a daily basis in the Hong Kong office," Lau said. "Li is familiar with the [political] situations in Hong Kong and Macau." Lawmaker Tam Yiu-chung, chairman of the Beijing-loyalist Democratic Alliance for the Betterment and Progress of Hong Kong said Li was the right choice after nine years in Hong Kong. "He has worked in Hong Kong a long time and often answered media questions well," Tam said. Li was known for his involvement in the office's negotiations with the Democratic Party over electoral reform in 2010, which helped to ensure the approval by the Legislative Council of the government's revisions. Democratic Party lawmaker Albert Ho Chun-yan, who met Li for the talks, recalled him as being "a courteous man". Ho said: "He was polite, but he was just executing his boss' commands … so it could be meaningless in showing what kind of man he is." With personnel changes at the Hong Kong office, Ho said "the invisible hand" would become "more and more active". He was referring to claims that the liaison office has been meddling more in local affairs.

Sacked professor slams 'literary inquisition' (By Lai Ying-kit) A Baptist University professor hit back on Friday against the “literary inquisition” that led to his sacking over the controversial Blue Book of Hong Kong last week. Professor Victor Sit Fung-shuen was fired on Tuesday because of an “inaccurate statement” that the book – which he co-authored – makes against Chinese University, and because he tried to shift the blame for its authorship onto subordinates. Those were the findings of a four-member panel set up to investigate the matter by Baptist University. On Friday Sit said the panel’s conclusions were “absolutely unacceptable” and biased, and he was trying to have them overturned. “The panel failed to objectively and comprehensively consider the information provided by me, and failed to give me an opportunity to defend myself,” said Sit, former director of the university’s Advanced Institute for Contemporary China Studies, in a statement. The Blue Book of Hong Kong discusses changes in the city since the handover. In it Sit wrote that the introduction of liberal studies had “facilitated an invasion of universal values from the West into schools”. “For example, the general education courses at Chinese University are sponsored by, and its teaching material written with the assistance of, a United States fund. Its teaching direction has in practice been directed by the fund,” he wrote. Those statements prompted Chinese University to complain to Baptist University, which set up the four-member investigation panel to look into the matter. In a strongly worded statement on Tuesday, the HKBU panel said Sit “wilfully intended to promote ill-conceived information as scholarship” in the book, and “attempted to shift the blame for the authorship and inclusion of the inaccurate statement to his subordinates”. Sit’s comment in the book was inaccurate, and he was guilty of academic misconduct by allowing it to be published, the statement said. On Friday Sit said the university’s decision to sack him for “negligence in one sentence” in the book “gives him the shivers”. “I have written millions of words in the past forty years,” Sit said. “The bountiful result I have achieved in the past five years at the Advanced Institute for Contemporary China Studies is destroyed by a literary inquisition overnight. Is there any academic freedom?”

 China*:  Dec 16 2012

Xi seeks 'renewed impetus' in Sino-US relationship (By Cary Huang in Beijing) In meeting with Jimmy Carter in Beijing, president-in-waiting calls for 'new type of bilateral ties' between the world's two biggest economies - In meeting with Jimmy Carter in Beijing, president-in-waiting Xi Jinping calls for 'new type of bilateral ties' between the world's two biggest economies. The new Communist Party leader, Xi Jinping, has called for "renewed impetus" to be given to Sino-US relations as he set the tone for the relationship in a meeting with former US president Jimmy Carter in Beijing on Thursday. Xi called on the world's two most powerful nations to "accumulate positive energy" in developing their ties. "Both China and the United States should be innovative and make efforts to accumulate positive energy to build a China-US co-operative partnership based on mutual respect and mutual benefit," Xinhua quoted Xi as telling Carter. "Positive energy" is a term used by mainland internet users to refer to giving renewed impetus to something. "They should also create a new type of bilateral ties between major powers, regardless of difficulties," Xi said. Analysts interpreted Xi's remark as an effort to achieve a breakthrough in the troubled ties between the world's largest and second-largest economies and set the tone for years to come under his leadership. Xi will succeed Hu Jintao as president in March. Tao Wenzhao, a senior research fellow at the Chinese Academy of Social Sciences' American Research Institute, said: "It suggests the new leader's keen interest to seek a breakthrough in ties by setting the tone for the relationship for the next decade." It was Xi's first meeting with a senior American political figure since he took over from Hu as party general secretary and chairman of the Central Military Commission after the party's national congress last month. Tao said: "Basically what Xi told Carter does not suggest any significant change of China's US foreign policy, as he also made similar remarks during his visit to the US early this year." Jin Canrong, associate dean of Renmin University's school of international relations, said: "Like any new leader, Xi Jinping might be keen to seek a fresh breakthrough in Sino-US relations. But basically, China's foreign policy and US diplomacy will continue to go ahead along the same track." China and the US established diplomatic ties in 1979, during Carter's one-term presidency. The meeting was also the first between political figures from the two nations since US President Barack Obama's re-election last month. Xi said China was looking forward to enhancing the two countries' mechanisms for bilateral talks. China and the US have become each other's second-largest trade partners. But they are at odds over a raft of issues, including the yuan's value, human rights and Taiwan. They are also suspicious of each other's strategic intentions.

Japanese big manufacturers' sentiment down on sour Japan-China ties (Xinhua News) Business confidence among large Japanese manufacturers deteriorated in December from three months earlier,reflecting a decline in exports amid strained ties between Japan and China, the Bank of Japan said Friday in its Tankan survey report. The index measuring sentiment among big manufacturers including carmakers and high-tech firms stood at minus 12, hitting its lowest level since March 2010 when it came to minus 14, the central bank said. It also said that sentiment among nonmanufacturing companies such as those related to construction and services fell to plus 4 from plus 8 against the average estimate of a fall to plus 6, the first fall in six quarters. The BOJ surveyed 10,654 companies between Nov. 13 and Dec. 13 of which 99.3 percent responded.

Mo Yan returns to Beijing after receiving Nobel Prize - Winner of the 2012 Nobel Prize for Literature, Chinese writer Mo Yan, is welcomed at the Beijing Capital International Airport in Beijing.

Longest high-speed railway to compete with Airbus A380s in China (By Bloomberg) A high-speed train runs over the Yellow River Railway Bridge in Zhengzhou City, Henan, last month. The run was part of a trial operation of the Beijing to Guangzhou rail route that will open on December 16. Travellers in China will soon have the choice of travelling on the world’s longest high-speed train line or flying on an Airbus SAS A380 superjumbo when going from Beijing to Guangzhou. A 2,298-kilometre line linking the nation’s capital and the southern city will open December 26, according to a statement by the Ministry of Railways on Friday, whisking passengers between the two in as few as eight hours. The trains will initially run at a speed of 300 kilometres per hour. The new line adds to competition for China Southern Airlines’ A380s flying between the cities, a three- hour flight. The carrier has already lost money on domestic A380 services in the first half, according to Citigroup. The planes have been used on the route for about a year as the airline has so far failed to fly them on overseas services from Beijing. The bullet-train line, which will eventually connect to Hong Kong, is part of China’s plans to build a 16,000-kilometre long network by 2015. The services have lured passengers from flights that often suffer delays in China because of airspace restrictions and poor weather. Nationwide rail passenger numbers rose 4.6 per cent to 1.7 billion through November, according to the ministry. The numbers have climbed because of the opening of new lines and the easing of safety concerns following a fatal crash last year. ‘Significant Milestone’ “The service marks a significant milestone of our high- speed rail construction,” the ministry said in the statement. “It will ease pressure on the rail transport between Beijing and Guangzhou, especially during the peak Chinese New Year holiday.” Guangzhou, China Southern’s home city, is in the Pearl River Delta region, one of the nation’s major manufacturing centers. It’s less than 200 kilometers northwest of Hong Kong. China Southern dropped as much as 1.3 per cent in Hong Kong trading today. It was down 0.5 per cent at HK$3.74 as of the lunchtime trading break. The benchmark Hang Seng Index rose 0.6 per cent. The rail ministry has not yet to announced ticket prices for the new high-speed service, which mainly uses China CNR trains. A one-way China Southern flight from Beijing to Guangzhou leaving tomorrow was priced at at least 1,620 yuan (HK$$1,997), according to the carrier’s website. A high-speed train line connecting Beijing and Shanghai, China’s two biggest cities, opened in June last year. About a month later, 40 people died in a crash on a different line near the eastern city of Wenzhou.

China launches Africa-edition newspaper (By Agence France-Presse in Nairobi) China launched on Friday an African edition of its China Daily newspaper, the latest media venture by Beijing on the continent. “The relationship between China and the African continent is one of the most significant relationships in the world today,” publisher and editor-in-chief of the state-run paper Zhu Ling wrote in the inaugural copy. “It is growing and complex and not always understood...we hope to set that right,” he added. The weekly paper will “look in depth at what the precise nature of Chinese involvement in Africa is, and also at the prominent role many Africans are now playing in China itself,” Ling added. Published in the Kenyan capital but to be sold across the continent, it follows the opening earlier this year of a production centre of China Central Television (CCTV) in Kenya, the first outside of China. The state-run CCTV News centre broadcasts English-language African news. Nairobi also is home to the African office for China’s state news agency Xinhua.

China submits oceanic claims to United Nations (By Associated Press in Beijing) China provided the United Nations with detailed claims to waters in the East China Sea on Friday, apparently padding out its legal argument in an ongoing territorial dispute with Japan. The Foreign Ministry said it submitted documents claiming waters extending beyond its 370-kilometre exclusive economic zone. It said geological features dictated that China’s claim extended to the edge of the continental shelf off the Chinese coast, about 200 kilometres from Japan’s Okinawa Island. A statement posted to the Foreign Ministry’s website gave no specifics, but China had pledged to make such a submission shortly after Japan angered China by buying the islands from their private Japanese owners. Violent anti-Japanese protests then broke out across China to assert what many Chinese believe is their country’s ages-old claim on the rocky outcrops, known as Senkaku in Japan and Diaoyu in China. Taiwan also claims it. China’s move is a way for it to underscore its claim, but will have little real impact. The U.N. commission to which it submitted its claim, which comprises geological experts, evaluates the markers on technical grounds but has no authority to resolve overlapping claims. The U.N. submission represents one aspect of China’s approach to the dispute. Another involves dispatching vessels to patrol in the area and confront Japanese Coast Guard ships. On Thursday, China for the first time dispatched a plane over the islands, prompting Tokyo to accuse it of violating Japanese air space. Japan’s Defense Agency said eight Japanese F-15 jets headed to the area in response, but the nonmilitary Chinese plane was nowhere to be seen by the time they got there. The Foreign Ministry said a formal protest was sent to the Chinese government through its embassy in Japan. The islands lie in a strategic location between Japan and Taiwan, and the surrounding waters hold rich fish stocks and a potential wealth of oil, gas and other minerals. The area China claims overlaps with Japan’s exclusive economic zone and includes undersea natural gas deposits that China at one time had pledged to tap jointly with Japan. Such joint measures have since been shelved by Beijing.

China shares jump to 3-year high amid recovery hopes (By Bloomberg in Hong Kong) China’s stocks jumped the most since October 2009 on speculation state-backed institutions were buying shares as a manufacturing survey added to optimism the world’s second-largest economy will rebound. The Shanghai Composite Index climbed 4.3 per cent to 2,150.63 at the close, with trading volumes more the double the 30-day average. A gauge tracking financial companies surged 6.7 per cent as brokerages jumped on signs the government will allow more funds to buy equities. Sany Heavy Industry led a rally by industrial companies after a preliminary reading for a factory output index rose. “It looks like institutional investors are re-entering the market and they have to increase their stock positions now in order not to miss the boat,” said Dai Ming, a fund manager at Hengsheng Hongding Asset Management in Shanghai, which manages US$190 million. “The economy has stabilised.” The CSI 300 Index surged 5.1 per cent to 2,355.86, with all 10 industry groups adding more than 2.4 per cent. The Hang Seng China Enterprises Index of Chinese companies traded in Hong Kong rose 1.4 per cent to a nine-month high. The IShares FTSE A50 China Index ETF, which mimics the performance of the 50 biggest A-share companies, jumped 4.5 per cent in Hong Kong. The Shanghai Composite has advanced 4.3 per cent this week, the biggest gain in 13 months and extending last week’s 4.1 per cent rally. Shares have rebounded 9.7 per cent from an almost four-year low reached on December 3. The gauge is still down 2.2 per cent this year, heading for a third straight annual loss. The 994-member index trades at 11.9 times reported earnings after valuations fell to 10.8 this month, the lowest level since at least 1997, data compiled by Bloomberg show. “There’s speculation that Ping An Insurance is increasing its positions in Chinese equities,” said Wu Kan, a Shanghai- based fund manager at Dazhong Insurance., which oversees US$285 million. Ping An Insurance (Group), the second-largest insurer in China, rallied 8 per cent to 41.96 yuan. Speculation that large institutions are buying shares follows data this week showing the number of trading stock- trading accounts containing funds declined to the lowest in two years. A gauge tracking financial companies jumped 6.7 per cent on the CSI 300. Citic Securities, China’s biggest listed brokerage, rallied 7.4 per cent to 11.53 yuan. Haitong Securities, the second largest, gained 5.6 per cent to 9.28 yuan. China may relax or abolish a rule that requires Renminbi Qualified Foreign Institutional Investors to keep most of their funds in bonds, according to the Hong Kong Monetary Authority, a move that may boost demand for stocks. RQFII funds, which raise yuan overseas, now must invest at least 80 per cent of their assets in China’s onshore bond market, with the rest going into equities or kept as cash. Stocks also gained ahead of this weekend’s Central Economic Working Conference, which sets the tone for policies for next year. The Chinese government may announce it will keep its economic growth target at 7.5 per cent, according to Nomura Holdings Inc. Industrial & Commercial Bank of China paced gains for banks, jumping 3.8 per cent to 4.10 yuan. Agricultural Bank of China advanced 4.1 per cent to 2.79 yuan, the most since October 2010. The December preliminary reading for the HSBC Holdings Plc and Markit Economics’s purchasing managers index rose to 50.9, more than the 50.8 median estimate in a Bloomberg News survey of economists and the final reading of 50.5 for November. Last month was the first time in 13 months it was above the expansion-contraction dividing line of 50. Sany Heavy, the biggest Chinese machinery maker, advanced 6.7 per cent to 9.25 yuan. Anhui Conch Cement rose 4.7 per cent to 18.76 yuan, its highest level since November last year. Today’s report may bolster confidence in the economic recovery after November’s trade and new loans trailed estimates. Recent stock-market gains had failed to stem equity outflows. Accounts containing funds used to trade stocks dropped by about 49,000 in the week to December7 to 55.55 million, the lowest level since the week to Nov. 26, 2010, according to regulatory data compiled by Bloomberg on December 12. Investors emptied 205,000 accounts the previous week, the most in 16 months. The Shanghai Composite’s 9.7 per cent rally from its December 3 low still lags the 25 per cent gain by the Hang Seng China index of mainland companies listed in Hong Kong from its September 5 low. Chinese companies on the mainland traded at their biggest discount to their Hong Kong-traded counterparts since January last year yesterday, according to an index from Hang Seng Bank .

Multinationals increase M&A activity (By Liu Jie) China's market potential has attracted a growing number of multinationals seeking M&A deals in a wide range of sectors, including the machinery, manufacturing, medical care and retail industries. US-based medical device provider Medtronic's stand at a medical equipment exhibition in Beijing. The company acquired China Kanghui Holdings, an orthopedic devices manufacturer, for $816 million in cash in September. Medical-device maker Medtronic Inc has recently announced two acquisition deals of Chinese companies, with the two deals worth nearly $900 million. The United States-based company said at the end of September that it would acquire China Kanghui Holdings, a Jiangsu-based maker of orthopedic devices, for $816 million in cash. The deal was completed in mid-November. In October, Medtronic - the world's largest maker of pacemakers - said it would buy a 19 percent stake in the Shenzhen-based LifeTech Scientific Corp for $46.6 million, with a $19.6 million convertible note representing an additional 7.4 percent stake. LifeTech makes devices for minimally invasive surgeries for cardiovascular and peripheral vascular diseases and disorders. Medtronic said that the acquisitions will help advance its globalization strategy, as well as expand its local presence and accelerate its access and competencies in China. Like Medtronic, many international companies are showing their interest in boosting their M&A activity in China. "Given the macroeconomic conditions globally and domestically, a transaction volume increase shows that multinational giants still have financial ability to do M&As, and Chinese companies are attractive to foreign buyers given their production strength as well as their marketing, and research and development resources," said Chen Fengying, director of the World Economics Research Center of the China International Economic Relation Research Institute. According to Zero2IPO Research Center, a domestic research firm, during the first nine months of the year, the number of foreign companies' acquisitions in China dropped. M&A deals decreased to 32 during the first three quarters of the year from 51 a year earlier. However, the average transaction volume of each deal increased to $141 million from $132 million. Thomson Reuters data show that during the first half of the year, the deal volume of global M&As amounted to $1.1 trillion, down 21.5 percent year-on-year.

Hong Kong*:  Dec 15 2012

Hong Kong’s problem needs to be solved with one heart, not by chanting slogans, beleaguered Chief Executive Leung Chun-ying said on Thursday night. (By Tony Cheung) Hong Kong’s problem needs to be solved with one heart, not by chanting slogans, beleaguered Chief Executive Leung Chun-ying said on Thursday night. Leung faced more grilling as he attended the third regional forum in Kwai Tsing Theatre before his maiden policy address next month. In his two-minute opening remarks, Leung said the government would start selling a new batch of subsidised housing next week. “I hope that property prices in Hong Kong will stabilise soon,” he said. The government was concerned about the elderly and environmental problems, he added. Most of the 20 members of the audience raised suggestions on various issues, including five who called for universal retirement protection, while others asked for better public healthcare and education policy. Four questioned Leung on how to mend the rift in the society and solve his integrity crisis. ”Hong Kong needs to be united, in order to solve the problems that have accumulated in society. Problems cannot be solved by chanting slogans,” Leung said, “I will listen to those who support me, as well as those who oppose me ... and I am the chief executive who will make district visits most frequently.” Shouts of “Down, down, Leung Chun-ying” echoed through the theatre repeatedly throughout the 100-minute forum, while fans of the chief executive chanted: “Support CY!” The forum was also interrupted for about five minutes as a group of protestors tried to rush into the auditorium. On calls for retirement protection, Secretary for Labour and Welfare Matthew Cheung Kin-chung said that the government had set up a taskforce to look into the matter, with the help of the Central Policy Unit.

Jackie Chan criticises Hong Kong as 'city of protest' (By Colleen Lee and Tony Cheung) Anger after movie star tells mainland newspaper his hometown has become ‘like South Korea’ and that it should limit the right to protest. Action star Jackie Chan is under fire again for suggesting that Hongkongers' right to demonstrate should be limited. It is the second time in three years that the kung fu star has made controversial remarks about restricting freedoms in the city where he was born. In an interview with Southern People Weekly - part of Guangzhou-based Nanfang Media - published on Tuesday, Chan said: "Hong Kong has become a city of protest. The whole world used to say it was South Korea. It is now Hong Kong. "People scold China's leaders, or anything else they like, and protest against everything. "The authorities should stipulate what issues people can protest over and on what issues it is not allowed." In April 2009, Chan came under fire at the Boao Forum for Asia in Hainan for saying Chinese people needed to be controlled. Answering questions about mainland controls on filmmaking, Chan said at the time: "I don't know whether it is better to have freedom or to have no freedom. With too much freedom, it can get very chaotic. It could end up like in Taiwan." He also said that he was starting to think "Chinese people need to be controlled, otherwise they will do whatever they want". Chan later said his remarks had been taken out of context and twisted.

Top court asked to seek Beijing's advice in abode case (By Lai Ying-ki) Secretary for Justice Rimsky Yuen Kwok-keung said on Thursday his department's suggestion to the city's highest court would not undermine Hong Kong’s judicial independence and rule of law. The Department of Justice suggested on Thursday that the city’s top court ask Beijing to clarify an interpretation of the Basic Law it made in 1999, in a bid to resolve legal issues relating to two right of abode cases. Secretary for Justice Rimsky Yuen Kwok-keung said the government wanted a clarification of how much binding power the opinion of a Beijing-appointed 1996 preparatory committee – mentioned in the 1999 interpretation – would have on right of abode cases relating to foreign domestic helpers and babies born to mainlanders in Hong Kong. Yuen said the clarification would help the city handle these cases. It is now up to the Court of Final Appeal to decide whether to seek the clarification from Beijing. In its 1999 interpretation, the Standing Committee of the National People’s Congress stated that the Basic Laws’ Article 24 meant that a child had the right of abode when at least one parent was a Hong Kong resident. The committee said this was the legislative intent of Basic Law drafters and was reflected by the preparatory committee in 1996. The interpretation in effect drastically reduced the number of mainlanders eligible for the right of abode. Yuen on Thursday dismissed concerns that the justice department’s latest move would undermine Hong Kong’s judicial independence and rule of law. He said it was in accordance with the Basic Law for the top court to ask the NPC for interpretations.

 Hong Kong on track to become No 1 financial centre (By Jeanny Yu) Hong Kong has long been a regional banking hub and a new report says it is poised to become the world's number one financial centre. Hong Kong is expected to overtake London by 2015 and surpass New York by 2016 to become the world’s biggest financial centre, reflecting a massive shift in the balance of power in the financial world and a remarkable turnaround since the financial crisis. By 2015, the number of financial service jobs in Hong Kong, which was less than half the London number in 2005 – will have overtaken London to reach 248,000, according to the lastest report released by the London-based Centre for Economics and Business Research (CEBR). By 2015, London would have 237,000 financial sector jobs, the report said. Hong Kong will also challenge New York, the US financial hub which only this year dethroned London as the world’s largest financial centre. By 2016, Hong Kong will have 262,043 financial professionals, compared with 252,543 in the Big Apple. Between 2008 -- the year in which the global financial crisis set in -- and 2012, the number of financial jobs has grown 12 per cent in Hong Kong, compared with a 23 per cent decline in London and a 10 per cent fall in New York over the same period. Western cities are losing their lead because of “the more dynamic growth of the Asian economies, which has created a booming demand for financial services”, the report said. ‘Much of this shift is inevitable as a result of the world’s changing economic geography. And Hong Kong will be boosted by the internationalization of the renminbi," the report said. Meanwhile, the city of London lost its crown also due to “short-sighted over-regulation, penal taxation and banker bashing” as well as the “inevitable” economic shift to the east, it said. New York has declined by less than London because of the greater strength of the US economy over the European economy, the London-based research centre said. The fall in financial sector jobs in London has been accompanied by a sharp fall in the bonus pool, CEBR said. This Christmas, financial staff in London may only get 1.6 billion pounds in total, down from 11.6 billon pounds in 2008. That means every financial staffer will only get 6,400 pounds this Christmas on average, compared with a peak of 33,000 pounds in 2008. The sharp fall results from a sharp fall equity trading in the city, which has fallen 20 per cent in value from 2011, and international orders for equity trading have halved compared to 2011, CEBR said. CEBR also revised down its bonus forecast from six months ago and said the “only high points” for the beleaguered City of London were private equity and technology M&A deals.

Jeffrey Koo removed as leader of Next Media buyout consortium (By Toh Han Shih) Jeffrey Koo replaced as leader of group, while new party enters buyout of print and TV firm - Next Media, which has a building in Taipei, Taiwan, has sold its print and television arm for HK$4.66 billion. Next Media, a company controlled by Hong Kong tycoon Jimmy Lai Chee-ying, has disclosed more details of the recently agreed sale of the company's Taiwan print and TV businesses to a group of Taiwanese businessmen, after changes in the composition of the consortium. The sale for NT$17.5 billion (HK$4.66 billion) would net Next a gain of HK$2.28 billion, said the Hong Kong-listed media firm. Next Media "will no longer be engaged in the print business, as well as television programmes and the sale of advertising in its television operation in Taiwan. The disposal allows the company to focus on profitable operations," Next said in a filing to the Hong Kong stock exchange. Next's net loss nearly tripled to HK$928.39 million in the six months ended September 30 from a year earlier, mainly due to its television business in Taiwan. Wang Wen-yun, chairman of Formosa Plastics Group, will lead the buyout with the biggest stake of 34 per cent in the TV and print assets, Next said yesterday. Previously, the leader of the buyout was Jeffrey Koo Junior, chairman of Chinatrust Charity Foundation. Taiwan's Financial Supervisory Commission had objected to Koo leading the consortium because of the island's rule that bars financial institutions from investing in the media. Instead, Koo will get 20 per cent of the TV and print assets. He is a grandson of the late Koo Chen-fu, a Taiwanese businessman who arranged the first direct talks between Taiwan and China since 1949 and served as Taiwan's chief negotiator with China in 1993 and 1998. Lee Shih-tsung, chairman of funeral services provider Yung Len Life Service, will acquire 14 per cent of Next's Taiwan TV and print businesses. Taiwan Fire & Marine Insurance chairman Lee Tai-hung - who was expected to participate in the buyout - was not mentioned as a buyer in Next's announcement yesterday. Instead, an unexpected buyer emerged in the form of Li Jiang-cheng of Yong Sin Development, a Taiwanese company, who will get 32 per cent of Next's Taiwan TV business, which is being sold for NT$1.5 billion. Tsai Shao-Chung will acquire 32 per cent of Next's Taiwan print business, which is being sold for NT$16 billion, but will have no investment in the TV operations. Tsai is the son of Tsai Eng-meng, chairman of Taiwanese food company Want Want Holdings.

 China*:  Dec 15 2012

10,000 gather to recall victims of Nanking massacre (By Alice Yan in Nanjing and Johnny Tam) As tensions rise between China and Japan, in the city of Nanjing they were grieving for those who died in a previous conflict between the two - Seventy-five years on from the start of the Nanking massacre, 10,000 people attended a ceremony at the Nanking massacre memorial hall in Jiangsu, singing the national anthem and laying memorial wreaths. China says 300,000 civilians and troops were killed by Japanese troops over the course of six weeks in what was then the national capital. Policemen carry wreaths during the memorial ceremony. Air raid sirens sounded in the eastern city of Nanjing yesterday as nearly 10,000 people attended a ceremony to mourn those who died 75 years ago in the Nanking massacre. The Chinese government says 300,000 civilians and soldiers died in a six-week massacre after Japanese troops entered what was then the capital on December 13, 1937. At the Nanking massacre memorial hall, built on a pit where thousands of victims were buried, people sang the Chinese national anthem as soldiers in dress uniforms carried memorial wreaths across a stage. "We are here to recall history, grieve for compatriots who suffered and died, and educate the people about the lessons of history," said Yang Weize, secretary of the Communist Party in Nanjing, as the city is now known. The ceremony took place amid rising tensions between China and Japan over a territorial dispute in the East China Sea. Li Gaoshan, who was a Kuomintang soldier in the battle to protect Nanjing before the city was occupied, said he hoped wars and such tragedies would never happen again. One student said she and 30 classmates had travelled for an hour from the Nanjing University of Aeronautics and Astronautics to visit the hall. Their visit was inspired by posters on the campus calling on students to register their opposition to the Japanese government's decision to buy three of the disputed Diaoyu Islands, known as the Senkakus in Japan. Zhang Xiang, a master's degree candidate at Nanjing University, said he was depressed by the hall's displays. "I am particularly stunned by a picture showing several Japanese soldiers smiling in front of many Chinese people's bodies, which were piled like a mountain," he said. "How could they be so cruel?" At Nanjing University, information about John Rabe, a German who lived in Nanjing and protected hundreds of Chinese during the Japanese occupation, has been on display since last month to commemorate the 130th anniversary of his birth. On Wednesday night, hundreds of people lit red candles at the memorial in a vigil for the victims, reported. In Hong Kong, Japanese activist Tamaki Matsuoka said not many Japanese knew the details of the Nanking massacre. "The massacre is only briefly mentioned in textbooks," she said at a conference at City University. "Even if it is mentioned, the word 'massacre' is always replaced by 'incident'. That's why I want to educate Japan's next generations about the real picture of history through books, exhibitions and documentaries." Matsuoka's first documentary, Torn Memories of Nanjing, was screened at the Hong Kong International Film Festival in 2010. She interviewed more than 250 Japanese veterans and 300 Chinese victims for the film. Her third documentary on the massacre, out next year, would include the never-before-recorded killing of 1,300 people at Taipingmen, Nanjing, she said. Meanwhile, two members of Hong Kong's Action Committee for Defending the Diaoyu Islands who intended to protest at the Yasukuni Shrine in Tokyo yesterday were taken away by police before they could reach the shrine. They were briefly detained at a Tokyo police station.

Mainland Chinese tourists power global travel boom (By Mandy Zuo) Cross-border trips by mainlanders are expected to rise by nearly 20pc this year, the biggest driver in global tourism. Mainland tourists love shopping in Europe because they save against weaker currencies. Mainland tourists made an estimated 82 million border-crossing visits this year, becoming the biggest driver of growth in international tourism. Dai Bin, president of the National Tourism Administration's China Tourism Academy, said outbound trips by mainland tourists were expected to grow by 16.7 per cent this year from last year's 70.25 million. The United Nations' World Tourism Organisation (WTO) said a record 1 billion tourists crossed international borders this year, with mainland tourists the biggest growth driver, followed by Russians. Dai said South Korea was expected to rank ahead of Japan as the most popular destination for mainland tourists this year, because of the prevailing tensions between China and Japan. Other popular non-Chinese destinations included Singapore, Thailand, Cambodia and neighbouring countries, followed by Australia, Russia, Europe and the United States. Dai projected that outbound mainland tourists would spend US$85 billion this year, up 20 per cent from last year. Last year's statistics show half of the money was spent on shopping. "More than a third of tourists we surveyed last year said shopping was their purpose for travelling abroad," Dai said. The US consultancy firm Bain & Company, said Chinese consumers had overtaken US shoppers this year to become the world's biggest buyers of luxury goods, accounting for 25 per cent of global sales. US consumers accounted for 20 per cent of the world's luxury sales, followed by Japanese shoppers at 14 per cent, it said. Its report also said that Chinese shoppers spent more than 60 per cent of their total outlay outside the mainland. The mainland's domestic luxury sales, estimated to be worth 106 billion yuan last year, are expected to grow 7 per cent this year. That is a slowdown from last year's 30 per cent growth, with expansion of the world's second-largest economy slowing and more Chinese buying abroad. Mainland tourists often shop in Europe, where they can save as much as 40 per cent on luxury watches because of the weaker euro and differences in tax or duties, Bain said. Dai said there was still a lot of untapped potential in the Chinese tourism market because outbound tourists represented just over 5 per cent of the total population, lagging far behind developed countries. "Also, on average, each mainlander made only two trips, either inside China or abroad, last year," he said. Dai said the mainland's outbound tourism market would keep growing by double-digit percentages for the next five years and that China would become the most visited country and biggest source of outbound tourists at the same time. "People will become keener on cross-border travel as China increases international trade and services," he said. "Cheaper luxury goods abroad are another motivation." He estimated that 200 million mainland tourists would make cross-border trips in 2020. The WTO says tourism accounts for one in every 12 jobs and up to 8 per cent of exports by least developed countries.

China marks 75th anniversary of Nanking massacre amid tense relations with Japan (By Agence France-Presse in Nanjing) Soldiers hold a wreath of flowers during a rehearsal a day before a memorial ceremony in Nanjing. Images from the Nanking massacre are on display at the Memorial Hall of Victims of the Nanking Massacre in Nanjing. Air raid sirens sounded in the Chinese city of Nanjing on Thursday as it marked the 75th anniversary of the mass killing and rape committed there by Japanese soldiers – with the Asian powers’ ties at a deep low. The two countries – the world’s second- and third-largest economies – have extensive trade and business links, but the weight of history still bears heavily on their relationship. The ceremony at the Nanjing Massacre Museum, attended by 9,000 people, began with the singing of China’s national anthem as soldiers in dress uniforms carried large wreaths across a stage. Beforehand an elderly woman cried as she placed flowers by the names of family members listed among the victims on a gray stone wall, and a group of Chinese and Japanese Buddhist monks chanted sutras to pray for world peace. China says 300,000 civilians and soldiers died in a spree of killing, rape and destruction in the six weeks after the Japanese military entered the then capital on December 13, 1937. Some foreign academics put the number of deaths lower, including China historian Jonathan Spence who estimates that 42,000 soldiers and citizens were killed and 20,000 women raped, many of whom later died. But Kai Satoru, the son of a Japanese soldier who served in China, was among those who attended Thursday’s event. “I am here to admit the crimes. They [Japanese soldiers] competed to kill people,” he told reporters. Fewer than 200 survivors remain, according to Chinese estimates. One of them, Li Zhong, 87, said he can never forgive, recalling how people had to restrain a man who grabbed a knife to kill Japanese soldiers after his wife was raped. “There are fewer and fewer of us survivors every year,” he said. “We must never forget history.” The 75th anniversary has taken on added meaning given the poor state of bilateral ties, a Chinese academic said. “We need to remain on serious alert about the tendency in Japan to deny the fact of Japan’s wartime aggression,” said Wu Jinan of the Shanghai Institute for International Studies. “The anniversary may only cool relations further to reach a freezing point. Currently, it’s hard to see any signs of improvement.” At the Nanjing Massacre Memorial in the city’s west, goose-stepping soldiers carrying flower wreaths rehearsed on Wednesday, watched by scores of tourists, ahead of the ceremony, which will be an invite-only event. Retired school teacher Li Fanling took photos of a list of victims carved into a grey stone wall, some known only by descriptions such as “Old Yang’s son”. “Name after name,” he said. “The Japanese killed so many people but they don’t acknowledge it, so Chinese people are angry.” A few metres away, teachers led schoolchildren by a covered pit of smashed skulls and broken femurs covered with a light layer of soil, remains of some of the 10,000 victims said to be located at the memorial site. Protests against Japan erupted in Chinese cities earlier this year, causing an estimated US$100 million in damages and losses to Japanese firms, after Tokyo nationalised islands it calls the Senkakus but Beijing claims as the Diaoyus. Chinese dissidents say the Communist Party nurtures anti-Japanese sentiment as part of its claim to a right to rule. Beijing typically cracks down on public protests but the anti-Japan demonstrations were allowed to take place. A Japanese diplomat, who declined to be named, said his country hoped for an improvement in relations after Japan holds general elections in a few days’ time and China’s own leadership transition completes next year. But some ultra-conservative Japanese politicians dispute that atrocities ever took place in Nanjing. Japan says it has apologised to Asian countries, citing a 2005 statement by then Prime Minister Junichiro Koizumi who expressed “deep remorse and heartfelt apology” in a reiteration of an earlier pronouncement in 1995. In an inconclusive joint study two years ago the Japanese side pointed to “various estimates” for the number of deaths, ranging from as low as 20,000 to 200,000.

Muddy waters (By Raymond Zhou) Crew of The Last Supper at the release ceremony in Beijing. Dubious online picks and pans inundate legitimate film commentary. Raymond Zhou follows one movie maker's effort to fight back. Movies depend on word of mouth for promotion, but in the Internet age it can be fabricated. Opinions you see on the net may not represent what people actually think about a movie, but could even mislead to the point of contradicting public opinion. As soon as The Last Supper debuted on Nov 29, director Lu Chuan knew he was in trouble. His historical drama about a ruthless emperor was getting the lowest possible scores on Douban and Mtime, two websites that aggregate movie feedback - this in contrast with the mostly positive reviews he got from critics. Lu realized he was being targeted by the nation's "water army". "Water army" is a nickname for web users who are hired to talk up or talk down a product. For a product with a limited shelf life but intensive response, the impression of waves of praise or disparagement can make or break it before the press and the audience discover it for themselves. "When plugging a new release, everyone would say great things about one's own work. I can accept that," says Lu Chuan. "But our profession has reached the moral low of hiring people to throw mud at the competition." To counteract the effect of the avalanche of manufactured ill will (some 9,000 negative comments per day), Lu admitted in a press interview that he had spent 50,000 yuan ($8,005) to "bump up" his movie's online score, thus becoming the first Chinese filmmaker to acknowledge the employment of the "water army". Lu did not use the term "water army", but a more euphemistic "word-of-mouth protection team" instead. "I would never pay someone to badmouth my competitor," he adds. However, Lu Chuan's admission placed himself in an extremely unfavorable situation. As phony comments mingle with real ones online, one may not be able to prove beyond reasonable doubt that a certain remark is definitely the result of rivals running amok, or that there is a force behind these bad words. Instead of getting sympathy from the public, Lu got suspicion at most, with some media commentators saying he should focus on making a better movie rather than battling negative comments. Gao Jun, an executive involved in film production and exhibition, said it was foolish of Lu to make such a confession to the public. (Lu later shifted his statement, saying that the hiring was done by his subordinates without his prior knowledge.) Some insiders charge that every movie resorts to such secret agents for creating buzz, each at a cost of over 1 million yuan. But this was refuted by Zhang Baiqing, president of China Film Criticism Association, who explains that at least half of China's feature films cost less than 5 million to make and therefore cannot afford such practices. "The dueling with the aid of the water army happens among some big-budget commercial films," he says, "and the trick is getting less and less effective."

Chinese car rental giant advertises in US (By Yu Wei) In celebration of China Auto Rental's fifth anniversary, the country's largest car-rental provider unveiled an advertising campaign at NASDAQ in New York's Times Square on Monday. A promotional display of China Auto Rental Holdings Inc illuminates New York's Times Square as after it made its debut on Monday in celebration of the company's 5th anniversary. The 30-second advertisement, which features the name and the logo of the company, is organized by Nasdaq and will be played 90 times a day on the screen until December 15. "As a leader in China's car rental industry, our company has always been given attention by Nasdaq as the two sides maintain close contacts and good relations," said Lu Zhengyao, president of the company. China Auto Rental, which had hoped to become the second Chinese company to list in the US this year, suddenly suspended its Initial Public Offering in late April. According to an official statement, the company said the suspension was to "avoid the shares falling on their debut". "Under current market conditions, US investors cannot provide a fair and reasonable price for Chinese companies attempting to go public," the statement said. "The valuation by investors is not recognized by the company and its shareholders." The company received $200 million from US-based private equity firm Warburg Pincus LLC in July. As for the possibility of restarting the IPO, president Lu told China Daily that there is no clear timetable. The car rental industry in China has developed rapidly in the past five years, with total revenue growing at an annualized rate of 25.4 percent. By the end of 2012, the industry is estimated to generate $4.0 billion, up 19.8 percent from 2011, according to a report released by IBISworld, a US market research organization. Compared to more mature car rental markets such as the United States, Canada, Japan and France, China's car rental market is underpenetrated and highly fragmented, according to Seeking Alpha, an American stock market analysis website. Currently, China Auto Rental has operated in 66 major cities, at 52 airports across China with over 600 service locations, serving more than 1 million individual customers and nearly 10,000 corporate clients, according to the company's filings. Lu said that China Auto Rental aims to expand its fleet to 100,000 units in China by 2015, but currently does not have concrete plans to expand overseas, he said. The company's advertisement will be displayed 90 times daily from Dec10 to 15, according to Nasdaq Multimedia Designer Rohini Shahriar. 

Massacre victims remembered at Nanjing vigil (Xinhua) People light the candles during a memorial event marking the 75th anniversary of the Nanjing massacre at the Memorial Hall of the Victims of the Nanjing Massacre by Japanese Invaders in Nanjing, capital of East China's Jiangsu province, Dec 12, 2012. Local citizens and representatives from other countries and regions attended the activity on the eve of the 75th anniversary of the Nanjing Massacre. A total of 3,000 candles were lit up to commemorate 300,000 Chinese killed by Japanese invaders in Nanjing in 1937. People light the candles during a memorial event marking the 75th anniversary of the Nanjing massacre at the Memorial Hall of the Victims of the Nanjing Massacre by Japanese Invaders in Nanjing, capital of East China's Jiangsu province, Dec 12, 2012. 

Hong Kong*:  Dec 14 2012 

Hong Kong Models and actors raise funds for Operation Santa Claus at the beach (By Lo Wei) Model Lisa Selesner (left) cheers on her guest celebrity team. Michael Wong poses with Santa on the beach at Repulse Bay. Terence Yin. Rosemary Vandenbroucke. Celebrities are used to attending glittering indoor charity events, so it was a novelty to be invited to one on a beach. "Ballroom charity events are very boring. It's more casual here and a lot more fun," model Lisa Selesner said at the opening ceremony of the first Santa on the Beach charity event, held in Repulse Bay on Saturday. The event was in aid of Operation Santa Claus - the fundraising campaign co-organised by the South China Morning Post and RTHK. Her guest celebrity team included models Ana Rivera, Nissa Marion, Jocelyn Luko and Rosemary Vandenbroucke, and actors Michael Wong Man-tak and Terence Yin Chi-wai. They competed against seven other teams. "We might win because we're really tall," Selesner joked before the event. The expectant mother cheered from the sidelines as her team dived in the sand in the water balloon battle, dressed up as Santa in a race, and set out to sea on a raft. In the end, Team Sino Group went home with the champions' trophy, although all the participants had three hours of fun on the beach. The event raised HK$240,000 for Operation Santa Claus. If you want to give a helping hand, visit

Ladurée opens in Harbour City Hong Kong (By Vivian Chen) Jimmy Chung, Tracy Chan and Steve Gye. Elisa and Arnaud Bathelemy, Vanessa Yeung and David Holder. VIP guests skipped the queue in front of French patisserie Ladurée's new boutique in Harbour City to taste its signature pastel coloured macarons. To celebrate the opening of its first retail space in Hong Kong on Wednesday last week, Ladurée hosted a tasting session at which guests could sample different flavours of its macarons along with free-flowing champagne. The Parisian café and pastry shop, established in 1871, is a much loved haunt for those with a sweet tooth. It gained fame after its macarons were featured in the 2006 film Marie Antoinette. For the Hong Kong shop, the macarons are shipped in daily from Switzerland. Flavour teas, jams and beauty products are also available in the store. Ladurée chairman David Holder said that he had been scouting for other locations in Hong Kong for the company's expansion, but a salon tea shop concept would be harder to conceive than the current boutique model. On their way out, each guest received a four-piece taster pack of the colourful desserts.

Hong Kong Monetary Authority (HKMA) supports Shanghai as onshore yuan hub (By Daniel Ren in Shanghai) Norman Chan says mainland city would be top beneficiary of currency's full convertibility - Norman Chan Tak-lam, chief executive of Hong Kong Monetary Authority (HKMA). Hong Kong Monetary Authority chief executive Norman Chan Tak-lam yesterday pledged to support Shanghai in building an onshore market for the yuan. Chan said he and Shanghai vice-mayor Tu Guangshao discussed a plan under which Hong Kong would introduce more capital and investors to Shanghai to help create an onshore yuan hub. "Co-operation between Shanghai, as an onshore market, and Hong Kong, an offshore centre, could be strengthened," Chan said. "There is still big room for the tie-up to be consolidated." Chan's remarks were aimed at allaying concerns about Shanghai's challenge to Hong Kong's role as the dominant yuan hub. He said the establishment of an onshore centre in Shanghai when the yuan became fully convertible could benefit the mainland in quickening the pace of internationalisation of the local currency. In January, Shanghai unexpectedly announced it would make the city a global centre for yuan trading by 2015, stoking fears in Hong Kong that the mainland's financial hub was readying to eat into its currency trade business. Hong Kong is the world's largest offshore yuan trading centre, where non-Chinese companies, institutions and residents can trade the currency and settle trade deals. But it is understood that Shanghai will not be able to create a yuan hub without the full convertibility of the currency. In September, Dai Xianglong, a former central bank governor, said China would probably take that step in 2015. Chan said Shanghai would be the top beneficiary when and if the central government made the move. He played down fears of any threat to Hong Kong because, he said, Shanghai's established role as a centre for yuan trading, clearing and pricing would only boost the cross-border flow of the currency, and that would benefit Hong Kong. Shanghai aims to transform itself into an international financial centre by 2020 in step with China's rising economic and financial might. The ambitious plan has caused consternation in Hong Kong about its own status in the future. Officials from both Hong Kong and Shanghai have thus been working on deepening co-operation between the two cities to further drive the internationalisation of the yuan. Chan is leading a delegation of the Hong Kong Association of Banks (HKAB) to meet officials in Shanghai and Beijing. Anita Fung Yuen-mei, chairwoman of the HKAB - also HSBC chief for Hong Kong - said Hong Kong banks would help mainland counterparts fine-tune their wealth management businesses.

Hong Kong's pupils rank among the very best in the world (By Dennis Chong and Associated Press) US professor hails ‘breathtaking’ performance of Asian youngsters in international assessments. Hong Kong school students, along with their Asian peers, continued to outperform their Western counterparts in the latest international mathematics assessments. The city's primary school pupils were among the top three in the tests, taken last year and gauging 63 countries and regions, while its secondary pupils were in the top four. But they did not score as highly in corresponding science tests, ranking eighth for secondary and ninth for primary. Local primary pupils, meanwhile, were named among the four top performers in literacy in another world ranking organised by the International Association for the Evaluation of Educational Achievements. The tests are taken every five years. In the last tests, in 2006, the city's primary pupils came first in mathematics. The results from Asian countries were described as "rather breathtaking" by an American professor involved in the tests. The Hong Kong tests were administered by the University of Hong Kong education faculty. The faculty said nearly 4,000 primary four pupils from 136 schools and a similar number of Form Two pupils from 117 secondary schools took the maths and science test, while the reading assessments were given to 4,200 primary four pupils. On a 1,000-point scale, primary pupils scored on average 602 in mathematics - three and four points short respectively of runner-up South Korea and champion Singapore. Students from the United States scored 541. In the secondary category, the SAR pupils came in behind South Korea, Singapore and Taiwan. Ina Mullis, an education professor at Boston College involved in the administration of the tests, said: "The dramatically superior achievement of the Asian countries is rather breathtaking." But Tom Loveless, a senior fellow at the Brookings Institution who in previous years represented the US in the international group that administers the tests, said: "These kinds of tests are very good at telling us who's ahead in the race. "They don't have a lot to say about causes or why countries are where they are." In the reading exam, Progress in International Reading Literacy Study, Hong Kong, Singapore, Russia and Finland were categorised as the top performing jurisdictions. The tests were taken by 300,000 children from 49 countries.

Mayan doomsday prophecy fails to deter HONG KONG wedding couples (By Johnny Tam and Amy Nip) Jon Lau and Winky Shum at Cotton Tree Drive Marriage Registry on Wednesday. Tang Ting and Lai Hoi-ying at Cotton Tree Drive Marriage Registry on Wednesday. The looming doomsday prophecy – the end of the Mayan calendar on December 21 – did not deter almost 700 couples in the city from tying the knot on Wednesday, when the special “triple 12” date appears for the last time in a century. But the total number of 12-12-this year weddings – 696 couples – fell well below the 1,002 pairs who exchanged vows on November 11, last year, and the 859 on October 10, 2010 – two dates that fell on a more convenient Friday and Sunday. Asked about the Mayan calendar, Yung Yu-shing, 28, said, “I say we get married even if it’s going to be the end of the world.” He married his fiancée Tam Hiu-dan, also 28, on Wednesday. “No matter what happens, we will spend the rest of our lives together,” said Yung, at the Cotton Tree Drive Marriage Registry on Wednesday morning. They chose that date for their wedding because it would be easy to remember, he said. Initially they feared a booking for their marriage registration would be hard to secure on that date, but their application went through smoothly at the end of August. The city’s five marriage registries hosted 132 couples exchanging vows – the maximum they could accommodate, according to a spokesman for the Immigration Department, which runs the registries. Others chose services with civil celebrants or at licensed places of worship. “We chose [a service provided by a] civil celebrant because it was easier to book,” said Yip Nga-man, 29, who married Raymond Ip Ho-yin, 34, on Wednesday. The couple even managed to book the 12.00 noon timeslot to exchange their vows at a private marriage registry in Central – for an even more memorable “quadruple 12”. Yip said she had been urging her boyfriend to marry her for years, and this year he ran out of excuses to postpone it. “I started pushing him in 2009, when the first September 9, 2009, came along,” said Yip, whose relationship with her new husband goes back about 10 years. “December 12, this year, was the last time in a century for a triple identical number to happen, so he had no more excuses for postponing it.” The couple decided to hold their wedding banquet on 1 March 2014 because, in Cantonese and Mandarin, 1-3-14 sounds like the phrase “together forever”. Since triple-12 fell on a working day – Wednesday – many relatives and friends of the newlyweds might not be free to attend a celebration, said wedding planner Cary Chan of the Petit Ami Wedding Consultancy. “Some couples made bookings but eventually rescheduled them, [to accommodate their friends],” she said. Chinese restaurant chain Super Star Group saw no increase in bookings for wedding banquets. In recent years, September 9, 2009, and October 10, 2010, were big hits for weddings because their Chinese translations carried propitious messages: nine means “forever” and ten stands for “perfection”, a Super Star spokeswoman explained. “December 12, however, does not carry any lucky or sweet connotations,” she added. Overall, newlyweds are currently spending about HK$6,000 per table for their banquets, about 3 per cent more than a year ago.

Leung tries to draw line under illegal structures row (By Lai Ying-kit) CY Leung visits the Greenview Villa housing project in Cho Yiu Chuen, Tsing Yi. CY Leung's property in Stanley. Chief Executive Leung Chun-ying said on Wednesday he had come clean on the illegal structures at his houses and hoped the controversy could be put to an end. Leung made the remarks hours before legislators discussed a motion for a vote of no confidence in him on Wednesday afternoon. In an apparent effort to end the controversy, Leung said on Wednesday morning he had revealed “all the facts” concerning the illegal structures at his Peak houses. “I gave all the facts on the matter in the Legco meeting two days ago. I also apologised to Legco and the community,” he said after visiting a construction site for a subsidised housing estate in Tsing Yi. “I hope that after the matter is put to an end, we – together with Legco and the community – can work on our policy making,” he added. At a Legislative Council question-and-answer session on Monday, Leung apologised five times for his handling of the unauthorised building works. His failure to acknowledge them until the media exposed them in June was negligent, he said. But Leung’s account failed to satisfy his critics, who accused him of lying in his remarks to Legco. The Buildings Department is carrying out inspections of his former home in Stanley, after media reports alleged that it had a suspected illegal extension.

SFC unveils tough new regulation for IPO sponsors (By Reuters in Hong Kong) An investor picks up an Agricultural Bank of China prospectus ahead of the companies' IPO. Banks preparing companies for listing on Hong Kong’s stock exchange will be made explicitly liable for IPO prospectuses, although they will also have more powers to ensure that their clients play by the rules, under proposals released by the city’s market watchdog on Wednesday. The Securities and Futures Commission’s (SFC) new rules follow a six-month consultation but are still likely to draw opposition from a Hong Kong banking community which forced the abandonment of similar ideas in 2005. Bankers had hoped for a watering down of the proposals, which would change Hong Kong company law to ensure that sponsors of initial public offerings face the same civil and criminal liability as company directors if a listing prospectus is found to have misled investors. The clampdown comes at a tough time for Hong Kong’s stock exchange, where IPO volumes have fallen 63 per cent this year, according to Thomson Reuters data, while issuance has increased at Southeast Asian rivals Malaysia, the Philippines and Thailand. “Although we are now experiencing lower IPO volumes these reforms will underpin market confidence during all market cycles,” SFC Chief Executive Ashley Alder said in a statement. The proposals were first aired in May, when the SFC launched the consultation period and banks lobbied heavily to reduce the severity of penalties they would face for improperly preparing listing documents. IPO sponsors, usually banks or corporate finance houses, prepare a company’s listing documents and perform due diligence to ensure they comply with Hong Kong’s listing rules. The main source of relief for bankers in the published proposals is the emphasis that companies as institutions rather than individual bankers will be subject to increased liability for the accuracy and reliability of a company’s prospectus. The SFC added that criminal liability will depend on whether a sponsor “knowingly or recklessly” signed off on a prospectus containing an untrue statement. That reduces the possibility of individual bankers ending up in prison if they are found not to have followed the rules when preparing a client to list, although any individual who colluded in preparing an untrue statement could still be prosecuted under general Hong Kong law. The SFC’s new recommendations on prospectus liability are not legally binding and the regulator will now have to apply to the government to put the proposals before the city’s Legislative Council. However, the new regulations also give banks greater authority to scrutinise their clients before they list and ensure competitive pressures will not hamper them from performing their role as market gatekeepers. In new proposals not included in the original consultation, the SFC said a sponsor will have to tell the regulator if their client is not following the rules or explain why if it decides to stop acting for them. A company wanting to list in Hong Kong will also have to commit from the outset that it will fully cooperate with the sponsor and agree on the sponsors fees at the start of their relationship. These new requirements, along with the proposed new code of conduct for sponsors, will apply to listing applications submitted on or after October 1, next year. Investment banks have argued that competitive pressures and resistant clients can make it impossible for them to detect fraud. The SFC’s proposals followed a series of scandals at mainland Chinese companies that have listed in Hong Kong. Shares in Chinese textile maker Hontex International Holdings were suspended in 2010, just three months after listing, when regulators alleged it had overstated its financial position in the listing prospectus. In April, the SFC revoked the licence of the sponsor of the Hontex listing, Mega Capital (Asia), and slapped it with a record fine.

Hong Kong faces risk of abrupt decline in home prices, says IMF (By Bloomberg and Ray Chan) Hong Kong's property sector is the main source of domestic economic risk, according to an IMF report. Hong Kong is at risk of an abrupt decline in property prices after gains fuelled by low interest rates and a limited supply of new housing, the International Monetary Fund said. “The property sector is the main source of domestic economic risk,” the IMF said in a report on the city released today. The odds of a slump that has major economic and financial consequences is “fairly low in the near term,” the fund said. The city should maintain its currency peg, it said. Home prices in Hong Kong, the world’s most expensive place to buy an apartment and to lease commercial space, have doubled in the past four years, leading the government to tighten mortgage lending and increase land supply. The property sector represents half of outstanding loans for use in Hong Kong, with additional risks from the use of real estate as collateral, the report said. The city’s economic growth may rebound to about 3 per cent next year, up from an estimated 1.25 per cent this year, the IMF said. Inflation may average 3.75 per cent this year and 3.5 per cent next year. Housing prices have increased 20 per cent this year, “defying the general slowdown in economic activity,” the report said. Concerns about the affordability and supply of housing “will take time to address,” Steven Barnett, the fund’s Hong Kong mission chief, said in a television interview from Washington. While measures such as stamp duties may have a short-term effect, “in the long run, it’s really about increasing supply,” he said. The Hong Kong-US dollar peg is still the “best arrangement” for the special administrative region and “warrants continued support,” Barnett said, calling the system “transparent and credible.” Hong Kong linked its exchange rate to the US dollar in 1983 when negotiations between China and the UK over the city’s return to Chinese rule spurred capital outflows. The exchange-rate system ties the city’s monetary policy to that of the US, where the Federal Reserve is using near-zero interest rates to help the economy recover from a recession. “Hong Kong really has the preconditions to maintain the system,” he said. “It has flexible markets, robust and proactive financial oversight, and a very healthy fiscal position.” Financial Secretary John Tsang Chun-wah said in reaction to the IMF report that the Hong Kong government was delighted that the IMF supports its measures to tackle exogenous risks and uncertainties globally. Norman Chan Tak-lam, Chief executive at Hong Kong Monetary Authority, said he welcomed the IMF’s support for the maintainance to the US dollar currency peg, which serves as the backbone of Hong Kong dollar and the city’s financial system. Chan also said he was pleased because the IMF agreed with the HKMA’s prudent anti-cyclical measures for the property mortgages.

HK$2 minimum wage hike approved (By Lai Ying-kit) The government has accepted a recommendation for raising the statutory minimum wage to HK$30 per hour – from HK$28 – starting sometime next year, the labour minister said on Wednesday. The new rate could come into effect on May 1 at the earliest, if the government's proposal was passed in the Legislative Council next week, Secretary for Labour and Welfare Matthew Cheung Kin-chung said. Cheung said it was estimated the 7.1 per cent increase in the wage level would benefit more than 327,000 workers. The increase rate has been approved by the Executive Council and Chief Executive Leung Chun-ying. The new level was proposed to the government by the 13-member Minimum Wage Commission in October following a review. Before agreeing on the HK$2 rise, employee representatives on the commission had pushed for raising the minimum wage rate to HK$33, while those representing employers wanted it to stay at HK$28. Hong Kong first introduced a minimum wage of HK$28 per hour in May last year.

 China*:  Dec 14 2012

China overtakes US to become world's largest patent filer (By Agence France-Presse in Geneva) China's patent office for the first time became the world's largest last year, as the number of global patent filings continued to grow despite the sluggish economy, the UN's intellectual property agency said. Launching its World Intellectual Property Indicators 2012 report on Tuesday, Wipo said global patent filings last year swelled to a record 2.14 million and that China had dethroned the United States to take the biggest portion of the pie. China's State Intellectual Property Office (Sipo) had received a whopping 526,412 patent applications last year, a hike of 35 per cent from 2010, compared to 503,582 for the United States and 342,610 for third-place-holder Japan, the report showed. "In the 100 years before 2011, only three patent offices - Germany, Japan and the United States - had occupied the position of largest office," Wipo said. Overall, patent filings grew 7.8 per cent in 2011 compared to the year before, while patents to protect inventions ballooned 35 per cent, industrial design patent applications grew 16 per cent and trademark filings jumped 13.3 per cent, Wipo said. This growth is good news, Wipo chief Francis Gurry said in a statement, since it "indicates that companies continue to innovate despite weak economic conditions." He said about two-thirds of patent applicants obtain the precious certificate protecting their invention.

New rules likely to cover industrial plasticisers in food and drinks in China (By Alice Yan) Officials aim to set a tougher standard to govern the level of industrial plasticisers, or phthalates, found in food and beverages - Kweichow Moutai was found to contain more industrial plasticisers, called phthalates, than a standard issued by the Ministry of Health. Authorities are inspecting major food manufacturers on the mainland to prepare for a new standard to govern the level of industrial plasticisers in food and beverages in an attempt to restore public confidence. Concerns over the toxic chemical were triggered after one of the nation's best-known liquor brands, Kweichow Moutai, was found to contain more industrial plasticisers, called phthalates, than a standard issued by the Ministry of Health in June last year. Online postings also alleged Jiugui Liquor, another top brand, contained three times more phthalates than the standard. Used to make plastics soft, phthalates can cause hormonal and reproductive problems and damage immune and digestive systems if absorbed. Su Zhi, director of the ministry's food safety and health supervision department, said authorities had inspected food manufacturers to determine the phthalate content of their products in the wake of a food-safety scandal last year involving excessive levels of plasticiser in sports drinks made in Taiwan. Su said the aim of the inspection was to understand whether phthalates were added to foods on purpose, as well as to pave the way for a food quality requirement regulating phthalate levels. "Other countries don't have this particular standard," Su said. "As far as we know, foreign countries and international organisations have not introduced such a requirement about the levels of phthalates in food." He said inspecting food producers was complicated because of different production systems. Professor Xu Yan, a biotechnology expert at Wuxi's Jiangnan University and a member of the experts committee for the China Alcoholic Drinks Association, said the current standard had been compiled without sufficient assessment. "We have proposed to the central authorities that they have a standard based on careful investigation," he said. On Sunday, a Hong Kong man alleged on his blog that tests by a local laboratory showed that a bottle of Kweichow Moutai he bought in the city contained 3.3 milligrams of Di(2-ethylhexyl)phthalate per kilogram, double the current standard. Trading in the liquor company's shares was suspended on the Shanghai Stock Exchange on Monday. Kweichow Moutai said yesterday that its products had passed tests in Beijing, Guiyang and Shanghai. It doubted that the product the man bought in Hong Kong was genuine. Wang Li, the company's chief engineer, said it had replaced plastic pipes and other plastic equipment with stainless steel fittings last year. Professor Wang Shiping , from China Agricultural University, said phthalate contamination of liquor stemmed from equipment used. "I am sure liquor factories don't put phthalates in deliberately because the chemical doesn't enhance a liquor's taste or colour," he said.

BHP to sell its interest in Browse to PetroChina for US$1.63b (By Bloomberg in Sydney and Hong Kong) PetroChina has earmarked close to US$16 billion for overseas investment this year as it aims to have half its production outside China within eight years. PetroChina, Asia’s biggest oil producer, agreed to pay BHP Billiton US$1.63 billion for its holding in Woodside Petroleum’s proposed Browse liquefied natural gas project in Western Australia. PetroChina will acquire an 8.33 per cent stake in the East Browse joint venture and a 20 per cent share of West Browse, BHP said on Wednesday in a statement. The deal comes as Chinese oil and gas acquisitions reached a record this year, following Cnooc’s US$15.1 billion bid for Nexen. It gives PetroChina a share in natural gas resources off the Australian coast that may underpin an LNG venture estimated by Deutsche Bank to cost A$44 billion (US$46 billion). The Chinese state-owned company wants half its oil and gas output to come from overseas by the end of the decade. The purchase confirms “China’s intensifying interest for natural gas imports,” Gordon Kwan, head of energy research at Mirae Asset Securities HK, said. “Expect more such deals, and they will gain speedy regulatory approvals as they are minority stakes.” The appetite for oil and gas assets among Asia-Pacific companies is growing after energy demand in the region rose at more than double the world average of 2.5 per cent last year. Up until now, purchases this year by China Petroleum & Chemical Corp., Cnooc, Malaysia’s Petroliam Nasional and India’s Oil & Natural Gas Corp. took the region’s total to a record US$99 billion, tying with the US for the first time. China will drive global demand for natural gas, with its consumption rising more than 11 per cent a year through 2020, according to a presentation this month by BG Group. Excluding the latest deal with Browse, Chinese companies had announced US$25 billion of oil and gas acquisitions this year, the most since at least 2007, according to data compiled by Bloomberg. PetroChina is planning to invest at least US$60 billion this decade in global oil and natural gas assets, Chairman Jiang Jiemin said in March. The company said in August it’s looking at assets in Central Asia, east Africa, Australia and Canada, with President Zhou Jiping telling reporters at the time he’s “completely confident” of achieving that goal. Woodside, Australia’s second-biggest oil and gas producer, plans to decide next year whether to go ahead with Browse at James Price Point in the Kimberley wilderness region. Royal Dutch Shell and BP are also partners in the venture, while Chevron earlier this year divested its Browse share in a transaction with Shell. Perth-based Woodside in February boosted estimates for the natural gas resources in Australia’s Browse Basin by 17 per cent to 15.5 trillion cubic feet. “BHP and Chevron were two of the most vocal potential dissenters about the James Price Point development, and they’ve voted with their feet,” said Benjamin Wilson, a Sydney-based analyst at JPMorgan Chase. Sending the gas to the existing North West Shelf LNG development operated by Woodside or using a floating LNG vessel to process the gas offshore are alternatives to developing a new Browse plant, he said. PetroChina will probably seek to buy LNG from Browse as well, according to Wilson. Woodside said in October 2010 that supply talks were continuing with PetroChina even after a preliminary 2007 agreement to sell as much as 3 million metric tons of Browse LNG a year to the Chinese company lapsed. Laura Lunt, a Woodside spokeswoman in Perth, declined to comment on whether the company is talking with PetroChina. Woodside rose 1.6 per cent to A$34.45 in Sydney trading, while BHP gained 1 per cent to A$35.76. Australia’s benchmark S&P/ASX 200 Index climbed 0.2 per cent. PetroChina and Shell own Australia’s Arrow Energy, which plans an LNG development on the Queensland state coast. Shell may delay until 2014 a decision on whether to build the project amid rising costs in the country, Chief executive Peter Voser said in Beijing last month. For the Chinese company, the Browse deal appears to show a lack of confidence in the Arrow plan and U.S. exports of the fuel, Neil Beveridge, an analyst at Sanford C. Bernstein in Hong Kong, wrote in a report on Wednesday. Chinese companies have invested in other Australian LNG projects as part of agreements to buy fuel. China Petrochemical Corp., or Sinopec Group, is a partner in a A$23 billion venture led by ConocoPhillips and Origin Energy, and China National Offshore Oil Corp. agreed last month to pay US$1.93 billion to increase its stake in BG’s project. Mitsubishi Corp., Japan’s biggest trading company, and Mitsui & Co. agreed earlier this year to buy a 14.7 per cent stake in Browse for $2 billion. The Mitsui and Mitsubishi venture, Japan Australia LNG Pty, also is buying about 1.5 million tons of LNG annually from Browse. PetroChina is paying about $5.40 per barrel of oil equivalent, higher than the $4.40 per barrel paid by the Japanese companies, Bernstein estimated. BHP’s minority interest in Browse fell outside its strategy of owning “large, long-life, low-cost, expandable, upstream assets diversified by commodity, geography and market,” the world’s largest mining company said. “The sale of Browse realizes an opportunity to exit at an attractive valuation.” The Browse partners have a right to match PetroChina’s offer, which is subject to regulatory approvals and expected to be completed in the first half of 2013, BHP said.

China's UnionPay grows to challenge Visa (By Bloomberg in Beijing and Hong Kong) A man passes a hoarding advertising UnionPay in Akihabara shopping district in Tokyo. Among the designer brands from Prada to Chanel at the Harrods flagship store in London, Chinese housewife Li Yafang spotted a logo she knows from back home: the red, blue and green of UnionPay cards. “It’s very convenient that I can now use my UnionPay card” to shop abroad instead of carrying a stack of cash, said the 39-year-old, who was buying the same 1,190-pound (US$1,920) Prada Saffiano Lux handbag carried by the hit woman in the “Mission: Impossible -- Ghost Protocol” movie. “I hope more places abroad will accept UnionPay.” Her wish is becoming reality as UnionPay, founded 10 years ago in Shanghai by the State Council and central bank, extends its reach. With more plastic in circulation than any other payment network -- 2.9 billion cards, or 45 per cent of the world’s total last year -- UnionPay is now accepted in 135 countries. Its rise is causing friction as the firm grabs market share from Visa as well as MasterCard, which UnionPay surpassed in customer spending in the first half of the year. “UnionPay has absolute dominance in China, and it’s now expanding beyond that to become a top global player,” James Friedman, a New York-based analyst at Susquehanna International Group who covers payments firms including Visa, said in a telephone interview. “Their numbers show they are already in the league of Visa and MasterCard.” A case brought by the US government to the World Trade Organization and ruled on in July challenged China’s requirement that foreign card issuers -- including Citigroup, which in August became the first Western bank in China to issue solely branded credit cards -- must use UnionPay’s network for yuan- denominated transactions. The rules, along with those requiring all Chinese automated teller machines and merchants to use its network, prompted the WTO to order that China stop discriminating against foreign payment companies. My next step isn’t any nation. It’s the world UNIONPAY PRESIDENT XU LUODE The decision didn’t spell out specific measures, and the WTO also ruled against the US claim that UnionPay is an “across-the-board monopoly.” “It’s difficult to say which side won after reading the WTO ruling as you basically can’t tell what’s actually going to happen,” Susquehanna’s Friedman said. A 2005 linkup with Discover Financial Services gave UnionPay access to a network that now reaches about the same number of US merchants as Visa and MasterCard. On November 30, the firm set up UnionPay International to expand further. More than 10 million UnionPay cards have been issued by 65 lenders in 17 countries outside China, according to the company’s website. Debit-card transactions drive most of UnionPay’s revenue. Its share of combined credit- and debit-card purchase volume for the first half of 2012 rose to 23.8 per cent from 20.9 per cent a year earlier, propelling UnionPay to No. 2 globally behind Visa, while MasterCard’s climbed to 21.7 per cent from 21.5 per cent, according to the Nilson Report, an industry newsletter. Visa’s fell to 46 per cent from 48.9 per cent. The share of spending volume at American Express, which UnionPay supplanted in 2010 as the third-biggest network by transactions processed, slid to 7.2 per cent from 7.5 per cent. UnionPay cards issued by banks rose 22 per cent in 2011 from a year earlier to 2.9 billion, according to the Nilson Report. Visa cards rose 4 per cent to 2.3 billion, Nilson said. Visa’s relationship with its Chinese competitor is similar to that of other firms, Jeff Liao, head of Visa China, said in a statement. The company has provided technology to help China’s payments industry and worked with UnionPay and the government on industry training programs, he said. “We compete vigorously, but we also cooperate as appropriate on common industry issues,” Liao said. MasterCard declined to comment. UnionPay doesn’t publish financial statements and interviews with its executives couldn’t be arranged, said Wang Kongping, a company spokesman. “If you look forward, the world has a new player that wants to be involved,” Diane Offereins, head of payment services at Discover, said in an interview in Beijing in August. “We do see them making good progress in building that international network.” Chinese residents increased spending abroad through credit and debit cards last year by 67 per cent to 300 billion yuan (US$48 billion), China Daily quoted UnionPay Chairman Su Ning as saying in March. Chinese spent a record US$7.7 billion on shopping in the US last year, according to US Commerce Department data. Their purchases climbed at least 30 per cent annually in seven of the past eight years, the data show. “Total transaction volume from UnionPay cards outside of China may not be so significant yet, but it’s a game about future opportunities,” Friedman said. Domestically, UnionPay dominates the payments market. Its Chinese name, Yin Lian, which means “banks united,” also reflects its ownership structure. Its founding shareholders in 2002 were 85 Chinese banks, led by the five biggest state-owned lenders and approved by the State Council and the People’s Bank of China. Its largest bank shareholder is China Construction Bank, with a 4.9 per cent stake. Industrial and Commercial Bank of China, Agricultural Bank of China and Bank of Communications each hold more than 3 per cent, data compiled by Susquehanna show. UnionPay’s top managers, including Chairman Su and President Xu Luode, are former senior officials at China’s central bank. UnionPay boasts on its website visits by Chinese leaders such as President Hu Jintao, Premier Wen Jiabao and Xi Jinping, the incoming president. Xu, in a 2009 interview in New York with Bloomberg News, said his goal was for UnionPay to be accepted around the globe. “My next step isn’t any nation,” he said. “It’s the world.” UnionPay’s 2011 profit rose about 78 per cent to 1.07 billion yuan, on revenue of 6 billion yuan, China Business News reported in April, citing data from the company’s shareholder meeting. Over the past four years, UnionPay’s revenue has more than tripled while profit increased almost 11-fold, according to the report. The company gets about half its revenue from commissions paid by domestic merchants, the 21st Century Business Herald reported in July, without saying where it obtained the information. The rest is from fees on domestic ATM withdrawals, international operations and other businesses, the newspaper said, without giving a breakdown. The only non-mainland Chinese banks allowed to issue solely branded credit cards in the country are Hong Kong-based Bank of East Asia and New York-based Citigroup. Citigroup’s ability to get an issuing license was “a meaningful development for US bank issuers,” Craig Maurer and Matthew O’Neill, analysts at CLSA Asia-Pacific Markets, wrote in a September 19 note. Other lenders, including HSBC Holdings, issue cards co-branded with Chinese banks. They typically pay a cut of each transaction to the Chinese partner as well as to UnionPay, whose network must be used for domestic payment processing. Visa’s logo is now printed on cards issued by at least 16 Chinese banks, including Bank of China and Bank of Communications, according to its Chinese-language website. MasterCard, whose Chinese name means “easy access to everything,” has 18 Chinese lenders issuing cards with its brand, its website shows. MasterCard signed a memorandum of understanding with UnionPay in 2010 to boost its revenue by improving acceptance in China for MasterCard and outside the country for UnionPay cardholders. AmEx has co-branded credit cards with UnionPay issued by four Chinese lenders including Bank of China and ICBC, according to AmEx’s Chinese-language website. UnionPay had US$660 billion of credit-card transactions last year, while debit-card volume was US$2.1 trillion, according to Nilson. Chinese banks had 3.08 billion debit cards circulating at the end of September, a 21 per cent increase from a year earlier, according to the People’s Bank of China. The number of credit cards printed jumped 19 per cent to 318 million, according to the central bank, which said 88.2 trillion yuan of transactions were made through bank cards in the third quarter. I don’t have a card issued by foreign banks. It’s too much of a hassle to get one. CHINESE HOUSEWIFE LI YAFANG China’s consumer lending has grown at an average 29 per cent annually from 2005 to 2010 and it’s expected to increase at 24 per cent a year through 2015, according to an August 2011 Boston Consulting Group report. Receivables from credit cards, which were broadly introduced to retail customers only in the early 2000s, could rise 40 per cent annually to reach 2.5 trillion yuan in 2015, according to the report. China will overtake the US as the largest market for credit cards by 2020, with about 900 million cards in circulation, MasterCard said in 2010. Credit cards featuring UnionPay numbered 285 million and debit cards totaled 2.7 billion as of 2011, according to the Nilson Report. Chinese tourists are fueling UnionPay’s growth overseas. On Paris’s Boulevard Haussmann, the cards are welcomed by retailers from Galeries Lafayette to Printemps. France expects as many as 5 million Chinese tourists within five years, or about 700,000 annually, according to a report by its tourist development agency and consulting firm Roland Berger. Chinese tourists typically spend about 3,100 euros (US$4,000) per household on shopping in Europe, the report shows. Across the English Channel, on an afternoon in July, two tour buses bearing Chinese signs were parked in London’s Knightsbridge district outside Harrods, which opened in 1849 and has counted Sigmund Freud and Oscar Wilde among its customers. Harrods has seen a sharp increase in sales and larger purchases from Chinese customers following the acceptance of UnionPay in February 2011, Katharine Witty, group director of corporate affairs, said in an e-mail. She declined to give specifics, citing company policy. “China is certainly among Harrods’s most significant customer base,” Witty said of the store, which employs more than 80 Mandarin-speaking staff. “A large majority of Chinese customers are now taking advantage of the UnionPay option.” UnionPay introduced a summer promotion at merchants including Harrods, offering a Montblanc key ring to each customer who spent 500 pounds or more using a UnionPay card. “I don’t have a card issued by foreign banks,” said Li, who was visiting London with her family from Ningbo, a port city in China’s Zhejiang province, with a UnionPay card issued by China Construction Bank. “It’s too much of a hassle to get one.”

China raps North Korea over provocative rocket launch (By Agence France-Presse in Beijing) North Korea’s sole major ally China expressed regret on Wednesday at Pyongyang’s long-range rocket launch, saying its nuclear-armed neighbour should abide by United Nations resolutions on the issue. The world body has already imposed sanctions against the North over its ballistic missile and atomic programmes, and analysts said Beijing – a veto-wielding permanent Security Council member – was likely to support further measures. This comes as the White House condemned on Wednesday North Korea’s successful launch of a long-range rocket, calling it a “highly provocative act” that threatens regional security. It is the first high-profile foreign policy incident Xi Jinping has had to deal with since taking over as leader of the ruling Communist Party last month, but Beijing’s longstanding policy was unlikely to change significantly, they added. “We express regret at the Democratic People’s Republic of Korea’s launch in spite of the extensive concerns of the international community,” foreign ministry spokesman Hong Lei, using North Korea’s formal name. He said Pyongyang should observe “relevant” resolutions of the United Nations Security Council, adding: “We hope relevant parties will keep calm and jointly maintain the peace and stability of the Korean Peninsula.” China is the North’s biggest trading partner and aid provider, and is seen as one of the few nations with any influence over its regime. But according to a high ranking western diplomat in Beijing, the two countries’ ties – one of China’s most secretive links – are increasingly strained and last month a senior Chinese official left Pyongyang after only a 24-hour visit. “The relationship between China and North Korea seems fairly bad at the moment,” the diplomat said on condition of anonymity. “North Korea seems not to pay any attention to China’s advice.” The relationship between China and North Korea seems fairly bad at the moment ... North Korea seems not to pay any attention to China’s advice Beijing had previously expressed concerns over the launch. Hong reiterated China’s stance that “the Democratic People’s Republic of Korea has the right to make peaceful use of outer space but this right is also subject to the restriction of relevant UN Security Council resolutions”. But he did not answer directly when asked whether the launch violated UN resolutions, instead repeating the call for calm and peace. According to Jia Qingguo, associate dean of the School of International Studies at Peking University, Beijing privately views the rocket flight as a breach. “The Chinese government may support sanctions, but they need to discuss how to use the sanctions. China will not want the sanctions to harm North Korea too much,” he told reporters. “China’s position on North Korea won’t see a big change” under Xi, he said, but added Beijing could react more strongly if Pyongyang further developed its capabilities – with a nuclear-armed missile a major concern. Pyongyang insisted the mission was not a banned intercontinental missile test but was designed to place a scientific satellite in orbit, and had achieved its objectives.

Hong Kong*:  Dec 13 2012 

Apple Opens Third Store for Hong Kong Fans - Apple Inc. is opening its third Apple Store in Hong Kong, one of the few smartphone markets in the world where it holds a far larger share than Samsung Electronics Co. The new Apple Store in Causeway Bay, the city’s shopping and entertainment hub, will open on Saturday, less than three months after the second store launched in late September. On weekends, the two existing Apple stores get so packed one can hardly walk through them without bumping into people. In the third quarter, Apple accounted for 53% of Hong Kong’s smartphone market in terms of shipments, while Samsung, the second-largest vendor, held a 21% share, according to research firm IDC. IDC analyst Kiranjeet Kaur said that Apple’s large market share in Hong Kong is in part because some of the iPhones sold in Hong Kong are subsequently redirected to mainland China. But even after taking that into account, Apple is dominant in Hong Kong’s smartphone market, she said.

HKMA defends currency peg, sells HK$6.2b (By Reuters in Hong Kong) Cash is flowing into Hong Kong stocks and conversion of US dollar bond proceeds into Hong Kong dollars are both combining to put pressure on the peg mechanism under which the Hong Kong dollar is pegged to the US dollar. The Hong Kong Monetary Authority (HKMA), the city’s de facto central bank, stepped into the currency market on Tuesday, selling HK$6.2 billion (US$800 million) in Hong Kong dollars as the local currency repeatedly hit the strong end of its trading range. According to Reuters data, the latest intervention will lift the aggregate balance - the sum of balances on clearing accounts maintained by banks with the HKMA - to HK$214.529 billion on December 13. It was the second injection this week. Before this intervention, the HKMA had sold a total of US$7.7 billion worth of Hong Kong dollars into the market since October 20. Market players said besides the recent inflows to purchase stocks in Hong Kong, the strength of the local currency was also supported by booming US dollar bond issuances as some of the issuers converted their proceeds to Hong Kong dollars for trade or investment use. The Hong Kong dollar is pegged at 7.8 to the US dollar but can trade between 7.75 and 7.85 to the US dollar. Under the currency peg, the HKMA is obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85 to keep the band intact. The currency traded at 7.7500 against the US dollar in early afternoon trade in Hong Kong.

High hotel rates dim Hong Kong’s convention appeal (By Reuters in Hong Kong) The average room rate in Hong Kong hotels was US$190 for the first half of the year. Above, The Peninsula. Hong Kong is losing its appeal as a convention destination as crowded hotels triple room rates during big events. During a jewellery convention last month, rates were so expensive that one company said it arranged for employees to stay with friends. “The rates are crazy,” said Rungrawi Prompa Hanapakdee, company secretary at Pak Import Export, a jewellery maker from Thailand, which had six workers stay at friends’ homes during the Hong Kong International Jewellery Manufacturers show. “It cannot be increased like this every time we come here.” A shortage of hotels helped push up room rates nearly 12 per cent in the first nine months of this year and some industry players expect Hong Kong will overtake Singapore as the world’s busiest hotel market next year. The average room rate was US$190 for the first half of this year, not far from Singapore’s US$210 and nearly double Shanghai’s US$100, according to tourism boards in the three cities. During a jewellery exhibition in September, some three-star hotels tripled rates, while some four-star hotels doubled prices, data from local travel agency Million Tour showed. “It’s quite drastic,” said George Kakuda, president of Kakuda Pearl, who attended two recent jewellery exhibitions. “They have doubled or tripled the price. We don’t like it. If it keeps going up, I need to think of something else.” Allen Ha, chief executive of convention centre AsiaWorld-Expo, said convention planners turned off by high-cost Hong Kong had mentioned Shanghai and Singapore as potential alternatives. The combination of scarce land, low interest rates and piles of speculative cash has made Hong Kong the world’s most expensive residential and retail property market. Buoyed by an influx of international business travellers and mainland Chinese tourists, Hong Kong had an 89 per cent hotel occupancy rate last year, according to the Hong Kong Tourism Board, ranking it among the world’s top hotel markets. The city saw a 23.7 per cent rise in the number of conventions held last year, despite a weak global economy, while the number of overnight business visitors rose 9.3 per cent over the same period. The number of hotel rooms, however, grew just 4 per cent over that time, data from the tourism board showed. “It’s a bottleneck issue that really stifles growth,” AsiaWorld-Expo’s Ha said. Hong Kong has pledged to increase the number of hotel rooms by 10 per cent by 2015, and some 50 projects are in the pipeline, but in the meantime convention planners may look elsewhere. The Federation of Hong Kong Hotel Owners said people would be willing to come no matter how expensive hotels were as the city offered good business opportunities, although some exhibitors are already having second thoughts. “By the time the government finally builds all the hotels, business travellers might already be used to holding meetings somewhere else,” said Jolland Chung, e-commerce manager at Million Tour. “Will they ever come back to Hong Kong? That’s the problem everyone is worried about.”

CLP Power, HongKong Electric to raise tariffs (By Cheung Chi-fai and Lai Ying-kit) Night view of Victoria Harbour from The Peak. Power users on both sides of Hong Kong harbour will face moderate increases in their electricity bills next year, lawmakers were told on Tuesday. CLP Power, which supplies about 2 million accounts in Kowloon and the New Territories, will raise its tariff by an average of 5.9 per cent. That means power consumption per kilowatt-hour will go up from 98.7 cents to 104.5 cents, passing the one-dollar mark. Meanwhile, Hongkong Electric, which provides power to Hong Kong Island and Lamma, will increase power prices by 2.9 per cent – for a kWh unit cost of 134.9 cents. The increases were reported to the Executive Council and the Legislative Council on Tuesday. The power companies do not need approval from either body to institute the rate increases. CLP managing director Richard Lancaster said on Tuesday the increase resulted from rising fuel costs associated with the use of new gas supplies from the West-East Gas pipeline. He also said the company had sought to keep the adjustment to a reasonable level. The rate increases come after the annual tariff review, which was held over the past few months, between the two power firms and the Environment Bureau. Last year, the review led to a public outcry over what the government described as excessive increases – 9.2 per cent and 8 per cent proposed initially by CLP Power and Hongkong Electric, respectively. CLP bowed to public pressure and cut its increase to 4.9 per cent, while Hongkong Electric dropped its rise to 6.3 per cent.

 China*:  Dec 13 2012

Patrol ship starts maiden voyage to Diaoyus (By WANG QIAN) China's largest fishery patrol ship, the Yuzheng 206, started its maiden voyage from Shanghai to patrol waters near the Diaoyu Islands on Tuesday, according to the Regional Bureau of East China Sea Fishery Management of the Ministry of Agriculture. Analysts said the move showed China's determination to safeguard its sovereignty over the Diaoyu Islands. The Yuzheng 206, China's largest fishery patrol ship, at port in Shanghai on Tuesday. The vessel embarked on its maiden voyage from Shanghai on Tuesday to patrol waters near the Diaoyu Islands, showing China's determination to safeguard its sovereignty over the islands. "The new fishery patrol ship is a sign that the country is strengthening its marine power to protect its sovereignty," said Yang Bojiang, a professor of Japanese studies at the University of International Relations in Beijing. The Yuzheng 206, with a full load displacement of 5,872 metric tons and around 130 meters long, is one of the largest and most advanced fishery patrol vessels in China, the bureau said. But no further details were given about the patrol. Zhao Xingwu, director of the ministry's Fishery Administration, said at the ship's maiden voyage ceremony in Shanghai on Tuesday that the Yuzheng 206 will play a positive role in regular patrols of the waters near the Diaoyu Islands, strengthening the country's law enforcement capacity and better protecting fishermen's safety. Yang applauded the move and said China enhanced its offshore law enforcement capacity recently after Japan's illegal "purchase" of the Diaoyu Islands. "We sent fishery patrol and marine surveillance vessels regularly to the islands' waters and built more ships, which reflects China's policy on the Diaoyu Islands," he said. Fishery patrol ships are mainly used to protect Chinese fishermen's interests and detect illegal fishing activity, and marine surveillance ships are mainly used to supervise water usage and protect the marine environment and maritime interests. According to the State Oceanic Administration, in November, two 3,000-ton marine surveillance ships joined the China Marine Surveillance fleet to patrol the country's waters. Routine patrols of the East China Sea have been intensified by China Marine Surveillance and the Fishery Administration since September, when Japan announced its illegal "purchase" plan. "It is Japan who wants to open a Pandora's box, and we are asserting our sovereignty," Yang said, adding that beefing up the country's marine power is just one way to do so. Liang Yunxiang, professor of international relations at Peking University, said that China and Japan both realize that demonstrating their power in the Diaoyu Islands dispute has evolved from fleet numbers to competition in technology and vessel durability. The Chinese government intends to make patrols of the waters around the Diaoyu Islands a long-term routine. A CMS insider told China Daily that the number of marine surveillance ships will surge amid the challenge of complicated marine disputes. Fishery Administration figures showed that by the end of 2010, China had 2,287 fishery administration ships, while the CMS had more than 300 inspection ships to carry offshore law enforcement missions as of 2011, according to a CMS report.

Foreigners to get key rights (By CHEN XIN) Foreigners who obtain permanent residency will have the same pension, employment and property rights as Chinese citizens, under new regulations announced on Tuesday. Access to schools for their children will also be on par with Chinese citizens the rules endorsed by central government departments in September state. The only rights not afforded to "green card" holders are political rights. Foreigners with permanent residency can participate in all aspects of social insurance and avail of the benefits. There are five types of social insurance: endowment, medical, unemployment, work-related injury and maternity.

China to open first subway crossing Yangtze (By Xinhua) A journalist shoots at a garage of the Changqing depot of Wuhan Subway Line 2 in Wuhan, capital of Central China's Hubei province, in this July 14, 2012 file photo. The Line No 2 is the first subway line of the city, also the first subway line across the Yangtze River. China's first subway line to cross the Yangtze River, the country's longest waterway, is expected to start test run this month in the central city of Wuhan, local officials said Tuesday. Subway trains have run through the 27.73-km tunnel for Wuhan Line 2, which links Wuchang and Hankou -- two major areas of the city -- over the past three months. But passengers will only be allowed to board the trains on December 28 when the test run starts, officials with the Hubei provincial transportation bureau said. The subway line has recently passed the experts' assessment, they said. It will be Wuhan's first subway, which is estimated to transport at least 600,000 passengers daily by 2015. As a key transportation route, the line is expected to handle half of the city's cross-Yangtze traffic flow, easing gridlock on bridges over the river. The construction costs around 14.9 billion yuan (2.37 billion U.S. dollars), according to estimates by previous reports. The 6,300-km Yangtze River, which originates in northwest China's Qinghai Province and flows through 10 provinces and municipalities before emptying into the East China Sea, is a major transport link between the west and east China. More than 100 bridges across the river are in use. Wuhan lies at the intersection of the Han and Yangtze rivers. Its city proper is divided into three major areas by the rivers. 

Swedish tourist dives into Chengdu waters to save drowning woman - Heroic 53-year-old saves woman in daring rescue. For this Swedish tourist it was certainly a trip to remember. Known only as Harald, the 53-year-old saved the life of a woman who was drowning in a river in Chengdu in the south western province of Sichuan in China. The video clip of a Chinese news report was posted on Youtube yesterday after being passed to website The drama unfolded on December 6 as the Swede walked near Jinjiang Bridge and saw a crowd gathered alongside the river. Realising there was a body floating in the water, he dived in and pulled the woman to safety. reports that the man was on a 10-day business trip to Chengdu - his first visit to China - when the incident happened.

Mo Yan receives Nobel Prize in Literature in Stockholm, Sweden - Chinese writer and Nobel Prize in Literature winner Mo Yan receives Nobel Prize in Literature at the 2012 Nobel Prize ceremony in Stockholm, Sweden, Dec. 10, 2012.

Memorial activities to be held for Nanjing Massacre anniversary - People visit the Memorial Hall of the Victims in Nanjing Massacre by Japanese Invaders during the World War II in Nanjing, Jiangsu Province, Dec. 11, 2012.

Chinese investors buying bulk of AIG unit (By Zhang Yuwei in New York) A group of Chinese investors is buying up to 90 percent of American International Group Inc's airplane-leasing business, International Lease Finance Corp. All told, the $5.3 billion deal would be the biggest acquisition of a US company by China. The Chinese consortium - New China Trust Co, China Aviation Industrial Fund and P3 Investments Ltd - agreed to acquire 80 percent of ILFC for $4.23 billion, with an option to acquire an additional 9.9 percent stake, according to New York-based AIG. If the option is chosen, two additional investors would be brought in - New China Life Insurance Co and an investment arm of ICBC International, the wholly owned Hong Kong subsidiary of Industrial & Commercial Bank of China Ltd. Once finalized, the deal will top China Investment Corp's $3 billion purchase in 2007 of a stake in US private-equity firm Blackstone Group LP. ILFC is the world's biggest lessor of aircraft. AIG CEO Robert Benmosche, who will keep a seat on the company's board of directors, said the deal creates a "solid and strategic partnership for ILFC". The business was deemed a non-core asset of AIG, though it will retain a 10 percent stake as it continues selling other businesses to help repay US government bailout loans from the fall 2008 financial crisis. "While ILFC is an extremely strong business platform and AIG will retain a minority stake as a passive investor, the aircraft leasing business is not core to our insurance operations," Benmosche said in a statement released Sunday. Weng Xianding, chairman of New China Trust Co and leader of the consortium, said the investors all share a commitment to ILFC's experienced management team, operating philosophy and presence in the US. "This transaction allows ILFC to continue to serve its worldwide partners in the aviation industry with world-class service while accelerating its growth in important markets, including Asia," said Weng, who headed China's main securities regulator before founding New China Trust in 2008. ILFC, whose current work force of 560 people includes more than 450 in the US, will be kept operationally independent and remain based in Los Angeles following the acquisition, the investors said. Both CEO Henri Courpron and President Frederick Cromer will continue to manage the business, a decision that was confirmed by ILFC on Monday. The company said, however, that Executive Chairman Laurette Koellner will leave her job under terms of the deal. Koellner was appointed by AIG in June to oversee the CEO following an internal investigation of an allegedly improper relationship between Courpron and another ILFC employee. "With existing management remaining in place, the transition will be seamless, allowing ILFC to maintain its focus on delivering the best mix of modern aircraft to meet our customers' needs around the world," Courpron said in a statement. This deal will help ILFC explore opportunities in the fast-growing Asian market. In China, major national airlines operate over 170 of the company's owned planes - about 19 percent of the worldwide fleet. Last year, the lessor opened offices in Beijing and Singapore to keep pace with demand. Chinese investment in overseas market has picked up, with mergers and acquisitions reaching $56.8 billion in 2012, according to data compiled by Thomson Reuters. That's the biggest M&A total since before the financial crisis four years ago. China's direct investment in the United States reached $6.3 billion this year, and Chinese companies support 30,000 jobs in over 30 states, according to New York-based Rhodium Group. Investors' interest in the US market is growing despite doubts about the accuracy of several US-listed Chinese companies and scrutiny of the business ties and activities of telecommunications giants Huawei Technologies Co and ZTE Corp. On Sunday, the US arm of Chinese auto-parts maker Wanxiang Group Corp won a bankruptcy auction with a $256.6 million bid for substantially all of Massachusetts electric-car battery maker A123 Systems Inc. The deal is expected to close in the second quarter of 2013 with approval from US and Chinese regulators. Both sides are allowed to terminate their agreement if the deal isn't completed by May 15, or by June 17 under a defined set of circumstances, according to filing from AIG on Monday with the US Securities and Exchange Commission. On the US side, the Chinese group will have to go through the Committee on Foreign Investment in the United States, or CFIUS, which reviews large or sensitive foreign investments. Clif Burns, who specializes in export controls and economic sanctions with Washington law firm Bryan Cave LLP, said the CFIUS review isn't likely to present any barriers this time. "It seems to me the deal is likely to be approved because it deals with civil aviation leases and shouldn't encounter any difficulties," Burns said.

Hong Kong*:  Dec 12 2012 

Cost of Chinese opera venue for West Kowloon doubles (By Olga Wong) Bing Thom poses on Monday with a model of Xiqu Centre for Chinese opera planned for the West Kowloon arts hub. A team of Hong Kong architects has won the design competition of the Xiqu Centre for Chinese opera, the first arts venue planned for the West Kowloon arts hub, officials said on Monday. The lantern-shaped design is expected to cost HK$2.7 billion – double the HK$1.3 billion originally estimated in 2006. It was designed by two leading architectural firms, Bing Thom of Vancouver and Hong Kong’s Ronald Lu. Chief architect Bing Thom, a Hong Kong-born designer who emigrated to Vancouver, said the winning design elevates the opera stage, creating room for a courtyard and a better entrance on the ground level. On the outside, the venue’s design suggests a lantern and an opening theatre curtain – key elements of a Chinese opera performance – the architects said. The design jury and Cantonese opera performer Yuen Siu-fai said the design is very friendly to performers. “We finally have a venue in which doors are large enough for our costumes to go through. Performers will not need to bend down in order to go through them,” Yuen said. Also, the make-up room is close to the stage, he added. The venue is expected to be completed in 2016. Chief Secretary Carrie Lam Cheng Yuet-ngor, chairwoman of the West Kowloon Cultural District Authority, said she has told the authority to control development costs carefully and secure the best possible investment returns. She blamed the huge price increase on the surge in inflation, construction costs and the addition of open space and educational facilities to the winning design. She declined to say whether the arts hub project would exceed its HK$21.6 billion budget. “We will only estimate that when all the designs are finalised,” she said. “We will report our financial situation later to the Legislative Council.” The authority said the project’s approved budget has increased to HK$23.5 billion.

CY Leung faces lawmakers over illegal structures (By Lai Ying-kit and Joanna Chiu) Chief Executive Leung Chun-ying takes questions in Legco on Monday. Between 5pm and 6:30pm, Chief Executive Leung Chun-ying visted the Legislative Council chambers in Central. The CE gave a short speech before the start of a special question-and-answer session with lawmakers on the controversy over the illegal structures found at his home on The Peak. Below is a live blog of the event followed by the views of a few Hongkongers on the issue:

 China*:  Dec 12 2012

Nanjing Massacre book to be released (By China Daily) Chen Zhongyuan (front right) and other survivors of the Nanjing Massacre show their portraits in the book Living History: Poetry and Portraits of Nanjing Massacre Survivors, in Nanjing, Jiangsu province, on Monday. A visitor walks past a statue at the Nanking Massacre Museum, east China's Jiangsu province Sept 18, 2012. The statue depicts a victim of the Nanking Massacre. The Nanjing Massacre: A Complete Story, a series of books about the massacre that took 10 years to compile, will be released to mark the 75th anniversary of the tragedy. Researchers from Nanjing University collected material from eight countries and unearthed previously untapped material from diaries, news reports and oral histories, when researching the books. The three volumes are by far the most comprehensive presentation of the 1937 tragedy, which led 300,000 people dead. Zhang Xianwen, a history professor with Nanjing University and leader of the research team, said he hopes the books will help establish a "sensible understanding" of the past. "We chose to work on the complete history to truthfully reflect what happened," Zhang said. The 1,000-plus page books explore the ordinary lives of the citizens at the time and the international response to the tragedy. They also detail how the city reacted to the massacre, detailing information of burials and charity work. Zhang and his team spent more than 10 years studying the Nanjing Massacre. In 2010, they released 72 source books. Bu Ping, a researcher with the Chinese Academy of Social Sciences, said their endeavor is important. "The Nanjing Massacre is now deeply associated with politics, people's emotions and different academic views. But this compilation has revealed the must-know basics. Their efforts are much appreciated," Bu said. Professor Zhang said the team worked to uncover the truth. "Our study will stand the test of time," he said. A translation of the books into English and Japanese is under way. 

China wealth gap continues to widen, survey finds (By Ernest Kao) The chasm between China’s rich and poor has widened to alarming levels, according to survey results released by the Survey and Research Centre for China Household Finance. The survey, released on Sunday, reported a rise in China’s Gini coefficient, a key yardstick of income or wealth inequality, to 0.61 in 2010, the latest year for which there is data on China. That number is significantly higher than the global average of 0.44 and 50 per cent above the "risk level" for social unrest, the Beijing Times reported. The figure was 0.56 for urban households and 0.60 for rural households. Measured on a scale of 0 to 1, a Gini coefficient of 0 represents perfect equality in which everyone has the same income, and 1 represents maximal inequality in which just one person holds all the wealth. Since China first published data on the Gini-coefficient in 2000, the official figure has stayed level at 0.412. In 2005, the World Bank data put the figure at 0.425, the last year it published a Gini index for the country. Li Shi, executive dean of Beijing Normal University’s China Institute of Income Distribution, who compiled his own Gini survey in 2007, told Bloomberg News in September that a poll of 20,000 households gave an index of 0.48. “A high Gini coefficient is a common phenomenon in the process of rapid economic development. It is the natural result of the market allocating resources efficiently,” said Gan Li, the director of the research centre, at a briefing in Beijing. “Relying on market forces alone can’t narrow the gap so China must change the structure of income distribution and rely on massive fiscal transfers to narrow the yawning disparity.” Gan recommended the government channel its high fiscal revenues and profits from state-owned enterprises to bolster education to “reduce inequality of opportunity to those in the lower income gap". Pan Jiancheng, from the National Bureau of Statistics' China Economic Monitoring and Analysis Centre, said solving the problem of uneven distribution of income would require greater urbanisation and economic restructuring in the form of higher social spending. The survey also revealed an urban unemployment rate of 8.05 per cent in July 2012, nearly double the country’s official figure. Unemployment among migrant rural workers rose twofold from 3.4 per cent in July 2011 to nearly 6 per cent a year later. The survey, conducted on 8,438 households and 29,500 individuals, was set up by the Finance Research Institute of the People’s Bank of China and Southwestern University of Finance and Economics. For university graduates, unemployment prospects have been worse, with fresh graduate unemployment at 16.4 per cent. Amidst the country's slowing economic growth, Beijing has become increasingly wary of the country’s yawning wealth gap out of fear that a large enough gap could spark social unrest in the country of 1.3 billion people. Chinese President Hu Jintao recently set a target to double national per capita incomes by 2020. New Communist Party chief and incoming president Xi Jinping has also pledged to take a harder line on corruption, dealing with economic reforms and improving social equality. The figure for Hong Kong, which is not included in China's Gini coefficient, stood at 0.537 in 2011, up from 0.525 just one decade ago, reflecting a similar and growing divide between the rich and poor.

Officials' assets in spotlight (By Zheng Caixiong in Guangzhou) South China's Guangdong province, traditionally a forerunner of reform in the country, will test out a program that will make details of officials' assets public, as part of an effort to fight corruption. The Hengqin new area in Zhuhai, the Nansha district of Guangzhou and Shixing county under the administration of Shaoguan city, have been selected as the districts where the test will be rolled out. The program will require all Communist Party of China and government officials to report their assets. The officials' assets will be made public and public opinion will be sought, according to a statement that the Guangdong Provincial Commission for Discipline Inspection of the CPC released over the weekend. "Currently, preparation work for the introduction of the test project is well under way in the three areas, while local Party commissions for discipline inspection are busy studying the details and relevant rules for the project, which is meant to prevent and fight corruption," said authorities with the Guangdong Provincial Commission for Discipline Inspection. Those who refuse to disclose their assets or lie in their reports will be relieved of their posts and be subject to further investigations, according to the statement. All major Party and government officials in the three designated areas will be audited when they retire or are to be transferred to other departments or places, the statement said. Liu Liansheng, a senior official from the Guangdong Provincial Party Commission for Discipline Inspection, said departments have also been urged to further improve the system of exposing corruption online, to encourage the public to report corrupt officials. "In recent times, many corruption cases have been made public after local residents reported the cases online," Liu said. The Hengqin new area, which is adjacent to Macao, has established a special anti-corruption office that consists of officials and experts from the local Party commission for discipline inspection and the departments of supervision, public security, taxation, industry and commerce, according to local media reports. The office will learn about preventing and fighting corruption from Hong Kong and Macao, and seek more cooperation with its counterparts in the two special administrative regions in the coming years, reports said. Nansha district, located at the mouth of the Pearl River, plans to work closely with local housing, taxation, and exit and entry departments to allow the public to inquire into the district's Party and government officials' property, travel records and other information in the coming months, according to Mei Heqing, a senior official with the Guangzhou municipal commission for discipline inspection. Mei said in the near future, people will be able to easily go online to find out how many properties local officials own. Shixing county in the northern part of Guangdong has also taken the lead of the city of Shaoguan in requiring all officials at township-level or above, to report their assets. Wang Yuyun, a professor from Guangdong Provincial Party School, said introducing the project demonstrates Guangdong's determination in the battle against corruption. "The project will strengthen the supervision of officials and the effects (of the project) are expected to be worthwhile," Wang said. Han Zhipeng, a local political adviser in Guangzhou, said the project, which places officials under the scrutiny of society and media, further standardizes the code of conduct of Party and government officials and makes government operations more transparent. "But governments at all levels should still try to prevent the centralization of power by senior officials to help keep corruption in check," said Han, a member of the Guangzhou Committee of the Chinese People's Political Consultative Conference. The project is being introduced after five high-ranking officials were placed under investigation in the past six weeks.

Hong Kong*:  Dec 11 2012 

Return to academia a break from politics for HKU's Gabriel Leung (By Patsy Moy) Gabriel Leung won't discuss his stormy years as undersecretary for health, but say he's glad to be back at the University of Hong Kong. Leaping from academia to the government four years ago, Professor Gabriel Leung quickly found himself learning political survival skills as he faced tough job assignments and a series of scandals. Perhaps it's not surprising, then, that when Donald Tsang Yam-kuen's administration ended in June, Leung decided to leave the government and resume his teaching duties at the University of Hong Kong. Now, at the relatively young age of 39, he has taken the helm of the university's department of community medicine, to head a staff of more than 200 academic and administrative employees. In an interview at his office at Cyberport, Leung refused to comment on his four years in the government. Rather, he kept emphasising how much he enjoyed being back in the academic world, and how excited he was about the university's medical-research projects. "Besides a major study to measure the mental and physical health - as well as the social well-being - of Hong Kong families, we are also undertaking many medical research projects on different public-health issues, such as hand, foot and mouth disease, influenza and other infectious illnesses. "Our anti-smoking campaign, which has been run by the school of public health for many years, must continue. All these projects will last for years, and we will keep the momentum going," Leung said. "I have been busy flying here and there these days, to attend academic conferences and meet other medical experts. We need to build a close network with our overseas counterparts in order to improve our exchange of information, for better disease control and medical advancement." Throughout his career, Leung has been a high-flier with an enviable career path. After graduating in 1997, he joined the University of Hong Kong in 1999. Seven years later, he became one of the youngest people to obtain a tenured professorship in the history of the university. His expertise in public-health science made him a natural pick for the government, to help the city prevent outbreaks of infectious diseases and cope with the health burdens of an ageing population. He was invited to become undersecretary for food and health in May 2008. During his time as the right-hand man to then secretary for food and health Dr York Chow Yat-ngok, Leung faced some thorny political tasks, from lobbying for long-awaited health-care-financing reforms, to handling the widespread problem of illegal columbariums. Leung played a key role in handling the aftermath of the Manila hostage killings in August 2010, in which seven Hong Kong holidaymakers and their guide were killed in the Philippine capital and others injured. With his boss on holiday, Leung represented the department and visited the survivors in hospital. Leung attended Legislative Council meetings, where he sometimes came under fierce attack from lawmakers over government policies. His roughest patch in government may have come after he became director of the Chief Executive's Office last year. Leung reportedly came under enormous pressure and faced scathing attacks from the central government's liaison office for failing to manage the conflict-of-interest saga over Leung Chun-ying's involvement a decade earlier in a design competition for the West Kowloon arts hub. At the time, Leung Chun-ying was running neck-and-neck with Henry Tang Ying-yen in the race to be chief executive. In the last few months of Donald Tsang's administration, the medical professor also had to handle a string of serious allegations of misconduct against Tsang. He was accused of accepting gifts from tycoons, including rides on private yachts and jets, and a bargain deal to rent a luxury penthouse in Shenzhen. At least one observer thinks Leung should have remained in the government. Andy Ho On-tat, a former information co-ordinator with the Chief Executive's Office, strongly believes Leung would have made a good health minister, given his strong leadership and competence. "Personally, I believe Gabriel is a suitable candidate to be secretary for health and welfare," Ho said. "He has a high EQ [emotional quotient], a strong network and competence. He is very effective as well, and goes about his duties very efficiently. "Gabriel is also very knowledgable in areas outside the medical field, and is able to blend into new environments easily. Despite the weak government in the final few months [of Tsang's term], Gabriel was able to handle his work very competently. "As friends, we always laughed with him about his becoming the vice chancellor, or at least dean of the medical school, after his return to the university."

Louis Vuitton holds reopening party at Pacific Place (By Vivian Chen) Carmen Kass and Jean-Baptiste Debains - Lisa Selesner and Patina Lin share their joy. Louis Vuitton's boutique in Pacific Place was abuzz with celebrities and socialites, some flying in from overseas, to celebrate the French brand's store reopening last Wednesday after renovations. The starry line-up included supermodel Carmen Kass, as well as the brand's executives and a bevy of local celebrities, such as Qiqi Yam, Lumen Kinoshita, and the newly married socialite couple Veronica and Evgeny Klyucharev. Guests checked out the latest fashion goodies in the newly opened store before heading out for a private dinner where caviar, foie gras and lobster dishes were served. After the gala dinner, many came back to the store for an after party with DJ Brahms & Co. Stealing the spotlight were two celebrity models, both pregnant - Lisa Selesner, and Patina Lin from Taiwan. Selesner and her actor husband, Daniel Wu Yin-cho, are expecting their first in June; they found out just last week that they are having a girl. "I feel very worried for Daniel because he would be very scared for the rest of his life," Selesner joked, looking radiant in a sequinned one-piece dress. "I think when my daughter brings home her first boyfriend, Daniel will be ready with his kung fu moves." The beauty said it was really good to finally announce the news so that people would stop telling her that she was looking fat.

Chef Harlan Goldstein credits his team for gaining Michelin star status (By Vivian Chen) Harlan Goldstein (holding a Michelin guide) with his restaurant team. Both restaurants of celebrated chef Harlan Goldstein were awarded a star in the 2013 Michelin Guide, and the thrilled chef credited the win to his team. "I have trained a very good team who have worked with me for a long time. I also believe that full concentration to keep the standards high is important," he said. "In my restaurants, Harlan Goldstein is always there and not just a name on the door." It's double happiness for Goldstein, who gets a star each for Gold by Harlan Goldstein, which opened in late 2010, and for retro-style steak house Strip House, which opened in May. Speaking of the star status, Goldstein said: "It was totally unexpected ... however, we are very honoured to receive the Michelin star for both restaurants." Goldstein is now eyeing more stars. He's planning to open three more restaurants next year, including one in California Tower in Lan Kwai Fong. He also wants to expand his restaurant territory to Causeway Bay.

 China*:  Dec 11 2012

Shanghai visa plan 'set to boost visitor numbers' (By XU JUNQIAN in Shanghai) Shanghai hopes to cement its burgeoning reputation as a global tourist hotspot by allowing visitors to spend three days in the city without a visa. As a new year commences, citizens from 45 countries will be permitted a 72-hour visa-free stay inside the "administrative area" of Shanghai, the municipal government said on Sunday. The countries include the United States, France, Japan and Australia. The new policy, approved by the State Council, comes four days after Beijing officially announced a similar program, the first city to do so. That will also be introduced on Jan 1. Shanghai already had a program allowing visitors from 32 countries a 48-hour visa-free stay. "The extra 24 hours is of great significance and will boost tourism," said Zhao Huanyan, senior researcher at the Tourism Research Institute under the Shanghai Academy of Social Sciences. Shanghai has a different charm than cities like Beijing or Xi'an. It usually takes a longer time for tourists to be attracted to its beauty, say a night cruise on the Huangpu River, or a banquet and a shopping spree in the crooked alleys, Zhao said. "The extra day will also allow business visitors to the city, the financial center of the country, more time to enjoy a city tour." While the city's outbound travel has been enjoying double-digit growth in recent years, inbound tourism fell last year, but there are signs it is picking up. In 2011, the number of foreign tourists visiting Shanghai reached 8.18 million, a 4 percent drop from the previous year that saw the successful hosting of the 2010 World Expo. But it is expected that in 2012 the number of inbound overseas travelers will rise to 8.25 million, a 3 percent increase. "The new policy will benefit airlines, travel agencies, shopping areas and, importantly, five-star hotels," said Zhao, adding that the city's supply of high-end hotels far outnumbers demand. According to real estate service firm Jones Lang LaSalle, Shanghai tops other Chinese cities with the largest number of four and five-star hotels, and is set to add another 80 to 100 hotels in the next three years. However, during the first nine months of this year, the average price of five-star hotel rooms in the city dropped by 8.54 percent, while the price for an equivalent room in Beijing saw a 10.9 percent jump, according to Zhao. "The new policy is definitely good news for us," said Tang Weiwei, communications manager of Shanghai Pudong Kerry Hotel. "We believe it will result in more guests." Yu Sejie, general manager of Wabco China, a vehicle control system provider based in Brussels, said it will greatly improve the efficiency of global companies like hers, which organizes annual flights for thousands of overseas colleagues and partners every year for conferences. "It usually takes a month for my secretary to go through visa-application procedures to invite our foreign colleagues to our two or three-day workshop," she said. "The new policy will certainly make our work a lot easier." It will also help Shanghai Pudong International Airport become an international transport hub, aviation experts said. China News Service recently cited the Shanghai Municipal Office for Port Service as saying that during the first half of 2011, less than 100,000 of the 10.31 million passengers at the Pudong airport were transit passengers. Globally, the proportion is between 25 to 30 percent. The notice issued by the municipal government said the city's two airports, Shanghai Hongqiao International Airport and Shanghai Pudong International Airport, will set up a special channel for visitors entitled to visa exemption. More details will be released.

Microcredit schemes struggling to aid China's rural poor (By Mandy Zuo) Providing small loans to help reduce poverty has been widely successful globally, but various problems hamper similar moves on the mainland - Zhang Xiulan with her pigs in Yixian county, Hebei. Loans from microcredit provider Project Happiness helped her expand to 300 animals within two years. The first investments by a long-awaited fund dedicated to helping the poor through financial services has helped shed light on the huge hurdles still facing microcredit organisations in rural China. Such non-governmental organisations, which now number about 100 on the mainland, aim to support entrepreneurship and fight poverty by providing small loans to individuals and businesses who would normally have trouble accessing credit. But they have long been starved of funding because Beijing has been reluctant to categorise them as bona fide financial institutions, banning them from receiving deposits. The Inclusive Finance Wholesale Fund, established last year by Beijing-based wealth-management firm CreditEase, was designed to change that. The fund - the first of its kind on the mainland - is modelled after one by Palli Karma-Sahayak Foundation's (PKSF) in Bangladesh, which provides financial assistance to various microcredit organisations. Like the PKSF, the Inclusive fund raises large sums from corporate or individual investors and redistributes the money in smaller portions to the NGOs. So far, it has raised 10 million yuan (HK$12.3 million) in the capital and, on Thursday, delivered the first 5 million yuan to five selected microcredit NGOs. Du Xiaoshan, deputy director of the Chinese Academy of Social Sciences' Rural Development Institute, said China, unlike other developing nations, has failed to support microcredit NGOs and allow them a free hand to help fight poverty. "We have called for government support for so many years and all we can do now is continue urging, in the hope of moving the gods," said Du, who some call "the father of China's microcredit" for pushing the establishment of the mainland's first microcredit NGOs in the 1990s. Professor Liu Lingling, of Tsinghua University's school of economics and management, said government support for microcredit NGOs could play an important role in efforts to improve the financial circumstances of the estimated 128 million currently living in poverty - 13 per cent of the population. "Doubling the income of these poverty-stricken people in remote areas in the next eight years will be a very tough task for the government," Liu said. President Hu Jintao , in his report to the 18th national party congress last month, called for doubling the per capita incomes of all citizens from 2010 levels by 2020. Hu had earlier vowed to guarantee access to those living under the poverty line to adequate food, clothing, education, health care and housing by the end of the decade. Last year, the mainland's poverty line was lifted by 92 per cent from the 2009 standard to the current threshold of US$1 per person per day. Microcredit NGOs emerged in 1994 and initially flourished. At their peak in 2003 there were more than 300, but only a third survived the decade, according to a report by CreditEase. "Because they are not allowed to receive deposits and their start-up funds are usually small, many NGOs have difficulties in expanding and thus cannot meet the demand from their clients," the report said. Du said that many counties listed as poverty-stricken do not have a single functioning microcredit NGO. By the end of last year, nearly 1,700, or roughly four per cent, of all the mainland's townships had no financial institutions at all, according to the CBRC. Since its launch earlier this year, the Inclusive Finance Wholesale Fund has received applications for investment from 18 microcredit NGOs. Five of them have passed assessment and been chosen as the first beneficiaries. Among the beneficiaries is the Xixiang Women's Development Association of Hanzhong , Shaanxi province. Qin Xiuping, its secretary general, said her organisation has been left with no bad debt since it started its microcredit programme in 2006. She said most of the money was lent to woman farmers who raise hogs, chickens or cows. "We charge yearly interest of 11.76 per cent and the borrowers are required to repay the debt in four payments in the year," she said. "For one who has borrowed 1,000 yuan, she usually makes 1,000 yuan after repaying the debt." Besides difficulties in financing, Du said many microcredit NGOs were facing challenges in improving the quality of their staff and their management practices. "Also, whether they can keep their initial goals [of helping the poor] in their minds is important," he said. Zhou Weimin, deputy director of Peking University's Advanced Financial Information Research Centre, said how to make investors trust microcredit NGOs was another challenge. "China does not lack wealthy people with loving hearts and NGOs should remain transparent to win their support," he said. Xu Chao, manager of CreditEase's corporate development department, said many rich people would rather donate money directly to the poor than lend to them and charge interest. "They don't understand that the point of microcredit is to teach the poor to create wealth with their credit," Xu said. Rural credit co-operatives are the main source of microloans for rural residents today. Some banks also offer microloans to students, the jobless and the especially poor in rural areas, but they have reduced their exposure as bad loans and the higher costs of meeting the varied demands of their widely dispersed customer base eroded their confidence. Besides these, there were about 850 "new rural financial organisations", including rural banks, microcredit firms and rural mutual co-operatives, offering similar services as of the end of September, according to statistics from the China Banking Regulatory Commission. But that is far too few to significantly reduce the massive numbers currently living in poverty.

Xinjiang police chief Qi Fang fired after claim he kept twin mistresses (By Zhuang Pinghui) Official probe 'partially proves' claims online Xinjiang officer kept twins from dance troupe, gave them police jobs and abused public funds - A police chief in the western autonomous region of Xinjiang was sacked days after he was accused online of keeping twin sisters from a dancing troupe as mistresses. The removal of Qi Fang as head of the Public Security Bureau in Usu on Saturday came after the nation's new leadership vowed last month to implement tougher anti-graft measures, Xinhua reported, citing an unnamed source from the Tacheng government, which administers Usu. The post on December 3 on news portal had been widely circulated. It said the twins, 31, were employed at the bureau five months after Qi was promoted to police chief in June last year. One of the women was made vice-captain of special operations, while the other was made an assistant police officer in the traffic department. It was unclear whether either had any previous work experience with the police. The post also alleged that Qi was renting a luxury apartment in the city's high-end area, paid for by the bureau. "An initial investigation … found that what internet users claimed was partially true," Tacheng officials told Xinhua. "The investigation is ongoing." Qi is the latest high-ranking official accused online of corruption in the past month to be promptly investigated. On Wednesday, Lanzhou Mayor Yuan Zhanting was accused of owning at least five luxury watches. Gansu disciplinary inspectors told People's Daily that his most expensive watch cost 25,100 yuan (HK$30,900) and the accusation he had worn other luxury watches "lacked substantial evidence". On Friday, the police chief of Taiyuan, Shanxi, was suspended and placed under investigation a day after a video circulated showing his drunken son, who is also a policeman, attacking a colleague after being caught drink-driving, Xinhua reported. The son was reportedly escorted home by a senior officer and traffic police were allegedly told to cover up the incident. However, the officer who was attacked refused to stay silent. Last month, the Shandong Provincial Commission for Discipline Inspection put a deputy head of the local agricultural department under investigation after a note he allegedly wrote to his mistress was leaked online. It said Shan Zengde would divorce his wife.

Hong Kong*:  Dec 10 2012 

California Memory scores back-to-back wins in Hong Kong Cup (By Noel Prentice) Jockey Chadwick praises 'great little horse' after showing stunning turn of foot - California Memory wins the Hong Kong Cup with something in hand. Jockey Matthew Chadwick pointed to California Memory as he crossed the finishing line in today’s Longines HK$22 million Hong Kong Cup, giving the horse all the credit as he scored back-to-back wins in the world’s richest 2,000m turf race. Chadwick and California Memory made brilliant use of gate one – in a carbon copy of last year – to box seat and then blow his rivals away in the straight. His margin over Giofra flattered the French filly, while Australian Alcopop grabbed third. “A great little horse,” Chadwick said as he basked in the victory. “It’s all about him. He’s been great to me. “He put them to bed in three or four strides. It’s unbelievable – the best feeling in the world.” Trainer Tony Cruz was arguably the proudest person among the 64,000 plus crowd, winning the biggest race on a day dubbed the “turf world championship” by the Hong Kong Jockey Club. “It’s a great honour, a privilege to win this race. It’s the biggest race in Hong Kong and the biggest raceday.” Cruz was super confident after the little grey wonder drew the same ace barrier and told Chadwick to “stay cool and be patient”. ”Last year he tried to come out on the turn and they banged him back in.” Despite dealing a hiding to some of the best middle-distance horses in the world, Cruz said he would resist travelling the six-year-old overseas again. “He gets injuries easily and gets sore. That’s why we have to medicate him all the time. We have solved the problems and that’s why he is performing so well this year. “It’s doubtful I will take him places. He performs better in Hong Kong and we have a sure thing going on here,” Cruz said.

Deterrents to having a family need fixing (By SCMP Editorial) Who would have thought Hong Kong would be one of the world's top 10 places to be born in the coming year? Bewildering as it sounds, that is the international community's latest entry in our list of accolades. We ranked 10th among 80 places examined in a study conducted by the Economist Intelligence Unit, a sister company of The Economist. The survey looked at "opportunities for a healthy, safe and progressive life in the years ahead". The ranking probably baffles Hongkongers. Whether couples want to raise a family is affected by a range of personal and social factors, including age, wealth, education, and the material quality of life they aspire to. The outlook for both the economy and the political situation are also important. In Hong Kong, the socio-economic environment does not stand out as particularly appealing - high property prices, cramped housing, persistent air pollution and a pressure-cooker lifestyle. These characteristics are more likely to deter rather than encourage having a family. Even though there have been positive signs recently, such as a debate on standard working hours and a plan for paid paternity leave, many public policies fail miserably in the family-friendly test. It is difficult to believe that people's confidence about having children will rise as a result of the study's findings. Oddly enough, our neighbours across the border have long realised that Hong Kong is a good place for a child to begin their life. They take advantage of the Basic Law to obtain permanent residency for their babies. The phenomena has begun to be curbed only recently, due to growing fears that mainlanders will burden our education and welfare systems. The truth is that our fertility rate remains one of the world's lowest, despite a recent rebound in the birth rate from seven per 1,000 people in 2003 to 12.6 in 2010. The recent decision to bar mainlanders from giving birth in the city has effectively killed what could have been one way to slow down the ageing of the population. By 2041, half the projected population of 8.47 million will be over the age of 50. Without better policies, that demographic trend will only aggravate social and economic problems, and undermine the sustainability of Hong Kong's development. Couples thinking about having children need to be confident about the future. The government has a role to play in ensuring that they are.

Old age allowance approval 'reflects public opinion' (By Johnny Tam) Chairman of the Executive Committee on the Community Care Fund Dr Law Chi-kwong. Chairman of the Executive Committee on the Community Care Fund Dr Law Chi-kwong said the sudden approval of the old age allowance by the Finance Committee of the Legislative Council reflected public opinion. “Many of the legislators did not have time to read the document. They did not even know what questions to ask,” Law said in a radio programme on Sunday morning. “It was a bit of ‘hard luck’ but [the decision] followed the wishes of the society.” Law added that although some legislators thought that the HK$2,200-a-month allowance asset cap was not ideal, the majority thought that the policy should be approved before further review. “If we only do things when they are perfect, the government won’t be able to do anything,” he said. Law said that discussion regarding the establishment of a long-term universal pension scheme needed to take place this year. “The number of people aged over 70 will increase drastically over the next five years and government expenditure on social welfare and medical services for the elderly will increase by up to 10 per cent,” Law said. “If we do nothing, the consequences could be very serious.” He added that a universal pension was one of the main issues facing the Poverty Commission.

Pro-euthanasia quadriplegic Ah Bun dies aged 43 (By Emily Tsang and Ng Kang-chung) Author of 'I Want Euthanasia' Tang Siu-pun (Ah Bun) visits the Hong Kong Book Fair at the HKCEC in 2007. Tang Siu-pun, who was also known as Ah Bun, in his flat in Sham Shui Po in 2010. Tang Siu-pun, whose high-profile appeal for euthanasia to be legalised in 2003 raised public awareness of the subject, has died at the age of 43. The quadriplegic, popularly known by locals as Ah Bun, died on Sunday morning of septicaemia, or blood poisoning, at Caritas Medical Centre, where he was admitted on Friday, according to reports. Hospital Authority chairman Anthony Wu Ting-yuk praised Tang for his courage and offered his condolences to Tang’s family. “Hong Kong people should learn from his positive attitude and we are proud of him.” Tang became paralysed from the neck down in 1991 after injuring his spine in a gymnastics accident. In 2003, he asked former chief executive Tung Chee-hwa for euthanasia to be legalised so he could end his life voluntarily. The request was rejected but his case raised public awareness of euthanasia and the lives of terminally ill patients. In 2007, he wrote a book I Want Euthanasia, in which he argued for the right to die in peace and with dignity. Two years ago, he left Queen Mary Hospital and moved into a flat in Sham Shui Po. He lived on social security, donations and income from a column he wrote for a newspaper.

 China*:  Dec 10 2012

China's Nov. inflation rises to 2 pct (Xinhua) A citizen buys fruit at a market in Yinchuan, capital of northwest China's Ningxia Hui Autonomous Region, Dec. 5, 2012. China's consumer price index (CPI), a main gauge of inflation, grew 2 percent year on year in November, the National Bureau of Statistics announced Sunday. The inflation rate increased from a 33-month low of 1.7 percent in October as food prices increased. 

Hong Kong*:  Dec 9 2012 

On December 8 2012 - Li Wei, Hong Kong's Wen Wei Po frontline reporters waiting at the Lotus Hill, Shenzhen China took the opportunity to ask China President Xi Jinping, have anything to say to the people of Hong Kong, Xi Jinping said: "Hong Kong will be prosperity!" 

等候在蓮花山的香港文匯報前線記者 李薇,趁機提問習近平,有什麼話要對香港人民說,習近平回答稱:「香港一定會繁榮昌盛!」 

Hong Kong exports to double next year (By Charlotte So) Vibrant mainland Chinese and US economies will fuel trade through the city, with growth in value outpacing volume, industry body says - As a transshipment hub for products produced across the border, Hong Kong is a major export city. The Hong Kong Trade Development Council says the city's export growth will double next year from this year. In terms of export value, growth is expected to be 4 per cent on the back of more vibrant economic growth in mainland China and a stable economy in the United States, up from a 2 per cent rise this year. Volume is expected to increase 1 per cent, after a 1 per cent decline this year. The growth in value would outpace volume as steeper production costs in mainland factories were being reflected in higher prices, Edward Leung, HKTDC's director of research, said yesterday. The HKTDC export index, which gauges exporters' confidence in the overall market, has dropped for two consecutive quarters to 31.6 points in the fourth quarter this year. The index has stayed below the threshold of 50 for the whole year, reflecting concern over the European debt crisis and the slowdown in the mainland's economy. Above 50 indicates positive sentiment. Some good news lightened up the dull export market towards the year end. Retail sales over the US Thanksgiving weekend unexpectedly grew 13 per cent from a year earlier, and helped boost demand from the US in the fourth quarter. Shipments of high-technology products have surged since September, mainly due to the demand for Apple and Samsung smartphones. Because Hong Kong is a transshipment hub for products produced across the border, every 1 per cent increase in cargo demand translated into 2 per cent cargo volume growth in Hong Kong, said Leung. Hong Kong exporters' confidence in the US market edged up to 40.8 points in the fourth quarter from 40.2 points in the previous quarter. It was the only one of the four major markets to show an increase in confidence. Europe, mainland China and Japan's markets remained soft. Still, Leung cautioned that there were some uncertainties on the horizon, including the prolonged euro-zone woes and the sour relationship between Japan and China. "Since the EU is not determined to resolve the problem, the debt crisis will linger," he said. Exports to Europe, which account for 10 per cent of total export value from Hong Kong, fell 9 per cent in the first 10 months of this year from a year earlier. "About 10 per cent of the trade between [mainland] China and Japan goes through Hong Kong," Leung said. Exports to mainland China from Japan dropped 12 per cent in October from a year earlier, as the demand for cars and machinery was hit by anti-Japanese sentiment.

Hong Kong Earns Michelin Two-Star Boost (By Te-Ping Chen) Michelin released its 2013 Hong Kong and Macau listings in Hong Kong on Dec. 4. Hong Kong’s firmament of Michelin stars got more crowded this week, as the French company announced its 2013 gourmet rankings in the city on Tuesday. Several one-star establishments moved up in the rankings, adding a star each to their collection, including Cantonese restaurants Ah Yat Harbour View, Summer Palace and Tin Lung Heen. Meanwhile, two new Japanese restaurants, Sushi Yoshitake and Ryu Gin, made their first appearance in the guide, with two stars each. It wasn’t all good news, however. Some two-star restaurants lost a star, including Pierre at the Mandarin Oriental hotel and the Mongkok branch of acclaimed Cantonese chain Lei Garden. The tally of three-star restaurants — there are four in Hong Kong and one in Macau — remained unchanged. Since Michelin began publishing its Hong Kong and Macau guide in 2009, Hong Kong’s dining scene has changed dramatically, said Michelin Guides international director Michael Ellis. The guide is now considerably fatter, he noted, with the number of Hong Kong restaurant listings nearly doubling in the past five years. What’s more, 40% of the guide’s 2013 edition has changed since last year alone. By contrast, the content of most other Michelin guides tends to be much more stable – in Japan, for instance, typically only 5%-10% of a guide’s content will change in a given year. “The rhythm of openings and closings here in Hong Kong are amazing,” said Mr. Ellis. “It’s a real challenge for us to stay on top of what’s going on, but it’s also very exciting.” There are 290 restaurants in the 2013 Hong Kong and Macau guide, up from 272 last year. While Michelin has at times faced criticism for appearing to have a bias toward French and Japanese cuisine, about a fifth of its current listings are so-called “simple shops,” ranging from congee stalls to humble noodle outposts. That percentage is consistent with last year’s release. To compile its listings, Michelin relies on a team of local Hong Kong residents who anonymously visit eateries several times before their selection. Among the more colorful listings featured in the 2013 guide are the multiple shops specializing in snake soup, a cold-weather delicacy, and a Cantonese eatery that cooks more than 40,000 geese a year. While Michelin guides are well known as arbiters of haute cuisine, they are in fact produced by a French tire company that’s well known for its jovial beaming symbol, the Michelin Man—a figure built out of white tires—whose billowy white body is often seen gracing the exterior of auto shops around the world. There are currently Michelin guides covering 23 countries. So far in Asia, though, only Japan, Hong Kong and Macau have guides, while cities such as Singapore and Shanghai have been left off Michelin’s culinary map. Mr. Ellis said that a new guide for Hiroshima is being planned for release next year, but declined to specify where else in Asia Michelin will position itself next. The company is still very much interested in the region for many reasons, he said—not just for its culinary prospects. “Our main activity is, of course, making tires,” he said.

Engineering firm and developer join Hong Kong listing rush (By Ray Chan) A private engineering company and a small property developer plan to raise up to a combined US$350 million in initial public offerings in Hong Kong as early as next week, according to people familiar with the situation. In a bid to join the listing rush before the Christmas holiday, Wison Group, a Shanghai-based engineering company specialising in petrochemical and oil refineries, plans to raise about US$200 million, following revived demand for new shares after a solid first-day performance by the People's Insurance Co (Group) of China. The country's largest non-life insurer gained 6.9 per cent on its debut yesterday. "Wison is going to kick off the Hong Kong roadshow and take orders from investors next Tuesday. The new shares are expected to begin trading before the Christmas holiday," said two people familiar with the deal. They added that the schedule of the listing remained tentative. Wison's move came after AAG Energy, a Beijing-based extractor of coal bed methane, scrapped its US$200 flotation plan on Wednesday after finishing a week-long marketing campaign. According to three fund managers, natural resources companies are losing favour because their valuations are subject to commodity market volatilities and exploration costs are relatively high and unstable. "The commodities boom in the previous several years has entered a slowdown phase, where demand for raw materials and energy is cooling amid lingering global macroeconomic weakness," one fund manager said. Besides Wison, Golden Wheel, a Nanjing-based real estate developer, aims to raise up to US$150 million in an initial share sale. Although no schedule was given, the company, founded by an Indonesian Chinese, is likely to hit the road for marketing late next week, according to market sources. "Unlike most small credit-strapped developers, Golden Wheel enjoys a low gearing ratio of just 15 per cent and plans to raise capital to finance its investment property and residential projects on top of subway stations in Nanjing," said two people familiar with the situation. They declined to be named because the deal is private. Golden Wheel could launch a roadshow next Friday and announce the pricing of its shares on December 19.

Public consultation begins on unfair sales tactics (By Amy Nip) 'Half-off' items at supermarkets, meal vouchers that expire quickly - the public is being asked to help define retail cheating as part of new law - Shoppers will benefit from a public consultation that will help define sales tactics that are misleading or induce them to make purchases. This follows the passage of a law earlier this year to prosecute people who use unfair trade practices. Terms such as "sale" or "reduced price" should be used with caution, according to the consultation paper put out by the Customs and Excise Department and Communications Authority - the future enforcers of the amended Trade Descriptions Ordinance. A typical scenario laid out under the proposed guidelines involves a supermarket shopper seeing two price tags on display - the original price and a discounted one. An experienced consumer distrusts the "discount", knowing the "original" price could have been marked up a week ago. But people who shop less frequently may think it is a bargain. "If the presentation of prices makes people think it is a big bargain that turns out to be false, such behaviour could constitute a misleading omission," Customs and Excise Commissioner Clement Cheung Wan-ching said. A price should be quoted as original only if it has been applied to goods or services for at least seven days in a row, the paper says. The document lists examples of the types of action that will be deemed illegal or unscrupulous from the second quarter next year. If a beauty centre promotes a stem-cell transfusion service performed by a doctor without advising the client of the risks before he pays, the centre may be guilty of a misleading omission. Businesses that state their prices or amount of goods or services in unreadable small print may also be found liable. A trader that accepts advance payment with no intention or ability to supply a product within a reasonable time may be found to have wrongfully accepted such payment. For instance, a beauty salon should not sell a service plan that it can provide only after six months, nor can a restaurant sell an excessive number of discount vouchers to diners if they cannot be redeemed within the validity period. Harassment or coercion using abusive language would fall under "aggressive commercial practices", which are to be banned. But service providers say the guidelines are too vague. Nelson Ip Sai-hung, founding chairman of the Federation of Beauty Industry, said the sections on misleading omissions and aggressive practices were ambiguously worded. "We need a clear list of points about what can be done and what can't be done, or operators will be unable to avoid breaking the law." He pointed to a situation where a patron at a beauty centre might be receiving a treatment while not fully dressed and is pitched another service. The government might classify that as an aggressive commercial practice. "If promoting packages to a naked customer is aggressive, how about to one in underwear?"

Elderly allowance bypasses filibuster (By Colleen Lee and Ng Kang-chung) Dramatic twist in Legco sees funding request included in budget, meaning monthly payment of HK$2,200 may be handed out from April - About 290,000 elderly residents in need may receive a new monthly allowance of HK$2,200 from April after the administration executed what critics said was a carefully devised tactic in Legco that cut short a filibuster. The government's manoeuvre last night ended the Finance Committee's discussion, totalling 29 hours across seven meetings since October, on a planned old-age living allowance for people aged 65 and above who passed a means test. The twist came when the government withdrew its HK$2.58 billion funding request for the allowance, which will now be included in the budget in February. Traditionally, Legco approves the budget proposal as a whole instead of vetoing specific items. Filibustering lawmaker "Long Hair" Leung Kwok-hung, of the League of Social Democrats, immediately vowed to launch another filibuster during scrutiny of the 2013-14 budget. While the manoeuvre killed Leung's current filibuster, it raises concerns on whether the entire budget can be voted down, since the opposition camp objects to the means test. At yesterday's meeting, the government withdrew its allowance funding request and proceeded only with a request for about HK$23.26 million to create 90 posts in the Social Welfare Department to prepare for the launch of the allowance as early as April. The committee endorsed that request by a vote of 24 to 3. Three Liberals abstained. Secretary for Labour and Welfare Matthew Cheung Kin-chung said approval for those posts already meant eligible residents could receive the money as soon as April. Payments would be backdated to December 1. Opposition legislators were riled by the sudden change of events, accusing the government of trying to create confusion by mixing up its funding requests for the scheme and the job creation. A shocked Leung, who had filibustered for weeks, slammed a plate on his bench, injuring his hand. He railed at committee chairman Tommy Cheung Yu-yan: "Even pro-establishment legislators did not know which item was put to the vote." Cheung said he had followed procedures by ruling that the allowance request had been amended by the government to such a large extent that it should be considered as a new proposal. The ruling effectively invalidated Leung's 302 pending motions due to be debated yesterday. Leung blamed the Legco secretariat for not returning him the documents for those motions, which would have alerted him to the change of request so he could file fresh motions, on the job creation proposal. "The retribution is that I will filibuster in the scrutiny of the next budget," he said. Matthew Cheung denied the government was playing tricks. He said: "We did not mount an ambush. We've been very transparent and have been following the necessary procedures." Pan-democrats want to ease or scrap the means test requiring applicants to have an income of less than HK$6,660 a month and assets of below HK$186,000. Currently, only those aged 65 to 69 have to go through a means test to receive HK$1,090 a month.

 China*:  Dec 9 2012

Chateau Lafite Rothschild unfazed by slowdown in demand in China (By Amy Nip) Michel Negrier, of Domaines Barons de Rothschild, says the company has more to offer than Chateau Lafite. If you think the producer of the world's most sought after Bordeaux is worried about a slowdown in sales in China, think again. With the craze for Chateau Lafite Rothschild having peaked two years ago, now is the time to reach out to Chinese drinkers and build a sustainable relationship, says Michel Negrier, export director of the wine's producer, Domaines Barons de Rothschild (DBR). The first thing Negrier wants people to know is that the family-owned private company has much more to offer than Lafite - among the first names that springs to mind for beginners just dipping into the world of fine wines, including many of China's newly rich and powerful. After three years during which they helped bid up the price of Chateau Lafite to stratospheric levels at auctions in Hong Kong, and quickly bought up city retailers' stocks of the wine, buyers finally realised prices could go no higher. The 2008 vintage was released at £1,950 per 12-bottle case in bond, and peaked at £14,043 per case (HK$172,000 at the time) in January 2011, according to Decanter magazine. This past January a case was priced at £8,108, according to The Drinks Business. Although Burgundy star Domaine de la Romanee-Conti stole the limelight in auctions over the past year, Negrier believes the name Lafite still speaks for quality. And China, including Hong Kong, was still the top export destination of DBR in Asia, he said. At a stopover in Hong Kong last week at the end of a tour of China, he was keen to stress the company produced a lot more than Chateau Lafite. Lining up five glasses before him, he gently holds one up and says: "This is an introvert." The wine, a 2010 vintage of Legende Pauillac, gives off an aroma of tobacco at the first encounter. Its inner self only unfolds when you give it more time - that is, through more decanting or a few more years in a cellar. In comparison, a Chateau d'Aussieres of the same year is much more expressive - it blossoms with vanilla and ripe cherry shortly after it is uncorked. There is no definite answer as to which wine is better - each wine drinker has a favourite of their own, the result of numerous personal trials. "Lafite is only the top of a pyramid," Negrier said, adding that the company offered a mix of brands all over the world, such as Vina Los Vascos in Chile, Caro in Argentina and Legende Bordeaux. All have different price ranges and characters. Now the company is working to develop its first vineyard on the mainland - in Penglai, Shandong province - with the Citic group. The first vines were planted last year, and it will take a few years before the first wines are ready. "The potential for making good wine in China lies in its soil. The winery is designed to produce high-level wine," he said, adding that he saw potential in developing vineyards further inland, away from the populated coast. He has some advice for wine lovers: take things slowly. Appreciation of wine is very much like getting to know a friend, he says, and shouldn't be rushed like a speed date. Also, says Negrier, make sure you are getting to know the real thing. Counterfeiting of Lafite in China has been a big problem for the brand. "We have been aware of the problem on the mainland for the past six years," said Negrier, adding that the situation was improving.

Xi Jinping adopts casual, open air on visit to Shenzhen (By He Huifeng) All smiles and charm, president-to-be breaks with past protocol and displays common touch on walkabout - but most journalists excluded - About 200 Shenzhen residents had an unexpectedly close encounter with Xi Jinping yesterday as the new Communist Party chief turned on the charm during the second day of his southern tour. Xi, the president-to-be, shook hands with several people who had gathered in advance of his 10am visit to Lotus Hill, and even answered questions from a pair of Hong Kong journalists in the crowd. Asked what message he had for Hongkongers, Xi said: "Hong Kong will definitely stay thriving and prosperous." Xi, 59, is known for his casual, approachable style, but previous party general secretaries have preferred more choreographed public appearances. "The party's decision [to implement the] open-door policy and reform is correct and we have to continue unswervingly. … We also should take new ground," he told his entourage. The visit to Lotus Hill Park, which features a bronze statue of late paramount leader Deng Xiaoping, appeared intended to emphasise the new leader's commitment to the economic "opening up" policies that helped make Shenzhen the booming metropolis it is today. Xi is following in the footsteps of Deng on his famous 1992 southern tour. He has ordered that the visit he kept low-key, banning red carpets and elaborate banquets. Security also seemed less restrictive. Before Xi's arrival, police told the people at the park that they could stay. Normally, only a carefully selected few are allowed to observe such events. Most reporters, however, were shuffled out. The general secretary, who is on his first trip beyond Beijing since his elevation to the role last month, arrived with Guangdong party secretary Wang Yang, provincial Governor Zhu Xiaodan and several retired party officials who had been with Deng on his earlier trip. In a five-minute ceremony paying tribute to Deng, Xi laid flowers at his statue. Then Xi and his entourage bowed three times. Xi also planted a tree. The new leader appeared relaxed and willing to interact with onlookers who scrambled to get close to him, shaking hands with several of them. Wang also signalled a plain-clothes policeman not to stop a Sunday Morning Post reporter from taking photos. "He was very charming, but I never expected to have the honour of shaking hands with the chairman," said a tourist from Sichuan who happened to be on a hike in the park. As his van prepared to leave, Xi opened the window and waved to the crowd, another break from past practice. The gesture drew applause. Earlier, Xi visited Yumin village in Luohu district, a now-wealthy symbol of Deng's open-door policy. A Shenzhen source said Xi also went to visit his mother, who is living in Shenzhen at an unknown address. Xi left for Zhuhai and Shunde yesterday afternoon and is expected to make another public appearance in Guangzhou today. While security was less visible in Shenzhen, road users in Zhuhai complained on Sina Weibo of route closures yesterday afternoon. Although his trip has been covered by Hong Kong and overseas media, neither Xinhua nor CCTV has reported on it yet.

China wine plays: oversaturation? (by Doug Young) China's fast-growing wine sector looks set for a period of stiff competition and consolidation over the next 2-3 years as too much investment flows into the sector. Two news bits from the wine sector are making headlines, shining a spotlight on this hot industry whose fast growth is being fueled by millions of new middle class Chinese who are willing to pay big money for premium products like wine and coffee. But these latest two deals also reflect intensifying competition in a sector that could easily become the next bloody battlefield for over-eager Chinese start-ups, resulting in big losses and ultimately an ugly consolidation. This kind of "me too" rush into hot new sectors is all too common for Chinese companies, and usually results in cycles of huge investment, followed by an explosion in companies in the space. That leads to rampant competition, followed by extensive closures and consolidation before the sector enters a more sustainable phase. Unfortunately, these cycles can often take up to a decade to reach their conclusion due to the big amount of investment capital in the market, making it difficult for investors to identify the best managed players with the greatest chances for longer term success. All of that said, let's take a look at the latest news involving two young wine sellers, one called Jiumei and the other called Jiuxian. We'll start with Jiumei, which has announced it has received a new round of venture funding although it isn't giving any details on the investors or actual amount of funds raised. Media reported back in September that Jiumei had raised a new round of funding totaling around 100 million yuan, or about US$16 million, and I suspect this new announcement could be the same deal. Despite the relatively small amount, I previously said this funding looked like a positive sign because it happened at all. By comparison, new funding has virtually disappeared for other companies in the overheated e-commerce sector, which has been plagued by rampant competition and losses by most players for more than a year. So the fact that an online wine-selling company could still get funding seemed like a positive sign. Meantime, media are also reporting that Jiuxian will notch more than 300 per cent revenue growth this year as demand for wine grows. But perhaps more significantly, the company's CEO also said Jiuxian wouldn't meet its target of generating 2 billion yuan in sales this year. The executive didn't say just how short Jiuxian would fall of its target, but the fact that he was discussing the subject at all probably indicates the company's revenue will fall well short of the figure, perhaps reaching just 1.5 billion yuan or less. His public discussion of the shortfall also probably reflects the growing competition in a space that has seen competition rapidly heat up from both start-ups and other more established companies entering the field over the last two years. All of those companies are chasing a market that grew some 60 per cent last year and should post similar growth in 2012, fueled both by imports and increasingly high quality wines produced in China. Over the last year alone, major e-commerce players including Jingdong Mall and (Shenzhen: 002024) have both announced new wine-selling initiatives; and Bright Food, one of China's leading food groups, also made headlines earlier this year with its purchase of a French winemaker. I've been in China long enough to know that all of this activity means that price wars and rampant competition are probably already starting to hit this up-and-coming industry. That means start-ups that were hoping to quickly become profitable may soon be facing a cash crunch if investors lose their appetite for the sector. We could still see 1 or 2 companies make an IPO in the next year before the situation becomes too overheated, perhaps providing a good chance for investors to buy into this promising sector. But the potential for any big returns might have to wait at least 2-3 years until this current wave of investment euphoria passes and a more sustainable situation takes shape. Bottom line: China's fast-growing wine sector looks set for a period of stiff competition and consolidation over the next 2-3 years as too much investment flows into the sector.

Canada approves CNOOC's Nexen takeover (By Bloomberg and Associated Press) Canadian Prime Minister Stephen Harper announces his governrment's approval of the takeover of the Canadian oil-sands firm Nexen by China's state-owned oil and gas producer CNOOC on Friday. Canadian Prime Minister Stephen Harper approved CNOOC’s US$15.1 billion (HK$117 billion) takeover of Nexen and Petroliam Nasional’s C$5.2 billion (HK$40.7 billion) takeover of Progress Energy Resources. The deal by Beijing-based CNOOC is the largest ever takeover by a Chinese company, according to data compiled by Bloomberg. It gives the state-owned company a stake in Canada’s largest oil-sands project and the biggest position in the Buzzard oil field in the UK North Sea. China is securing global reserves to feed demand in the world’s second-largest economy, which accounted for half of the world’s oil consumption growth last year, according to the US Energy Information Administration. Harper, who has touted Canada as an emerging “energy superpower,” has called it a national priority to diversify energy exports, sending less to the US and more to Asia. “It’s important to have clarity on this, not just for Canada’s foreign relations with certain super-power nations but also to ensure timely development of these very important resources,” said Robert G. Gill, portfolio manager at Toronto-based Aston Hill Financial, which has more than C$6 billion assets under management. The two bids tested Harper’s ability to balance the need to bolster economic relations with Asian economies without letting them gain too much influence over the world’s third-largest pool of oil reserves. While allowing the deals, he also said Canada won’t approve state-owned companies taking controlling interests in any more oil-sands projects, except in “exceptional circumstances.” “These were difficult decisions” that reflect “the broad views of Canadians,” Harper said. Wang Yilin, chairman of China National Offshore Oil Company said on Saturday the approval was recognition of the acquisition’s long-term economic benefits for Calgary, Alberta and Canada. “I express my appreciation for Canada’s welcome of our investment,” Wang said in a statement. Nexen is headquartered in Calgary in Canada’s Alberta province and is to remain there after CNOOC’s takeover as its head office for north and central American operations. CNOOC chief executive Li Fanrong said the takeover would bring opportunities for Nexen employees, partners and CNOOC. “We are delighted that the Ministry of Industry has concluded that this transaction represents a ‘net benefit’ to Canada,” he said. China’s Ministry of Commerce could not be reached for comment on Saturday. “From a perspective of industry this is the perfect solution,” said John Stephenson, who helps manage C$2.7 billion at First Asset Management in a phone interview from Toronto. “You get the benefit of patient capital servicing value for investors and you don’t give up control, which is really the issue most Canadians feel passionately about.” Shares of Calgary-based Nexen rallied 15 per cent to US$26.94 as of 6:19pm New York time in trading after US exchanges closed, 2 per cent below Cnooc’s US$27.50 offer. The Canadian dollar strengthened, rising 0.3 per cent to 98.84 cents per US dollar as the announcements were made. The CNOOC-Nexen transaction is the biggest in Canada since Calgary-based Suncor Energy bought Petro-Canada in August 2009 for about US$18 billion. Through its C$2.1 billion acquisition of Opti Canada last year, CNOOC already owns 35 per cent of the Long Lake oil-sands project operated by Nexen. It would gain Nexen’s 20 per cent interest in the Usan offshore Nigerian project operated by a unit of Total. Progress shares, which surged 74 per cent on the day the first bid by Petronas was announced June 28, closed at C$19.35 in Toronto. Petronas offered C$22 a share. “We’re obviously quite pleased with the decision,” said Michael Culbert, chief executive officer of Calgary-based Progress, by phone. “We know that this has been a difficult decision to make and we don’t take that lightly.” An e-mail seeking comment sent to Peter Hunt, a spokesman for CNOOC in Calgary, was not immediately returned. Patti Lewis, a Nexen spokeswoman in Calgary, did not immediately return phone and e-mail messages seeking comment. Azman Ibrahim, a spokesman for Petronas, did not immediately return an e-mail message seeking comment and could not be reached before regular business hours in Kuala Lumpur. The acquisition of Progress by Petronas gives the Malaysian state-owned company gas reserves to build a liquefied natural gas export facility along the British Columbia coast that would cost C$9 billion to C$11 billion, the companies said this week. Petronas has the world’s largest LNG-producing site in Sarawak, Malaysia, according to its website, and also operates the world’s largest LNG carrier fleet. The Canadian decisions came on the same day Glencore International’s C$6.1 billion takeover of Viterra, Canada’s largest grain handler, received Chinese regulatory approval. Investment by Chinese state-owned companies in Canada’s energy industry has become a contentious issue, and the deals represent the end of a trend of state-owned companies buying Canadian oil-sands firms, not the beginning, Harper said. Harper said further “foreign state control of oil sands development” would no longer be a net benefit to Canada, which relies on exports for one-third of economic output and counts on energy products for almost one-quarter of those shipments. Fifty-eight per cent of Canadians wanted the government to block the Nexen takeover, according to an online poll of 1,000 people taken October 10 to October 11 by Angus Reid Public Opinion. The opposition New Democratic Party called the CNOOC approval “irresponsible” because most Canadians oppose the purchase. “This is a farce,” Peter Julian, the NDP’s spokesman on natural resources, said in a statement. “While Conservatives admit that under the new rules this transaction is not a net benefit to Canadians, they have approved it anyway.” Natural Resources Minister Joe Oliver has said the country’s biggest resource projects will require nearly C$650 billion of investment to develop over the next decade. Harper said Canada would raise the threshold for foreign-takeover reviews by private investors to C$1 billion in enterprise value as earlier planned, while the existing threshold of C$330 million in asset value will continue to apply to state-owned enterprises. Industry Minister Christian Paradis would also have the ability to extend the review period to take national security reviews into account, Harper said. Foreign state-owned businesses would still be welcome to acquire minority stakes and enter into joint ventures with Canadian businesses, Harper said. CNOOC, which said it received approval from the European Union today on the deal, has not said whether US authorities have approved its takeover of Nexen’s assets in the US Gulf of Mexico, where the Calgary company gets eight per cent of its production. Natalie Earnest, a spokeswoman at the US Department of the Treasury that oversees the Committee on Foreign Investment in the US, declined to comment in an e-mail, citing confidentiality rules. CNOOC had already made several commitments to Canada to win support for the Nexen sale. These include listing its shares on the Toronto Stock Exchange, establishing Calgary as its base for North and Central America and maintaining Nexen’s employment levels and capital spending programme. CNOOC accepted management and employment conditions set by the Canadian government, two people familiar with the matter said November 20. The approval of the Petronas bid came after Paradis blocked the bid on October 19 and gave the companies 30 days to make additional concessions.

Passenger-vehicle sales in China hit a record last month as a series of positive indicators boosted the market. A total of 1.419 million cars, sports utility vehicles, multi-purpose vehicles and minivans were sold in November, a 13 percent year-on-year increase, according to data from the China Passenger Car Association on Friday. The number showed that total sales for the first 11 months jumped 6.6 percent year-on-year to 13.12 million, paving the way for an increase of at least 5 percent in passenger-vehicle sales this year. "Many new models launched at the just-finished Guangzhou Auto Show as well as a fuel price cut greatly supported the market performance," said Rao Da, secretary-general of the association. Rao added that the 18th National Congress of the Communist Party of China last month had also helped boost confidence in the sector. Cui Dongshu, deputy secretary-general of the association, said the Guangzhou Auto Show last month helped passenger-vehicle sales surge more than 20 percent in the last week of November. "More impressively, China's homegrown brands recovered in the domestic market as their share of the passenger-car sector reached 35.1 percent, the highest in 20 years," Rao said. Cui also said a rebound in sales of Japanese cars helped the domestic vehicle market. Sales of Japanese products have been hit by the row between China and Japan over the Diaoyu Islands. Japanese automakers, which have dominated the Guangdong market and launched heavy sales promotions to help the rebound, saw sales boom by more than 50 percent from October, Cui said. Toyota Motor Corp said on Monday its new-car sales in China fell 22.1 percent in November year-on-year to 63,800, but that was an improvement from a 44.1 percent decline in October and a 48.9 percent drop in September.

Mo Yan gives Nobel Prize speech (Xinhua) Chinese writer Mo Yan, winner of the 2012 Nobel Prize in Literature, described himself as a storyteller in a lecture at the Swedish Academy on Friday afternoon. It is telling stories that earned him the prize, the Nobel laureate said. The 2012 Nobel Literature Prize laureate Mo Yan of China speaks during the traditional Nobel lecture at the Royal Swedish Academy December 7, 2012. In the lecture titled "Storytellers," he talked about how he started story telling as a child and shared with the listeners his memory of his childhood and mother, "the person who is most on my mind at this moment." "As repayment for mother's kindness and a way to demonstrate my memory, I'd retell the stories for her in vivid detail," said Mo Yan. He also recalled memories of being surrounded by adults instead of children of his age after he dropped out of school, which "created a powerful reality" in his mind and later became a part of his own fiction. By introducing the background of his most famous works such as "Frog," "Life and Death are Wearing Me Out," "Big Breasts and Wide Hips," "The Garlic Ballads", "Sandalwood Death" and "The Transparent Carrot," Mo Yan shared the inspiration behind the stories and the way they were produced. "Many interesting things have happened to me in the wake of winning the prize, and they have convinced me that truth and justice are alive and well," said Mo Yan. "So I will continue telling my stories in the days to come," he said at the end of his lecture. Mo Yan, who arrived in Sweden on Thursday morning, will attend the Nobel Prize Award Ceremony and the Nobel Banquet next Monday.

Canada OKs CNOOC's $15b purchase of Nexen (By Joseph Boris in New York) Canadian regulators on Friday approved China National Offshore Oil Corp's $15.1 billion purchase of Calgary-based Nexen Inc, which explores western Canada's oil-rich tar sands and operates production rigs in the North Sea, the Gulf of Mexico and Nigerian waters. CNOOC, China's biggest offshore oil producer, announced the planned acquisition in July, and Nexen shareholders overwhelmingly approved it two months later. It is believed to be the most valuable acquisition of a foreign company by a Chinese enterprise. 

Hong Kong*:  Dec 8 2012 

Hong Kong's waste-charges plan get broad support, government poll shows (By Cheung Chi-fai) Environmental Protection Department poll shows 60 per cent of respondents back scheme as a way to tackle rubbish-disposal problems - Rubbish trucks in a landfill in Tseung Kwan O. It is expected that Hong Kong’s landfills may reach full capacity by 2018. People will have to pay to have their rubbish dumped after the Hong Kong government finally took the next step in dealing with its mounting waste problem after years of delays. Officials had pledged to introduce quantity-based solid-waste charges scheme, in which people pay according to how much rubbish they dump, by 2007. The Environmental Protection Department said that a public consultation exercise held between January and April showed that about 60 per cent of respondents supported waste charges and believed that the quantity approach was the way forward. While the EPD neither specified its preferred model of charging for waste nor spelled out details of the plan, in a paper submitted to the legislature yesterday it made extensive reference to Taipei's experience in implementing the measure, in which households buy designated rubbish bags of varying sizes. In the Taipei model, households are levied the equivalent of HK$0.50 for each kilogramme they discard. This is then used to dispose of the waste they generate. If Hong Kong adopted a similar scheme, a three-member household would pay about HK$40 a month, based on the average of 0.87kg of rubbish each person disposes of a day. But a department official who declined to be named said that the waste charge, even if implemented, would not fully recover the cost of waste treatment. He said the charge would serve only as an incentive for people to cut their waste. He said more than 9,000 tonnes of solid waste a day was being dumped in landfills and that if there was no expansion, the landfills would reach their capacity by 2018. Secretary for the Environment Wong Kam-sing said yesterday that he had invited the Council for Sustainable Development to help the public address key questions about the charging scheme, which he hoped would be implemented by 2016. He said the questions would test the public's level of tolerance in accepting the waste charges and other changes that would come with the measure, such as removing up to 20,000 rubbish bins from the streets so as to ensure proper enforcement of the charges. The department's officials said although Taipei's waste charge had helped cut domestic waste disposal by about 60 per cent, up to 27 tonnes of waste were still being illegally dumped across the city each day. Alkin Kwong Ching-wai, president of the Hong Kong Association of Property Management Companies, said that while the association supported the quantity approach, they were worried that the charge would increase their workload. "We are bound to spend more in cleaning up rubbish not properly thrown away, and we might be forced to increase management fee to pay for that additional expense," he said. Environmental organisation Friends of the Earth said the problems foreseen with introducing the charge could be overcome. Its spokeswoman, Celia Fung, said that stringent enforcement could deter people from disposing of their waste illegally and that conventional rubbish bins on the streets could be replaced with recycling bins.

Citigroup to close six Hong Kong branches and lay off staff (By Ray Chan) Staff to be culled as part of 11,000 job losses globally in bid to save US$1b - Citigroup is to close six branches and cut jobs in Hong Kong over the next few months as part of efforts to trim its workforce worldwide. The closures come on the heels of the Japanese investment bank Nomura quietly laying off staff in Hong Kong. The new cuts are on top of several rounds of lay-offs at international banks in Hong Kong this year that have resulted in hundreds of job losses. Behind the staff cuts are weak financial markets, including a downturn in new listings on the Hong Kong stock exchange, and low turnover. Citigroup announced on Wednesday that it would slash 11,000 jobs globally, or 4 per cent of its workforce. The bank had been aggressively expanding its branch network in Hong Kong and now has 46 branches, up from just 25 three years ago. A Citigroup spokesman said the staff impact of closing six branches would be minimal. Michael Corbat, chief executive at Citigroup, said the New York-based bank would close 84 branches globally, 44 in the US, in a bid to save more than US$1 billion a year from 2014. Corbat succeeded Vikram Pandit as chief executive in October when Pandit abruptly left the helm. The headcount reduction will mainly come from Citigroup's consumer banking business, where 6,200 jobs are expected to vanish. Total staff numbers will be cut to 250,000, down by a third from before the global financial meltdown four years ago. At Nomura, Japan's largest brokerage firm by assets, pressure has been mounting from shareholders to cut costs. At least 20 staff members in the equity sales and trading department in Hong Kong have been told to leave in February, according to two people with direct knowledge of the matter. "After failing to build itself up into a top-tier investment bank, the company is struggling in the highly competitive environment in Asia, where more job cuts in the region are expected in the coming weeks," one of the people said. Nomura in Hong Kong declined to comment. After the latest round of layoffs, industry executives expressed cautious views about hiring next year. Some banks have started to renegotiate contracts with high-paying staff, offering them lower compensation.

Hybrid taxis set to hit Hong Kong's roads early next year (By Ada Lee) Vehicles that run on both petrol and electricity, emitting fewer fumes and charging their own batteries, could be on city's roads in February - A Toyota New Generation Hybrid Taxi is unveiled at the company's Kowloon Bay main branch yesterday. Hybrid taxis that run on both petrol and electricity and emit less exhaust fumes could be on the road as early as February. Crown Motors, sole distributor for main taxi supplier Toyota, said it was talking to the Transport Department about its plan. It had received orders for 20 cars, which would be ready to for use before the Lunar New Year. The announcement came three months after Nissan said it planned to introduce 50 Leaf electric vehicles for trial as taxis early next year. Crown Motors' general manager for public vehicles, Ernest Wong Sai-kit, said the company had been preparing for the hybrid taxi launch for a year and its plan was unrelated to Nissan's. "Hybrid cars do not need to be recharged, which we believe fits cabbies' habits best," he said. "The greatest challenge of using electric cars as cabs is that drivers will have to spend time charging their taxis." Toyota said in 2008 that its hybrid cars were not intended for commercial use, but David Lee Kai-cheung, of Crown Motors, said experience had shown the cars fitted the purpose. The Prius was being used in taxi fleets in many major cities, including Tokyo, Sydney, Paris and Toronto, and drivers should not be worried about its performance and durability, he said. A hybrid car charges its own batteries while it is running. When it is starting or moving slowly, it uses only the electric motor, consuming no petrol. As it does not rely on petrol all the time, emissions are reduced. A 1,788cc hybrid taxi, before tax, will cost HK$269,000, which is HK$18,000 more than a regular LPG taxi. A litre of LPG costs about HK$5.22, while petrol costs HK$16.97. Although a hybrid car can travel further on the same amount of fuel, it is still 13 cents more expensive to run per kilometre than an LPG cab. Wong said that the company was co-operating with Caltex petrol stations to offer a HK$3-a-litre discount on petrol for hybrid taxi drivers until the end of next year, and might extend the plan after that. Lai Hoi-ping, of the Hong Kong Taxi Association, which represents owners of 800 urban taxis, said he believed electric taxis would be the most environmentally friendly and fuel would be the cheapest. Wong Wing-chung, of the Northwestern Area Taxi Drivers and Operators Association, said he was worried about the durability of the engines on hybrid cars.

 China*:  Dec 8 2012

Nobel winner Mo Yan defends censorship as a must (By in Stockholm) Mo Yan defended censorship as something as necessary as airport security checks. Mo Yan is in Stockholm to receive his Nobel literature prize on Monday. This year’s Nobel Prize in literature winner, Mo Yan, who has been criticised for his membership in China’s Communist Party and reluctance to speak out against the country’s government, defended censorship on Thursday as something as necessary as airport security checks. He also suggested he won’t join an appeal calling for the release of the jailed 2010 Peace Prize laureate, Liu Xiaobo, a fellow writer and compatriot. Mo has been criticised by human rights activists for not being a more outspoken defender of freedom of speech and for supporting the Communist Party-backed writers’ association, of which he is vice president. His comments on Thursday, made during a news conference in Stockholm, appear unlikely to soften his critics’ views toward him. Awarding him the literature prize has also brought criticism from previous winners. Herta Mueller, the 2009 literature laureate, called the jury’s choice of Mo a “catastrophe” in an interview with the Swedish daily Dagens Nyheter last month. She also accused Mo of protecting the Asian country’s censorship laws. China’s rulers forbid opposition parties and maintain strict control over all media. Mo said he doesn’t feel that censorship should stand in the way of truth but that any defamation, or rumours, “should be censored”. “But I also hope that censorship, per se, should have the highest principle,” he said in comments translated by an interpreter from Chinese into English. Mo is spending several days in Stockholm before receiving his prestigious prize in an awards ceremony on Monday. He won the Nobel for his sprawling tales of life in rural China. In its citation, the jury said Mo “with hallucinatory realism merges folk tales, history and the contemporary”. In addressing the sensitive issue of censorship in China, Mo likened it to the thorough security procedures he was subjected to as he travelled to Stockholm. “When I was taking my flight, going through the customs ... they also wanted to check me – even taking off my belt and shoes,” he said. “But I think these checks are necessary.” Mo also dodged questions about Liu Xiaobo, the jailed Peace Prize winner. Liu was sentenced to 11 years in prison in 2009 for co-authoring a bold call for ending China’s single-party rule and enacting democratic reforms. China’s reception of the two Nobel laureates has been worlds apart. While it rejected the honour bestowed on Liu, calling it a desecration of the Nobel tradition, it welcomed Mo’s win with open arms, saying it reflected “the prosperity and progress of Chinese litreature, as well as the increasing influence of China”. Although Mo has previously said he hopes Liu will be freed soon, he refused to elaborate more on the case. “On the same evening of my winning the prize, I already expressed my opinion, and you can get online to make a search,” he said, telling the crowd that he hoped they wouldn’t press him on the subject of Liu. Some, however, have interpreted Mo’s October comments as if he hoped the release of Liu would make the jailed activist see sense and embrace the Communist Party line. Earlier this week, an appeal signed by 134 Nobel laureates, from Peace Prize winners such as South African Archbishop Desmond Tutu to Taiwanese-American chemist Yuan T. Lee, called the detention of Liu and his wife a violation of international law and urged their immediate release. But Mo suggested he had no plans of adding his name to that petition. “I have always been independent. I like it that way. When someone forces me to do something I don’t do it,” he said, adding that has been in his stance in the past decade. Mo is to receive his Nobel prize along with the winners in medicine, physics, chemistry and economics. The Nobel Peace Prize is handed out in a separate ceremony in Oslo on the same day.

Echoes of Deng Xiaoping as Xi Jinping heads to Shenzhen on first inspection trip (By Fiona Tam and He Huifeng) New party boss evokes memories of ex-leader's 1992 tour and issues a signal of his commitment to change by heading to Shenzhen on first trip - A billboard of former leader Deng Xiaoping overlooks Shenzhen. Xi Jinping has decided Shenzhen will be the venue for his first inspection trip as the party's new general secretary. It is a move political observers say pays tribute to the famous southern tour of Deng Xiaoping in 1992 and sends a signal of commitment to deepening reform. A Shenzhen propaganda official said Xi, who will succeed Hu Jintao as president in March, would follow in the footsteps of Deng's tour to "express his determination to further deepen China's reform". Xi is due to visit the Yunong fishing village in Luohu, the Qianhai experimental zone and export factories in Shekou today, before heading to Zhuhai and Guangzhou. Guangdong and Shenzhen party bosses, busy preparing for Xi's visit, cancelled a scheduled interview with a group of Hong Kong reporters yesterday. Former National People's Congress deputy Ng Hong-man said Xi chose Shenzhen for his first tour to pay tribute to Deng and his reformist father Xi Zhongxun's commitment to reform and opening up. Deng gave Xi's father the task of setting up experimental zones for economic reforms in 1979. There was no noticeable tightening up of security in Yunong yesterday, nor any signs of extravagant preparations for a VIP visit, although villagers were told to prepare for a family visit by "an important leader". The Qianhai experimental zone cancelled the media tour for Hong Kong reporters that was scheduled for today, without giving a reason. The party's 25-member Politburo banned fawning, over-the-top, red-carpet welcoming ceremonies for top leaders on Tuesday and political observers expect Xi's first inspection trip to be a low-profile affair. "Xi has the courage to reform … and further reforms are also good for Hong Kong's stability," Ng said. "However, China is facing many urgent issues, especially as the conservatives and the vested interests are very powerful. Even though Xi wants to deepen reforms, he could face many difficulties." Zhang Lifan, a political analyst formerly with the Chinese Academy of Social Sciences, said Xi was trying to demonstrate he was a legitimate successor to the spirit of reform advocated by Deng and his father. "Hu Jintao chose Xibaipo as the destination of his first trip, the red headquarters of the Communist Party and the People's Liberation Army in the late 1940s before the communists came to power," Zhang said. "New leaders always want to emphasise and connect themselves with some glorious image from the past. But I don't think Shenzhen and Guangdong have done a good job in terms of reform in recent years." In the three weeks since he assumed the party's helm, Xi has been trying to present a reformist image, including banning empty talk by officials and excessive pomp for tours. He has also cut back on the use of party jargon when giving public speeches.

Shanghai gains in competitiveness list (By Gao Changxin in Hong Kong) Eastern city in position to pass HK in ranking in next few years - Shanghai is likely to overtake Hong Kong in just a few years to become China's most competitive city, according to a report published by the China Institute of City Competitiveness. The construction site of the Shanghai Tower, which will be the tallest building in the city when it is completed in 2015. Shanghai is expected to overtake Hong Kong to become the most competitive city in China in a few years, according to a recent study. The institute, a non-government organization founded in 1998 in Hong Kong, released 21 rankings on Wednesday at a news conference in Hong Kong in its latest annual evaluation of Chinese cities. The rankings were compiled by taking into consideration a wide range of attributes among various cities, including comprehensive competitiveness, internationalization, growth potential and safety. Shanghai took second place on five of the 21 lists, coming in behind Hong Kong in each case. Hong Kong has held the top spot in the ranking of comprehensive competitiveness in each of the past 11 years. But Shanghai has been catching up recently. For 2012, Shanghai scored 14,607 points on the ranking of comprehensive competitiveness, only 253 points below Hong Kong. Beijing and Guangzhou took the third and fourth places on the list. "Hong Kong is facing quite a challenge from Shanghai," said Gui Qiangfang, president of the institute. Shanghai's economy is in fact already much larger than Hong Kong's. In the first half of the year, Shanghai's gross domestic product increased by 7.2 percent year-on-year to 955.2 billion yuan ($115 billion). That compares with Hong Kong's GDP of $96.68 billion, a year-on-year increase of just 0.9 percent.

China must maintain economic growth and persevere with market-oriented reforms in the face of multiple risks in the economy, the new helmsman of China's ruling party has said. The government should continue its proactive fiscal and prudent monetary policies next year and improve the economy's internal vigor and dynamic, said Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, at a symposium held with non-Party figures here last week. "The growth that we achieve must be tangible, not exaggerated growth, and should be efficient, of good quality and sustainable," Xi said. He urged adherence to market-oriented reforms and well-conceived top-level reform designs. "Targeted measures should be carried out in a timely way, while gradual progress in the overall reforms should be combined with breakthroughs in certain parts," said the leader. "We must explore boldly and pursue substantial results." Other priorities of tasks in 2013 include supporting agriculture, restructuring the economy and improving people's livelihoods, according to the general secretary. China has to prepare itself for multiple risks and challenges that can not be underestimated now or in the coming period, though the fundamentals of the economy are healthy, Xi stressed. The world economy will continue to grow at a slow rate, while domestic companies are troubled by cost rises and weak capabilities in innovation, and conflicts are increasing between inadequate demand and excessive production capacity as well as between economic development and the environment, Xi elaborated. China's economy expanded 7.4 percent year on year in the July-September period, slowing for the seventh consecutive quarter. However, official data has showed recovering fixed-asset investment, industrial activity and retail sales in recent months. China's economy is stabilizing and the government will maintain continuity and stability in its macro-economic policies next year, according to a statement released after a meeting of the Political Bureau of the CPC Central Committee on Tuesday.

Hong Kong*:  Dec 7 2012 

SCMP Racing Post tweets live from Happy Valley (SCMP) The whips will be cracking at Happy Valley for the International Jockeys' Championship. Follow scmpRacingPost on Twitter at Happy Valley as Alan Aitken and Michael Cox bring you all their thoughts and reports from the track to steer you towards a winner with the most up-to-date information - parade yard assessments, market moves and the tips and track trends live on Twitter with scmpRacingPost.

Lamma ferry disaster inquiry opens with minute's silence (By Simpson Cheung) Family members of victims and survivors of the Lamma ferry disaster attend a hearing at the former Central Government Offices on Wednesday. A preliminary hearing into the collision between two passenger ferries off Lamma Island that claimed 39 lives on the National Day holiday on October 1 opened on Wednesday. Before the hearing began, Mr Justice Lunn – chairman of the commission of inquiry appointed by Chief Executive Leung Chun-ying to investigate the accident – led commission members, lawyers and members of the public attending the hearing in observing a minute's silence in remembrance of the victims of the tragedy. Director of Public Prosecutions Kevin Zervos SC applied to adjourn the hearing until mid-January to allow police time to finish their investigations and to let the Department of Justice to reach a decision on whether to lay charges against the seven ferry crew members arrested. Zervos said the ongoing police probe and possible criminal trial could be affected by the premature release of information into the public domain during the commission’s hearing. Charles Sussex SC, representing HK & Kowloon Ferry and crew of the Sea Smooth, and Clive Grossman SC, representing Hongkong Electric and crew of the Lamma IV, also applied to adjourn the hearing until January, arguing that they needed more preparation time to go through some 30 boxes of documents and a report prepared by British maritime expert Captain Nigel Pryke. More than 50 survivors, relatives of the deceased and members of the public as well as 30 reporters filled the inquest room in main wing of the former Central Government Offices in Central, and a second room to which the proceedings were broadcast live. Some 42 people, including Captain Pryke, two Marine Department staff, a police officer, and 38 passengers from Sea Smooth, Lamma II and Lamma IV, were listed as witnesses. The seven crew members who were arrested, management staff from the two companies owning the vessels and other rescuer workers were expected to be called as witnesses. An initial hearing date was set at weekdays from December 12 to 21, January 7 to February 8, and February 18, until completion of the hearing, starting from 10am to 1pm and 2.30pm to 4.30pm – except on December 17 when only the afternoon session was available. The hearing will be open to the public and conducted in English. Mr Justice Lunn noted the hearing was not a trial and would not determine criminal liability. He adjourned the hearing until Friday, when he will rule on whether to approve Zervos, Sussex and Grossman’s applications to adjourn the hearing.

 China*:  Dec 7 2012

China perceived as less corrupt than Greece of EU in graft index (By Agencies in Berlin) China's incoming leader Xi Jinping said last month that if corruption was allowed to run wild, the Communist Party risked major unrest and the collapse of its rule. China’s ranking in a corruption index has slipped to 80, from 75 last year, out of the 176 countries surveyed, but it was still perceived to be less corrupt than Greece. Greece had the worst ranking among the 27 European Union nations in the index on state sector corruption. published by anti-corruption watchdog Transparency International (TI) on Wednesday. The index, which ranks perceived official corruption among the world's nations, also showed other struggling euro zone countries scoring poorly as public anger over state corruption in the debt crisis hit region soars. The Berlin-based TI urged European and other governments to try much harder to turn promises of fighting graft into action in areas such as public tenders, political party financing and tax evasion. TI’s index measures perceptions of graft rather than actual levels due to the secrecy that surrounds most corrupt dealings. TI said there was a stronger public recognition worldwide, including in big emerging “Bric” economies such as China and Brazil, of the costs of corruption and a growing refusal to accept it as an inevitable fact of life. “Today corruption is the world’s most talked about social problem. It is very positive that people around the world are demanding more accountability... This could be a game changer,” TI managing director Cobus de Swardt said. TI ranks countries on a scale from 0 (perceived to be highly corrupt) to 100 (perceived to be very clean). China scored 39 this year, but Swardt said the Beijing leadership showed a greater understanding of the dangers of ignoring corruption, including among Chinese companies operating both at home and abroad. Last month, state media quoted incoming leader Xi Jinping as saying that if corruption was allowed to run wild, the Communist Party risked major unrest and the collapse of its rule. Swardt drew comparisons with standards in the Organisation for Economic Co-operation and Development, which groups wealthy nations. “We have seen a criminalisation of bribery to the standards of the OECD,” he said. “The Chinese used to say their companies could not be held to rich country standards because they needed to catch up, but now they realise tackling this is in their own interests.” But tackling corruption in a lasting way required allowing ordinary citizens the power to scrutinise public services and institutions, he added. Greece took 94th place, below the poorer, newer democracies such as Bulgaria and Romania. Italy was placed 72nd, just ahead of Bulgaria at 75th but behind Romania on 66th. In the last year index, Greece was 80th with Bulgaria scoring worst among the EU nations in 86th place. Top of the class this year were Denmark, Finland and New Zealand, each with a score of 90 due to a “strong access to information systems and rules governing the behaviour of those in public positions”. Hong Kong ranked 14 (with a score of 77), above the United States at No 19. Lawless Somalia, North Korea and Afghanistan remain rooted to the foot of the table, each scoring eight points despite efforts to tackle rampant corruption in Kabul. In these three countries, “the lack of accountable leadership and effective public institutions underscore the need to take a much stronger stance against corruption”, TI stressed. Overall, the NGO urged greater efforts globally against corruption, noting that two-thirds of the countries listed scored below 50. “After a year of focus on corruption, we expect governments to take a tougher stance against the abuse of power,” TI chairwoman Huguette Labelle said. The results of the survey show that “societies continue to pay the high cost of corruption,” Labelle added.

Chinese premier addresses 11th SCO prime ministers' meeting (Xinhua) Wen Jiabao attends the large group meeting of the 11th prime ministers' meeting of the Shanghai Cooperation Organization in Bishkek, Kyrgyzstan, Dec. 5, 2012.

BRICS nations to deepen ties (By Wei Tian) Five countries are also expected to speed up development bank launch - BRICS countries should intensify trade ties and speed up cooperation on setting up the BRICS Development Bank, as they become a main driver of the global economy in 2013, officials and experts said. Chen Deming (second right), China's minister of commerce, attends the BRICS Summit Forum in New Delhi on March 28 along with his counterparts from Brazil, Russia, India and South Africa. Zhu Guangyao, vice-minister of finance, said he expected the idea of establishing the BRICS Development Bank, currently under a feasibility study, to be accelerated with initial findings expected at the summit of BRICS countries' leaders in Durban, South Africa, in March next year. He said this will be part of efforts to intensify economic cooperation among Brazil, Russia, India, China and South Africa in trade, trade financing and infrastructure construction. "The global economy still faces uncertainties in 2013 ... and there will be less participation by European banks in global trade amid the ongoing debt woes," he said, adding that BRICS nations should have a bigger say in global economic and financial affairs. India first suggested forming a BRICS Development Bank in February this year, financed by developing countries, and acting as an alternative to the World Bank and International Monetary Fund. Speaking at a forum organized by Economic Daily on Tuesday, Zhu said: "Underdeveloped infrastructure is still a bottleneck for economic development in some emerging economies, and needs massive credit support. "We hope the establishment of the BRICS Development Bank will help better support these projects." Zhu added: "Amid weak global trade, which will grow by only 2.5 percent this year, it is a common obligation for BRICS countries to fight against trade protectionism and unleash their potential." Jim O'Neill, chairman of Goldman Sachs Asset Management, expects the combined growth of BRICS economies to improve from an estimated 6.1 percent this year to 6.9 percent in 2013, amid global economic expansion of 3.6 percent for next year. O'Neill said BRICS countries each face their own challenges, such as Brazil hoping to see some response from a considerable monetary and fiscal stimulus, and Russia eager to shift away from energy dependency.

Chinese J-11 fighter jets prepare to take off for a large-scale air combat drill involving more than 100 pilots in China's northwestern desert area, from Nov 19 to 30. The drill was focused on the rivalry between J-10 and J-11 fighters and became the biggest exercise of the air force in recent years.

Beijing approves 72-hour visa waiver for tourists (By Zheng Xin) Foreign tourists from 45 countries will be able to enjoy a 72-hour visa-free stay in Beijing from Jan 1, the city government announced Wednesday morning. The policy is aimed at making Beijing more accessible to the world and is expected to attract more overseas travelers.However, visitors without a visa will not be allowed to travel outside the capital once they arrive. Doing so will be deemed illegal entry, the government said.

Prejudice dents enterprises' overseas expansion (Xinhua) As China moves to invest billions in businesses around the world, Chinese entrepreneurs are trying to overcome the sense that their investment is not welcome there. Although the reasons given are numerous, national security is routinely cited by politicians and media that oppose plans by Chinese enterprises to acquire or put money into foreign companies. In the most recent case, Chinese tycoon Huang Nubo was denied permission by the Icelandic government for the second time to purchase a plot of land for the purpose of building a resort. Huang, chairman of Beijing-based Zhongkun Investment Group Co, a property development company, said he has been "angry and annoyed" by his treatment.

Hong Kong*:  Dec 6 2012 

Ho Tung Gardens to be bulldozed; minister admits policy failure (By Joyce Ng and Olga Wong) While west wing on Government Hill will be saved, Ho Tung Gardens will not; minister says U-turn on mansion shows need for rethink - Ho Min-kwan. The government admitted a policy failure yesterday as it decided to give up on a plan to save the historic Ho Tung Gardens on The Peak, which is held by an owner who refuses to co-operate. It also bowed to public pressure and abandoned a scheme, put forward by the last administration, to redevelop the west wing of the former government headquarters in Central. The secretary for development, Paul Chan Mo-po, announced the Ho Tung Gardens decision, made by Chief Executive Leung Chun-ying with the Executive Council. He said the abandonment of the plan to declare the mansion and private park a monument came down to money. "We understand that not everyone would agree with spending billions of dollars of public money on private heritage sites," Chan said. The mansion's owner, Ho Min-kwan, rejected all proposals from the government, including a land swap. Ho, who could not be reached yesterday, wants to demolish the main building to build ten houses. Chan said Ho had asked for compensation of HK$7 billion, while the government estimated the site's worth at HK$3 billion. Chan said the Ho Tung Gardens case showed a need for a heritage policy review. The Antiquities and Monuments Ordinance does not specify in what circumstances the government should acquire and preserve private heritage buildings. It does provide a mechanism for the Antiquities Authority - the secretary for development - to declare a private building as a provisional monument. The ordinance does not encourage public participation, but the public can submit views to the Antiquities Advisory Board, which grades buildings by their historic, architectural and social value. Those given grade one are potential monuments. The ratings given by the advisory board, however, are not necessarily adopted by the authority. Bernard Chan, the board chairman, said: "It is time to come up with objective standards [for acquiring private heritage] and to discuss how far the public is willing to go when it comes to compensation." Paul Chan, while declining to comment on whether the board should be reformed or given more power, said it was too early to say if the ordinance needed amendments. The government has yet to disclose the results of a study on setting up a heritage trust. The decision to preserve the west wing along with the two other blocks of the former government headquarters was announced at the same press conference. The Secretary for Justice, Rimsky Yuen, said that as well as his own department's offices, the building is likely to be occupied by international legal organisations, including the Hague Conference on Private International Law, which will set up its Asia Pacific office in Hong Kong. The Government Hill Concern Group, the Bar Association and the Law Society welcomed the plan. Civic Party leader Alan Leong Kah-kit called the about-face a "victory for civil society".

Michelin stars may lead to increased rent in Hong Kong (By Phila Siu) Restaurateurs fear the often-revered accolade may give landlords reason to increase rent and ultimately put them out of business - Suen Cheung-yu of the Yat Lok Restaurant in Central gets to grips with its inclusion in the latest Michelin guide. Some restaurateurs fear that receiving an honourable mention in the famous guide may drive up their rent. A Michelin recommendation, one of the highest accolades in catering, is usually seen as a boon for recipients. But some cheaper Hong Kong restaurants honoured in the French guide's latest edition fear there could be a downside. With rents already hard to afford, they hope landlords will not use the awards as an excuse to push them even higher. Pang Pak-sheung said that when he learned that Pang's Kitchen, his Cantonese restaurant in Happy Valley, had received one star in the 2013 Michelin Guide, his reaction was, "Keep me out of this". "Rent has already doubled compared to 10 years ago when I started this restaurant here," Pang said. "If it goes up again, I may as well just retire." His restaurant, which can seat 40 people, charges about HK$100 for signature dishes such as sweet and sour pork with strawberry. He said the restaurant was already very full throughout the week and might not be able handle more people attracted to it by the star. Pang said he wanted to open another branch but the high rent, rising food costs and staff salaries made it impracticable. "It's hard to compete with big companies and hotels to get good cooks," he said. "As you can see, many restaurants out there belong to the big corporations. There may come a day when small restaurants no longer exist in Hong Kong," he said. Suen Cheung-yu, wife of the owner of Yat Lok Restaurant in Central, also said rent had doubled in recent years. "I am concerned that it will go up further but what can I do?" she asked. This restaurant, specialising in roast goose, was recommended in the guide under the Bib Gourmand category for restaurants that are the Michelin inspectors' favourites for good value. Sixty-one Hong Kong restaurants are starred in the latest guide, down from 62 last year. Of these, four were given three stars, 13 were given two stars and 44 were given one star. Meanwhile, public relations company Headman & Partners, which represents Michelin, confirmed that copies of the Michelin Guide Hong Kong and Macau 2013 were put on sale at City'super supermarkets on Monday night by mistake. A spokeswoman said the retail launch was planned for today and the distributor had advised all retailers about the date. The guides were retrieved yesterday after the South China Morning Post inquired about their presence in City'super. They will be put back on shelves today. The Michelin Guide spokeswoman said it was a "disappointing incident".

Central Policy Unit to take HK$20m fund from Research Grants Council (By Simpson Cheung) The Central Policy Unit, the city's most influential think tank, intends to resume administration of a HK$20-million funding scheme from the university-linked Research Grants Council next year, the council says. The move by the organisation, which provides policy advice to the government, raises questions about its motives and doubts over its neutrality. One commentator said he suspected a political motive was at work. The council said it received notification from the think tank on November 13 that it intended to "rescind" the annual funds and run the grants scheme for public policy research under its own administration. "The Research Grants Council respects the plan of the Central Policy Unit, which oversees the policy and funding on the public policy research funding schemes, to change the mode of administration of the funding," the council said yesterday. Last night, a spokesman for the think tank said it would invite academics to advise on the merits of funding applications and would ensure a fair vetting mechanism. But political commentator James Sung Lap-kung called it an attempt to rope in support from various other think tanks. "The unit would use the money to appoint pro-government or pro-Beijing think tanks to conduct policy studies and surveys favouring the government," according to Sung. "It would help the government to store more 'ammunition' for a public opinion battle, as unit head Shiu Sin-por had earlier said the unit would engage in such a battle." Sung said that since the money came from the public coffers, the unit must exercise more transparency in vetting future funding applications. The scheme was announced in the 2005 policy address, when Tung Chee-hwa was chief executive, to boost policy research. Every year, a sum of HK$20 million was allocated via the Central Policy Unit to the University Grants Committee, under which the council operated. The council was responsible for inviting applications, evaluating proposals, deciding on funding awards, dishing out the money, and monitoring and assessing approved projects. The neutrality of the unit was questioned after it employed Sophia Kao Ching-chi, whom Shiu said had to be informed on all appointments to advisory and statutory bodies. The unit had also assigned staff members to collect public opinions expressed on the internet, prompting lawmaker Emily Lau Wai-hing to describe them as "internet police".

First bachelor-level course in Chinese food launched (By Dennis Chong) Chinese Cuisine Training Institute's tonic foods course puts theory into practice with cooking sessions in the kitchen. The Vocational Training Council will launch its first bachelor-level course in Chinese food – covering everything from cooking to managing a restaurant – next September, a council executive said on Tuesday. Leung Yam-shing, the VTC’s senior assistant executive director, said: “There has been a need for systemic management expertise in the field. The industry has been looking for highly trained, highly educated people to enter the field, [but] there is no such supply at the moment.” He said the full-time programme was developed to meet the growing need for a more modern approach in enterprises traditionally run as family business and small kitchens. The demand for practical and administrative skills – and better-run restaurants – is worldwide, as the cuisine’s popularity continues to grow. The four-year programme will be the VTC’s first full-time degree course specialising in Chinese cuisine. Some of the courses will be taught at the school’s International Cuisine College in Pok Fu Lam, when its construction is completed. The course will be taught mainly in English. The school has been faulted in the past for teaching only in Chinese. The school expects to accept 30 to 60 students in the first enrolment exercise, which began at the beginning of this month. Other than the International Cuisine College, the VTC has developed two other schools specialising in catering and hospitality – the Chinese Cuisine Training Institute, and the Hospitality Industry Training and Development Centre – which offer diploma-level courses in catering and hospitality. Former chief executive Donald Tsang Yam-kuen set out a plan, during his tenure to develop the city into a hub for talent in areas where it has strengths, including catering and hospitality services. A VTC spokeswoman said the tuition fee for the course has not been decided, but the fee for other four-year bachelor’s degree programmes ranged from HK$260,000 to HK$300,000 for the current academic year.

HK's real estate prospect to remain favorable in 2013 (Xinhua) The outlook for real estate investment and development in Hong Kong is generally favorable in the next year, although this sentiment is tempered by the high costs for both commercial and residential properties, according to a joint report released by the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC) Monday. The report, titled Emerging Trends in Real Estate Asia Pacific 2013 provides an overview of Asia Pacific real estate investment and development trends, real estate finance and capital markets, and trends by property sector and metropolitan area. Of the 22 markets included in the report, Hong Kong is ranked 11th for investment prospects and 10th for development prospects. Hong Kong's Grade A office space is among the world's most expensive, despite a recent decline in rents and softening in capital values caused by weaknesses in the financial sector. However, the report said that the scarcity of prime institutional-grade office disposals continues to make buying such assets both difficult and expensive. There is a growing momentum for businesses to move staff away from the traditional central business district area, which has become overcrowded, to secondary locations such as Kowloon, where rents are more affordable and subject to lower increases, said the report. For the Asia Pacific region in general, the report notes that steady economic growth, rising incomes, and stable or increasing property values are all contributing to an outlook that is optimistic, but cautious, due to concerns about prime assets in key markets becoming overpriced. "Although the overall tenor of investor sentiment for this years' survey reflected a degree of apprehension over real estate investment prospects for the coming year, the mood as indicated by survey ratings of individual cities was rather more bullish, with higher scores awarded this year for most surveyed markets than one or two years ago," said KK So, Asia Pacific Real Estate Tax Leader for PwC China. Hong Kong's housing prices are among the world's highest. Hong Kong's government has introduced further tax increases, aimed at curbing speculative housing investment, which may switch the focus of real estate investments to commercial property assets in Kowloon, he said. Jakarta, Shanghai, Singapore, Sydney and Kuala Lumpur are the top five investment markets for 2013 predicted by the report. In addition to Shanghai, Beijing and some other cities were also placed in the top ten listing for both investment and development prospects. The report is based on the opinions of more than 400 internationally renowned real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.

China Mobile to start 4G operations in HK (By Shen Jingting) China Mobile Ltd, the nation's largest mobile operator, plans to start commercial operations of its converged LTE FDD/TD network in Hong Kong on Dec 18, sources from telecom equipment vendors said. The move means that China Mobile will become the first Chinese telecom carrier to offer 4G services in the country. The Hong Kong network is also Asia-Pacific's first network to combine two 4G technologies: LTE FDD and TD-LTE. In July, China Mobile selected ZTE Corp and Sweden-based Telefon AB LM Ericsson, to build a converged LTE FDD/TD network in Hong Kong. China Mobile launched 4G services using the LTE FDD network in April. TD-LTE technology will be added to the existing LTE FDD network to build a dual-mode network. The Hong Kong combined 4G network is the first commercial TD-LTE network set up and operated by China Mobile, and because of that, it will play a critical role in the company's overall plan to promote TD-LTE technology both at home and abroad, analysts said.

 China*:  Dec 6 2012

China takes a bold step in Afghanistan (By Toh Han Shih) Two of three big projects are run by mainland companies because Westerners are not prepared to take the risks in the country - A miner unloads coal from donkeys at a mine north of Kabul. While the West is pulling out of Afghanistan, China is scouting out the strife-torn country's natural resources, estimated to be worth trillions of US dollars. Last year, Afghanistan's Ministry of Mines declared that 30 per cent of the country's land contains US$3 trillion of mineral resources. Getting the wealth out of ground, however, poses big political and security risks. "The country is known to have valuable deposits in gold, copper, lithium and rare earth," said Juman Kubba, a campaigner for Global Witness, a British non-governmental organisation. Resource-hungry China, not surprisingly, is one of the big mining players in the country. "Chinese companies are willing to take risks where other countries are not," Kubba said. "Because of that, Chinese companies have a good chance of winning more contracts in Afghanistan. There are three big mining projects in Afghanistan and two have gone to China, so that is a hugely dominant role." They are the Aynak copper deposit in Logar province, the oil reserves in Amu Darya and the Hajigak iron deposit in Bamyan province. Chinese state-owned companies control the Aynak copper mine and Amu Darya oil field, while an Indian consortium controls Hajigak, Kubba said. According to the World Bank, revenue from the Aynak copper mine and Hajigak iron deposit will generate US$900 million per year until 2031. "To date, Western firms have largely avoided large commercial investments in Afghanistan due to the country's security situation," said Hugo Williamson, managing director of the Risk Resolution Group, a British risk consultancy. "By contrast, Chinese companies have been less risk-averse, investing in the oil and mineral resource sectors. The activity of US firms in Afghanistan has been limited," he said. In 2008, the Afghan government signed a contract with a Chinese state-backed consortium to mine the country's largest copper mine in Aynak district, Logar province. The consortium is 75 per cent owned by Metallurgical Corp of China (MCC) and 25 per cent owned by Jiangxi Copper, both listed in Hong Kong. To date, Aynak is the biggest private investment in Afghanistan and China's biggest investment in the country, said the policy head of the Afghan Ministry of Mines, Ghazaal Habibyar. The deal is expected to generate US$541 million per year for the Afghan government from 2016, create 5,000 jobs and bring in infrastructure investment, according to the World Bank. The Chinese consortium is granted the right to a copper deposit estimated to contain 240 million tonnes of material with a reported value of US$43 billion. In return, the consortium provides investment worth at least US$2.9 billion, including payment totalling US$808 million in three instalments plus investment in projects like the construction of a railway, a power plant and water supply. Since the Aynak deal was signed details of the contract have been kept confidential until Global Witness recently disclosed them. "The local people are not happy because they have not seen the contract. They don't know what they are going to get. The deal looks good for Afghanistan but the details are not so good," said Kubba. The contract allows the Chinese party to negotiate down the royalty they pay the Afghan government, Kubba revealed. It also allows MCC to deploy private security forces at the Aynak mine, which is unusual because such forces are prohibited on other deals, Kubba said. In its third quarter report, MCC said the worsening safety situation at Aynak has delayed work on the mine. Recently, more than 170 Chinese workers fled the copper mine after a rocket attack but at least 150 have returned. MCC did not respond to the South China Morning Post's questions. The contract gives the Chinese consortium six months exclusive rights to all natural resources within the Aynak area, including coal, timber and water, said the Global Witness report. "It's very unusual for one company to have the rights to all natural resources," said Kubba. In December 2011, an oil contract for the Amu Darya basin was awarded to a joint venture between China National Petroleum Corp (CNPC), the biggest Chinese state-owned energy firm, and Watan Oil and Gas, an Afghan firm. The contract allows for an exploration period of 4.5 years plus a production period of 25 years. For the first five years after the contract date, Amu Darya is required to produce at least 12.3 million barrels of crude oil, according to the contract. Given that one barrel of crude oil is worth roughly US$100, 12.3 million barrels translates to a value of US$1.23 billion over this five-year period. The Amu Darya basin contains at least 80 million barrels of crude oil reserves, according to the contract. "The US and UK are beginning to withdraw from Afghanistan. Now the Asian players are coming in, mainly from India and China. China and the US are changing places," said Kubba. "China has invested in infrastructure projects in Afghanistan and secured lucrative contracts in the natural resource sectors, which is seen by many in Washington as China benefiting unfairly from the US presence in Afghanistan. This has caused tensions between the two countries," said Williamson. In September, China's then security chief, Zhou Yongkang, visited Afghanistan and signed agreements on security and economic co-operation, including a deal to train, fund and equip Afghan police. With the 2014 Nato withdrawal approaching, China is contributing to stability in Afghanistan, Williamson said. "This is driven by China's concern that once US troops leave, increased instability in Afghanistan will enable Uygur separatists to play a greater destabilising force in Xinjiang region," he said. "We are likely to witness greater co-operation between the US and China to bring stability in Afghanistan. This … is likely to override tensions between the two countries over China's increasing economic presence in Afghanistan," Williamson said.

Accounting firms caught between the laws of China and the US (By Enoch Yiu and Bloomberg) The US regulator wants them to give up the documents that China considers state secrets - The Big Four firms and BDO are accused of not co-operating with the US. The world's top five largest accounting firms facing a US regulatory probe relating to allegations they withheld documents under mainland state secret laws, have called on China and the US to prevent them being sandwiched between the laws of the two countries. The US Securities and Exchange Commission (SEC) said in an administrative order statement yesterday that it was accusing mainland affiliates of the Big Four accounting firms and BDO of withholding documents from investigators involving potential accounting fraud related to nine mainland Chinese companies listed in the US. The accounting firms involved reject suggestions of any wrongdoing. They said they could not hand over the documents because under mainland law, accountants' working papers are regarded as state secrets and cannot be taken out of the country. The SEC named Deloitte Touche Tohmatsu CPA, Ernst & Young Hua Ming, KPMG Huazhen and PricewaterhouseCoopers Zhong Tian CPAs and BDO China Dahua as having refused to co-operate with its fraud investigations into mainland companies traded in the US. In Hong Kong, the High Court will make a landmark ruling in March whether Ernst & Young can use China's state secret laws as the reason for not handing over audit working papers relating to mainland water treatment firm Standard Water to the Securities and Futures Commission (SFC). SEC enforcement director Robert Khuzami said in a statement yesterday that "only with access to work papers of foreign public accounting firms can the SEC test the quality of the underlying audits and protect investors from … accounting fraud". He said firms that conduct audits knowing they "cannot comply with laws requiring access to these work papers face serious sanctions". BDO chairman Albert Au Siu-cheung said the SEC's proceedings against the top five biggest accounting networks show it was not an individual problem but that it affects the industry. Deloitte and PwC issued statements with similar views. "Accountants are sandwiched between the conflict of the US and the mainland law. This requires the governments of China and the US to work together to solve it," Au told the South China Morning Post. Deloitte is hopeful of a diplomatic agreement. PwC China has "co-operated with the SEC at every opportunity", it said, but it will, and must, comply with its legal obligations under China law. Ernst & Young Hua Ming said: "We hope that an agreement can be reached between US and Chinese regulators." KPMG Huazhen is also hopeful that US-China discussions will have a positive resolution.

Xi pledges to implement rule of law (By ZHAO YINAN) 'Ensure that power bestowed by people is constantly used in their interests' - Xi Jinping, general secretary of the Communist Party of China Central Committee, pledged to protect the rights of citizens on Tuesday, in a message aimed at promoting the faithful implementation of China's Constitution. Xi called on officials to respect and protect citizen's rights, including human rights, and to reinforce public confidence in the law, as he delivered a speech marking the 30th anniversary of the current edition of the Constitution. He urged officials to work hard to let the people feel the sense of justice in every legal issue, and never allow unfair rulings to hurt people's feelings. "We must firmly establish, throughout society, the authority of the Constitution and the law and allow the overwhelming masses to fully believe in the law," Xi said. "To fully implement the Constitution needs to be the sole task and the basic work in building a socialist nation ruled by law." The current version of China's Constitution, passed in 1982, is more rights-oriented than previous versions, Xi said. To accommodate the broad changes that have taken place in China's social and economic spheres, the Constitution was amended four times — in 1988, 1993, 1999 and 2004. Notable amendments include those that emphasize the rule of law, the protection of human rights and the protection of citizens' private property. Xi said although the Constitution is generally suitable for the country, its implementation is flawed in the some ways. He said the supervising system that ensures the Constitution is carried out is not well established, and occasional dereliction of duty has dented the authority of the country's judicial system. Violations of laws and the lax enforcement of laws have also occasionally occurred. "No organization or individual has the privilege to overstep the Constitution and the law, and any violation of the Constitution and the law must be investigated," he said. "We must establish mechanisms to restrain and supervise power. Power must be made responsible and must be supervised," he said. "We must ensure that the power bestowed by the people is constantly used for the interests of the people." Han Dayuan, a professor at Renmin University of China, said Tuesday's speech is Xi's first targeting the rule of law and it has sent a strong message. He said Xi pointed out some of the most acute problems faced by law enforcement, problems that are expected to be addressed in future measures. He also noted that Xi has emphasized the rights of the people, which was not mentioned in the speech delivered by his predecessor Hu Jintao a decade ago, when Hu spoke on the 20th anniversary of the Constitution. As of the end of August 2011, China's top legislature had enacted 240 laws, including the current Constitution.

US regulators charge Chinese affiliates of top accountants (By Reuters in Washington and Singapore) SEC enforcement director Robert Khuzami says firms that conduct audits knowing they do not comply with US laws requiring access to certain documents will face sanctions. The SEC upped the ante in a battle with Chinese firms over disclosure by charging their accountants in a high stakes battle that could bring it into conflict with Beijing. US regulators have charged the Chinese arms of the world’s five top accounting firms with securities violations, raising tensions in a regulatory stand-off which experts say could kill off US listings for Chinese firms if not resolved. The move indicated China was refusing to yield in talks with the United States over access to Chinese audit papers, trying to keep foreign regulators off what it sees as its turf. The Securities and Exchange Commission (SEC) wants the firms to supply documents relating to audits of US-listed companies suspected of possible wrongdoing, but the audit firms say they are prevented from doing so by Chinese state secrecy laws. “I think China has determined that it does not want to co-operate in this way. It believes this is an impingement on China’s national sovereignty, and it’s just too far for them to go,” said Paul Gillis, a professor at Peking University and author of the China Accounting Blog. “They want the US regulators to rely on the work of Chinese regulators, and that has been their position and apparently continues to be their position,” said Gillis. The SEC began proceedings against the Chinese affiliates of Deloitte, KPMG, PricewaterhouseCoopers (PwC), BDO and Ernst & Young. The agency on Monday also moved to pursue a case they had put on hold against Deloitte. It was the SEC’s widest enforcement effort yet to procure documents in connection with probes of possible accounting fraud of US-listed Chinese companies, however lawyers voiced doubts over whether it would help them make a breakthrough. “Simply swinging the hammer of enforcement, while effective at garnering headlines, will likely not be enough to achieve the SEC’s goal,” said William McGovern, a partner at Kobre & Kim in Hong Kong and a former SEC attorney. The SEC, which is seeking documents in investigating possible wrongdoing at nine China-based companies, said an administrative law judge would schedule a hearing to determine potential sanctions against the accounting firms’ Chinese arms. It was unclear whether the SEC’s move would result in financial penalties and discourage the firms from working with certain Chinese companies, or it was designed to force a breakthrough in the larger negotiations. Peking University’s Gillis said if no diplomatic solution could be found, the SEC might ultimately suspend the Chinese firms’ right to practice - a sanction that could in turn mean that their US-listed client companies would have to de-list. “That would mean they cannot audit US-listed public companies,” he said. The SEC said in July it was in talks with Chinese regulators on cross-border co-operation, including access to documents, but Monday’s action suggested it was unhappy with progress. US accounting regulator the Public Company Accounting Oversight Board (PCAOB) has now reached agreements with almost every major economy aside from China on being allowed to inspect foreign auditors of US-listed companies. “Firms that conduct audits knowing they cannot comply with laws requiring access to these work papers face serious sanctions,” SEC enforcement director Robert Khuzami said in a statement announcing the action. The accounting firms called for regulators to negotiate a solution, noting that US and Chinese laws were in conflict. “This action involves an issue that needs to be resolved between the US and China,” PwC China said in a statement. Deloitte said it was unfortunate the two sides could not find common ground but “we remain hopeful that a diplomatic agreement can be reached”. China affiliates Ernst & Young Hua Ming and KPMG Huazhen said they too still hoped for an agreement. BDO did not immediately respond to a request for comment. Top accounting firms operate as global networks of legally separate member firms in each country, so all member firms are not jointly liable for auditing work done in any one country. Lawyers say there is still a queue of Chinese companies eager to tap US capital markets, despite the problems faced by many of their peers that went before them. “I would estimate that there are probably 30 to 40 China-based companies in some stage of pursuing a US listing at this time,” said Alan Seem, a partner at law firm Shearman & Sterling in Beijing. Separately, Canada’s securities regulator said it believed Ernst & Young had breached the Ontario Securities Act in its audits of Sino-Forest Corp, a China-focused forestry company which collapsed after being accused of accounting fraud. Ernst & Young Canada said in a statement it was confident its work “met all professional standards”. Last year, the SEC took Deloitte to federal court to try to force it to turn over documents in connection with an investigation into China’s Longtop Financial Technologies Ltd. In July, it sought a six-month delay in that legal battle, citing negotiations with Chinese regulators. On Monday, the SEC said those talks had failed and it filed a motion to proceed with the case. It also renewed efforts to obtain the documents related to the Longtop audit. The PCAOB, the US accounting watchdog, recently completed observations of Chinese inspections of auditors and expressed optimism about talks over access to audit documents. In a statement, PCAOB Chairman James Doty said his agency’s negotiations were proceeding on a separate track from the SEC. If the agency’s efforts do not lead to an agreement, “then we will need to consider other alternatives”, Doty said.

China economy picks up as consumer sentiment rises to five-month high (SCMP) Two Chinese women carry their Gucci shopping down the street. Chinese consumers are more willing to splash out on big-ticket items. Consumer sentiment in China has risen to its highest level in almost five months, a new survey showed on Tuesday, further evidence of signs of a pickup in the world's second largest economy. The MNI China Consumer Sentiment Indicator rose to 95.5 in November from 92.3 in October, marking a second straight month of gains, according to the report issued by MNI, a unit of Deutsche Boerse Group. The group said the gains were broad-based, including current personal finances, the economic outlook, and the willingness to purchase household durable goods. Only the outlook for personal finances declined during the month, with comments from some higher income respondents complaining about the worsening economic environment. “Salary increases don’t match price increases. Salaries have doubled but CPI (consumer price index) is up fourfold. I am not thinking about buying a car,” one respondent told MNI, giving his name only as Zhang. Both current and future indicators improved in November. The current indicator rose to 98.7 from 93.6 the previous month, while expectations rose for the third consecutive month, to 93.7 from 91.6. Consumers’ willingness to buy large household items rose in November to its highest since May 2011, after dropping each of the previous three months. Moreover, car purchase sentiment rose again in November, with morale improving among so-called middle-income respondents. “Per-capita income has indeed increased. I am not worried about economic growth. It will rise further in the future,” Long, a Beijing middle-income respondent told the survey. Sentiment on the real estate market increased to 110.1 from 109.8, the first gain since January, amid growing confidence that the government would not tolerate a collapse in property prices despite its efforts to stem runaway price growth. The number of consumers saying it was a good time to buy a house increased marginally in November, with the outlook for housing prices rising for the second straight month. Car purchase sentiment rose to the highest level since March, as Japanese car sales started to recover.

Finals of China-USA Super Model Contest held in Beijing - Winner Zeng Zheng (C), runner-up Fang Xingtong (R) and second runner-up Cheng Lin gesture to audience during the finals of China-USA Super Model Contest.

Gold and silver for Year of the Snake (Xinhua) The year of the Snake, 2013, is yet to arrive but snakes made from gold and silver have already become available for purchase. Some are cheap, while the others lean on the expensive side. A gold "snake", which weighs 93.75 grams, is sold for more than 50,000 yuan in Guiyang, capital of Southwest China's Guizhou province. A gold "snake" is sold in Guiyang, capital of Southwest China's Guizhou province. 

Hong Kong*:  Dec 5 2012 

Police to crack down on drink-drivers (By Simpson Cheung) Police officers want to use breathalysers that will allow them to finalise readings on the spot at roadside, giving drivers no time to sober up - A police officer conducts a random breath test. Police may take their most accurate breathalysers to the roadside so that officers can finalise the alcohol readings of suspected offenders on the spot. The idea came up for consideration because of a rising number of drivers who, initially over the limit when measured at the roadside, escaped prosecution after their breath-alcohol measurements fell to within the legal limit after being retaken at a police station. The force had the idea of bringing the evidential breath test machines out of police stations and to the roadside, but they need time to ensure the devices can be tested to ensure they are not affected by atmospheric changes like temperature and humidity. Chief Superintendent Steve Verralls of the traffic branch said breath tests were conducted as soon as possible but some drivers post readings marginally over the legal limit of 22 micrograms per 100 millilitres of breath and recover by the time they are retested at a police station. The police are also working on other methods to stop drink-drivers. "[There are] hardcore drivers who become complacent and would still drink and drive," Verralls said. "We are working on a random breath-testing regime to tackle these drivers and take them off the road." Police figures showed 196 people were arrested for accidents related to drink-driving in the first 10 months of this year; a 14 per cent rise year-on-year. Of those detained, 39 were "tier 1" offenders with the least serious alcohol readings - 22 to 35mcg/100ml, roughly equal to two cans of beer - which was an increase of 56 per cent. Drink-driving suspects who fail a breathalyser test at the scene are taken to police stations for a more accurate test that can be used in court as evidence. However, 27 people were released - mostly the "tier 1" offenders - after subsequent testing, a rise from 20 year-on-year. Since July, police have been using 280 new German-made hand-held breathalysers that combine the functions of two current breathalysers - one determines if a person passes the legal limit and the other shows the actual reading. The city saw 116 casualties in drink-driving-related accidents in the first 10 months this year, an increase from 97 year-on-year. Meanwhile, 46 people were arrested for driving under the influence of drugs between January and October, compared with 51 in the whole of last year. Thirty-five were arrested, mostly ketamine users, after a law was enacted on March 15 that gave police officers the power to compel suspected offenders to undergo impairment tests and give urine or blood samples. Police are working with the Hospital Authority and government laboratories to decide between several prototypes of oral drug detection tests too.

Government vows to cut city's food waste by 10 per cent (By Cheung Chi-fai, Thomas Chan and Stuart Lau) New steering committee aims to 'terminate' excesses and also launch collection charges - Chan Yi-chun, from Choi Fook Restaurant, discards kitchen waste. The government hopes to cut Hong Kong's food waste by 10 per cent in three years. Environment Secretary Wong Kam-sing announced yesterday that a Food Wise Hong Kong Steering Committee had been formed to work out the strategies and measures needed to hit the 10 per cent target. Led by Wong, it includes executives from catering chain Maxim's and Wellcome supermarket, food bank representatives, school principals, academics and green groups and will first meet on Thursday. Wong also vowed to introduce municipal solid waste charges by 2016, and to consult the public next year on how to collect the fees. He said the campaign aimed to reduce food waste at source. While he did not publicly give a timetable, sources said 2015 was the target date. "We are introducing the Food Wise campaign as a response to the chief executive's election platform to 'terminate' food waste," he said. Wong added that the committee would work on changing household habits, establishing a code of practice for trades, and facilitating food donations to charity. It would also co-ordinate efforts by government and public bodies to set a good example. Food waste accounts for about 40 per cent of the city's solid waste and the volume has been tipped to rise further as the economy grows. Last year more than 3,500 tonnes of food waste was dumped in landfills. Greeners Action executive director Angus Ho Hon-wai, a member of the committee, said that while the 10 per cent target was achievable, he believed it could be tripled to 30 per cent in the right circumstances. "It really depends on how much effort is put into it, how government departments work together, and whether the top leaders throw their full weight behind it," he said. Friends of the Earth's senior environmental manager, Michelle Au Wing-tze, said countries like Germany and South Korea had started to tackle the source of food waste. "The Korean government is giving cash to the catering trade to set up buffet salad bars to replace the practice of offering different plates of appetisers individually," she said. On the solid-waste charge, Wong said the levy would be set at a level that balanced the benefits of waste-reduction with the burden on the public. "Time is needed to build up and discuss the details," he said. A poll conducted by Friends of the Earth last month found that 65 per cent of about 1,000 respondents supported a waste-disposal fee. That is an increase of 13 percentage points since the group's previous poll, in March, when 51.7 per cent supported the "polluter pays" principle.

Thousands of mainland students flock to Hong Kong for SAT exams (By Ernest Kao) Screenshot from The Beijing News of candidates waiting outside an SAT test centre in Hong Kong on Saturday. Screenshot from The Beijing News of several study-abroad 'education consultants' at the Asia WorldExpo inviting mainland parents to attend their seminars on Saturday. Mainland Chinese students flooded to Chep Lap Kok’s AsiaWorld-Expo early on Saturday morning, to take the SAT US college entrance exams, The Beijing News reported on Monday. The event, organised by Beijing-based New Oriental Education, a company providing study-abroad services, drew thousands of mainland Chinese students seeking to break away from the ultra-competitive Gaokao – China’s own college entrance exam system. Huge queues stretching several hundred metres wound round corners as concerned parents shuffled to and fro to find out the latest exam times and details for their children. According to mainland media reports, an estimated 95 per cent of the candidates taking the tests were from mainland China, where SAT test centres are still non-existent. Tour operators have been quick to cash in on the growing phenomenon in recent years, providing chartered buses shuttling them directly to test centres, hotel rooms and entire tour packages to students and parents, spawning a whole new industry dubbed “exam tourism”. An exam package trip to the city would cost about 5,000 yuan (HK$6,200), according to the China Daily in a November article. According to local media reports, from October 2007 to June 2008, up to 7,000 mainland students came to Hong Kong to take the exams. From October 2008 to June 2009, the figure had nearly doubled to more than 15,000. The Hong Kong Examinations and Assessment Authority (HKEAA) estimates this figure will exceed 40,000 by the end of this year. Two factors have been driving the mass exodus of mainland students abroad, Xiong Bingqi, deputy director of the 21st Century Education Research Institute in Beijing told The Beijing News. China’s burgeoning economic growth means more middle-income families can afford to send their children overseas to study. The US-based Institute of International Education (IIE) estimates the number of mainland Chinese students attending US higher education institutions in the 2010-11 school year to have increased 23 per cent from 2009-10, totalling 157,600. In 2011-12, the figure rose again to 194,000, according to the IIE. Half of all mainland students studying abroad do so in the US, according to New Oriental Education. Increasing numbers of parents and students are opting out of China’s high-stakes Gaokao, the mainland’s one and only do-or-die college entrance exam system, which has been the subject of heated debate in recent years due to a caste-based system. Chinese netizens were quick voice their opinions. "Some migrant workers don’t seem to have a choice," said one user on microblogging site Sina Weibo. "They have no choice but to pay a lot of money to take the SATs and study abroad, since they can’t get fair access to the [Gaokao] college entrance examinations at home." The current policy allows students from major Chinese cities like Beijing and Shanghai to get into better universities even with scores significantly lower than those of their counterparts in other provinces. Migrant workers without urban Hukou – China’s household registration system – find it much harder to get in. “Students who take these [SAT] exams are just afraid of competition,” said another Weibo user.

International pilots back plan for third runway at Hong Kong Airport (By Phila Siu and Tony Cheung) International federation says members complain of delays because of growing air traffic, and that current capacity will not be sufficient in future - The International Federation of Airline Pilots' Associations said Hong Kong would eventually need a third runway because of increasing air traffic. A group representing pilots around the world is backing plans for a third runway at Hong Kong International Airport. The International Federation of Airline Pilots' Associations, which has 100,000 members, said the city would eventually need a third runway because of increasing air traffic. Its director of operations, Gideon Ewers, said from Britain: "My colleagues say they often face 30-minute delays as air traffic in Hong Kong grows." The Airport Authority estimates the two-runway system will reach its maximum capacity of 420,000 flight movements annually between 2019 and 2022. A three-runway system would be able to accommodate 620,000 flight movements a year. One problem that increases airport congestion is that planes flying from Hong Kong into the mainland have to fly at a minimum of 15,700 feet. It means planes flying to the mainland must suddenly ascend, creating air traffic problems. According to Hong Kong's Civil Aviation Department, this requirement is in place to ensure a safe separation of aircraft flying into and out of Shenzhen airport. But Ewers said: "That really is a problem. The mainland military owns the airspace, and they decide how much to allow." He said that while the number of flight movements might increase in the short term if the mainland loosened its airspace requirement, Hong Kong's two runways would still reach their maximum capacity eventually. Ewers said this was because of Hong Kong's strategic location in southern China, which he compared to London's location at the heart of Europe. "The UK is a financial hub because of a good airport. Companies choose places to do business in that have a close proximity to other airports," he said. A third runway would cost an estimated HK$130 billion to build, although the projected economic benefits to the city have been put at HK$900 billion. But the project has run into opposition from "green" groups. An environmental assessment is expected to be completed in about two years. Melonie Chau Yuet-cheung, of Friends of the Earth, said building a third runway would inevitably worsen the environment in the area and the government should review whether it was really necessary. "With a possible recession in the global economy, Hong Kong's air traffic could drop, so will the demand for a third runway be met? Has the Airport Authority overestimated flight movements?" Chau asked. "And with the expansion of airports in neighbouring cities like Shenzhen, where should the leading aviation hub in the Pearl River Delta be?" Chau said city officials should discuss these questions with the central government, along with the airspace requirement issue. She added: "The people must be given choices and be informed about the costs of the project, such as its impact on their lives and on traffic in the area."

Macau gambling revenue rises 8pc in November (By Reuters in Hong Kong) Gambling revenue in Macau, the world’s largest casino market, rose 7.9 per cent in November year-on-year, boosted by strong spending from China’s emerging middle class who have continued to flock across the border to the enclave. November’s revenue was at 24.88 billion patacas (US$3.12 billion), data from Macau’s Gaming Inspection and Co-ordination bureau showed on Monday. The figure was in line with analyst estimates predicting a 7-8 per cent growth rate. Macau is the only place in China where people can legally gamble at casinos. While growth rates have dropped from double-digit highs in the past seven months due to lower spending by big VIP gamblers, overall revenue has remained solid. Annual revenue is expected to reach US$38 billion, more than six times that of Las Vegas.

Taiwan culture chief urges Hong Kong to focus on ties with Beijing (By Stuart Lau) Taiwan's Culture Minister Lung Ying-tai speaks in Wan Chai. Hong Kong should focus on its own relationship with Beijing rather than continuing to act as the cross-strait intermediary between the mainland and Taiwan, the island’s culture minister said on Monday. Lung Ying-tai spoke as she ended her six-day visit to the city that she once called home. “In terms of Hong Kong’s role as an intermediary in cross-strait interactions, in past decades [the city] was always important and indispensable. But since direct cross-strait flights [were introduced], the city’s role has dwindled. Now there are fewer Cathay Pacific flights from Hong Kong to Taipei. ”A rather big challenge for Hong Kong now is how to re-position its relations with Beijing,” Lung said. She noted the awakening of Hongkongers’ sense of their own civil society. Protests, such as the one against the Queen's Pier demolition, she said, showed how locals were trying to preserve their own culture. On this trip she had engaged only in cultural activities and visits, paid no “secret” visits to local, or mainland, officials, Lung said. She thanked the local government for its assistance and for “coping with my ministerial visit”. Relations have come a long way. In 2005, Taipei mayor Ma Ying-jeou’s application for a Hong Kong visa was rejected. Today Ma is Taiwan’s president. When asked by a mainland journalist about the Taiwanese approach to officials’ asset disclosure – a system not used on most of mainland – she said: “I was quite frustrated … I couldn’t even overlook an account that had only two dollars. To do so would have been a breach of the law.” Commenting on recent protests in Taipei about mainland-based businesses taking over the media sector, she called it a global problem that was not limited to Taiwan. “What’s most important in a civil society is a high level of alertness … and the vision of policy-makers,” she added. With mainland tourism to Taiwan increasing, Lung said she knew of anti-mainlander incidents in the city. She cited a video clip showing a quarrel about mainlanders eating on board a train. “In Taiwan we always hear people [complaining], ‘Oh, mainlanders are so noisy’,” Lung said. “What I would tell them is this: ‘You are too young. You don’t know what Taiwanese people were like 30 years ago. “It was not really a long period of time in which we’ve become elegant.” She called on Hongkongers to be “tolerant” towards new immigrants from the mainland. The best-selling writer – who was a highly regarded University of Hong Kong scholar before taking the reins of the new culture department – said she would not write books while serving as the bureau’s chief. It would be “a temporary job”, she said. Her trip to Hong Kong had given her a better understanding of how the city and Taiwan can work together in cultural enterprises, she said. In particular, the under-construction West Kowloon Cultural District had its counterparts in Taiwan, creating rich potential for co-operation.

Go easy on those hairy crabs (By Winnie Chong) Don't pig out on hairy crabs. That's the warning from a Chinese medicine expert. And diners with an immune deficiency, arthritis or hepatitis B should avoid eating the delicacy altogether. It follows a report from Shanghai where a 25-year-old man was admitted to Fudan University hospital with violent stomach cramps and acute renal failure. The man, surnamed Wu, who had eaten hairy crabs for four days in a week, was diagnosed with rhabdomyolysis - in which muscle tissue in the body breaks down. He recovered with treatment and has been discharged. Rhabdomyolysis can cause kidney complications as the damaged cells are released into the bloodstream. In the worst cases, kidney failure can develop. Hong Kong Chinese medicine practitioner Chan Mei-lok said people with an immune deficiency, rheumatoid arthritis, hepatitis B or lupus should avoid eating hairy crabs. Chan said hairy crabs have too much cholesterol and may cause discomfort or stomach ache. In addition, since many crabs are reared for the table, they may be fed chemicals including hormones and antibiotics which also affect the kidney. "Just eat one crab at a time," said Chan, who graduated from Nanjing University of Chinese Medicine. However, Hong Kong Medical Association president Tse Hung-hing said he has not heard of such cases in Hong Kong. He said as hairy crabs eat micro- organisms that may carry bacteria, people would absorb some of these micro-organisms if the crabs are not fully cooked. Tse also warned of the crabs' high cholesterol and that diners should not eat too many. Kay Kwong-nam, owner of Old San Yang on Pak Sha Road, Causeway Bay, said the restaurant has sold 15 percent more hairy crabs recently even though prices are up 30 percent. Kay advised people to drink ginger tea after eating the delicacy. Chris Chan Kam-fai, owner of Wing Fu Company on Hau Wong Road, Kowloon City, said the crab business is good this year. Sales have increased by 10 percent and he has sold about 20 tonnes so far. Chan said the crabs cost about HK$100 each and 30 to 40 percent of his business comes from high-end customers and mainlanders. Amy Cheung Yee-wing said she became faint and suffered from stomach- ache after eating one hairy crab a few years ago. Food lover Mandy Kwok Wai-yi said people should not eat too many at one sitting. "Hairy crabs are tasty," Kwok said. "I will eat carefully but will not stop eating them."

 China*:  Dec 5 2012

Mo Yan to leave Beijing tomorrow for date with Nobel Prize glory (By Laura Zhou) Novelist Mo Yan will leave Beijing tomorrow to receive the first Nobel Prize for literature awarded to a Chinese citizen. Mo will attend the Nobel Prize award ceremony in Stockholm, Sweden, on Monday along with the other most recent Nobel laureates, according to Shao Chunsheng, an official in charge of broadcasting and publishing in Gaomi city, Shandong province, which is Mo's hometown. Shao spoke to West China City Daily, adding that Mo's wife and daughter would join him. The newspaper also reported that Mo has invited about 10 people, including three translators who translated his works into English, Spanish and Russian, as well as the president of Mo's publishing company, the Beijing Classic & Wise Culture Development Co. Since it was announced in October that Mo won the prestigious award, some fashion-minded mainland internet users have debated what he should wear when he accepts it. Some Photoshopped images of Mo in different suits have even been circulated. Shao said that Mo will take five suits to Stockholm, including a tailcoat and a traditional Chinese suit similar to those worn by Mao Zedong . In an online survey conducted by CCTV News, more than 60 per cent of respondents to a Sina microblog poll said Mo should wear a traditional Chinese suit, while only 2.5 per cent favoured the tailcoat. Mo's older brother, Guan Moxian , previously said that Mo was learning the waltz in case he is invited to dance at the banquet at Stockholm City Hall that will follow the ceremony. According to the Nobel Foundation, Mo will deliver the traditional Nobel speech to the Swedish Academy, which awards the Nobel literature prize, on Friday. The next day, he will attend the annual Nobel Prize Concert, where German conductor Christoph Eschenbach will take the stage with the Royal Stockholm Philharmonic Orchestra and Taiwan-born violinist Ray Chen. As the first Chinese national to win the prestigious prize, Mo is also scheduled to give public lectures at several universities, including Stockholm University, where he will read some of his own work on Sunday.

US censure cannot solve trade issues (Xinhua) A Chinese Foreign Ministry spokesman said Monday that U.S. lawmakers' censure on China over trade issues cannot solve the U.S. problems. Spokesman Hong Lei made the remarks at a daily news briefing in response to a question concerning four senior U.S. lawmakers pressing the U.S. government to take action on longstanding complaints about trade with China. "Blaming China over trade issues cannot solve the own problems of the United States," said Hong. "The U.S. side should do more things that are conducive to mutual trust and cooperation with China, as this accords with its own interests." The top Republicans and Democrats on the House of Representatives Ways and Means Committee and the Senate Finance Committee said in a letter to senior Obama administration officials on Friday that they are "concerned that China continues to move away from market-based reforms and is more deeply embracing an economic model dominated by state-owned enterprises, World Trade Organization-inconsistent subsidies, and economic protectionism." The letter came ahead of the annual meeting of the China-U.S. Joint Commission on Commerce and Trade, which is expected to be held this month. Calling the essence of China-U.S. trade relations "mutually beneficial," Hong said the two sides should properly resolve their disputes on the principle of mutual understanding and benefit as well as peaceful negotiations. "We hope both sides can make the best of platforms like the China-U.S. Joint Commission on Commerce and Trade, deepen bilateral cooperation and resolve contradictions so as to boost the healthy and stable development of China-U.S. trade relations on a mutually beneficial and win-win basis," he said.

China PMI survey shows growth reviving (By Reuters in Beijing) A labourer works at a textile mill in Huaibei in Anhui province. The final reading for the HSBC Purchasing Managers’ Survey (PMI) rose to 50.5 in November from 49.5 in October, the first time since October 2011 that the survey had crossed the 50-point threshold, the line that divides accelerating growth from slowing growth. The pace of activity in China’s vast manufacturing sector quickened for the first time in 13 months in November, a survey of private factory managers found, adding to evidence that the economy is reviving after seven quarters of slowing growth. The final reading for the HSBC Purchasing Managers’ Survey (PMI) rose to 50.5 in November from 49.5 in October, in line with a preliminary survey published late last month. It was the first time since October 2011 that the survey crossed above 50 points, the line that demarcates accelerating from slowing growth. The final HSBC reading follows a similar survey by the National Bureau of Statistics (NBS) released this weekend, which showed the pace of growth in the manufacturing sector quickening. The official PMI rose to a seven-month high of 50.6 for November, from 50.2 in October. “This confirms that the Chinese economy continues to recover gradually,” HSBC’s chief China economist Hongbin Qu wrote. An official PMI survey of China’s non-manufacturing sectors also ticked up, to 55.6 in November from 55.5 in October, led by expanded activity in construction services. But growth in air and rail transport and food and beverages both slowed. While a recovery in growth appears possible, there are troubling signs that China is still relying too much on state-led investment rather than the more dynamic private sector. Growth accelerated for large firms for the third month in a row, but medium and smaller companies saw a retrenchment, with the decline more pronounced for the smaller firms, the NBS said in a not accompanying its official manufacturing PMI survey. “The improving numbers are mostly because of government investment,” said Dong Xian’an, economist with Peking First Advisory, referring to the official PMI. “From the second quarter the government has unleashed a lot of projects, and that has started to be felt in the economy, but it’s not a very healthy recovery yet.” In another sign that demand remains lacklustre, an HSBC sub-index for output prices fell despite a rise in a different sub-index for input prices, indicating that firms are unable to pass rising costs on to buyers. “Whilst we feel that the economy has been stabilized through the short-term, we feel that the manner in which activity has been revived will retard China’s economic reform agenda and make the transition onto a sustainable footing all the more tricky,” wrote Xianfang Ren and Alistair Thornton of IHS Global Insight. Smaller and private firms are still pleading for greater access to credit and investment incentives, which have gone disproportionately to the state sector, particularly since the financial crisis of 2008-2009. Government intervention to mask debt problems where they do appear runs the risk of a socialisation of losses, the IHS Global Insight analysts warned. “Production can continue (hence contributing to GDP), and employment can remain tight. Our fear, therefore, is that whilst activity is resuming, economic efficiency is declining. This has negative longer-term consequences.” Overall, China’s economic health has improved since September, with an array of indicators from factory output to retail sales and investment showing Beijing’s pro-growth policies are starting to gain traction. Output, new orders and new export orders all improved, the official PMI showed, but a sub-index tracking employment deteriorated. Private firms generally account for more new jobs than does the state sector. China’s annual economic growth dipped to 7.4 per cent in the third quarter, slowing for seven quarters in a row and leaving the economy on course for its weakest showing since 1999. Given the recent signs of recovery, many analysts expect the economy to snap out of its longest downward cycle since the global financial crisis, and start to trend upwards in the fourth quarter. The end of a destocking cycle and a greater pace of investment are expected to keep driving up domestic demand. Economists also warn of downside risks from still cloudy external markets. The European debt crisis and listless US economy continue to crimp demand from China’s two largest trade partners. China’s central bank has moved cautiously in easing monetary policy to underpin economic growth, wary of reigniting inflation and fanning property prices which are still high. It cut interest rates twice in June and July and lowered banks’ reserve requirement ratio by 150 basis points in three stages since last November, but has refrained from further cuts since July. The authorities have opted to inject liquidity via open market operations to pump short-term cash into money markets. The official PMI generally paints a rosier picture of the factory sector than the HSBC PMI because the official survey focuses on big, state-owned firms, while the HSBC PMI targets smaller, private companies. There are also differing approaches to seasonal adjustment between the two surveys.

Toyota China sales tumble again in November (By Reuters in Beijing) Toyota Motor Corp is still struggling to revive sales in China, part of a broader slump Japanese car firms are suffering as a result of a diplomatic row between the countries. Toyota’s sales in China totalled roughly 60,000 vehicles last month, a senior company executive said, compared with 81,800 cars the company and its Chinese partners sold in November last year. The pace of the last month’s decline - roughly 25 per cent from a year earlier - eased from the previous two months but was still “far off from our more normalised and targeted sales pace,” said the Toyota executive who declined to be named because the information had not yet been made public. Toyota’s numbers indicate that sales in China by other Japanese carmakers are also likely to be down. For most of those firms, sales are still falling at double-digit rates from 2011 levels, though the pace of decline has slackened recently. “It probably won’t be until March or April when we see sales return to a pre-September pace,” the senior executive said, echoing a consensus expressed by officials from other Japanese brands. Demand for leading Japanese car brands in China virtually halved in September and October. That reduced the Japanese firms’ collective market share in China’s passenger car market, which excludes trucks and buses, to about 17 per cent from 19 per cent at the end of August, according to the China Association of Automotive Manufacturers. Toyota’s sales fall in November followed a decline of 44 per cent in October, and almost 50 per cent in September. Violent protests and calls for boycotts of Japanese products broke out across China in mid-September after Japan nationalised two East China Sea islands, known as the Diaoyu in Chinese and Senkaku in Japanese, by buying them from their private owners. Some Chinese consumers have since avoided Japanese-brand cars. In a widely reported incident during the height of anti-Japanese sentiment, a Chinese man was attacked by angry protesters for driving a Toyota Corolla. The driver was so severely beaten that he was partially paralysed. At the start of the year, Toyota said it aimed to sell 1 million cars annually in China. This target is unlikely to be met until 2013 at the earliest.

China's top Doha negotiator attacks lack of climate control progress (By Li Jing) Fears that no concrete deals will be reached this year to slow global warming as 190 nations meet - Su Wei, of the Chinese delegation at Doha, said it was "not clear whether any breakthrough can be achieved". China's top climate negotiator has taken a swipe at the Doha climate talks one week into negotiations, complaining of a lack of progress and underscoring concerns that no concrete deals to slow global warming will be reached this year. A total of 190 nations are in the talks, and ministers began arriving at the weekend for the high-level portion of the meeting, which will begin tomorrow. But after a week of lower-level meetings, Su Wei, China's chief climate negotiator, was less than optimistic. China News Service quoted him as saying: "It is not clear whether any breakthrough can be achieved." Little progress has been made on so-called core issues, such as arrangements for a US$100 billion climate fund to help poor countries cut emissions and adapt to the effects of global warming, as well as an extension of the 1997 Kyoto Protocol, which set binding obligations on industrialised countries to limit their greenhouse gas emissions. The first commitment period of the Kyoto Protocol ends on December 31, and a second commitment period has not been set. "Whether the second phase of the Kyoto Protocol should last for five years or eight years, and how to ensure it will be implemented immediately from January 1 have yet to be negotiated," Su said. The Kyoto Protocol is the only existing global treaty that binds most industrialised nations on their emissions of greenhouse gases, while sparing China, India and other large, emerging economies, which have caught up quickly in carbon emissions. Only the European Union, Australia, Norway and Switzerland have signalled that they would join a second commitment period of the protocol, while New Zealand, Russia, Japan and Canada have pulled out. Li Yan, Greenpeace East Asia's climate and energy campaign manager, said nations were not approaching the challenge with a proper sense of urgency, as some disagreements had even emerged in the EU, which used to strongly support extending the Kyoto Protocol but is now struggling to agree on emission-reduction targets. "Doha is really the only chance left for the Kyoto Protocol," Li said. "But if negotiations continue on this path, the eventual outcome could be very weak pledges to curb greenhouse gas emissions." Meanwhile, delegates at the negotiations are still at odds with each other over how to address unresolved issues, including how to ramp up funding provided from developed countries to developing ones. Su lamented that developed countries were unwilling to be more open about how much money they have already put on the table. "They just don't want to do it, and you can't force anyone to do anything," he said. However, talks for a post-2020 climate arrangement could also put China in the spotlight this week, as such a deal is likely to require China to reduce emissions, according to Li. Xinhua issued a commentary last night calling China "a responsible player in combating climate change" and blaming "some developed nations" that "evade responsibility and just talk the talk".

China slams US-Japan security treaty on Diaoyus (By Agence France-Presse in Beijing China) A Chinese maritime surveillance ship cruises near the Diaoyu Islands. China on Monday branded a US-Japan security treaty “a product of the cold war” after Washington reaffirmed its commitment to Japan in its territorial dispute with China over the Senkaku Islands, known in Chinese as the Diaoyus. The amendment, attached to the National Defence Authorisation Bill, noted that while the United States “takes no position” on the ultimate sovereignty of the territory, it “acknowledges the administration of Japan over the Senkaku Islands”. It added that “unilateral actions of a third party” would not affect its position. The legislation passed last week reaffirmed the US commitment to Japan under the Treaty of Mutual Co-operation and Security and warned that an armed attack against either party “in the territories under the administration of Japan” would be met in accordance with its provisions. “The Chinese side expresses serious concern and firm opposition to the US Senates’s amendment to the National Defence Authorisation Act,” foreign ministry spokesman Hong Lei told reporters. “The Diaoyu islands and affiliated islands have been China’s inherent territory since ancient times. China has indisputable sovereignty over them.” Hong said the legislation violated Washington’s repeated pledge to not take sides in the dispute. “The US-Japan security treaty is a product of the cold war and should not go beyond the bilateral scope or undermine the interests of a third party,” Hong said. “We hope the US side will bare in mind the broader interests of peace and stability in the region, honour its words with actions and refrain from sending self-contradictory, wrong signals.” The sovereignty of the islands has been a source of friction for decades, but the row erupted earlier this year after the nationalist governor of Tokyo said he wanted to buy them for the city, forcing the Japanese government to nationalise them. Chinese vessels have been spotted in and around the territorial waters every day for the last month. Both sides have publicly refused to back down on their respective claims to the Japan-controlled islands.

Challenge to expats for the top positions (By Xie Yu and He Wei in Shanghai) But more foreigners still attracted to pursue their ambitions in China Most expatriate executives plan to stay in China despite increasing competition from local talent, a recent survey conducted by the Association of Executive Search Consultants found. According to the survey, 72 percent of the respondents have been working for more than three years in China. During their time here, most of them (70 percent) said they noticed a change in the type of expatriate workers that China is attracting - most are now younger and from more diverse nations. This indicates that China, as one of the few places that is still experiencing growth in the troubled global economy, is attracting more expat executives from a wide range of demographics to pursue their careers, the AESC survey found. Fifty expat executives in general management roles including chief executive officers and chief operating officers, responded to the survey. They found themselves facing more severe competition from local counterparts, the survey said. Most expat executives now believe it is hard for foreign-born executives working in China to gain access to local executive positions (71 percent). They also cited "employers favoring local talent" as the most inhibiting factor to finding an executive job in China (42 percent). As much as 79 percent of the respondents also see a shrinking compensation package gap between expat and local executives. David Guo, chairman at Heidrick & Struggles (China), the first executive search firm to enter China, said local executives are increasingly popular in foreign companies nowadays. "It is true that some companies will emphasize they are looking for local professionals to conduct leading roles in their China offices," he said. It has been more than 30 years since China started reform and opening up. More and more Chinese people are going abroad and speak very fluent English so language is no longer a barrier for Chinese people to work in overseas companies, Guo said. "Local executives are more familiar with China's market and culture while expat executives are stronger in international operations and communications with headquarters," Guo said. A growing number of companies in Asia-Pacific are seeing the increasing allure of local talent, said Brian Sullivan, chief executive officer of CTPartners, a New York-headquartered human res ources firm specializing in top executive recruitment. As companies in the region now face stronger competitive pressures and slightly weakening demand, they need the kind of sophisticated senior leadership talent that can devise and implement winning business strategies, Sullivan said. On top of that, a deep understanding of the market becomes a priority. "The first preference goes to a local national candidate, with the second preference going to a regional executive with local language skills and cultural knowledge," he said. Within this talent market landscape, the experienced and senior Chinese executive will enjoy some of the greatest demand and also command the attendant compensation package. Peter Felix, president of AESC, said expat executives in China still enjoy a competitive edge in many ways. To stay ahead of the game, he recommends that expat executives invest in their cultural skills, Chinese social networks and especially language capabilities so that they may become more easily considered for top management positions in either local or multinational corporations. In fact, there are more opportunities for them in Chinese companies. Guo pointed out that local companies with an ambition to conquer overseas markets, like Chinese home appliance giant Haier, have already hired foreign senior executives to broaden their horizons and better manage the overseas market. Despite the increasing competition from local talent, the expatriate job market in China is more active than ever. More than half (51 percent) of the expat executives surveyed said they are actively looking for a new opportunity and 39 percent of them are open to considering new opportunities.

China expands VAT trial to 3 more regions (Xhinhua) China expanded the trial of replacing business tax with a value-added tax (VAT) to three more provincial regions on Saturday, the State Administration of Taxation has announced. The change to a value-added tax from a tax on revenue was applied on Saturday to transportation and services businesses in Tianjin municipality and Zhejiang and Hubei provinces, according to a statement on the administration's website. Shanghai piloted the tax-cutting program on Jan 1 this year in an effort to decrease the overall tax burden and boost the transportation and service sectors. The pilot program was then expanded to regions including the provinces of Jiangsu, Anhui, Fujian and Guangdong as well as Beijing, Xiamen and Shenzhen later this year. The tax-cutting program will likely to be expanded to cover telecommunications, rail transportation as well as construction and installation industries in 2013, according to the statement. With Tianjin, Zhejiang and Hubei joining the pilot, more than 900,000 enterprises across the country will have been covered by the tax-cutting program, the administration said earlier this week. In Shanghai, the tax cut has helped reduce enterprises' tax burdens by 22.5 billion yuan ($3.57 billion) in the first 10 months of this year, while in Beijing, the new measure has cut tax revenue by 2.5 billion yuan in two months.

Hong Kong*:  Dec 4 2012 

Lawmakers want transparency for West Kowloon arts hub rent policy (By Lana Lam) Lawmakers want the West Kowloon authority to show more transparency in its policy for rental charges for the arts and cultural site - Hong Kong band Chochukmo perform on the first day of the Clockenflap festival yesterday on the West Kowloon harbourfront. New York rapper Azealia Banks performs at the Clockenflap festival in West Kowloon yesterday. The body running the West Kowloon arts hub site needs to be more transparent about rental charges, lawmakers say. It refuses to say how much it charged organisers of this weekend's Clockenflap outdoor music festival, or reveal the rent paid by a couple who recently held their wedding party on the prime waterfront site. It said the information was "commercially sensitive". Officials would not even explain how the body, the West Kowloon Cultural District Authority, decides who to rent parts of the 40-hectare site to as it awaits the construction of arts venues including museums and theatres. The authority, which has been handed HK$21 billion of taxpayers' money to develop the cultural district, leases the land from the government. It reportedly charged HK$10 million for the wedding party on November 17. But it charged festival organisers only a six-digit sum. While neither side will say what that figure was, it was believed to be under HK$1 million. Labour Party lawmaker Cyd Ho Sau-lan said if a statutory body charged others for using government land that was meant to be open to the public, its revenue-raising strategies must be scrutinised. "We put public money into the project on top of this huge piece of land, so when they want to raise money to support other expenditure, it should tell the public as a guiding principle instead of being a loose cannon," Ho said yesterday. "The fee structure and application process should be made known so no favours are given to certain close affiliates. The area must be open to all, not only to those from certain privileged groups." Ho accepts the need to raise revenue through private events but says these should be limited. Democratic Party lawmaker Emily Lau Wai-hing, the former chairwoman of the Legislative Council's finance committee, said the authority must explain what it means by "commercial sensitivity" - its reason for not revealing rental policies. The authority operates under a special ordinance that allows it to develop the site into an "integrated arts and cultural district". Under this umbrella aim, it must provide free public access to the common areas of the land. A spokeswoman for the authority said its rents were based on "prevailing market conditions and rates of similar venues". They also took into account the size and nature of an event and if it was a profit-making venture. Discounts and priority were given to arts or cultural events, she said. She declined to give details of pricing or rental revenue. "It would be misleading for us to disclose exact figures," she said. The authority confirmed the site was leased at the "full market rate" for a private wedding but would not verify reports it pocketed HK$10 million. Cultural events apparently pay less than HK$1 million. The Home Affairs Bureau, which oversees the authority, says arts, cultural and community events receive priority and discounts.

Hong Kong Int'l Boat Show 2012 kicks off - Hong Kong International Boat Show 2012 held in south China, Dec. 2, 2012.

 China*:  Dec 4 2012

Beijing court jails 10 for illegally detaining petitioners (By Reuters in Beijing) A 2009 file photo of a man standing in the corridor of a former 'black jail' in Beijing, China. A Beijing court has sentenced 10 people to up to 18 months in jail for illegally detaining petitioners from another city, state media reported on Sunday, in a rare case of the judiciary taking on the shadowy men who operate on the margins of the law. Those convicted were hired by authorities from Changge city in central Henan province to stop petitioners airing their grievances in Beijing, the People’s Daily said on its website, citing a Beijing newspaper. They held them in rented houses in a Beijing suburb where the petitioners said they were beaten, the report said. The men wore badges identifying them as employees of the Beijing representative office of the Changge government, it added. Petitioning officials has deep roots in China, where courts are seen as beyond the reach of ordinary people, who often try to take local disputes ranging from land grabs to corruption to higher levels in the country’s capital Beijing. But studies show only small numbers are ever able to resolve their cases through petitioning. In many cases, petitioners are rounded up in Beijing by men hired by provincial authorities to prevent the central government from learning of problems in China’s outlying regions. They are often forced home, or held in “black jails” in Beijing. Despite international criticism, China has continued to run these so-called black jails - unlawful secret detention facilities used to hold critics and petitioners, where detainees are often subjected to beatings, sleep and food deprivation, as well as psychological abuse.

Tourists enjoy seaside in China's Hainan - Tourists enjoy the seaside of Sanya, South China's Hainan province, Dec 1, 2012. Sanya has always been a winter tourism preference thanks to its tropical climate. Tourists ride speed boat near Wuzhizhou Island, a scenic spot in Sanya, South China's Hainan province, Dec 1, 2012. Sanya has always been a winter tourism preference thanks to its tropical climate.

Industry growth brightens outlook (By Hu Yuanyuan) China's manufacturing picked up for the third straight month in November, official data showed on Saturday, pointing to further recovery of the world's second largest economy. The purchasing managers' index rose to 50.6 in November from 50.2 in October, reaching a seven-month high, according to China Federation of Logistics and Purchasing. The PMI rebounded to 49.8 percent in September, ending four straight months of decline. A reading above 50 indicates an economic expansion. "Though the November PMI is a bit lower than the market expectation of 50.8, it remained above 50 and has risen for three months in a row, demonstrating that the country's real economy and financial market is improving," said Zhou Hao, an economist at ANZ Banking Group Ltd. Readings for sub-indices also indicated an expansion. The sub-index for new orders climbed 0.8 percent from October to 51.2 last month. The export order sub-index for November stood at 50.2, up 0.9 percent from the previous month, CFLP statistics show. For Zhang Liqun, an analyst with the Development Research Center of the State Council, increases of new orders and improvements in some PMI sub-indices mean companies have finished cutting inventories, which points to further expansion in coming months. HSBC China's flash PMI, which prefers samples from small and medium-sized enterprises, bounced back into expansion territory for the first time in 13 months to stand at 50.4 in November. China's economic recovery has been underway since September thanks to a series of macroeconomic policies and recovering global market demand. A number of indicators in the past two months have boosted confidence that the economy is improving. Exports increased 11.7 percent year-on-year in October, 1.7 percentage points higher than September. Industrial added-value output growth accelerated to 9.6 percent year-on-year in October, from 9.2 percent in September and 8.6 percent in August. Retail sales of consumer goods rose 14.5 percent from a year ago in October, compared with 14.1 percent in September and 13.2 percent in August. "The recovery in industrial activity appears to be gaining traction, supported by policy easing and stabilization in the housing market," said Zhu Haibin, chief China economist and head of Greater China economic research at J.P. Morgan. "External demand has also improved in the near term." Standard & Poor's Ratings Services on Friday affirmed the AA- long-term and A-1+ short-term sovereign credit rating of the People's Republic of China, with the outlook being stable. The ratings reflect the country's strong economic growth potential, robust external position, and the government's relatively healthy fiscal position, S&P said. "We expect no major change in policy directions in China in the wake of the recent top leadership changes," said S&P credit analyst Kim Eng Tan. "Efforts to deepen structural and fiscal reforms are likely to continue. We expect the Chinese economy to continue its strong growth while the country maintains its large external creditor position in the next three to five years." But some economists are not so optimistic, considering the global economic recession may continue next year. Royal Bank of Scotland expects China's GDP growth to be around 7.6 percent in 2012 and, with a modest recovery, around 8 percent in 2013, the bank's China economist said. This forecast is below the consensus opinion. A number of economists believe the country's GDP growth could still reach 8 percent this year. "We think export growth will face some headwinds from the subdued global growth outlook for 2013, especially for the European Union, China's largest export market," said Louis Kuijs, China economist with the Royal Bank of Scotland PLC. "Also, we expect consumption growth to moderate in the coming quarters because we expect wage growth to decelerate, given the weak profit situation and modest growth outlook," Kuijs added. However, the inventory reductions that have been a drag on growth in 2012 should be less restraining next year, the RBS research showed. 

Hong Kong*:  Dec 3 2012 

Vote on old-age living allowance delayed again (By Joshua But) Intended beneficiaries of the government's proposed old-age living allowance have lost another HK$2,200 each after a lawmaker's filibuster prevented a vote on whether to approve funding for the measure. Had the allowance been passed when an attempt to reach a vote on it was first made two months ago, payments would have been backdated to October. It is government practice to backdate payments to the first day of the month in which lawmakers approve them. The allowance is meant to help the elderly poor, and would be an alternative to the old-age allowance of HK$1,090. The government says the new allowance must be means-tested for all recipients aged 65 and over to avoid its cost ballooning as the elderly population grows. But lawmakers have vowed to prevent its approval unless the means test is eased or scrapped. The current allowance is only means-tested for recipients aged 65 to 69. Old people with income of not more than HK$6,660 a month and assets of no more than HK$186,000 would be eligible. Last night's meeting of the Legislative Council's finance committee meeting was the sixth since October to discuss the government's application for HK$3.1 billion to fund the allowance for the financial year to March. "Long Hair" Leung Kwok-hung, of the League of Social Democrats, who has moved hundreds of amendments - all vetoed - in previous weeks, vowed to continue the delaying tactics until the government changed tack. At yesterday's six-hour meeting he moved another 200 amendments, drawing criticism from government allies. Wong Kwok-hing, of the Federation of Trade Unions, who earlier suggested the committee work overnight to clear the amendments, said it was the only solution to ending the filibuster. Michael Tien Puk-sun of the New People's Party said Legco was being hijacked.

Widow appeals against rejection of Yung Kee Restaurant winding-up (By Austin Chiu) Wife of late shareholder fights rejection of petition to wind up firm that owns restaurant - Yung Kee. The wife of late Yung Kee shareholder Kinsen Kam Kwan-sing has appealed against the dismissal of a petition to wind up the company behind the famed roast goose restaurant in Central. Leung Sui-kwan filed the application as representative of the Kam estate after Mr Justice Jonathan Harris, of the Court of First Instance, ruled against the application - filed by Kinsen Kam before he died in early October - on a technicality. Despite the latest move, Kinsen Kam's sons said they were still open to talk to their estranged uncle Ronald Kam Kwan-lai over the sale of his late brother's 45 per cent stake. Harris decided on October 31 that Yung Kee Holdings, an investment vehicle, was an offshore company in the British Virgin Islands that had not established a place of business in Hong Kong. He dismissed the case, saying the court had no jurisdiction to deal with it. But the judge made clear that if not for the technicality, he would have ordered Ronald Kam's camp to buy Kinsen Kam's shares because the latter had been "unfairly prejudiced". Leung argued in her notice of appeal filed in the High Court that the judge erred in law by failing to consider the "substantial connections" the company had with the city. The company's affairs have been managed by directors at the Yung Kee Building office in Central, the paper says. All meetings of its board of directors were also held there. All the board resolution documents were also signed by directors and shareholders at the building. Dividends were also paid to the shareholders in Hong Kong, the document says. "All corporate activities of the company and its wholly owned subsidiaries were carried out in Hong Kong and mostly at the office at 5/F Yung Kee Building," it says. "The court is required to look at the economic entity of the entire group instead of focusing on separate legal entities of various companies," lawyers for Leung argue. They are asking the Court of Appeal to order that Yung Kee Holdings be wound up. Alternatively they want the court to order Ronald Kam to buy their shares at its market value without any discount, taking into account that he and his son had unfairly prejudiced Kinsen Kam's interest. Hardy Kam Shun-yuen, younger son of Kinsen Kam, said: "We are open to talk as long as the common intention is to reach a fair and reasonable deal." Kinsen Kam's estate is expected to pay legal costs, estimated at about HK$30 million, to Ronald Kam.

HK asset limits raised for secondary HOS buyers (By Joseph Li from Hong Kong) The Housing Authority's Subsidized Housing Committee increased income and asset limits for purchases of the Home Ownership Scheme units on the secondary market, widening the population base of those eligible to apply to purchase. The income ceiling for households with two or more members has been increased to HK$40,000 ($5,161) per month and the asset ceiling lifted to HK$830,000. For single applicants, the income limit goes up to HK$20,000 a month, while the ceiling on assets has been raised to HK$415,000. The announcement came as the HA prepares to go ahead with the plan to sell 5,000 second-hand residential units next year under the HOS. White-form applicants - those who currently live in private housing - will be able to purchase the flats without being required to pay the unpaid land premiums. Speaking after the committee meeting on late Thursday afternoon, Committee Chairman Stanley Wong said the revised income and asset limits were worked out in accordance with an established formula. Although the revised limits will increase the number of applicants, he said it would not diminish chances of low-income people to purchase a home. "If there are a lot of people applying, their chance of getting allotted will of course decrease," he said. "But no matter whether they are high or low earners, their chances of winning an allotment are the same. Therefore those getting the allotments are not necessarily high earners." Wong reiterated that the purpose of the scheme is to provide those who are unable to afford private housing a chance to buy homes during this interim period before new HOS units are completed in 2016 or 2017. Whether property prices will rise or fall as a result of the plan was not taken into consideration. Committee member Michael Choi disclosed that the committee almost unanimously approved the revised income and asset limits. In view of surging property prices and high-riding inflation, he said it was necessary to raise the limits. "People who earn HK$20,000-strong find it hard to buy flats in the private market, but so do those earning around HK$30,000. Therefore the government needs to help both categories of people." Choi said he has no fears that the scheme will drive up property prices. The supply is limited to 5,000 flats over two phases, regardless of the number of applicants, he said. And after the extension of the special stamp duty and introduction of the buyer's stamp duty on Oct 26 to cover sales of private residences to offshore buyers, the number of property transactions over the past month has dropped by 50 to 60 percent. "So I believe when this scheme is launched in January, there will be room for downward adjustment of property prices and that will be the time for genuine home buyers aiming at self-use," he commented.

 China*:  Dec 3 2012

Overseas ambitions (By Liu Jue) Yale University, where Yung Wing was a trailblazer for those seeking knowledge and academic success outside China. More than 160 years ago a young man paved the way for Chinese studying abroad - Every September, Terminal 3 of Beijing Capital International Airport turns into Platform 9 3/4 of the Harry Potter series, with boys and girls running around pushing overloaded luggage carts, nodding and promising their parents to take good care of themselves over the next 10 months. But of course, they are just students going out of the country to study. China has become the leading source of overseas students, and these young Chinese are bound for schools around the world. Last year alone, 339,700 Chinese students began studying abroad, according to the Ministry of Education, and an even larger number are applying this year. Ever since 150 years ago when Yung Wing (容闳 róng hóng) first blazed a trail to the US, study abroad has been the trendy thing to do in various historical periods. For some time, only the best students were granted the opportunity, as well as the task, of repatriating knowledge. A sense of honor and responsibility came to be associated with studying abroad. As Chairman Mao Zedong said in a speech to Chinese students in Moscow University in 1957: "The world is yours (the younger generation) and ours (the older generation), but eventually yours ... the future lies in your hands. ("世界是你们的,也是我们的,但是归根结底是你们的.希望寄托在你们身上." shì jiè shì nǐ men de, yě shì wǒ men de, dàn shì guī gēn jié dǐ shì nǐ men de.xī wàng jì tuō zài nǐ men shēn shàng.) A look back at the time of the first Chinese student who obtained a Western degree gives an insight of how this trend started. These days, Chinese students at Yale University are a dime a dozen, but in the mid-19th century, Yung Wing was the only Asian at what was then called Yale College. In a speech at Yale in 1878, Yung's friend Joseph Twichell described how Yung dressed in a long traditional robe on his first day, his hair braided according to Manchu style. Later he took on Western fashions, and the portrait of him that still hangs at the university reveals that the man widely regarded as the first Chinese to receive a Western degree was a handsome young fellow. Born a villager's son on a small island six kilometers from Macau in 1828, Yung was one of only two male students who attended a missionary school for girls. While his male peers were trained for the imperial examination, Yung grew up learning the language of the "red-haired people", a name given to foreigners during the Qing Dynasty (1616-1911). When he turned 19, Yung bravely accepted an offer from his headmaster, an American missionary, to continue his study in the New World. This was a destination beyond the reach of most Chinese at the time, and little did Yung know that he would go all the way to study at Yale. As to his academic life, in defiance of the common stereotype of Chinese students, Yung was a total failure in maths. "In my sophomore year, from my utter aversion to mathematics, especially to differential and integral calculus, which I abhorred and detested ... I used to fizzle and flunk so often that I really thought I was going to be dropped from the class, or dismissed from college," Yung wrote in his memoir, My Life in China and America (《西学东渐记》 xī xué dōng jiàn jì). However, he was very good at composition, and won first place in school competitions two years in a row. Yung always planned to return to China, which at the time was embroiled in civil war and border disputes with Russia, and was under constant pressure from colonial powers demanding greater trade privileges. Yung hoped the advanced ideas he had learned would help him solve some of these problems by modernizing China. After graduating with a Bachelor of Arts degree, he returned home to work as an interpreter and a consultant, but his biggest achievement was to initiate the first study abroad program sponsored by the government, which sent more than 100 Chinese students to the US. More than a century later, things changed greatly. In 1981, a policy allowed students to independently finance their education overseas, opening up new career paths for many students, and democratizing study abroad to include more than just an elite few selected by the government. That same year, the TOEFL (Test of English as a Foreign Language, 托福 tuō fú) was introduced to China. Many students began to take the exam and submit their scores, along with other material, to apply for scholarships at overseas universities. Ministry of Education statistics show that from the reform and opening-up to 2011, a total of 2.25 million students went overseas. The loosening of policies and management governing their activities meant they were able to pursue careers and lives in their host countries, an appealing prospect given the poor economic and living conditions in China. "Study abroad" ultimately became a way of saying "move abroad" during the 1990s, illustrated by the fact that only 26 percent of these students returned to China when they completed their studies. The number of overseas students has risen greatly since the late 1970s, as a booming economy, frugal spending habits and family planning policies have given middle-to-upper class Chinese families the means to afford sending their only child to study abroad. Disappointment with the domestic educational experience has made parents and students all the more willing to trade a Chinese diploma for a foreign one. Today, Chinese students are found on every campus of the world's major universities, and their community is thriving. The number of those returning to China upon finishing their studies has also increased. Past or present, studying abroad is an eye-opening experience for the individuals involved, and for the country as a whole.

Equity 'not addressed' in climate talks (By Wu Wencong in Doha, Qatar) Long-term equity concerns are not being adequately addressed in climate negotiations so far, said Chinese scholars, emphasizing that equity is not a barrier to further emission reductions, but a key enabler of them. A man inspects the engine of a hybrid test car at a display of environment friendly vehicles during the United Nations 18th Climate Change Conference in Doha on Friday. At a side event held at the China Pavilion on Friday, scholars from China released a report on developed and developing countries' responsibilities for climate change and carbon dioxide mitigation using a model generated by independent research. It shows that developed countries accounted for about two-thirds of global warming from 1850 to 2005, but they only contributed to one-third of mitigation efforts. The case for developing countries is just the opposite: They accounted for one-third of global warming, but contributed to two-thirds of the mitigation efforts. Current commitments by developed countries cannot effectively curb climate change, nor do they reflect their ethical responsibility, said Cui Xuefeng from Beijing Normal University, one of the report's authors. Stronger mitigation efforts by developed countries are needed to keep temperature rise below the 2 C objective on the basis of equity in the future," he said. A report released by the UN Environment Program and the European Climate Foundation on Nov 20 showed that the emissions gap is bigger than earlier assessments. Current greenhouse gas emission levels are already about 14 percent above where they need to be in 2020. Li Ting, senior policy consultant from the School of Public Policy and Management of Tsinghua University, said emphasizing equity does not mean that developing countries care only about emission rights, nor does addressing the importance of "common but differentiated responsibilities" mean taking no action. "I really think the rights to development are much bigger and meaningful than just emission rights," said Li. She said sustainable development is the only approach to the future of the Earth and its climate system. Without poverty eradication and sustainable development, human beings will not be able to protect the climate. "The current way of sharing is not sustainable and not fair," she said. The report released on Friday was published in the journal Proceedings of the National Academy of Sciences of the United States of America in August. The models applied for the research will be used in the fifth Assessment Report of the Intergovernmental Panel on Climate Change.

Hong Kong*:  Dec 2 2012 

Textile heiress Veronica Chou and Russian beau wed in style (By Vivian Chen) After a proposal spelled out in human form on a Big Wave Bay beach, Veronica and Evgeny celebrate with 1,500 in custom-built Russian palace - The bond between Veronica Chou and Evgeny Klyucharev goes back to the day they came into the world. They share not only a birthday but a birth year. Veronica is the daughter of textile tycoon Silas Chou, and president of Novel Fashion Holdings and Iconix China. Entrepreneur Evgeny is the founder and president of Key Asset Holdings. The couple tied the knot after dating for almost two years. They celebrated their marriage over two days. On November 16, they exchanged vows at a candlelit wedding ceremony in the ballroom of Wan Chai's Grand Hyatt hotel. More than 300 friends and relatives flew in from Russia, the mainland and the United States to congratulate the newlyweds. The bride wore a Michael Kors couture dress and jewellery designed by her friend Wan Baobao. The groom's mother, following Russian tradition, offered the newlyweds bread sprinkled with salt as a symbol of health, prosperity and long life. "Walking down the aisle was the most memorable moment," Veronica said. "The best part also was that all our guests had so much fun." The following day, the couple hosted a gala dinner on the West Kowloon promenade in a custom-built Russian palace designed by production house Bureau Betak. The company has built fashion show pavilions for the likes of Christian Dior and Victoria's Secret. Almost 1,500 guests attended the gala, including Duchess of York Sarah Ferguson and businessmen David Tang, Bruce Rockowitz and Timothy Fok Tsun-ting. The banquet mixed Chinese and Russian styles. Guests were welcomed by uniformed men and two horses. Reproduction Faberge eggs, Ming vases and Russian dolls decorated the 81 tables, and guests enjoyed a vodka-pairing menu. Performers from Cirque du Soleil provided the night's entertainment, and the throng of party-goers didn't start to thin out until the early hours. Veronica and Evgeny were first introduced in 2010. They didn't hit it off instantly because of their globetrotting lifestyles. Evgeny was travelling back and forth between Hong Kong and Moscow, while Veronica was regularly in Beijing. They remained friends, but as the days went by they got to know each other better. Before long they had fallen in love. "We think very similarly," Veronica said. "I could never be really mad at him because I know I would do exactly the same thing. "I definitely see a bit of myself in him when we are together. That also helped me to understand myself more and we grew together." A few months into their courtship, the couple broke up as they both felt they needed some personal space. "We weren't quite ready to take the next step so we took a break. But we soon reconciled and realised how much we needed each other," Veronica said. After they got back together again, their relationship reached a new level. In November last year, Evgeny took Veronica on a helicopter ride to see the city's skyline from a different angle. When they flew over a private beach near Big Wave Bay, Veronica noticed something unusual on the sand. As the helicopter descended, she realised that it was people lying on the beach spelling out the words, "Will You Marry Me?"

Global demand for yuan on the rise (By Ray Chan) Beijing's efforts to promote currency paying off as trade settlement and holdings in yuan by foreign central banks are on an upward trend - HKMA chief Norman Chan says Hong Kong banks should develop their yuan business with other offshore centres. Beijing's efforts to promote the yuan by developing the offshore yuan business are well supported by increasing trade settlement with the rest of the world in the currency, officials and industry experts said yesterday. They noted that Asian and European central banks had been increasing their yuan holdings and the continuing appreciation in the currency was boosting its investment appeal for investors. Speaking at the Paris Europlace Financial Forum yesterday, Norman Chan Tak-lam, the chief executive of the Hong Kong Monetary Authority, the city's de facto central bank, said "globally, demand for [yuan] is inevitably on an upward trend, with increasing trade settlement between China and the rest of the world, as well as investment activities on the mainland, both of which should lift the popularity of the Chinese currency overseas". HKMA figures show trade settlement in yuan in Hong Kong rose 40 per cent in the first 10 months from a year earlier to 2.1 trillion yuan (HK$2.6 trillion), exceeding the full-year amount last year. Outstanding yuan loans more than doubled to 70 billion yuan in October from about 30 billion yuan at the end of last year. Under the "one country, two systems" principle, Chan said Hong Kong had a unique advantage over other offshore yuan centres because of its financial and regulatory infrastructure. In 2003, Beijing introduced an offshore currency facility in Hong Kong so that overseas investors could use its banking services to tap into the mainland market. Taiwan gained yuan clearing status in August, and Singapore and London are vying to become offshore clearing hubs for Southeast Asia and Europe, respectively. "Although Hong Kong has a dominant position in the offshore [yuan] business, other cities could play catch-up in the future," Chan said. He said lenders in Hong Kong should prepare to develop the yuan business with other offshore centres to try to create synergies. Anita Fung, the chairman of the Hong Kong Association of Banks, said mainland China could double its share of world trade to 20 per cent by 2017-20. "With the [yuan] system maturing in Hong Kong, trade services in the Chinese currency will also increase alongside," said Fung, who is also the chief of HSBC's Hong Kong operation. She said the widening of the band within which the currency was allowed to trade could attract more overseas investors and central banks which were trying to diversify their currency holdings in the face of US dollar depreciation and high volatility in the euro. "Going forward, more international issuers are coming to Hong Kong as they seek funding channels in the offshore yuan, or dim sum, bond market," Fung said. However, amid liquidity concerns and unattractive yields, issuance of dim sum bonds in Hong Kong remained little changed from last year, with a total size of 95 billion yuan in the year's first 10 months, HKMA figures show. In that time, yuan deposits in Hong Kong rose 1.7 per cent to 554.8 billion yuan from the same period a year earlier, while Hong Kong dollar-denominated deposits grew 2.2 per cent.

Japanese tourist arrivals in Hong Kong plunge after Diaoyus dispute (By Dennis Chong) Arrivals drop 24 per cent after island sovereignty dispute sparks violence - Japanese tourists learn tai chi in Tsim Sha Tsui. The number of Japanese tourists coming to Hong Kong dropped for the second consecutive month in October, with industry executives blaming the dispute between Beijing and Tokyo over sovereignty of a group of islands. Arrivals fell by 24 per cent compared with a year ago, to 79,840. That followed a 9 per cent decline in September, Tourism Board figures released yesterday show. The government has been trying to broaden the tourism base, to avoid an over-reliance on mainlanders, who accounted for 67 per cent of all arrivals last year. Last month Japan fell from third to fourth place in the ranking of tourist source markets, excluding the mainland, trailing the United States, Taiwan and South Korea. "Hong Kong is part of China and the perception among the Japanese people is not to differentiate between them," said Masaki Hirata, executive director of the Hong Kong office of the Japan National Tourism Organisation. "They fear a negative atmosphere and possible violence." Hirata noted, however, that recent tensions over the disputed ownership of the Diaoyu Islands, known as the Senkaku Islands in Japan, had not deterred Hong Kong people from visiting Japan. "Hong Kong people are not [overly] political," he said. In September the Japanese government agreed to buy three islets in the chain from a private citizen. The move sparked violent protests in various cities on the mainland, with Japanese- branded cars overturned by mobs and Japanese-owned business targeted by vandals. In the same month a Japanese couple were attacked in Tsim Sha Tsui. Protests in Hong Kong were overwhelmingly peaceful. A Tourism Board representative said short-term visitor arrival figures were not a good reference point for assessing the broader health of the market, and a number of factors drove the fluctuation. In the first 10 months of the year, the number of Japanese tourists grew by 3.9 per cent against the same period last year. Hong Kong recorded a 12 per cent year-on-year increase in total arrivals in October, hitting 4.2 million, with growth largely fuelled by the mainland and Russian markets.

Hong Kong Disneyland posts first profit since opening (By Agence France-Presse in Hong Kong) Actors perform during a parade at Hong Kong Disneyland. Hong Kong’s struggling Disneyland has posted its first profit since opening seven years ago thanks to an increase in mainland Chinese visitors, a report said on Friday, as it considers opening new hotels. The news will come as a welcome relief for the resort, which has battled below-forecast visitor numbers since opening in 2005, while doubts about its future have swirled since China gave permission for a park in Shanghai. The Wall Street Journal report, which cited an unnamed person familiar with the park’s financial situation, gave no details. A Disney spokesman declined to confirm the report when contacted, saying the park’s financial report will be released early next year. A deal to open Hong Kong Disneyland, which is majority owned by the Hong Kong government, was signed in 1999 as part of a plan to boost the city’s economy as it reeled from the Asian financial crisis. However, it has been desperate to ramp up the number and quality of its attractions as it tries to lure more big-spending visitors from the mainland, while it has also embarked on a huge public-relations campaign. Walt Disney Company has also boosted distribution of its television shows across the country, while it also runs nearly 24 hours of weekly programming, the Journal said. And it seems there has been some success. The report said attendance jumped to 5.94 million visitors in the year to September 2011 from 4.5 million in 2008. It also said the proportion of mainland visitors reached 45 per cent in fiscal 2011, compared with 34 in 2006, while Hong Kong residents made up just 31 per cent, down from 41 per cent. The park in January said it posted its smallest annual loss for the fiscal year ending October 1, 2011, after enjoying a 13 per cent rise in visitors and a surge in hotel occupancy. Net loss fell to HK$237 million (US$30.5 million), less than half its net loss of HK$718 million in 2010. Critics have attributed much of the park’s struggles to its size – it is the smallest of all Disney’s theme parks – and a lack of attractions. The resort, including two hotels, covers about 125 hectares. However, the report said the park’s investors are discussing plans to add new hotels to the resort to increase overseas arrivals. Adding to the resort’s problems was news that the Chinese government had given permission for the building of a US$3.7 billion Shanghai Disneyland, which is expected to open in 2016 and could provide stiff competition.

Former NowTV news editor joins Chief Executive's team (By Lai Ying-kit) Another former journalist has been appointed as a political aide to Chief Executive Leung Chun-ying’s administration. Rebecca Chan Hoi-yan, a former news editor with Now TV, will become political assistant to Secretary for Food and Health Dr Ko Wing-man from Saturday, the government said on Friday. Chan, 35, is the fifth political aide in Leung’s administration with a background in journalism. She assisted in setting up Now TV’s news and business news channels. She was in charge of daily news editing and reporting, with a special focus on medical news. Before joining Now TV, Chan was senior reporter and news presenter at the free-to-air broadcaster TVB. Political assistants, a new tier of appointees created in 2008, are responsible for helping their bureau secretaries and undersecretaries, and liaising with the media and various stakeholders. Former chief executive Donald Tsang Yam-kuen’s government had four aides with a journalism background.

PICC raises US$3.1b in Hong Kong's biggest IPO this year (bloomberg) Chairman of PICC Group Wu Yan announces the company's global offering in Hong Kong on November 23. People’s Insurance Company (Group) of China, the nation’s biggest property insurer, raised HK$24 billion (US$3.1 billion) in Hong Kong’s largest initial public offering in two years, two people with knowledge of the matter said. PICC Group sold about 6.9 billion shares at HK$3.48 apiece, near the bottom of a marketed range, said the people, asking not to be identified because the information is private. The IPO is the largest in Hong Kong since October 2010, when AIA Group raised US$20.5 billion, data compiled by Bloomberg show. The insurer defied a 78 per cent slump in the value of Hong Kong IPOs this year, thanks in part to US$1.82 billion of pre- negotiated investments with American International Group and 16 other so-called cornerstone investors, to complete the offering. Before the sale, companies had raised US$3.5 billion in Hong Kong IPOs this year, the lowest for similar periods since 2001, data compiled by Bloomberg show. An external spokeswoman for PICC Group declined to comment on the final price. Founded in October 1949, PICC Group offers property, casualty, life and health insurance products. It had about 130 million individual customers and 2.4 million institutional clients at the end of June, according to the prospectus. PICC Group is the biggest property insurer in China with 163 billion yuan in premium income for the first 10 months of this year, according to the website of China Insurance Regulatory Commission. The shares were originally marketed at HK$3.42 to HK$4.03 each, according to a prospectus for the offering, which accounts for about 16.7 per cent of the insurer’s enlarged share capital. Based on the per centage, the sale values PICC Group at US$18.6 billion. China’s Ministry of Finance, which held an 88.7 per cent stake in PICC Group before the IPO, will own 72.5 per cent after the sale, the prospectus shows. The offering values PICC Group at 19.1 times earnings of US$975 million for the 12 months through June 30, Bloomberg data show. That compares with 10.6 times for Hong Kong-traded PICC Property & Casualty, in which PICC Group has a 69 per cent stake, and 34.6 times for China Life Insurance, the data show. China International Capital Corporation, Credit Suisse, Goldman Sachs, and HSBC managed the share sale as joint sponsors, the prospectus shows. Cornerstone investments from companies including AIG, Tokio Marine and China State Grid accounted for about 59 per cent of the IPO, compared with an average of 26 per cent for eight other Hong Kong offerings worth at least US$1 billion in the last two years, data compiled by Bloomberg show. Cornerstone investors were allotted a guaranteed amount of stock in exchange for the promise that they won’t sell PICC shares within six months. China’s Social Security Fund acquired 11.3 per cent of PICC Group for 10 billion yuan (US$1.61 billion) in June last year, according to a statement on the fund’s website. That transaction valued the insurer at about 90 billion yuan. PICC Group demanded a premium to the 90 billion yuan valuation because the pension fund bought its shares at a discount, people with knowledge of the matter said November 12. The Social Security Fund’s stake in the company will fall to 10.9 per cent after the offering, PICC Group’s prospectus shows. China’s insurance market expanded at an average 19 per cent annual pace in the past decade to become the world’s sixth biggest, while insurers’ assets jumped 10 times, according to the industry regulator.

Cathay offers 2pc pay rise after posting HK$935m loss (By Lai Ying-kit) Cathay Pacific Airways Flight Attendants Union rally for a 5pc salary rise at a press conference in Wan Chai on November 8. Cathay Pacific will pay its staff a 2 per cent pay rise next year after posting a HK$935-million loss for the first two quarters, the airline announced on Friday. The increase falls short of the 5 per cent increase the airline’s flight attendants have been demanding. But Cathay said employees would receive a bonus equivalent to December’s salary. That and the pay rise will apply to all ground staff and cabin crew based in Hong Kong. Chief executive John Slosar said this year has been an “extremely challenging” year, and the pay schemes had taken the business performance into account. “Commercial aviation is always volatile, so our business performance can vary greatly from year to year,” he said in a statement. “We do appreciate the professionalism of the Cathay team and try to do the best that we can for them.” The airline reported a HK$935 million loss in the first half of the year, citing high fuel prices, low growth in passenger numbers and weak demand for cargo services. During the same period a year earlier, the company made a HK$2.8 billion profit.

 China*:  Dec 2 2012

China's savings rate world's highest (By Han Peng) Latest figures from the IMF show that China’s personal savings rate has become the world’s highest. At more than 50 percent, it’s well above the global average of 20 percent. Experts say the high savings rate could hurt China’s economy because it reduces consumption. Every month when Song Xiaoxu gets his paycheck, the first place he goes to is the bank. The 25-year-old saves over half his salary, preparing to pay for something that still hasn’t come into shape. Song Xiaoxu, clerk, said, "I’ve worked for two years. Now I should be settling down. I’m planning to buy an apartment here when it’s built. But it’s too expensive for people like me. My whole family, including my grandparents, are all saving money for me for the down payment. And then I’ll still have to save money to pay the mortgage." Song is just one of the over a billion Chinese money savers.

Shifting China consumer tastes show in brand sales (By Reuters Breakingviews in Hong Kong) China’s consumers are still spending, but some brands are losing their lustre. Yum Brands and Hong Kong listed jeweller Chow Tai Fook have both warned that growth in China is slowing. That’s natural as companies hit a certain size. But quickly shifting Chinese tastes also play a role. Yum, the parent of Kentucky Fried Chicken, said it expects same store sales in China to fall 4 per cent year on year. Growing after a 21 per cent revenue gain last year would tough at the best of times, but competition has also started to bite. Kungfu, a Chinese fast-food chain specialising in steamed meals, said its first-half revenue grew 24 per cent year on year, as Chinese fast food junkies opt for something healthier. Chinese demand for jewellery demand has softened after breakneck growth in the past few years. Chow Tai Fook recorded a decline in overall same store sales of 1.7 per cent in the six months ending in September, after year-on-year growth of 62 per cent for the same period last year. Chinese consumers seem to favour more personalised design. That helps brands like more upmarket Greek jeweller maker Folli Follie, now backed by Shanghai’s Fosun Group, which saw same-store sales in China up more than 20 per cent in the first half. Much growth from Chinese consumption now comes from outside China. According to Global Blue, which processes duty-free shopping tax refunds, refunds for shoppers with Chinese passports rose 63 per cent year on year in the first nine months, on the back of a 60 per cent rise in the same period last year. Chinese shoppers now account for 24 per cent of total duty-free sales in the European Union, up from an 18 per cent share in the same period last year. Value-driven Chinese consumers are increasingly seeking to take advantage of better prices abroad. Despite China’s slowing GDP growth, 40 per cent of consumers plan to increase their discretionary spending in the next year, up from 36 per cent last year and 23 per cent in 2010, according to a survey from Boston Consulting released in October. But not all consumer goods companies will be winners. As the Chinese trade up from fried chicken and gold bracelets, investors need to adjust their tastes too. Context news Yum Brands Inc, parent of Kentucky Fried Chicken and Pizza Hut, said on November 30 that it expects a 4 per cent year-on-year decline in fourth-quarter sales at its established restaurants in China. The company said a cooling economy made it difficult to exceed the 21 per cent revenue increase it saw a year earlier. Half of Yum’s total revenue and operating profit for the third quarter of this year came from China. Chow Tai Fook Jewellery Group Ltd, the world’s biggest jewellery retailer by market value, on November 29 reported a 33 per cent fall in profit for the six months ended September to HK$1.82 billion, year on year. Same-store sales fell 1.7 per cent over the same period, with mainland China revenue up 3.4 per cent and Hong Kong, Macau and Taiwan falling 6.3 per cent.

Xi highlights national goal of rejuvenation (Xinhua) Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, views "The Road Toward Renewal" exhibition in Beijing Thursday, along with other members of the Standing Committee of the CPC Central Committee Political Bureau. Xi Jinping, general secretary of the Communist Party of China Central Committee, on Thursday visited The Road Toward Rejuvenation exhibition in Beijing, pledging to continue targeting the goal of “great rejuvenation of the Chinese nation.” Xi made the comments as he viewed the exhibition, on display in the National Museum of China, along with other members of the Standing Committee of the CPC Central Committee Political Bureau including Li Keqiang, Zhang Dejiang, Yu Zhengsheng, Liu Yunshan, Wang Qishan and Zhang Gaoli. During his time at the attraction, Xi went through the exhibition halls one by one, carefully examining the exhibits and listening to explanations made by staff members of the museum, which houses a large number of historic pictures, charts, material goods and videos on Chinese history since the First Opium War (1840-42). Xi stopped in front of some exhibits on major historical events in the 19th century, including charts illustrating how the West had occupied China’s territories, established concessions and drew up spheres of influence; the cannons installed at the fortifications of Humen in Guangdong during the Opium Wars; materials and pictures on the 1911 Revolution that overthrew China’s last feudalistic regime of the Qing Dynasty (1644-1911). The Party leader also studied the first Chinese version of the Communist Manifesto, material exhibits and photos relating to the founding of the CPC in 1921, the autobiography of one of CPC founders Li Dazhao, the first national flag of the People’s Republic of China, and photos on the Third Plenary Session of the 11th CPC Central Committee at which Deng Xiaoping and his comrades launched the epoch-making reform and opening up drive. Making a keynote speech during his visit, the general secretary described The Road Toward Rejuvenation as a retrospective on the Chinese nation, a celebration of its present and a declaration on its future. Citing a sentence from one of Mao Zedong’s poems, “The strong pass is a wall of iron is but an idle boast,” Xi said the Chinese nation had suffered unusual hardship and sacrifice in the world’s modern history. “But the Chinese people have never given in, have struggled ceaselessly, and have finally taken hold of our own destiny and started the great process of building our nation,” he emphasized. “It has displayed, in full, the great national spirit with patriotism as the core.” Talking about China today, Xi borrowed another sentence from Mao’s poems, “But man’s world is mutable, seas become mulberry fields,” referring to the country’s hard-earned finding of a correct road toward its rejuvenation and remarkable achievements since the launch of the reform and opening up. “It is the road of socialism with Chinese characteristics,” he stressed. Xi also cited a poetic sentence from Li Bai, one of the best-known ancient Chinese poets, “I will mount a long wind some day and break the heavy waves.” It indicates that, after more than 170 years of hard struggle since the Opium War, the Chinese nation has bright prospects, is closer than ever to reaching its goal of great rejuvenation, and is more confident and capable of reaching that goal.

Hong Kong*:  Dec 1 2012 

Phoenix TV boss Liu named Business Person of the Year (By Enoch Yiu) The award winners at the presentation held at the Grand Hyatt last night. From left, Sunny Kok, chief executive of Green Tomato; Mark Whitehead, managing director of Hong Kong Air Cargo Terminals; Kam Hing-lam, group managing director of Cheung Kong Infrastructure Holdings; Benjamin Hung, chief executive of Standard Chartered Bank (Hong Kong); Ken Lee, Asia-Pacific head of commercial at DHL Express; Liu Changle, chairman of Phoenix Satellite Television Holdings; Robin Hu, chief executive of SCMP Group; Girish Jhunjhnuwala, chief executive of Ovolo Group; Jacky Kwan, chairman of Bamboos Professional Nursing Services; Wang Tianyi, general manager of China Everbright International. DHL and the South China Morning Post announced the winners of the 23rd Hong Kong Business Awards last night, showcasing business leaders and companies successfully coping with the still stormy global economic environment. Media executive Liu Changle was named Business Person of the Year. Liu is the chairman and chief executive of Phoenix Satellite Television Holdings. He is a Shanghai-born former colonel in the People's Liberation Army with strong ties to senior Communist Party officials. Liu set up Phoenix Television in 1996 as a joint venture with media baron Rupert Murdoch. The Hong Kong-listed broadcaster last year added a Cantonese television channel in Hong Kong in addition to its five channels in Putonghua. It also wants to expand into English broadcasting. The Executive Award was won by Standard Chartered Bank (Hong Kong) chief executive Benjamin Hung Pi-cheng. Hung led the bank in responding to its customers' demand for yuan business services and developed a branch network tailored to wealthy mainlanders. The venerable lender has created a presence for itself in upmarket retail areas such as Canton Road and Nathan Road in Tsim Sha Tsui and hot spots such as the nightlife mecca of Lan Kwai Fong in Central. The Owner-Operator Award went to Ovolo Group chief executive Girish Jhunjhnuwala. Ovolo owns and operates four hotels and two serviced apartments in Hong Kong. Earlier this year, it expanded into Melbourne in its first overseas venture. Cheung Kong Infrastructure Holdings, which has made overseas acquisitions in recent years, won the International Award. The Enterprise Award went to Hong Kong Air Cargo Terminals. The China Company Award was won by China Everbright International, a holding company for direct investment funds and brokerage operations on the mainland and in Hong Kong. The company has been actively launching new investment products despite the weak sentiment in the market. The Young Entrepreneur Award went to Jacky Kwan, the chairman of Bamboos Professional Nursing Services, while mobile software developer Green Tomato won the SME Award.

HKEx drives on with new offering to fund LME takeover (By Enoch Yiu and Ray Chan) Bourse moves ahead with first share sale in a decade after 'last big hurdle' cleared in takeover of London Metal Exchange - The London Metal Exchange. Hong Kong Exchanges and Clearing is making its first share offering since it was listed, aiming to raise US$800 million following the British regulator's approval yesterday for HKEx's takeover of the London Metal Exchange. The Financial Services Authority gave the go-ahead for HKEx's £1.39 billion (HK$17.24 billion) bid for the LME, the world's biggest metal exchange. The deal will now need the sanction of the High Court of England and Wales, due on Wednesday, to become unconditional and effective. But brokers said the FSA's approval was the last major hurdle, so they considered the deal as done. HKEx plans to sell new shares to fund part of its payment for the LME, the first such offering since its listing in 2000. A term sheet seen by the South China Morning Post shows the bourse aims to raise US$800 million. The shares will be priced in an indicative range of HK$116.10-HK$119, translating into a discount of between 4.7 per cent and 7 per cent to yesterday's closing price of HK$124.80. Buyers of the new shares will be subject to a 90-day lock-up period. "About 90 per cent of the overall deal was covered before the market close," said a syndicate banker who declined to be named, because the deal is private. Joseph Tong Tang, executive director of Sun Hung Kai Financial, said the new share offering was popular. "The HKEx offering … comes at the right time, as stock market sentiment has been good recently. Many fund managers are interested in taking up the new shares," Tong said. "Also, both HKEx and the LME are established exchanges, and so investors have confidence in buying shares that the HKEx can finance its deal to take over the LME." A source close to the HKEx said that after the US$800 million share sale and its US$500 million convertible bond issue two months ago, HKEx would be under no pressure to issue more new shares in the near future. Tong said while HKEx had no problem financing the LME takeover, it would have to expend a lot of effort to combine the two entities. "Brokers and investors who trade stocks are very different from those who trade commodities," Tong said. "HKEx would need to do a lot of promotion and education to encourage Hong Kong investors to develop an interest in commodities trading." HKEx chief executive Charles Li Xiaojia wants to use the mega takeover of the LME, which is the first overseas acquisition by the local bourse, to diversify its business and avoid relying too much on stock trading and IPOs. The LME deal comes as the exchange struggles with low turnover, and new listings have fallen this year, resulting in a 19 per cent drop in third-quarter profit and a 16 per cent drop in profit for the first nine months, compared with the same periods last year.

Foie gras - modern interpretations (By Vicki Williams) Foie gras is now found in many cuisines in different guises (By Vicki Williams) Shang Palace's braised South African six-head abalone and pan-fried foie gras in abalone sauce. Whisk's Scottish oyster with foie gras and grapefruit granita. Chez Patrick's foie gras trio with orange and bitter chocolate sauce. Stewed spotted grouper with foie gras and black garlic. Foie gras, the fattened liver of a goose or duck, has had its ups and downs recently. Although France legally protects it as part of the country's cultural and gastronomic heritage, California banned its sale starting from July 1 because it is the product of a traditional feeding method of animals called gavage. Bans of varying degrees also exist in other places, including Australia. Detractors of gavage consider it cruel. However, fans disagree, and there are scientific studies to support their view. What's more, not all producers practise gavage on their fowl. In any case, consumer demand for foie gras is growing, and countries such as China, Vietnam, Hungary, Russia and Canada have joined France in producing it. In Hong Kong, demand is high. It is a popular diners' choice, as can be seen by its increasing use in modern dishes by local chefs. Take Frenchman and executive chef of Chez Patrick, Patrick Goubier. On his menu are four foie gras dishes, all using duck liver, which he prefers. This includes the modern foie gras trio with orange and bitter chocolate sauce. A slab of foie gras terrine is served with two profiteroles, one filled with foie gras ice cream, the other containing duck liver which has been marinated in the sweet wine Monbazillac and baked in an oven for a few minutes. This is finished with a drizzle of sauce that includes balsamic vinegar reduction, orange zest and dark, bitter chocolate. "The idea was to create a surprise for the diner. First you taste the robust chocolate, which is quickly replaced by the acidity of the orange and then the delicate foie gras," says Goubier. The dish is delicious and moreish, the chocolate serving as a fine complement to the liver. No stranger to creating something from a traditional inspiration, Alvin Leung, chef owner of Bo Innovation, uses savoury ice cream in a foie gras dish. Muy choi flavoured ice cream and preserved Chinese mustard greens sit atop a bed of ginger biscuit crumbs. The preserved vegetable is traditionally used in Hakka cuisine and is often paired with braised pork belly. Here, the fatty protein element is duck foie gras. The liver is seared in a pan until it is browned, with a firm outside and soft centre. The dish is garnished with a dehydrated, crispy leaf of preserved mustard greens. Leung is not the only chef substituting foie gras for pork belly. A friendship inspired Jason Atherton, the chef behind tapas bar 22 Ships, to create a popular dish - chargrilled Iberico pork and foie gras burger with avocado and pickled cucumber. "I invented this for Asian film director Eric Khoo, who is a family friend. When I was working on my tapas restaurant in Singapore, he asked me to include a good pork burger, so it was born out of that. I wanted to create the ultimate burger." The mini burgers are a combination of minced pork neck and duck liver served on a brioche bun that adds a hint of sweetness. The cucumber is used to balance the richness. Also on offer is foie gras and sweetbread empanada with capers and burned onion jam. Finished with a piece of pan-fried foie gras, it is indulgence on a fork. Ming Court's executive chef, Tsang Chiu-king, is well-known for his innovative creations and use of luxury Western ingredients. The current foie gras offering is an evolution of the traditional taro puff. This puff has a fluffy, extra crunchy outside that gives way to a succulent blend of pork, taro, and goose liver. It's a delight to eat, with a rich mouthfeel as the flavours of pork and taro lead to a lingering foie gras finish. At the two-Michelin-star Shang Palace, there are six goose liver dishes on the menu. Executive Chinese chef Mok Kit-keung believes the richness of the liver enhances certain dishes, particularly seafood. That includes the signature dish, stewed spotted grouper with foie gras and black garlic, and braised South African six-head abalone and pan-fried foie gras in abalone sauce. In the grouper dish, it certainly adds depth, and with the abalone dish, it provides textural and taste contrasts. On offer at three-Michelin star Lung King Heen are wok-fried prawns with duck liver and almonds, which are deep fried. According to executive chef Chan Yan-tak, the dish was the result of experimenting with ingredients that would complement and bring out the flavour of prawns, which he believes can be rather tasteless on their own. The liver is slow-cooked before being pan-fried and then added to the wok with the other components, resulting in a balanced dish with complexity and three distinct tastes and textures that combine seamlessly. He says each mouthful is a new experience. Foie gras is making an appearance in a sushi roll at Roka. The Japanese spin of foie gras nu ume she is to give the duck liver the appearance of a thick-cut futomaki style sushi roll. It is poached in Japanese plum wine and wrapped in seaweed. It comes with a squid ink nori (seaweed) bread. Head chef Manabu Oikawa says the dish is an homage to classic French poached foie gras, but the presentation and flavour are firmly Japanese. The result is an intense and successful combination with notes of fruit and spice playing off the liver, with the taste of the sea from the bread adding playfulness to the dish. More surprises are in store at Whisk. Part of a degustation menu that highlights dishes from around the world, "Scotland" is the first course. It is a combination of Scottish oyster, foie gras and grapefruit granita. Chef Bjoern Alexander Panek describes the thinking behind it: "It is a dish designed to surprise the palate. The oyster gives saltiness, the duck foie gras is buttery, while the grapefruit granita gives texture and freshness. The palate experiences cold first, then fattiness and finally saltiness." 

From Frankel to Class Five – welcome to Hong Kong Tom Queally (By Michael Cox) Tom Queally on Frankel. “Frankel’s jockey” Tom Queally starts his Hong Kong riding career on Sunday, and in what must be some sort of cruel initiation ritual by the club, he has been drafted to ride a horse which has never been placed in eight starts and wouldn’t be able to keep up with Frankel if the champion was walking backwards around the parade ring. We’ve described getting off Frankel and on to a Class Five slug as climbing out of a Ferrari and into Fred Flintstone’s stone-wheeled foot mobile, but that might be overstating Diamond Agate’s ability. Tom, welcome to Hong Kong, and welcome Class Five, on the all-weather track no less – try and stay out of the kick-back. There’s that point at the school athletics carnival when a teacher announces: “All of the kids who haven’t won a ribbon today please come forward” – and the less athletically inclined students step up for a what is hoped will be a morale boosting, “everyone gets a prize” contest. Well, the Hong Kong Jockey Club have their own versions of these egg-and-spoon races – they’re called Class Five handicaps, where the roughest and most dishonest collection of nags this side of Macau do battle in a race to decide the best of the worst. Hong Kong racing is structured in such a way that every one of the 1,400 or so horses eligible to race at any given time are given a fair chance to win a race through handicapping. Every horse has a rating indicating their ability expressed as a number – re-assessed after each run. Ambitious Dragon is currently rated the best on 134. Horses are then bracketed into divisions, or classes – Class One (with Group One, Two and Three above that), right down to our hapless friends in Class Five. At the bottom end of the scale, rated from zero to 40 points, you have this motley crew of thoroughbred failures. Whether they are unco-ordinated, unsound or just plain hopeless horses, they are the bane of a punter’s existence. At the moment three horses share the dubious distinction of being stuck with the label “worst horse in Hong Kong” – with a rating of 13: Barcelona Too, Crimson and Beautiful Scenery. Too slow to keep up in sprints, but too weak to race over any further – this is the lot of many riding the slippery slope down the ratings. But the worst type of Class Five animal isn’t necessarily the slow one - who at least tries his best - but it’s the pretender who is less reliable as a copy watch from Chun King Mansions when put under any sort of pressure. Watch this effort from Class Five scoundrel and punters’ nemesis Saddlers Lodge last season – where he bursts to the front like he belongs in a Group One, but “lays down” and leaves Douglas Whyte stranded at sea and paddling like crazy. It’s all very well to label a jockey “Group One-standard” – but is there a greater test of a rider’s skill and tenacity than getting a Class Five slowcoach over the line in a close finish? Umberto Rispoli earned plaudits from Tony Millard at Happy Valley last night when he did everything bar get off and carry Medic Champion – a horse that is so fat he needs a medic with an oxygen mask after every gallop. One of the best jockeys to watch in a Class Five is the energetic and ultra-competitive Brett Prebble. He sometimes gets marked hard on aesthetics by posh purists from the northern hemisphere, but at least his effort levels are obvious when he throws himself into his work. And saving every inch of ground takes on critical importance when you’re on a horse whose fuel meter is always stuck on empty. For those part-time punters who like to take a shortcut with the form and simply illiminate the horses who “can’t win” – Class Five is a nightmare. Putting a big red line through those who apparently haven’t got recent positive performances will leave you with very little ink left, and worst still, no selection. Some liken “cellar grade” to a maximum security prison containing only the shiftiest customers – you don’t turn your back on them, because you can’t trust any of them with your hard-earned. Saddlers Lodge races on Sunday – where he faces another Class Five “lifer” Gorgeous Ruler. It’s hard to separate these two for lack of willingness to compete. The tale of the tape of this epic head-to-head match-up of mediocrity is revealing. Saddlers Lodge had already racked up two seconds in maidens in England before he came to Sean Woods – admittedly one of them was behind a subsequent multiple Group One winner in Society Rock – but, in hindsight, the failures were telling. Getting beaten has quickly become Saddlers Lodge’s specialty – he has finished runner-up six times in 27 starts – but still never won. Likewise, winless Gorgeous Ruler has finished second six times in 32 trips to the track. We can see it now, Gorgeous Ruler and Saddlers Lodge emerge from the pack at the 300m, locked in a neck-and-neck struggle … to see who can best find a way to lose. All eyes will be on Queally though, and what happens when he asked Diamond Agate for effort in the straight. He might like good on Frankel when he pushes the “go button” – but will his Fred Flintsone feet move fast enough to carry this one over the line?

Kowloon Watch Company celebrates 60th anniversary (By Vivian Chen) Angie Wong, Wong Kam-shing, Samson Sun and Yu Chui-yee. To celebrate its 60th anniversary, the Kowloon Watch Company hosted a get-together in The Ritz-Carlton hotel's Diamond Ballroom on Monday night. The company opened its first shop in 1952 in Sham Shui Po, and now has 13 stores in town. It also sells its own brands, Cover and Jaz-ma, on the mainland. Looking back, managing director Wong Kam-shing said the company had evolved over the past few decades. "Before, it was more about having a strong product and introducing it to customers. But these days, we are more focused on catering to our clients' needs," he said. Wong said he hoped to further develop the company's market research team to keep up to date on the ever-changing tastes of luxury-watch enthusiasts. To highlight the "Hong Kong spirit" that has been passed down from the company's founders, local singing group C AllStar were booked to provide entertainment at the gala. The company's staff also took turns on stage to show off their Gangnam Style moves.

Ranking falls, but Hong Kong still in world's top 10 places to be born & United States was ranked 1st now at the 16th place (By Ernest Kao) Hong Kong ranked seventh the last time the EIU's report was published in 1988. The city now ranks 10th. Despite out-of-reach property prices and dangerous air pollution, Hong Kong is the world’s 10th best place for a baby to be born - at least according to a study by the Economist Intelligence Unit. The EIU, a sister company to The Economist magazine, looked at “11 statistically significant indicators” including geography, demography, social and cultural characteristics, policies and the economy as well as taking into account a wide range of different life-satisfaction surveys. The study was conducted in 80 countries, of which Hong Kong and China received separate rankings. Hong Kong ranked seventh the last time the EIU’s report was published in 1988. Singapore, No 6 on the list, has since edged Hong Kong out as the best place in Asia for a child to be born. For 2013, China languishes at a dismal 49th place, which means that other than stellar economic growth things have not improved that much over the last twenty years. The United States, which took the top spot in 1988, dropped out of the top 10 to a meagre 16th place, putting the country only slightly higher than the United Arab Emirates, South Korea and Israel. The EIU attributed America’s big drop to 2013’s babies having to “inherit the large debts of the boomer generation”. Large European economies such as Germany, France and Britain did not perform well either, mainly because of uncertain circumstances of the euro-zone financial crisis. Germany fell from No 3 in 1988, just before unification with its eastern counterpart, to 16th place for 2013. Australia and a handful of Scandinavian countries dominate in the top 10, with Switzerland taking the top spot as the best place for a baby to be born. According to The Economist, the next where-to-be-born index is scheduled for publication in 2030, when the children born in 2013 reach adulthood. The world's top 10 countries to be born in

Rank Country Score (of 10)
1 Switzerland 8.22
2 Australia 8.12
3 Norway 8.09
4 Sweden 8.02
5 Denmark 8.01
6 Singapore 8.00
7 New Zealand 7.95
8 Netherlands 7.94
9 Canada 7.81
10 Hong Kong 7.80

KMB seeks 8.5pc fare hike as losses mount (By Lai Ying-kit) A Kowloon Motor Bus station in Hung Hom. Kowloon Motor Bus, the city’s largest franchise bus operator, on Thursday applied for an 8.5 per cent fare rise for next year. The proposed increase would be higher than this year’s inflation, which was between 1.6 per cent and 6.1 per cent. It will require approval from the government. KMB posted a loss of HK$15.2 million in the first half of this year. It said it hoped the fare increase could help it break even by the end of next year. The company has been struggling with a 40 per cent increase in fuel prices and a 9 per cent rise in wages over the past two years. It also said a substantial number of passengers – about 500,000 daily – had shifted to using the MTR and railways which have been expanded in recent years. Despite efforts to rearrange duplicated bus routes with low patronage, progress has been very slow, the bus company said on Thursday. At present, over 70 per cent of KMB’s 400 bus routes consistently suffer from low patronage. The last time KMB raised its fares – by 3.6 per cent – was in May last year, but that was not enough to cover the overheads, the company said.

 China*:  Dec 1 2012

KFC China says chemical chicken feed produces 'normal' growth (By Amy Li) China's KFC released a statement on Thursday maintaining the methods used to feed chicken by its supplier, Shanxi province-based Suhai Group, are 'scientific'. A branch of KFC restaurant in Beijing. China’s KFC released a statement on Thursday, maintaining the methods used to feed chicken by its supplier, Shanxi province-based Suhai Group, are “scientific”. The response came days after reports surfaced online accusing the supplier of using toxic “instant chicken” chemical feed. Those chemicals could speed up chicken’s growth cycle to 45 days, reported China Daily on Wednesday. In the statement posted on KFC’s official account on Sina Weibo, China’s Twitter-like service, KFC denied any foul play in Suhai’s feeding practice. It also asks the public to recognise the “significant changes” in poultry breeding brought by “increasing market demand and advanced technology”. The statement said: “45-day growth cycle for white-feather chickens is normal. It’s a result of selecting top quality chicken breed and scientific methods.” KFC said earlier on its weibo that Suhai supplied only 1 per cent of its chicken.

Trade barrier motivates US Huawei, ZTE allegations (Xinhua) As the United States warns that two leading Chinese technology firms pose potential threats to its national security, an expert from a Chinese think tank has called this assertion "a barrier to trade." "Technically or economically, it's impossible for Huawei and ZTE to place back doors deliberately," Fang Binxing, a member of the Chinese Academy of Engineering and president of Beijing University of Posts and Telecommunications, was quoted as saying by Guangming Daily on Wednesday. "Back doors" refer to programs secretly inserted by developers, enabling attackers to install malicious software that could paralyze networks and allow hackers to gain entry into highly classified systems. An 18-month White House-ordered review on Huawei, the world's second-largest maker of networking gear, indicated no evidence of Huawei espionage was found, but that it was still risky based on the presence of "back doors." Fang said Huawei shares similar technology with Cisco in routers. As the world's leading maker of computer networking equipment, Cisco is able to find any back door without difficulty, if it exists. "But now US companies and government agencies fail to provide any evidence," Fang said. "How can they still claim Huawei and ZTE insert back doors in their products?" In recent years, Huawei has pursued a foothold in the US market as a private enterprise. Spying for China at the expense of its reputation "does not make sense," according to Fang. Huawei and ZTE have already become Cisco's major competitors. But both of them hit an invisible wall when they attempted to expand their business in the United States. Fang said US allegations against Huawei are groundless. "It just intends to set up trade barriers to Chinese companies," he said. He also called on the Chinese government to tighten its own information security measures and establish a dedicated agency for this task. According to a report released in early July by China's primary computer security monitoring network, nearly 50,000 overseas-based internet protocol addresses were involved in attacks against 8.9 million Chinese computers last year. As China is facing increasing cyber attacks and threats from overseas, "we need a specific agency to take charge of network security issues," Fang said.

Patrols in Hainan get more clout (By Huang Yiming in Haikou and Wang Qian in Beijing) Police in Hainan will be authorized to board and search ships that illegally enter the province's waters in 2013, the latest Chinese effort to protect the South China Sea. Under a set of regulation revisions the Hainan People's Congress approved on Tuesday, provincial border police are authorized to board or seize foreign ships that illegally enter the province's waters and order them to change course or stop sailing. The full texts of the regulations, which take effect on Jan 1, will soon be released to the public, said Huang Shunxiang, director of the congress's press office. Activities such as entering the island province's waters without permission, damaging coastal defense facilities, and engaging in publicity that threatens national security are illegal. If foreign ships or crew members violate regulations, Hainan police have the right to take over the ships or their communications systems, under the revised regulations. Calling the revisions "significant", Zhuang Guotu, director of the Southeast Asian Center at Xiamen University, said: "It is urgent for China to improve its legal system regarding offshore law enforcement because disputes with other countries are on the rise in the South China Sea. "Police have clear processes laid out in the new regulations for appraising illegal activities and punishing illegal entry," Zhuang said. The revisions also emphasized border police should strengthen the patrolling of the waters of Sansha and coordinate with the routine patrols conducted by the country. Sansha, the newest prefecture-level city, which was established in July, administers the islands and waters of the South China Sea. The city is under the jurisdiction of Hainan. Bi Zhiqiang, director of the legislative affairs commission of the Hainan People's Congress, said the revised regulations will strengthen offshore patrols of the waters off Hainan, protecting national maritime interests. An insider from China Marine Surveillance told China Daily that new ships will join the South China Sea patrol fleet soon. On Nov 12, a 3,000-metric-ton inspection ship started patrolling the Yellow Sea, and on Nov 15, another one joined the patrol fleet in the East China Sea. All these moves show that the country is preparing itself for dealing with complicated marine disputes, said Qi Jianguo, former Chinese ambassador to Vietnam.

Hong Kong*:  Nov 30 2012 

What Hong Kong can expect from Li Yuanchao, likely next Beijing link-man (By Cary Huang in Beijing) Li Yuanchao is tipped to be the next vice-president of Hong Kong and Macau affairs, after a career that began in teaching - Three decades ago, Li Yuanchao seemed destined for a life in the classroom, not the intrigue-filled halls of Zhongnanhai. Li, from Jiangsu, was among the first students to enter the prestigeous Fudan University after the social upheavals of the Cultural Revolution. The university, under the leadership of the famous "first geometer of the Orient", Su Buqing, was developing into the cradle of the mainland's burgeoning mathematics community. Like most students in his classes, Li seemed wholly devoted to his studies and showed little interest in politics. He had taught secondary school mathematics before entering university, and many expected him to have a long career in teaching after his studies were complete. One former classmate, Wu Zongmin, who is now a mathematics professor at Fudan, told the Southern Metropolis Weekly: "His only prospect in life was to learn mathematics and continue his career as a secondary school teacher after graduation." Those who know Li say his humble, flexible and easy-going manner was already well established during that modest period of his life. Analysts believe such characteristics will serve him well if Li, as widely expected, is tipped to become vice-president in charge of Hong Kong and Macau affairs. Friends, classmates and colleagues describe him as a reform-minded leader open to new ideas and initiatives, provided they meet a careful cost-benefit analysis. That could possibly include controversial political reform proposals on the mainland and in Hong Kong. A former subordinate of Li's said: "He is flexible in policy and thus he would adopt a more tolerant approach in regard to Hong Kong affairs as it is under the one-country, two-system formula. However, he is not radical. While he is bold in accepting new things, he is also cautious in trying experiments." Li was born in 1950 in Liangshui, Jiangsu province. He father, Li Gancheng , was a vice-mayor of Shanghai in the 1960s, making him a member of the Communist Party elite. But that status, which today makes Li a "princeling", did little to protect him in Mao Zedong's purges during the Cultural Revolution. Like many of the children of revolutionaries, he was "sent down" to the country to work as a labourer. He was among the first wave of students to enrol in universities when entrance exams resumed in the first two years after Mao's death in 1976, the so-called 77th and 78th classes. Those students now make up much of the country's ruling elite, and hold several seats in the party's powerful Politburo. Chen Zhimin, a professor at Fudan's School of International Relations and Public Affairs, said: "The 77th and 78th students have played major roles in sowing new thinking, reforming the old system and guarding the new in the past three decades." At university, Li established a reputation for being both accommodating and assertive. His classmate Wu recalled how Li accepted a less desirable bed near a door so that a classmate could have a better one near a window. Another time, Li, acting as student representative, asked Su to push back the dormitory's scheduled lights-out time to 11pm from 10.30pm so students could continue reading without having to go into the lobby. Although he joined the party in 1978, Li did not seem to pay much mind to politics. Many expected him to pursue a career in academia, like large numbers of his classmates, who are now scattered across the prestigeous universities of the world, from Chinese University of Hong Kong to Harvard. "Like most students of sciences, who are usually indifferent to politics, Li showed no particular interest in controversial political issues at that time," the former colleague said. His shift towards politics came after graduation, when Li became an assistant professor at Fudan's School of Management and agreed to serve as the school's secretary for the Communist Youth League. In 1983, an early patron of Li's, Shanghai party chief Chen Pixian, recommended the young professor to then general secretary Hu Yaobang to serve as Youth League secretary for the entire university. It was a major break. The Youth League was becoming a key power base for future president Hu Jintao and Li rose quickly through the ranks of what is now known as the tuanpai or the "Youth League faction" of the party. By the end of his first year as a full-time league leader, Li had become secretary of the Shanghai league. He later moved up to the same post in Beijing, where colleagues remember him as intelligent and personable, with a ready smile. "He is poised, but without an official air," a former colleague said under the condition of anonymity. "He is cautious, but not indecisive; he is flexible, but not unprincipled; and he is pragmatic, but not without ideals." Li was later appointed to the top party posts in Nanjing and Jiangsu before being promoted to the Politburo and placed in charge of the Central Committee's Organisation Department in 2007. In that powerful role, he oversaw the personnel assignments for the entire 80-million-member party. In the meantime, he attended Peking University and the Central Party School, earning bachelor's, master's and doctoral degrees. In 2002, he completed a five-week training programme at Harvard University's Kennedy School of Government. With such a background, Li is often seen as an exemplar of the new generation of party leaders: well educated, with a good administrative track record and exposure to the outside world. Steve Tsang, who heads the University of Nottingham's China Policy Institute, said: "While all the third and fourth-generation leaders received an education in Soviet-style planned economics, the new leaders are generally younger, better educated and, to some degree, less ideological, as many received an education increasingly influenced by Western ideas in economics, law and politics." Because of his background and ties to Hu Jintao, many expected that Li would ascend to the Politburo's supreme Standing Committee after the 18th party congress earlier this month. That did not come to pass, if only because the Standing Committee was reduced to seven members. Analysts say he remains a figure to watch and, at 62, is young enough to be promoted after the next party congress in 2017. Beijing names Zhang as its top man for HK - Politburo Standing Committee member Zhang Dejiang has taken over from Vice President Xi Jinping as the highest mainland official in charge of Hong Kong affairs - ending speculation that the job will go to former propaganda chief Liu Yunshan. Zhang, formerly Guangdong party secretary, was elevated to the all- powerful seven-man committee at the 18th Communist Party congress earlier this month. News of his new role comes as top local officials take turns to visit Beijing, where a once-in-a-decade leadership transition is under way. Chief secretary Carrie Lam Cheng Yuet-ngor started the ball rolling in September, followed more recently by Financial Secretary John Tsang Chun- wah and Police Commissioner Andy Tsang Wai-hung. The justice and development chiefs, Rimsky Yuen Kwok-keung and Paul Chan Mo-po, are currently in Beijing, while Secretary for Security Lai Tung- kwok is expected to return to the SAR today. None of their itineraries mentions any meeting with Zhang. Earlier, there was speculation that Liu, who was also elevated to the Standing Committee, would be in charge of Hong Kong affairs. But a source told The Standard that Zhang, who is familiar with local affairs, will replace Xi - expected to succeed Hu Jintao as president in March. Zhang, 66, studied at the Kim Il Sung University in Pyongyang, North Korea, where he earned a degree in economics in 1980. He was party chief for Jilin province from 1995 to 1998 before taking over the reins of economic powerhouse Zhejiang. His next move as party chief was to Guangdong in 2002. As Guangdong chief, Zhang pushed for the formation of a pan-Pearl River Delta economic bloc to boost growth. Also known as "9+2" - the bloc covers the provinces of Fujian, Jiangxi, Hunan, Guangdong, Hainan, Sichuan, Guizhou and Yunnan, the Guangxi Zhuang autonomous region and the two SARs of Hong Kong and Macau. Zhang was appointed vice premier in 2008 and in March he was appointed Chongqing party chief in place of former "princeling" highflier Bo Xilai who was removed over charges of corruption and abuse of power.


Kai Tak paddle sports centre clears hurdle, gets green light (By Alvin Sallay) World-class facility for dragon boats, rowing and canoeing next to old airport now set to become a reality after thumbs-up from key government bodies - The Kai Tak development project. A world-class water centre for paddle sports in the heart of Hong Kong has moved closer to reality after two key government bodies recently gave the project their stamp of approval. The Home Affairs Bureau and the Harbourfront Commission's task force on Kai Tak have backed the Water Sports Council's proposal to create a regatta centre adjoining the runway at the old airport site in Kowloon East. The council comprises the national associations for rowing, dragon boating and canoeing. Mike Tanner, chairman of the Hong Kong Rowing Association, said: "This is excellent news. By showing their support for a water sports centre, we are one step closer to realising our dream for a world-class facility which can host major international events in all the different paddle sports." Dr Raymond Ma Siu-ming, chairman of the Hong Kong Dragon Boat Association, added: "Every year the government spends millions of dollars on creating a flat-water course for the international dragon boat races in the harbour. So why not save money by giving us a permanent place? This is absolutely good news for our sport." On Tuesday, the Water Sports Council (WSC) gave a second presentation to the task force, spelling out in detail its plans for a multi-use water sports centre to cater to the strong public demand. The facility will include an international-standard regatta course for rowing, canoeing and dragon-boat racing as well as a kayak whitewater course. Ian Brownlee, one of the main forces behind the plan and a consultant to the water sports associations, said: "Last August we presented our case, and while generally supportive, they had a few reservations. But this time they were fully behind us and gave us the nod to go ahead." The WSC received a further boost last week, when the Home Affairs Bureau (HAB) gave its blessing to the project. Annie Kong, on behalf of the secretary for Home Affairs, wrote: "The HAB welcomed the provision of new facilities that will help to promote sport at both the elite and community levels. "We see clear merit in developing water sports facilities at Kai Tak, given the convenient location and the presence of other sports facilities under planning in the area, including the multi-purpose sports complex. We therefore support in principle the allocation of the site concerned for the development of the proposed water sports centre." Brownlee said the next step would be to make a formal application for the 1.8-hectare site. "There will be a lot of engineering work going on over the next five years or so in that area, so I'm not sure when the site will become available. But we will try to get temporary use of it so we can hold events," Brownlee said. Tanner said the major hurdle had been overcome. "The support from these two key bodies was essential and crucial to our hopes. Now we have to start looking at how the project will be funded, designed and planned. "I think the site will only become fully available to us by 2018 or 2019, but in the interim we are looking at holding events. "We will have to look to the government for funding. But there have also been suggestions that the project go ahead on a public-private partnership, and we'll look at this as well."

Hong Kong ranks third in global study of cognitive skills (By Linda Yeung) International survey shows city's youngsters are doing well, but experts warn about rote learning - The University of Hong Kong. Hong Kong ranked third in an international survey of students' cognitive skills and educational attainment, behind South Korea and Finland. Japan and Singapore trailed behind the city, despite being among the top five in the Global Index of Cognitive Skills and Educational Attainment study by the Economist Intelligence Unit released yesterday. The survey compared the performances of grade 8 and grade 4 pupils in 40 countries in mathematics, reading and science, based on their results in the OECD's Program for International Student Assessment, and the international Trends in International Mathematics and Science Study and Progress in International Reading Literacy Study assessments. The measurement of educational attainment is based on the countries' latest literacy rate and graduation rates at the upper secondary and tertiary level. Despite Hong Kong pupils' superior academic performance, local experts warned rote learning remained an issue here. The report attributes the success of Finland and South Korea to some common qualities: high-quality teachers, value accountability and a moral mission that underlies education efforts. The index is in The Learning Curve, a research report published by educational company Pearson, which has information on education inputs and outputs in more than 50 countries. While factors like government spending on education, school entrance age, teacher salaries and degree of school choice are believed to affect educational quality, the report points out that simply pouring resources into a system is not enough: far more important are the processes which use these resources. Cultural change towards education and ambition are equally, if not more, important than income in promoting better educational outcomes. But there is no doubt about the importance of good teachers. "The impact of good teachers extends beyond positive educational outcomes and can be linked to positive societal factors, such as lower levels of teenage pregnancy," the report says. "The best performing countries attract top talent, train teachers throughout their careers and allow them freedom." The report also highlights the difficulty parents - even in the developed world - have in making the right choice of schools for their children. Extensive studies of voucher programs and charter schools in the United States indicate that, while both can be beneficial, neither offers a magic formula, it says.

Wedding guests need to give more generously than ever (By Amy Nip) - With the average cost of a banquet above HK$600 (US$80) a head, giving less than that won’t do. If you want to be a welcome guest at your friend's wedding, be prepared to stuff more than HK$600 in your gift envelope. It seems the woman who got Hong Kong talking when she used Facebook to tell would-be guests not to come to her banquet unless they paid more than HK$500 has a point. Getting married is expensive, and the lion's share of the cost is the wedding banquet, a traditional must-have in Chinese society. Although friends invited to the dinner can pay whatever amount they want, an ESDlife survey covering 1,768 respondents found that a sum less than HK$612 would be unlikely to cover the food and beverage costs. The website, which offers information about wedding-related services to couples, conducts an annual survey on the cost of getting married. The most recent survey found that couples paid an average of HK$282,317 on their weddings, 6 per cent more than last year. They spent an average of HK$147,173 on banquets, which usually involved about 240 guests at 20 tables. "Giving HK$500 is not quite enough [to cover banquet costs]," ESDlife research manager Jeremy Mou Chi-wah said. The woman, whose post went viral, said: "I don't want to create economic difficulties for you, but I'm not operating a charity." She was upset that people paid the same amount (HK$500) for dinners at restaurants and hotels. For those worried about how much to pay, the survey may offer clues. Respondents paid a median of HK$1,000, HK$800, HK$700 and HK$500 for banquets held at a high-end hotel, standard hotel, high-end restaurant and standard restaurant respectively. The survey found that couples spent an average of HK$43,323 on rings and jewellery this year, 39 per cent more than last year. Banquet spending rose just 1 per cent. "Instead of one-off events like banquets, couples are willing to spend more on jewellery, which can help them fend off inflation," Mou said.

Carrie Lam denies interfering in CE illegal structure probe (By Lai Ying-kit) Carrie Lam speaks at a Legco meeting in Tamar on Wednesday. Chief Secretary Carrie Lam Cheng Yuet-ngor said on Wednesday she did not interfere in the investigation of the illegal structures problems involving her boss Chief Executive Leung Chun-ying. Questions were raised about the roles of Lam and the Buildings Department after the department revealed that it had noticed a suspicious brick wall sealing up an unauthorised extension in one of Leung’s houses on The Peak in late June. The position of the wall also did not match the original approved plans. But the department had not released the information until early this week. Media reports have also suggested that the department’s senior management had stopped a frontline officer following up on a “suspicious” wall. When the department first investigated Leung’s house in June, Lam was then development minister and boss of the department. Leung then was chief executive-in-waiting, preparing to take office in July. Lam, responding to a barrel of questions on the issue after a Legislative Council meeting, said the Buildings Departments carried out enforcement independently and impartially under the law. Lam added that not even a principal official had any power to interfere. “There is no room for anyone from outside the Buildings Department, not even a principal official, to interfere in enforcement actions on any case,” she said. Lam said she and the development bureau did no more than receive reports from the department on its probe in Leung’s case, as in other cases involving senior government officials or celebrities. “The role of my bureau was no more than being notified about the actions taken by the Buildings Department, some news releases and replies to media enquiries [about the case],” she said. “I did not take part or interfere in any enforcement action,” she said.

Hong Kong's MTR buys first China-made locomotives (By Hao Nan) Hong Kong's Mass Transit Railway Corp has signed a 160-million-yuan order with China CNR Co for 23 locomotives with proprietary technologies developed by its subsidiary in Dalian. Following fierce competition, the first independently developed diesel locomotives made on the Chinese mainland have been selected by Hong Kong's Mass Transit Railway Corp for use in its world-class transit system. China CNR Co announced last week that it has secured an order worth more than 160 million yuan ($25.7 million) from the MTR for 23 diesel locomotives made with its proprietary technologies. The designer and builder of the locomotives is a wholly owned CNR subsidiary headquartered in Dalian, Liaoning province. According to an announcement from the State-owned railway equipment manufacturer, its CKD0A locomotives ordered by the MTR meet the strictest global emission standards and reduce operational noise to less than 70 decibels, lower than the 78-decibel standard on the Chinese mainland. The MTR is considered one of the most successful railway operators in the world with a comprehensive and highly sophisticated network. It is also famous for caution in selecting suppliers, said the CNR statement. The announcement also noted that the MTR procurement announcement attracted many well-known locomotive manufacturers, and bidding for the contract was fierce. A CNR spokesman said the order shows its CKD0A locomotive has won the recognition it deserves and is also useful as a stepping stone to competing in top international railway markets. The manufacturer says the CKD0A meets advanced international standards in fabrication, design, quality control and performance tests. It can run at 80 kilometers an hour powered by two electric motors and a diesel engine. The design also provides more interior room by eliminating the need for a gearbox, which also improves the locomotive's reliability. The driver's cab has two sets of controllers equipped with computer and cruise control systems. The CKD0A locomotive is expected to be used in MTR's rolling stock in addition to subway vehicle rescue. The contract calls for the first locomotive to be delivered to MTR by March 2014, followed by a 5,000-kilometer test run. The MTR has also ordered high-speed trains valued at 1.36 billion yuan from China South Locomotive and Rolling Stock Co Ltd, National Business Daily reported. The report said CSR's CRH380A model will be customized to meet MTR requirements and serve on the Guangzhou-Shenzhen-Hong Kong express rail link expected to enter service in 2015.

Hong Kong catering industry records profits (By Li Tao from Hong Kong) Major players in Hong Kong's catering industry have managed to grow their profits despite wrestling with rising operating costs. Both Fairwood Holdings Ltd and Cafe de Coral Holdings Ltd have posted a healthy profit gain in the first half. Fairwood posted a net profit of HK$64 million ($8.26 million) for the six months ended Sept 30, 2012, up 10.3 percent from the restated HK$58.1 million a year ago, the fast food chain operator told the Hong Kong Stock Exchange on Tuesday. Total revenue edged up by 6.9 percent to HK$972.8 million, with gross profit margin improving to 14.5 percent from the previous 13.7 percent. The result compares with those of the city's biggest fast food restaurant operator, Cafe de Coral, which said on Monday that profit rose 16 percent to HK$221 million over the same six-month period, while total revenue also gained 8 percent to HK$3.14 billion. Both catering services groups cited soaring raw material costs, rising rents and higher wages as challenges to the business operations in Hong Kong as well as on the mainland. At the same time, both groups expressed their support to the government's plan to lift the minimum hourly salary from HK$28 to HK$30 in the city. Raymond Chan, chief executive officer of Fairwood, said the proposed HK$2 hourly salary increase is unlikely to bring much impact to the group, as only about 15 to 20 percent employees were affected when the minimum hourly wage was increased from HK$23 to HK$28 previously. However, Fairwood will slow down the pace of new stores opening in both Hong Kong and mainland in the second half, as it had already opened seven new outlets in the city and mainland during this period, respectively, Chan said during a media briefing on Tuesday, The fast food chain will also not select prime places to open new shops as the landlords in Hong Kong are raising rental prices aggressively these days, Chan added. During the first six months, Fairwood renewed leases for 19 existing shops in Hong Kong. Average rents for these stores rose about 7 to 8 percent over the previous contracts, according to Chan, who added that 10 more outlets in the second half of its financial year will also need to renew their contracts. Cafe de Coral's Chief Financial Officer Mike Lim said Monday that the company would maintain its announced plan to open 20 outlets in Hong Kong and 30 on the mainland for the whole year, after 14 outlets in Hong Kong and 15 on the mainland were opened in the six months through September. Linus Yip, a strategist from First Shanghai Securities, said catering services are one of the most promising sectors within the consumer goods market as they are daily necessities. "Challenges for these fast food chains are how to control the costs, which are easily affected by rising material costs as well as government policies," Yip told China Daily in a telephone interview.

 China*:  Nov 30 2012

In memory of a respected highflier (By By Wu Yong and Liu Ce in Shenyang and Zhao Lei in Beijing) China is mourning the death of Luo Yang, who made major contributions to the development of the country's first carrier-based fighter jet. Xi Jinping, general secretary of the Communist Party of China Central Committee, has extended his "condolence with a deep feeling of grief" at the unexpected death of Luo, chairman and general manager of the Shenyang Aircraft Corp and on-site director-in-chief of China's carrier-borne fighter jet program. Xi called Luo's death "a big loss to the Party as well as the nation", and he extended words of comfort to Luo's family. Xi said Luo devoted himself to the country's aviation industry and made an extraordinary contribution to its development. Luo headed the development and production of the J-15 fighter jet. He died of a heart attack shortly after leaving China's aircraft carrier, the Liaoning, on Sunday. He was 51. "Luo Yang, I know you were too exhausted these days," his wife, Wang Xili, said as she watched his body being sent to a funeral home. "I don't want to lose you. You were so tired and now you can sleep!" Her words moved everyone present to tears. Chu Xiaowen, Party chief of the Shenyang Aircraft Design Institute, where Luo worked for 20 years after graduation, recalled: "After Luo finished his work at the Zhuhai Airshow, he flew to Beijing for a business meeting. Then he took a helicopter to the Liaoning aircraft carrier without having any rest. "On the Liaoning, I noticed he was seriously fatigued, and I tried to persuade him to take at least a short break, but Luo refused and told me he had to catch up with the agenda." Xie Genhua, Party chief of the Shenyang Aircraft Corp and a longtime colleague of Luo's, wrote in a memorial letter: "Now, return home, Luo. Your wife and sister have come to Dalian to receive you. Leaders and your brothers-in-arms from the People's Liberation Army navy have come to the hospital to bid you farewell, and leaders and your friends at the Dalian Shipbuilding Industry carried your coffin to the hearse and they were shouting ‘Now you are going home, our brother!'" Researchers, technicians and workers at the Shenyang Aircraft Corp have been flooding the mourning hall at the company to express their respects and grief. "I don't know the words to express how deeply sad I am," the general manager of a subsidiary of the company who gave his name as Li said on Wednesday as he left the mourning hall. "Without Luo's contribution, our company would not be what it is today." Tian Feng, of the Shenyang Aircraft Corp labor union, said: "Luo was always very nice to us ordinary workers. Our incomes saw substantial increases because of his efforts. "In our hearts, he has not died. I think the best way to commemorate him is to work harder for our country's aviation industry." A 32-year-old employee at the company said: "I don't believe he has left us. The name Luo Yang will live as long as the Liaoning aircraft carrier, and we will never forget him." The man was too grief-stricken to give his name. Receptionists at the mourning hall said every day more than 1,000 people, from primary school students to an 88-year-old man, have come to say goodbye to Luo. Bombardier, a Canadian aircraft manufacturer and partner of Luo's company, sent a representative to Shenyang to express its sorrow. In Beihang University, China's top aeronautics and astronautics institute and where Luo studied high-altitude equipment from 1978 to 1982, professors who taught him said he was a model for all students. "Luo once told me that being busy at work made him feel happy because ‘our nation had so many missions to accomplish'," said Wang Jun, a member of the Chinese Academy of Engineering who tutored Luo. Li Min, the instructor of Luo's class, said Luo's accomplishments far exceeded all expectations and his selfless spirit inspired admiration and respect. Luo had never boasted of his achievements, according to Li Zhaojian, who shared a dormitory with Luo during their time at the university. "I didn't know anything about his success and achievements until I saw them on the Internet and the TV. He used to keep a low profile." Huang Yuchen, a postgraduate from the School of Aeronautical Science and Engineering at Beihang University, said: "His story has been encouraging us. We selected the profession of aeronautics and we are determined to serve our motherland with our knowledge. We will follow Luo's path." In commemoration and respect, the Liaoning sounded its siren on Tuesday morning as the crew lined up along the bows saluting Luo.

China not a currency manipulator, US says (By Bloomberg) The yuan has gained 9.3 per cent in nominal terms and 12.6 per cent in real terms against the dollar since June 2010, the US Treasury said. China isn’t a currency manipulator under US law, though the yuan “remains significantly undervalued” and needs to rise further, the US Treasury Department said. China “has substantially reduced the level of official intervention in exchange markets since the third quarter of last year”, the Treasury said in a statement accompanying its semi- annual currency report to Congress on Tuesday. The yuan has gained 9.3 per cent in nominal terms and 12.6 per cent in real terms against the dollar since June 2010, the Treasury said. “It appears that the strategy of the last two administrations to use diplomacy rather than confrontation in dealing with the yuan’s value is having some positive results,” William Reinsch, president of the National Foreign Trade Council, a Washington-based business group, said in an e-mail after the report. “There is clearly room for further appreciation, however.” In declining to brand China a manipulator, the Treasury cited the reduced intervention and “steps to liberalise controls on capital movements, as part of a broader plan to move to a more flexible exchange-rate regime”. The US hasn’t designated another nation since 1994, when it named China. Critics of China’s exchange-rate policies, including former Republican presidential candidate Mitt Romney, say the nation deliberately suppresses the value of its currency, making its goods cheaper in overseas markets and costing jobs in the US “This report all but admits China’s currency is being manipulated, but stops short of saying so explicitly,” US Senator Charles Schumer, a New York Democrat, said in a statement. “The formal designation matters because there can be no penalties without it. It’s time for the Obama administration to rip off the Band-Aid, and force China to play by the same rules as all other countries.” Chinese Central Bank Governor Zhou Xiaochuan said on November 17 that full convertibility of the yuan will be the next step in an overhaul of the exchange-rate system. Signs that Asia’s largest economy is starting to recover after a seven-quarter slowdown is also supporting the currency. In addressing other trading partners, the Treasury said in the report that “it remains important that Japan take fundamental and thoroughgoing steps to increase the dynamism of the domestic economy, by easing regulations that unduly deter competition”. The Treasury said it will “continue to press” South Korea to limit its foreign-exchange interventions to “the exceptional circumstances of disorderly market conditions and to commit to greater exchange-market transparency, including through the publication of intervention data”. Though the South Korean government doesn’t publish data on currency intervention, “market participants indicate that Korean authorities intervened on both sides of the market during the course of the year”. The South Korean won has strengthened 5.7 per cent against the dollar since the end of June, the best performance among the 11 most-traded Asian currencies. On the euro area, the Treasury said the region’s success in the next phase of fighting its debt crisis “will hinge on rapid implementation of institutions that strengthen the euro, and continued progress on economic reforms that support growth”. The US ran a US$295.4 billion trade deficit with China last year, about an 8 per cent increase above the 2010 level. Allowing the yuan to appreciate would make Chinese goods more expensive for American consumers than they are now, reducing US imports of the merchandise. The yuan climbed to a 19-year high on Tuesday after European officials reached an agreement on Greece and on signs that China’s slowdown is nearing an end. The yuan climbed 0.05 per cent to 6.2223 per dollar in Shanghai, a 1 per cent premium to the daily fixing, the maximum it’s allowed to fluctuate, according to the China Foreign Exchange Trade System. The US Treasury said it would pay “particular attention” to the pace of the yuan appreciation and “press for policy changes that yield greater exchange-rate flexibility, improve transparency, level the playing field for American workers and businesses, and support a strong, sustainable, and balanced global economy”. Because of the yuan’s appreciation, the US decision not to name China a manipulator isn’t a surprise, Ted Truman, a former Federal Reserve official and assistant Treasury secretary, said in an e-mail. “But we are still living with economic, financial and political after-effects of a decade of a very undervalued yuan,” said Truman, who is now senior fellow at the Peterson Institute for International Economics in Washington. China revalued the yuan, officially known as the renminbi, and ended its peg to the US dollar in 2005, allowing the currency to become convertible for trade purposes, giving banks more freedom to set interest rates and allowing some foreign institutional investors access to the country’s stock and bond markets. “China’s overall trade deficit has come down while the renminbi has appreciated and is trading in both directions on a given day,” said Phillip Swagel, who was an assistant Treasury secretary under President George W Bush and is now a professor at the University of Maryland in College Park. “With these changes, it is more difficult to label China a currency manipulator, especially when the Obama administration declined to name them previously.” John Frisbie, president of the US-China Business Council, said the Treasury “again made the right call. China’s exchange rate has strengthened over 30 per cent against the dollar in the past several years”. “The exchange rate has little to do with the US trade balance or employment,” Frisbie said. “We need to move on to more important issues with China, such as removing market access barriers and improving intellectual-property protection.”

China decries attempts to 'read too much into' passport map (By Reuters in Beijing) A pointer indicates where disputed islands and territorial waters are situated in the map of China that includes the South China Sea, printed on page 8 of the new China passport. A page in a Chinese passport that shows dashes which include the South China Sea as part of the Chinese territory. China said on Wednesday that people should not read too much into the placement of a new map in its passports that depicts claims to disputed maritime territory, after the United States said it would raise concerns with Beijing over the issue. The Philippines and Vietnam have condemned the new microchip-equipped passports, saying the map they incorporate violates their national sovereignty by marking disputed waters as Chinese territory. India, which also claims two Himalayan regions shown as Chinese territory on the map, is responding by issuing visas stamped with its own version of the borders. “The aim of China’s new electronic passports is to strengthen its technological abilities and make it convenient for Chinese citizens to enter or leave the country,” Foreign Ministry spokesman Hong Lei told a daily news briefing. “The issue of the maps in China’s new passports should not be read too much into. China is willing to remain in touch with relevant countries and promote the healthy development of the exchange of people between China and the outside world.” State Department spokeswoman Victoria Nuland said the United States had concerns about China’s map causing “tension and anxiety” between countries in the South China Sea. The United States, which has urged China and its Southeast Asian neighbours to agree on a code of conduct as a first step toward reducing tensions over the South China Sea, will continue to accept the new Chinese passports because they meet the standards of a legal travel document.

Yao Ming receives honorary PhD degree at HKU (China Daily) China's basketball legend Yao Ming, left, attends the 187th Congregation of the University of Hong Kong (HKU) where he is conferred Honorary Degree as an outstanding individual in Hong Kong, Nov 27, 2012.

Scandal-hit liquor maker halts packaging lines (Xinhua) A Chinese liquor maker suspended its packaging lines on Tuesday after being hit by a plasticizer scandal. Initial investigations indicated that liquor produced by Jiugui Liquor Co Ltd might be contaminated with plasticizer during the packaging process -- from plastic tubes and corks, according to Xia Xinguo, general manager of the firm. Xia said only the packaging lines are suspended while the production lines are still in operation. The scandal broke a week ago when a business news website ( reported that one kind of Jiugui liquor contained 1.08 mg per kg of dibutyl phthalate, a type of plasticizer. The report prompted an investigation by the food quality watchdog of the Tujia-Miao autonomous prefecture of Xiangxi, in Hunan province, where Jiugui is based. The results found the DBP in Jiugui liquor was higher than the 0.3 mg per kg standard, a provisional regulatory limit set by the Ministry of Health in June 2011. The food quality watchdog urged the liquor maker to determine the source of the plasticizer and make sure other products were not tainted. Plasticizers are used to thicken liquids but alcohol products do not need them, according to health experts. The chemicals can cause male reproductive problems as well as damage to the digestive and immune systems. The scandal sent Jiugui's shares tumbling and some of its products taken off the shelves. Shares closed at 34.69 yuan ($5.52) per share by midday Tuesday. It marked a third consecutive trading day its shares have dropped by the daily limit on the Shenzhen Stock Exchange. Most liquor companies have seen their shares contract over 10 percent since the scandal erupted, including Wuliangye Yibin Co and Hebei Hengshui Laobaigan Liquor Co. The least-affected company, Kweichow Moutai Co, has slumped 3.3 percent. The China Alcoholic Beverage Association said last week that large-scale tests on China's liquor showed that almost all alcohol products contained plasticizers, with an average level of 0.537 mg per kg.High-end liquor products contain more plasticizers than low-end ones. Some industry observers defended the liquor makers because there is no law or formal regulations on the levels of plasticizers liquor products are allowed to contain. Dai Qi, an official of Hunan Provincial Administration of Quality, Inspection and Quarantine, said the MOH has not put the provisional regulatory limit into the production standards for liquor products, so legally it is impossible to say whether Jiugui contain "excessive" amounts of the plasticizer.

China launches new communication satellite (Xinhua) A Long March-3B carrier rocket is launched in Xichang, Southwest China's Sichuan province, Nov 27, 2012. China successfully sent a French-made communication satellite "APSTAR-7B" into orbit with a Long March-3B carrier rocket launched from the Xichang Satellite Launch Center on Tuesday. China successfully sent a communication satellite into space on Tuesday evening. Conditions of Chinasat 12 are normal after it was launched from the Xichang Satellite Launch Center in Southwest China's Sichuan province at 6:13 pm. It has reached a preset orbit, according to a monitoring center based in Xi'an. The satellite, the 13th commercial orbiter operated by the China Satellite Communications Co Ltd, will provide telecommunications services for its customers in Asia, Africa and Europe. Manufactured by France's Thales Alenia Space, Chinasat 12 was launched by the Long March-3B carrier rocket. It was the 173rd launch mission for the Long March series of carrier rockets.

 *News information are obtained through various sources: South China Morning Post, The Standard, Hong Kong Trade Development Council, Hong Kong Economic and Trade Office, Hong Kong Government, Asia Society, Wall Street Journal, China Daily, Xinhua, World Journal, The Singtao Newspaper, TVB, CCTV Stations in China and others that are deemed reliable, but not guaranteed

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