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October 31 2008
The Hong Kong Monetary Authority (HKMA) on Thursday lowered its base interest rate to 1.5 per cent – down 50 basis points.
The Transport Advisory Committee does not intend to change its decision over the controversial proposal to raise taxi fares, committee chairwoman Teresa Cheng Yeuk-wah said on Thursday. Travel agents may resort to rejecting credit cards should banks continue to take months to settle customers' card transactions, the Travel Industry Council has said. "This will be a lose-lose situation," executive director Joseph Tung Yao-chung said. "Not only will this affect banks and travel agents' business, but it will also cause much inconvenience to inbound visitors who are used to paying for travel services by credit cards." Mr Tung and council chairman Ronnie Ho Pak-ting relayed their concerns and requests to Commissioner for Tourism Au King-chi yesterday. Mr Tung said it used to take two days or so for a bank to transfer card payments to a travel agent, but now it took as much as six months. "Many travel agents would not have the cash to pay for air tickets and other expenditure." He also hoped the government could waive the HK$5,820 annual licence fee, saying "more than 90 per cent of the travel agents in Hong Kong are small-scale operations". Mr Ho said he found the meeting helpful and was satisfied with the positive stance taken by the government.
Canadian expert: China has made tremendous achievements in 30 years of reform, opening-up: China has made tremendous achievements in all social aspects and improved its status on the international arena as a result of its reform and opening-up policy adopted 30 years ago, Peter Harder, a Canadian expert on international affairs, told Xinhua in a recent interview. Harder has visited China at least 14 times since 1980 and thus enjoys first-hand knowledge of what the country has undergone in the past three decades. "China was colorless, (and) it was grey, everybody wore grey," he said while recalling his first Chinese tour. However, things have changed tremendously since then, said Harder, who served as deputy chief for 16 years in several Canadian federal government departments including the Treasury Board, Ministry of Justice, Ministry of Citizenship and Immigration, Foreign Ministry and Ministry of International Trade. In just 30 years' time, China has emerged as a colorful, prosperous and self-confident society with a significant influence on world political and economic affairs, he said. While economic growth has substantially facilitated the improvement of the material life of ordinary people, the whole of Chinese society has seen progress in all aspects, from people's awareness of their social responsibilities, their openness to the outside world, the mode and level of governance, to the awareness of sustainable development, Harder pointed out. "You cannot come on visits to China over a period of time as frequently as I have without noticing the tremendous increase of human freedom, of rule of law, of focusing on accountability, particularly at the municipal and local levels where the issues of being responsive to native citizens are very much discussed," he said. China's progress is a good thing for the whole world, he said. "I view the opening-up to the outside world as having been hugely beneficial to both China and the world." "By that I mean China has been able to provide economic opportunities to its public, which has vastly improved the quality of life of its population and has done so over a period of years, which indicates sustainable economic strategy." On the other hand, "the world has benefited from China's participation in the global market place and global political space," he noted. Harder credited China with being a responsible member of the United Nations Security Council and a partner in global solutions for several international and regional issues. Though China faces the challenge of economic disparity between its coastal and interior areas as well as between rural and urban regions, its leadership is fully aware of the situation and is putting in place a development strategy to address that challenge. As for environmental challenges, the Chinese government has advocated the notion of harmonious growth in its latest five-year plan to better balance the relationship between economic growth and environmental protection, Harder said. He expressed confidence that China would have an even brighter future as the Chinese leadership is responsible and has displayed the ability to maintain national economic growth and to participate in global affairs effectively and responsibly. Harder currently holds the post of president of the Canada-China Business Council (CCBC), Canada's leading organization to facilitate bilateral trade and investment. He will lead a large delegation consisting of Canadian entrepreneurs and five provincial government heads scheduled to visit China from Nov. 2-7. The tour will be part of celebrations marking the 30th anniversary of the establishment of the CCBC and of China's opening-up policy. October 30 2008
Leading Hong Kong supermarkets and
wholesale associations said on Wednesday mainland eggs contaminated with
excessive melamine were no longer on sale.
HK, Guangdong 'should set up investment firm' - A think-tank close to Chief Executive Donald Tsang Yam-kuen has proposed that the governments of Guangdong and Hong Kong set up an investment company to finance cross-border infrastructure projects. The government put a damper yesterday on a move in the Legislative Council to scrap the levy on employers of foreign domestic helpers. Secretary for Labor and Welfare Matthew Cheung Kin-chung insisted that doing so would have an impact on government spending. Therefore, he said, the administration would urge Legco president Tsang Yok-sing to rule out of order any resolution to scrap the levy. Independent lawmaker Regina Ip Lau Suk-yee had said she was confident the amendment could proceed.
China's southern Guangdong province and Hong Kong jointly staged a business and technology cooperation conference on Tuesday in the Spanish capital to boost their business ties with Europe. The opening ceremony drew some 1,800 businessmen and officials, including Spanish Minister of Industry, Tourism and Commerce Miguel Sebastian Gascon, Guangdong Governor Huang Huahua, Chinese Ambassador to Spain Qiu Xiaoqi, Secretary for Commerce and Economic Development of the Hong Kong Special Administrative Region Rita Lau. On the first day of the gathering, agreements on 27 projects with a total value of 2 billion U.S. dollars were signed. Trade between Guangdong and Spain topped more than 4.9 billion dollars in 2007, accounting for 23.6 percent of the total trade volume between China and Spain, Huang said in a speech. Spain is a key EU member and has played a significant role in promoting China-EU economic and trade cooperation, the governor said. "The Guangdong provincial government will encourage more import from Spain and support Spanish businesses' entry into the Chinese market," he said. Guangdong will support the expansion of cooperation between medium and small Spanish businesses and their Guangdong counterparts to achieve win-win results, he said. Lau said at the gathering that Hong Kong has close business links with Spain, with two-way trade totaling 2.2 billion euros (2.8 billion dollars) last year. Nearly 100 Spanish companies have businesses in Hong Kong, mostly in the financial, logistics, commercial and fashion industries, Lau said. Condemnation can be the only response to the abduction and killing in cold blood of Chinese oil workers in Sudan. Their presence was contributing to that country's economic development. They presumably were not involved in any of the ethnic, separatist or anti-government movements challenging Sudanese President Omar al-Beshir's rule. The killings are loathsome; especially so when foreigners are unwittingly dragged into matters in which they have no part. Who carried out the heinous crime and why is unclear. Sudan's government has blamed rebels in the troubled Darfur region, but none of the groups involved has taken responsibility. It could be that dissidents angry at China's support for General Beshir's dictatorship were the culprits. There are suggestions that detractors pushing for the leader to be extradited to The Hague to stand trial on charges of genocide were involved. No matter how worthy their cause or fervent their desire, taking the lives of innocents is despicable. Sudan has been wracked by anti-government unrest for much of its 52 years of independence from Britain and Egypt. China well knew this when it began exploring and drilling for oil there. The same is the case in the other unstable parts of the world that Chinese companies and workers are increasingly moving into. It is because of such risks that Beijing in 2004 created a Department of External Security Affairs, which is in part charged with protecting Chinese assets and citizens working abroad. China's search for energy sources, overseas investment by its companies and desire to get involved in global diplomacy has correspondingly put its officials, volunteers, workers and tourists at greater exposure to risk. Chinese workers have been killed by extremists in Afghanistan, Pakistan, Ethiopia and now Sudan; a mainland peacekeeper was shot dead during the conflict in south Lebanon in 2006; countries where Chinese nationals have been abducted for ransom include Iraq and Nigeria; and anti-Chinese protests have led to the looting of Chinese-owned factories and shops the world over. When China was isolationist, such incidents were rare; as its influence grows, they are becoming frequent. Beijing strictly follows the principle of non-interference in the affairs of other states. This does not protect its citizens and companies beyond Chinese shores from political violence. As its foreign investment strategy gets more aggressive, so, too, will the human price it has to pay. Beijing needs to be more worldly-wise. It has to do its utmost to protect Chinese citizens and firms overseas and to ensure that the risks they face are as low as possible.
The deputy director of the Supreme People's Court, Huang Songyou , was among four government officials sacked yesterday as the fifth session of the 11th National People's Congress Standing Committee ended. The committee also approved two proposed laws on state-owned assets and fire prevention. Mr Huang, 51, also lost his title of member of the judicial committee and judge. The South China Morning Post (SEHK: 0583, announcements, news) reported two weeks ago that investigators from the Communist Party's Central Commission for Discipline Inspection had questioned him on October 15 and searched his office and home. Mr Huang was widely believed to be involved with financial corruption in Guangdong province, but the court remained vague on his case yesterday. Standing Committee press bureau chief Kan Ke also announced at yesterday's press conference that the committee had "accepted the resignation of Zhu Zhigang , director of the NPC Standing Committee's budgetary affairs committee". "Zhu Zhigang was suspected of a serious breach of the law and party rules, and is under investigation," Mr Kan said, without disclosing the results of the investigation. Mr Zhu was subject to party disciplinary action for alleged corruption, Xinhua reported yesterday. The investigation into Mr Zhu had started before the week-long National Day holiday, but he was not officially put under shuanggui - a form of party investigation - until last Wednesday, according to Caijing magazine. Two deputies of the 11th NPC were also expelled yesterday for "involvement in serious corruption". The two lawmakers are Zhu Siyi , general manager of Yida Fuel Development Limited Co in Guangdong, and Xie Bing , chairman of Miaodayi Meichu Food Co in Sichuan province. Zhu Siyi was suspected of offering bribes and Mr Xie was suspected of fraud, but no other details were given by the NPC. Besides passing amended versions of laws on fire prevention and state-owned assets, legislators also reviewed drafts of other laws, including the food safety law. Laws on state compensation, the postal service and precautions against earthquakes and disaster reduction were also read and discussed during the session, and legislators have discussed a State Council plan on improving macroeconomic controls over financial markets.
Bank of China (3988) said yesterday
its net profit for the third quarter rose 11.5 percent to 17.76 billion yuan
(HK$20.11 billion), broadly in line with expectations, on growing fee income
business.
October 29 2008
Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong said on Tuesday he believed central banks internationally would continue to lower interest rates.
HK shares bounce back, post a 14.4pc
gain on Tuesday, clawing back Monday’s losses and notching up their biggest
one-day gain in 11 years as investors snapped up bargains. The Bauhinia Foundation Research Centre on Tuesday called for more co-operation between Guangdong and Hong Kong to create a Pearl River Delta metropolis over the next 20 years. The centre is an economic and social policy think-tank established in March 2006. In a new study, the centre said both cities should take advantage of new economic and social developments in the region. The study was conducted between February and October with participation by the China Business Centre of Hong Kong Polytechnic University and China Development Institute of Research in Shenzhen. It interviewed 100 government officials, specialists, academics and industry representatives, 30 Hong Kong enterprises, 100 Guangdong enterprises and 2,000 citizens in both cities. The centre noted that the Pearl River Delta Metropolis covered nine areas – including Hong Kong and Macau. Centre chairman Anthony Wu Ting-yuk said considerable benefits had resulted from economic developments in Guangdong and Hong Kong. “The industrialisation in Guangdong and post-industrialisation in Hong Kong have been accelerated – resulting in a concentration of highly competitive industries and fostering a cluster of townships in the Pearl River Delta Region,” he noted. The study predicted the development of a Pearl River Delta metropolis. This would boost the region’s gross domestic product, trade and level of investment. However, Mr Wu said there were problems in developing a metropolis. These included Hong Kong and Guangdong’s differences in legal and economic systems, and in public administration and social services. Competition and conflict of interest also existed among cities in the region, he added.
Most of the customers who bought Lehman Brothers’ constellation structured retail notes would lose their entire principal, DBS Bank (Hong Kong) said on Tuesday .
Sohu.com, China's second-largest Web portal expects to double its sales in the fourth quarter as the popularity of its online games continue to increase.
Chinese leaders have approved 2 trillion yuan (HK$2.26 trillion) of spending on railway construction, stepping up domestic investments to help fend off an economic slowdown. October 28 2008
Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong on Monday urged local banks not to tighten up too much on lending to small and medium enterprises (SMEs). Mr Yam said he understood banks’ concerns about the ability of some SMEs to repay their loans. But he said the financial crisis was now hurting many local firms and retail companies. Mr Yam also said the authority had introduced measures to protect banks since the global crisis began – such as reducing interest rates and raising the deposit protection scheme to 100 per cent. “Liquidity is crucial for individual banks and the banking system as a whole,” Mr Yam said. “It is important to address both issues if the banks are to continue to provide funding to finance economic activities and sustain economic growth,” he said on the HKMA website.
Eggs and meat in Hong Kong would be tested for melamine this week, Centre for Food Safety (CFS) acting-controller Constance Chan announced on Monday said.
David Li Kwok-po, the chairman and chief executive of the Bank of East Asia (SEHK: 0023), does not want to be part of the Legislative Council’s sub-committee set up to investigate the controversy involving Lehman Brothers’ financial products, local media reported on Monday. The sub-committee’s chairman Raymond Ho Chung-tai said on Monday Mr Li had asked to be withdrawn from the committee. The committee will examine issues arising from the controversy involving Lehman Brothers-linked structured products. Many Hong Kong people bought these financial products, but suffered significant losses after the collapse of Lehman Brothers in the United States. They are now demanding compensation and argue these products were often sold to them as secure investments. During the first meeting of the Legco sub-committee on Monday, Mr Ho said Mr Li has sent a formal letter and requesting that he be withdrawn from the sub-committee, local media reported. Mr Ho said Mr Li had not provided a reason, but Mr Ho had denied suggestions it was because the Bank of East Asia was one of the local banks which distributed Lehman Brothers structured products. During the meeting, Civic Party legislator Margaret Ng Ngoi-yee said the sub-committee should also examine other high-risk investment products. Troubled CITIC Pacific (0267) will not sell off any of its assets at firesale prices, according to the company's embattled chief Larry Yung Chi-kin. The University of Hong Kong (HKU) announced Thursday that it has received a 100,000 U.S. dollars Grand Challenges Explorations grant from the Bill and Melinda Gates Foundation to do research on AIDS vaccine. The grant will support an innovative research project about a study of a new type of AIDS vaccine conducted by Dr. Zhiwei Chen, Director of the AIDS Institute at the university's Faculty of Medicine. The institute was established with a mission to make scientific discoveries and provide solutions to end the HIV/AIDS pandemic. Chen said that this is one of the most important research grants they have received since the establishment of the institute in 2007. The funding will allow them to conduct innovative research projects on AIDS vaccine at HKU immediately. The project aims to work on a new vaccine for AIDS which is capable of inducing neutralizing antibodies against HIV-1 sexual transmission, the major risk factor of AIDS pandemic.
Premier Wen Jiabao has called for new rules to guide the international financial system following Asian and European leaders' call for the International Monetary Fund to step in and play a "critical role" in dealing with the global financial crisis. "The crisis has fully revealed some defects in the current international financial system The international community has demanded reforms and the establishment of a fair and efficient international financial system," Wen said at the closing ceremony of the Asia-Europe Meeting (ASEM) summit in Beijing on Saturday. The premier proposed increased participation of developing countries in international financial organizations, strengthening supervision of the international financial system and building a financial assistance system. Leaders of the summit's 45 members, including 27 European countries, 16 Asian countries and other regional organizations, vowed at the two-day summit to overhaul the global financial system. "Leaders pledged to undertake effective and comprehensive reform of the international monetary and financial systems," said a statement released on Friday night. At a press conference after the summit on Saturday, Wen said the Chinese government is well positioned to control the crisis' ripple effects on the national economy.
October 25 - 27 2008
Hong Kong's wealth gap is biggest in Asia - The financial divide between Hong Kong's haves and have-nots is the greatest in Asia, despite the region having the greatest income equality in the developing world, a UN report has found. The report showed that Hong Kong had a relatively high Gini coefficient of 0.53 in 2006. In contrast, Beijing's Gini coefficient was 0.22, making it the most equal city in the region and the world. The Gini coefficient is a widely used indicator of income inequality. The lower the measurement, the more equal the wealth distribution. A measurement of zero would indicate a society where income was perfectly distributed. If one person had all the income, the Gini coefficient would be one. A measurement of 0.4 or higher was considered unacceptable, the report said. The data was compiled in the State of the World's Cities 2008/2009 report, published every two years by the UN Human Settlements Programme, or UN-Habitat. In Europe, relatively high Gini coefficients were recorded for Portugal at about 0.36, and Britain and Spain at about 0.34. Major US cities such as Atlanta, New Orleans, Washington, Miami and New York had Gini coefficients of more than 0.5, the report found. Hong Kong's Gini coefficient has risen from about 0.43 in 1976 to 0.48 in 1996 and 0.53 in 2006. A widening wealth gap is a difficult trend to halt or reverse, especially in an open, globally connected economy such as that of Hong Kong. With most wealth-creation opportunities concentrated in the financial sectors.
Tuition fees cut for 5,000 students
at DSS schools - Tuition fees for about 5,000 direct subsidy secondary students
have been slashed to ease the financial burden on families, but some 10,000 high
school seniors have been left without relief.
The Hong Kong Monetary Authority continued to inject liquidity into the banking system yesterday by buying HK$3.88 billion worth of US dollars to keep the Hong Kong unit within the official trading limits of its currency peg system.
China joins Latin American lender after jump in trade and investment - China has become a member of the Inter-American Development Bank, the biggest lender to Latin America, as the country's trade and investment with the region is flourishing. Peking University School of Transnational Law opens - A dedication ceremony of the Peking University School of Transnational Law (STL) was held in Shenzhen, Guangdong Province, southern China. Among cheers and drum-beatings, the ceremony was declared open by Chancellor and Founding Dean Jeffrey S. Lehman Wednesday. Lehman is the former president of Connell University and ex-dean of Michigan University School of Law. Dong Jianhua, vice-Chairman of Chinese People's Political Consultative Conference, President of Peking University Xu Zhihong, and U.S. Supreme Law Justice Anthony Kennedy were present at the ceremony which also drew a group of government officials, college presidents and leading jurists of the two countries. Being Chinese mainland's first law school mostly using U.S.-styled teaching methods, STL was founded in July, 2007. It aims to train qualified lawyers on the international plane, awarding students Jurist Doctor (J.D.) degree after four years study, using a curriculum based on that in American law schools. It is also the first law school out of America to seek ABA accreditation. The dean is fully informed as to the Standards and Rules of Procedure for the Approval of Law Schools by the ABA. The Administration and the Dean are determined to devote all necessary resources and in other respects to take all necessary steps to present a program of legal education that will qualify for approval by the ABA," said Lehman in a speech. The J.D., an internationally recognized degree conferred by law schools in the U.S. universities, is designed specifically for graduates from non-law disciplines to potentially move to admission to legal profession. Unlike education in traditional Chinese law schools, STL values intellectual skills, rather than a particular aspect of legal knowledge or the memorizing of legal rules. Its classes are taught entirely in English and teachers are mostly leading scholars, renowned justices and lawyers from the U.S. "using the so-called Socratic method of teaching," according to school source. STL ushered in its 55 pioneering students this August and received a grant of 2 million U.S. dollars from C.V. Star Foundation. Several top U.S. law firms, companies and philanthropic institutions have also expressed their readiness to support. On the Peking University's Shenzhen campus Wednesday, unveiling ceremony was also held for HSBC School of Business headed by economist Hai Wen, also vice president of the university. China's economic growth would be about 9 percent if the United States recession is mild, whereas a more serious U.S. recession could lead to the Chinese economic growth capped by about 8 percent, said Glenn Hubbard, dean of the Columbia Business School and a former advisor to U.S. President George W. Bush. October 24 2008
DBS Bank will today begin paying out compensation expected to reach as much as HK$414 million to investors in Lehman Brothers-linked derivative investment products after determining that the way they were sold did not meet the bank's standards. he investors are among 4,700 customers in Hong Kong and Singapore who paid about HK$1.86 billion to buy structured notes related to the bankrupt US investment bank. DBS, which had earlier pledged to compensate customers found to be victims of mis-selling, said in a statement last night, without giving details, that "a number of cases did not meet the standards DBS upholds". It said it would start paying out compensation today and expected the amount to range between HK$362 million to HK$414 million. But it said its valuation of the redemption amount for the relevant series of Constellation Structured Retail Notes indicated that the "worst-case scenario" in which investors would lose their entire principal, "is likely to materialise". It said it would announce the valuation next week. Structured notes are complex financial products that appear to be fixed-income instruments, but contain embedded options that may involve high-risk investments such as derivatives. The announcement came as the Hong Kong Association of Banks said banks could start buying back Lehman-related minibonds at current market value in December after the first phase of the project was completed - amid predictions that some of the payments could be "very low". DBS (Hong Kong) chief executive Richard Stanley said it was important for DBS to "do the right thing" and "in cases where our standards are not met DBS will not hesitate to make cash compensation". The bank could not say what the breakdown of the refund would be, which clients , if any, would have priority or what criteria it would use. "It's great that they have said they will refund," said the organiser of a group of DBS investors that has been pressuring the bank for a refund. But the organiser, Ms Lee, said she would not believe it until she saw it in black and white. "They should be ... contacting us directly to tell us. We don't trust banks any more." Ms Lee, who bought HK$270,000 in notes in 2006 and 2007, also wondered how the money would be split. "There are so many different series, and the underlying assets are different for each one." The announcement came days after it was disclosed that DBS, in the first known settlement with investors in Lehman-linked derivatives, agreed to pay a partial refund to an 84-year-old woman and her mentally ill son. The city will have to pay almost HK$2 billion more for guaranteed water imports from Guangdong's Dongjiang for the next three years as inflation and the yuan drive up costs, the Development Bureau has said. The change will not result in higher tariffs, which the government has vowed to freeze for the next two years to help residents combat inflation.
The Democratic Party's Andrew Cheng
Kar-foo has suggested the government buy stakes in Eastern Harbour Tunnel and
the Western crossing held by troubled CITIC Pacific (0267).
Investors worried yesterday that
Shui On Land's (0272) cross-currency interest rate swap arrangement could lead
to losses, while CLSA warned more heavyweights have significant foreign-currency
exposure or derivative investments.
The central government will revise laws to allow farmers to continue using the land contracted to them beyond the current 30-year term, the country's top rural policymaker says.
The global financial turmoil is taking its toll on the mainland's tourism industry, with the number of overseas visitors dropping significantly last month. The numbers were down by more than 15 per cent from the same month last year, National Tourism Administration data shows. The mainland tourism industry had been preparing for a big autumn to make up for losses caused by visa controls during the Beijing Olympics, but the crisis has dashed such hopes. An administration spokesman said yesterday that the crisis would have an impact across the entire sector. "Those catering to overseas visitors will likely suffer first and most," he said. In Asia, South Korea registered the biggest drop in visitors to the mainland, with numbers down by more than 24 per cent. Visitors from the United States, Australia, Britain, Canada and France were down by about a fifth. Russia defied the slump in oil prices to register just a 2 per cent reduction. Arrivals in tropical destinations in Hainan were holding up well. October 23 2008
Hong Kong’s banking system and money
markets were stable and operating smoothly, Secretary for Financial Services and
the Treasury Professor Chan Ka-keung said on Wednesday.
The extent to which Hong Kong people
helped others and sought help themselves was generally quite low, a survey by
Chinese University of Hong Kong (CUHK)’s Department of Social Work has found. Despite the slowing global economy, several Hong Kong-listed consumer electronics manufacturers say they have not seen a decrease in Christmas orders. The Hong Kong Cyberport Management Company Limited announced Wednesday that the Cyberport Venture Capital Forum 2008 will be launched on Nov. 18 in the city. The yearly event was first held in 2004 and the theme of this year's forum is to show ways to be creative in business in an unexpected or unusual way. The 2008 forum will provide a platform for investors, entrepreneurs and senior executives in the information and communications technology (ICT), media and creative industries to develop and build novel "contrarian" companies that could change the dynamics of doing business. The forum will be made up of three keynote sessions and three panel sessions, which are the "Investor-Investee Dialogue", " Venture Capitalist Panel" and "Closing Keynote Speaker Panel Discussion" sessions. Participants will be able to meet international venture capitalists, potential investors and like-minded entrepreneurs, join the concurrent exhibition showcasing the creativity from ICT and local communities, and encounter local inventors, young designers and new digital entertainment start-ups. "In difficult times like the present global financial turmoil, it takes some totally innovative ideas for businesses to survive and thrive," Chief Executive Officer of Cyberport Nicholas Yang said. Yang said that attendees of the forum will have the privilege of hearing a venture capitalist from Silicon Valley, technology forecaster and consultant, expert on intellectual capital strategy, as well as venture capitalist from Chinese mainland sharing their experience in unearthing unusual and creative businesses.
The mainland must modernize its food safety system, the United Nations said on Wednesday, arguing an outdated and disjointed approach may have worsened a crisis over contaminated milk that killed four babies. In a new report on food safety in China, the UN urged Beijing to adopt a “modern” food safety law and introduce other measures that would help build trust in the government’s ability to ensure the nation’s food was safe. “The present system is managed by several laws and an old philosophy that government is responsible for everything,” Jorgen Schlundt, the director of the UN’s World Health Organization department of food safety, told journalists. “We have to change that kind of philosophy because we need the food producers to be responsible for food safety,” he said. The report was issued as Beijing continued to deal with the fall-out of a scandal in which the industrial chemical melamine was found to have been commonly mixed into milk to give it the appearance of higher protein levels. Four babies died and at least 53,000 babies fell ill after drinking tainted milk powder, and contaminated mainland dairy products have been recalled around the world, once again tarnishing the global image of the “Made in China” brand. Although at least one dairy firm knew of the scam for months, it did not immediately report it to local government officials, who in turn delayed passing on the news for nearly a month until after the Beijing Olympics. “In this incident we see that an old-fashioned system contributed to the event,” Mr Schlundt said of the milk scandal. “This disjointed system with disjointed authority between different ministries and agencies had resulted in broken communication and may have prolonged the outbreak with a late response.” The report warned that the public could lose faith in the current system. “The public is best served by a single consistent authoritative source of advice they can trust,” the report said on the disjointed communication in the nation’s food safety system. “In some sensitive and difficult areas, different government departments have sometimes announced different views, advice and actions to be taken by the public... the effect of this can only serve to undermine public confidence in the government’s ability to manage food safety.” The report called on Beijing to set up a unified and enforceable system capable of ensuring product safety from farm to table, and which would highlight the responsibilities of producers to make safe food. Beijing needed to educate its companies to better understand the role they played in building market confidence both domestically and abroad, Mr Schlundt said. The UN report further said the mainland’s current method of testing millions of food products to determine if they were safe was “wasteful of resources and both inefficient and ineffective in protecting health”. The UN report further said the current mechanism for testing millions of products as a means of ensuring food safety was “wasteful of resources and both inefficient and ineffective in protecting health”. Beijing needed to focus food safety inspections on areas of known risks in the production chain and set up analysis and control points around them, Mr Schlundt said. The government’s food safety enforcement was “ad hoc without any overall strategy,” while inspections ignored small enterprises along the value chain as well as remote areas in the nation’s countryside, it said. The report was issued as the nation’s parliament prepared to deliberate on a draft law on food safety this week, the UN said.
Sequoia funds Cernet expansion program - Sequoia, a United States venture capital firm that invested in Yahoo and Google, has provided financing for the expansion plans of Cernet Koncept Network, a mainland internet company targeting the country's 27 million college students, sources said. Cernet Koncept, operator of cdrean.com, is a subsidiary of the China Education and Research Network, a state-backed agency in charge of internet infrastructure construction on college campuses nationwide. Neither Sequoia nor Cernet would disclose the financing amount but it was definitely a double-digit million US dollar capital infusion, according to Cernet Koncept chief executive Kuang Peng. "Cernet is a one-of-a-kind company that enjoys a monopoly in its area," said Neil Shen, founding managing partner of Sequoia Capital China. "We are bullish on its outlook." The fund would be used to develop new valued-added services to cater to mounting demands for information and recreation among college students, Mr Kuang said. On the mainland, telecommunications operators provide customers internet access but the Ministry of Education set up the China Education and Research Network to build "information highways" for university students. Nearly 27 million students connect to the internet via the separate network, which covers 3,500 schools and research institutions nationwide. "Basically, investors shun internet-related companies nowadays because it is difficult to create a profitable model," said Lu Liang, a manager at Hotung Venture Capital. "But it seems that Cernet Koncept can make a difference with a monopoly in the education market." Sinomonitor, a business data supplier, estimates that college students spend 300 billion yuan (HK$341 billion), or 11,860 yuan per head, a year. "The media platform will also be appealing to big companies who want to advertise on it because university students are potentially the major powerful purchasers in future," Mr Kuang said. "We hope to launch an initial public offering in 2011," he said. "The priority is the A-share market."
China will exempt, starting from
Nov. 1, the stamp tax on property purchase and the value-added tax of land on
property sales to boost the recessive real estate sector, the Ministry of
Finance said on Wednesday. October 22, 2008
The High Court on Tuesday overturned a ruling by the Obscene Articles Tribunal that a series of sex articles in a student newspaper – which were also reproduced in a local newspaper last year – were indecent. Mr Justice Lam said on Tuesday Ming Pao Daily News and Chinese University’s Student Press’ former chief editor Tong Sai-ho had won the judicial review. He said this was because the tribunal failed to follow the guidelines of the Obscene and Indecent Articles Ordinance, local media reported. According to these guidelines, the tribunal has to state clearly what exactly is ‘indecent’. However, the tribunal failed to explain which aspect of the sex articles in CU’s Student Press were indecent. It had, therefore, made an error during its classification procedures. Subsequently, the judge decided to overthrow the ruling the articles belonged to the Class II Indecency category. They are not required to be sent to the tribunal for re-classification. Mr Justice Lam said he understood the resources of the tribunal were limited and it had a heavy workload. He suggested the government provide more resources to the tribunal and increase its staff. He stressed it was important to protect freedom of speech, while at the same time upholding the public interest. In May last year, the obscenity watchdog issued an interim classification deeming of Class II Indecency on several pieces from CU’s Student Press monthly. These appeared in print and online in February and March 2007. The articles dealt with students’ views on sex, including bestiality and incest, and contained photos and illustrations of the subject matter. The classification followed complaints from the Television and Entertainment Licensing Authority, and the Department of Justice. Applications for judicial review were filed by Ming Pao Daily News – which reprinted the entire sex column – and Chinese University’s Student Press’ former chief editor Tong Sai-ho.
A High Court judge has suggested that the mother of late Cantopop diva Anita Mui Yim-fong file for bankruptcy or seek assistance from the Social Welfare Department.
October 20 - 21, 2008
Hong Kong’s unemployment rate rose to 3.4 per cent in the July to September quarter, latest figures released on Monday showed. US gambling giant Las Vegas Sands has scrapped plans to raise US$5.25 billion in loans for its expansion in Macau - including funding for a hotel resort complex - due to the credit crunch and a weak appetite among lenders amid the market turmoil, sources said. Right now it is a pulled deal. It will come back when they cook up a new shape and new price," a source familiar with the situation said. Sands sounded out the market six months ago on a US$7 billion financing package for its subsidiary Venetian Macao and prospective lenders were invited to visit the site in July. But after a cool response from the site visit, the company cut its fund-raising target to US$5.25 billion. "It was still too large and the banks were offering to lend with only limited creditability. Any kid on the street knew they did not have the balance sheets," said a banker who walked away from the loan. Five banks - Lehman Brothers, Citi, Goldman Sachs, BOC (SEHK: 3988) International and Standard Chartered - were mandated as the arrangers of the syndicated loan, sources said. Three of the arrangers have since been hit by the global financial turmoil, with Lehman Brothers going bankrupt in September. Bankers backed away from a US$3.3 billion refinancing of the company's loan deal from two years ago. So Sands was forced to cut its new loan target to US$1.95 billion, but was still unsuccessful. The casino company wanted the money to complete the construction of a massive 6,400-room Cotai casino resort complex across the street from the Venetian. Budgeted at US$3.3 billion, the project is to include Sheraton, Shangri-La, Traders and St Regis hotels as well as St Regis-branded serviced apartments. But the fundraising plan has now failed because of lack of support from the lenders. "It's as dead as a dodo right now, but will be back at the right time," said a source with knowledge of the transaction. The plan might be refloated in January, a source said. A Nevada-based spokesman for Las Vegas Sands declined to comment on the matter. Sands chairman and majority shareholder Sheldon Adelson said last month that to raise the money needed to complete the resort complex - in the event that banks refused to sign on to the financing plans - the company might consider project financing or selling off the shopping malls inside the Venetian and Four Seasons resorts in Macau. According to an August filing by Las Vegas Sands to the US Securities and Exchange Commission, the company had just US$247.2 million available in a revolving credit facility out of its total US$3.3 billion financing package as of July 30 this year. The growth of the Macau gaming sector has been interrupted by the global credit crunch, visa restrictions imposed on mainlanders by the central government, and intensifying competition due to overcapacity. "The credit crunch seems to be long-lived and will force operators to delay developments in the pipeline," a fund manager said. Beijing's five-month-old crackdown on visits by mainlanders to Macau has started eating into gaming revenue and corporate profits. Monthly casino revenue fell for the first time in nearly three years to 6.9 billion patacas last month, down 3.4 per cent from a year ago and 28 per cent from August, according to unofficial data reported by a Portuguese news agency earlier. September's drop in gaming revenue comes in stark contrast to average monthly growth of 52.5 per cent in the first eight months of the year.
Lawmakers have been warned to abstain from voting at the end of tomorrow's debate about help for people caught up in the Lehman Brothers minibonds saga if they have a direct financial interest in the outcome. The Hong Kong Monetary Authority said it will sell an extra HK$4 billion of Exchange Fund bills to meet local banks' demands for liquidity.
China court on Monday upheld the
death sentence against the killer of six police officers, whose case attracted
controversy over claims that he was abused by police. October 15 - 19, 2008
One of Princess Cruises’ luxury ships, Diamond Princess, could not stop at the Ocean Terminal on Tuesday morning because the terminal was too small for the vessel, local media reported. Consumer confidence in Hong Kong has dropped to the same level as during the 2003 Sars period, according to a new survey released by the Chinese University of Hong Kong on Tuesday. The number of passengers carried by Cathay Pacific Airways (SEHK: 0293) has dropped for the first time since the severe acute respiratory syndrome epidemic in 2003, signalling that the financial turmoil may have curtailed air traffic demand in the city. Cathay and its affiliate Dragonair carried a total of 1.88 million passengers last month, 0.7 per cent down from the same period last year. That, adjusted, represented the first contraction in more than five years. The percentage of seats sold dropped 6.7 percentage points to 72.3 per cent. Tony Tyler, the airline's chief executive, warned last week in the airline's internal magazine of a downturn in passenger demand in the business and first-class cabins. The financial sector accounts for 75 per cent of Cathay's top-20 corporate clients. Air cargo has also fallen. Last month the two airlines carried a total of 141,570 tonnes of cargo and mail, representing a 7.3 per cent year-on-year drop. Titus Diu, general manager of cargo sales and marketing for the airline, said: "The expected post-Olympics surge from mainland China didn't materialise and there was also no significant rush before either the Mid-Autumn Festival or National Day holidays." Despite the oil boom, visitors from the Middle East fell about 5 per cent in the first nine months, compared with a 23.7-per cent jump in numbers to 185,681 for the whole of last year, the Tourism Board said.
The Consumer Council has received nearly 2,000 complaints from Lehman Brothers minibond investors totaling HK$11.85 billion and involving more than 21 banks and financial institutions.
PCCW (0008) shares plunged to their lowest level in 9 years yesterday - returning to valuations last seen before its acquisition of former fixed-line monopoly Hong Kong Telecom - after the company said it scrapped a plan to sell a 45 percent stake in its core business.
China's trade surplus widened to a record in September, boosting the currency reserves that may shield the world's fourth-biggest economy from the global crisis. xports rose 21.5 percent from a year earlier to US$136.4 billion (HK$1.064 trillion) after gaining 21.1 percent in August, the customs bureau said on its website. The trade surplus climbed to US$29.3 billion, a figure derived by deducting the value of imports from the number for exports. China has cut interest rates twice in a month to stimulate the economy as the worst financial crisis since the Great Depression undermines global growth. The surplus adds to US$1.8 trillion of foreign-currency reserves, a buffer that may help the nation to maintain an expansion of more than 9 percent even as a world recession looms. "It's not a bad thing to have a relatively large trade surplus when there's a global financial crisis," said Wang Qian, an economist at JPMorgan in Hong Kong. "China's foreign-currency holdings will help the country to survive the crisis." The median forecasts in a survey of 13 economists were for export growth of 20 percent and a trade surplus of US$24.5 billion. The previous record was US$28.7 billion in August. "Holding the world's biggest foreign-exchange reserves puts China in a better position to cope with the global financial crisis," said Xing Ziqiang, an economist at China International Capital Corp in Beijing. "If needed, China may also be able to cooperate with the US on financing the bailout of its financial system." Imports increased 21.3 percent to US$107.1 billion after climbing 23.1 percent in the previous month. Falling prices for commodities such as copper and oil have trimmed the value of inward shipments. "The good news is that imports are healthy, showing China's domestic demand remains very strong," said Mark Williams, a London-based economist with Capital Economics. "China's growth rate will slow but it won't be traumatic because export falls will be to some extent offset by healthy spending at home." Export growth is down from 25.7 percent for all of 2007. "Although the numbers look like China's exports are holding up, the volume growth of exports has slowed to below 10 percent," said JPMorgan's Wang. "Export growth will continue to weaken as the economic slowdown spreads from developed economies to emerging markets." October 14, 2008
PCCW (SEHK: 0008) has scrapped the sale of a 45 per cent stake in telecommunications subsidiary HKT Group Holdings after private equity funds including TPG, Bain Capital, Macquarie and Providence Equity Partners entered ultra-low bids of as little as US$450 million, market sources said. The board was encouraged by the interest shown in HKT's business. However, we strongly believe that the bids received were not sufficiently attractive for us to continue the process," Alex Arena, PCCW group managing director, said last night. PCCW's falling share price and frozen credit markets greatly reduced what the interested parties were willing to pay despite general agreement that the company has a solid business and good management. PCCW shares closed at HK$2.80 on Friday, more than HK$2 below the price they traded at in mid-July when the first round of bidding started. The banking crisis that has seen some of Wall Street's biggest names go bankrupt or bought out also hampered bidders' attempts to borrow funds against the share dividends they would receive from PCCW. "There's not a dollar of financing to speak of," said one source. Some funds had expected to use debt to finance up to 40 per cent of their bid, making the deal more onerous, particularly for smaller funds that have to put up more of their own cash than the larger funds. PCCW's move last month to give the winning bidder priority over other shareholders on those dividends to help buoy bid levels proved unpopular with shareholders, who pushed the share price down even further. Seven funds, including MBK Partners, Apax Partners, Macquarie, Carlyle, TPG, Bain and Providence, were shortlisted in August. At that time, the high end of the bidding range was tipped to be US$2.5 billion. The current bids place a total valuation of US$6 billion on PCCW, which includes a US$5 billion debt package the company arranged and US$1 billion in equity. The original total valuation at the time of the deal's start was about US$8 billion, meaning US$3 billion in equity. "Those numbers three months ago were totally unrealistic," a source said. "The assets are definitely interesting but they are low growth going forward despite PCCW pushing aggressive earnings. And PCCW has always traded at a premium to other companies with similar capital structures and growth profiles, which is something to think about as well." Some sources said PCCW might have been able to get funds to push up the total valuation to about US$6.5 billion. That would have made for a bid of US$675 million for the 45 per cent stake. Bids were placed before noon Saturday and the PCCW board met yesterday evening and voted to halt the transaction. "Nobody knows what we are facing - is it going to go on for a month, a year or a decade? So there's no sort of sense of whether this will be back on the agenda in, say, January. Maybe it will, maybe it won't," a source said. PCCW's sale is not the first to go down in defeat because of globally weak markets. Huawei Technologies, the largest mainland telecommunications equipment maker, scrapped the sale of a controlling stake in its handset business to private equity funds last week after receiving bids far below what was originally expected. PCCW, the city's largest fixed-line telephone company, set up HKT earlier this year to hold the core assets of the fixed-line, media and information-technology businesses. The company said the move was aimed at improving operational efficiencies and to pave the way for fund-raising, without specifying what the proceeds would be used for.
Entrepreneurs and businesses cannot afford to be left behind when it comes to advances in electronics, Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan stressed on Monday. Mrs Lau was opening the Hong Kong Electronics Fair and Electronic Asia. “With a mobile subscriber penetration rate close to 160 per cent, and a population amenable to adopting the latest technologies, Hong Kong is a good testing ground for the latest IT innovations,” she said. Ms Lau noted that Hong Kong had received more than 28 million visitors last year. Many came to shop for the very latest high-quality electronic products. “We have established the HK$5 billion innovation and technology fund to encourage technological upgrading and innovation among the trade. She said Hong Kong had also established a R&D centre on information and communications technologies. “Our HK$250 million DesignSmart Initiative supports initiatives that promote excellence in design and branding,” the commerce secretary said. She said the government was also setting up thousands of Wi-Fi hotspots for public access. “We also launched our digital terrestrial television broadcasting just 10 months ago, and now 20 per cent of our families are enjoying the new viewing experience.”
Canton Fair faces financial slowdown - Bookings down ahead of major trade expo - Trucks carrying iron poles and wooden planks are lined up outside the exhibition hall and workers strain to push trolleys full of goods inside, but Hong Kong businessman Chan Wing-kee is doubtful this season's Canton Fair, which opens on Wednesday, will be a busy one. Airlines and hotels report that bookings are down. The black-market rate for a booth has slumped to as little as a third the usual price - simply more evidence that even for one of the world's most celebrated economic successes, times are tough and optimism is in short supply. "We are prepared that business will not be good this year. It is obvious," said Mr Chan, a former president of the Chinese Manufacturers' Association in Hong Kong. "We will be unrealistic if we say business will not be affected." Not all exhibitors share Mr Chan's pessimism, however. David Xiao Rong is a sales manager with Shanghai textile company Shartex, which has been at the fair since the 1980s. He believes business will increase 20 per cent this year. "The global economy is bad, but economic downturn only eliminates the smaller players," he said. "With fewer competitors this year, I believe we will be doing better in this fair." The fair is held twice a year. For the previous session, in April, organizers sent 366,000 invitations to buyers across the globe, but by its normally bustling opening only 7,200 had registered, with US buyers noticeably absent. Then in July, Wang Junwen, the director general of the China Foreign Trade Centre, predicted business would be up a fifth over the spring season, although that estimate preceded the current global economic crisis. According to the head of a travel agency in Guangzhou, booking for air tickets and hotel rooms from companies attending the fair, which runs until November 6, has dropped 15 per cent. "Both the domestic and global economies look gloomy," he said. "It is already affecting our business. We did not do well over the National Day holidays, and now bookings have dropped 15 per cent compared with last year. The Canton Fair has not brought much business." Guangzhou media report that city hotels have only half of their rooms booked - down 30 per cent on last year. Participants used to pay more than 3,000 yuan a night at five-star hotels, but this year can get a room for 2,000 yuan (HK$2,275). The black market is also feeling the effects. The allure of the fair has been so strong that companies far down the waiting list will often go the unofficial route to secure spot. According to Guangzhou's Nanfang Daily, the price for a booth on the black market has dropped more than 100,000 yuan to about 45,000 yuan, about the same as the regular rate. Still, Mr Xiao says he is looking forward to doing business in the Pazhou Complex, which will host the entire fair for the first time this year. "The new compound is much bigger and it has modern facilities, which were missing in the old venue," he said. The fair, one of three backed by the Commerce Ministry, moved to the mega venue two years ago when it was celebrating its 100th consecutive session since 1957. For the past two years, the fair was split, with half taking place in the old Liuhua complex. The new complex provides 160,000 square metres of indoor exhibition space and 220,000 square metres of outdoor space. To keep business flowing smoothly, even as more companies pack into the halls, the organiser has streamlined the fair into three segments. Machinery, construction materials and electronics are in the first phase; furniture, toiletries and toys in the second; and textiles, clothes and accessories in the last. "It has changed from an exhibition event that showcases Chinese goods to a major sourcing trade fair to which international buyers come to purchase what China offers," said Ronald Ho Kin-wing, regional director of Hong Kong's Trade Development Council. "The Canton Fair nowadays provides a convenient platform for international firms to identify new manufacturers and check out the newest products of their old manufacturers. By going to Guangzhou, it saves them the time and effort of going to, say, a town in Hunan. "So the fair still has an important role to play in China trade." October 13, 2008
The English Schools Foundation (ESF) began a new era on Friday – after the election of six new parent members to its Board of Governors. The government would meet with the Association of Banks to discuss the possibility of buying back Lehman Brothers investment products from investors, Financial Secretary John Tsang Chun-wah said on Friday. Mr Tsang said that if an agreement was reached, it would appoint independent auditors to value the underlying assets of Lehman Brothers in Hong Kong. He said the Hong Kong Monetary Authority (HKMA) was already investigating complaints that some bank staffers had misled people into buying some complicated investment products. “If the investors were really found to have been misled by banks, we will take action and follow up the cases,” he said. Secretary for Financial Services and the Treasury Chan Ka-keung said the government and relevant banks were still studying the buy-back plan. It involved a lot of complex legal issues. Mr Chan noted that investor confidence remained fragile in the wake of the global financial crisis. He said the United States and the European governments have to work out a comprehensive solution to restore market confidence. Mr Chan stressed that the banking system in Hong Kong remained sound. Singapore’s trade-sensitive economy has declined for a second straight quarter, the government said on Friday, meaning the city-state has entered a recession for the first time in six years. The Ministry of Trade and Industry also revised downwards Singapore’s full-year growth forecast to around 3 per cent, citing a slowdown in the global economy and key domestic sectors. In a move to confront the downturn, the Monetary Authority of Singapore – its de facto central bank – said it was easing monetary policy for the first time in more than four years. Singapore is Southeast Asia’s wealthiest economy in terms of gross domestic product (GDP) per capita but is heavily dependent on trade. This makes it sensitive to hiccups in developed economies, particularly key export markets the United States and Europe. The ministry said the impact of the worsening US financial crisis and the deepening credit crunch had weakened US consumer sentiment, which will affect demand from Asia and the rest of the world. On a seasonally adjusted quarter-on-quarter annualised basis, real GDP declined by 6.3 per cent in the third quarter after contracting 5.7 per cent in the previous quarter, the ministry said. While it did not describe the economy as being in recession, a technical recession is generally defined as two consecutive quarters of contraction in economic output. Economists polled by Dow Jones Newswires had forecast a 0.3 per cent quarter-on-quarter rise in gross domestic product, the value of goods and services produced in the economy. Singapore’s last technical recession occurred in 2002 while the most recent full-scale recession was in 2001, when the economy contracted 2.4 per cent during the year. Compared with the third quarter of last year, the ministry said Singapore’s economy contracted by 0.5 per cent in real terms, against 0.8 per cent expansion foreseen in the Dow Jones poll. In August the government had revised down its full-year GDP forecast to 4.0-5.0 per cent but since then, external economic conditions have deteriorated more than expected and some sectors of the economy have weakened significantly because of industry-specific or domestic factors, the ministry said. “Singapore’s export-oriented sectors, such as manufacturing, will be affected,” it added. Last year the economy expanded 7.7 per cent but after years of growth, signs of a slowdown emerged with recent disappointing trade data and contractions in the important manufacturing sector, which includes the export-dependent electronic and pharmaceutical industries. The government’s preliminary third-quarter GDP estimates are based largely on data from July and August, and are subject to revision. Developing radio frequency identification (RFID) technology would offer Hong Kong considerable benefits during a period of great economic uncertainty, Permanent Secretary for Commerce and Economic Development Duncan Pescod said on Friday. He was opening the GS1 Hong Kong Supply Chain Management Excellence Summit. RFID is an automated identification method, relying on storing and remotely retrieving data through tags. It is used for identification and tracking purposes. Mr Pescod said the technology would be very beneficial to Hong Kong’s economy –especially during difficult times. He said: “The technology can help achieve business sustainability in face of the increasingly complex operating environment and very fierce global competition. “The technology with this infrastructure has made possible a seamless information flow among different business partners including suppliers, manufacturers, distributors, retailers and after-sale service providers along the whole supply chain, heralding a new era of the so-called ‘internet of things’, ” he added. Mr Pescod said an example of the broad application of the technology could be found Hong Kong International Airport at Chek Lap Kok. “The Hong Kong International Airport is the world’s first airport to fully utilise this technology to ensure the efficient flow of passengers and cargo,” he explained. “The tags attached to the luggage allow access to information and real-time tracking more easily and quickly.” Mr Pescod said studies were also exploring the feasibility of applying RFID in areas such as library services, public health care and food safety. He also said the government was funding 13 RFID projects out of 111 HK$453-billion research projects.
Engel & Volkers, a property franchiser specialising in the luxury residential sector based in Germany, is to launch its first shop in Macau. "The market is slow but we can still see demand for residential leasing from expats who are working in the city and looking for mid- and up-market homes," said Nestor Ng, managing director at Engel & Volkers Macau. "Our initial and primary focus will be on the numerous residential and casino-resort projects that are due for completion in the next 12 months," Mr Ng said yesterday. "The Macau market offers enormous opportunities in a rapidly growing market and we see our target buyers as investors from Hong Kong, China and Europe as well as expatriates living in Macau," he said. The first shop will be in launched in Taipa, Macau by the end of this year and Mr Ng said the second shop was expected to be opened in summer next year. Despite the recent market slowdown, Mr Ng said: "Eventually, we plan to open four or five outlets in Macau." The objective for fiscal 2009, he said, would be to gain market share from leading local and international property brokerages that already have an established presence in the market. Estate agents said that individual owners had been prompted to lower their asking prices because of uncertainties in the external environment, despite the present low interest rate and the genuine occupational demand. There was a significant retreat of the number of sale transactions, with volume contracting 34.5 per cent year on year to 8,638 units during the first half of this year, according to Colliers International.
China's securities regulator on Thursday said publicly-traded companies must pay dividends in cash rather than stock over three years before submitting their refinancing applications. The move could help to encourage long-term investment and reduce market volatility, the China Securities Regulatory Commission (CSRC) said. The benchmark Shanghai Composite Index has plunged 66 percent from its record high last October. In a new regulation stipulating cash dividend payment by listed companies, the CSRC said: "The listed firms, if applying for refinancing, must pay dividends in cash totaling no less than 30 percent of its distributed profits over the past three years." The regulation went into effect on Thursday. In the draft version released in August, companies were allowed to pay dividends either in cash or stock. The listed firms were also ordered to reveal their cash dividend policies and previous cash dividend data to investors in their annual reports to improve transparency. "The listed company should give reasons why it failed to pay a cash dividend if it is able to and where the money goes," according to the rule. Cash dividends could offer stable investment returns and prompt large institutional investors to reduce speculation on the secondary market, the regulator said. A couple of huge refinancing plans earlier this year triggered a market plunge on concerns over stake dilution and liquidity stress. In a separate regulation on share buy-back, also effective on Thursday, the CSRC said it allowed a cash dividend payment when the controlling shareholders bought stocks on the secondary market. Such action was banned in the draft version released in late September to solicit public opinion. Share buy-back through bidding at stock exchanges also no longer needs regulatory approval. The CSRC added it would continue to revise the rules on stock buy-back and also give consideration to repurchase through agreement or tender offer.
The organizing committee of the China Import and Export Fair (Canton Fair) has relaxed application procedures for next week's event after companies were inconvenienced by tougher measures earlier this year. Prospective exhibitors are no longer required to produce documentation proving they do not have criminal records when applying to attend the 104th session, as they were told to do ahead of the 103rd edition in April. The forthcoming session will be hosted at three exhibition complexes in Guangzhou's Pazhou from next Wednesday. "The practice for the past session was something temporary," Liang Yanfang, a press officer with the fair's organizing committee, told China Daily yesterday. "However, exhibitors and journalists are required to produce the original identification cards when they apply for passes for the forthcoming event. "The organizing committee attaches equal importance to the safety of the fair. "We are very strict with the qualification of the exhibitors and we won't issue one-off passes for them." The 103rd session of the Canton Fair in April was subject to the strictest safety measures to date as Beijing tightened security ahead of the Olympic Games. Li Jiehua, a marketing manager with a ceramics firm in Chaozhou in east Guangdong, said the laxer security procedures would make processes more convenient for exhibitors, especially those from abroad. "I'm not a native of Chaozhou, and I would probably have to go back to my hometown in Anhui province to get it if the policy did not change," he said. "What's more, I really doubt whether the documentation worked." The 104th session will be the first time it is held in three phases. The first phase will be held from next Wednesday to Sunday.
October 11 - 12, 2008
Lenders kept their prime rates unchanged yesterday as Hong Kong interbank offered rates (Hibor) actually rose, defying a rate cut by central banks around the world.
Not a single deal was reported from developments in the primary market other than Cheung Kong (Holdings) (SEHK: 0001)' Seasons Monarch project over the weekend, according to estate agents. By Monday night, 122 deals were reported at Cheung Kong's new project in Kam Tin, thanks to promotions on the development. Even worse was sales in the secondary market, where deals done between September 29 and October 5 collapsed to a 100-week low (excluding deals done over the last two Lunar New Year weekends when transactions are traditionally low). Just 177 units changed hands in this segment in the 50 key housing estates monitored by Ricacorp Properties, down 8.3 per cent from a week earlier. No deals were done in seven of the housing estates, namely City Garden in North Point, Sceneway Garden in Lam Tin, Central Park above Olympic Station, Sha Tin Centre, Luk Yeung Sun Chuen in Tsuen Wan, Tierra Verde in Tsing Yi and Fairview Park in Yuen Long. Average transaction prices in the secondary market were down 1.2 per cent last week, extending declines to a 15th consecutive week. Prices are now down by an accumulated 12 per cent compared with the peak at the end of March. David Chan Tai-wai, a director at Ricacorp, forecast that weekly transaction volumes would likely stay below 200 units until the stock market stabilised. He added that housing price would remain under pressure amid the financial crisis. Data also shows that as the housing slowdown continues, speculators are being driven out of the market. In the third quarter, 312 "confirmor" deals were recorded in the secondary market, a 60.2 per cent drop from the 784 deals in the second quarter. It is also the lowest deal volume for the past six quarters. Confirmor deals are a gauge of short-term speculation which occurs when a buyer enters into an agreement for the sale and purchase of a property with the owner but before completion sub-sells the property to a sub-purchaser. Meanwhile, total confirmor deal values have slumped 59.4 per cent to HK$1.2 billion from HK$2.95 billion. Wong Leung-sing, an associate director of research at Centaline Property Agency, said the drop was largely because of the continuous decline in house prices, which exposes speculators to losses on their deals. Separately, the 312 confirmor deals in the third quarter accounted for 2.1 per cent of overall transaction in the secondary market, down 1.6 percentage points from the second quarter, indicating speculative activities declined with the slowing housing market.
China's central government has set aside 300 million yuan ($43.93 million) in subsidies for dairy farmers after a devastating scandal over tainted milk. The Ministry of Finance did not specifically mention the milk scandal though it noted in a statement on its website that the subsidies would be made to areas where milk has been discarded. The ministry said that dairy farmers in Hebei, Liaoning, Shanxi, Shandong, Henan and the Inner Mongolian region -- would be granted subsidies. These are the areas hit hardest by the scandal over melamine tainted milk powder. Melamine, normally used in plastics, has been found added to milk powder in order to create the appearance of higher protein content. The tainted milk powder has been found in products tested from major suppliers such as Sanlu Group, Hong Kong-listed Mengniu Dairy and Shanghai-listed Yili. Numerous countries have banned imports of Chinese milk powder and other food products. The Ministry of Finance said that the subsidies are also aimed at maintaining dairy cow breeding and promoting sustainable and healthy industrial development. October 10, 2008
Bank of China (Hong Kong) BOCHK said it would meet customers on Wednesday evening to update them on latest developments relating to the problems associated with Lehman Brothers.
Hong Kong's official foreign currency reserve assets rose to 160.6 billion U.S. dollars at the end of September, up 2.5 billion U.S. dollars from a month earlier, the Hong Kong Monetary Authority said Wednesday. Hong Kong is the ninth largest holder of foreign currency reserves worldwide after economies such as the Chinese mainland, Japan, Russia, India, China's Taiwan, South Korea, Brazil and Singapore. Including unsettled forward contracts, the foreign currency reserve assets also stood at 160.6 billion U.S. dollars. The total foreign reserves of 160.6 billion U.S. dollars represent about seven times the currency in circulation or 41 percent of Hong Kong dollar M3.
Beijing raised the retail prices of gasoline and diesel by as much as 4 percent yesterday to offset the higher cost of providing cleaner fuels to the capital. Gasoline prices will climb by 200 yuan (HK$228) per tonne and diesel by 290 yuan per tonne for fuel sold only in Beijing, the Municipal Commission of Development and Reform announced. Gas stations in Beijing may sell No93 gasoline - China's most-used type of fuel - for as much as 6.37 yuan a liter after an adjustment of up to 8 percent allowed by government. "We applied to the National Development and Reform Commission to raise fuel prices a while ago, but the NDRC so far just approved the increase in Beijing," a Sinopec official told The Standard. "It is not a nationwide hike yet, and fuels sold in Beijing accounts for only a small proportion of our profits pie," he added. "But it has symbolic meaning, showing the government is willing to act during a high crude price cycle." The capital city consumes about 10 million tonnes of gasoline and diesel a year, equivalent to 2.7 percent of the nation's total. Beijing adopted the higher emission standard of Euro IV, which leads to a higher fuel-refining cost, from July 1. Some analysts said the move in Beijing could mean China will address price adjustments on a broader base. Still, oil companies are not certain about that, the Sinopec official said, "as the market was expecting a national fuel hike after the Olympics. "But that was when the crude price hovered above US$120 [HK$936] per barrel, and now it has retreated." China's central bank announced on Wednesday the decline of reserve requirement ratio by 0.5 percentage points from Oct. 15, and the decrease of interest rate by 0.27 percentage points from Friday.
China's outstanding foreign debt was at 427.43 billion U.S. dollars through June, 14.4 percent higher than the second half of 2007, the State Administration of Foreign Exchange said on Tuesday.
October 9, 2008
The city's firefighters may stage a protest march later this month - the first in nearly two decades by Hong Kong's firemen - after their demands for a pay adjustment were rejected. Financial advisers can be held liable for negligent investment recommendations to clients, a local court ruling in 2003 has established. In the Field vs Barber Asia Limited (HCA7119/2000) case, plaintiff Susan Field was awarded compensation of £219,890 (HK$2.84 million) plus interest and costs that she had lost as a result of changing an investment portfolio on the recommendation of the defendant. Ms Field had asked for a conservative investment portfolio. It initially made a British sterling-dominated portfolio for her, but later advised her to gear up her portfolio with a Japanese yen loan. A subsequent appreciation of the yen forced her to provide additional cash for the loan, eventually losing the whole investment. The Court of First Instance ruled that the financial adviser was expected to warn Ms Field of the risks. The ruling was upheld by the Court of Appeal when the defendant appealed. Citing this case yesterday, Civic Party leader Audrey Eu Yuet-mee said minibond holders were in an even stronger position than Ms Field to claim compensation, as they had signed contracts with the distributors. She has asked the Consumer Council to refer to the case and consider using its consumer legal action fund to help holders claim compensation. Ms Eu said individual investors might not be willing to launch costly lawsuits.
Multinational companies on the Fortune 500 list have seen the majority of their corporate operations on the Chinese mainland establish trade unions, with union members exceeding 2.01 million. Sun Chunlan, the All China Federation of Trade Unions deputy head, said on Tuesday of 483 Fortune 500 companies operating on the mainland there were more than 4,100 corporate entities. Of those, 3,370, or 82 percent, had established trade unions. The federation is preparing to hold its 15th national congress from Oct. 17 to 21 in Beijing. In total, 1,800 deputies and 289 special deputies from 31 provinces, autonomous regions and municipalities, as well as 29 guests from Hong Kong and Macao, will participate. Of the deputies, women accounted for 31.6 percent; minority ethnic groups made up 13.2 percent. About 83.5 percent were under 55 years. The deputies also included 47 migrant workers, representing a population of at least 140 million such workers nationwide. Construction began on a high-speed passenger rail line between Beijing and Shijiazhuang, capital of north China's Hebei Province Tuesday, the Ministry of Railway (MOR) said. The new 281 kilometer line is part of another route which connects Beijing, Guangzhou and Hong Kong in south China. It totals more than 2,300 km long. With an estimated cost of 43.87 billion yuan (6.4 billion U.S. dollars), the Beijing-Shijiazhuang line is expected to be complete and in operation in four years. It is jointly funded by the MOR, Beijing and Hebei governments. The designed speed of the railway is 350 km per hour. Initially, however, trains will only travel 300 km per hour. Once operating, this new line should cut the journey from Beijing to Shijiazhuang from 119 minutes to less than 60 minutes, the ministry said. The new line will have six stations. Seventy-seven percent of it, or about 218.47 km, will be built on an elevated alignment to save land. In the meantime, Chinese workers will also be building a 28.7-km-long railway linking Shijiazhuang to Taiyuan, capital of Shanxi Province. The MOR said it hopes to build 9,800 km of passenger-dedicated railway over its Five-year Plan (2006-2010).
Overseas Chinese fund or play a hand in the funding of almost half of the 28,000 foreign-invested companies in Shanghai, making indelible contributions to the city's development. At a recent gathering to mark the 30th anniversary of the country's reform and opening up, people of Chinese birth or descent who live abroad were praised for their deep love of their motherland. In the years between 1978 and 1995, the local government approved around 13,600 foreign investment projects. They drew 34.27 billion yuan of foreign direct investment, with 60 percent of the projects and 56 percent of capital coming from overseas Chinese and compatriots of Hong Kong and Macao. "Over the 30 years, overseas Chinese, returned compatriots and their families showed their tremendous love of their hometown and motherland," Yang Xiaodu, head of the United Front Work Department of Shanghai, said during his address to the forum. Overseas Chinese will be written into history for their role in supporting the opening-up and reform, in the creation of a positive international environment and in the nation's social development, he said. Overseas Chinese and Hong Kong and Macao compatriots made more than 2,000 donations amounting to 2 billion yuan, mainly in the fields of culture, education, healthcare and other public welfare from 1990. Statistics show that following the devastating Sichuan earthquake, Chinese ethnicities opened their wallets and donated -300 million yuan in cash or relief materials for disaster-stricken areas via Shanghai. Overseas Chinese have also showed tremendous interest in the upcoming 2010 Shanghai World Expo. An 80-member delegation from All-China Federation of Returned Overseas Chinese paid a visit to the Bureau of Shanghai World Expo Coordination to get an update on preparations. During the forum, representatives of overseas Chinese shared their experiences and the dramatic changes they felt had taken place in China. Yue-Sai Kan, an international television star and immensely successful businesswoman, said she marvelled at China's social changes but cherished the sincerity and purity people had three decades ago.
October 8, 2008
HSBC (SEHK: 0005, announcements, news) – the trustee of Lehman Brothers minibonds and other banks who helped distribute them – have showed a positive response to government suggestions they buy back Lehman Brothers minibonds from holders, Financial Secretary John Tsang Chun-wah on Monday. Mr Tsang said the proposals were suggested by the government during a meeting with the trustee and distributing banks. “On the back of the trustee, HSBC, we have suggested the distributing banks of Lehman Brothers minibonds buy back the minibonds from the customers according to the products’ estimated current value. “A few banks have already showed a positive response to the proposal, while other banks said they would consider it more thoroughly,” he said. Mr Tsang said this would allow investors to get back some of their money back quickly. “I hope both the investors and distributing banks find this solution fair and efficient. I believe the banks would come up with a decision soon,” he said. Meanwhile, the Hong Kong Monetary Authority on Monday said it had received more than 5,500 complaints relating to Lehman products. It has deployed 70 staff to deal with this. The spokesman said it had reviewed 112 complaints on products linked to Lehman Brothers – which involved eight banks. Of these, 22 cases involved inappropriate sales tactics. This is now being investigated. The spokesman said the authority was continuing to collect information from investors.Taiwan authorities arrested six people suspected of counterfeiting 100 million Chinese yuan (US$14.19 million) as they tried to smuggle the stash to the mainland, officials said on Monday. Soldiers and police tracked the suspects, ages 32 to 67, for nearly five months before pouncing as they tried to set off on a fishing boat for the mainland, the National Police Agency said in a statement. The suspects, linked to a counterfeit factory in Taiwan, intended to sell the bogus bills in China. The statement said they had also fabricated T$16.8 million (US$520 million) worth of highway toll booth tickets. Taiwan authorities arrested six people suspected of counterfeiting 100 million Chinese yuan (US$14.19 million) as they tried to smuggle the stash to the mainland, officials said on Monday. Soldiers and police tracked the suspects, ages 32 to 67, for nearly five months before pouncing as they tried to set off on a fishing boat for the mainland, the National Police Agency said in a statement. The suspects, linked to a counterfeit factory in Taiwan, intended to sell the bogus bills in China. The statement said they had also fabricated T$16.8 million (US$520 million) worth of highway toll booth tickets.
The Hong Kong government has asked banks and brokers embroiled in the minibonds debacle to buy back the investments in the hope of bringing a quick end to investors' uncertainty. Market sources last night valued the minibonds in question - complex derivatives issued by bankrupt US investment bank Lehman Brothers originally worth HK$12.7 billion - at HK$7.24 billion. They said some of them, backed by the bank's own credit notes and originally valued at HK$1.27 billion, were now almost worthless but that most were still worth around two-thirds of what investors paid for them. "Small investors ... want an early solution," Financial Secretary John Tsang Chun-wah said. "This proposal will enable the investors to get some of their money back quickly." The government said it hoped investors could get their money before the end of the year. The Hong Kong Monetary Authority said it was investigating 22 banks for possible mis-selling of minibonds. Three brokers are being investigated separately. Some investors have said they were told minibonds were low-risk investments, when in fact they are high-risk, credit-linked derivatives. The government said several banks had responded positively to its suggestion of a buy-back. It has given banks a week to respond, but says a buy-back could proceed even if some banks do not take part. The buy-back would dash investors' hopes of recovering all their money, but the government insists it is the best way forward. Secretary for Financial Services and the Treasury Chan Ka-keung said if banks made a gain from liquidating the underlying assets of minibonds, they would have to distribute the surplus to the investors affected. "We have no choice," said one banker of the government's proposal. "But we don't know whether it will really satisfy the investors." He said the idea was for banks to buy back the minibonds at a price representing the fair value of the underlying assets or at a discount to fair value, then pursue Lehman Brothers' liquidators or HSBC (SEHK: 0005, announcements, news), which acted as the minibonds' trustee - the middleman between the US bank and the local distributor banks. Another banker said the minibonds taskforce set up by the Hong Kong Association of Banks would appoint an adviser to value the underlying assets and set a reference price. David Li Kwok-po, chairman of Bank of East Asia (SEHK: 0023), which sold minibonds, said it would discuss with other banks the best thing to do for their customers. Banks would have to look at the pricing of minibonds, he said. Some investors were not impressed by the buy-back idea. "This is not a solution," said one woman who bought HK$1.2 million in minibonds from Mevas Bank. Monetary authority chief executive Joseph Yam Chi-kwong pledged to handle promptly the 5,500-plus complaints it had received.
China National Chemical Corporation (ChemChina) announced Monday that China Bluestar (Group) Co. Ltd., its joint venture in Beijing with the Blackstone Group, has officially launched. Bluestar, one of ChemChina's subsidiary company groups, will be transformed into a Sino-foreign joint venture. U.S.-based Blackstone is putting 600 million U.S. dollars into the project for a 20 percent stake in the new company. ChemChina and Blackstone signed the cooperation agreement in September 2007. It was ratified by the government in December. A ChinaChem spokesman said the joint venture aimed at internationally-advanced technologies and would build high-tech chemical new materials equipment with self-owned intellectual property. It will draw on Blackstone's successful experience in the global chemical industry and its advanced management ideas. ChemChina is one of the country's state-owned giant enterprises and a leading player in the global chemical industry. It ranked 28th among China's top 500 enterprises and 19th in global chemical enterprises. Bluestar has three subsidiary companies listed on the Shanghai and Shenzhen exchanges. October 7, 2008
The Executive Council has agreed to a land swap that will allow the Housing Society to develop the first integrated community project for the elderly and create up to 800 jobs in Tin Shui Wai.
China's securities regulator announced Sunday that it will soon launch margin trading business for securities firms, which has long been expected by the market.
October 6, 2008
A total of 380,374 visitor arrivals were recorded in Macao during the first four days of this year's National Day "Golden Week" holidays, an increase of 29,374 compared with the corresponding period of last year, The Macao Post Daily reported on Friday. About 99,269 visitor arrivals were logged on the National Day alone, which was the highest number so far of the "Golden Week" holidays, according to the daily, which quoted statistics from Macao's Public Security Police (PSP). The PSP were also quoted as saying that the figures of 380,374 visitor arrivals were recorded between Sept. 29, the first day of the holidays, and 10 p.m. local time Thursday. According to the PSP statistics, some 351,000 visitor arrivals were recorded during the corresponding period of last year's "Golden Week".
Chinese industry analysts warn Brazil's mining company, Companhia Vale do Rio Doce, it would probably lose the Chinese market. Major Chinese steel makers and iron ore suppliers decided to suspend imports from Vale because ofthe company's price hike on iron ore. Chinese analysts called Vale's move untimely and unreasonable since market demand for steel products was weak in both China and other parts of the world. The second Summer Davos forum, or the Annual Meeting of the New Champions 2008, concluded in the north China metropolis on Sunday afternoon. The two-day meeting was the first gathering of such kind after the U.S. subprime mortgage crisis, attracting some 1,400 participants from nearly 90 countries and regions. Chinese Premier Wen Jiabao addressed the opening ceremony. The meeting picked "The Next Wave of Growth" as its theme, and the participants, including business elites, senior officials, experts and scholars, paid much attention to the current global financial crisis. The Summer Davos forum mainly targets growth enterprises worldwide. Schwab, founder and executive chairman of the World Economic Forum announced the third Summer Davos forum would be held in northeast China's port city of Dalian from Sept. 10 to 12 next year.
Several rare herbal plants aboard the recent Shenzhou VII space mission have now been transferred to a Chinese nanobiotechnology lab for study. The plants, including rauwolfia and salvia miltiorrhiza (also known as red sage), were used to produce nanomedicines to treat cancerous tumors, Professor Zhang Yangde with China's Laboratory of Nanobiotechnology at the Central South University told the Changsha Daily newspaper in Hunnan Province on Thursday. Anti-tumor nanomaterials can be obtained from extracts of the herbal plants, Zhang said, adding researchers hoped the microgravity environment in outer space could have spurred gene mutation of the plants and enabled them to grow and reproduce faster. Rauwolfia is a genus of evergreen trees and shrubs of the Apocynaceae family. Rich in alkaloid, the plant is widely used to produce anti-hypertensive drugs. The natural reserves of this plant are declining as a result of over-harvesting. The international Union for Conservation of Nature and Natural Resources has listed the plant as endangered. Salvia miltiorrhiza is a shade-providing perennial flowering plant, highly valued for its roots in traditional Chinese medicine. Other samples aboard the spacecraft included the seeds of 25 endangered plants and live samples of aquatic animals and plants. The Shenzhou VII space module carrying three taikonauts landed safely by parachute on September 28 in China's northern grasslands after a 68-hour flight. The mission included the first ever spacewalk by a Chinese astronaut.
October 4 - 5, 2008
Three of five available school sites were allotted to international schools yesterday in a bid to ease campus overcrowding. Two sites in Chai Wan, on Cheung Man Road and in Yue Wan Estate, were allocated to the French International School and the Hong Kong Academy respectively. They are both expected to be available by the end of next year. Another site in Sha Tau Kok allotted to the Hong Lok Yuen International School is expected to be available as soon as the end of this year. Two other sites, in Tai Po and Shau Kei Wan, were not allotted due to a lack of interest or a lack of proposals that met requirements. International school heads had previously criticised most of the sites as being too far away from where most of their students lived. The Education Bureau earmarked vacant school premises and undeveloped sites for international school expansion in March. An American Chamber of Commerce study of 12 international schools last year found there were 1,654 students queueing for places. Only five schools responded, because the other seven did not keep waiting lists. Secretary for Education Michael Suen Ming-yeung said the allocation of the three sites would help address the demand for international school places among families coming to Hong Kong for work or investment. The bureau spokeswoman said the government planned to launch an allocation exercise for four undeveloped sites - in Kowloon Bay, Lai Chi Kok, Sai Kung and Tuen Mun - at the end of this school year. Thirty-one schools have expressed interest. The government is also expected to provide an extra 300 primary and 200 secondary school places on Hong Kong Island and about 400 secondary places in the New Territories starting from 2009-10. International schools offer about 35,000 primary and secondary places and serve students from about 30 nationalities. French International School principal Francis Cauet said the Cheung Man Road site would host extra primary pupils, on top of the 1,800 students, from kindergarten to secondary, at the school's Happy Valley campus. He said the school was facing an increase of 120 to 150 students every year and the site would be able to ease the pressure. "We are really pleased to get this site; we wouldn't know what's going to happen if we didn't get it," Mr Cauet said. Elaine Goddard-Tame, the principal of the Hong Lok Yuen International School in Tai Po, said the school would use the extra site in Sha Tau Kok to provide about 400 extra secondary school places. The Tai Po campus currently has about 380 students from nursery to Year Nine. Ms Goddard-Tame said the school would move the junior secondary section and build a senior secondary section at the new site by next September. "It would have been nice if we could have had a site nearer, but it's not as far away as people think," she said. "It's only 20 minutes' bus ride away from Tai Po." As if a 35 per cent drop in the Hang Seng Index this year was not bad enough, the 35,000 members of the Hospital Authority Provident Fund Scheme have fallen victim to the bankruptcy of US investment bank Lehman Brothers. Scheme administrators say the fund portfolio includes Lehman Brothers bonds, securities and derivatives but that they account for less than 1 per cent of its investments. A spokesman would not discuss the extent of the fund's losses on these investments. At the end of March, the fund had 35,814 contributors and assets of HK$35.4 billion. It is not the only public sector provident fund in Hong Kong to have suffered losses from the US$639 billion bankruptcy of Lehman Brothers, the fourth-largest US investment bank and one of the highest-profile victims of the subprime-mortgage crisis which erupted 14 months ago. The Subsidised Schools Provident Fund announced it had lost HK$133 million on investments in Lehman Brothers securities. In a notice released to contributors this week, the fund's board of control said its holdings of Lehman Brothers shares and senior debt securities amount to HK$3 million and HK$188 million respectively. "The portfolio managers have assessed that the value of the equities would need to be fully written off [because of] the company's liquidation, while there might be a 20 per cent to 40 per cent recovery rate for the senior debt securities," said the statement. It estimated the fund would book a loss of HK$133 million - about 0.2 per cent of its net asset value. It is not known whether other public institutions have exposure to Lehman Brothers investments.
The confidence of Hong Kong consumers is falling as the global financial crisis worsens, with many businesses feeling the effects of belt-tightening and weakening demand. Car dealers, restaurants, travel companies and some shops face falling sales. Leon Roy, general manager of Rolls-Royce Motor Cars Hong Kong, said sales last month were down from September last year. Still, he remains cautiously optimistic about the outlook for customer orders. "The coming 12 months will be difficult," Mr Roy said. "Like everyone else, we're definitely affected by the weakening economy but the impact on us is not as severe because we're not mass-market." The typically quiet months of July and August were especially quiet this year. That was because customers flocked to Beijing for the Olympics, he said. Rolls-Royce sales tend to peak between September and March. Sales of Porsche sports cars also weakened last month, said Derek Tong, general manager of the Porsche Centre Hong Kong and Macau. The outlook for the next 12 months would depend on general economic conditions, he said. "As expected, the magnitude of the recent financial market turmoil has had an impact on consumer sentiment. September's orders were a little softer compared to earlier in the year," Mr Tong said. A spokesman for Italian Motors, the official Ferrari dealer in Hong Kong, said business "remains healthy". At the city's pricier restaurants, revenue was down 20 per cent to 30 per cent year on year last month, Hong Kong Federation of Restaurants and Related Trades president Ken Chan Wing-on said. Business at more affordable restaurants had not been affected, he said. "When the stock market and property prices have tumbled so much, high-class restaurants - like those offering expensive ingredients such as abalone, shark's fin, sea cucumber and fish maw - are affected," Mr Chan said. People also appear to be curtailing their travel plans. Hong Thai Travel Service's general manager, Susanna Lau Mei-sze, expects zero year-on-year growth in business between now and December 31, despite having seen a 7 per cent jump in customers in the first half of the year. "There is a fall in the number of tourists for some long-haul destinations and luxury tours, but short-haul trips to Southeast Asia have seen an increase," Ms Lau said. Retail sales in August rose 10.4 per cent year on year by value, to HK$22.8 billion. And although there were double-digit increases in sales of electrical goods and furniture, car sales dropped 14.8 per cent and sales of footwear fell 4.1 per cent. A government spokesman said the global financial turmoil "will continue to generate shocks to the local asset markets, thereby impacting on consumer sentiments and the local economy".
Liability insurance should be mandated in the food and beverage industry to strengthen companies' risk management in the sector, a political adviser has said. "An increasing number of food safety disputes have emerged with the public's enhanced awareness about food safety," said Feng Xingyun, a member of the National Committee of the Chinese People's Political Consultative Conference. "The ongoing Sanlu milk scandal has once again drawn attention from home and abroad about the food safety issue," Feng said in a signed article carried by People's Daily on Thursday. The melamine-tainted baby formula produced by Sanlu Group has killed four infants and left about 53,000 children suffering from urinary problems including kidney stones. The company has recalled more than 10,000 tons of milk powder, involving more than 700 million yuan ($103 million) in refunds. It will also have to bear the medical expenses for those affected. Sanlu may go bankrupt and be taken over by Beiijng Sanyuan Food Co, which remains untainted in the scandal, according to media reports on Friday. "As most food and beverage enterprises are vulnerable to risks owing to their small scales and lack of insurance coverage, they often have limited compensation capabilities in the case of a food safety accident," Feng said. Therefore, she suggested the Ministry of Health and the China Insurance Regulatory Commission mandate liability insurance in the food and beverage sector in selected pilot areas, by introducing commercial insurance to their food and hygiene management system. Then the insurance service should be gradually expanded to food and beverage enterprises nationwide, based on experience drawn from the trial period, she said. The insurance would lower the enterprises' operating risks and enhance their ability in responding with compensation following food poisoning or consumer casualties, she said. The compensation made by insurers would also alleviate pressure on the government arising from potential bailouts, she added. An insurance analyst agreed with her. "There're many measures to limit compensation liability due to damages from product deficiencies," the unnamed analyst told Shanghai Securities News. "Apart from improvements on techniques and management, buying products liability insurance is another easy way for effective risk management. However, consumers as well as producers and sellers still lack knowledge about the products' liability insurance or food contamination insurance." In the 1980s, premiums from product insurance services took up 45 to 50 percent of the revenues of all non-life insurance services in the United States, while in Japan liability insurance services accounted for 25 to 30 percent, according to China Youth Daily. By contrast, the coverage rate for liability insurance among Chinese enterprises is only 4 percent, much lower than the world average of 15 percent, even though the first product liability insurance service was launched in China in 1984. China should catch up with the world trend in constructing a nationwide product liability insurance network, which should also include medicine, home appliances and cars, said the China Youth Daily report.
October 3, 2008
Chief Executive Donald Tsang Yam- kuen is expected to grant the requests of political parties and concern groups to increase the so-called "fruit money" for the elderly to HK$1,000 when he makes his policy speech later this month. The total value of annual retail sales in August has increased by 10.4 per cent to HK$22.8 billion as compared to last year, latest figures showed on Thursday. The Census and Statistics Department said the volume of total retail sales in August increased by 3.9 per cent over a year earlier.
Up to 1,000 former Gurkha soldiers in Hong Kong will gain British residency after a landmark victory in a two-year legal battle in London. The veteran fighters from Nepal, who helped man Hong Kong's defences under British rule, joined former comrades around the world in jubilation at gaining the right to live in the country they fought for.
Trade with South Africa was now worth billions of dollars annually to Hong Kong, Trade and Industry director-general Joseph Lai Yee-tak said on Thursday. China authorities have quietly extended the clampdown on Guangdong residents visiting Macau. They are now limited to one trip every three months to the casino boom town, travel agents say. The change, effective yesterday, follows several rounds of tightening since June which have slowed Macau's tourism growth. It means a Guangdong resident visiting Macau must wait three months before applying for another permit. Until Tuesday, residents were allowed a seven-day Macau trip once every two months. Secretary for Social Affairs and Culture Fernando Chui Sai-on said the government had yet to "gather accurate information" about any new travel restriction. Guangdong is Macau's biggest source of punters. Like some of the travel curbs previously aimed at Macau, the new measure appears to be an unwritten policy. Travel agents in Guangzhou and Shenzhen said they had been informed of it by immigration officials. Zhang Yao, a manager at China Travel Service in Guangzhou, said the number of city residents visiting Macau had been falling and looked set to decline further. "People joining Macau tours in September have dropped by nearly half [compared to August]," Mr Zhang said. "There used to be more than 10 buses a day taking Guangzhou residents to Macau but now there are only about three." Like Mr Zhang, Wang Qi, a manager of Shenzhen Comfort Travel Service, said she had learned about the new restriction from immigration authorities. From June 1, Guangdong residents were restricted to visiting Macau once a month instead of once a fortnight. From July 1, they were restricted to visiting once every two months. Since September 1, mainland travellers to Hong Kong have had to get a separate permit to visit Macau. Previously, it was possible to visit both cities on a Hong Kong permit. Andy Wu Keng-kuong, president of the Travel Industry Council of Macau, said the move could stall growth in mainland visitors, but predicted full-year visitor numbers would still be up 10 per cent on 2007. Macau's visitor arrivals have been growing at nearly 20 per cent annually in the past few years. Despite the imposition of restrictions in June, casino revenue rose 42.2 per cent year on year to 9.2 billion patacas in July. In August, revenue was up 44 per cent. Mainland visitor numbers in July were up 29.9 per cent year on year. In August they were up 10.9 per cent. Political commentator Larry So Man-yum said the new travel curbs indicated Beijing was serious about putting the brakes on Macau's casino development and limiting the outflow of mainland money.
Beijing has urged rich nations to curb greenhouse gases by as much as 95 percent by 2050 compared with 1990 levels, in order to allow developing economies to grow. China called on developed countries to cut emissions by between 25 and 40 percent below 1990 levels by 2020, and between 80 and 95 percent by 2050, said a statement published on the website of the United Nations Framework Convention on Climate Change. Mid-term targets for developed nations, which have caused most of the buildup of heat-trapping gases in the atmosphere, are "most important," China said. "Only with such a mid-term target being clearly determined is it meaningful to talk about any long-term goals for emission reductions." Europe, the United States and other industrialized countries should contribute 0.5 to 1 percent of their national output to help developing countries cope with global warming and reduce output of greenhouse gases, China said. About 180 nations are seeking to form a climate-protection agreement next year under the UN process. World carbon dioxide emissions from energy use rose 2.8 percent last year as coal consumption outpaced crude oil and clean-burning natural gas. Industrialized nations produced more of the heat-trapping gases that have built up in the earth's atmosphere in the past century, causing climate change, scientists say.
China's newly-revised administrative regulations on foreign investment in advertising enterprises came into effect on Wednesday. The regulations, jointly promulgated by the State Administration for Industry and Commerce (SAIC) and Ministry of Commerce (MOC), were set to replace the former regulations issued by SAIC and MOC on March 2, 2004. Under the new regulations, foreign-invested advertising enterprises can engage in design, production, publication and some other types of advertising businesses for both domestic and overseas costumers after receiving official approval. A Sino-foreign advertising joint venture can be established on the condition that all investing parties are the enterprises engaging in advertising business and having been operating for more than two years. For the establishment of a wholly foreign-owned advertising enterprise, the investor is required to be an enterprise with advertising as its main business and also has been in operation for over three years. A foreign-invested advertising enterprise is qualified to apply the establishment of a branch in China, only if it has the full amount of its registered capital paid up, and with a minimal annual operating turnover of 20 million yuan (2.9 million US dollars). October 2, 2008
The impact of the global financial crisis on Hong Kong manufacturers is expected to be worse than that of the Sars epidemic of 2003. As a result of fewer orders and tighter credit, the number of Hong Kong-owned factories in the Pearl River Delta that were expected to go out of business was forecast to grow, said Stanley Lau Chin-ho, a deputy chairman of the Federation of Hong Kong Industries. In March, it was announced that 10 to 20 per cent of Hong Kong manufacturers with factories in the delta were expected to close down within two years because of rising labour costs and other costs, according to a survey of 162 Hong Kong manufacturers by the federation. "With the US and European financial crisis, the proportion will be higher. The financial crisis mainly affects the export markets, which will shrink. Not only exports to the US but also to the European market," said Mr Lau, who could not give exact figures. There are more than 70,000 Hong Kong-owned factories in the delta. Orders from the United States and Europe, the two main markets for Hong Kong manufacturers, would soften this year, Mr Lau said. "Sars was a disease that went away in five months," he said. "But for the recent economic crisis, we don't know when it will hit bottom." An executive with one toy company said: "We've already seen a good number of Hong Kong toy factories closing shop this year, with the new labour law in January and the weakening global economy. It's a double whammy." US orders for toys from Hong Kong-owned factories had fallen year on year in "the low double digits", the executive said. "Europe will not be affected as badly as the US, but we will see a downturn [in European orders] this year." Mr Lau said the second problem facing manufacturers was that banks were tightening their loans. "There are more cases of banks tightening or cancelling loans or raising interest rates, even though there is no sign that small and medium-sized manufacturers cannot repay their loans. This will cause liquidity problems for these manufacturers," he said. Hong Kong banks had been burned by some of the city's firms which defaulted on their loans because of the worsening global economic environment, Mr Lau said. Another reason for tighter credit from Hong Kong banks was the exposure that some lenders had to the US debt instruments that helped precipitate the financial crisis, another executive with a Hong Kong toy company said. "Hong Kong banks are more conservative because they are being hurt by the US credit crisis. Many Hong Kong toy factories are running short on cash flow. They will slim down their operations or close," he said. Hong Kong posted a HK$36.2 billion fiscal deficit for April-August, the first five months of the financial year, against a HK$1.2 billion surplus a year earlier, government data showed. Government finances have rebounded in the past four years in tandem with strong economic growth. That has allowed the government to offer a temporary salary tax cut for this year and property rate waivers, although those sweeteners will curb government revenue for the year ending in March 2009. As a result, the government forecasts a small deficit for 2008/09, compared with a record HK$123.7 billion surplus for 2007/08, before returning to the black in 2009/10. Analysts, however, say the government's 2008/09 estimate is pessimistic and they forecast a healthy surplus.
The Shenzhou VII crew may have returned to Earth on Sunday, but the space mission continued last night: scientists started to move a small satellite closer to a module left behind in orbit. China Central Television reported that scientists at the Beijing Space Control Centre made their first satellite manoeuvre last night, with four or five adjustments due within a week. "The satellite is a bit far from the orbit module right now, so we have to give the satellite a little push to force it to move closer to the module," Li Gefei, a scientist with the ground control centre, told CCTV. The 40kg satellite has two cameras on board that are sending pictures of the orbit module back to Earth. The satellite and the orbit module were detached from the Shenzhou VII re-entry capsule and left to circle the planet after the crew's three astronauts finished their space tasks last weekend. Reports said both pieces of equipment would be abandoned after their batteries ran out. Besides sending back clear pictures of the orbit module, scientists said the experiment would offer technological references for building a space station in the future, but they did not elaborate. The attempt to bring the satellite and the module closer together appears to be a warm-up for a much more ambitious plan to connect space modules in orbit in about 2013. Space programme deputy head Zhang Jianqi said in another CCTV interview that China would send up an 8 tonne space lab, tentatively named Tiangong No 1, in 2010 or 2011, before Shenzhou VIII, IX and X were launched in the next two years to dock with the space lab. Tiangong literally means "heavenly palace" and is well known in Chinese literature as the home of a number of legendary characters. Mr Zhang said the Shenzhou VIII mission would have significant implications for subsequent space trips because the success or failure of the test would decide whether astronauts would be sent to outer space on the next three Shenzhou missions. "If the docking test of Shenzhou VIII is carried out smoothly, it's possible we will send astronauts to test the technology" in the next two missions, Mr Zhang said. Another senior space engineer, Su Shuangning, said docking could prove to be a difficult task. "In my opinion, it's like putting a needle up there in outer space, and then you try to put a thread through the needle from several hundred kilometres below. It's a hard task to do even on the ground," Mr Su said. From the lessons learned there, China will build a space station in outer space, allowing astronauts to live there for longer periods. Space engineering expert Wang Yongzhi said government blueprints for the space station indicated China would try to send astronauts to the moon. He said scientists were evaluating the feasibility of a manned lunar mission and would seek the central leadership's approval for the project when the timing was right.
Chinese President Hu Jintao has appointed four new ambassadors in line with decisions adopted by the Standing Committee of the National People's Congress, China's top legislature. Liu Jian was appointed ambassador to Malaysia, replacing Cheng Yonghua. Gao Deyi was appointed ambassador to the Kingdom of Lesotho, replacing Qiu Bohua. Gong Jianwei was appointed ambassador to Georgia, replacing Wang Kaiwen. Cheng Guoping was appointed ambassador to Kazakhstan, replacing Zhang Xiyun.
October 1, 2008
The Hong Kong Monetary Authority (HKMA) has received more than 2,000 complaints about the selling practices of banks regarding investment products arranged by or linked to Lehman Brothers, Secretary for Financial Services and the Treasury Chan Ka-keung said on Tuesday. The Consumer Council also said they have received more than 890 complaints and 200 inquiries from holders of about HK$620 million in structured notes arranged by or linked to Lehman. Mr Chan said the complaints were mainly about the inappropriate methods used by banks when they sold Lehman’s investment products. “I am really concerned about these cases,” he told reporters.The HKMA will look into all complaints from investors, and will give priority to handle those obvious cases where banks used improper sales tactics to sell those products to investor,” he said. He said the HKMA has already increased its staff to handle complaints and urged investors to report whether they had been misled by financial institutions. Mr Chan also said he was concerned US lawmakers, early on Tuesday (HK time), had rejected a US$700 billion (HK$5,446 billion) plan to bail-out the troubled American economy. Mr Chan said it was inevitable the market would be volatile and urged investors to stay calm. He said Hong Kong’s financial authorities would closely monitor how the markets react to further developments in the US. “I feel disappointed that they [some US politicians] rejected the bail-out. This will affect the stability of global stock markets – including Hong Kong. “I hope local investors can stay calm... the government and HKMA will also do everything to ensure the stability of financial markets and the banking system,” he added. The government has abandoned the tendering process for the Kai Tak cruise terminal and decided to allocate approximately HK$7 billion to build it, Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan said on Tuesday. Ms Lau said the tendering process had failed to find acceptable bids. Rising constructions costs and the recent international financial crisis had also increased the risks for companies who might have been interested in the project. “So we have decided to build the terminal by ourselves. We want to complete the construction as soon as possible as any further delays in construction would only increase costs,” she said. Ms Lau said after the terminal was completed, the government would lease it to a private operator for seven to 10 years. “The first berth is expected to be in service by 2013. It is expected the new project would create 8,000 to 9,000 new jobs and bring an economic benefits of HK$2.5 billion to Hong Kong by 2023,” she added. In July, the government said the two bids it hgad received were rejected for going outside the tendering requirements. Under the original proposal, the successful tenderer would design, build, operate, manage and maintain the terminal for 50 years, starting with the first berth in 2012.
Cheung Kong (Holdings) (SEHK: 0001) has sold the former headquarters site of Asia Television in Kowloon Tong and a luxury residential site in Mid-Levels for about HK$2.5 billion to a United States fund. Justin Chiu Kwok-hung, an executive director at Cheung Kong, yesterday said the company had signed an agreement of sale and purchase with an unnamed US state pension fund. The developer has also received the deposit. "We can't disclose the price but it is close to HK$2.5 billion," Mr Chiu said. The developer sold the sites at 81 Broadcast Drive in Kowloon Tong and 16-18 Conduit Road in Mid-Levels to the fund. According to the sales agreement, Cheung Kong is responsible for building a 103-unit project in Kowloon and a 35-unit project on Hong Kong Island for the buyer. The projects are scheduled for completion in 2010. Mr Chiu said the buyer bought the properties for long-term investment. Cheung Kong is expected to generate an attractive profit as the sites were bought for HK$790 million. Home prices in the areas around the sites are about HK$12,000 and HK$15,000 per square foot respectively, in line with neighbouring properties. A property agent said the average price of Kowloon Development (SEHK: 0034, announcements, news) 's 31 Robinson Road luxury project, close to the Conduit Road site, was about HK$16,000 per square foot. The sales are a sign that the developer may not be expecting prices to rise further, an analyst said. "The outlook for the property market is uncertain," the analyst said. "It's a good deal for Cheung Kong ... as the fund's offer is attractive." Meanwhile, 15 developers yesterday showed an interest in the Urban Renewal Authority's "Wedding Card Street" redevelopment project in Wan Chai which could be turned into a commercial and residential project with a total gross floor area of 835,000 square feet. Cheung Kong, Sun Hung Kai Properties (SEHK: 0016), Henderson Land (SEHK: 0012), Hopewell Holdings (SEHK: 0054), New World Development, K Wah Real Estates and Chinese Estates Holdings (SEHK: 0127) submitted expressions of interest yesterday after invitations went out last month.
Hong Kong establishes Anti-Doping Committee - The Sports Federation and Olympic Committee of Hong Kong, China announced the establishment of the Hong Kong Anti-Doping Committee (HKADC) on Monday. Secretary General of the Sports Federation and Olympic Committee Pang Chung and Chairman of HKADC Frank Fu officiated the opening ceremony for the HKADC's establishment, the first independent anti-doping organization in Hong Kong. Speaking at the ceremony, Chung said, "the establishment of HKADC will further take Hong Kong to an international level in terms of the fight against doping in sport." He added that the new committee involved members from sports, educational, medical, legal and some other domains. According to Fu, HKADC is committed to preserve a doping-free environment for fair play in sport in Hong Kong. It will ensure the city's anti-doping policy is in full compliance with the World Anti-Doping Code by the World Anti-Doping Agency. In addition to managing the Drug Testing Program, HKADC is responsible for promoting educational programs to the sport community on rules governing the use of performance enhancing substances and its harmful health effects, said Frank Fu. With continued support from the Hong Kong government, HKADC will gradually evolve into an official, world-recognized anti-doping organization in its second year of operation.
BT Group is expecting its revenue from China operations to surge by more than 50 per cent year on year within the coming three years to US$250 million, the company's Asia-Pacific president said.
National Day holiday sees people on the move - More than 60 percent of Chinese said they planned to travel during the National Day holiday, according to a survey conducted by the China National Tourism Administration. But the number of outbound tourists is surprisingly small as only 3 percent of the 14,666 people surveyed said they would visit overseas destinations during the holiday week. The survey found 33 percent of respondents planned outings to downtown or suburban areas, while another 24 percent intended to go sightseeing in other provinces. Among domestic destinations, Beijing, Zhejiang, Yunnan, Shandong and Guangdong are the five most popular destinations. For outbound mainland tourists, the hottest overseas destinations are Hong Kong and Macao, with 22 percent of those with outbound travel plans saying they would visit the special administrative regions. Singapore, Thailand, Malaysia, Japan and South Korea remain popular, while Europe stands out among all long-distance destinations, the survey found. Among the remaining respondents, 24 percent said they will visit friends, relatives or family members. And 13 percent said they would rather stay at home during the holiday, while 3 percent had alternative plans. "We can see from our sales figures that domestic travel has the upper hand during this National Day holiday," said Zhang Qingzhu, a marketing manager with China Comfort Travel Ltd. "One of the reasons may be that domestic package tours during this Golden Week are much cheaper than last year. For example, package tours of Tibet are nearly 1,000 yuan ($147) cheaper," she said. Prices of domestic tours have been cut to attract tourists because tourist attractions and travel agencies suffered severe losses in the first half of this year due to the severe frost and snowstorms that hit southern China in February and the May 12 earthquake in Sichuan province. The huge traffic flow during the holiday week is expected to put a great deal of pressure on the nation's transport system. Ministry of Railways spokesman Wang Yongping said the national railway network is expected to transport 57 million people this week, an increase of 7.57 million compared to the same period last year. The traffic peaked Monday, when 6.5 million people were estimated to be taking trains, he said. The ministry has arranged 45 additional pairs of trains to transport people to popular tourist destinations such as Zhangjiajie, Guilin, Shenzhen and Kunming. As for road traffic, He Jianzhong, a spokesman for the Ministry of Transport, estimated that 381 million people will travel by road during the Golden Week, up 5 percent year-on-year.
*News information are obtained via various sources deemed reliable, but not guaranteed
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Hong Kong:
Financial Secretary John Tsang Chun-wah said on Thursday Hong Kong faced the
likelihood of an economic recession next year.
Premier Wen Jiabao has assured Hong Kong that Beijing will make "all-out
efforts" to help the city ride out the global financial storm. But as he issued
five pledges designed to bolster the city's economy, the state leader urged its
government to "seriously learn the lessons arising from this financial crisis".
"We should analyse the problems with the structure of Hong Kong's economy and
regulation of its financial system so that we can enhance our management and
improve [Hong Kong's] economic structure," he said in Moscow yesterday. "We
should make a thorough assessment of the possible difficulties and make full
preparations to face them," he said. Mr Wen said confidence was key to coping
with the financial crisis. "People's confidence hinges on the resolute measures
introduced by the leadership [in Hong Kong]. I note that the Hong Kong
government has introduced a series of measures which have achieved some positive
results," he said. "But there is a need to monitor how the crisis unfolds and
adjust policies promptly." A Hong Kong government spokesman said: "We agree with
Premier Wen ... We welcome the measures suggested, which are beneficial to Hong
Kong. We will work closely with the central government to ensure that the
measures will be implemented smoothly." The premier said he had instructed
mainland financial regulators to work with their counterparts in Hong Kong to
map out contingency plans to cope with risks arising from the crisis. Beijing
would facilitate such co-operation and communication. He promised help for Hong
Kong-owned businesses on the mainland, a speeding up of infrastructure projects
and a stable supply of food to Hong Kong to keep inflation in check. Mr Wen also
said the scheme allowing individual travel to Hong Kong from parts of the
mainland would now cover 44 cities. More than 29 million people have used the
scheme to visit in five years. Joseph Yam Chi-kwong, chief executive of the Hong
Kong Monetary Authority, supported further co-operation between financial
regulators in Hong Kong and on the mainland. The Chinese Manufacturers'
Association of Hong Kong said the central government should suspend the Labour
Contract Law, which has been criticised for increasing production costs for Hong
Kong-owned firms on the mainland. It is not the first time Mr Wen has said Hong
Kong has lessons to learn. In December 2005, he told Chief Executive Donald
Tsang Yam-kuen "deep-rooted problems and conflicts" in Hong Kong needed
resolving. During Mr Tsang's duty visit to Beijing in November, Mr Wen suggested
four ways to enhance Hong Kong's competitiveness - boosting technological
innovation, improving knowledge, nurturing talent and ensuring environmental
conditions were good. The Democratic Party called Mr Wen's remarks "a red flag"
for the administration, but the head of the main Beijing-loyalist party
disagreed with the suggestion the premier was not satisfied with the performance
of the Hong Kong government. Five ways to help - Wen Jiabao said the mainland
would: Work with Hong Kong financial regulators on contingency plans to handle
risks from financial crisis; Fast-track infrastructure projects, particularly
the bridge linking Hong Kong with Zhuhai and Macau; Ease inflationary pressure
by guaranteeing stable supplies of food; Extend to more cities the scheme
permitting individual travellers to visit Hong Kong; Provide support for Hong
Kong-owned small and medium-sized enterprises on the mainland.
A customer buys eggs on display for sale
in a Beijing supermarket on Wednesday. Eggs in Hong Kong and the mainland have
been found with traces of melamine. The government would propose to mainland
food safety authorities that they use melamine-free certification of eggs before
exporting them to Hong Kong, Secretary for Food and Health York Chow Yat-ngok
said on Thursday. This comes after three out of 62 egg samples tested by the
Centre for Food Safety (CFS) during the past five days were found to have
excessive levels of melamine. Dr Chow said the department would work closely
with mainland authorities to trace the source of eggs found in Hong Kong. “We
will continue to liaise closely with mainland authorities. We have asked them to
trace the source of melamine and whether there are common factors that affect
the various suppliers. “At the moment, we are also discussing with them whether
it is possible to have a melamine-free certification for eggs exported to Hong
Kong,” he said. Although two samples were from Hubei and Shanxi, Dr Chow said it
was impossible to ban eggs from Hubei. This was because eggs imported from the
province accounted for nearly 40 per cent of the total number in Hong Kong. He
has urged consumers and traders to closely follow the latest announcements by
the CFS. The CFS would post latest daily test results on its website. 
Local lenders should adopt a more
supportive attitude towards small and medium-sized enterprises (SMEs) during the
current financial crisis, the Monetary Authority has said. It would be against
their interests to tighten credit indiscriminately out of "generic fear over
what the future may hold", Choi Yiu-kwan, deputy chief executive of the
authority, said yesterday in a circular to all authorized institutions. The call
comes as SMEs express worries about getting loans to tide them over through the
tough times. The authority urged all authorized institutions involved in lending
money to SMEs to be "as accommodative and flexible as possible" to the
companies' funding needs, Mr Choi said. "It is for [the authorized institutions]
to manage credit risks and to price credit flexibly in the light of changing
conditions and changing risks," he said. "However, in these difficult times and
following the unprecedented steps taken to support the banking system, the HKMA
believes that it will be in the best long-term interests of the economy and the
banking industry if [authorised institutions] adopt a supportive attitude
towards their SME customers." He suggested lenders assess individual cases based
on their merits and avoid across-the-board tightening, which "could have a
significant adverse impact on the business and economic prospects of otherwise
healthy SMEs". Mr Choi said that if a lender had to tighten credit provision, it
should explain the rationale to its customer. He asked lenders to adopt a
"sympathetic" attitude towards requests for temporary relief arrangements, such
as extensions of repayment deadlines. Danny Lau Tat-pong, chairman of the Small
and Medium Enterprises Association, said many SMEs were desperate for cash. He
called on the government to raise the maximum amount of its guarantee from 50
per cent to 80 per cent of the loan offered to SMEs. One lender said banks were
willing to help their customers, but had to be careful because of the slump. He
expected banks might be more willing to lend money if the government implemented
the revised SME Loan Guarantee Scheme, including extending the maximum guarantee
period for working capital loans from two years to five. "It's difficult for us
to lend if the customer's business is going down," he said. 
Former beauty queen Cally Kwong credits
the principles of her Buddhist faith for guidance in business and investment, as
well as charity. 
China:
Beijing hit out on Thursday at claims made by US presidential candidate Barack
Obama that its huge trade surplus with the United States was related to its
manipulation of its currency. “The yuan exchange rate is not the cause of the US
trade deficit,” foreign ministry spokeswoman Jiang Yu said in response to a
question on how China viewed Obama’s remarks. “I hope that the US can expand its
exports to China and reduce barriers for trade and investment. We believe this
will help the US reduce its trade deficit.” In a letter to the US National
Council of Textile Organisations published on Wednesday, Obama called for China
to change its foreign exchange policies to rely less on exports and more on
domestic demand for growth. “The massive current account surpluses accumulated
by China are directly related to its manipulation of its currency’s value,”
Obama said in the letter, published on the council’s website. “The result is a
large imbalance that is not good for the United States, not good for the global
economy and likely to create problems in China itself. “China must change its
policies, including its foreign exchange policies, so that it relies less on
exports and more on domestic demand for its growth.” Jiang however refused to
comment specifically on Obama, giving no indication as to whom the Chinese
government favoured out of the Democratic candidate or Republican nominee John
McCain. “The US presidential elections are the internal affairs of the United
States,” she said. “We believe that whoever wins this election will attach
importance to US relations with China.” Both Obama and McCain have focused
mainly on the global financial crisis and said little about their policies
towards China. 
True to his promise, Chief Executive
Donald Tsang Yam-kuen has swiftly set up a special taskforce to tackle the
challenges posed by the global financial meltdown. But while the experience and
expertise of most of its members are not in question, we should not expect it to
offer a panacea. The government needs to be seen to be taking a proactive
stance. The public, however, may reasonably be sceptical of what can be achieved
by a committee of well-connected people. Governments the world over tend to set
up expert taskforces in the face of serious crises as a substitute for real
policy; Hong Kong is particularly adept at playing this game. Certainly the
taskforce has high-quality members. Lawrence Lau Juen-yee, Chinese University's
vice-chancellor, is a distinguished economist. Tycoon Victor Fung Kwok-king is a
seasoned businessman and accomplished finance scholar. And Stephen Roach of
Morgan Stanley has been prescient in his many published analyses of the credit
crisis and proposed solutions. The appointment of Mathias Woo Yan-wai, who is
director of the avant-garde art group Zuni Icosahedron, is more surprising.
Perhaps the idea is to channel his creativity and outside-the-box thinking into
the taskforce. The credit crunch has evolved and will not be resolved quickly.
Thousands of Hong Kong and Pearl River Delta businesses are being exposed
because of the drying up of credit lines. The crisis has been inflicting damage
on the world economy in a way which is unprecedented since the Great Depression.
Though major central banks and finance officials have successfully thrown a
cordon around their banks to protect the system from collapse, the process of
deleveraging continues. This has resulted in terrifying plunges in asset values
and has shocked policymakers in Hong Kong and elsewhere. The new taskforce's
mandate is to help better understand the crisis, consider ways to respond to it,
identify opportunities and enhance the city's competitiveness. But, to be
effective, taskforce members need to react quickly to new problems as they arise
and offer counter-measures. They need to think outside the box. To this end, the
taskforce should be flexible in securing outside expert help and meet regularly.
Above all, it must avoid "white elephant" projects such as Cyberport as well as
the sort of ill-conceived economic policies seen during the Tung Chee-hwa era.
What we need are innovative fiscal measures and policies which will spur growth.
But the road ahead is perhaps not as grim as it looks. Premier Wen Jiabao said
yesterday Hong Kong could rely on the mainland for support. The nation's growth
rate will slow, but is still forecast to be in the high-end of single-digit
growth, which will provide a cushion for Hong Kong. With planning, foresight and
confidence, our community may yet come through this great economic contraction
in relatively good shape.
More tainted eggs as hairy crabs cleared -
Eggs sold in a government-run market were found to contain high levels of
melamine, the Centre for Food Safety said, but crustacean lovers will be pleased
to know that hairy crabs are safe - so far. 
Travel agencies have appealed to the
Hong Kong Monetary Authority to pressure banks into resuming the policy of
settling credit card payments in two days instead of 60 days or more. 
Sudan seeks missing hostages - Sudan said it was searching for three missing
Chinese oil workers on Tuesday after what Beijing described as a failed attempt
to rescue nine mainland men kidnapped.
Workers check the generating unit 15
on the right bank of the Three Gorges Project in central China's Hubei Province
Oct. 29, 2008. The last turbo-generator completed a 72-hour test run at 9 a.m.
Wednesday, and would be connected to the power grid. Main works of the Three
Gorges Project are a 185-meter-high dam, a five-tier ship lock, and 26
hydropower turbo-generators. The dam has 14 turbo-generators on the left bank
and 12 on the right.
This photo taken on Oct. 28, 2008 shows
the dam of the Three Gorges Project in central China's Hubei Province Oct. 29,
2008. With a budget equivalent to 22.5 billion U.S. dollars, the project is also
a water control system for the upper and middle reaches of the Yangtze, China's
longest waterway. Its functions cover power generation, flood control and
navigation. Main works of the project are a 185-meter-high dam, a five-tier ship
lock, and 26 hydropower turbo-generators. The dam has 14 turbo-generators on the
left bank and 12 on the right. Combined, they will produce 84.7 billion kw of
electricity annually, which would require 40 million to 50 million tons of coal
consumption for a coal-fired station to produce. Plans were expanded further to
include six more turbines by 2012. A ship lift will be finished by 2015. 
The Jockey Club's racing
operations might go into the red for the first time because of a lower turnover
amid the economic downturn and a "heavy" tax regime, its chief executive said.
Winfried Engelbrecht-Bresges has called for a tax waiver, a review of the tax
structure and an easing of restrictions on betting to plug a likely deficit of
between HK$50 million and HK$100 million. Although the club's charitable
commitments would not be affected in the short term, Mr Engelbrecht-Bresges said
that if the situation continued, the club might have to cut jobs and reduce
donations. The club would also be unable to invest in the future by renovating
its facilities to maintain the appeal of racing in the light of increased
competition from overseas betting operators, he said. "You can't restrain our
business and tax us to death. If there is no change in three to five years'
time, we have to cut jobs. We may not be able to do another Olympics, handle
another Sichuan [earthquake], or help in Tin Shui Wai," he said. As one of Hong
Kong's leading charity providers, the club has funded many projects such as the
Olympic equestrian events, relief efforts in Sichuan and community services for
the poor including those in Tin Shui Wai. Its total charity payout in 2007-08
was HK$1.052 billion, up from HK$1.049 billion in the previous year. Under an
agreement struck with the government in 2006, the club has to pay at least
HK$12.50 out of every HK$100 it receives in bets placed by racing punters,
keeping only HK$5. The remainder is paid out. But Mr Engelbrecht-Bresges said
the agreement to pay at least HK$8 billion each year as betting duty to the
government would be unsustainable because of the drop in turnover as a result of
the financial crisis. Racing turnover has already dropped by 6 per cent compared
with the same period of last season. The club expects that the annual drop in
turnover could reach 10 per cent by the end of the season. If that happened,
then losses could amount to HK$100 million. Although the club's soccer-betting
business is making money, its profit margin has dropped from 17 per cent to 14
per cent. The Mark Six lottery operation could just break even, according to the
club. Under the current agreement, the government takes 50 per cent of profits
from the soccer-betting business. In Mark Six, the club pays a 25 per cent
betting duty after taking a commission, with the remainder going to the
Lotteries Fund. In the light of the gloomy estimates, Mr Engelbrecht-Bresges has
written to Financial Secretary John Tsang Chun-wah requesting greater
flexibility in running events and a change in the way horse racing is heavily
taxed, as the mechanism is due for review next year. Among demands made by the
club were the addition of five race days each year, operating simulcast race
days for overseas racing events, and waiving the betting duty guarantee to allow
for operations during an economic downturn. "We are not going to close down, but
we have to invest for the future," Mr Engelbrecht-Bresges said. A spokeswoman
for the Home Affairs Bureau said that although the government had been in talks
with the Jockey Club over its concerns, the present formula of betting duty was
decided by the legislature and could not be revised without its approval. She
said discussions would continue with the club ahead of the scheduled review of
the tax mechanism but no change was planned for the present season. In the last
racing season, the Jockey Club paid HK$8.17 billion in betting duty for horse
racing. The tax payments for soccer betting and Mark Six were HK$3.1 billion and
HK$1.59 billion respectively. The overall turnover for horse racing was up from
HK$63.8 billion in 2006-07 to HK$66.7 billion last season. Turnover for soccer
betting also rose from HK$30.2 billion in 2005-7 to HK$34.4 billion. 
Billionaire property tycoon Cheng Yu-tung
urged Hongkongers yesterday not to worry too much about the financial crisis,
saying the tumbling stock market would eventually bottom out. Mr Cheng, chairman
of New World Development, said the mainland economy's continued growth would
help Hong Kong ride out the crisis. "I think [we] don't need to worry too much,"
he said. "Hong Kong is lucky to have China because China's economy, according to
Premier Wen [Jiabao ], will grow by a few per cent. The financial [crisis]
doesn't have too much impact on it and if Hong Kong has any [problem], China
will support us." But he said he believed the local economy would be affected by
the economic turmoil for a year or two, and said Hongkongers should unify in
combating it. Saying that small and medium-sized enterprises (SMEs) were
suffering the most, he urged the government to come up with ways to help them.
He said it should also stimulate consumption, boost tourism and speed up the
building of infrastructure to boost the local economy. "It's not that Hong Kong
people don't have money. Hong Kong people are rich, but they don't want to spend
money. Therefore, we need to stimulate the public to spend more," he said. With
land supply limited, Mr Cheng said property prices would not plummet too much,
although he predicted a fall of 10 per cent to 20 per cent next year. He also
said the mainland property market would rebound gradually, When asked how much
his wealth had shrunk because of the stock market slump, Mr Cheng - reportedly
worth US$9.4 billion in January - said he had no problems with his investments.
"Just leave the shares there when they have shrunk," he said. "[The slump] is
like a tsunami so no one can handle it or [could have] guessed that it would
come so quickly. But we will see [the bottom] eventually." The noted
philanthropist, recently awarded the city's top honour - the Grand Bauhinia
Medal - said he would not cut his donations amid the financial crisis. He said
he wanted to continue doing charity work and hoped to "help more people in the
academic and medical fields".
Bank of East Asia (0023), Hong Kong's third- largest lender by assets, expects a
HK$2.2 billion loss in the second half after disposing of its collateral debt
obligations.
HK
dollar offers a port in storm - The Hong Kong dollar became an attractive safe
haven for institutional investors and major companies yesterday as
emerging-market currencies continued to tumble.
The mainland should issue 3G mobile licences based on the principle of
technology neutrality to end the year-long head start for homegrown TD-SCDMA
mobile technology, according to Frank Meng Pu, the president of Greater China
for 3G mobile technologies developer Qualcomm. Mr Meng said the technology would
mature once it hits the street and competes with rival technologies in the form
of the United States-developed CDMA 2000 EV-DO platform and WCDMA system
developed in Europe. China Mobile (SEHK: 0941, announcements, news) has been
handling the building and operation of a TD-SCDMA 3G commercial trial since
April in 10 cities, including Beijing, Guangzhou and Shanghai. The company will
establish the network in 28 more cities in the second phase of expansion.
According to government figures, about 300,000 users have signed up to the
network since it was launched in April. However, problems such as frequent
technical failures, dropped calls and a lack of coverage have beset a system
that is said to be years behind its rivals. "The government should open the
market. Operators know how to drive the technology under market competition,"
said Mr Meng, adding that if the government really wanted to help TD-SCDMA
become stronger, other systems should not be blocked. "The technology will
improve when it competes with others. Just like the competition between CDMA and
GSM is driving the improvement of these two technologies," Mr Meng said. China
Telecom (SEHK: 0728) and China Unicom (SEHK: 0762, announcements, news) , which
are most likely to adopt CDMA 2000 and WCDMA, still do not have government
approval to build their networks or provide trial services, despite conducting
trial runs. The mainland has given TD-SCDMA a one-year lead over others and
"that's enough of a head start", Mr Meng said. In May, the mainland authorities
said 3G mobile licences would be issued after the completion of the
telecommunications industry restructuring. The reshuffle has resulted in the
formation of three full-service carriers, namely China Telecom, which acquired
China Unicom's CDMA services; China Mobile, which took over China Tietong; and
China Unicom, which merged with China Netcom. Qualcomm has the patents for all
three 3G mobile technologies and has licensing agreements with more than 80
foreign companies. Qualcomm is also a consultant to fixed-line giant China
Telecom for its launch of CDMA services. Mr Meng said China Telecom might take a
year to enhance its network coverage to meet the quality of China Mobile's GSM
network. "China Telecom needs to add new base stations and undertake some
network optimisation projects to improve network quality. This will take a
year." China Telecom has about 100,000 CDMA base stations, compared with China
Mobile's 300,000-plus. Mr Meng said that an independent survey conducted a few
years ago found that the CDMA network had outperformed China Mobile's GSM
network. However, network quality dropped because of a lack of investment by
China Unicom brought on by uncertainties arising from the industry
restructuring. Mr Meng said the latest round of network enhancement would give
China Telecom the capacity to upgrade its existing CDMA network to a 3G or EV-DO
mobile network. "The CDMA technology can enable China Telecom to deploy the CDMA
EV-DO service by only changing some equipment in existing base stations, and
then the company can immediately start providing 3G services," said Mr Meng.
China Telecom, which already provides CDMA services on the 800 megahertz
frequency, should be able to provide 3G services without seeking new bandwidth.
CDMA handset supply would also be key to the success of China Telecom's mobile
business. In excess of 70 CDMA handset models from more than 30 vendors
reportedly featured in China Telecom's recent handset bidding. Mr Meng said he
believed China Telecom could focus on high-spending commercial customers and
low-end users to meet the target of 100 million CDMA users in three years, from
42 million last month. "China Telecom can provide high-speed mobile internet
service based on EV-DO to compete in the high-end segment for higher profits,
while launching low-cost CDMA phones to boost user numbers," he said.
Beijing's Association for Relations
Across the Taiwan Strait (ARATS) chairman Chen Yunlin will visit Taiwan next
week to discuss direct shipping, air cargo, postal service and food safety
issues.
HK shares in biggest drop since '97 as
HSBC slides 14pc - Hong Kong shares recorded their biggest one-day fall in more
than a decade on Monday with the Hang Seng index shedding 12.7 per cent of its
value. The nosedive, led by blue-chip heavyweight HSBC (SEHK: 0005,
announcements, news) , came as fears of a global recession hammered other Asian
stock markets. Hang Seng Index closed down 1,602.54 points at 11,015.84, its
lowest level since mid-2004 and taking its losses so far this year to 60 per
cent. The index lost as much as 15 per cent earlier, its largest one-day decline
since 1987. Europe’s largest lender, HSBC shed 14.77 per cent to HK$75.00, its
lowest level in seven years and wiping US$20 billion off its market value. The
stock plunged 12.5 per cent on Friday after Morgan Stanley slashed its target
price to HK$75 on growing signs of trouble in emerging markets.
The Krispy Kreme Doughnuts has
closed all but two of its outlets at the Hong Kong International Airport today
after going into liquidation. Pictured is one of the stores in Elgin street,
Central, that is already closed.
In the eyes of the newly appointed
chairman of the arts hub, arts and culture cover a much broader scope than
paintings and opera - wine is also a form of culture and a vineyard should be
planted as part of the project. Chief Secretary Henry Tang Ying-yen revealed his
innovative vision on his first day chairing the West Kowloon Cultural District
Authority, while talking about his passion for the arts. "Wine is also part of
arts and culture," said Mr Tang, an avid wine lover and collector. He suggested
planting vineyards at the arts hub. "Why not? How many in Hong Kong have seen
wine grapes? I'm not talking about the grapes you buy at supermarkets," he said.
"There will be some green areas [in the arts hub] so instead of planting grass,
we can plant one or two vineyards." Mr Tang said he would present the idea to
the authority later on "when we discuss the green plan in the area after we
finish with the master layout plan". The idea has earned a degree of support
from the wine industry. "Why not think big?" said Boris de Vroomen, co-chairman
of the Hong Kong Wine and Spirits Industry Coalition. "[A vineyard] usually
doesn't work very well in tropical countries unless it's on a mountain. In Hong
Kong it could probably be on the top of the IFC," Mr de Vroomen said. "But the
idea is fun to explore ... a few bottles of authentic wine from Hong Kong can
promote wine culture."
Workers build houses in Shaanxi on
October 17. Reconstruction work is hastened before the onset of winter in
Hanzhong's worst affected counties. The World Bank is planning to lend China
US$710 million (HK$5.5 billion) to help with the reconstruction of areas
destroyed by May’s earthquake, a bank spokeswoman said on Monday. The Xinhua
news agency reported on Sunday that the World Bank would provide an emergency
recovery loan in that amount, US$510 million of which would go to Sichuan
province, which was hardest hit by the quake.
The global downturn is biting into mainland companies, with Aluminium Corp of
China (2600), or Chalco, reporting a 92 percent drop in third-quarter net profit
and Datang International Power Generation (0991) issuing a profit warning.
Chalco said yesterday that net profit for the quarter to end-September dropped
to 182.9 million yuan (HK$207.18 million) from a restated 2.29 billion yuan in
the corresponding period a year ago, with earnings per share at 1.4 fen. The
company attributed the dive to a substantial increase in production costs and
sliding aluminum prices amid weakening demand. Aluminum futures have dropped
more than 20 percent this year, standing at 13,825 yuan a ton on Friday on the
Shanghai Futures Exchange.
The 12th conference of a joint
commission for the regular meetings of Chinese and Russian prime ministers is
held in Moscow, capital of Russia, Oct. 27, 2008. During the one-day conference,
the two sides exchanged views in a candid and thorough manner on major issues of
common concern and reached a broad consensus.
A Long March-4B rocket carrying
satellites coded as the 03 Group of the Shijian-6 serial research satellites
blasts off from the launch pad at the Taiyuan Satellite Launch Center, north
China's Shanxi Province, on Oct. 25, 2008. China successfully launched two
satellites with a Long March-4B carrier rocket early Saturday morning.
Chow Ying, 86, welcomed the decision, saying: "The old age allowance is a kind
of token to show respect to the elderly." She lives on her savings and HK$705
monthly allowance. Chow Ying gave the government's decision to increase the old
age allowance the thumbs up. She is already planning a yum cha gathering with
friends to celebrate. "I thought young people should have sharper minds, but it
seems our leader's mind is not as sharp as us old people's," said the
86-year-old, referring to Chief Executive Donald Tsang Yam-kuen's original
opposition to increasing the monthly allowance for fear it would strain the
public finances. The current old age allowance is HK$625 for those aged 65 to
69, subject to a means test, and HK$705 for everyone aged 70 and over. Ms Chow,
who lives on her savings and receives the HK$705 monthly allowance, spends most
of her time doing voluntary work for the social welfare organisation St James'
Settlement, where meals costing about HK$13 are served. "I feel very happy about
the increase. Money is not the main issue, but saying giving old people more
money could place a heavy burden on the next generation is just not right. "Is
the government suggesting that old people are all like parasites? Old people
will not waste money on jewellery or other luxury things. We spend most of our
money on medicine and food." She is still unhappy about the means test the
government applies to stop better-off old people from getting the monthly
allowance. "The old age allowance is a kind of token to show respect to the
elderly," said Ms Chow, who lives in Western. "There is no reason for the
government to check our wealth." Kwok Tsz-yin, 76, of Sham Shui Po, was also
delighted with the government move. But he said the policy U-turn came a bit too
late. "I did not understand why Mr Tsang could not have done it sooner," said Mr
Kwok, a retired construction worker who is also living on his savings and
receiving the HK$705 monthly allowance. "He has already hurt old people's
hearts. A U-turn is, of course, good. It is better late than never."
HSBC
Holdi ngs (SEHK: 0005, announcements, news) ' share price plunged to a five-year
low in Hong Kong yesterday after Morgan Stanley cut its forecast for the bank's
earnings and dropped its target price for the stock by 25 per cent. The stock
dropped 12.52 per cent to end the day at HK$88, the first time it has closed
below HK$100 since September 2003, when the severe acute respiratory syndrome
epidemic hit earnings. Shares of Standard Chartered Bank also hit a five-year
low, closing down 13.47 per cent at HK$105.40. Hang Seng Bank (SEHK: 0011,
announcements, news) fell 8.72 per cent to HK$89.50. Morgan Stanley cut its
target price for HSBC to HK$75 from HK$100, and warned of weaker revenue from
Hong Kong and the rest of Asia, and an increase in its bad debts. "We question
how long HSBC shares can continue to tread water in the face of falling earnings
and increased pressure on capital," Morgan Stanley said, adding that HSBC might
halve its dividend next year. Ivan Li, an analyst at Kim Eng Securities in Hong
Kong, said it was too early to say whether HSBC would cut its dividend, but
agreed the business outlook was uncertain. Louis Tse Ming-kwong, a director at
Hong Kong brokers VC, said HSBC's share price would remain under pressure since
emerging markets account for a big share of its income. Still, he said Standard
Chartered would suffer most from a downturn in emerging markets since it was
most dependent on them for its profits. Morgan Stanley cut its target price for
Standard Chartered shares by half.
Citic Pacific (SEHK: 0267) managing director Henry Fan Hung-ling took leave of
absence from the Executive Council yesterday with immediate effect and for an
indefinite period, in a move that could relieve some of the pressure on him to
resign. He also stepped aside as chairman of the Mandatory Provident Fund
Schemes Authority. The decision, announced last night by Chief Executive Donald
Tsang Yam-kuen, came amid questions about Mr Fan's suitability to continue as an
executive councillor after his troubled company delayed for six weeks an
announcement about massive losses in foreign exchange dealings.
Crowds pack Causeway Bay's Cafe
de Coral. The chain plans to open 40 to 45 outlets next year. While some
restaurants in the city are struggling to survive in the economic downturn, one
local fast-food chain is benefiting from the crisis and has ambitious expansion
plans. Cafe de Coral (SEHK: 0341), one of Hong Kong's biggest fast-food chains,
said revenue grew about 8 per cent in the first nine months of the year, thanks
to more customers, higher prices and costs that had remained stable. "We have
many new customers. Even fund managers eat at our restaurants," Michael Chan
Yue-kwong, chairman of the company, said. He expected the chain to achieve
double-digit growth for the whole year. Cafe de Coral, which has been operating
for four decades, has 135 outlets in Hong Kong and on the mainland. It plans to
open another 40 to 45 outlets in the coming year, compared to 30 to 35 opened
annually over the past two years. "[A bad economy] has proven to be an excellent
opportunity for us to expand," said Mr Chan, citing the Asian financial crisis
in 1998 and the Sars outbreak in 2003. "I believe history can be repeated."
Fast-food chains McDonald's and Maxim's refused to comment on their businesses.
But unlike Cafe de Coral, some cha chaan tengs, or tea cafes, are having a tough
time. Tai Hing Roast Restaurant Group, which has 28 outlets across the city,
said more customers were coming in but they were spending less. Sophie Cheung,
spokeswoman for Tai Hing Roast, said turnover dropped 5 per cent over the past
two weeks. "Although we have more new customers, some of our regular diners are
turning to other cheaper tea cafes," Ms Cheung said. Another cha chaan teng to
suffer is the decades-old Tai Fat Cafe in Wan Chai. The operator, a man surnamed
Lo, said: "We have not seen a serious impact on our business so far. More people
are coming in to have cheap meals in the afternoon, but fewer people are coming
in for dinner." 
Large numbers of Hong Kong-owned
factories across the border will be forced to close by Lunar New Year if banks
continue to tighten credit, the Federation of Hong Kong Industries has warned.
Some 17,500 out of 70,000 Hong Kong-owned businesses in the mainland will be
affected, according to federation chairman Clement Chen Cheng-jen. Amid the
gloomy outlook for the economy, the government yesterday announced five rescue
measures for small and medium-sized enterprises. They are: Hong Kong Export
Credit Insurance Company will continue to provide cover for buyers' failure to
take delivery of goods although other insurance companies have refused to
provide such cover; The ECIC will also freeze premiums for its insurance
facilities; Provide free buyer credit assessment for all Hong Kong exporters; A
shortened processing time in handling exporters' credit limit applications from
five to four days; and More seminars to share risk management experience and
enhance understanding of the latest overseas market developments. The measures
were announced by Secretary for Commerce and Economic Development Rita Lau Ng
Wai-lan after meeting with lawmakers and representatives from five major
chambers of commerce and small and medium enterprises. Chairman Chen said
overall orders received at this time of the year have dropped 20 to 30 percent
from 2007 and that some manufacturers have yet to secure any January orders.
These businesses are left even more cash-strapped as some European and American
buyers have called a halt on Christmas orders - which is supposed to be a peak
season for all industries. An ECIC spokeswoman said most measures are already in
place but they will continue to be enforced despite the rising risk in selling
to overseas markets. Chen said a quarter of the 70,000 Hong Kong-owned factories
in the mainland are facing critical refinancing difficulties and that
manufacturers of labor intensive cheap goods are the most vulnerable. "It is
difficult to find new orders. We are not asking banks to increase the loan, but
just continue to lend us money. Otherwise even those not going to fold up will
be forced to close shop eventually." SME Mentorship Association chairman Anders
Wong Siu-leung said the service sector is as much threatened, if not more,
because they have no goods to secure for loans. 
Nicolas Sarkozy (fourth from the left in
the front row) walks with President Hu Jintao as they lead the other heads of
state and government leaders representing Asian and European countries into the
Great Hall of the People for the opening of the Asem summit.
Japanese Prime Minister Taro Aso is
welcomed by Premier Wen Jiabao to yesterday's meeting in the Great Hall of the
People in Beijing. China and Japan agreed yesterday to improve communications by
conducting more "timely" exchanges over the phone, as Taro Aso met Chinese
leaders in his first visit as Japan's prime minister. 
Thomas Lin, head of the special customs taskforce, holds a computer hard disk
and LCD screens for cellphones that were seized. Customs has arrested seven
suspected smugglers, including three core members of a racket that used powerful
speedboats to sneak high-value goods to the mainland over the past few years.
The crackdown dealt a heavy blow to the syndicate. Computer hard disks,
integrated circuit chips, cellphones and other goods with an estimated retail
value of HK$22 million were also seized. Smuggling in Hong Kong's western waters
was likely to ease and customs would keep a close eye on the situation, said
Thomas Lin Shun-yin, head of the Customs and Excise Department's special
taskforce.
Second-hand bag trader Milan Station has
actually benefited from the difficult economic times with an increase in stock.
Although the financial turmoil has spread gloom among a variety of industries,
there are still some sectors unaffected by the economic downturn - or even
benefiting from it. ne is the trade in second-hand goods. Milan Station, a
second-hand handbag chain with 10 outlets across the city, has recently seen the
number of customers selling handbags rise by 5 per cent, along with a 10 per
cent increase in the number making purchases. District manager Tong Chan said:
"Of the increase in customers trading in their items, most of them are new
clients." And he did not rule out the possibility that some people were choosing
to trade in their bags for cash because of the financial turmoil. While many
Hongkongers have plans to cut their dining and travel budgets, they seem less
willing to save money on marriage and babies. A spokeswoman for the Matilda
International Hospital, which provides high-end maternity services, said their
maternity unit was fully booked until May next year, mostly by local women. She
said most of their customers had chosen single-room packages costing between
HK$39,000 and HK$55,000. "Although the economy has not been good recently, we
haven't heard any clients wanting to transfer to cheaper packages yet," the
spokeswoman said. Another private hospital, St Paul's in Causeway Bay, also said
it had not seen any drop in bookings in the past few months. "Although there has
been hardly any influence [on our business] so far, we are watching the economic
situation closely," a spokeswoman said. The wedding industry also appeared to be
riding out the crisis, with business schedules for next year almost fully
booked. According to the Chinese calendar, next year is especially auspicious
for marriages with "double springs", wedding planners said. "Our schedules are
now booked until April or May of 2010," said Twiny Wong Wing-ting, director of
wedding company Memoria Amoris. People had already started to save for weddings
before the downturn, she said, adding that any impact from the financial turmoil
on her business would only surface in 2011. Carol Choy Ka-yan, a wedding planner
at Wedding Angel Company, said the financial crisis "affects business to a
certain extent, but if people have had to plan for it, they won't cancel their
marriage". Another optimist was Olivia Cheng Man-ha, sales and marketing manager
at France Bridal. "It is all right. Even Sars did not affect us," she said,
insisting that price was not the determining factor when it came to wedding
products. "After all, a wedding is a once-in-a-lifetime event for most people."
David McCormick speaks at a lunch at
the Renaissance Harbour View Hotel in Wan Chai. Communication between China and
the United States has never been stronger, a top US Treasury official said in
Hong Kong yesterday, referring to recent talks between the countries' leaders
about stabilising financial markets. The dialogue between President Hu Jintao
and his US counterpart George W. Bush would continue because their economies
were so intertwined, said David McCormick, the US Treasury undersecretary for
international affairs. China is among a group of countries Mr Bush has urged to
collaborate in efforts to pump liquidity into the financial markets and prevent
a global recession. On Monday, Mr McCormick led a delegation to Beijing to meet
Vice-Premier Wang Qishan , as well as Finance Minister Xie Xuren , central bank
chief Zhou Xiaochuan and Gao Xiqing, president of China Investment Corp. They
discussed the details of the Bush administration's US$700 billion rescue
package. CIC has US$5.4 billion frozen in a money market fund that has suspended
redemptions. "We are very much in the eye of a financial storm," Mr McCormick
said at a lunch organised by the Better Hong Kong Foundation. The event was co-organised
by the Asia Society, with the South China Morning Post (SEHK: 0583,
announcements, news) , The Economist and Caijing Magazine as media sponsors. Mr
McCormick urged China to continue reforming its financial sector, which is
crucial to its productivity growth and macroeconomic stability. "As China's
leaders recognise, their current growth model has created growing internal and
external imbalances that need to be addressed," he said. Earlier, Mr Hu pledged
in a phone call with Mr Bush to join with the global community to stabilise the
world's economies, Xinhua said. Despite Washington's unprecedented intervention
in the markets by taking ownership stakes in banks, the US economy still faced
serious challenges, Mr McCormick said, though he hoped for a turnaround by the
end of next year. Asked why the US government allowed Lehman Brothers to fail
last month, yet helped bail out Bear Stearns, Mr McCormick pointed to Lehman's
large balance sheet and the absence of "an obvious buyer". He added: "The
Treasury did not have the authority it has now." He said the US learned several
lessons from the financial meltdown. Regulations must be tightened and
transparency enhanced on structured products, particularly credit default swaps,
and the role of credit rating agencies on these products improved, Mr McCormick
said.
Hong Kong's elderly homes are being urged
to adopt international guidelines on drug management following the deaths of
three senior citizens. The appeal came from Secretary for Food and Health York
Chow Yat-ngok, who expressed concern at the deaths and admitted that drug
management systems varied from home to home. "Many times, problems arise from
the drug distribution procedure. They may have mixed up or were not familiar
with the prescriptions for the old people. The most important thing is for
frontline staff to follow the guidelines completely to avoid these mistakes from
happening again," Chow said. The guidelines were drawn up last year and
distributed to all 765 homes in Hong Kong by the Social Welfare Department. At
least two women and one man, aged between 76 and 98, are believed to have died
after being given diabetes drugs not prescribed for them at three different
homes, though a Social Welfare Department spokesman said it was not certain that
the drugs were the actual cause of death in one of the cases.
India's maiden lunar mission
Chandrayaan-1 blasts off Wednesday from the Satish Dhawan Space Centre on a
two-year mission to the moon.
A trade enforcement
officer checks the expiry dates on boxes of milk at a shop in Tongzi, Guizhou
province. The mainland's food safety system is chaotic, poorly informed, "old
fashioned" and has poorly trained staff, according to a WHO investigation into
the factors behind the milk contamination crisis. The report "recognises and
applauds the many actions taken by the government of China in the area of food
safety" and "the consequent improvement" in the system. But it also exposes in
telling detail the poor state of the system. It concluded that the tragedy could
have been avoided if some obvious institutional issues had been recognised in
time and sufficiently addressed. The most puzzling issue for the authors was the
number of laws, regulations and government bodies to oversee food safety, said
Tony Hazzard, the World Health Organisation's adviser on food safety. "There
needs to be one food law that governs all aspects of the system. Currently,
there is too much ambiguity among the different bodies with roles in food
safety," he said. Contrary to a common criticism from mainland residents, the
report said the central government had intervened too much - not too little - in
food safety. "Primary responsibility for food safety lies with food producers
and food businesses, while government authorities are responsible for enforcing
food controls effectively," Mr Hazzard said. Jorgen Schlundt, director of the
Department of Food Safety, Zoonoses and Foodborne Diseases at the WHO
headquarters, said an old-fashioned system had contributed to the contamination.
Dr Schlundt said a disjointed system with authority dispersed between different
ministries and agencies had resulted in poor communication and a prolonged
outbreak with a late response. "If there had been better detection and follow
up, this problem would not have been as severe. A coherent system covering the
full farm-to-table food production continuum would most likely have ensured
quicker intervention," Dr Schlundt said. South Korea, meanwhile, said yesterday
that powdered egg and other processed egg products from China had been found to
contain minute traces of the harmful chemical melamine. Five out of nine samples
tested between Friday and Monday fond traces of melamine, the agriculture
ministry said. The five positive samples were produced by two Chinese companies,
Dalian Hanovo Foods and Dalian Greensnow Egg Products Development. The ministry
immediately suspended the import of egg products from the two Chinese companies
and asked Beijing to investigate the cases quickly. 
Hong Kong's securities watchdog
said on Wednesday it had launched a formal investigation into steel-to-property
conglomerate Citic Pacific (SEHK: 0267) after it shocked the market this week by
announcing a potential US$2 billion in losses from unauthorised currency
trading. The Securities and Futures Commission (SFC) confirmed that a formal
investigation has been launched into the affairs of Citic Pacific. It gave no
further information. The company warned of the potential losses from
unauthorised foreign exchange trading on Monday, triggering investor concerns
over its internal risk management and sending its stock down nearly 60 per cent
in the two days to Wednesday. Meanwhile employees at Citic Securities will take
a 5 to 20 per cent pay cut starting next month, part of a plan by the country’s
largest brokerage to shave costs, three sources briefed on the plan said in
Shanghai. However, Wang Dongming, chairman of Citic Securities, which once tried
to buy into troubled US bank Bear Stearns, now part of JPMorgan, told his staff
the firm had no plan for any lay-offs, said the sources who declined to be
identified. Mr Wang also called on staff to walk together out of “the winter of
the capital markets”, adding he was “not optimistic” about mainland’s stock
markets in the short or mid-term, they said. Officials at Citic Securities
declined to comment. In the last year, Mr Wang, one of the most influential
investment bankers in the mainland, earned about 3 million yuan (HK$3.4 million)
including dividends, according to the firm’s stock filings, far less than his
counterparts on Wall Street or the City of London. Executives at state-run
companies in the mainland typically earn salaries that are just a fraction of
their peers in the west, although they usually enjoy many non-cash benefits such
as free cars or government housing. In normal times, an equities analyst with
three or more years of experience at a major mainland brokerage would typically
earn about 1 million yuan a year, including bonus and other benefits, according
to industry executives familiar with payroll matters.
Chandrayaan-1, India's maiden lunar
mission is seen soon after the launch at the Satish Dhawan Space Centre in
Sriharikota on Wednesday. India launched its first unmanned moon mission on
Wednesday following in the footsteps of rival China, as the emerging Asian power
celebrated its space ambitions and scientific prowess. Chandrayaan-1, a cuboid
spacecraft built by the Indian Space Research Organisation (ISRO) blasted off
from a southern Indian space centre shortly after dawn in a boost for the
country’s ambitions to gain more global space business.
Amendments to existing laws would make it
easier to recall and prohibit food items in Hong Kong suspected of being
harmful, Secretary for Health and Food York Chow Yat-ngok said on Wednesday. He
said the legislative amendments to the Public Health & Municipal Services
Ordinance would be made on November 5 in the Legislative Council. However,
speaking to the media after attending a radio programme, Dr Chow said it was
still unclear exactly when this would occur. “We hope legislators can pass this
bill as soon as possible so that we can enforce it. “This is a bill of great
importance to public health and safety. I am sure that the Legislative Council
will also set up a bills committee to examine it,” he said. Dr Chow also said
the response from traders about the food recall bill had been positive. “We had
a preliminary consultation with the trade on the amendment bill and most of them
have agreed that we should have such authority. “This can also safeguard their
products as well,” he added. Under the proposed legislation, the director of
food and environmental hygiene could ban the import and supply of any suspected
unsafe food items and order their immediate recall. “If the traders were
dissatisfied with their food products being recalled, they can make appeals and
provide evidence to show their food was safe to consume. The authorities would
then compensate to them according to the current value of the [recalled] food if
their appeals are approved,” he said. Dr Chow said the government was proposing
these measures because of the recent melamine-tainted products scandal. “We are
considering imposing measures that require all food importers and traders to
list the source of the foods being imported. This includes biscuits and canned
foods. “Once they are found to have problems, we can then recall them more
quickly,” he explained. 
Merkel to mend fences in Beijing visit -
German Chancellor Angela Merkel travels to the mainland this week in a visit
marking a normalization of ties after her meeting with the Dalai Lama last year
led to frosty diplomatic relations. The main aim of Ms Merkel’s visit is to take
part in the Asia-Europe Meeting (ASEM) in Beijing on Friday and Saturday, but on
Thursday she will also meet Prime Minister Wen Jiabao and later President Hu
Jintao. In doing so Merkel is one of the few leaders from the 40 or so attending
the summit – which is expected to be dominated by the financial crisis – using
her visit to hold bilateral talks with senior mainland officials. “I think that
[with this visit] Merkel would like to make a signal as chancellor that there is
a normalization of relations between China and Germany,” Barbara Unmuessig from
the Heinrich Boell Foundation told reporters. Ms Merkel’s decision to receive
the Dalai Lama in September last year at the chancellery in Berlin went down
badly in Beijing and the resulting chill in relations between China and Europe’s
biggest economy took some time to thaw. Beijing takes a dim view of foreign
leaders meeting the exiled Tibetan spiritual leader, whom they accuse of
masterminding riots against Chinese rule in Tibet and neighboring areas in March
– a claim he denies. Beijing responded by cancelling a number of planned
German-Chinese political meetings and joint cultural events, and there were
fears that German businesses would suffer. But thanks in part to efforts behind
the scenes by Foreign Minister Frank-Walter Steinmeier to repair ties, relations
have steadily improved and in June China’s Foreign Minister Yang Jiechi declared
they were back to normal. Business ties, which analysts say never suffered in
any case, have continued to go from strength to strength, with German exports to
China rising by a fifth in the first half of the year. There remain differences,
however. Germany joined other Western countries in criticizing China’s crackdown
in Tibet in March and neither Merkel nor Steinmeier attended the opening
ceremony of the Olympic Games in August – unlike US President George W. Bush and
France’s Nicolas Sarkozy. Ms Merkel last met with Mr Hu at a Group of Eight
summit in Japan in July and she used the talks to push for a successful outcome
to talks between China and the Dalai Lama, and according to officials in Berlin
she will not shy away from “critical issues” this week either. But analysts said
she will have to tread carefully in Beijing if she is to keep China on board for
a planned global summit including both industrialized counties and emerging
nations – plans for which will be at the forefront of the ASEM summit. “Merkel’s
trip now is all the more important because when it comes to resolving the
financial crisis China plays a very central role. If the Chinese don’t play
along then you can forget about the whole clean-up and crisis management,” Ms
Unmuessig said. “The Chinese must be at the table if there is to be a world
financial summit to restructure the global financial system... I think that
Merkel must think about whether she shouldn’t go back to the traditions of quiet
diplomacy,” she said.
Chinese Vice President Xi Jinping called for closer international cooperation to
tackle the problems created by the global financial turmoil, a report said.
"China would like to propose that governments from various nations strengthen
cooperation in the financial field, boosting their dialogue and coordination,''
Xi said, according to CaiHuaNet.com, a financial website. Xi, widely seen as a
future leader, was speaking at a business forum held ahead of major summit of
Asian and European nations in Beijing this week. China's growth slowed to 9.9
percent in the first nine months of 2008 from 12.2 percent in the same period
last year, official figures showed this week, indicating the country is not
insulated from the global economic downturn.
Chinese Premier Wen Jiabao on
Wednesday held talks with Vietnamese Prime Minister Nguyen Tan Dung who is in
Beijing for a six-day official visit to China and for the seventh ASEM summit.
Workers call for help after firm's collapse - About 40 people who work for a
subsidiary of a bankrupt Hong Kong-listed company sought help from the Labor
Department yesterday over claims for HK$2.75 million in compensation.
Citic Pacific (SEHK: 0267) has demoted
Frances Yung Ming-fong, daughter of its chairman Larry Yung Chi-kin, and cut her
salary for her involvement in the unauthorized foreign-currency bets, managing
director Henry Fan Hung-ling said yesterday. Shareholder activist David Webb had
earlier questioned her role in the risky currency transactions. "Did she [Ms
Yung] know what was going on, or is her title misleading?" Mr Webb asked. Ms
Yung, 36, was listed as "director, group finance" in the company's 2007 annual
report but not "group finance director". Her salary was not disclosed. Citic
Pacific said on Monday that group finance director Leslie Chang Li-hsien, 53,
resigned after failing to obtain proper approval before conducting those
transactions. Financial controller Chau Chi-yin, 52, also quit for failing to
exercise oversight or notify the chairman of unusual hedging transactions. But
Mr Webb said that in the annual report Mr Chang was listed as deputy managing
director instead of group finance director and Mr Chau executive director, not
financial controller. Mr Fan said Ms Yung was head of the company's finance
department and reported to Mr Chang. Although she was involved in the
transactions, she was not a board member, Mr Fan said. Ms Yung had been demoted
and received a pay cut, Mr Fan said. He said Ms Yung had not told her father
about the transactions before the company uncovered the matter last month. Ms
Yung was unavailable for comment.
The provisional liquidators of 3D-Gold
Jewellery Holdings (0870) said they have received several indications of
interest from potential white knights and remain hopeful the company can be
rescued. he provisional liquidators have not yet entered any substantive
discussions, Deloitte Touche Tohmatsu partner Darach Haughey told The Standard.
Haughey said the provisional liquidators have taken steps to enhance security at
all locations of the 3D-Gold group. The new security measures follow the theft
last week of HK$179 million worth of bullion from vaults.The five 3D-Gold
management officials arrested in connection with the theft - including
chairwoman Jane Chan Yam-fai, widow of late company founder Lam Sai-wing - met
with Deloitte after being released on bail and have been cooperating, Haughey
said. All 3D-Gold stores remain open and no staff have been laid off, he said.
On Friday, the High Court appointed Deloitte as provisional liquidator of
3D-Gold and subsidiary Hang Fung Jewellery after creditor Hongkong and Shanghai
Banking Corp presented a winding-up petition. Meanwhile, Sun East Group, a Hong
Kong-based cosmetics firm listed in Singapore, said it is still in discussion
with Deutsche Bank's Hong Kong branch about repaying US$15 million (HK$117
million) of bonds after it breached financial covenants. Sun East, best known
for its breast-enhancement creams, has still not been able to find alternative
financing sources, said chairman Philip Chung. As of the end of August, Sun East
had outstanding trade receivables of HK$360 million owed by seven customers. Of
that, there is HK$84.81 million overdue from five customers. Sun East said it
was able to recover HK$200,000 between October 8 and October 17.
How the screen went black
yesterday for millions of users of fake Microsoft XP who recently downloaded new
anti-piracy patches. Thousands of computer users' screens went black across the
mainland yesterday as they felt the impact of the newest step in Microsoft's
global anti-piracy push. Mainland netizens vented their anger. sers of illegal
copies of the Microsoft XP operating system and Microsoft Office software fell
foul of software patches known as Windows Genuine Advantage (WGA) and Office
Genuine Advantage (OGA), which they unknowingly downloaded and installed
recently through XP's automatic update facility. When they switched on their
computers yesterday the software scanned their system to see whether they were
using genuine or illegal XP. The screen wallpaper of those using a pirated
operating system vanished to be replaced by a plain black desktop, and a
persistent error message appeared warning: "You may be a victim of software
counterfeiting." Assurances from a Microsoft China spokesman that the patches
were aimed only at improving user experience by promoting copyright awareness
did little to placate computer users, with some calling the act a declaration of
war by Microsoft. Lin Congwu , Microsoft China's marketing director for consumer
products, said last week that the program would help uninformed users identify
whether or not they were using genuine software. He said installation of the
programs was not compulsory. Hours after the Microsoft announcement, posts began
to surface on the internet teaching people how to bypass the check by cancelling
the automatic update or changing a registration key. But information-technology
expert Lin Feng said it was not as simple as that. "If you choose not [to
update], you will be barred from all security updates, and hackers and malicious
software could easily break into your system through known loopholes," Mr Lin
said. "Microsoft has hijacked us and given us freedom to pay a ransom or die."
Some IT experts claimed the software giant was threatening China's national
security. Ni Guangnan , a leading software expert and member of the Chinese
Academy of Sciences, wrote in his weblog: "If you cannot fully control the
computer, you are not the owner. If Microsoft can blacken your screen today,
what else can it do tomorrow?" An opinion poll conducted by Sohu.com attracted
more than 100,000 voters and more than 90 per cent of the respondents - some of
them users of genuine software - disapproved of Microsoft's action. Li Xiaolei
said he used a legitimate pre-installed copy of Windows XP but Microsoft had
deeply hurt his feelings as a consumer. In response, millions of users have
dumped their pirated versions of Microsoft Office and turned to mainland
software companies that are offering legitimate, localised and free office
applications for functions such as word-processing. Zhang Xuefeng , product line
manager of Kingsoft (SEHK: 3888), a Hong Kong-listed mainland software company,
said downloads of its WPS office processing software by individual users had
risen by a staggering 50 per cent since Friday. "It's not only individual
customers who are becoming more interested in domestic software. We are also
receiving a big increase in phone calls from various industries about our
products," Mr Zhang said. "It would be a good opportunity for Chinese software
companies to reclaim lost territory."
About 100 elderly people protested at the government headquarters in Central
yesterday against plans to expand means testing in the old-age allowance system.
Microsoft expects Samsung Mobile
to help power the growth of Windows Mobile with its i908 handset, a rival to
Apple's iPhone 3G. Software giant Microsoft Corp aims to boost shipments of
Windows Mobile-based smartphones to compete with rivals by partnering with more
than 50 handset makers. Research firm Gartner estimated Windows Mobile-based
devices would reach 27.5 million next year. Global growth in mobile-telephone
sales is expected to total just 8 per cent this year, compared with a previous
forecast of 11 per cent, according to research firm Gartner. "Microsoft mobile
technology runs on over 200 mobile phone models from 56 handset makers,
including Samsung Group, Motorola, High Tech Computer Corp, Palm, Nokia Corp and
Research In Motion, which are carried by more than 160 mobile operators around
the world," said Adam Anger, a senior director for Microsoft's Mobile
Communications Business. Mr Anger added that the company had experienced strong
growth in shipments this year and estimated that 20 million devices would be
shipped by the end of this year, while next year's target was more than 27
million devices. Google, the biggest internet search engine, launched its first
mobile-telephone platform Android on the G1 smartphone in partnership with
T-Mobile in the United States, while Apple's iPhone 3G has already sold more
than 1 million units since its July launch. 
Hong Kong office market deals have
fallen to a five-year low as investors cancelled deals or reopened price
negotiations because of fears that the troubled economic outlook will spill over
into occupancy rates, prices and rental yields. More than 80 per cent of tenants
of grade A office space in Central were from sectors already worst-hit by the
current turmoil and expected to suffer further, property agents said. They are
from the finance, insurance, property and other professional services.
Sir Run Run Shaw's former right-hand man
at TVB has said goodbye to ATV, the station he briefly served for a year. Louis
Page has been replaced as director and chief executive by another former top
Shaw aide - Ho Ting-kwan - who was ATV's chief operating officer and director.
ATV said Page resigned to pursue personal interests. "The board thanks Mr Page
for his contribution in the past year and wishes him every success in his future
endeavors," an ATV statement said. Page was the managing director of TVB before
leaving that station in 2006. One of his first tasks on joining ATV last year
was to recruit Ho. Current TVB general manager Stephen Chan Chi-wan, who worked
with Page for a decade, called him an experienced industry professional, and
said it would be regrettable if he stepped away from the entertainment world. A
source said Page's resignation is likely due to poor ratings at ATV, exacerbated
by a conflict of interest between his job and a production company he supports.
Many of the TV dramas that ATV bought are produced by Soft-Trek Corp, a venture
Page is connected with, said the source, adding: "It [the conflict] was blatant,
but acceptable to ATV as long as the ratings were good, but apparently the 2008
ratings were even worse than 2007." When Page and Ho joined ATV last year they
vowed to reform the station. It was rumored the station tried to lure many of
the A-list actors and actresses - including Ada Choi Siu-fun - but only a few of
the lesser stars switched to ATV.
Hong Kong's financial secretary John
Tsang Chun-wah said on Tuesday that all bank deposits in the territory would be
fully guaranteed until 2010, following turmoil in the international banking
system. “[We will] use the exchange fund to guarantee the repayment of all
customer deposits held in authorised institutions in Hong Kong,” Mr Tsang said.
The move was the latest by the city’s central bank to help stabilise Hong Kong’s
banking system and follows moves by central banks around the world to provide
liquidity and boost confidence in the financial sector. Previously the first
HK$100,000 was guaranteed. The new measure will be introduced with immediate
effect, Mr Tsang said. “This is to provide assurance to depositors that their
money is fully protected,” he said. “This is in line with a number of measures
taken in a number of jurisdictions throughout the world to reinforce confidence
in banks.” Mr Tsang also announced a new system for local banks to access extra
capital, following similar international moves to boost confidence in the
sector. “[There will be] the establishment of a contingent bank capital
facility, for the purpose of making available additional capital to locally
incorporated banks on request and subject to supervisory scrutiny,” he said. The
new measures will in force until 2010 when they will be reassessed. Mr Tsang did
not initially give figures for the size of the capital fund. He stressed that
the new measures were “precautionary and pre-emptive in nature.” “I must stress
there are no serious issues in the banking sector,” he said. “I do not expect
that the measures need to be triggered,” he said. “Our banking system is healthy
and robust with capitalisation well above international capital requirements.”
Hong Kong’s stock market rebounded for the second consecutive day on Tuesday,
rising 3.2 per cent, following a 16 per cent plunge last week on the Hang Seng
Index to a three-year low, its worst week since the Asian financial crisis a
decade ago. “It is a positive move. The measures will restore depositors’
confidence in Hong Kong banks,” said Y.K. Lee, an analyst at Core-Pacific
Yamaichi. “It may help sustain a rally in the local stock market,” he added. The
contingent bank capital facility is only available for 23 banks registered in
Hong Kong, said Hong Kong Monetary Authority chief Joseph Yam Chi-kwong. He
estimated the city’s total bank deposits at about HK$6 trillion. The Hong Kong
Exchange Fund’s assets totalled HK$1.4 trillion at the end of August, the bulk
of which is foreign exchange reserves to back the Hong Kong dollar’s currency
peg with the US dollar. Last month, Bank of East Asia (SEHK: 0023) experienced
heavy withdrawals due to rumours that Hong Kong’s fifth-largest lender was in
financial distress. The rumours proved unfounded.
Chief Executive Donald Tsang formally
accepted the resignation of Tsang Yok-sing from the appointment of Lau Kong-wah
to the Executive Council on Tuesday.
Joseph Yam of the Monetary
Authority and Martin Wheatley of the Securities and Futures Commission attend a
Legco meeting to discuss the controversy yesterday. Regulators yesterday
rejected legislators' accusations that they had failed to monitor local banks
selling high-risk, Lehman Brothers-linked investment instruments to clients. "I
don't think these accusations are correct. [The blame for] failing to monitor
does not exist," Monetary Authority chief executive Joseph Yam Chi-kwong said.
He was speaking at a special Legislative Council meeting on the troubles
surrounding products related to the collapsed US investment bank as investors
facing heavy losses continued to call for their money back.At the same meeting,
Securities and Futures Commission chief executive Martin Wheatley rejected
suggestions the regulator should have stopped complex products being sold under
the name of minibonds. Investors should have ensured they knew what they were
buying, he said. Mr Yam said: "I personally think that if banks followed all the
SFC and HKMA regulations, investors would have sufficient understanding of the
risk. The problem is whether the banks followed all the regulations." Between
May 2005 and the third quarter of last year, he said, the authority issued extra
guidelines to banks on the sale of complex investment products. It also urged
banks between late last year and early this year to relabel products containing
collateralised debt obligation - security backed by a pool of bonds, loans and
other assets - as high-risk instead of low-risk. "Before the breakout of the
subprime mortgage crisis, we rapidly issued guidelines. This is having
foresight, not belated awareness." He said he had also warned investors and had
commented on the financial crisis as well as how to manage investment risks in
his articles and public speeches. "No one has said more than I have" on the
issues in Hong Kong, he said. Mr Yam, who earned more than HK$10 million last
year, drew criticism from lawmaker Wong Yuk-man for "sitting still to wait for a
salary", while minibonds victims "sit still to wait for death". Tourism sector
lawmaker Paul Tse Wai-chun called on Mr Yam to step down. Democratic Party
legislator Lee Wing-tat asked why the SFC had allowed the products to be called
"minibonds", which gave a false impression that they were low-risk. Mr Wheatley
replied that investors should not simply rely on marketing materials, but should
ensure they understood the product. "The term minibond ... has no regulatory
meaning. It's just a brand name ... Different firms use different brand names. I
would be shocked if anybody bought a product based on the name of the product.
The requirement is to understand the features ... Anybody who is offered via
bank staff a product that pays 6 per cent rather than half a per cent on deposit
should be asking, `Why?'" At the day-long meeting, Financial Secretary John
Tsang Chun-wah said he hoped banks could decide by the end of this week on the
government's proposal to buy back Lehman minibonds. He also said the SFC and
HKMA would submit a report within three months, which would include how to
regulate the sale of such products. By Friday, the HKMA had received 9,281
complaints. Mr Yam said results of investigations over potential
misrepresentation would be made partly available in a week. Out of 5,300
complaints against Lehman's minibond products, the elderly were involved in
about 800 cases. HKMA has investigated 39 cases of mis-selling of investment
products at banks. It has reached a conclusion in 15 of the cases, in which
banks were warned in five cases and two would involve prosecution. Admitting
that it had no statutory power to force banks to compensate victims who claimed
to have been misguided, Mr Yam said that for the sake of their own reputation,
banks that found misconduct "should make compensation". He said Hong Kong's
position as a world financial centre had not been harmed because the impact of
Lehman's demise was global. But he admitted public confidence in the banking
system had been damaged. He said the recent run on the Bank of East Asia (SEHK:
0023) could be attributed to negative sentiments following Lehman's collapse.
The government should be prepared to
go all out to tackle the widening economic crisis, even if it means breaking
some rules, Hong Kong General Chamber of Commerce chairman Andrew Brandler said.
The government should be ready to throw moral hazard out the window - throw some
of these principles out the window - on a short-term basis [to maintain market
confidence and stability]," Mr Brandler said without elaborating. "In
extraordinary times, the government should not feel shy taking extraordinary
measures." Warning of fiscal deficits amid a shrinking tax base and greater
unemployment, Mr Brandler said there was an urgent need for the government to
shore up increasingly fragile investor confidence. The chamber expected a global
recession next year that might last for a few years, he said, although Hong
Kong's financial system remained in good shape. "You don't want to take risks
with what is fundamentally a sound system right now," he said. Mr Brandler
called on the government to act "quickly and boldly" to boost confidence by
"substantially" raising the HK$100,000 cap on bank deposit insurance. Such a
measure would not be permanent, but could be implemented for six to 12 months to
help tide jittery investors over until the economic outlook improved. He also
supported the use of taxpayers' money to underwrite soured Lehman Brothers
minibonds if it helped "get a deal done" between banks and angry investors. "You
don't want to have people queuing up, demonstrating outside Legco, demonstrating
outside banks, saying I want my money back because of these minibonds. You want
to get that issue cleared up quickly," he said. "We face a once-in-a-lifetime
financial turmoil. Let's not take any risks with that, even if it means the
government breaking a few principles and digging into its pockets to maintain
stability. It's a small price to pay." Mr Brandler also urged the government to
do everything possible to preserve the financial health of the city's small and
medium-sized businesses. Nervous banks were less willing to lend to companies in
an economic downturn for fear of being unable to recover their money if
businesses failed. This choked off funds to companies, which relied on credit.
Despite a pledge by the government to use the city's US$160-billion war chest of
foreign currency reserves, if necessary, to help deal with the crisis, resources
were limited. A large civil service and weak corporate earnings would exacerbate
pressure on government finances, which depended mainly on profits and salaries
taxes as well as property sales. The chamber had been disappointed at a lack of
government commitment to explore ways to broaden the tax base, including the
introduction of a goods and services tax, but Mr Brandler said now was not the
time to broach the issue again.
Taxi drivers angry at a new flagfall pricing system stopped all services from
Hong Kong International Airport to the city at times yesterday. More than 200
taxi drivers went to Central during the day in a slow-drive protest up Garden
Road then let off 30 drivers to march from Chater Road to the Central Government
Offices. They restarted their protest at the airport last night. The protesters
claim the flag-fall adjustment will affect the number of short-journey
passengers. Stranded passengers were told by the Airport Authority that taxi
service was temporarily out of service. That left people like a traveler
intending to catch a ferry at China Hong Kong City in Tsim Sha Tsui worried
about making it in time. Long queues of taxis appeared at Garden Road heading
down to Central. But traffic to Central and Wan Chai remained smooth. Earlier,
the drivers shattered fare meters at the central government offices to drive
home a claim that the new rates will not protect livelihoods. The Executive
Council in September approved raising the flag-fall from HK$16 to HK$18,
effective from November 30. There will also be a new incremental charge, from
HK$1.40 to HK$1.50 up to nine kilometers when the total fare reaches HK$70.50.
After 9km, the incremental charge will be HK$1. At a distance of 11.8km, the
fare under both the old and new charges will be the same. But trips longer than
that will be cheaper, with one usually costing HK$100 now down to HK$95.50, a
HK$200-trip falling to HK$167 and a HK$300 trip HK$240. 
Chan Chun-keung set up the vineyard
near Taiyuan and asked daughter Judy (above) to run it. Judy Leissner Chan Fong
was still in college in the US when she found out her father had started a
winery. "I was astonished," she says. It was an even bigger shock when dad,
entrepreneur Chan Chun-keung, put her in charge of launching the first vintage
from their Grace Vineyard in 2002. eissner was 24 at the time and had barely
settled into her first job at an investment bank. "I didn't drink then and
didn't know a thing about grape varietals or winemaking," she admits. Six years
on, Grace Vineyard in Shanxi province has acquired an enviable reputation for
producing fine tipples in a region better known for coal than chardonnays. But
getting there was no cake walk. Hong Kong-based Chan, who has extensive
interests in department stores, water treatment and infrastructure projects on
the mainland, became interested in wine during his business trips to France. He
and a French friend dreamed about eventually retiring to a winery, and started
to look around for a suitable property. After an initial search in France, they
turned their sights to China. "Everyone was saying how there was only a mass
market there and the quality wasn't good. But my father is the kind of person
who likes to do what others consider impossible," says Leissner. The family
brought in oenologist Denis Boubals and spent two years scouring the mainland
before plumping for a plot 40km south of Taiyuan, the capital of Shanxi, in
1997. Situated in the middle reaches of the Yellow River, it has deep, sandy
soil and the mild, continental climate best suited for grape growing. They
imported vines and equipment from France, hired a French winemaker and began
looking forward to the first vintage. The launch in 2002, however, was a
disaster. Of the 500,000 bottles produced, they sold just 10,000 and gave away
another 10,000. "I was lost and dejected," says Leissner. "We hadn't paid enough
attention to packaging, believing it was enough for the wine to be good." The
French style of Grace's wines didn't go down well with mainlanders used to
sweeter wines with less tannin. And unlike in the west, where boutique wineries
tend to be associated with quality, Chinese customers saw Grace's small,
family-run operation as a sign of lower standards. The winery's location in
Shanxi, largely known for its coal mines and pollution, also made it a tough
sell. It was a particularly hard time for Leissner: she had just had a baby, her
banker husband had been transferred to Singapore, and she was dealing with staff
who were much older than her. "Everything combined to make it overwhelming," she
says. That her father left the winery entirely in her hands only added to the
pressure. "I didn't get to work my way up," she says. "He just dumped the job on
me and told me to get it done. It was frustrating not being able to reach him,
and when I did, he would tell me to make the decisions myself." Leissner had to
learn about wines and winemaking on the run, reading up as much as she could,
asking questions and tasting as many wines as possible. But along the way she
also met people who guided her, she says. Besides its own vines, Grace Vineyard
is contracted with 450 farm units from five villages to supply grapes for their
wines. "We provide farmers with the vines and initial capital and also guarantee
them an income, so our presence is welcomed by the local government," Leissner
says. "Their income has increased four times since we set up." However, she
found it took time and patience to convey the finer points of viticulture to
farmers used to growing apples, dates and corn. "It helps that they are
experienced growers and care about the land, but it's hard to convince them that
irrigation is bad [because it dilutes the flavour of the grapes] or that they
should do green pruning [to remove some of the immature grapes to allow better
ripening]." Persistence and attention to quality have paid off. The Peninsula
Hong Kong began including Grace's vintages on its wine lists, and other
five-star establishments followed. Oliver Schnatz, the Peninsula's director of
food and beverage, says the hotel added Grace wines to its list in 2006 after
extensive tastings. "The quality of the wines from Grace Vineyard is very good,"
Schnatz says. "Our philosophy is that the wine lists at our restaurants and bars
should include wines from all the world's biggest wine-producing regions. While
China may not be a major world player at the moment, we believe it has huge
potential." A favourite among guests at the Peninsula is Grace's Private Blend
Barrel 401. "People generally don't have confidence in Chinese wine, but these
hotels were willing to taste our wine and believed in us," Leissner says. "Our
2004 vintage is drinking well now and 2006 - the year of the great frost - will
do even better." Grace's wines have won favourable reviews from critics such as
Jancis Robinson, recognition at international wine fairs, and now are being
added to collectors' cellars. (During a trip to the mainland in March, Robinson
visited Grace where she found the wines to be "encouragingly authentic", naming
its Chairman's Reserve 2005 as one of the top five wines she has tasted in China
this year.). The winery, which began turning a profit two years ago, has earned
a loyal following, especially for its Chairman's Reserve. "The quality of that
label has surprised many wine industry friends abroad," Leissner says. "They
like to take it back for blind tastings because people rarely guess that it's
made in China." On the mainland, Grace's wines are sold through its shops in
Shanghai and Guangzhou. Leissner occasionally shows up at the counters. "It's
always very exciting to be able to sell a crate," she says. These days, the
winery's problems have less to do with selling its output and more with not
being able to meet demand. "Since last year, we've been running out of wine,"
she says. "While this is a better problem to have, we don't want to be delisted
from hotels because we can't supply them with enough wine, and we also want to
ensure quality doesn't fall." To expand production, Grace has established two
new vineyards, in Shaanxi and Ningxia provinces. "Our ultimate goal is to
discover what grows best where, so it's important to step out of Shanxi," says
Leissner. Australian winemaker Ken Murchison now oversees the production at
Grace, but it will retain its Old World style. Leissner, who visits the Shanxi
winery at least once a month, also has her say on the big decisions, such as
which blend will suit the prestigious Chairman's Reserve label. Her father, she
says, mainly enjoys drinking the wines. With her daughters now aged three and
five, Leissner's long working hours have become an issue for negotiation. "When
they were younger, it didn't really register how many days I was away," she
says. "Now they hold me to my promises. But it's important for me to travel
because there are markets in China I know nothing about." Leissner makes it a
point for them to join the annual grape harvests, when she and her daughters
help with the picking. "For my girls, knowing the names of the grape varieties
is an obvious thing. I hope they will take over and I'm trying to cultivate
their interest." Despite her abrupt launch into the wine business, Leissner says
she wouldn't trade her job now. "First, I really like wine and I think the
industry suits my personality. The vineyard is a wonderful place to be - it's
not hard to like it." Most of all, she enjoys promoting the wines. "Through
wine, I've met a lot of interesting people," she says. "Wine is an interesting
product because it acts as a bridge for Chinese people, who tend be conservative
and find it hard to open up and chat with strangers. And wine always goes with
good food." For now, Leissner's ambitions are not to put her wines on
international connoisseurs' lists, but lie closer to home. "In 10 years, I hope
we will have discovered varietals that do really well in our soil and that can
represent Grace as our signature vines," she says. And while the mainland has
traditionally exported a lot of its best produce, "we want to be the good stuff
that stays".
Calvin Tai, the head of HKEx's derivatives
markets, says gold futures offer investors a relative safety net during market
turbulence. The rising demand for gold as a safe haven and the increasing
volatility of gold prices amid the global credit crunch may help Hong Kong
Exchanges and Clearing (SEHK: 0388, announcements, news) attract investors to
gold futures that are due to relaunch next Monday, according to Calvin Tai
Chi-kin, the exchange's head of derivatives market. "Recent incidents including
the sale of Lehman Brothers Holdings minibonds have made people lose confidence
or become cautious of over-the-counter trading of derivative products," Mr Tai
said. "But it may be a good time for our launch of gold futures given our higher
transparency and stringent regulations."
Almost half of Hong Kong's aid package for Sichuan will be used to rebuild the
Wolong panda reserve the government said on Sunday. Almost half of Hong Kong's
aid package to help earthquake-stricken Sichuan will be used to restore a giant
panda reserve, the government said on Sunday. he Hong Kong government said it
would spend HK$863 million of its HK$2 billion (US$256 million) commitment on a
4.5 kilometre road leading to Wolong Nature Reserve in the country’s southwest
province, which was devastated by a 8.00-magnitude earthquake in May. Another
US$22.7 million would be devoted to studying the 200,000-hectare park, a
government spokesman told reporters. The reserve was the top priority among the
first 20 Hong Kong-funded reconstruction projects, officials said after signing
an agreement with mainland officials in Sichuan on Saturday. “We now need to
climb two large mountains and cross 350 kilometres before arriving at the
reserve,” Carrie Lam, Secretary for Development and a member of the delegation
to Sichuan, said in a statement. “This has largely affected the restoration work
for the reserve. The importance and urgency of the construction of a new road is
unquestionable,” she said. Ms Lam said the work in Wolong would involve about
US$1.7 billion, and the government would seek more funding from the legislature.
The reserve was established in 1963 in Wenchuan county, the epicentre of the
quake that left nearly 88,000 people dead or missing. Fourteen pandas have
already been moved out of the Wolong Giant Panda Research Centre following the
quake, while 48 remain. Another 150 pandas are believed to live in the wild in
the reserve.
Chief Secretary Henry Tang believes the
financial crisis will have a negative effect on the city, but "it's hard to
tell" how severe. Hong Kong's foreign reserves could protect its currency from
global economic turmoil, the undersecretary for financial services and the
treasury, Julia Leung Fung-yee, said yesterday. "We'll use all the ammunition if
we have to," Ms Leung, a former Hong Kong Monetary Authority executive director,
said on radio. "Hong Kong should have faith." Hong Kong's foreign-currency
reserves stood at US$160.6 billion at the end of last month, the HKMA announced
on Wednesday. That represents seven times the currency in circulation and makes
the city the world's ninth-largest holder of foreign reserves, behind the
mainland, Japan, Russia, India, Taiwan, South Korea, Brazil and Singapore. "We
also have other strategies that we could use if the need arises," Ms Leung said.
"The point is that the SAR government will make every effort to support our
financial system." Ms Leung sought to calm the city as the International
Monetary Fund warned that the world's financial system was on the brink of
meltdown. "People do not have to be too worried. The wind and waves are big
outside, but by comparison we in Hong Kong are extremely robust," she said. A
Financial Services and Treasury Bureau spokeswoman stressed last night there was
no need to use the Exchange Fund at this stage. "What the undersecretary said
was just a preventive measure," she said. "If anything goes wrong, the
government has the responsibility to defend. But there is no need to use the
Exchange Fund at this stage." Chief Secretary Henry Tang Ying-yen predicted the
economic turmoil would have a definite negative impact on Hong Kong. "I believe
that the economic crisis will be a negative blow to Hong Kong because Hong Kong
is an open and small economy," he said yesterday. "As for how severe that blow
will be, and how severe the results will be, it's hard for us to tell right
now." Ms Leung said the US government had been wrong in deciding not to bail out
Lehman Brothers because it had led to a collapse in confidence. Billy Mak Sui-choi,
an associate finance professor at Baptist University, said: "The US ended up
suffering a domino effect when the government didn't rescue Lehman Brothers.
Hong Kong needs to stabilise its financial market by any means." Regarding banks
that thousands of investors allege mis-marketed Lehman minibonds and similar
products, Ms Leung said the city would learn from the experience and that a
government proposal to buy back the investments after assessing their current
market value was the fairest available solution. A group of owners of small and
medium-sized enterprises (SMEs) took to the street yesterday, calling for more
government loans to help them survive the financial crisis. Twenty
representatives marched from the HSBC (SEHK: 0005, announcements, news)
headquarters to petition the government headquarters. The protest organiser -
the Liberal Party's SMEs Concern Group - said SMEs, with their particular need
for credit, were the worst hit now that many banks were reluctant to make loans,
creating a cash-flow problem. The protesters called on the government to double
the maximum working capital loan guarantee under the SME Loan Guarantee Scheme
to HK$2 million and double the guarantee period to four years.
Three mainland dairy companies have
publicly apologised for their involvement in a toxic milk scandal that has
killed at least four children and led to mainland-made products pulled from
shelves around the world. nner Mongolia Yili Industrial Group, Mengniu Dairy (SEHK:
2319) and Bright Dairy Group were found earlier to have produced milk
contaminated with melamine, a compound used to cheat nutrition tests. The
scandal has savaged the companies’ share prices and prompted Seattle-based
coffee chain Starbucks to pull Mengniu milk from its 300-plus stores last month.
“I feel I have let everybody down. I have done so much, yet still done wrong,”
Monday’s Beijing News quoted Mengniu’s marketing chief, Zhao Yuanhua, as saying
on state television. Mr Zhao and executives from Mengniu and Bright Dairy also
promised consumers that their products prices would not rise despite higher
costs of quality controls. Mainland health officials last week said that nearly
10,700 infants and children were still in hospital after drinking toxic milk and
formula. More than 36,000 children had left hospital after being treated. The
scandal has rocked faith in the safety of mainland-made products, already under
a cloud from a series of quality scandals involving food, drugs and toys last
year, and prompted authorities to issue tighter rules governing milk production.
Beijing’s quality watchdog said a fourth round of tests on baby milk formula and
other milk powder from dozens of local brands across 18 provinces had shown no
new cases of melamine contamination, Xinhua news agency said in a separate
report. But the Ministry of Agriculture had decided to continue sending quality
teams across the country to monitor the clean-up of milk stations and animal
feed producers, it said in a notice on its website. “Supervise and urge local
authorities to investigate and punish the illegal use of melamine and other
toxins, and other unlawful adulteration,” the ministry said.
Average prices of Residence Bel-Air in the secondary market have fallen.
Defaults on Hong Kong home sales agreements remain low for the moment - but if
the market slowdown deepens the number of buyers walking away from contracts
could grow significantly by the second quarter of next year, property experts
have warned. Concerns have been raised by the big increase in property releases
in the pipeline, with 5,000 pre-sold flats ready for delivery between April and
June next year. Property consultants said developers of the new flats and houses
could find that growing numbers of buyers might over-extend themselves and then
walk away from uncompleted deals if prices continued to tumble. Home prices have
so far dropped about 8 per cent on average from a peak reached in the first
quarter of the year, and analysts expect values could continue to fall by
another 30 per cent. Buyers who put down between 10 per cent and 30 per cent of
purchase prices as deposits could find that when the time comes to take transfer
of their homes they will still owe more than their homes are worth if they
completed the purchases. In the circumstances, some might consider forfeiting
their deposits and walking away from the deals, analysts said. "It is likely
that this will happen, since the housing market is not expected to recover
before the end of 2009," said Alva To Yu-hung, the director of the research
department at property consultant DTZ. He did not expect home prices to bottom
out and stabilise until 2010. Buyers caught in this predicament who did not
respond by walking away from agreements could also choose to sell the units at
below purchase price in order to cut their losses, Mr To said, with the extra
supply driving prices further down. According to DTZ, about 5,000 units in new
projects are scheduled for completion in the second quarter of next year. New
completions on the way include the Capitol in Tseung Kwan O, Celestial Heights
in Ma Tau Wai, the Palazzo in Ho Man Tin, One Pacific Heights in Sheung Wan,
Island Lodge in North Point, and York Place in Wan Chai, according to estate
agents. Ricacorp Properties research manager Patrick Chow Moon-kit said a small
number of defaults in both the new and secondary markets had already occurred.
But agents said the number was so far insignificant since only a few new
projects had been released. In addition, some developers had extended delivery
dates so that buyers did not need to complete their purchases at the moment.
Projects to be completed or recently completed include Harbour Place and the
latest phase of Residence Bel-Air in Pok Fu Lam. Agents said the occupation date
of the latest phase of Residence Bel-Air had been delayed to next month from the
end of last month. Ricky Poon Wai-ki, a director of residential sales at
Colliers International, said buyers in the project had paid between HK$13,000
and HK$14,000 per square foot, but in the meantime average prices of Residence
Bel-Air in the secondary market had fallen to less than HK$11,000 per square
foot. "Many buyers may exit from the deals when the development is completed and
owners are required to complete their purchase agreements and move in," he said.
In the secondary market, buyers are required to complete purchase agreements
within two months, while buyers in new pre-sale projects enjoy a longer
transaction period until the projects are completed. "That's why so many
investors are attracted to new projects even though they cannot afford it
because they hoped to sell the units before taking delivery," Mr Poon said. Mr
Chow said the result was that a number of investors were now on the verge of
walking away from deals against a background of tighter credit conditions and
rising interest rates. "If the global financial market continues to worsen, or
we see another big financial institution going bust, I would expect to see
defaults becoming a major phenomenon next year."
Bimos ("intellectuals" in the yi
language) of China's Yi ethnic group present a send-off ceremony for the
dinosaur fossil to be donated to Hong Kong Special Administrative Region, in
Lufeng World Dinosaur Valley, southwest China's Yunnan Province, Oct. 9, 2008.
As a gift from Yunnan provincial government symbolizing the firendship between
Yunan and Hong Kong, a 7.8 meter-long dinosaur fossil unearthed in June 2007 in
Lufeng County was packed and delivered to Hong Kong on Thursday for a permanent
exhibition which will kick off in late October.
Taiwan leader Ma Ying-jeou said on Friday
that his government will continue to relax ties with the Chinese mainland to
build a stable cross-Strait relations. In a televised speech on the island's
"National Day", Ma promised to adopt more open policies in terms of exchanges
with the mainland for the benefit of the Taiwan people. Such policies included
promoting non-stop cross-Strait charter flights, attracting more mainland
visitors to Taiwan and expanding direct cross-Strait links for mail, trade and
transportation, Ma said. Cross-Strait relations have changed rapidly since Ma
took office on May 20, as Taiwan and the Chinese mainland resumed talks that had
been suspended for 10 years. Ma said the efforts have eased cross-Strait
relations and stabilized the situation in east Asia, winning support from the
international community. He expressed his hope that both Taiwan and the Chinese
mainland could shelve disputes and extend political reconciliation to the
international stage.
Sanhao Bridge over Hunhe River in
Shenyang, Liaoning Province, is seen on its inauguration day, October 10, 2008.
The 1,342 meter-long bridge is deemed the most beautiful bridge in the city,
with two arches designed like wings of a butterfly. 
Chinese banks have good reasons to
venture abroad but face a range of challenges, so they need to be selective as
they pursue cross-border merger and acquisition (M&A) deals. According to a
latest report, titled Venturing Abroad: Chinese Banks and Cross-border M&A,
compiled by The Boston Consulting Group (BCG), Chinese banks have been seeking
larger and more ambitious M&A deals, many of which have involved taking stakes
in foreign institutions. BCG is a global management consulting firm and the
world's leading advisor on business strategy. From 1993 through 2005, Chinese
banks made an average of about one cross-border acquisition per year. Most deals
were valued at under $20 million. Since then, Chinese banks have made 11
outbound M&A deals, five of which worth at least $1 billion. They conducted the
deals in a bid to channel their excess funds, follow customers overseas, become
global companies, adhere to national directives, extend products and service
offerings, import skills into China, diversify the banks' businesses and risks,
increase scales and lower costs, or leverage capabilities abroad. However, in
addition to strategic opportunities, they still face many risks. At the
management level, risks include lack of full support from senior management,
managers lacking experience in overseas markets and M&A, and conflict with
targeted companies. Unfamiliarity of regulatory and legal frameworks and lack of
support from local regulators and officials are also regulation risks. Operation
risks involve insufficient and/or unreliable information to conduct fair
valuation, few deal structure options, complexities of cultural differences,
failure to extract cost synergies and integrate operation, loss of local talent,
loss of existing clients, customers and momentum, inability to transfer best
practices, as well as loss of shareholder value or failure to communicate
shareholder value, according to the report. "Chinese banks face a series of
challenges as they pursue overseas M&A deals, but they are moving inexorably
toward a more international profile," said a co-author of the report, Tjun Tang,
a partner in BCG's Hong Kong office. Their size alone makes them capable of
influencing markets, particularly if they can harness the momentum of China's
global challengers - dynamic companies that are heading abroad. "To build strong
international positions, however, Chinese banks still need to develop core
skills and capabilities," Tang said. "Selective M&A deals can help accelerate
this process." According to another co-author, Frankie Leung, also a partner of
BCG in Hong Kong, Chinese banks have good reasons to pursue cross-border deals
but some investors and analysts believe they should concentrate on opportunities
closer to home, given the country's strong growth. "They have also questioned
whether Chinese banks have a clear strategy - along with the skills and
resources - for venturing abroad," said Leung. He addressed that M&As are
inherently risky and complex, and transnational deals tend to pose even greater
challenges than domestic ones. The steps that Chinese banks can take to build
and execute a strategy for cross-border M&As were recommended as below: Follow a
clear and convincing rationale for outbound M&A; Start small and build M&A
capabilities; Ensure deal structure and degree of integration support deal
objective; Identify approaches to add value to the target company; Retain and
empower key local management talents; Engage in pro-active communication to
target company staff, investors and the public; There are also opportunities for
foreign banks in partnering with their globalizing peers from China. Foreign
banks could look for opportunities to provide Chinese banks with the presence to
serve their globalizing customer base. In turn, the cash-rich Chinese banks can
help foreign banks weather the current financial crisis. "Chinese banks need to
look beyond potential financial gains," said co-author Holger Michaelis, a
partner in BCG's Beijing office. "They need to look for ways to acquire new
capabilities, enhance their offerings, and leverage their emerging-market
skills." Western banks, particularly those that have been hit hard by the
crisis, might consider selling business lines as a way to free up capital and
refocus on core objectives. "Chinese banks have both the capital and the
incentive to make such purchases," Michaelis said, adding that Chinese banks are
not direct competitors - at least not yet - and therefore present a better
option for foreign banks seeking to divest business lines.
Huawei Technologies, China's largest telecom equipment maker, yesterday said it
had suspended the auction of a stake in its terminal unit to foreign buyout
companies, citing the ongoing global financial crisis. "Despite investors'
strong interest, we believe it is the best choice to halt the sale as the global
financial market continues to deteriorate," the privately held company said.
Huawei's terminal division recorded $2.2 billion in sales revenue last year.
Insiders said Huawei had been expected to sell a controlling stake, which could
be worth about $2 billion. The Shenzhen-headquartered company in mid-May
formally invited potential buyers to make bids to introduce strategic
investment. Huawei's terminal unit includes mobile phones, data cards for
notebook PCs and ADSL modems. US private equity groups Bain Capital and Silver
Lake have been negotiating with Huawei over the deal and had been expecting to
finalize it in November, insiders said. However, the two US companies hoped to
cut the value of the deal, citing the economic crisis that has dealt a blow to
most US financial institutions, but Huawei rejected this, insiders said.
Huawei's terminal unit has maintained a fat and steady profit margin as it has
been customizing mobile phones for telephone operators such as Vodafone. Unlike
Huawei, most Chinese handset makers have been focusing on an increasingly
overcrowded domestic retail market that can only offer razor-thin profit
margins. Huawei's terminal division is expected to book $3.5 billion in revenue
with a net profit of about $400 million this year, earlier media reports said,
citing a report by Morgan Stanley, which Huawei hired to advise on the auction
of its terminal unit. Last year, the division accounted for 17.5 percent of
Huawei's total global sales of $12.56 billion. "The terminal unit has been our
fastest-growing business. It has been always our strategic priority and a major
revenue driver. We are confident about its prospects," a Huawei spokesman said,
adding that halting the auction would not affect Huawei's cash flow and
operations. The spokesman said Huawei's terminal unit recorded a compound annual
growth rate of 70 percent although it was a latecomer to the mobile phone
business, and by September the company had sold 150 million units of terminals
worldwide. If the market condition improves, Huawei may restart the auction, the
spokesman said, declining to give a timetable. Wang Guoping, an analyst with
China Galaxy Securities, said the credit crisis would force many foreign
investors to scale down their acquisition activities in China. "Given the
current problems, it's a wise decision for Huawei to shelve the auction," he
said. The credit crisis will impact on the global telecom market as spending on
telecom equipment is expected to drop, the analyst said. "But (China's) Huawei
and ZTE Corp might have a better chance in competition as they have been selling
cost-effective telecom gear. In a difficult time, there is no reason to buy
expensive equipment from Western suppliers, especially for operators outside
China."
In August, China's top land regulator
urged local authorities to safeguard 1.8 billion mu (120 million hectares) of
the country's farm land fearing a grain shortage. Thursday, local authorities
responded to the request. Xu Shaoshi, head of the Ministry of Land and Resources
(MLR), called on provincial leaders to abide by the land use general outline in
a letter dated August 29. On the the ministry's website Thursday, local
government officials said they would protect arable land by strengthening
management and by fighting land use malpractice. They added that they would
formulate scientific land utilization plans to improve efficiency and
conservation. On August 13, China's State Council, the cabinet, approved a
general outline for the country's land use plan during the 2006-2020 period. The
goal is to ensure the proper use of farm land and guarantee a minimum of 120
million hectares of arable land, amid concerns about grain supplies. In
September the MLR asked local governments to replenish farmland before
allocating it for non-farming purposes. China is facing a sharp conflict between
land supply and demand. The area of arable land, shrank 610,100 mu in 2007 to
1.826 billion mu. That was only slightly above the governments minimum total
goal.
Customs and Excise Department officials display some of the 51 bars of silver
abandoned during the operation, at a marine police base in Sai Kung. Police
smashed a silver smuggling operation in Sai Kung early yesterday, but the 11
smugglers escaped on two powerful speedboats. Authorities said they had
confiscated 1.3 tonnes in bricks of silver, with a retail value of HK$4.2
million bound for the mainland. Senior Inspector Roger Mak Chi-man, of the
marine police outer waters district, said they found 51 silver bricks, some of
them weighing 30kg, inside a delivery van parked near Po Leung Kuk holiday camp
off Tai Mong Tsai Road. The speedboats had docked about 200 metres away for the
pickup. It was the biggest water-smuggling operation of a precious metal in
three years, police said. They said they witnessed 10 men from the speedboats
and the driver of the van unload the bricks from the back of the vehicle onto
the speedboats at about 2am. Police land and sea teams then swooped on the
smugglers, who had to abandon their operation and escape - leaving most of the
load. The smugglers outran water police in their powerful vessels, which were
last seen crossing the sea boundary east of Hong Kong heading towards Shenzhen.
"Each speedboat was equipped with two 250-horsepower engines. They're very
powerful and can run at very high speed," Senior Inspector Mak said. The pursuit
was also hampered by a big swell, he said. Onshore, officers seized the delivery
van. Police did not reveal whether they had any prior intelligence of the silver
smugglers, but they did say marine police had been carrying out anti-smuggling
operations. "There were 51 silver bricks on board the vehicle. Each was wrapped
with water-proof covering," he said. Officers believe the haul was destined for
Nanao on the coast of Shenzhen. Police are still investigating the source of the
silver bricks and whether the delivery van was stolen. "We can't rule out the
possibility that the silver bricks were to be smuggled onto the mainland to
escape tariffs," said Senior Inspector Mak, who described the smugglers as "well
organised". His colleague, Senior Inspector Mak Che-hung, said silver bricks
could be used as raw material for industrial products. The Customs and Excise
Department is also investigating. 
A U-Right outlet in Central closes down
- one of 20 shut as the firm faces possible liquidation. Court-appointed
liquidators for a garment manufacturer and retailer have sacked nearly half its
Hong Kong workforce and shut 20 of its shops in the city as they seek a buyer
for the company. Nearly 200 U-Right International Holdings staff lost their jobs
- about half from the back office, which will now be run by a core of 20 people,
according to Deloitte Touche Tohmatsu, the court-appointed provisional
liquidator. "Our goal now is to find a white knight. The company is not yet
liquidated," Edmund Yeung Lui-ming of Deloitte said. "We are restructuring the
company and are in talks with two or three potential buyers." The company
originally had 500 workers and 95 shops in Hong Kong, and 516 mainland shops.
"We also closed about 20 outlets in Hong Kong which had been losing money for
quite a long time," Mr Yeung said. Each employed about four people. The
remaining shops across the city and on the mainland will operate as usual. "The
sacked workers may be re-employed and deployed to other outlets. We will also
recommend the future buyer to employ them," Mr Yeung said. All the sacked
workers would be compensated according to the employment ordinances. Staff
salaries had been paid to the end of September, but commission on sales that
month and pay for this month was outstanding, the accountants said. "The amount
is less than HK$1 million and can be paid from the company's assets," Mr Yeung
said. "These two to three weeks are critical for us to find a buyer. We told the
workers that we need their support." He said the company's problem was rooted in
overinvestment, with much of its capital tied up in the mainland. The company
owed about HK$1.2 billion to 18 banks and other financial institutions. The
Labour Department has made arrangements to help the U-Right staff affected, and
155 of them had contacted the department by yesterday. There are three hotlines
for the affected employees: 2928 7112, 2928 7002 and 2150 6397. "In addition,
the department has set up special service counters at all of its labour
relations offices to help employees pursue termination compensation," a
spokesman for the department said. Raymond So Wai-man, associate professor of
finance at Chinese University, noted the company's financial hardship was mainly
due to poor investment. "However, we really must pay attention to the financial
downturn. With so many giant banks collapsing, it is impossible that the economy
won't be affected. People's willingness to spend will be influenced hugely, so
that the retailing industry will be hit hard," he said. Yesterday a U-Right shop
in Sheung Wan was crammed with people hunting for bargains. "It is a shopping
paradise. The quality of these clothes is very good. I have bought many from
U-Right for a few years," one shopper said. The U-Right layoff came less than
two weeks after HSBC (SEHK: 0005, announcements, news) cut 1,100 jobs worldwide,
including 100 in Hong Kong, amid the global financial chaos. At the time of the
HSBC job cuts, Financial Secretary John Tsang Chun-wah warned more jobs could be
lost because the economy was showing signs of slowing.
Responding to snowballing complaints from
investors in minibonds linked to bankrupt US bank Lehman Brothers, the Monetary
Authority chief said yesterday that there were 10 issues the government had to
look at. How the collapse of Lehman Brothers "played out in Hong Kong raised
questions about the adequacy of investor protection", Joseph Yam Chi-kwong said
in Viewpoint, his regular column on the authority's website. "This will be one
of the issues that will be addressed in a systemic review the government will be
conducting." There should be an evaluation of whether institutions should offer
financial products to retail investors at all, Mr Yam said. Given the risks that
banks assume as distributors of financial products to retail investors who are
also depositors, the government should evaluate how banks might better manage
the risks involved and whether they should even continue selling such products,
he wrote. The government should consider whether the current "buyer beware"
policy was still appropriate, particularly for small investors buying complex
financial products. If it was insufficient to protect investors, changes must be
considered. Regulators should assess whether the mechanism for approving sales
documents could ensure that they identified and disclosed the risks so investors
could make informed decisions. Mr Yam suggested reviewing the code of conduct on
the sale of complex products that the Securities and Futures Commission and the
Monetary Authority had drawn up for brokers and banks. If these companies mis-sold
such products, the review should consider how to prevent that happening again.
Investors in minibonds and other complex derivatives issued or guaranteed by
Lehman Brothers appear to have fallen into a grey area. Mr Yam wrote: "Under the
relevant laws, the protection of investors is the responsibility of the SFC."
However, "in the great majority of cases, investors who have bought financial
products through the banks are also depositors", meaning they come under the
sphere of the Monetary Authority. SFC chief executive Martin Wheatley said the
commission was responsible for confirming products were properly described and
their risks disclosed in documentation. "It is then the responsibility of the
selling intermediary ... to determine whether these products are suitable and
match the needs of the investor," he said.
People walk past a store
advertising a sale of upmarket goods in the shopping mall at the Venetian Macao
casino complex. Macau's government is expected to launch night markets in an
attempt to revitalise old districts and boost tourism, industry sources say. The
idea for night markets, which are a major tourist draw in Taiwan and elsewhere
in the region, has taken on fresh urgency amid growing uncertainty about the
economic outlook and the impact on the casino trade of mainland curbs on travel
to Macau. However, one source said: "We have to think about how exactly a night
market is going to work. If the government takes care of the utilities, like
water and power, and we just fill the night market with all sorts of shops,
neighbouring retailers are going to complain that the night market is stealing
all their business." Entrepreneur and lawmaker David Chow Kam-fai said he was
the first to propose the idea about a decade ago. Macau is trying to diversify
beyond the gaming industry, which has seen rapid expansion and the development
of Las Vegas-style casino resorts. Many casinos contain luxury shops to attract
non-gamers and get them to stay longer. The average length of stay in Macau is
1.1 days, far shorter than Hong Kong's 3.5 days. Mr Chow said the length of stay
needed to grow to 3.5 days for the tourism industry to prosper in Macau. The
city already has 18,000 hotel rooms and that number is projected to nearly
double in the next three years. However, the pace of expansion could slow if the
economic situation worsened, one source said. The number of visitors rose about
10 per cent during the National Day "golden week" holiday last week, with a 10
per cent jump in individual mainland visitors but a one-third drop in tour
groups. Despite the increase, hotel occupancy levels averaged 80 per cent during
the holiday week, compared to around 85 per cent a year ago, because of an
increase in hotel rooms. Visitor spending is down, with many restaurants
reporting a drop in business of 20 per cent to 30 per cent. There is usually
little correlation between the casino industry and economic growth but, with
Macau trying to project itself as somewhere to visit for more than gambling and
dining, the tourism industry is looking to shopping as the "third reason" for
visitors to come to Macau. "What comes to mind when you think of Macau? Food and
casinos and nothing else. We are hoping shopping can be the third thing. Right
now, retail is still in the early development phase here, but many retail brands
are doing well," another industry source said. 
Chief Secretary Henry Tang Ying-yen has been chosen to chair the long- awaited
West Kowloon Cultural District Authority. A government source said Chief
Executive Donald Tsang Yam-kuen has already appointed members for the authority
and will probably name them in his policy address on Wednesday. Tang will
announce details of the authority after that. The authority will comprise around
20 members with three official members - Tang and two others from the Home
Affairs and Development bureaus. The other non-official members mostly come from
the former consultative committee on the core arts and cultural facilities for
the district. Sources said those likely to be in the authority include executive
councillors Ronald Arculli, who was convenor of the financial matters advisory
group of the committee, and Victor Lo Chung-wing, who was convenor of the museum
advisory group. Others are Ocean Park chairman Allan Zeman, Arts Development
Council chairman Ma Fung-kwok, Hong Kong University professor of architecture
David Lung Ping-yee and Danny Yung Ning-tsun, the founder of local performing
arts group Zuni Icosahedron. Legislators and representatives from the cultural
sector earlier suggested that members be elected, but this was rejected due to
the complexity of such an election and possible conflicts of interest. Instead,
a source said letters were sent to various interest groups and people asking
them to nominate candidates. Even though the cultural district ordinance states
the chairman of the authority may or may not be a public officer, the
administration suggested it will be better to have government officials
initially since it involves the planning and use of 40 hectares. The development
will be completed in two stages. The visual arts museum M+ and 12 smaller
museums and performance venues are expected to be completed in 2014 and 2015,
with the expansion of M+ and three other venues in the second phase to be
completed between 2026 and 2031. Legislators have approved the cultural district
bill and a one-off HK$21.6 billion fund for the development of the culture hub.
To ensure the authority has enough public monitoring, it will set up an
investment committee to monitor and advise on investment matters; a remuneration
committee to recommend hiring clauses; and a consultation panel to collect
public opinion.
Hong Kong's bon viveurs may be
drinking more duty-free wine but the cash registers are not ringing merrily for
the city's wholesalers. "To date, all the products we're selling to hotels,
restaurants, membership clubs have gone up 22 percent volume-wise," regional
business development manager at Watson's Wine Wholesale, Luca Luise, said
yesterday. "But the dollar signs have gone down because we have had to reduce
our prices. "Competition is so fierce that we're scared to raise prices." That's
a good thing for the end consumer but meant that Luise, who is broadly
representative of the wine wholesale industry, has to work much harder than
before. The global economic crisis has not stopped people enjoying wines but
wholesale profits have not truly reflected this. Fine wines and champagne are
among the few to buck the market trend and still command top prices, meaning
higher profit margins than low-end wines. He saw retailers, seeking to sell more
fine wines. But with the current economic situation, he said, consumers are less
likely to buy fine wines. He reached that conclusion on his experience of the
wine market during SARS , suggesting that the coming months might follow a
similar trend. "I think a lot of smaller companies [in wholesaling] might have
to close," Luise said, claiming there are too many. "But it's too early to say.
Actually, in the retail sector [such as supermarkets], people are still buying -
even the wines that cost more than HK$100." Luise said he understood that the
food and beverage industry overall was encountering a slowdown. But wine
education is very important to keep maintain enthusiasm in spite of the gloom.
Hong Kong was one of only two cities - the other is Macau - to abolish wine
duty, Luise noted. "This has created a wow factor . Hong Kong is such a small
place but everybody is talking about it ," he said.
A dairy farmer at work in Shelawusu
village, 60km south of Hohhot, Inner Mongolia. Farmers in remote areas are not
confident about getting aid quickly, despite government vows. The Ministry of
Finance has earmarked 300 million yuan (HK$343 million) in subsidies to help
dairy farmers cope with the ongoing milk contamination crisis. The subsidies
would go to farmers in the six worst-hit provinces and municipalities - Inner
Mongolia, Hebei, Liaoning, Shanxi, Shandong and Henan, Xinhua said yesterday.
The money is aimed at farmers who have been forced to dump their raw milk
because many dairy firms have refused to buy it, since dairy products were found
to contain the industrial chemical melamine. The report said the money was a
one-off payment to the six provincial and regional governments to be added to
local subsidies. To protect dairy farmers' interests, the ministry demanded
lower-level governments report details of their relief plans to the farmers and
ensure only farmers in need received money, Xinhua said. The aid came as 14
provinces and municipalities issued various plans to help the dairy industry. In
Hebei, home of the Sanlu Group, the company first identified in the crisis, the
provincial government has already announced a 316 million yuan plan to give
farmers 200 yuan for each cow, to stop them from being slaughtered. The Inner
Mongolian government has also earmarked 100 million yuan in emergency funding to
help dairy giants Yili and Mengniu deal with the crisis. Melamine was detected
in products from both companies. However, dairy farmers in remote rural areas
said the subsidies would take a long time to reach them. Feng Shengcai , who
raises cows in his backyard in Changhanmutai village in Wuchuan county, Inner
Mongolia, said he had not heard anything about the subsidies and no officials
had notified him. "They [my fellow villagers] said we should have gotten a 100
yuan monthly government subsidy for each of our cows since last month, but so
far I have not seen any cash in my hands," Mr Feng said. He said he did not plan
to check with village or county officials about the money because "at the end of
the day, it's still up to them to decide everything". Mr Feng said his milk
supply contracts with Mengniu had remained in effect in the past month, even
though many dairy farmers near Hohhot said dairy companies had stopped buying
their milk for a short time last month. Mr Feng said he was still selling milk
at 2.6 yuan a kilogram, the same price as on September 5. Mr Feng said the price
would probably go up slightly over the winter because cows produced less milk in
cold months. The tainted-milk formula has killed at least four babies on the
mainland, and 10,666 children, including eight in a critical condition, are
still in hospital. For a list of tainted products go to
The "golden week" national
holiday failed to deliver its traditional boost to property sales and deal
volumes across the country sank to their lowest levels in 10 years as buyers
stayed away from the market. The fall in transactions last week was recorded not
only in the traditional autumn property exhibitions held at key cities such as
Beijing, Shanghai, and Guangzhou, but also in secondary cities such as Nanjing,
Chengdu, and Tianjin. Shenzhen proved an exception, however, as new releases
reached a record high over the holiday period, helping to drive sales higher.
The golden week runs from September 29 to October 5 and is traditionally a peak
period for home buying. The autumn sales data is compiled by property agents in
different cities. "The holiday sales performance was the poorest I have seen in
the past 10 years," said Fu Wai-chung, a director of Hopefluent Group Holdings,
the biggest property agent in Guangzhou. Mr Fu said the poor response was
widespread and had affected cities across the country despite the fact that many
developers had prepared for the peak buying season by unveiling new marketing
lures to raise buying interest. Hopefluent has 200 branches in Guangzhou and
property brokerage businesses in 20 cities. "It is a disastrous signal to
witness such a nationwide drop in property sales during such a peak season,"
said Clement Luk Shing, a director and assistant general manager at Centaline
(China) Property in Shanghai. The anecdotal evidence from agents was supported
by data compiled by research and brokerage house ICEA Securities that showed
property sales in Guangzhou plunged 92 per cent to 74,000 square metres during
the golden week holiday, compared with 944,000 sqmetres a year ago. ICEA noted,
however, that sales at Guangzhou Agile Garden were better supported as a result
of discounted pricing. "We expect Guangzhou selling prices to continue to move
downward when more suburban projects will be launched and price wars intensify,"
the brokerage said. However, transaction volumes at the Nanjing autumn property
exhibition dropped more than 85 per cent to fewer than 40 deals during the
period. This compared with 284 deals a year ago, according to mainland property
news website Soufun.com. Asking prices at new projects in Nanjing fell 22 per
cent to 7,800 yuan per square metre from more than 10,000 yuan a year ago,
Soufun.com added. The lukewarm response came despite attempts by the Nanjing
government to lift demand by announcing 20 stimulus measures before the holiday
period. Two days before golden week was due to start, the government said it
would give homebuyers cash subsidies of up to 1 per cent of the value of a flat
for deals done from October 1. Meanwhile, property developers would be allowed
to defer the payment of various government charges. Other measures included
allowing homebuyers to borrow higher amounts from housing provident funds set up
to provide low-interest home loans, and a reduction in deed tax - levied on the
transfer of a property title - from 4 per cent to 2 per cent. However, Mr Luk
said the measures failed to trigger buying interest since the cash subsidies
were only of value to those who bought smaller flats and only saved "a few
thousand yuan". "But poor sales performance has now become a matter of a
collapse in confidence. Market sentiment will not improve significantly unless
the Beijing government announces a bailout plan for the property market," he
said. In the present climate developers would only attract buyers if they
offered steep discounts of at least 20 per cent, Mr Luk said. In Beijing,
transactions in the primary market dropped 53 per cent to 642 during golden week
and data for last month showed that sales were down 20 per cent on the previous
month, said Alan Ngok, the residential director for North China at DTZ in
Beijing. "Homebuyers in Beijing appear more cautious than in other cities as
developers have not yet offered large-scale price cuts," said Mr Ngok, who added
that he expected cash-strapped developers to respond to the poor demand by
offering substantial price cuts for projects in suburban areas to increase
sales. In Shanghai, 821 new units were sold during the city's four-day
exhibition, down 44 per cent from 1,480 units a year ago, and 36 per cent lower
than the 1,298 deals secured in 2006. Sales in Chengdu dropped 5 per cent to
3,134 units while transaction volumes in Tianjin last month totalled just 25 per
cent of the deals done during the same period last year, agents said. However,
in Shenzhen sales volumes rose 96 per cent to 521 deals during the holiday week
compared to 265 a year ago. Gerry Xu Feng, a researcher at Midland's Shenzhen
office, said the higher transactions were due to the fact that the number of
projects exhibited in the city's property exhibition reached a historical high.
There were more than 120 projects offered for sale and special prices were
available for most properties to push sales, Ms Xu said.
Visitors at Shanghai Aircraft Customer Service Co Ltd, which opened on October
7, 2008. The Commercial Aircraft Corporation of China Ltd opened its service
center in Shanghai on Tuesday, as China's home-made aircraft ARJ21 is ready for
test flights. The Commercial Aircraft Corporation of China Ltd (CACC) opened its
service center in Shanghai on Tuesday, as China's home-made aircraft ARJ21 is
ready for test flights. Known as the Shanghai Aircraft Customer Service Co Ltd,
it is located in the Zizhu Science Industrial Park in Minhang district. The
center will provide aircraft maintenance and repairs, pilot training, aviation
equipment, leasing and consultation. Earlier this year, CACC announced it would
be manufacturing aircraft with a take-off weight of more than 100 tons and
capable of accommodating more than 150 seats. Jin Zhuanglong, CACC's general
manager, said since the launch of the company in May, its jumbo jet program had
been progressing steadily, and feasibility studies had begun. The company has
hired a team of domestic and overseas professionals to work on the aircraft's
design and manufacture. CACC's chairman, Zhang Qingwei, said the first trial
flight will be held at Shanghai's Pudong International Airport. However, he
declined to give a date. Meanwhile, China's first domestically produced
commercial regional jet, also manufactured by CACC, is scheduled for its maiden
test flight at the end of next month. The ARJ21 has entered the final stages of
development, with test pilots putting the aircraft through it paces. For its
final test, the aircraft will be equipped with passenger seats. "Everything is
ready. I'm confident of a smooth maiden flight," Zhang said. The ARJ21, which is
expected to sell for between $27 million and $29 million, can seat 70 to 110
passengers and has a maximum range of 2,000 nautical miles. It is the world's
first aircraft designed for China's natural environment and is capable of
landing and taking off in extreme weather conditions. So far the company has
received 200 orders.
China, following other economies,
cut the benchmark deposit and lending rates by 0.27 percentage point Wednesday
to anchor its economy amid a worsening global financial crisis.
US-based online recruitment service provider Monster yesterday secured complete
control of ChinaHR.com, paying $174 million for the remaining 55 percent stake
in the Chinese recruitment site. Monster had said in its financial report for
the second quarter of 2008 that it would pay $200 million to $225 million in
cash to ChinaHR.com shareholders. Monster said in 2005 that it would take the
remainder if ChinaHR.com was unable to get listed within three years. Analysts
said the failure of the IPO was due to problems with ChinaHR.com's
profitability. The company suffered a loss of 150 million yuan in 2007,
according to Monster's financial statements for the year. "The acquisition will
give Monster a stronger presence in the Chinese online recruitment market," said
Edward Lo, executive vice-president of Monster China, who takes over as the
interim CEO of ChinaHR.com while maintaining his current Monster post. China's
online recruitment market is led by NASDAQ-listed 51Job with a 29 percent share,
followed by ChinaHR.com with 24 percent, according to Beijing-based consulting
firm Analysys International. Although Monster's acquisition comes amid a slump
in US online labor demand due to the global financial crisis, Lo said it is an
opportune time for Monster to invest in the Chinese market. "The economic
situation which has ups and downs is a cycle," he said. "The merger is not a
short-term investment but a long-term strategic partnership to create the best
global recruitment platform." Liu Tong, an online industry analyst from Analysys
International, said it is a good deal for Monster from a long-term perspective
as China's online recruitment market is growing rapidly. It grew 36 percent
year-on-year in the first quarter of 2008. In addition, ChinaHR.com's loss does
not mean it has operational problems, he said. In 2007, it achieved a revenue of
281 million yuan. The merger with Monster means there will be enough cash flow
to enhance its brands, he added. More than 90 percent of ChinaHR.com's revenue
comes from the online recruitment compared to 33 percent of its rival 51job's,
Liu said, adding it means there is plenty of space for Monster to diversify
ChinaHR.com's future revenue structure.
A piling machine works at the
loading bay of Qinhuangdao harbor. With just two exceptions, China has
officially halted all of its coal-to-liquids (CTL) projects due to environmental
and economic concerns. In a notice posted on its website on September 4, the
National Development and Reform Commission (NDRC) said that, apart from two
projects operated by the Shenhua Group, none could go ahead before receiving
official approval, because CTL is "a technology-, talent- and capital-intensive
project at an experimental stage with high business risks". The two Shenhua
projects are one it has already launched in the Inner Mongolia Autonomous Region
and an indirect coal liquefaction project in Ningxia Hui Autonomous Region
jointly invested by Shenhua Group and South Africa's Sasol Limited. Direct CTL
is differs from indirect CTL, in that it converts coal directly to liquid fuel,
bypassing the process of gasifying coal into syngas. The move aims to "control
the business risks of the country's coal-to-oil industry", the NDRC said. The
commission also called on local governments not to approve any new coal-to-oil
projects. The new restriction presents coal giants such as Yanzhou Mining Group,
which already has several CTL projects under construction, with a big challenge,
said China Coal Information Institute President Huang Shengchu. Sasol said on
Sept 7 it had suspended its indirect coal liquefaction project with Shenhua in
Yulin, Shaanxi province. The project had been expected to cost $5-$7 billion and
achieve an annual capacity of 3.6 million tons. "The NDRC's notice has darkened
prospects for CTL investors in China", Huang said. Rising crude oil prices had
sparked huge investor interest in CTL over the past two years. Some local
governments and enterprises have already started coal-to-oil projects, including
major coal mining groups such as Inner Mongolia-based Yitai Group,
Shandong-based Yanzhou and Shanxi-based Lu'an. China is a country with rich coal
reserves, which satisfy 70 percent of the country's energy needs. "The main
reason China sought to obtain oil from coal was to help ensure energy security,"
said Shenzhen-based Fortune Securities analyst Zhang Ke. The Shenhua plant that
is already operational is expected to convert 3.5 million tons of coal into 1
million tons of oil products annually. That's the equivalent of about 20,000
barrels a day, while China's daily oil consumption in China is around 7.2
million barrels. Inner Mongolia had been planning to turn half of its annual
coal output into CTL and other chemicals by 2010, requiring around 135 million
tons of coal. However, CTL "is not suitable to be developed on a large-scale
basis due to environmental concerns", said Zhang. Environmentalists are
concerned about the huge amounts of water required by the process and its large
carbon dioxide emissions. Every three to five tons of coal can be converted into
one ton of oil products such as diesel for cars, while in the process about 10
tons of water is needed to produce every ton of oil products, according to a
report by Bohai Securities. Many regions with large coal reserves have long-term
drought problems, meaning that CTL projects would put great pressure on the
local environment. In addition, this lack of water would also limit the
long-term development of the CTL industry. Though CTL technology was developed
about 100 years ago, it has been only used by Germany and South Africa when
those two countries had difficulties obtaining oil.
DAB lawmaker Jasper Tsang Yok-sing,
pictured here after winning his seat on September 8, was elected as the new
president of Legco on Wednesday. Democratic Alliance for the Betterment and
Progress of Hong Kong (DAB) lawmaker Jasper Tsang Yok-sing has been elected as
the new Legislative Council president by legislators. The fourth Legco held its
first meeting on Wednesday at 11am in the Chamber of the Legislative Council
Building. During the meeting, 60 newly elected legislators took the Legislative
Council Oath and elected the president of the Legco. Mr Tsang, who received 36
votes, beat Democratic Party’s Fred Li Wah-ming by 12 votes, said he was
grateful for lawmakers’ support. He said he would do his best to live up to
people’s expectations. He also advised lawmakers not to hesitate in voicing
their concerns – but also to work together. His rival, Mr Li, told local media
there were 23 pan-democrats legislators, but he had received 24 votes. The
result was better than his expectations. He said the extra vote might have come
from an independent legislator. Mr Tsang is the founder of the DAB – the largest
pro-Beijing political party in Hong Kong. The DAB was largely supportive of the
government’s controversial attempt to implement Article 23 of the Basic Law in
2003. Mr Tsang has earlier pledged that he would not cast a vote or participate
in key debates about political issues if elected Legco president. 
The Hong Kong Monetary Authority
announced it will cut its key interest rate by 100 basis points from Thursday,
as central banks across the region continued to pump in billions of dollars into
the system to address the credit crunch that has wreaked havoc on markets
worldwide. HKMA said the base rate would now be calculated using the US Federal
Reserve’s benchmark plus 50 basis points, meaning the Hong Kong rate would
effectively be reduced to 2.5 per cent from 3.5 per cent. It followed a strong
hint from Fed chief Ben Bernanke that a US rate could be coming soon. Hong
Kong’s currency is pegged to the US dollar, and the city usually follows changes
to the US rate. But HKMA chief executive Joseph Yam Chi-kwong said the decision
had taken account of the current conditions on global markets. He said he hoped
the move would ease the pressure on banks to increase lending rates in the face
of tight credit markets. But the short-term Hong Kong interbank offered rates (Hibor)
were higher on Wednesday even after the HKMA’s announced its cut in its interest
rates. The overnight Hibor was fixed at 2.11429 per cent at 11.15am HK time, up
from 1.75000 per cent on Monday following the Chung Yeung Festival holiday on
Tuesday. The one month Hibor rose to 4.39714 per cent from Monday’s 4.08214 per
cent. Meanwhile Japan and Australia pumped US$15 billion into money markets as
governments across the region tried to ease the credit crunch pummelling world
stock markets. “These sorts of measures aren’t working anymore,” said Hiroichi
Nishi, a broker at Nikko Cordial in Japan. “It’s like you’re trying to pump
blood into a heart with clogged arteries.” The Bank of Japan injected 1.5
trillion yen (HK$114.99 billion) into the money markets, its 16th straight day
of intervention, while Australia’s central bank pumped in A$1.21 billion
(HK$6.77 billion). Governments are trying to keep funds available to fight off
the credit crunch, first sparked by the subprime loans mess in the United States
that set off a chain reaction of chaos on world markets. Officials said Britain
was set to announce a rescue package for its ailing banking industry before
markets opened there, after key bank shares tumbled 40 per cent on Tuesday amid
a global sell-off by panicked investors. In Washington, the US Federal Reserve
said it would buy up short-term debt in an effort to kick-start credit flows,
describing the move as “necessary to prevent substantial disruptions to the
financial markets and the economy”. And European finance ministers agreed to
increase an EU-wide savings deposit guarantee to 50,000 euros (HK$528,000) from
30,000, saying they would coordinate their response to the financial crisis. But
nothing has worked so far to slow a sell-off on share markets across the globe.
Iceland, which has been hit hard by the crisis, meanwhile nationalised its
second largest bank, Landsbanki, and gave its biggest, Kaupthing, a US$678
million loan. Its third largest bank was nationalised last week. Russia also
agreed to negotiate a 4 billion euro emergency loan to help Iceland’s fight
against national bankruptcy. The European Central Bank pumped US$50 billion back
into interbank money markets, but it said banks sought more than twice that
amount. European stock markets had a mixed performance on Tuesday, with gains in
Paris and London and a drop in Frankfurt. The London FTSE 100 index of leading
shares rose 0.35 per cent and the CAC 40 in Paris gained 0.55 per cent, while in
Frankfurt, the DAX fell 1.12 per cent.
Thai Airways International said on
Wednesday it would cut flights to Asian countries from next week due to a fall
in passenger numbers as an industry association warned that the next 12-18
months will be “extremely difficult” for Asia-Pacific carriers. Passenger
numbers are falling as Americans and Europeans curtail travel plans and the
current financial market turmoil undermines consumer confidence, the Association
of Asia Pacific Airlines (Aapa) said. “The biggest challenges right now are
weakening passenger demand, particularly for first and business class travel,
and continuing uncertainty about the global economic outlook,” AAPA
director-general Andrew Herdman said. “Asian carriers are therefore bracing
themselves for a period of continued turbulence, hopefully without losing sight
of their long term strategic goals and future growth opportunities. “The next
12-18 months will be extremely difficult times for airlines and some won’t
survive the current crisis.”
Between March and July, wine imports to Hong Kong increased significantly in
value compared with the same period last year, Permanent Secretary for Commerce
and Economic Development Yvonne Choi Ying-pik says. In this year’s budget, the
government scrapped wine duties to promote the development of wine-related
businesses such as auctions, storage and distribution of fine wine. Ms Choi said
lifting these duties has had an enormous impact. “In the five months since the
duty was lifted, between March and July this year, wine imports into Hong Kong
have increased by about 95 per cent in value compared to the same period last
year,” she said. Ms Choi made the comments late on Tuesday during a signing
ceremony between Hong Kong and Bordeaux on Co-operation in Wine-related
Businesses in Bordeaux. Hong Kong is now the only place in Asia to have no
value-added tax or other duty on wine. Thailand and India have had some of the
region’s highest wine taxes while the mainland’s taxes still remain at about 50
per cent. “The Hong Kong government has reduced wine duty from 80 per cent to 40
per cent last year, then to zero in February,” Ms Choi noted. “This has made
Hong Kong the first free wine port among major economies,” she added. Wine
imports from France – one of the world’s largest wine producers and Hong Kong’s
biggest wine supplier – increased by as much as 116 per cent during this brief
period. “Wine-related activities have surged; new companies have established in
Hong Kong and existing companies have flourished,” the economic development
secretary said. “Wine companies are expanding their wine storage facilities,
wine auctions have returned and achieved record-breaking sales,” she added.
Looking at the current market, she said Hong Kong has a great potential to be a
successful wine trading hub in the region. Ms Choi said that other plans to
promote the industry in Hong Kong were underway. These include working with the
tourism boards to organise a wine and gourmet festival next year and to
encourage ‘Great Wine Capital Global Network’ to have their meetings in Hong
Kong. “With expertise, care, time and love, our relationship will mature like
your fine Bordeaux wines,” she said. 
The Old Tai O Police Station, a
grade 3 historic building. An NGO set up by a developer is bidding for a
revitalisation project to turn the Old Tai O Police Station into a boutique
hotel. The police station is one of seven sites designated for the government's
revitalisation scheme, announced in October last year. The government said the
vacant public structures had "limited commercial viability", but the grade 3
historic building in remote Tai O had drawn interest from developer Sino Land.
One of the two shortlisted bidders, alongside the Hong Kong Young Women's
Christian Association, is Hong Kong Heritage Conservation Foundation Limited. A
search on the Companies Registry found that its sole director is Sino Land
executive director Daryl Ng Win-kong. Set up in December last year, it was
initially named Nice Brilliant Limited but changed its name in March. A Sino
Group spokeswoman said Mr Ng had set up the NGO solely for charity, and it was
administratively independent. "Its proceeds will not go to shareholders but
benefit the community," she said. Mr Ng's NGO had not taken part in local
conservation projects and had no other board members, but would form local
partnerships if it won the bid, she said. In Singapore, Sino Group handled the
Fullerton Heritage project, which turned a former post office into a five-star
hotel. In a letter to Tai O residents, Mr Ng introduced his NGO and its boutique
hotel plan, saying it was "set up by Sino Group, a well-established real estate
developer and a top dog in the hotel industry". The hotel would organize
activities for locals, he said. The revitalization scheme for historic buildings
seeks to encourage NGOs to run social enterprises and create jobs. Successful
bidders can, at the most, apply for HK$5 million for initial costs, and occupy
the building at a nominal rental. Although Mr Ng's NGO is an eligible applicant,
its association with Sino Land has raised concerns that it runs counter to the
scheme's intention to help NGOs. Antiquities Advisory Board member Ng Cho-nam
said he was worried it would reduce the chances for less well-off NGOs to
participate. "The scheme is a precious opportunity," he said. "If the chance is
given to one backed by a large developer, this would seem unfair and discourage
other NGOs from taking part. The vetting committee should consider carefully,
and encourage NGOs with a track record." Another board member, Bernard Lim Wan-fung,
agreed Mr Ng's NGO was eligible, but added that the vetting committee should
look at its objectives and track record. Outgoing legislator Fernando Cheung
Chiu-hung, a lecturer in applied social sciences at Hong Kong Polytechnic
University, said it was inappropriate for businesses to compete with NGOs.
"Normally a charity is founded by people who have been in social service for
some time," he said. "Without a track record, this one-man NGO would appear a
company more for business interest." Lawmaker Alan Leong Kah-kit said: "The most
important thing is whether the bidder can minimise alteration works and keep the
building open to the public at an affordable price." Bernard Chan, chairman of
the scheme's vetting committee, said it would accept applications only from
NGOs, and would ensure the winner would be non-profit making. He said Ma Wan's
Fong Yuen Study Hall might be pulled from the revitalization list because it was
too small and remote to attract visitors, while Lui Seng Chun, a former Chinese
medicine shop in Lai Chi Kok, could be "challenging" for revitalization. 
The government is considering building a
subway instead of an MTR station to link Happy Valley to Causeway Bay, a source
said. MTR Corp, according to the source, is likely to give up the idea of a
station at the racecourse because the government believes it is better to link
Happy Valley to popular areas in Causeway Bay, such as Times Square and Victoria
Park, through a subway system. The subway plan also includes building a mall.
"It is technically more viable to do so," said the source, who explained that if
the MTRC was to build a station at the racecourse, the railway would have to
pass through narrow Wong Nei Chung Road. "We would need to block one lane for
construction and keep the other open for traffic." The new plan is also more
economically sound, the source said, because it is easier to build a subway than
a railway. As well as generating revenue from shops through rentals, the project
would give Happy Valley residents easier access to Causeway Bay. The government
has allotted HK$7 billion to building the South Island Line, which will link
Aberdeen with Admiralty. However, it will not pass through Happy Valley despite
a request from the Hong Kong Jockey Club. The club is not keen to pay HK$1.3
billion for a station at the racecourse. It will take only nine minutes to
travel from South Horizons in Ap Lei Chau to Admiralty when the line is
completed in 2015, but 11.5 minutes if it were to pass through Happy Valley. The
railway would have to be extended from seven to nine kilometers. The government
believes the 19,000 people living in Happy Valley by 2016 will not need an MTR
link. Happy Valley residents have yet to reach a consensus over the building of
an MTR station. While some favor it because of convenience, others do not want
to be put out by the construction.
China filmmaker Pan Jianlin struggles to
find the right words to describe what he saw at Muyu Middle School six days
after the earthquake that devastated Sichuan province. Officially, nearly 300
children died in the school's dormitory, which collapsed as they were taking
their afternoon nap. They were among the tens of thousands killed in the massive
May 12 tremor. "The entire dormitory was still in a pile," Pan said. "There was
just nothing left but rubble. Nothing can prepare you for such a scene." Pan's
gripping documentary about the quake - Who Killed Our Children? - makes its
world premiere at the 13th Pusan International Film Festival on Sunday. The
film, the first independent documentary about the disaster, takes an unflinching
look at the devastation caused by the 8-magnitude quake and the effect on
survivors. It devastated wide areas of Sichuan and left more than 87,000 people
dead or missing - many of them children buried in schools that parents say were
built with shoddy materials. Pan tells the story of the school, located in
Qingchuan county, from both sides - grief-stricken parents point their fingers
at officials, who say the quake was simply too powerful. "The quality of these
buildings was terrible," the director said. "This is a big problem in China.
Corruption is also a problem. It is shameful. And the parents are looking for
answers. They were in such deep sorrow." The official death toll from the school
was 286 children, but some parents - who say the doors to the dormitory were
locked when the quake struck - claim the figure was closer to 600. Most of the
bodies, they say, were found piled on top of each other near the exits, some
hands still gripping door handles. Pan, who was in Beijing at the time of the
quake, said he immediately packed his camera and rushed to Sichuan. "I wanted to
see this, and for people to see this - to see what was actually going on," he
said. Making the film was not easy, Pan said. While survivors were willing to
face the camera in the immediate aftermath of the quake, probably because they
were still in shock, the authorities were not so keen for the footage to be
aired. Three weeks after the quake, when the entire region had been sealed off
to the media, officials paid Pan a visit in Beijing and confiscated his tapes.
But "I had made copies by then", he said. After Pusan, Pan said he hoped to take
his film to other international festivals and insisted he was unconcerned about
a possible backlash at home. "I just hope as many people as possible can see
this film," he said. "We don't want these things to be forgotten."
China's Health Ministry has issued new safety standards for dairy foods
following the scandal of melamine-contaminated milk products that sickened
thousands of babies. The industrial chemical was intentionally added to diluted
milk to make it seem high in protein content. More than 50,000 babies were
sickened as a result of consuming contaminated milk powder. At a press
conference on Wednesday, Wang Xuening, deputy director of the ministry's Health
Supervision Bureau, released new rules for the dairy industry. Wang said a
maximum of one milligram of melamine per kilogram of infant formula was the new
limit. A maximum 2.5 milligrams per kilogram was allowed for liquid milk, milk
powder and food products containing at least 15 percent milk. "Melamine is
neither a raw food material nor a food additive," he said. "Deliberately adding
the chemical to food items is prohibited. Once such cases are spotted, they will
be investigated according to law." Melamine is used to make plastics and food
packaging materials. When asked why China allowed any melamine at all dairy
products, Wang said it was impossible to have "zero levels". The chemical can
seep into food from its packaging. "The limits mainly aim to curb the deliberate
adding of melamine," he said. According to the standards of the Unites Stated
Food and Drug Administration, the safety reference value (tolerable daily
intake, or TDI) for melamine is 0.63 milligrams per kilogram of body weight per
day. A child weighing 30 kilograms would have to drink around 1.2 kilograms of
milk powder containing 15 milligrams of melamine per kilogram a day to have
exposure reaching the TDI. In tests by China's quality watchdog, the State
Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), last
month, Sanlu products had the highest content of melamine, at 2,563 milligrams
per kilogram, out of the 109 baby formula producers tested. The Sanlu Group, a
leading dairy producer based in the northern Hebei Province, admitted on Sept.
12 it had found some of its baby milk powder products were contaminated with
melamine. Contaminated baby formula has killed at least three infants and left
more than 53,000 with urinary tract problems, including kidney stones. About
13,000 infants are still being treated in hospitals. So far, 27 people have been
arrested over the scandal. 
Citigroup Inc, the largest U.S. bank,
said yesterday that China's banking watchdog has approved its plan to open two
microcredit firms in Hubei Province, tapping the nation's vast rural market.
Citigroup, the first overseas lender allowed to establish such institutions in
the country, plans to set up the two firms in Gong'an county and the city of
Chibi, which are scheduled to open in the next few months. The move comes as
major rivals including HSBC and Standard Chartered are opening rural outlets in
order to expand in the nation's underdeveloped regions and the government is
relaxing controls on private financing to support thousands of small and
cash-strapped manufacturers. Citigroup, which has eight branches and 20
sub-branches on the mainland, was one of the first locally incorporated foreign
banks in China. The financial giant, which has a stake in Shanghai Pudong
Development Bank as well as de facto management control of Guangdong Development
Bank, said Gong'an and Chibi have tremendous lending needs due to their rapidly
developing agriculture and robust economies. "We feel very excited and proud of
being allowed to set up the microcredit firms," said Citi China CEO and Chairman
Andrew Au. "It's a very important new element in the process of Citi's operation
and investment in China. We deeply understand the urgency to expand finance
services in China's rural areas, a goal we believe could be achieved by the mode
of setting up microcredit companies."
Taiwan police officers check the
amount of counterfeit money that they confiscated from a criminal gang in the
Gaoping Region of China’s Taiwan Province, Oct. 5, 2008. Taiwan police and the
local Procuratorate cracked down a criminal organization making counterfeit
money and seized over 100 million fake Renminbi notes.
Olympic diving champion Guo Jingjing
poses for the promotion of a mammary cancer prevention campaign.
Veteran Beijing loyalist
politician Tsang Yok-sing - tipped as the next Legislative Council president -
said yesterday it was unreasonable that some pan-democratic lawmakers were
barred from entering the mainland to exchange views. The founder and former
chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong
said he was optimistic about breaking the ice in the future. Mr Tsang was
questioned on the issue during a two-hour debate ahead of the election for the
presidency, which will be held at the first meeting of the new legislative term
tomorrow, after members have been sworn in. With backing from the
Beijing-friendly camp, he is widely expected to succeed to the post left vacant
by the departure of Rita Fan Hsu Lai-tai. But his rival, Fred Li Wah-ming of the
Democratic Party, said he was still confident of picking up some votes, apart
from those of the pro-democracy camp's 23 legislators. The two men each fielded
20 questions from fellow legislators. Civic Party legislator Audrey Eu Yuet-mee
asked Mr Tsang if he would pledge to build constructive relations between the
legislature and mainland authorities. Mr Tsang said it was unreasonable for the
mainland to ban entry for some pan-democrats who wished to exchange views with
mainland authorities. "The Legco president should avoid repeating the same
scenario. I will do my utmost to deal with it. But it is the mainland
authorities who make decisions," he said. "I believe the question could be
solved to break the ice. It would be good for the mainland if lawmakers were
allowed entry to the country." "Long Hair" Leung Kwok-hung of the League of
Social Democrats was denied an entry permit to Sichuan in early July while he
was on the way to the airport with a Legco delegation. Mr Tsang said he was
optimistic about his ability to help a lawmaker gain entry to the mainland if a
similar incident happened again. Regardless of who wins tomorrow, it will be the
first time that a Legco president has had party affiliations, raising doubts
about the president's impartiality. But Mr Tsang and Mr Li disagreed with
suggestions that the post should only be taken up by an independent. Mr Leung
challenged both candidates to say if they were members of the Chinese Communist
Party. Mr Tsang sidestepped the question and replied: "I reserve my DAB
membership. "I pledge, if elected, not to be influenced by any political
parties, as this might affect my impartiality." Other legislators questioned
whether the candidates, if elected, would follow Mrs Fan's practices. Tanya Chan
of the Civic Party asked if they would allow debates on the decisions of the
National People's Congress, which Mrs Fan banned. Noting that the Basic Law
allowed Legco to debate issues concerning the public interest, Mr Tsang said
that debates should be allowed even on the NPC's interpretation of the Basic
Law, since the issue involved the public interest.
Home purchases in Hong Kong grew
13.2 per cent to 5,115 deals last month, but agents predict transaction activity
will drop in the fourth quarter on fears of rising interest rates, higher
unemployment and an unstable economic outlook. By Monday, 665 transactions had
been closed in the primary market, data collected by Centaline Property Agency
showed. This compared with 187 deals in August. In the secondary market, there
were 4,450 deals, a 2.8 per cent rise from August, Centaline estimates. The
agent said total property transactions, which include sales of office and
industrial units, reached 7,400, a 15.6 per cent growth from August's 6,402.
Total transaction value rose 32 per cent to HK$23.8 billion. The Land Registry
will announce the official property transaction figures this week. Centaline
said the surge in primary sales last month came from Le Bleu, a 524-unit mass
housing development in Tung Chung. The developer, HKR International (SEHK:
0480), has sold more than 300 units since the launch in August. However, agents
said the outlook for the sector was negative. Hong Kong Properties chief
executive Fredy Wu Yat-fat said the property market was clouded by uncertainties
such as interest rate rises and anticipated rising unemployment. "The weak
market sentiment is likely to prevail over the next few months," said Mr Wu. He
expected monthly property transactions to remain between 6,000 and 7,000 in the
next three months with prices dropping 10 per cent. He also said the company had
cut its headcount by 100 to 700 to reduce costs. Ricacorp Properties and
Centaline expect home prices to fall 5 to 8 per cent within one month. Amid
slowing property sales, New World Development executive director Stewart Leung
Chi-kin reportedly said property agents were responsible for the rising number
of loss-making secondary market transactions at its Harbor Place in Hung Hom.
Anxious owners of flats in the development wanted to resell the units before the
completion of the transactions by the end of this year. Mr Leung was quoted by
Apple Daily as complaining that agents had spread word a number of buyers at
Harbor Place faced mortgage financing problems as banks did not give sufficient
valuations amid flagging market conditions. The newspaper said buyers had had to
settle valuation shortfalls in cash before they could get the 70 per cent
mortgage loan. This triggered market rumors that a substantial number of buyers
at Harbor Place might default on their deposits and walk away from the
purchases. Mr Leung was quoted as saying: "I will report to the Estate Agent
Authority if we receive complaints from buyers [that] agents have provided them
inaccurate information." He assured that all buyers capable of repaying their
loans would be able to secure mortgage loans from banks, including HSBC (SEHK:
0005, announcements, news) and Bank of East Asia (SEHK: 0023). An EEA spokesman
said the authority would investigate if it received a complaint from the
developer. "Agents have the responsibility of providing accurate property
information to ensure their principal interest," said the spokesman. Mr Wu of
Hong Kong Properties said it was normal for overstretched borrowers to offload
their units even at a loss when market sentiment turned sour. "Owners will
double-check with the banks' property valuation and will not make the decision
simply depending on our advice," he said. Rocky Wong Chun-wai, Centaline's
senior sales director for Kowloon, said half of 10 transactions at Harbor Place
were recorded at a loss in the secondary market. Some sellers resold the units
at as much as 20 per cent lower than their purchase prices. There are about 500
Harbour Place units on the second-hand property market.
The country's dairy industry
was plagued by chaotic production and lax government supervision, the State
Council said yesterday, vowing it would revamp the industry and hold producers
and local officials accountable. Premier Wen Jiabao chaired the State Council
meeting - the second since the tainted-milk powder crisis broke - and announced
steps to shake up the industry and deal with the aftermath. While the meeting
blamed dairy companies for "greed and ignoring people's lives", it did not
comment on the earlier covering up of the crisis. At least four infants were
killed and tens of thousands made ill after drinking milk tainted with the
industrial chemical melamine - used by dairy farmers to cheat on protein tests
of their milk. The crisis also led many countries to ban Chinese dairy products
and some products manufactured using Chinese-made ingredients. The State Council
meeting blamed unscrupulous individuals and businesses for the crisis, but said
it had also exposed deep-rooted problems in the industry. "At the same time,
this has exposed chaos in our country's dairy product production and
distribution and serious shortcomings in oversight and administration," a Xinhua
report said of the meeting. "It also exposed that China's dairy production and
distribution order has been chaotic and supervision has been gravely absent.
"Those responsible for the contamination - including producers, traders and
officials - should be penalised in accordance with laws and regulations." Last
month, authorities in Hebei province , where the problem was first exposed,
arrested 22 people including Tian Wenhua , head of the Sanlu Group in
Shijiazhuang . Officials have blamed Sanlu for delaying reporting of tainted
milk to higher authorities. Officials of the World Health Organisation have
described the delay as either "deliberate" or "ignorant". Also yesterday, Xinhua
reported six people connected with the production and sale of melamine had been
arrested in Inner Mongolia. The arrests were made after police investigated
Mengniu and Yili - two major dairy companies based in Hohhot - but Xinhua did
not identify the suspects or explain whether they were related to the two
companies. The reports came as more countries announced restrictions or stepped
up controls over China-made dairy products. Finland has withdrawn Chinese Koala
biscuits and White Rabbit sweets from the market as a precaution, its Food
Safety Authority said. Japan, meanwhile, has stepped up inspection of China-made
animal feed and pet food that may be laced with melamine, Japanese agriculture
officials said. In Hungary, melamine had been found in products in several
Chinese restaurants, the agriculture ministry's food safety officer, Miklos Suth,
told a radio station, but the content did not reach dangerous levels.
Melamine-tainted Nestle products found on Saturday were still being examined,
and "if the excess melamine content is confirmed, the entire stock will be
destroyed", Mr Suth said.
The photo taken on Oct. 7, 2008 shows
the Qinghuai River in Nanjing, capital of east China's Jiangsu Province. The
Habitat Scroll of Honor Special Citation was awarded to Nanjing, the UN-HABITAT
announced in Nairobi, capital of Kenya, on Oct. 6.
Picture released by China's manned space
project on Oct. 5, 2008 shows the image of China's Shenzhou-7 spaceship, taken
by a small monitoring satellite six seconds after it was released from the
spaceship on Sept. 27, 2008. Launched about two hours after Chinese astronaut
Zhai Zhigang finished the country's first spacewalk, the monitoring satellite
has sent back over 1,000 pictures of the spaceship. The shadow on the spaceship
was that of the monitoring satellite.
The
maiden flight of China's first homegrown regional jet, the ARJ21-700, could be
delayed to the end of November, the Commercial Aircraft Corporation of China
Ltd. (COMAC) announced on Tuesday. The company said last month that the maiden
flight was expected to be in October, but it could be delayed depending on the
weather, said COMAC chairman Zhang Qingwei. The ARJ21 had entered the final
stage of development, with test pilots practicing starting-up and taxiing, Zhang
said at the launch of COMAC Shanghai Aircraft Customer Service Co., Ltd. The new
firm will provide aircraft maintenance and repair, pilot training, aviation
equipment and materials leasing and consulting for aviation technologies for
both large planes and regional aircraft. The plane for the maiden flight had
three seats: two for the test crew and one for an observer, he said. The third
test plane would be equipped with passenger seat. "Everything is ready after
numerous tests. I'm confident of a smooth maiden flight." Delivery of the
aircraft would begin after 18 months of test flights of four more ARJ21s, said
Xu Jun, deputy head of the Shanghai Aircraft Manufacturing Factory. The ARJ21,
an acronym for "Advanced Regional Jet for the 21st Century," is the first
regional jet that China has fully developed independently, in accordance with
the standards set by General Administration of Civil Aviation of China (GACAC),
Federal Aviation Administration (FAA) and Joint Aviation Authorities (JAA). The
ARJ21, which is expected to sell for 27 million to 29 million U.S. dollars, can
seat 70 to 110 and has a maximum range of 2,000 nautical miles. It is the
world's first aircraft designed for China's natural environment and is capable
of landing and taking off in the extreme weathers on western China. 
A worshipping ceremony for the Yellow
Emperor or Huangdi, legendary progenitor of the Chinese people, is held at the
tomb of Yellow Emperor to celebrate the Chongyang Festival, or the Double Ninth
Festival, in Huangling County, Northwest China's Shaanxi Province, October 7,
2008. Chongyang Festival is considered a traditional occasion to pay respects to
the aged and falls on the ninth day of the ninth month on the Chinese lunar
calendar, or Oct. 7 this year. 
Potential homebuyers visit a real
estate exhibition in Shanghai.The average number of daily deals over the holiday
week fell 72 percent year-on-year in Beijing to 69 units, making it the worst
period so far this year for the property sector. Property transactions in
China's major cities hit a record low over the past National Day holiday as more
potential homebuyers adopted a wait-and-see attitude. Statistics from the
Beijing Real Estate Transaction website revealed that the average number of
daily deals over the holiday week fell 72 percent year-on-year in the capital to
69 units, making it the worst period so far this year for the property sector.
Shanghai Autumn Real Estate Expo, regarded as a barometer of the industry,
attracted 130,000 visitors from October 1 to 4. Although this was the same
number as 2006, its transaction volume fell 37 percent over the same period.
Property prices up 5.3% in August. The situation is equally gloomy in Shenzhen,
where a five-day real estate expo was held over the National Day holiday. While
20,000 sq m of property was changing hands every day at the fair in 2006, the
daily amount ranged from 4,000 to 9,000 sq m this year. Luo Yuan, general
manager of Beijing-based Sunrun Real Estate Agencies, said one of the reasons
for the sluggish market was that property prices still remain beyond the reach
of many potential buyers. Liu Xia, a 31-year-old journalist, has been
flathunting in Beijing for more than six months but remains reluctant to take
the plunge. "Although some developments have offered discounts as high as 30
percent, a 100 sq m apartment along the eastern Fourth Ring Road still costs at
least 1.5 million yuan, and that's beyond my budget," Liu said. Liu is also
concerned that, should she buy property now, she will lose out if prices fall.
"There might be still room for property prices to slide," Liu said, adding she
is also quite concerned about the overall economy. Property prices in 70 major
Chinese cities rose 5.3 percent year-on-year in August, compared with 7 percent
in July, the National Development and Reform Commission said Monday. The growth
rate has dropped for eight months in a row this year, showing signs of
nationwide decline after a two-year surge.
Towards the end of this month is the time when
naughty souls get ready for the day when they can play pranks legitimately.
Those keen to indulge in a little mischief with friends, could find dinner a
tempting occasion. Regal Kowloon Hotel has created a haunted castle where dinner
is served in the company of monsters, spiders and ghosts. Wild phantoms will
serve a Halloween-themed set dinner for four along with a "Scary Dessert
Buffet." "First, you need to go through a haunted house, where bogey men await,
before you can enter the dining hall," says Queenie Suen, assistant marketing
communications officer of the hotel. "There, we have zombies and devils to
terrify you throughout the dinner." But, the dishes course, are a different
matter. "We want to play with the food, like decorating with small eerie
details, but not too much that makes them too foul to eat," she says. "And our
food is actually made out of Chinese ingredients. A twist to celebrate this old
western festival." The eight-course meal begins with Halloween Mess, which is
crispy snacks, and a Skeleton Shark's Fin Soup. While you munch on the snacks,
Pop Eye is watching - steamed prawn balls made to resemble floating eyeballs.
And then there is abalone on a carving fork. A small scarecrow made of bamboo
pith and mushroom will then be served with asparagus, followed by a Jack-O-
Lantern (steamed eggs in colored pepper). Barbecue pork ribs with udon in tomato
sauce and sauteed Chinese pudding cake in Shan ghai style will conclude the
dinner and open the way for the dessert buffet. There are a dozen scary desserts
including a bloody hand on a blueberry cheesecake and a spider on a raspberry
crunch cake. There is also a coffin, actually a chocolate mousse cake, as well
as a ghostly eye - lychee mousse and guava jelly.
The fortunes of the mainland's richest
billionaires are shrinking as hard times hit the country's stock and property
markets, according to a list released yesterday. Appliance and property tycoon
Wong Kwong-yu, with assets estimated at US$6.3 billion, tops the list of the
mainland's 1,000 wealthiest individuals, compiled by Shanghai-based analyst
Rupert Hoogewerf. The 39-year-old chairman of Gome Group, who had topped the
list in previous years but ranked fourth last year, displaced Yang Huiyan , who
last year led the list of billionaires with a fortune estimated at US$17.5
billion. This year Ms Yang, 27, ranked third, with US$4.9 billion, Mr Hoogewerf
said. Second this year was Du Shuanghua , a 43-year-old steel tycoon whose
wealth was estimated at US$5.1 billion, he said. The remaining names on Mr
Hoogewerf's list were due to be announced today. Last year, the fortunes of many
mainland billionaires swelled as stock prices soared to record highs, with the
benchmark Shanghai Composite Index surging to 6,124.04 points in mid-October.
Since then, share prices have fallen in a prolonged correction, with the
benchmark index now nearly 65 per cent below that peak. Property prices have
also fallen back, although not by as much. Last year, the top three on the list
had wealth estimated at US$35 billion. This year, their fortunes total less than
half that - US$16.3 billion. The ups and downs of the mainland's newly rich
often reflect broader trends in the economy. Ms Yang's fortune came from a
controlling stake in Country Garden Holdings, a real estate developer founded by
her father. The company's initial public offering in Hong Kong last April raised
some US$1.9 billion, and its share price soon more than doubled in value to
HK$13.50. Yesterday, the shares fell 8.1 per cent to HK$2.26. Mr Wong has
managed to insulate himself somewhat from market turmoil by selling off shares
in his private holding company to the company's publicly listed unit.
Lenovo is working with regulators and
operators in Asia and other markets to introduce its personal computer products
with WiMax capability. Mainland technology giant Lenovo Group (SEHK: 0992,
announcements, news) will release this week an upgraded portfolio of notebook
personal computers in the United States designed for the country's first
commercial WiMax network. The world's fourth-largest personal computer supplier
will offer six WiMax-ready laptops in Baltimore, Maryland, where US wireless
communications carrier Sprint launched last week the nation's first commercial
WiMax service. A mobile internet technology, WiMax is a contraction of worldwide
interoperability for microwave access - a standard that provides long-range
wireless data transmission in a variety of ways ranging from point-to-point
links to full mobile cellular-type access. Compared with the limited-range and
lower-speed Wi-fi internet access used in coffee shops, WiMax is like a
broadband internet hotspot that covers an entire city. David Critchley, a Lenovo
product marketing manager in Raleigh, North Carolina, said the initial line of
Lenovo products with built-in WiMax capability for Sprint's XOHM-brand service
would include the newly released ThinkPad X301 ultra-portable laptop, ThinkPad
T400 enterprise notebook, ThinkPad SL400 and SL500 for small businesses, and
IdeaPad Y530 for home users. "Lenovo has been at the forefront of the industry's
WiMax efforts, as we started well over a year and a half ago," Mr Critchley
said. He noted that Lenovo was working with regulators and operators in other
markets including within Asia to prepare for future product introduction. Taiwan
and Singapore already have commercial WiMax services, while Hong Kong is to
auction WiMax spectrum to operators in January next year. Charles Guo, an
analyst at JP Morgan in Hong Kong, said Lenovo's efforts to invest and market
WiMax-capable computers ran counter to what consumers preferred to buy during
the economic slowdown. "In a market downturn, everyone wants cheap, reliable
stuff," Mr Guo said. "Lenovo is focusing on products at the high end of the
market. Why would people unwisely spend their money on technology that is not
useful and unproven?"
Macau's booming casino revenue growth came to a
sudden halt last month as Beijing's crackdown on visits by mainlanders to the
city threatens to derail six years of post- liberalization gaming expansion.
Monthly casino revenue fell for the first time in nearly three years to 6.9
billion patacas, down 3.4 per cent from a year ago and 28 per cent from the
previous month, according to unofficial data reported at the weekend by
Portuguese news agency Lusa. September's year-on-year contraction in gaming
revenue comes in stark contrast to average monthly growth of 52.5 per cent in
the first eight months of the year and was Macau's smallest monthly takings in
13 months. The sharp fall-off comes after Macau's secretary for the economy and
finance, Francis Tam Pak-yuen, said last week that Macau's economic growth could
come in at just 10 per cent this year despite soaring 26 per cent in the first
six months. Casino revenue accounted for 60 per cent of Macau's gross domestic
product in the year to June and Mr Tam's forecast implies there will be a 36 per
cent decline in gaming revenue between September and December compared with the
same period last year. Since June, the central government has been reducing the
ease and frequency with which mainland passport holders, including non-permanent
Hong Kong residents, can travel to Macau. Industry watchers have been dismayed
by the measures, which to date no central or Guangdong provincial government
official has explained or commented on. "Overt actions to damage the health of
the emerging casino business in Macau just don't seem to be in the best
interests of China," one observer said. The restrictions have progressively
reduced the number of times individual mainland travelers can visit Macau - from
once a fortnight to once a month starting on June 1, then to once every two
months starting on July 1. In addition, from September 1 mainlanders travelling
to or working in Hong Kong have been required to apply for a separate permit to
visit Macau; previously they could visit on their Hong Kong permit. The South
China Morning Post (SEHK: 0583, announcements, news) reported last week that
from the start of this month, Guangdong residents will be able to visit Macau
only once every three months. Shares in SJM Holdings have fallen 53 per cent
below their July initial public offering price, while shares in the other five
Macau casino operators have fallen between 51 per cent and 87 per cent in the
past 12 months due to the visa crackdown, concerns that a junket commission war
will eat into profit margins and the prospect of slower future revenue growth.
Asian Coast says the Ho Tram project will include twin casino hotels offering
2,300 rooms, 180 gaming tables and 2,000 slot machines. The developer of a
planned US$4.2 billion ocean-front casino resort complex in Vietnam is
considering a Hong Kong share offering and an entry into Macau's booming market
for high-rolling gamblers. Mike Aymong, the chairman of private Canadian firm
Asian Coast Development, said the company planned to open the US$1.4 billion
initial phase of its Ho Tram Strip project by late 2011 with twin casino hotels
offering 2,300 rooms, 180 gaming tables and 2,000 slot machines. "We are
considering an [initial public offering] in the next two years but we're waiting
for the right time," Mr Aymong said. "Hong Kong would be our first choice.
There's a huge appetite there for gaming companies and they understand the
business." The projected capital to be raised from the issue would be about US$1
billion, he said. The financial turmoil in recent months has presented
challenges for regional gaming firms seeking to tap the debt and equity markets
to fund new projects. Las Vegas Sands Corp has cut its borrowing target from
US$7 billion to US$5.2 billion in its current attempt to raise funds for Macau
projects, while the retail portion of SJM Holdings' HK$3.85 billion share offer
in July was heavily undersubscribed. Mr Aymong said Asian Coast had prepared an
US$800 million to US$900 million debt offering but planned to ride out the
financial storm before taking it to market. "You'd have to be a fool not to be
concerned about the marketplace, so we just have to pick our timing and pick our
price. We've got enough money where we can start the pre-construction and start
building, and when the market opens back up, we'll go out and do the debt
offering." Asian Coast is 26 per cent owned by Mr Aymong and chief executive
David Subotic. Wall Street financier Philip Falcone's Harbinger Capital Partners
holds another 26 per cent, and other shareholders include Bessemer Venture
Partners and Southpaw Asset Management. The Hong Kong share sale would be in
addition to the debt offering to help cover costs of the US$1.4 billion initial
phase of the project and fund future phases. Asian Coast's Ho Tram project spans
222.6 hectares including 2.2km of beachfront in Bang Ria-Vung Tau province,
1-1/2 hours south of Ho Chi Minh City. The master plan for the Paul Steelman-designed
project calls for five resorts with more than 9,000 hotel rooms, a convention
centre, theatre, marina, dolphin park, Greg Norman-designed golf course and 300
condominium units. "This is different from but complementary to Macau. People
will be coming to our place and stay longer and spend more money," Mr Aymong
said. "Sixty per cent of our customers are going to come from China." There are
only two small-scale casinos operating in Vietnam, one of which is owned by
Stanley Ho Hung-sun, and access is restricted to foreign-passport holders.
"Currently, Vietnamese are not allowed to gamble, but I'm hoping the government
will look at that and open it up to everybody," he said. The nation's 25 per
cent tax rate on gaming revenue is comparable to Malaysia or the Philippines and
compares with Macau's 39 per cent rate. Gaming tax rates play a major role in
determining the level of commissions and rebates casino operators can offer to
VIP gambling junket agents and their customers. Mr Aymong said the company was
in "advanced conversations" with several large junket operators in Macau who
were exploring alternative markets. He added that the firm was also in
discussions with well-known industry players to manage its casinos and hotels
and will be announcing several senior executive appointments early this month.
Still, analysts expressed concern over Asian Coast's ambitious fund-raising
target and its current lack of a casino partner. "Raising funding in financial
markets like these is no easy task and will be all the more difficult without a
well-known and established gaming company attached to the project," said
Lawrence Klatzkin, a gaming analyst at Jefferies. 
Commercial crime detectives have launched a probe
into an allegation that a top executive of the jewelry firm Hang Fung Gold
Technology (0870) stole as much as HK$200 million from the company. Sources have
told Sing Tao Daily, the sister paper of The Standard that a report was filed
with police just a day before the funeral of the company's founder and late
chairman, Lam Sai-wing. The Commercial Crime Bureau launched an investigation
after a review of the evidence. The force has so far refused to comment
officially on the case. Sing Tao Daily was unable to reach the Hang Fung Gold
senior executive allegedly involved despite repeated attempts. Lam died suddenly
on September 26, he was 53. His wife, company co-founder Jane Chan Yam-fai, went
to Universal Funeral Home in Hung Hom yesterday to arrange funeral preparations.
Lam's coffin will be sent to Wo Hop Shek Crematorium this morning. Hang Fung
Gold, which became famous for the iconic golden toilet that Lam turned into a
tourist attraction, manages the 3D-Gold jewelry brand. His driver went to his
home on the morning of September 26, but by noon Lam had not come out. The maid
then knocked on Lam's bedroom door but there was no response. Later, chief
executive officer Kathy Ng Yee-mei went to the house with a locksmith and found
Lam dead on his bed. 
DAB's
Tsang set to clinch top post - Democratic Alliance for the Betterment and
Progress of Hong Kong founder Jasper Tsang Yok-sing is almost certain to become
the next Legislative Council president.
Customers check out the new stock of milk at a supermarket in Nanjing yesterday
after none of 609 batches failed a test for melamine. More foreign countries
have imposed bans on mainland food products even as the country's top food
safety watchdog said none of hundreds of liquid milk samples had failed a new
round of testing for melamine. The latest test of 609 batches of liquid milk
from 27 cities across the mainland detected no melamine, the industrial chemical
at the centre of the dairy scare that has left four infants dead and made
thousands ill, the Beijing Morning Post reported. Seventy-five brands were
sampled for the test, including prominent ones such as Yili, Mengniu and Bright
Dairy, the paper said, citing the General Administration of Quality Supervision,
Investigation and Quarantine. It was the sixth test since the milk scare broke
out last month, according to the administration, the nation's top product
quality watchdog. The administration has sent scores of inspectors to factories
manufacturing baby formula and other milk powders in an attempt to supervise
production and provide timely results of tests. In addition, the Ministry of
Agriculture has sent out 152,000 officials and investigated nearly 19,000
milk-collecting stations, which have been criticised for adding melamine to milk
collected from farmers before reselling it to producers of milk products. The
melamine was added to watered-down milk to boost results in quality tests for
protein. In a meeting on Friday aimed at supporting milk farmers, Agriculture
Minister Sun Zhengcai called on fellow cadres to launch detailed investigations
and impose punishments when necessary to ensure fodder safety and set up an
industry standard to regulate melamine in feed. At least 151 illegal enterprises
have been banned for allegedly manufacturing fodder adulterated with melamine,
Xinhua quoted a source from the ministry as saying. Three more are being
investigated. While underlining the importance of ensuring there was no abuse of
antibiotics or drugs in the livestock industry, Dr Sun urged officials from
various levels of agricultural and veterinary departments to stick with several
measures designed to address the problem. "On the one hand we must crack down on
illegal behaviour, but on the other hand we must protect the interests of the
dairy sector," he said. "We must do our best to minimize the dumping of milk and
we must resolutely prevent the killing of cows." The minister also pledged to
register and supervise all milk stations across the nation by yesterday. Despite
almost all mainland media striving to reassure the public that it is safe to
resume consumption of dairy products, there is a growing list of countries
banning mainland-made food after finding tainted samples. On Saturday, Guyana
became the second Caribbean Community member, after Surinam, to pull Chinese
dairy products off the market. Its health ministry said it was targeting in
particular "Milky Evaporated Milk". Meanwhile, South Korea's food and drug
administration said it had blocked 1,637 tons of Chinese-made kimchi because of
food safety concerns last year, up from 282 tons in 2006, for containing
"inedible" additives such as cancer-causing artificial sweeteners or banned
colorings.
Travelers queue up to buy train tickets at a railway station in Hangzhou, East
China's Zhejiang province October 4, 2008. More than 18.29 million people
visited 119 major tourist destinations nationwide between Sept 29 and Oct 5, a
13.2 percent increase year-on-year, National Tourism Administration statistics
showed. Retail sales of consumer products during the holiday surged 21 percent
year-on-year to reach 420 billion yuan ($61 billion), the Ministry of Commerce
said Friday. The capital remained one of the top choices for travelers during
the holidays. "Although most tourist spots have attracted a growing number of
visitors, Beijing was still the first choice for most tourists during the Golden
Week because of the Olympic Games," said Jia Shuo, an employee with the Beijing
Great Wall International Travel Agency. Zhang Jinling, who visited Beijing from
Shandong province, agreed. "The Water Cube, the Bird's Nest and the Olympic
Village are must-see places for every Chinese," the 26-year-old said.
Tourists enjoy a ride on boats though Slender West Lake in Yangzhou of East
China's Jiangsu Province October 1, 2008, the 59th National Day. China is
celebrating the week-long National Day holiday starting from September 29.
People select Shou Tao (longevity peach bun) ahead of the Chongyang Festival at
a restaurant in Beijing, October 5, 2008. Chongyang Festival is a traditional
day celebrating the elderly on the ninth day of the ninth month according to the
lunar calendar. Shou Tao is a kind of Chinese steamed bun in the shape of a
peach and is usually sent as a gift for elderly people. This year's Chongyang
Festival falls on October 7.
Workers pack Shou Tao (longevity peach bun) at a restaurant in Beijing, October
5, 2008. Chongyang Festival is a traditional day celebrating the elderly on the
ninth day of the ninth month according to the lunar calendar. Shou Tao is a kind
of Chinese steamed bun in the shape of a peach and is usually sent as a gift for
elderly people. This year's Chongyang Festival falls on October 7.
Officials
from Shuangcheng City, Heilongjiang Province, give instructions to dairy farmers
on October 2. China's Ministry of Agriculture said Saturday it had made an
emergency rescue plan with the Ministry of Finance to give special subsidies to
the country's dairy farmers, who have suffered from shrinking demand after the
tainted milk scandal. China's Ministry of Agriculture said Saturday it had made
an emergency rescue plan with the Ministry of Finance to give special subsidies
to the country's dairy farmers, who have suffered from shrinking demand after
the tainted milk scandal. Fewer dairy farmers were dumping raw milk as
government support policies to shield them from losses paid off, said the
ministry in a statement on its website. Some dairy farmers started to dump raw
milk because of decreased demand as customers lost confidence in local dairy
brands after the scandal erupted last month. The ministry said 14 local
governments had already come up with policies to stabilize the dairy industry.
Some local authorities have promised subsidies for dairy farmers to reduce the
cost of feeding cows. For instance, north China's Hebei Province has earmarked
316 million yuan ($46.4 million) as subsidies on the basis of 200 yuan for each
cow. The country had sent more than 150,000 officials to overhaul
milk-collecting stations and cow feed supply chains as of Thursday, said the
ministry. Altogether 18,803 milk-collecting stations had been registered and
checked by then. The ministry also investigated 98 dairy producers and farms,
banned 151 illegal companies and transferred to the police three manufacturers
of feedstuff that contained melamine. It urged local authorities to reinforce
bailout measures and technical guide on cow feeding and epidemic control. In an
effort to encourage dairy producers to buy raw milk, the Ministry of Finance
said last month that interest rate for loans to dairy producers' raw milk
purchase will be reduced by 3.1 percent, or half of the six-month lending rate,
from October to December.
A loser from the crisis - an
investor in Bank of China (HK) minibonds - shows her feelings at being barred
from its headquarters yesterday. Despite the passage of the US government's
US$700 billion bank bailout, Hong Kong must brace for belt-tightening amid the
global "financial tsunami", the city's labour chief and a top banker said
yesterday. HSBC (SEHK: 0005, announcements, news) Asia-Pacific executive
director Peter Wong Tung-shun warned the impact of the crisis would be "far more
severe" than that of the 1997-98 East Asian financial crisis. "This will affect
Hong Kong and the whole world," he said. The effects would be felt for another
12 months and recovery would take "much longer" than a decade ago. So far
investors - including buyers of minibonds backed by bankrupt US bank Lehman
Brothers, who scuffled with bank security staff yesterday - have been the
biggest losers locally from the crisis. But both men warned its impact would
grow. Mr Wong expected Hong Kong businesses would have to control costs, but
said mass layoffs were unlikely. Matthew Cheung Kin-chung, the secretary for
labour and welfare, forecast jobs would go, however. He said: "The financial
tsunami will have a far-reaching impact. Enterprises may need to make manpower
changes and there is a chance unemployment will rise, particularly in the
finance and property sectors. Consumption will likely be hit too." China joined
governments around the world in welcoming the US House of Representatives'
263-171 vote in favour of the bailout. The mainland's central bank said
authorities had contingency measures to minimise the impact of the crisis. The
People's Bank of China said it would strengthen co-ordination with the US and
other countries to stabilise global financial markets. "All countries have to
co-operate in view of the current financial crisis," a PBOC statement quoted
Premier Wen Jiabao as saying. Maintaining rapid economic growth would be China's
biggest contribution to the global economy, he said. Before signing the bailout
bill into law, US President George W. Bush thanked lawmakers, saying: "We have
acted boldly to help prevent the crisis on Wall Street becoming a crisis in
communities across our country." Friday's vote capped an extraordinary two weeks
of tumult in Congress and on Wall Street, punctuated by urgent warnings from Mr
Bush that the country confronted the gravest economic disaster since the Great
Depression if lawmakers failed to act. And it was followed by sombre reminders
on Wall Street, where enthusiasm over the rescue gave way to worries about
obstacles still facing the economy, sending the Dow Jones Industrial Average
down 157 points. US Treasury Secretary Henry Paulson pledged quick action to get
the programme up and operating. Highlighting the ferocity with which the global
crisis has swept into Europe, Belgium and Luxembourg scrambled to find a buyer
for the rest of financial group Fortis after the Netherlands nationalised most
of its Dutch units. Last week the three governments had injected €11.2 billion
(HK$120.4 billion) to keep it afloat. In Paris, the leaders of Europe's four
biggest economic powers held crisis talks on the global financial meltdown,
despite disputes that killed off talk by French President Nicolas Sarkozy of a
joint bailout package for European banks. German Chancellor Angela Merkel and
British Prime Minister Gordon Brown only confirmed they would attend after
France quietly backed away from a joint fund. German Economy Minister Michael
Glos warned "very well paid" bankers they must put their own houses in order.
Zhang Chunmei is rescued from the rubble of her school. Zhang Chunmei now has
two artCleanliness, security and Disneyland. Those are what impressed Zhang
Chunmei most about Hong Kong. For the 11-year-old, who spent 68 hours beneath
the rubble of her school after the May 12 earthquake, such things are precious.
Chunmei lost both her legs despite being flown by military helicopter to Chengdu
from the quake's epicentre in Yingxiu after her rescue. She visited Hong Kong
last week with two other young quake survivors - Kan Ruoqi , who lost her left
leg, and Xia Fengting , who lost her right arm when Xinjian Primary School in
Dujiangyan collapsed on them. More than 300 of the school's 680 students and
teachers were killed. "Only six, including Fengting and me, out of 46 pupils in
my class, managed to escape or be rescued from the ruins," Ruoqi said. The pair,
both nine, and Chunmei were in Hong Kong on a packed four-day trip arranged by
the Rotary Club of Tai Po. It included a medical conference but also plenty of
sightseeing. They have seen more trauma this year than most of us ever will, but
they were just like any other group of little girls after a visit to Disneyland.
"They just kept talking deep into the night after they came back to the hotel,"
said Ruoqi's mother, Wang Yan. Chunmei particularly loved the park's Mad Hatter
Tea Cups and Dumbo the Flying Elephant rides. Before wrapping up their trip,
they tasted dim sum for the first time at a Sha Tin restaurant. The trio were
delighted with their trip, the gifts they received and the food they ate, but
behind the excitement the pain remains. When four able-bodied children began
playing around them, Fengting's mood changed. "How come there is so much
bitterness and suffering in our lives?" Fengting asked Ruoqi, who was sitting to
her right. Ruoqi's father, Kan Jianning, was surprised. "How can you say
something like this? The parents who have to take care of you all have an even
harder time." Ruoqi replied: "What I've just said is true. Look, we are so young
but suffered so much pain while others can enjoy their lives." Almost five
months after the devastating Sichuan earthquake, which left 88,000 people dead
or missing and 15 million homeless, the scars are no longer physical. Lan Xiufu,
an orthopaedic specialist at Chongqing's Daping Hospital who carried out about
100 amputations on earthquake victims, said what the young victims needed most
were mental-health services. The Hong Kong Society for Rehabilitation estimates
that 15 per cent, or 7,500, of the 50,000 people left disabled by the quake are
amputees. Mr Kan said that sometimes "depressed and jealous feelings" arose from
deep in Ruoqi's heart, especially when she saw healthy children. "I know
Fengting is envious of her healthy peers, while Ruoqi desperately wants a pair
of legs so she can walk and run just like other children," he said. "Once I took
Ruoqi to a park nearby in Chengdu. I wondered why she had fallen silent after
playing for a while. Only when she refused to go there the next day, saying it
was because of the mosquitoes, did I realise that it was because the other
children had been staring at her prosthesis." Mr Kan and his wife have both
stopped working temporarily to dedicate their time to helping their daughter
overcome her mental scars. Fengting rubs her stump against her mother Li
Hongwing's face every night to make sure she is beside her. "Only then can
Fengting sleep in peace," Ms Li said. As they prepared to fly back to Chengdu,
Ruoqi and Fengting asked their parents to promise them they would bring them
back to Hong Kong if they did well in school. Chunmei said nothing. She had not
spoken all morning. No one knew why sorrow had overtaken her happy mood. Just as
they were about the leave for the airport, a hotel security guard from came
over, shook Chunmei's hand and passed the youngster a scrap of paper. On it was
written: "I wish you good health, from Tony Tam." Without saying a word, she
boarded the bus.ificial legs (right). Chunmei visited Hong Kong last week with
other young survivors Kan Ruoqi (centre) and Xia Fengting. 
It could be Hong Kong's least
exclusive nightspot. But with drinks costing less than your average bottle of
water, it is no surprise that financially challenged youngsters choose the
7-Eleven - or "Club Seven" - as their drinking establishment of choice in Lan
Kwai Fong. The 7-Eleven on D'Aguilar Street was easily the most crowded venue in
the district at midnight on a recent weekend, a Sunday Morning Post (SEHK: 0583,
announcements, news) reporter observed. Judging from the number of revellers
dropping in to buy beers and alcoholic drinks and the 100-strong crowd drinking
outside, the store competes as a de facto bar. "I like to get pre-drinks at
7-Eleven before clubbing, so as to get a bit tipsy before going in," said party-goer
Felix Lam Kai-lok. "It's more expensive in the club. [At 7-Eleven] I can
possibly save more than 40 bucks per drink," the 20-year-old said. He added that
the store was a good "hanging-out spot" to wait for friends before hitting the
clubs. But bars close to the two Lan Kwai Fong 7-Elevens admitted to feeling the
pinch. The manager of the Coconuts bar, Abdul Hanif, said the popularity of the
convenience store had put a damper on his business. The opening of another
7-Eleven across the street three months ago made matters worse, he said. "Our
customers buy less cigarettes and drinks from us," he complained, adding that
more guests were not making their purchases at his bar. "Sometimes when they
come in and out with a bottle of Heineken or Stella Artois, it's hard to tell
whether they bought it here or there." Mr Hanif also claimed that the rowdy,
drunken crowds congregating outside the 7-Eleven at night were a nuisance to
guests and staff alike. "The teenagers outside are often very noisy and drunk.
Sometimes there is fighting, too. It's big trouble to us." Clubs with an older
clientele pronounced a different verdict, however. For Lux, a nightclub that
aims to attract mature drinkers, the 7-Elevens were a welcome presence. "We
think 7-Eleven is good because it can separate potential customers from those
who can't spend too much on drinks," said manager Phillip Chow Chi-hong. "Those
who cannot spend much money, now they're all staying at the corner." The police,
while aware of the potential for under-age drinking and the occasional fight
breaking out at the store, were nonchalant. "There are troublemakers everywhere
in the Lan Kwai Fong area," said a policeman patrolling the area. "Also, it's
hard for sales staff at 7-Eleven to refuse to sell to under-age drinkers because
some customers will say they have no right to check IDs. We will only look into
the matter if there are complaints. This is how life is - the way businesses are
conducted." A 7-Eleven spokeswoman said the company regularly stocked more
alcohol than usual at its Lan Kwai Fong outlets. Staff try their best to serve
only customers who are over 18.
Sheldon Adelson, the chairman and
controlling shareholder of Las Vegas Sands Corp, yesterday injected US$475
million of his own money into the casino developer to help fend off a cash
crunch as it struggles to raise funds for new Macau mega resorts. The Adelson
family's purchase of US$475 million in convertible notes comes as Las Vegas
Sands is reconsidering efforts to raise US$5.25 billion in bank loans to fund
current and future resort construction on Macau's Cotai Strip after running
headlong into the global financial crisis. "While the credit markets are
experiencing turbulence, our strategy remains alive and well and our business
continues to march forward," Mr Adelson said yesterday. "This investment will
strengthen our capitalisation and liquidity position as we continue to execute
our plans." In addition to operating the 3,000-room Venetian, Sands and newly
opened Four Seasons in Macau, Las Vegas Sands is spending US$3.3 billion to
build a 6,400-room Cotai casino resort scheduled to open in phases from next
year with four branded hotels: the Sheraton, Shangri-La, Traders and St Regis.
The company previously planned to tap Asian lenders for about US$7 billion in
debt financing but by July had revised down its target to US$5.25 billion. Last
month, it further slashed its borrowing target to US$3.3 billion, Citigroup
analysts said on September 9. But a Reuters report yesterday cited Mr Adelson as
saying the firm was considering abandoning the Macau mega-financing package in
favour of smaller project financing deals. He said the company now preferred to
leave the terms of its existing Macau debt unchanged and could accelerate plans
to raise capital by selling off assets such as the shopping centres attached to
its casino resorts. In addition to turmoil in the global markets, Las Vegas
Sands' fund-raising efforts have been frustrated by the company's increasingly
leveraged financial position, Macau margin pressures due to higher junket
commissions and concerns that a government crackdown on mainland visitation will
slow growth in casino revenue. The firm's gearing has more than tripled in the
past three years. Total debt-equity ratio stood at 387.01 per cent in the second
quarter, according to Bloomberg data. Mr Adelson's cash injection came after
Standard & Poor's last month downgraded Las Vegas Sands' credit rating on
liquidity concerns. He and his family, who control 64 per cent of the company,
will pay US$475 million for convertible senior notes that pay interest at 6.5
per cent and on maturity in 2013 can be exchanged for shares in Las Vegas Sands
at US$49.65 per share. The strike price represents a 37.5 per cent premium to
the stock's closing price of US$36.11 on Tuesday. Shares in Las Vegas Sands have
fallen 64.96 per cent in the year to date.
Duncan Pescod, permanent
secretary for commerce and economic development, and Greg So announce the
proposals to regulate obscene and indecent articles. An independent
classification board would be set up under government proposals to improve the
regulation of obscene and indecent articles in the wake of the celebrity sex
photos scandal. The proposals, set out in a consultation paper released
yesterday, also include a new system to classify articles and the mandatory
provision of a filtering service by internet service providers. Board decisions
would be subject to appeal to the Indecent Articles Tribunal, which now handles
classifications. The posting and publication of photos of female stars in sex
acts with entertainer Edison Chen Koon-hei on the internet and in print media in
March prompted calls for tighter controls over dissemination of obscene or
indecent materials in various media. Under the revamped classification system,
articles now classified as Class II indecent would be subdivided into material
restricted to persons above 15 and 18 respectively. "We want to maintain the
free flow of information and the freedom of speech, yet it is important to put
teenagers under protection [from indecent or obscene materials]," the
undersecretary for commerce and economic development, Greg So Kam-leung, said in
launching the first round of consultation. One of the options to improve the
adjudication system of obscene articles is to set up a two-tier system under
which an independent classification board would make interim classifications.
The existing Obscene Articles Tribunal would remain as a judicial body to
consider appeals against the board's decisions and deal with articles referred
to the tribunal by courts. The new classification board would draw in 20 to 30
lay members from sectors like education, social welfare, media, cultural
services and district organisations. Under the existing arrangement, the
tribunal, which is a judicial body, has exclusive jurisdiction to determine
whether an article is obscene or indecent. Another option is to improve the
tribunal by drawing adjudicators from the list of 570,000 jurors in the city for
each tribunal hearing, expanding the panel of adjudicators from the existing 300
to 500 or more. The number of adjudicators at each hearing could also be raised.
The third option is to abolish the tribunal and authorize a magistrate to
classify articles. Civic Party lawmaker Ronny Tong Ka-wah said it was not
plausible to abolish the tribunal or to draw adjudicators from the jurors' list
as this would lay too heavy a burden on the judiciary system. "[Classification]
is a moral, not legal issue and it is better handled by the public instead of
the court," said Mr Tong, a senior counsel. "A better proposal is to expand the
tribunal." Mr So agreed that it would impose a heavy burden on the courts if a
single magistrate was responsible for classifying articles as there were 70,000
classification cases a year. Obscene Articles Tribunal adjudicator Mervyn Cheung
Man-ping said it could not meet the demand with only 20 or 30 members in the
independent classification board under the two-tier system proposal. One option
to improve the classification system is to divide indecent articles into Class
IIA, restricted to those aged above 15, and IIB restricted to those above 18.
Class IIA articles would be required to provide statutory advice and subject to
a wrapping requirement; Class IIB articles would be subject to a wrapping
requirement and could only be displayed in premises restricted to people above
18. Under the existing law, Class II articles must not be published or sold to
people under 18. The first round of consultation is scheduled to end on January
31. Definitions: * Define more broadly "the undue exploitation of sex, horror,
cruelty and violence". Adjudication: * Two-tier system comprising a
classification board and the existing tribunal to handle appeals; * Expand the
existing adjudicators panel; * Have magistrate classify articles; * Mandatory
submission for classification before laying charges; * Issue guidelines on
submission in borderline cases. Classification: * Subdivide indecent category
into two age groups, one restricted to 15 and one to 18; * A new nomenclature to
avoid confusion arising from the different terms used in film classification.
New media: * Require internet service providers to provide filtering software; *
Enforcement agencies to issue "take-down notices" to indecent websites; *
Require provision of credit card details as a means of checking website user's
age; * A voluntary labelling system for websites unsuitable for children; *
Tighten up service contracts; * Regulate internet chat rooms. Penalties: # Raise
maximum penalty to HK$2 million fine and three years in jail.
Staff take the personal details
of visitors at a makeshift security post set up at Revenue Tower after
Thursday's fire. Police expect to take about two years to complete a review of
security at 50 government buildings, including Revenue Tower, the scene of
Thursday's arson attack. The Government Property Agency said yesterday that the
review by the Crime Prevention Bureau - launched after a Thai woman's body was
found in Revenue Tower in 2005 - was about 70 per cent complete. Remote
monitoring, addition of metal bars to glassed-in counters and replacement of
wooden entrance doors with steel doors are under discussion in the review.
Thursday's fire, in which a man ignited a liquid at an Inland Revenue Department
service counter in the Wan Chai building, brought calls for stepped-up security
in the public areas of government buildings, particularly those involved in
collecting money. Police will meet representatives of government departments in
Revenue Tower in the next few days to discuss security improvements. They also
planned to meet representatives of departments in the Queensway Government
Offices in Admiralty. Crime Prevention Bureau Chief Inspector Bob White said
yesterday that police were concerned about access control at government
buildings and the security of the buildings outside office hours. He said
closed- circuit television could be useful to strengthen security. Use of
security guards - called for by civil service unions after Thursday's fire -
would also be discussed, he said. Meanwhile, the Business Registration Office on
the fourth floor of Revenue Tower - scene of the arson attack - reopened
yesterday, although 15 minutes late. The three payment counters damaged in the
blaze remained sealed for repairs and pipes and ducts were visible through the
damaged ceiling. The public were told they could pay their bills at a designated
counter in the Stamp Office on the third floor or at the nearby post office.
Tightened security measures were introduced, with counters set up at the lobby
and on the first floor yesterday morning. All visitors had to register their
personal details, such as names and identity-card numbers, before entering the
tower, while officers had to show their staff cards. Occasional checks on bags
and belongings were also conducted at the counters. The measures would last
"until further notice", according to an announcement in the lobby. One woman
said the arrangement yesterday was quite chaotic; she had managed to get to the
fourth floor without registration and unnoticed. "I was told to wait for
registration, but there was a long queue and I just rode up on the escalator,"
she said. An employee of an accountancy firm who had to visit the Business
Registration Office every day said the new measures had brought inconvenience.
"It looks like a response to the fire yesterday. I am fine, as it looks safer
despite a little trouble. "I hope the arrangement will be better in future."
U.S. House of Representatives Speaker
Nancy Pelosi signs the financial rescue package bill in Washington, Oct. 3,
2008. The U.S. House of Representatives on Friday approved a revised 700 billion
dollar bailout plan, authorizing the U.S. government the largest financial
intervention since the Great Depression. The financial bailout package was
passed by a vote of 263-171. The Senate passed the measure earlier in the week
on a bipartisan vote of 74-25.
The ongoing global financial
turbulence will have a limited impact on China's banks and financial system in
the short run, according to officials and experts. "We feel China's financial
system and its banks are, to the chaos developed in the U.S. and other parts of
the world, relatively shielded from those problems," said senior economist Louis
Kuijs at the World Bank Beijing Office. He told Xinhua one reason was that
Chinese banks were less involved in the highly sophisticated financial
transactions and products. "They were lucky not to be so-called developed,
because this (financial crisis) is very much a developed market crisis." A few
Chinese lenders were subject to losses from investing in foreign assets involved
in the Wall Street crisis, but the scope and scale were small and the banks had
been prepared for possible risks, Liu Fushou, deputy director of the Banking
Supervision Department I of the China Banking Regulatory Commission, told China
Central Television (CCTV). Chinese banks had only invested 3.7 percent of their
total wealth in overseas assets that were prone to international tumult, CCTV
reported. The ratio of provisions to possible losses had exceeded 110 percent at
large, state owned listed lenders, 120 percent at joint stock commercial banks
and 200 percent at foreign banks. Kuijs noted most of the banks resided in China
where capital control made it more difficult to move money in and out. Besides,
the country's large foreign reserves prevented the financial system from a lack
of liquidity, which was troubling the strained international markets. "At times
like this, one cannot rule out anything," he said. "But still we believe the
economic development and economic fundamentals in China are such that it's not
easy to foresee a significant direct impact on the financial system." However,
he expected an impact on China's banks coming via the country's real economy, as
exports, investment and plans of companies would be affected by the troubled
world economy and in turn increase pressure on bad loans. Wang Xiaoguang, a
Beijing-based macro-economist, said the growing risks on global markets would
render a negative effect on China in the short term but provided an opportunity
for the country to fuel its growth more on domestic demand than on external
needs. He urged while China, the world's fastest expanding economy, should be
more cautious of fully opening up its capital account, the government should
continue its market reforms on the domestic financial industry without being
intimidated. Chinese banks had strengthened the management of their investments
in overseas liquid assets and taken a more prudent strategy in foreign
currency-denominated investment products since the U.S.-born financial crisis
broke out, CCTV reported.
Photo taken on Oct. 4 shows fishing
boats at a harbor of Wenchang, south China's Hainan Province. Tropical
depression Higos will continue to lose strength as it leaves Hainan and moves on
to Guangdong province in southern China on Saturday. Tropical storm Higos landed
at 10:15 p.m. on Friday in Longlou Town, Wenchang City, 19.6 degrees north
latitude and 111.0 degrees east longitude.
China will revise current
industrial policies and improve market access standards for dairy production, Li
Yizhong, minister for industry and information technology (MIIT), said on
Friday. "We will clearly require dairy enterprises to enhance management on
source milk bases and intensify supervision on source milk production and
purchase," Li said in a press release. A market access management system will be
established, he said. Qualified dairy enterprises will be notified publicly and
disqualified ones will be ordered for rectification within a specified time
limit. New dairy production projects including the expanded ones must be
reported to relevant departments under the State Council for approvals. "We
encourage dairy enterprises to improve industrial concentration through assets
regrouping, mergers and acquisition," Li added.
People play with music fountains in
front of the National Stadium, or the Bird's Nest, the main venue of the Beijing
2008 Olympic Games October 2, 2008. China is celebrating the week-long National
Day holiday starting from September 29.
Tourists watch fish in a pond in
Suzhou Museum in East China's Jiangsu Province October 2, 2008. China is
celebrating the week-long National Day holiday starting from September 29.
Tourist enjoy sunbathe in Qingdao of
East China's Shandong Province October 2, 2008. China is celebrating the
week-long National Day holiday starting from September 29. 
Sun
Li joins exhibition tour to support stray animals - Chinese mainland actress Sun
Li attended a photography exhibition for stray animals, titled a "Take Me Home,"
at the Xidan Joy City shopping center in Beijing on Friday. Beijing is the first
stop for the exhibition's national tour, which advocates public concerns for
stray animals. Various photos, presenting abandoned dogs and cats, Sun Li
nurturing animals, and photos from the Society for the Prevention of Cruelty to
Animals in Hong Kong, were displayed at the exhibition. Sun's photo album, with
the same name of "Take Me Home," was released at the opening as well. The book
tells several touching stories between the actress and those pitiful animals.
Sun signed autographs for fans and donated all the proceeds from the sales of
five hundred her albums to Beijing Human and Animal Environmental Education
Center for stray animal rescue. Sun now has seven dogs. The oldest Xi Xi is
already twelve years old. Sun said it was hard for her to identify with those in
the business of buying and selling cats and dogs because their actions have
prematurly separated lots of animals from their puppies. "It is better to adopt
stray animals and give them a warm home." said Sun. During the exhibition,
visitors were invited to sign a petition to refuse to eat cat and dog meat or
wear animal furs. The exhibition in Beijing will last until the end of the
upcoming National Day holiday.
Canto-pop star Kelly Chen Wai-lam tied the knot yesterday with her long-time
boyfriend, businessman Alex Lau Kin-ho, at an extravagant multimillion-dollar
wedding yesterday at the InterContinental hotel. The singer-actress and her
entourage, including manager Claudie Chung Chun and 10 bridesmaids, arrived at
the Tsim Sha Tsui hotel in Salisbury Road at about 1pm, where more than 200
members of the local and overseas media, a number of die-hard fans and hotel
guests waited. At about 3.30pm, the groom and bride, wearing 10-carat diamond
earrings and a six-carat wedding ring given by Mr Lau, 35, posed at the ballroom
staircase for a press photo call. Chen, 36, was wearing an elegant wedding dress
worth hundreds of thousands of dollars designed by long-time friend and
award-winning art director Yee Chung-man. The off-white dress had a 10-metre
train decorated with the auspicious number of 999 flowers. It was matched by a
15-metre veil. Hotel guests Elaine Lovit, 60, and her husband Louis, 70, from
Los Angeles, waited for the star's appearance after learning of the wedding from
hotel security staff. Mrs Lovit said Chen looked very beautiful, and that she
would look up her music. Chen also prepared a red gown for the banquet and
another wedding dress by Karl Lagerfeld. After the cake-cutting ceremony, Chen
said she was not nervous and that she had skipped the hen's night so she could
go to bed early to be in good shape for her big day yesterday. "But Alex
couldn't sleep. I thought I would be moved to tears but I wasn't because I was
in a rush all day. I was too busy to shed a tear. I'm still not used to being
called Mrs Lau." She said Mr Lau played games, including singing rap songs and
performing pole dances, and gave HK$99,900 in lai see to the bridesmaids before
meeting her at the hotel. But Mr Lau was too shy to speak to the press. The
couple officially wed at 8pm before hundreds of relatives and friends at 52
tables in the ballroom, decorated with champagne and purple carpet by a friend
of Mr Lau's from the Netherlands. The room was filled with flowers from the
Netherlands, South America and Taiwan. Ms Chung said Mr Lau paid for the wedding
and that the banquet alone cost about HK$3 million - nearly 13 times more than
the spending of an average couple, according to an ESD Life survey released
yesterday. Chen's manager said the couple also hired a ballroom with 12 tables
to entertain the media with a buffet, which cost HK$888 a head, because the
media had been very kind to Chen and wanted to thank them.
Hong
Kong is prepared to follow its overseas counterparts in banning short selling of
financial-sector stocks amid intense volatility and sweeping changes caused by
the US financial tsunami, government sources said yesterday. "The backup plan is
there. The decision will be effective immediately if any abnormal changes in
short-selling activities and market volatility are observed," a source told The
Standard. Word of the plan emerged after the Securities and Futures Commission
warned on Tuesday it was prepared to crack down on illegal short sales as the
market situation became unstable. The securities watchdog vowed it was ready to
"implement more aggressive measures in the event that any abusive short selling
is identified" amid a mounting outcry from the market for a stop in short
selling. Measures would include market-wide controls, as well as targeted action
against individuals or entities. Unlike other markets, Hong Kong has used
stricter rules to protect investors from short selling. The SFC banned "naked"
short selling, which allows investors to sell stocks short without previously
borrowing the stocks for settlement; and upheld the "uptick" rule to permit
short sales only during upward markets. However, when the impact of the
financial tsunami recently became worse and more institutions started to show
signs of sinking, the US Securities and Exchange Commission took the lead to
temporarily ban short selling in an attempt to maintain stability in the banking
system and financial markets. On Wednesday, the SEC announced an extension of
its temporary ban, indicating the tsunami remained a potent threat. Other places
including Ireland, Singapore, Japan, Taiwan and South Korea have temporarily
banned short-selling activities completely. Britain, like its US counterpart,
has implemented the ban in financial sectors. These global moves have left Hong
Kong among those vulnerable to the dangers of short selling. Short selling
yesterday accounted for about HK$5.6 billion of turnover, representing 8 percent
of total market turnover of HK$69.65 billion. Nomura Securities analyst Tacky
Cheng said the figures were normal compared to recent days. "Short-selling
volume did come up during the past three months, but it was still normal and did
not hit an alarming level," Cheng said.
Nanjing's government is offering cash
subsidies and tax breaks to bolster the property market. Home-buying confidence
is improving in Nanjing after the city introduced a package of stimulus
measures, raising hopes that more major mainland centres will follow suit. "The
package has definitely given a boost to market sentiment," said Clement Luk
Shing, a director and assistant general manager at Centaline (China) Property in
Shanghai. Sales had picked up slightly after the announcement, Mr Luk said. The
Nanjing government on Sunday said it would give homebuyers cash subsidies of up
to 1 per cent of the value of a flat from today, while developers would be
allowed to defer payment of various government charges. Other measures include
allowing homebuyers to borrow higher amounts from housing provident funds set up
to provide low-interest home loans, and a reduction in deed tax (levied on the
transfer of a real estate title) from 4 per cent to 2 per cent. Mr Luk said
Nanjing followed Xian, Dalian and Shenyang in introducing measures to boost the
housing sector and the positive outcome would encourage other cities to take
similar actions to shore up the troubled property market. "The impact on the
mainland property market will be greater if more local authorities in different
cities take steps to boost property sales," he said. Agents believe Shanghai
could be the next city to attempt to revive its market. Property transactions in
the financial hub have dropped 50 per cent since early this year. In Nanjing,
mainland media reported that queues started to form outside sales offices after
several developers offered steep discounts for new projects during the Golden
Week national holiday - a traditional peak season for home buying. Long lines of
potential buyers formed outside the Evergrande Oasis Garden project in Nanjing,
built by Evergrande Real Estate group (SEHK: 3333), after prices were cut by
about 20 per cent. About 30 to 40 customers were seen yesterday at Evergrande
Oasis sales office. One unit at the Evergrande Oasis was selling for 700,000
yuan (HK$796,000), down from 900,000 yuan, according to agents. The Nanjing
property market almost came to a standstill in September, prompting the
municipal government to launch the stimulus measures. According to government
figures, the city still has 6 million square meters of unsold residential units,
accounting for about 60 per cent of this year's total sales target. "The city
property market is entering a chilling winter earlier than expected," said Mr
Luk. He said the mainland property market would not improve significantly until
Beijing relaxed earlier measures designed to cool prices. Among the measures
taken to combat speculative investment was imposing tighter loan conditions and
higher interest rates on buyers of second homes.
A view of an
island in a lake in Kanas of Xinjiang Uygur Autonomous Region, September 30,
2008. The unique scenery of Kanas in autumn drew a lot of tourists from home and
aboard during the week-long National Day holiday. 
Hong Kong Monetary Authority ( HKMA) may consider further measures to enhance
the city's ability to cope with turbulent liquidity conditions if necessary,
HKMA Chief Executive Joseph Yam said here Thursday. In his weekly Viewpoint
column published here Thursday, Yam said it is sometimes necessary for HKMA, the
de facto central bankof Hong Kong, to use public money to restore confidence in
the financial system, although controversial. He said the local money market has
been orderly despite heightened concerns about credit risk in the interbank
market and HKMA is ready to provide liquidity to the banking system as neededand
there is a well-established and transparent framework for doing so. Yam said the
United States had no choice but to bail out banks as the alternative of letting
the markets take care of the problems might lead to a financial meltdown that
would throw the economy into a tailspin, which would be a lot more costly to the
community as a whole. He said it takes time, and possibly severe pain, for
stakeholders in a free-market economy to realize and accept the inevitability of
market intervention in special circumstances and the use of public money to
rescue the financial system. "To contain or end a financial crisis there is a
need for the authorities to provide liquidity to the financial system and
facilitate the re-capitalization of financial institutions," Yam said, adding
the provision of liquidity is obviously the role of the central banks, since
they are lenders of last resort. He hoped the U.S. Congress can reach a
consensus on the comprehensive measures proposed by the U.S. government to
repair the balance sheet of the financial system soon. 
A man has been arrested in connection
with an arson attack on the Inland Revenue Department's headquarters in Wan Chai
on Thursday morning.
A solicitor along with a senior Chinachem
Group executive both withheld evidence crucial to a fung shui master’s bid for
control of Nina Wang’s HK$100-billion fortune, the High Court was told on
Thursday. Lawyer Winfield Wong Wing-cheung and company sales manager Ng Shung-mo
played an “elaborate charade” when the pair first claimed they had not seen a
copy of the late tycoon’s will and, when that was revealed to be untrue, refused
to testify about it, senior counsel Jonathan Harris told Mr Justice Johnson Lam
Man-hon. “Both of them had, in fact, been in possession of the will and prepared
statements before Mrs Wang died [last year],” said Mr Harris, who represented
feng shui master Tony Chan Chun-chuen. “Mr Wong in particular for some reason,
which he hasn’t explained, rushed to prepare a statement [about the will] and
then withheld it from us until last week. “He played an elaborate charade.” In
an e-mail, Mr Wong said: “In view of the pending legal proceedings, I think it
is inappropriate and inconvenient for me to make any comment on the topic.” Mr
Ng did not return phone calls or e-mail requests seeking comment. The pair also
claimed they had no idea which will Mr Chan’s lawyers wanted to see, Mr Harris
said, adding that the men should pay legal costs stemming from a bid to force
their testimony. “They’ve wasted our time,” Mr Harris said. “This is a
complicated case. The way in which the witnesses behaved made it more
complicated.” Thursday’s allegations came as the acrimonious legal battle headed
for a trial expected to start in early 2009. At issue was whether Mr Chan or Mrs
Wang’s Chinachem Charitable Foundation are the rightful inheritors of the
massive estate. The two sides pointed to rival wills, dated four years apart
that they claimed would prove their case. Wang, once Asia’s richest woman and
chairwoman of the Chinachem Group conglomerate, died from cancer in April last
year. Her death came less than two years after she won a bitter, decade-long
battle with her father-in-law, Wang Din-shin, over the estate of her husband,
Chinachem founder Teddy Wang Teh-huei – who has not been seen since he was
kidnapped in 1990. The current legal dispute emerged after the foundation said
it had a will that gave it control of the estate. Mr Chang, who was a close
friend of Mrs Wang, subsequently claimed the billionaire signed a will in 2006
that gave him all her money. 
The anticipated surge in parents
seeking kidney checks for their children at government clinics failed to
materialize on National Day yesterday. But mainland parents flocked to the SAR
border town of Sheung Shui to stock up on imported milk powder. "Although the
number is lower than expected, we'll continue to do our best to eliminate
parents' concerns," Hospital Authority chairman Anthony Wu Ting-yuk said after
visiting a government clinic designated for melanine- related checks in Kwun
Tong yesterday. About 20 to 30 children and their parents were seen waiting at
the Tuen Mun clinic in the morning, most with advanced bookings. Free kidney
checks at 18 outpatient clinics and nine additional assessment centers will last
at least six months for children under 12 who have or may have consumed
melamine-tainted milk products, he said.
Li
Na recovered from a terrible start to pull off a scarcely credible 0-6, 6-1, 6-4
victory over world number one Serena Williams in the second round of the
Stuttgart Grand Prix on Wednesday. Williams, playing her first match at the
indoor tournament after receiving a first-round bye, took advantage of a series
of errors from her unseeded opponent to take the first set in just 21 minutes.
It looked a complete mismatch at that stage but in the second set Li suddenly
found her range, hitting the lines more and more often and putting Williams
under increasing pressure. Williams, who won her ninth grand slam title at the
US Open last month, made 11 unforced errors in the second, dropping her serve
twice along the way, and despite improving in the third she was unable to
re-establish herself. Li broke for 4-3 in the decider and while Williams saved
three match-points in her next service game she was unable to stop her opponent
serving out for the match, which she clinched with an ace down the middle. Li
was joined in the quarter-finals by Victoria Azarenka of Belarus, who upset
eighth-seeded Pole Agnieszka Radwanska 6-1, 7-5. Patty Schnyder of Switzerland
earlier overcame Russian fifth seed Svetlana Kuznetsova 6-4, 4-6, 7-5 in an
entertaining first round match. Serving strongly throughout, the 29-year-old
Schnyder set up match-point when Kuznetsova marginally over-hit a return and
clinched it when the Russian’s attempted backhand winner drifted wide.
"From every aspect, no matter whether promotion, marketing, operations,
management or security, the Shanghai World Expo can learn from the Olympics,"
said Shanghai World Expo Bureau head Hong Hao. "The World Expo is the cultural,
scientific and economic Olympics." Like the Olympics, the expo will be laden
with political significance for China. Like the Olympics, Shanghai will mobilise
an army of volunteers and muster all the powers of the state to ensure nothing
goes wrong. "Hosting a successful, splendid and unforgettable World Expo is
crucial for China in its drive to fully build a well-off society and speed up
socialist modernisation," reads a poster at an expo exhibit. Among the
differences, the expo will last for six months (from May 1 to October 31)
instead of two weeks, and 70 million visitors are expected. Countries will
participate in the expo, and companies will sponsor it to acknowledge China's
growing power and seek inroads into its market. A record 222 countries and
international organisations have already signed up, and top sponsors include
Germany's Siemens and Coca-Cola. Organisers make no secret that several
countries that have formal diplomatic relations with Taiwan will participate, a
political win for China. Nations classified as "developing countries" are
receiving subsidies as encouragement. "It doesn't matter if they don't have
diplomatic relations with us. We welcome them all to come," Mr Hong said. Amid
improving relations, Taiwan itself might even participate, which would be its
first official involvement in a World Expo since the island was ousted from the
United Nations in 1971. Taiwan's capital, Taipei, signed an agreement in June to
attend. Planners have already set aside land next to the China pavilion for
Taiwan, alongside Hong Kong and Macau. "We are getting in contact with some
Taiwanese organisations, institutions and industry groups. We think the Taiwan
pavilion can definitely be done well," Mr Hong said without offering further
details. China has already stated that the perceived political and economic
benefits from the expo outweigh the likelihood the event will lose money. Based
strictly on operating expenditure and revenue, the event will lose about 1
billion yuan (HK$1.12 billion), according to official estimates. "There is a big
difference between the World Expo and other exhibitions; the expo is a
non-profit activity," Mr Hong said. The estimated 28.6 billion yuan budget
doesn't include the 18 billion yuan for construction. Shanghai has already
started construction on major structures for the expo and plans to have them
finished by the end of next year. On a recent visit, workers swarmed over the
China pavilion, which will incorporate elements of traditional architecture in
red. The main structure of the building is nearly finished, despite the tight
schedule and complicated design. One way organisers will limit costs is to rely
on 150,000 volunteers as "vital cogs" for the event. Olympic volunteers received
high marks for their enthusiasm, but showed a lack of expertise in specialised
areas such as handling the media. Some expo volunteers are already on the job,
like Tongji University student Sun Chenyi , who works at an exhibition promoting
the expo. "It's fun and we can meet a lot of people," he said. Mr Hong said it
was too early to say whether Shanghai would implement measures such as limiting
cars on the road and shutting down factories to improve air quality as the
Olympics did. However, some traffic controls were likely and security was
paramount, he said. "If there is a problem with security, then the event will
fail," he said. "The principle is to guarantee security and at the same time
make it convenient for visitors." Shanghai's hotel industry is already
speculating whether China will restrict visas for foreign nationals at that time
to limit potential security threats, as it did during the Olympics. Regardless,
organizers of the expo said the main target would be the domestic audience with
overseas visitors expected to account for about only 5 per cent of the total.
A plan by
Belgian-Dutch financial firm Fortis to sell half of its asset management arm to
Ping An Insurance (2318) has been put on hold because of the crisis in the
global capital market.
Chinese President Hu Jintao and other members of the Standing Committee of the
Political Bureau of the Communist Party of China (CPC) Central Committee,
including Wu Bangguo, Wen Jiabao, Jia Qinglin, Li Changchun, Xi Jinping, Li
Keqiang, He Guoqiang and Zhou Yongkang, walk towards the Monument to the
People's Heroes in Tian'anmen Square in Beijing, capital of China, Oct. 1, 2008.
China's top leaders laid flower baskets at the monument on Wednesday morning to
mark the 59th anniversary of the country's founding. China's top leaders laid
flower baskets at the Monument to the People's Heroes in Beijing yesterday to
mark the 59th anniversary of the country's founding. At the monument in
Tiananmen Square, all nine members of the Standing Committee of the Politburo of
the Communist Party of China Central Committee participated in the ceremony to
pay their respects to those who made sacrifices for the nation's independence.
Led by President Hu Jintao, the members - Wu Bangguo, Wen Jiabao, Jia Qinglin,
Li Changchun, Xi Jinping, Li Keqiang, He Guoqiang and Zhou Yongkang - laid the
baskets, accompanied by 18 military honor guards. The leaders then walked around
the monument as they viewed inscriptions on its sides that depict the history of
the nation's modern struggle. "This year also marks the 30th anniversary of
China's opening up and reform policy," said Liu Zhigang, a doctor from Sichuan,
who brought his family to watch the ceremony. More than 5,000 people gathered in
the square decorated with national flags, Beijing Olympic mascots and models of
the Shenzhou VII spacecraft. 
People
watch the national flag raising ceremony at the Tian'anmen Square in Beijing,
capital of China, Oct. 1, 2008. Some 53.2 million people hit the roads in China
on Wednesday, the third day of the "golden week", said a Ministry of Transport
(MOT) spokesman.
Visitors roam Zhoucun village, a ancient town of Zibo, east China's Shandong
Province, Sept. 30, 2008. Zhoucun village that boasted its original folk custom
attracted lots of tourists from home and abroad during the National Day
Holidays.
China's sixth largest lender, China Merchants Bank (CMB), announced on Tuesday
that it had completed the 17 billion yuan (2.48 billion U.S. dollars) purchase
for 53.12 percent of Wing Lung Bank's equity. Ma Weihua, CMB's president, would
serve as Wing Lung Bank's board chairman, while CMB's vice president Zhang
Guanghua would act as the vice chairman of the family-run bank based in Hong
Kong, according to the public announcement of the Shanghai-listed CMB. There are
currently ten members in the Wing Lung Bank's board of directors, with five from
the CMB and the others from Wing Lung. Ma said the recent global financial
turmoil had relatively small impacts on the two banks and would not diminish the
strategic importance of CMB's purchase action. He added that the CMB had a
positive view of the economic prospects in both the country's mainland and the
Hong Kong Special Administrative Region. He believed this stake purchase was in
line with the CMB's strategic development goals. Incorporated in 1933, Wing Lung
has developed into the fourth largest bank in the special administrative region
of China. 
Lipton milk tea powder- being
recalled by Unilever Hong Kong in Hong Kong and Macau - on sale at a Wellcome
supermarket in Causeway Bay yesterday. After confectionery maker Lotte and
chocolate producer Cadbury, food manufacturers Lipton, Glico and Ritz are the
latest big brands with products found to be contaminated with the industrial
chemical melamine. Unilever Hong Kong yesterday recalled four batches of Lipton
3-in-1 milk tea powder sold in Hong Kong and Macau, after finding melamine in
internal quality checks. "Melamine at the level between less than one part per
million to 16ppm has been detected in the affected products," Unilever Hong Kong
marketing director Sharon Hwang said. Unilever owns Lipton. Under Hong Kong's
guidelines, the melamine safety limit is 2.5 parts per million but 1ppm for
pregnant women and young children. Ms Hwang said the products recalled include
mainland-produced milk powder. The affected items are Lipton Milk Tea Powder
Original (20 sachets) and Lipton Milk Tea Powder Gold (10 sachets and 20
sachets) with best-before dates between November 17 and November 19, 2009. "We
use milk powder from New Zealand and other foreign countries for most of our
products ... only since May 17 have we started using China-made milk powder in
some products," she explained, adding that other Lipton products on the market
were melamine-free. The Centre for Food Safety found excessive melamine in three
other products in its latest tests, which covered 119 samples of milk,
chocolate, biscuits, cookies, cakes, egg rolls and other dairy products. Glico
Pocky Men's coffee-cream-coated biscuit sticks had 43ppm of melamine, and
Zhongshan-produced coconut cakes and walnut cakes contained 19ppm and 3.7ppm of
the chemical. The centre's spokesman said a three-year-old child weighing 10kg
would have to eat about 1.5 packs, or 0.07kg, of the Glico biscuit sticks a day
to reach the melamine safety limit, while an adult with a body weight of 60kg
would need to consume about 17 packs daily to exceed the limit. The centre also
tested some chocolates made by Cadbury - which recalled 11 of its products on
Monday - and some M&Ms and Snickers chocolate bars. Its spokesman said results
showed all the samples were satisfactory although one - Cadbury Chocolate
Eclairs (in the 180g package) - contained 1.9ppm of melamine. Mars tested its
M&Ms, Snickers and Dove chocolate products in Hong Kong and said they were safe
to eat. That result came a day after the Indonesian Food and Drug Monitoring
Agency said it found unusually high levels of melamine in M&Ms, Snickers and
Oreo chocolate candies. The Korea Food and Drug Administration yesterday said
two more mainland-made snacks - Ritz Cracker Sandwiches Cheese produced by
Nabisco Food Suzhou, and Savoury Rice Crackers made by Danyang Day Bright Foods
- contained 23.3ppm and 1.77ppm of melamine, respectively. Kraft Foods Hong Kong
said the affected Ritz crackers were produced on the mainland while those sold
in Hong Kong were made in Indonesia and contained no dairy ingredients from the
mainland. An official with Danyang Day Bright Foods of Zhenjiang, Jiangsu
province, who only gave his surname, Jia, said the company had not at this stage
been informed by its South Korean distributor about the reported melamine
contamination. Danyang Day Bright Foods is one of the two subsidiaries set up by
Thailand's Day Bright Group on the mainland. Mr Jia admitted yesterday that the
company used to buy some of its powdered milk from Sanlu Group. "But Sanlu only
accounted for a small portion of our supplies," he added. Mr Jia said his
company had frozen its entire inventory about two weeks ago, but declined to say
if the stocks had been tested for melamine.
This is the flag-hoisting ceremony at
Tian'anmen Square. The 59th anniversary of founding of the People's Republic of
China, which fell on Wednesday, was celebrated by people from different walks of
life across the country. At Tian'anmen Square, the heart of the national capital
of Beijing, some 190,000 people from different part of the country gathered
early on Wednesday to attend a special flag-hoisting ceremony marking the
occasion.
Giant pandas play at the Xiangjiang Wildlife World in Guangzhou, capital of
south China's Guangdong Province, Sept. 30, 2008. Ten giant pandas in the zoo,
including five adopted from Wolong nature reserve in the quake-hit Sichuan
Province, become the tourists' favorite attraction in the city during the
National Day Holidays. 
Autumn is the best time of year for oolong and the pick of the crop is now to be
found in East China's Fujian province. Four famous Chinese oolong teas are
tieguanyin (Iron Goddess of Mercy), produced in southern Fujian; dahongpao (big
red robe) in northern Fujian; fenghuang (phoenix) dancong oolong in Guangdong
province, and dongding (top-frozen) oolong in Taiwan. It is the best time of
year to visit the Wuyi Mountains, which produce the four most famous northern
Fujian oolong teas: dahongpao, also called "rock teas" as they grow on cliffs;
baijiguan (white cockscomb); Wuyi rougui (rock teas with cinnamon flavor); and
Wuyi shuixian (rock teas with the scent of narcissus flowers). Oolong tea is
half fermented and looks dark green. Because they grow on the mountains,
northern Fujian oolong teas are known for their floral fragrance and a "rock
rhyme". They taste strong, round and have a descending power in the body, which
people call "the bone of rocks". The fragrance lingers long in the mouth. The
big red robe tea got its name from a story. A Chinese scholar in the Ming
Dynasty (1368-1644) was passing through Fujian when he fell sick with a
stomachache. Local monks offered him a cup of tea and cured him, so that he not
only took a national qualifying exam for officials but also became the top
qualifier. He also used the tea to cure the Queen's stomach problem. He later
returned to Fujian and tied a red robe of honor on the tea tree.
This photo taken September 30,
2008 shows a musical waterscape performance in the National Aquatics Center,
better known as the Water Cube. A waterscape concert titled "Dream of the Water
Cube" kicked off at Beijing's National Aquatics Center on Tuesday night. The
concert is part of a four-month-long musical performance series presented by the
Beijing Artists Management Corp, the Beijing International Culture & Art Corp,
and the National Aquatics Center. The performances will be devoted to four music
genres: classical, electronic, pop and rock and roll. The performance Tuesday
night was divided into six segments, each comprising classical music and a
fountain performance using high-tech sound effects and lighting techniques. The
performances will last through January 2009. Each concert can accommodate 8,000
audience members, and the cheapest tickets will be sold for 200 yuan.
BYD soars as Buffett bets on its electric
cars - BYD (1211) shares roared out of the gate yesterday when the stock resumed
trading after US billionaire Warren Buffett's strategic investment in the
Chinese battery maker boosted the firm's capital to allow it to pursue its dream
of making electric cars. The shares soared 90.5 percent in early trading before
settling back and closing at HK$11.90, up 41.7 percent. Nearly 21 million shares
changed hands on turnover of close to HK$260 million. David Sokol, chairman of
MidAmerican Energy Holdings, a unit of Buffett's investment vehicle Berkshire
Hathaway, said while the company was sensitive to an appropriate investment
value, it did not buy a 9.9 percent stake in Shenzhen- based BYD merely because
of the cheap share price. "We invest on the future of this alternative fuel car
... we are thrilled to make an additional investment, if it makes sense, with
BYD," Sokol said in Hong Kong. He added it was Berkshire's first investment in
China whereby it would partner with a mainland firm. He said MidAmerican, one of
the largest renewable energy investors in the United States, is bullish on the
future of electric cars among many alternative fuel vehicle choices. "The
investment is a huge vote of confidence for BYD," said JPMorgan technology
analyst Charles Guo, adding it will "elevate BYD's profile and help future
customer acquisitions." BYD is reportedly considering selling domestic A shares
in the mainland to broaden funding channels. MidAmerican Energy said it will
acquire 225 million BYD shares, paying about HK$8 apiece, for a total investment
of HK$1.8 billion. BYD has plans to start selling electric cars in China by
2010, and to overseas markets the following year. 
EU Trade Commissioner Peter Mandelson
drinks a Beijing-branded yogurt at a press conference in the capital on Friday.
Mandelson said he was confident of Chinese dairy products despite the recent
tainted milk food scandal. 
Food safety personnel check on the
fresh milk at a milk collection station in Chengdu on Sunday. Police in northern
China have arrested 27 people in their probe into tainted milk that has sickened
53,000 children and embarrassed the mainland's reputation abroad, state media
reported on Tuesday. The 27 are among 36 detained since law enforcers in Hebei
province started investigating Sanlu Group, the company at the centre of the
scandal, earlier this month. It followed the discovery that the industrial
chemical melamine, which is normally used to make plastics, had been added to
Sanlu powdered milk. Xinhua news agency had reported 22 detentions by Monday,
and said they were involved in a network that made and sold melamine and added
it to milk. Four children so far have died after drinking milk tainted with
melamine, which can make watered-down milk appear richer in protein. According
to police investigations in Hebei, where Sanlu is headquartered, the melamine
was produced at underground plants and sold to breeding farms and purchasing
stations, the China Daily reported on Tuesday. It said mainland officials,
learning that the purchasing stations were among the key links in how the
contaminated milk spread, have kicked off a national campaign to overhaul the
system. Altogether, 31 provinces have set up special task forces to supervise
the purchasing centers and implement more standardized practices, the newspaper
said. As the tainted milk scandal has multiplied, a growing range of
mainland-made products abroad have been pulled off shelves.
Microsoft slashes China's prices - Microsoft has cut the selling price in the
mainland of one of its software products by over 70 per cent to counter rampant
piracy. It is the first special offer since Microsoft entered the mainland
market in 1992, the company said. Microsoft said it had slashed the price for
Office last year Home and Student Edition to 199 yuan (HK$227) from 699 yuan.
The promotion, which started on Monday, will last through next week’s National
Week holiday. The price cut is designed to make Microsoft’s products in the
mainland more affordable and more promotions are likely in future, said Jim Lin,
the company’s public relations manager in Beijing. “With this price, we believe
more customers can enjoy authorised software products,” he said. Violation of
intellectual property rights has been a running sore in mainland’s relations
with its trading partners, including the United States. US movie, music,
software and book industry groups estimate they alone lost US$3.5 billion in the
mainland due to piracy last year, three times more than in 2001. Microsoft, the
world’s largest software firm, is among the hardest-hit victims. Pirated
versions of Microsoft’s Office software can sell in the mainland for less than
10 yuan. Last month police detained the operator of a website, “Tomato Garden”,
from which millions of pirated versions of Microsoft software had been
downloaded, according to media reports.
Bargain Chinese property projects will be
up for grabs in coming months as developers scramble to survive falling home
sales and a funding crunch. But circling foreign funds can no longer expect a
big firesale as the government eases tough steps to cool the market, fearing
mass bankruptcies and a damaging property price slide. When Beijing upped the
ante against property speculation at the end of last year by ruling that buyers
of second homes must pay 40 percent in equity, apartment sales and prices slid
in Guangzhou and Shenzhen. Developers, squeezed by a land appreciation tax and a
clampdown on bank lending, found that capital market turmoil closed off share
and debt issuance. Some fund managers believed their time had come, and cheap
deals would open up a mainland property market where a yearly influx of eight
million people into cities promises long-term riches. They are still waiting.
"We expected there to be a lot more guys going under and a lot more forced sale
situations," says Chris Gradel, managing partner at Pacific Alliance. Describing
the resilience of Chinese developers as "one of the biggest surprises of the
year," Gradel says property companies had muddled through with presales, delayed
payments to contractors, and borrowing from banks and other sources. Local
authorities have also been stretching payment schedules for land, and choosing
not to implement a government edict that developers lose land if they fail to
build within two years. However, with bank loans to developers down 30 percent
in the first half of this year to 399 billion yuan (HK$455 billion), according
to the People's Bank of China, thousands of companies are vulnerable, especially
if they took part in a buying frenzy last year. "The guys who blew all their
cash in the second half of last year are the guys who are having the most
trouble," Gradel says. "I think there's a good chance we'll see some more
distress over the rest of the year." So far, few bankruptcies have been
reported. Nanjing property tycoon Liu Fulin abandoned his home building business
in February in favor of pig farming when hog prices soared, local television
reported. Another firm in the eastern city, Nanjing Panlong Jinling Property
Development, went bankrupt in July, according to property website
Top Chinese leaders Hu Jintao,
Wu Bangguo, Wen Jiabao, Jia Qinglin, Li Changchun, Xi Jinping, Li Keqiang, He
Guoqiang and Zhou Yongkang and other Party and state leaders attend the National
Day reception at the Great Hall of the People in Beijing, capital of China,
Sept. 29, 2008. China's State Council held the reception on Sept. 29 to
celebrate the 59th anniversary of the founding of the People's Republic of
China.
A girl selects some crafts at the
flea market in Nanjing, capital of east China's Jiangsu Province, Sept. 29,
2008. A three-day-long flea market was opened Monday in the city.
Mainland Chinese actress Hu Jing
married Malaysian business tycoon Frank Choo early Saturday, September 27, 2008.
The grand marriage ceremony was held at Asia's most extraordinary hotel, Palace
of The Golden Horses in Kuala Lumpur, Malaysia. 
China's four-time Olympic table tennis
gold medalist Wang Nan (2nd L) pours Champagne into glasses at her wedding with
long-time partner Guo Bin onboard a luxury yacht in Yantai, Shandong Province,
September 27, 2008. Wang's teammate Ma Lin (R), the reigning Olympic men's
singles champion, and Japan's most popular table tennis star Ai Fukuhara (L)
were best man and maid of honor respectively.
Customers return tainted milk powder at a supermarket in Hefei, Anhui province
last week. China takes measures to regulate dairy market, aid dairy farmers.
Chinese Ministry of Agriculture (MOA) said that 29 provincial areas nationwide
had set up special working groups by Wednesday to regulate the dairy product
market in response to the recent tainted baby formula scandal. Local governments
also promised subsidies for dairy farmers, in a bid to reduce their cost of
feeding cows. North China's Hebei Province earmarked 316 million yuan ($46.4
million) as subsidies on the basis of 200 yuan for each cow, said the ministry
on its website. Central China's Shanxi Province would grant a subsidy between 10
and 18 yuan per day for each cow to dairy farmers in major milk producing cities
and counties. Liaoning Province in northeast allocated 108 million yuan as
subsidies for 240,000 cows, according to the MOA. The General Administration of
Quality Supervision, Inspection and Quarantine (AQSIQ) also announced Wednesday
that a quality check of milk, yoghurt and other liquid dairy products produced
after September 14 had shown no signs of toxic chemical melamine. The Sanlu
Group, a leading Chinese dairy producer based in northern Hebei Province,
admitted on September 12 that it had found some of its baby milk powder products
was contaminated with melamine. "The quality sample check this time covered
major brands including Mengniu, Yili, Guangming and Sanyuan," said the AQSIQ.
The quality watchdog would continue conducting dairy product quality inspections
and make public the results in a timely manner.
