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December 25 - 31, 2008
Lai Fung Holdings (1125) - the mainland property arm of Lai Sun Group - expects to reap about HK$2.2 billion from two mainland residential projects next year. The company plans to start marketing the remaining 300 flats at Shanghai Regents Park phase II during the Lunar New Year or later and expects to earn between HK$1.6 billion and HK$1.7 billion. About 150 homes were sold earlier this year. "The property market is slower this year compared with the previous year, but prices are stable," executive director Kraven Tam Kin-man said yesterday. "We are still optimistic about the market after the central government cut interest rates actively." Lai Fung has also sold up to 70 percent of the units at Guangzhou West Point. The project consists of 243 flats and serviced apartments as well as commercial space. Tam expects the remaining homes will all be sold next year for HK$500 million. He predicts rental income from its Shanghai Hong Kong Plaza will surge after a yearlong HK$200 million renovation. Rental income for the year ended July 31 was HK$181.4 million for the plaza. "Rental income in Guangzhou and Shanghai amounted to HK$250 million [last year]," he said. Sister company Lai Sun Development (0488) said it expects rent from its properties in Hong Kong to drop by up to 5 percent because of the weak market after recording some growth this year.
The China Association of Automobile Manufacturers recently announced the top 10 sedan models in regards to sales volume from January to November this year. They are, in order, Jetta, Santana, Excelle, Corolla, Accord, Camry, F3, QQ, Xiali and Elantra.
The mainland is at "grave risk" of missing its goals for social and economic development if it fails to deal properly with problems thrown up by the global financial crisis, the minister for economic planning warned yesterday. "As a result of the global financial crisis, we are facing severe challenges in the implementation of the 11th five-year plan," Xinhua quoted Zhang Ping , minister in charge of the National Development and Reform Commission, as saying. The 11th five-year plan runs from 2006 to 2010. He said the global financial turmoil was expected to last for some time, and a global economic downturn was inevitable. "If we are unable to properly deal with the difficulties, we might be faced with grave risks of failing to realize our strategic goals in economic and social development." To counter this, a cabinet meeting chaired by Premier Wen Jiabao decided yesterday to take steps to boost domestic consumption and exports, the two main drivers of the world's fourth-largest economy. To boost growth in the short term, the government would invest an additional 100 billion yuan (HK$113 billion) in new projects in the fourth quarter - which ends next week - and allocate 20 billion yuan to a special earthquake relief fund, he said. Mr Zhang warned the quality of bank assets would worsen as corporate losses mounted. Under the 4 trillion yuan stimulus package the central government announced early last month, banks are being encouraged to lend more for infrastructure projects and to small and medium-sized firms badly hit by the crisis. Mr Zhang also proposed measures to help boost exports, help low-income families and fund education, health care, pensions and environmental protection. He did not elaborate. He warned that weakening demand for property had affected economic growth. The minister said the volume of real estate sales, in square meters, in the first 11 months of the year was 18.3 per cent lower than in the same period last year. Mr Zhang's deputy, Zhang Mao , said the government would regulate land sales and seek to stop land prices rising too rapidly. "Volatility in the property market may induce some negative impact," Zhang Mao said. "A moderate decline in high property prices can help the property market return to a path of rational and healthy development, but we ought to prevent a sharp fall in property prices." The government has stepped up its efforts to stabilise the property market since mid-September - slashing lending rates and reducing duty on home sales. Economic growth slowed to 9 per cent in the third quarter, and to 9.9 per cent in the first nine months, compared with 11.9 per cent for the whole of last year. Economists expect a further weakening of growth in the fourth quarter. But Li Yang, a prominent economist, said the economy would probably recover in the second half of next year, making it one of the first to see a turnaround. To make that a reality, Beijing is taking steps to boost development in nine major industries - steelmaking, carmaking, shipping, petrochemicals, textiles, light manufacturing, nonferrous metals production, equipment manufacturing and information technology - Zhang Ping said in a briefing to lawmakers. Guangzhou will spend nearly 50 billion yuan (HK$56.66 billion) on cleaning up the Pearl River and its tributaries by mid-2010, in time for the Asian Games that November. Zhang Hu , director of the Guangzhou municipal bureau of water affairs, said the city government would clean up 121 rivers with a total length of 388km in 18 months. It would order factories, restaurants, clinics, construction sites and farms to upgrade their sewage treatment facilities, he said. Guangzhou will also build 30 new sewage treatment plants, increasing treatment capacity by 2.25 million tons a day. The announcement was made as a water quality program was launched on Tuesday with construction of a treatment plant for the Shijinghe, a tributary of the Pearl River. Locals often call the Shijinghe "Black Dragon River" because of its severe pollution and foul odour. Mr Zhang said that from January 1, Guangzhou residents would no longer be allowed to discharge untreated sewage directly into rivers. The bureau would also demolish buildings on the banks of rivers designated as sources for drinking water, he said. Water shortages, water pollution and flooding have constrained growth and affected public health in many parts of the mainland. The World Bank says the per capita availability of natural fresh water on the mainland is a quarter of the world average. A report from the bank in 2006 said a combination of water scarcity and poor water quality was greatly jeopardizing the sustainability of water resources. The environment minister said the nation had stepped up efforts to curb pollution at major water sources to improve water quality. The mainland had invested nearly 24 billion yuan over the past two years on distributing clean drinking water to its rural population, Environmental Protection Minister Zhou Shengxian said on Tuesday. In a report to a plenary session of the National People's Congress Standing Committee, Mr Zhou said the programme had so far benefited 109 million people. Water quality last year was almost the same as in 2006, while the urban sewage treatment rate reached 63 per cent last year, an 11 percentage point rise from 2005, he said. China's quality supervisor said on Tuesday that it would step up checks of soybeans from the United States after tons of soybeans were found tainted by pesticides. The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) said the local quality watchdog in eastern Zhejiang province found some 57,000 tons of US soybeans were mixed with soybean seeds coated with three types of pesticides: metalaxyl, fludioxonil and thiamethoxam. Such seeds are for planting and usually bear warning colors such as red, blue or green, said the AQSIQ. In response, the AQSIQ said it had issued a notice to all local quality bureaus, ordering them to implement an early-warning system within 90 days and step up inspections of US soybeans. The AQSIQ also informed the United States about the issue and required the US side to intensify quality checks on soybeans destined for China. The AQSIQ said it had found soybean seeds mixed in many batches of soybeans imported from the United States, which it said indicated there were major problems in the US soybean export system. December 24, 2008
Improved relations between the mainland and Taiwan do not necessarily pose a threat to Hong Kong, according a pro-government think-tank. Bauhinia Foundation Research Centre chairman Anthony Wu Ting-yuk said yesterday that members of the think-tank visited Taiwan recently and took note of aspects of life and activities that carry lessons and potential benefits for Hong Kong. "Hong Kong government officials should visit Taiwan more often since cross-strait relations have improved," Wu said. More Taiwanese firms should be encouraged to list in Hong Kong, while local professionals should consider opportunities in Taiwan. Hong Kong should also consider importing agricultural products from the island. Wu said Taiwan has a successful creative outlook and an educational system that fosters cultural development. For instance, Taiwanese embrace gastronomy in their culture, Wu continued. "They have countrywide beef noodle competitions every year, so why can't we have a wonton noodle competition?" Wu hopes too that the day will come when Hong Kong think-tanks can be as influential as those in Taiwan and the mainland. The Chung-Hua Institution for Economic Research, the Taiwan Institute of Economic Research and the mainland's Chinese Academy of Social Sciences were welcomed as official think-tanks, he remarked. "I don't rule out the possibility that Bauhinia can eventually develop into a think-tank like those." Bauhinia has developed ties with several political appointees, but Wu side- stepped questions about the think-tank moving to foster more political talent. Bauhinia wanted to do no more than stimulate interest in public affairs, Wu said. Hong Kong recorded a 51.3 billion HK dollars surplus in its balance of payment account, at 11.9 percent of GDP, in the third quarter, announced the Census and Statistics Department of Hong Kong SAR on Tuesday. According to the Census and Statistics Department, of the major balance of payments components there was a current account surplus of 76.5 billion HK dollars, compared with 34.8 billion HK dollars in the previous quarter. A net outflow of financial non-reserve assets amounting to 49.2 billion HK dollars was recorded. Beating the 60.1 billion HK dollars for the same quarter last year, the current account surplus in the third quarter of 2008 was characterized by an increase in visible trade deficit, a rise in invisible trade surplus, an increase in net inflow of external factor income, and a continued net outflow of current transfers.
China military authorities are considering building an aircraft carrier to protect its interests, a development likely to worry its neighbors. Beijing’s rising military spending has prompted concern in the United States and elsewhere, especially in Japan and self-ruled Taiwan. “Aircraft carriers are a symbol of a country’s overall national strength as well as the competitiveness of the country’s naval force,” Chinese Ministry of National Defense spokesman Senior Colonel Huang Xueping told reporters. “China has a large sea territory. It is the sacred responsibility of our armed forces to protect our sea territory and to maintain our maritime sovereignty and rights and interests. China, taking into account all relevant factors, will earnestly research and consider [building aircraft carriers].” Taiwan was cautious in its reaction. “We need to do some research before we can judge whether (the carrier) is directed at Taiwan,” said Ministry of National Defence spokeswoman Chih Yu-lan. Mainland military officials have been lobbying the central government for years to build an aircraft carrier, which would allow naval forces to project air power offshore, but rarely make public statements about their intentions. Hong Kong media have said the mainland could build its first carrier by 2010. The comments come amid strained military ties between Washington and Beijing, and as China prepares to send two navy destroyers and a supply ship on Friday to the Gulf of Aden, to join international efforts to fight rampant piracy off the Somalian coast. US defense officials last week welcomed China’s Somalia mission and said they hoped it would act as a “springboard” for resuming contacts with Beijing, which China suspended in October in protest over a US$6.5 billion arms sale to Taiwan. Huang, however, said the US military had more work to do to improve ties. “At present the military relationship between China and the United States has some difficulties, but the responsibility is not with the Chinese side,” he said. “We hope the US side will take seriously the major concerns and interests of the Chinese side... and take concrete actions to create conditions for military relations to recover.” The United States switched diplomatic recognition from Taiwan to China in 1979, recognizing “one China”, but remains the island’s biggest ally and arms supplier and is obliged by the Taiwan Relations Act to help the it defend itself.
China announced plans Monday to establish a social security number system for the welfare of its citizens. The draft of the social insurance law was discussed by the Standing Committee of the 11th National People's Congress, the country's top legislature, on Monday. The draft said China would establish a standard social security number system across the nation by using each citizen's current identification card number. The social insurance fund will be categorized into endowment insurance, medical insurance, insurance against injury at work, unemployment insurance and childbirth insurance, the draft said. Currently, China's social insurance fund is managed by the Ministry of Human Resources and Social Security and its branches in provinces, municipalities and autonomous regions. December 23 2008
Computer games show cuts entry fee but fails to draw in punters - Cutting the entry fee failed to boost attendance at the seventh Asia Game Show, which closed yesterday after a disappointing last-day turnout. Despite a reduction to HK$10 from HK$30. Ten NGOs have received a total of HK$87 million in government funding to run 12 reconstruction projects in Sichuan , the first batch of groups to do so. And the government plans to apply to the development panel of the Legislative Council for more funds to help rebuild the quake-hit areas in the province, Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung said. The Hong Kong government had said the city aimed to provide up to HK$10 billion in government and private funds for the reconstruction in Sichuan, where a massive earthquake in May left tens of thousands of people dead. Government funds worth HK$2 billion were granted by the Legislative Council in July. From this amount, the government is setting aside HK$100 million to sponsor rebuilding projects being run by local non-governmental organisations. The first 12 projects will range from rebuilding and reinforcing schools, and setting up rehabilitation centers to providing prosthesis and orthopaedic training and services to quake victims. They will be run by 10 organisations - the Youth Foundation, Sowers Action, Polytechnic University, Society for Rehabilitation, Scout Association, Rotary Club of Kowloon West, the Association of Engineering Professionals in Society, the Association of Chinese Evangelical Ministry Limited, Federation of Education Workers Education Organization Limited, and the Chinese Speaking Orthopaedic Society. Each project will cost between HK$1.5 million and HK$11.67 million. Chief Secretary Henry Tang Ying-yen presented the funding-grant letters to representatives of the groups yesterday. He said the government received more than 40 applications from local NGOs in October and last month. More groups would receive support, he said. Chan Kai-ming, president of the orthopaedic society, said the group would use the funds to train orthopaedists, physiotherapists and nursing officers at the Sichuan-Hong Kong Rehabilitation Centre to be built at the Sichuan Provincial People's Hospital. Choi Yuen-wan, president of the Youth Foundation, said the group would focus on post-disaster psychological counseling in the region. Checks on imported food to be tightened - The food-hygiene watchdog has promised to tighten inspections following reports that importers have been sneaking uncertified mainland chicken carcasses into Hong Kong hidden among vegetables. Singapore's DBS Group and Japan's Mizuho Financial Group are seeking to raise HK$52 billion in total to shore up their capital ratios, ramping up pressure on other Asian banks such as HSBC (0005) and Bank of East Asia (0023), which have yet to tap new funds.
December 22 2008
The Social Welfare Department was duped into doling out a total of about HK$49 million in the 2007-08 fiscal year to reimburse applicants who falsely claimed to have lost money - as well as paying for designer glasses and bogus visits to the dentist. Hong Kong Exchanges and Clearing (0388) chairman Ronald Arculli admitted yesterday he has received many phone calls and letters in recent days disagreeing with the stock exchange's plan to extend the "blackout" period during which listed-company directors cannot trade their company's shares.
China’s plans to join the fight against piracy off the coast of Somalia could lead to a renewal of military exchanges between Beijing and Washington, a top US military official said Thursday. Admiral Timothy Keating, head of the Pacific Command, held out hopes for a revival in military relations after China said it was preparing to send warships to the Gulf of Aden in response to a pirate attack on a Chinese vessel. “I hope the Chinese do (send ships to the Gulf of Aden) and we’ll work closely with them,” Admiral Keating told reporters. “I think this could be a springboard for a resumption of dialogue between PLA forces and US Pacific Command forces,” he said. China suspended military contacts with the United States in October in protest over US arms sales to Taiwan valued at US$6.5 billion (HK$50.5 billion). Relations between Taipei and Beijing, which regards Taiwan as a renegade province, nevertheless have warmed since President Ma Ying-jeou assumed office in Taiwan in May. Admiral Keating said his command has been in touch with other agencies and military commands to provide information to the Peoples Liberation Army should it decide to deploy warships in Gulf of Aden. The United States wants “to make sure they are aware of the lines of communications that are available to them... should they desire to send ships to the area of piracy most prevalent which is of course the Gulf of Aden and off the coast of Somalia.” Since the start of the year, about 100 ships have been attacked by Somali pirates who are holding 240 sailors for ransom. China is to send two frigates and one support vessel to pirate-infested Somali waters for about three months for escort missions, it was reported yesterday. The group of three will leave from Sanya , Hainan province , after Christmas, state media said. Global Times, a subsidiary of the central government-run People's Daily, said it obtained the information from maritime departments. But the Foreign Ministry was more cautious in its regular press conference, saying the country was preparing for the mission and details would be available in a few days. On Tuesday, Foreign Affairs Vice-Minister He Yafei told a United Nations conference that China was seriously considering sending its navy to join an international operation in the Gulf of Aden to fight increasingly emboldened pirates, who have been seeking ransoms of about US$1 million per ship. The United Nations gave permission for international forces in the area to pursue the bandits on land, after extending the mandate for international combat against Somali pirates to one year. Foreign Ministry spokesman Liu Jianchao said Beijing was sending the navy to the area under the UN framework, since piracy there had already become a "threat to the international community". If realized, the mission would be China's first naval operation outside its immediate waters in the modern Chinese era, and as some point out, even in the 600 years since Ming dynasty voyager Zheng He ventured to the Cape of Good Hope. The Kenya Seafarers' Assistance Program said more than 300 ships were attacked or hijacked off Somalia last year. Between January and last month, more than 40 ships were hijacked, with 600 crew members on board. Half of these vessels are still in pirates' hands. Mr Liu said for Chinese ships alone, 20 per cent of the 1,256 journeys made through the Gulf of Aden in the first 11 months faced attacks. Seven China-related vessels have been hijacked this year, including two that were Chinese-flagged, several that were Hong Kong-flagged and other international vessels with Chinese crew members or cargo onboard. One of these is still being held. The latest attack on a Chinese ship was launched on Wednesday morning, just as Beijing announced its long-deliberated decision to combat pirates in the area. But although the pirates boarded the ship, they were forced to retreat four hours later after a "multilateral" rescue effort. The MV Zhenhua-4, a 60,000-tonne transport ship owned by the Chinese Communication Construction Company, was hijacked in the Gulf of Aden but the 30 Chinese sailors onboard held the pirates off until a Malaysian frigate and helicopter arrived and deterred the pirates. "We would like to express our gratitude to Malaysia and the concerned international organisation," Mr Liu said, referring to the International Maritime Bureau's Piracy Reporting Centre in Kuala Lumpur. Plagued by Islamist insurgents, droughts and a dysfunctional transitional government, Somalia has been mired in anarchy for 17 years, making piracy a much-desired and easy occupation for many people. UN agencies said up to 40 per cent of the country's 10 million people would be starving but for donated food. Beijing has approved in principle a plan to boost domestic demand and infrastructure in the Pearl River Delta region, which has been savaged by the global financial crisis, state media reported yesterday. The impact of the crisis on the mainland's economy was "getting worse by the day", and its effects were being sharply felt in the Pearl River Delta region, which plays a major role in the country's export industry, state television said, quoting notes from a meeting of the State Council. The State Council ordered local leaders to boost infrastructure and social welfare to expand domestic consumption, which - with the heavy losses in exports - is the government's hope for maintaining any growth in the near future. "The Pearl River Delta region's small and medium-sized enterprises and export-oriented companies are numerous. Their overseas exposure is high, and they have been hit relatively badly," the notes from the meeting said. "Maintaining stable and fast growth must be made the sole priority." Tens of thousands of factories have shut down in Guangdong in recent months, sparking industrial unrest due to slower exports amid the global credit crunch. Guangdong's GDP growth in the first nine months of this year was 10.4 per cent, the lowest in 15 years. And from January to October, growth in tax revenue dropped by 12.3 percentage points, to 19.8 per cent, compared with the same time last year. There is consensus among economists that the mainland is facing its most severe economic downturn since the Asian financial crisis in 1998.
December 20 - 21 2008
The government will announce arrangements within a year for a trial scheme to allow private cars from Hong Kong and the mainland to drive into each other's jurisdictions on temporary one-off passes. Secretary for Transport and Housing Eva Cheng said the scheme might first be introduced at the under-used Western Corridor. The expressway links Ngau Hom Shek in the northwestern New Territories to Dongjiakou in Shekou. Answering legislators' questions, Ms Cheng said quotas for the temporary passes should take into consideration the capacity of the road networks on both sides, road safety, security and environmental concerns. Mainland cars could be tested for Hong Kong's emission standards before their owners could apply. "Our target is to announce the arrangements for the first phase of the scheme within one year, while the actual implementation date will be worked out subject to the progress of discussions," she said. Ms Cheng added that experts from both sides would need to discuss details such as the number of passes, the issuing criteria, application procedures, mutual recognition of vehicle licences, insurance and traffic enforcement. She said the plan was aimed at allowing private car owners who could not get regular passes to apply for the one-off passes. "All information gathered about tested mainland cars will be used for setting up a data bank," Ms Cheng said. "We also want to make the application procedure convenient to users, such as by allowing them to apply via the internet." She said views had already been exchanged with Guangdong authorities. Both sides agreed to implement the proposed scheme in two phases, starting with the issuing of passes for private cars from Hong Kong, followed by those from Guangdong. Ms Cheng said the proposed scheme would provide specified quota limits to allow mainland residents to drive their cars to Hong Kong. "The number of ad hoc quotas may increase incrementally over the years in a gradual and controlled manner, or be adjusted flexibly having regard to seasonal demand."
Beauties lash out at ATV over Miss Asia result - Mainland contestants of this year's Miss Asia Pageant have complained about the alleged unfairness of the beauty contest and demanded that the organisers, ATV, explain the voting results. Some of the eight mainland contestants who did not make it to the final five have been voicing their discontent, either on their blogs or in interviews. Danae Shen, an 18-year-old contestant from Liaoning , questioned the results on her blog. "All the mainland contestants lost in this contest and have already returned to their respective hometowns," Ms Shen wrote. "But did all eight of us have so few votes?" The pageant this year scrapped the usual panel of judges in favour of public voting through the internet and mobile phones, to mark its 20th anniversary. There were 20 finalists, including six Hongkongers, eight mainlanders and one Taiwanese. The rest were from elsewhere in the region. Hongkongers Eunis Yao and Belinda Yan were crowned champion and first runner-up, respectively, on December 7. Lene Lai of Taiwan was second runner-up, while the fourth and fifth positions were taken by Hongkongers Bonnie Yuen and Tanya Manifold. But it was discovered that the voting results were different from the final outcome. Votes for some of the contestants were removed in the lead-up to the final after tens of thousands of ballots were found to have been cast for the same contestant at a time. The discrepancies prompted the television station to set up an independent committee to investigate. "All the unhappiness and unfairness that we have experienced during the contest have been kept in our hearts," Ms Shen wrote. "Here are the number of votes and the winners. Whether they will be altering the results, it won't matter any more." Amy Ma from Shandong said she heard the results were pre-determined a few days before the final. She also questioned why she received so few votes. Ada Wang from Yunnan told the mainland press that if ATV failed to give a proper explanation, she would call on other mainland contestants to take action. ATV said no action would be taken until the committee completed its investigation in two months. Bridge could bring HK$48b in benefits - The bridge linking Hong Kong with Zhuhai and Macau could benefit the city to the tune of 42.8 billion yuan (HK$48 billion) in terms of increased trade, and time and money saved, the government has said. In a paper released yesterday to explain the cost allocation for the bridge, it said the economic value was calculated based on reduced costs of freight operations, shorter travel time and increased freight volume for 20 years after 2016, when construction of the bridge is expected to be completed. The figure of 42.8 billion yuan compares with 24.1 billion yuan for the mainland and 7.1 billion yuan for Macau. Working backwards, this means Hong Kong, Zhuhai and Macau will be responsible for 50.2 per cent, 35.1 per cent and 14.7 per cent of the construction costs, respectively. The costs total 31 billion yuan, after private investments are factored out. The government said the benefit for Hong Kong was higher in part because a higher economic value has been attributed to its time saved, compared to the time saved in the other two cities. More than 23,000 passengers are expected to use the bridge after it is built in 2016, and the number will increase to more than 120,000 in 2035. Raymond So Wai-man, an assistant professor of finance at Chinese University, said the benefits to the city could be more than the official estimate, because the bridge would speed up cross-border economic integration.
Functional constitutional lawmakers yesterday defeated a motion calling on the government to buy back a 25 percent stake in the Link Real Estate Investment Trust, or Link REIT. An executive of Hong Kong's newest hotel, which is close to the airport, says the economic crisis may help lure people seeking promotional deals during its grand opening period. Business can flourish despite the troubled times and a drop in passenger and cargo traffic, according to Robert Jensch, general manager of the 658-room SkyCity Marriott near the airport at Chek Lap Kok. "I think we will have a good first year," he said. "The downturn could help as grand-opening promotional deals offered until March could price out competitors. "When times are tough, lower rates matter, and we will have good deals because we are trying to make sure people know about the hotel." A central part of the Airport Authority's HK$2 billion SkyCity project, the Marriott there adjoins a new nine-hole golf course as well as shops and restaurants next to AsiaWorld-Expo. Jensch sees the SkyCity area becoming a transport hub with the completion of the SkyPier and its ferry links to Shenzhen and Macau and the construction of the Hong Kong-Zhuhai-Macau bridge. "The Pearl River Delta has a growing economic base, and Hong Kong is the most convenient hub," he said.
China is to loosen its tight control on the property sector by allowing purchasers of second homes to enjoy the same benefits as first-time buyers, and cutting taxes to help both the ailing property market and wider economy. December 19 2008
Homeowners affected by the Kwun Tong town centre redevelopment would be paid compensation of HK$5,937 per square foot of their flats but owners said yesterday that they wanted almost double that. A Hong Kong police investigation into whether there was any criminality involved in unauthorised foreign exchange contracts at Citic Pacific (SEHK: 0267) would not result in any prosecutions, a mainland magazine reported. The report follows the revelation in the Sunday Morning Post (SEHK: 0583, announcements, news) that Hong Kong's Commercial Crime Bureau was in the early stages of investigating the circumstances surrounding the contracts and a six-week delay in reporting them to the market. The contracts have so far cost about HK$18 billion and forced the company to look to its mainland parent, Citic Group, for extra funding. Citing an unnamed source from within Citic Group, Caijing Magazine said it had obtained confirmation an investigation was under way. But the magazine said the source believed "the relevant parties would not be criminally prosecuted". Citic Pacific issued a statement on Saturday to say it had not been contacted by police. The losses stem from about 24 so-called "foreign currency accumulator" bets on the Australian dollar which oblige it to buy dollars at a fixed price over a period up to 2010. The rapid decline in the currency means it is now paying far more than market value, resulting in massive paper losses.
PCCW (SEHK: 0008) chairman and major shareholder Richard Li Tzar-kai has no plans to sweeten the offer to privatise the company despite growing opposition to the deal, sources said. Glass, Lewis and Co, an advisory firm to institutional investors, yesterday issued a statement to urge PCCW's shareholders to reject the offer, which it said was too low. "We are not convinced that the financial terms of the proposed transaction are fair for the company's independent shareholders," Glass Lewis said in a statement e-mailed to several institutional investors. David Smith, co-head of Asian corporate governance research at RiskMetrics Group, also said the deal was not in the best interest of investors, according to Bloomberg. However, a source said: "Mr Li wants to maintain the offer price at HK$4.20, as it seems that institutional investors think the price was reasonable." Mr Li's Singapore-listed flagship, Pacific Century Regional Developments, and China Network Communications Group, which together own 45.2 per cent of PCCW, want to buy out all other stakeholders at HK$4.20 a share, a 17.6 per cent premium over yesterday's closing price of HK$3.57. PCCW minority shareholders will meet on December 30 to vote on the deal. It needs support from more than 75 per cent of the votes and cannot get 10 per cent or more veto votes. The deal will also need approval from PCRD's minority shareholders, and sources say Mr Li, who owns 75 per cent of PCRD, has already mustered enough support. Public hospitals are witnessing a rare influx of nurses amid the financial crisis. In the last week, the Hospital Authority, which runs public hospitals, got more than 10 job applications, which new chief nurse Sylvia Fung Yuk-kuen said is rare. Fung said the cash crisis can help ease a shortage of nurses in public hospitals, where staff turnover hit 5 percent this year and stood at 4 percent in 2007 in brighter economic times, compared with the usual rate of 3 percent. The authority has already seen a rise in patients using accident and emergency services and out- patient clinics. The private Hong Kong Sanatorium and Hospital's director of nursing services Manbo Man Bo-lin said staffing has not been affected by the financial turmoil. He admitted that some private hospitals might lose patients suffering from nonlethal conditions but people seeking specialist treatment will still prefer private hospitals despite the current economic situation. In fact, instead of cutting back on staff, the sanatorium plans to hire 66 nurses it has newly trained. Man added that there is no plan as yet for a nurses' pay rise next year. The authority plans to hire about 700 nurses next year in anticipation of a growing workload brought about by the financial crisis as well as an ageing population. Fung said her priority in her new job is to lift staff morale. "[Poor] morale is a problem. Our nurses work very long hours and spend more time in hospitals than with their families," she said. Fung said pay rises are not a magic panacea. Instead, the authority will seek to ease staff workload. "For instance, some nurses told us the extra work was caused by an excessive number of visitors coming to see patients. So, we have tightened security to control the crowds," she said. The authority has just launched a study to determine a proper nurse-to-patient ratio in different wards to improve its human resources management. A year ago public and private hospitals were raising their game to attract senior nurses in the face of a worsening shortage of frontline medical staff. Some nurses switched from the public to private sector while several others went overseas or left the profession. In a mass recruitment exercise in December last year, the authority offered better salaries to experienced nurses and replaced a relatively rigid pay scale with a more flexible one.
Quality control and customs officials from China and United States are set to meet in January in a bid to speed up moves to standardize the rules on toy safety. Next month's Toy and Games Fair in Hong Kong will give Beijing and Washington the chance to iron out issues that have dogged the process, say representatives of the Toy Council and Toys Manufacturers' Association. Federation of Hong Kong Industries chairman Lawrence Chan Wing- luen said yesterday that an agreement - which could take years to reach - would help deal with soaring costs. "If we have one set of standards we can have one system of tests," said Chan. "Everyone will be playing by the same rules, and it will make life much easier and less costly." Vice chairman Bernie Ting Wai- cheung estimated that costs had risen by between 300 and 400 percent in the past year due to quality control tests. He added that cutting costs would be the primary challenge for companies in the coming "difficult" year. Toys Manufacturers Association president David Chu Ki-kwan hoped the financial crisis would help them cut labor costs. Representatives are pinning hopes on international toy demand despite the bankruptcy of large US toy retailer KB Toys on December 11 and the fact that an estimated 4,000 toy factories have closed in China over the past two years. Both organizations predicted KB Toys' bankruptcy was unlikely to have a serious impact on SAR companies. "The ones most likely to be affected will be those with contracts with KB and larger companies relying on their brand," Chu said. Chu said strong demand was a sign of long-term growth potential, citing a 2 percent growth this October - a normally slow month. "No matter how big a financial tsunami is, there will always be children and they will always need toys to play with," he said. "So even if we have another year with no growth, I feel confident we can ride this out." FHKI chairman Chan also pointed to local toy companies' advantages in quality and technology. "When the new US laws went into effect in August, many US companies were asking us for advice," he said. "And with quality as important as it has become, that's a great help for companies here." December 18 2008
Hong Kong’s unemployment rate probably rose to 3.8 per cent in September-November, its highest level in more than a year, as companies hit by the global economic downturn shed jobs to cut costs, a Reuters survey shows. The jobless rate, calculated on a three-month seasonally adjusted average, stood at 3.5 per cent in August-October and economists see it peaking at 5.5 per cent in the first half of next year, as more businesses are expected to slash staff with Hong Kong now in recession. “Hong Kong has been hit pretty hard by the financial crisis,” said Peng Chen, an economist at JP Morgan. “A lot of companies are laying off workers.”
Seventeen banks have so far paid a total of HK$257 million to settle 616 claims brought by Hong Kong investors in financial derivatives which lost much or all of their value when US investment bank Lehman Brothers collapsed three months ago. The figures were disclosed yesterday by the Hong Kong Monetary Authority, which said banks were in the process of settling a further 1,000 claims involving investments of HK$429 million. The authority did not disclose the amounts involved in individual settlements. Last week, Democratic Party lawmaker Albert Ho Chun-yan said banks had paid HK$30 million in compensation to about 60 investors in financial products issued or guaranteed by Lehman Brothers. The police commercial crimes bureau has received more than 5,000 complaints from investors. The bureau had taken statements from 2,566 of the 5,184 complainants, the Democratic Party said after party lawmaker Kam Nai-wai met the head of the bureau, Chief Superintendent Chan Yiu-kwok, yesterday. The bureau was seeking legal advice on whether any crimes may have been committed, Mr Kam said. He expressed dissatisfaction with the speed with which the bureau was handling the cases, and claimed many of them had obvious evidence of criminality. Some 43,700 Hongkongers invested HK$15.7 billion in derivatives linked to Lehman Brothers, which sought bankruptcy protection amid the global credit meltdown. Most bought minibonds - high-risk, credit-linked products which derived part of their value from the performance of complex underlying assets. Many of those who bought minibonds claim bank staff mis-sold them as low-risk investments in well-known companies. The Monetary Authority has received nearly 20,000 complaints about Lehman Brothers-related products. It has referred more than 200 to the Securities and Futures Commission for investigation of possible misconduct by banks. It is still investigating another 3,700-plus complaints and is seeking more information about a further 11,072. The Hong Kong Monetary Authority was forced to intervene in the money markets five times yesterday to defend the Hong Kong dollar peg, actions that will cause the liquidity in the banking system to spike to a new record high of more than HK$113 billion.
December 17 2008
Hong Kong's imports and exports of goods are expected to contract 6 per cent in value next year as weak overseas demand and shrinking global trade take a heavy toll, the Trade Development Council said. By volume, the forecast year-on-year decline in trade is 3 per cent, effectively wiping out this year's gains. It would be the first time exports had contracted since 2001. Warning of poor prospects next year for Hong Kong's key trading partners - the United States, the European Union and Japan - the council's chief economist, Edward Leung Hoi-kwok, said the relatively robust mainland market offered local firms the best hope in the downturn. Economists generally expect the city's economy to shrink next year. "Given the economic headwinds, the long-running consumption spree in traditional markets, especially the United States and the European Union, has subsided, with consumer confidence hitting an all-time low," he said. The three markets combined made up about 30 per cent of Hong Kong's total exports but a 60 per cent share of the city's exports of consumer goods. According to the council's quarterly export index, which is an indicator of exporters' performance and prospects, the outlook has steadily deteriorated this year. The index has fallen to 22.3 points in the fourth quarter, down from 49.1 in the first quarter, 45.9 in the second and 33.9 in the third. A reading below 50 points to a pessimistic outlook by exporters.
Citic Pacific (SEHK: 0267) managing director Henry Fan Hung-ling, who has taken a leave of absence from his public posts, has not been reappointed to chair a civil service advisory body. After Citic Pacific's six-week delay in making an announcement about its massive losses in foreign-exchange dealings, the government approved Mr Fan's request in late October to step away from all public duties. Critics had raised doubts over Mr Fan's credibility amid the public scrutiny. Mr Fan was an executive councillor and chairman of the standing committee on disciplined services salaries and conditions of service, among other appointments. The government announced yesterday that Barry Cheung Chun-yuen, the committee's current acting chairman, had been appointed to chair the advisory body for two years from next month. Lawmaker Ip Kwok-him, who has been reappointed as a member of the committee, agreed with the move to leave out Mr Fan. "I think it is an appropriate decision, as Mr Fan's term would have expired by the end of this year. His company's affairs have attracted a lot of public attention," he said. Asked whether the government should stop Mr Fan's reappointment to other public posts, Mr Ip said each case should be considered individually. Hong Kong offers flights every hour, so it's still the most convenient for us - Daily direct flights between the mainland and Taiwan are unlikely to have a big impact on the business and travel patterns of Taiwanese living in the Pearl River Delta, even though the mainland says the services will make a one-day round-trip from either side of the strait possible. "The flights are still infrequent; it doesn't change the fact that I can't spend my weekend in Taipei," Shunde plantation company manager Chen Chang-lung said. Given the greater frequency of flights, he would be able to visit his family in Taiwan more often, he said. "Now, I go to Taipei once every three to four months." Direct charter flights between Taiwan and the mainland have been running since July, but only at weekends and on major holidays. The new flights mean expanded services - previously limited to Beijing, Shanghai and Guangzhou - to 13 mainland cities, including Shenzhen, Nanjing and Chengdu. While there will be 41 flights each week between Taiwan and Shanghai, only four weekly services will be available between Guangzhou and Taipei, and six between Shenzhen and Taipei. The first passenger flight departed Shenzhen for Taipei at 7.20am yesterday, with 120 passengers on board, while the first air cargo service left for Taipei from Guangzhou. Direct shipping services have also begun between Taiwan and 63 mainland ports, including Shanghai, Ningbo, Zhuhai and Shenzhen. Hung Chia-sheng, deputy chairman of the Taiwanese Merchants Association in Shenzhen, said Hong Kong would remain an important transit centre for Taiwanese businessmen. "Hong Kong offers flights every hour, so Hong Kong is still the most convenient for us," he said. Mr Hung, who runs a consumer electronics factory in Shenzhen, also said he had no plans to move his factory northwards to cut costs. "We are exporters, our concern is not how many ports are open but more about whether the less developed regions have a supply chain." Chen En , director of Jinan University's Institute of Taiwan Economy, said the biggest benefit of the direct flights and shipments would be lower operating costs. "Most Taiwanese businesses in the Pearl River Delta are exporters who rely on Taiwan for most of their raw materials, so opening more ports for direct shipping will have a significant impact on reducing costs," Professor Chen said. He noted, however, that Taiwanese businesses still faced many trade barriers in the way of full access to mainland markets. There are 21,000 Taiwan-invested enterprises in Guangdong and most are small to medium-sized manufacturers, the institute said. Most are concentrated in Dongguan , Guangzhou and Shenzhen. Nearly 30,000 Taiwanese businesses operate in the Yangtze River Delta.
The government is being urged to set up a dedicated statutory body to oversee all charitable fund-raising activities after the ICAC found inconsistencies in the way government departments monitor donations. Hongkongers donate a huge amount every year, with about HK$6 billion being donated in the 2006 financial year. Philip Chen Nan-lok, chairman of the Corruption Prevention Advisory Committee, which monitors the ICAC, said yesterday at a press conference that a report on charitable fund-raising activities had been submitted to the relevant government bureaus. "Hong Kong people are very generous and they donated more than HK$6 billion in 2006," Mr Chen said. "That's not a small matter." He said because Hongkongers donated so much every year, the ICAC's corruption prevention department decided to examine how donations were made and whether there were any irregularities in how the donations were handled by the various departments. "The ICAC took the initiative to look at organizations involved in fund-raising] and see if there are any loopholes," he said. Mr Chen said the rules governing donations in the city were inconsistent. The study found that numerous government departments were in charge of monitoring fund-raising activities. These included the Social Welfare and Inland Revenue Departments, the Television and Entertainment Licensing Authority and the police. The research found that there were different rules for different types of fund-raising activity. And for some activities, such as holding a ball for charity, there were no rules at all. There were also no proper measures for the handling of funds made at these events to prevent them from being stolen. The study recommended that the government introduce a statutory body to oversee all charitable fund-raising activities. Organizations looking to sell flags must be an NGO exempt from tax under the Inland Revenue Ordinance. They are required to apply to the Social Welfare Department to raise funds through flag-selling. But if the same organization wants to hold a lottery, it has to apply to Tela. In the last financial year, HK$107 million was raised from flag days. The Labor and Welfare Bureau said yesterday it would study the ICAC's recommendations for regulations governing fund-raising, as well as measures to strengthen existing mechanisms used by departments. The Financial Services and Treasury Bureau also said it had noted the ICAC's recommendations. The Law Reform Commission is reviewing the law and regulatory framework relating to charities in Hong Kong. The commission recently pointed out that there was no single piece of legislation governing charities in the city, nor was there any system of oversight or regulation to ensure that donations were properly applied to the purposes for which they were solicited.
The central government yesterday blacklisted 17 food additives and named 10 kinds of food that could contain excessive additives. The lists, issued by the Ministry of Health, the Public Security Bureau and seven other ministries under the direction of the central government, were part of a four-month nationwide food-safety campaign to restore consumer confidence. A government notice said food manufacturers and restaurants would be punished for adding illegal chemicals or having excessive amounts of food additives in their products, but companies would have until January 10 to check their products and destroy those that did not meet standards. Food suppliers will also have to ensure that the permitted food additives used are within legal limits and produced by licensed companies. The 17 prohibited items include headline-making additives such as Sudan red, a carcinogenic dye used for coloring egg yolks, and melamine, an industrial chemical used to boost protein readings in milk. Other banned additives include carbon monoxide, industrial methanol for coloring or improving the texture of food, and opium, added to hotpots to get customers addicted. The 10 types of food that the government said could contain too many additives included traditional snacks such as pickled vegetables, mooncakes and pastries. Preservatives and colorings have sometimes been added to these foods to improve their flavor, color and shelf life. The mainland, one of the world's major food producers and exporters, has become notorious for fatal food scandals in recent years. In September, melamine was detected in infant milk powder produced by mainland company Sanlu, and later in other brands. The Health Ministry said at least six babies died of melamine-induced kidney problems after drinking milk formula, while 294,000 others throughout the country were affected. In May last year, the United States' Food and Drug Administration investigated mainland-made, melamine-tainted pet food believed to have killed at least 38 animals. In 2006, duck eggs from Hebei were found to be contaminated with Sudan red dye, while Sudan 1, another type of dye that has been linked to an increased risk of cancer, was found in a spicy bean product made in Hunan. China's first mass-market hybrid electric car - which you will be able to plug in at home - was unveiled in Shenzhen yesterday. Battery maker-turned-auto-firm BYD showcased the 149,800 yuan (HK$169,470) F3DM - dual mode car - saying it can run up to 100 kilometers on its electric engine, before a back up petrol engine kicks in. The battery can fully charge in nine hours from a regular electrical outlet, or much faster at BYD's own charging stations. US investor Warren Buffett's Berkshire Hathaway has a 9.9 percent stake in the firm, which started off making rechargeable batteries.
December 16 2008
Deloitte Touche Tohmatsu plans to hire as many as 2,400 new staff for its mainland and Hong Kong operations next year, a senior executive at the accounting firm said. Kester Yuen Shek-hung, the regional managing partner for southern China at Deloitte, said the big hiring campaign reflected the firm's belief that the country's economy would rebound to strong growth despite the recent poor market environment around the world. About 400 of the vacancies will be in the Hong Kong division, while the rest will be based at the firm's mainland unit. "Short-term uncertainty will not affect our long-term strategy on both the Hong Kong and China market. Also, we haven't cut any staff over the past few months, even though the whole economy has turned worse," Mr Yuen said. The new recruitment will represent increases of 18 per cent and 25 per cent, respectively, in the headcount of the Hong Kong and mainland divisions. Deloitte employs 2,200 and 8,000 staff, respectively, in the two divisions. "The downturn in the global capital market is inevitably affecting every party serving the financial sector. But China's high-growth economy is still offering us tremendous opportunities for future expansion," Mr Yuen said. The central government unveiled a 4 trillion yuan (HK$4.5 trillion) stimulus policy last month to support growth in the fourth-largest economy as the world heads towards a recession. An initial tranche of 100 billion yuan was earmarked for this year and will go towards low-rent housing and infrastructure in rural areas, as well as roads, railways and airports. "The move has delivered a strong signal to every corner in the world that the Chinese government is keen on stabilising the world economy," said Mr Yuen, who added that Deloitte would seek opportunities by offering integrated accounting and advisory services for international firms preparing to pitch for projects in the mainland's infrastructure sector. The firm's auditing division had been the biggest victim of the recent economic slowdown, because of the slump in new share issues, Mr Yuen said, but other divisions, such as human capital, advisory and consultancy, had shown strong revenues during the year, allowing the firm to maintain a healthy balance sheet. Deloitte expected to report revenue growth of about 10 per cent for this year, but that would be far below growth levels achieved in recent years. "Hong Kong's capital market is likely to face another tough year in 2009, as investors are lacking the confidence to put money in the stock market, because of lower earnings and the poor economic environment," Mr Yuen said. "The year now drawing to a close has been disastrous for all professional parties engaged in assisting new listing candidates to come to the market, since such IPOs had fallen dramatically from last year because of the deteriorating market condition." Data compiled by Thomson Reuters shows that, in the first 10 months of the year, 284 initial public offerings in Asia, excluding Japan, raised a combined US$28.2 billion, compared with 439 offerings in the same period last year that raised US$63.3 billion.
The Hong Kong Monetary Authority injected US$3.875 billion (HK$30.23 billion) of liquidity into the money markets during New York trading hours on Friday night, selling Hong Kong dollars to keep the currency within its trading band.
Daily direct flights between the mainland and Taiwan are due to begin this morning, a historic step forward in the improvement of cross-strait relations. Nine mainland airlines and five Taiwanese operators will run a total of 101 flights during the first week of the new arrangements, seen as a major potential boost to tourism and business relations on both sides of the Taiwan Strait. The first direct shipping links since 1949 are also scheduled to start this morning, when six ships set out from three Taiwanese ports and another from the northern mainland city of Tianjin . Direct postal services also begin today, completing the "three mini-links". This comes ahead of the fourth cross-strait economic, trade and cultural forum in Shanghai next weekend. Kuomintang chairman Wu Poh-hsiung will lead the Taipei delegation to the two-day meeting, which starts on Saturday. The party's honorary chairman, Lien Chan, a former vice-president of Taiwan, will join the delegation. The improvement of cross-strait relations has been made at an unprecedented rate since the KMT's Ma Ying-jeou came to power in May. Direct flights between Taiwan and the mainland have been running since July but only at weekends and on major national holidays. The new services also expand the flights - previously limited to Beijing, Shanghai and Guangzhou - to 13 mainland cities. The largest number of flights will be to Shanghai, accounting for 41 in the first week. George Tsai, political science professor at Chinese Culture University in Taipei, said he expected the direct links to "kick-start" the process of a full normalisation of relations between the mainland and Taiwan. Lo Chih-cheng , associate professor of political science at Soochow University in Taipei, said the new links would mean tension between the two governments would ease. "That will mark the beginning of more frequent civil exchanges and business as the cost of transportation between the two sides will be lowered and travelling time cut," Dr Lo said. "Once closer links are in place, they can hardly be stopped or retracted, no matter who becomes the next president. Once that happens, Taiwan will not be able to get out of framework of `one China'." Improving relations between the two governments is also likely to have an economic impact on Hong Kong's tourism. Timothy Wong Ka-ying, associate director of the Hong Kong Institute of Asia-Pacific Studies at Chinese University, said the local aviation industry would lose an estimated HK$1 billion a year as a result of the direct flights. But he said that in the long term the entire economy would benefit as the demand for services such as finance, accounting and international law increased. Hong Kong Association of Travel Agents chairman Michael Wu Siu-ieng expressed concern that the number of Taiwanese tourists to the city would drop by 5 to 8 per cent, and transiting passengers from the island might decrease by a third.
Slump in car sales forces Volkswagen to suspend production lines - Two mainland auto plants run by German automaker Volkswagen through joint ventures are planning to partly suspend production lines to conduct maintenance work.
December 15 2008
The legislature passed the government's HK$100 billion loan guarantee scheme for small and medium-sized enterprises yesterday. The initiative to tackle the financial crisis is a revised proposal originating from the chief executive's taskforce on economic challenges. At first, only HK$7 billion was committed, but Chief Executive Donald Tsang Yam-kuen made significant revisions this week. Registered Hong Kong companies, except listed firms, can get up to HK$6 million in loans and have 70 per cent of the loan guaranteed, raised from HK$1 million. The loan period was extended from 30 months to 36. However, League of Social Democrats lawmakers opposed the initiative as merely benefiting banks. They argued that it failed to provide further incentive to lending and did nothing to help people at the grass roots. Unionists Wong Kwok-hing and Lee Cheuk-yan also criticised the government for failing to include an incentive for firms to maintain their number of employees. "The whole society is helping them out, but what are these businesses going to do for society?" Mr Wong said. Mr Lee said the government seemed to think it was acceptable to "sacrifice the foot soldiers of our economy". Liberal Party member Vincent Fang Kang said that in his experience "small and medium-sized enterprises are actually very socially responsible. It's the big corporations you should be more worried about". Permanent Secretary for Commerce and Economic Development Yvonne Choi Ying-pik said businesses' financial health would be assessed by banks when loans were handed out, but it would be unreasonable to enforce a guarantee against job cuts as a condition for a loan.
Amid concerns about the impact of Beijing's 4 trillion yuan (HK$4.5 trillion) stimulus plan, the mainland's economic managers yesterday stressed that most of the money would go into projects to raise living standards, not industrial output. In a statement broadcast by China Central Television, the National Development and Reform Commission said the money would be spent on five areas - agriculture, public housing, removing transport bottlenecks, environmental protection and renovating schools. The plan to spend 4 trillion yuan in the next few years to save the economy from a catastrophic slowdown has won widespread support from domestic and overseas observers. But the plan is not without flaws. One of the biggest criticisms from economists is that the unprecedented investment will result in excess manufacturing capacity, pushing the economy to the point of overheating when the financial crisis ends. But the commission's statement signalled that the central government had no intention of letting that happen. Investment in large and medium-sized reservoirs, dams, hydropower stations, water pipelines and water diversion projects for irrigation would increase dramatically next year, the statement said. The proportion of the stimulus package to be devoted to the agricultural sector is 370 billion yuan, with the goal of increasing annual production of rice, wheat and corn by 50 million tonnes. In the public housing sector, the government will build up a large stock of low-cost homes for rent. Investment in transport infrastructure will focus on improving connections between existing traffic networks, often the main cause of traffic jams in big cities and road accidents. Beijing plans a 700 billion yuan railway construction boom next year that could create 6 million jobs. The government will also pump money into the environmental sector, particularly projects related to improving the energy efficiency of manufacturing plants. Sewage systems in urban areas, rubbish collection and waste processing facilities will also be built or upgraded. Hundreds of thousands of school buildings will be renovated, especially primary and middle schools in less developed regions where many structures were built decades ago and are in danger of collapse. The statement was in line with the guidelines approved by the central economic work conference, which concluded on Wednesday. At the top-level meeting, policymakers pledged an all-out effort to ensure strong growth next year after exports plunged, domestic demand shrank and the inflow of foreign investment dropped sharply last month. The government will increase spending by a "relatively large margin" and cut taxes next year to increase support for job creation, agriculture, social security, education, energy conservation, and small and medium-sized enterprises.
China will issue the 25th batch of book-entry treasury bonds worth 25.37 billion yuan (3.71 billion U.S. dollars) for this year starting next Monday, according to the Ministry of Finance. The ministry said in a statement here on Friday the issue period would last from Dec. 15 to 17. The ten-year bonds have a fixed yield of 2.9 percent. Interest will be calculated from Dec. 15 and be paid twice a year on every Jun. 15 and Dec. 15. Principal will be paid on Dec. 15, 2018 along with the last interest. China has issued more than 1 trillion yuan worth of book-entry T-bonds this year. China's Ministry of Health has banned hospitals and doctors from selling insurance to patients to reap profits. According to media reports, some medical institutions and workers in the country have been taking advantage of their jobs and help insurance companies promote anesthesia accident insurance policies to patients to receive kickbacks. The ministry announced the rule on its website on Friday, but didn't identify the names of offending hospitals or doctors, only saying that those who have done so are limited in number. Nevertheless, an official from the ministry said the practice impaired the image of medical service sector and needed a serious probe. The ministry has directed medical facilities to step up their management and has strictly prohibited insurance companies marketing their business in hospitals. Local health bureaux were also ordered to strengthen their monitoring efforts and punish those who were found to have violated the rule. A doctor at a local Beijing Hospital, who declined to be named, told Xinhua she had never heard of such a term as "anesthesia accident insurance", and believed no colleagues of hers had ever been involved in such practice. However, she added that in her opinion those who tried to make money from patients should be given a warning and a fine. Deutsche Borse, the Germany-based security exchange group, opens its representative office in Beijing on Friday. The runner of Frankfurt Stock Exchange was approved on Sept. 26by the China Securities Regulatory Commission to set up its Beijing office. Wu Jianhong will be the Chief Representative Officer. "The opening under the global financial crisis shows our strong confidence in the Chinese market," the group's deputy CEO Andreas Preuss said. Frank Gerstenschlager, member of the company executive board responsible for the cash market, said the exchange would place China's high-tech companies as its business focus, especially those in the fields of clean energy, renewable resources and environment protection. Currently, 13 Chinese companies have been listed at the Frankfurt Stock Exchange, one of the world's largest stock exchange center whose turnover takes up 90 percent of Germany's total. Deutsche Borse has established business partnership with several financial institutes in China, including major mainland equity centers Shanghai Stock Exchange and Shenzhen Stock Exchange. The group covers the entire security exchange process from trading, clearing, to settlement and securities custody. It also offers market data, indices and analyses.
December 13 - 14 2008
Hong Kong banks are playing down customers' expectations concerning interest rate cuts following a widely expected move by the US Federal Reserve next week. Hongkong and Shanghai Banking Corp said yesterday local lenders - to maintain profitability - may not follow the Fed if it cuts its benchmark rate, an about-turn from comments HSBC executives made just days ago that local lenders might have room to lower rates.
The Hong Kong Monetary Authority was forced to intervene in the money markets twice in less than 24 hours, injecting HK$2.713 billion of liquidity to defend the peg system. The SAR's de facto central bank sold HK$1.938 billion worth of the local currency against the US dollar during Hong Kong trading hours yesterday. The action was triggered automatically when the exchange rate hit HK$7.75 to US$1. In New York trading late Wednesday, the HKMA sold HK$775 million worth of Hong Kong dollars against the greenback to curb the Hong Kong dollar's appreciation. The renewed strength of the local currency stems from a continuation of global deleveraging, Standard Chartered senior FX strategist David Mann said.
The Hong Kong Mortgage Corporation has extended its insurance coverage in response to banks' tighter lending policies but has introduced a new rule that in effect brings the days of 95 per cent home loans to an end. The corporation said yesterday that from next Thursday it would extend its coverage limit to 30 per cent of the purchase price from the present 25 per cent. At the same time, however, it will require buyers to put down a deposit of at least 10 per cent. It has also raised its premiums, shortened the allowable term of the mortgage and tightened its debt-to-income ratios that govern how much buyers can actually borrow. Before the credit crunch, banks were lending up to 70 per cent at first and buyers could borrow an additional 25 per cent with the corporation's coverage, meaning they needed only a 5 per cent down payment. But as credit tightened many banks have been unwilling to lend more than 60 per cent, leaving the corporation's coverage limit too tight to close the gap. The corporation said yesterday it had extended its limit to keep pace with banks' tougher lending rules. It will start to accept applications under the new plan from Thursday. Corporation chief executive James Lau said he expected the move would help potential buyers borrow money even after the banks had tightened lending on properties. To cut down the risk of overleveraging, the maximum loan amount has been capped at HK$8 million, down from the existing HK$12 million and the maximum term has been shortened from 40 years to 30 years. And, the corporation has reduced the maximum debt-to-income ratio from 50 per cent to 45 per cent for buyers with monthly household income below HK$60,000 a month, meaning their repayments should be no more than 45 per cent of their income. For those earning more than HK$60,000, the ratio has been lowered from 60 per cent to 50 per cent. Joseph Yam Chi-kwong, deputy chairman of the corporation and chief executive of the Monetary Authority, said the new arrangements "can help to lessen the impact of the credit crunch in the mortgage financing market on potential homebuyers. It also provides banks with a greater degree of flexibility in conducting mortgage business." Ricacorp Mortgage associate director Wong Wing-yan said the problem of tighter bank lending became serious in October. Louis Chan Wing-kit, managing director of Centaline Property Agency's residential department, said that as a result many potential homebuyers had become hesitant. According to the Land Registry, home sales had dropped to 3,786 last month, the lowest in 17 years. This is down steeply from 18,105 at the same time a year ago. Hendrick Leung Lee-chung, director and general manager at Centaline Finance, expected mortgage applications to increase 20 per cent from the level of the last two months after Hong Kong Mortgage Corporation released the plan.
More than 200 uninhabited islands in Hong Kong remain deserted and the government has shown no intention of exploiting their commercial value. Hong Kong comprises around 260 islands in an area of 1,600 square metres. Yet only a small number have ever been inhabited or used for tourism, public facilities or other government purposes. Despite the policy introduced by the mainland to encourage commercial development on uninhabited islands, the Hong Kong government has shown little interest in such a plan, citing a number of constraints. These mainly include a lack of land to develop, poor access, and inadequate infrastructure and services, including water and electricity. In addition, some of the islands have already been recommended for landscape protection and conservation purposes in view of their ecological and scenic value. Four years ago, the mainland introduced a new law, allowing applicants including Hong Kong, Macau and Taiwan residents to name and develop 100 islands off the coast of Zhuhai for commercial use, including property development, tourism, animal breeding, port development or the storing of explosives. Although there have been periodic suggestions that Hong Kong's uninhabited islands be sold or leased to raise government revenue, the administration has not put any such plan on its agenda.
China recorded 114.99 billion U.S. dollars worth of exports last month, down 2.2 percent from the same period last year, the General Administration of Customs said on Wednesday. It was the first time since June 2001, when China's monthly exports were down slightly by 0.6 percent from a year earlier because of slump demand from the U.S. economy after the high-tech bubble burst. December 12 2008
More than 5.8 million migrant workers in Shenzhen will be able to visit Hong Kong Disneyland from Monday. Non-Shenzhen residents who have lived and worked in the special economic zone for a year or more in private enterprises, Sino-foreign joint ventures and foreign-owned enterprises would be able to apply to join group tours to Disneyland organised by some Hong Kong travel companies, a senior official from the city Public Security Bureau's exit-entry administration division said yesterday, according to Xinhua. A visa would allow a three-day stay in Hong Kong within three months. The number of qualified people was estimated at 5.81 million in June. The official said the State Council-approved measure was to help Hong Kong in the financial crisis, part of a new package under the Closer Economic Partnership Arrangement. The Bank of East Asia (SEHK: 0023) (BEA) has become the second bank to set up a fund for loans to small and medium-sized businesses, announcing that HK$1 billion will be earmarked to support the government's special loan guarantee scheme. "We may increase the top limit [of the fund] if needed," said Adrian Li Man-kiu, the bank's general manager and head of the corporate banking division. The bank said priority would be given to applications relating to the new small and medium-sized enterprise loan guarantee scheme, announced by Chief Executive Donald Tsang Yam-kuen on Monday, under which banks can offer local firms loans of up to HK$6 million with the government guaranteeing 70 per cent. Mr Li said the interest rates would be lower than normal. The bank's move comes four days after HSBC (SEHK: 0005) committed HK$4 billion for loans to local SMEs as part of a US$5 billion global fund to give struggling firms access to credit. BEA said all loan applications would be processed within three business days. It has set up a telephone hotline for SMEs to inquire about the scheme. Ken Chiu Siu-kan, vice-chairman of the Hong Kong Association of International Co-operation of SMEs, welcomed BEA's move to set aside HK$1 billion for loans. But he was worried that small companies in the service sector, which may want to get unsecured loans, would be unable to obtain them from banks. The Link REIT is planning to create 4,600 construction jobs over the next three years through shopping mall upgrades. The proposal is one of the strategies outlined in a paper it gave to the Legislative Council's housing panel yesterday. Ian Robins, new executive director and chief executive of The Link, will attend a panel meeting on Tuesday. The Link plans to spend HK$1.6 billion on upgrades to 26 shopping centers that would create 4,600 construction jobs. Completed projects amounting to HK$500 million have already created 800 retail jobs. The remaining projects are to be completed over the next three years.
Standard Chartered Bank (Hong Kong) said local lenders may not match a US Federal Reserve interest rate cut because Hong Kong interbank lending rates are not low enough. Moody's Investors Service yesterday changed its industry outlook for Hong Kong banks to "negative" from "stable," as gathering economic headwinds are expected to hit their earnings and asset quality over the next two years.
China researchers published more papers in quality engineering journals than their American counterparts for the first time last year, and the gap would only grow, a government scientific agency said. The mainland made the biggest contribution to the growth of engineering knowledge, by publishing 78,200 papers in academic journals, mostly in English, indexed by Engineering Information, a leading engineering database, last year, according to a study by the Institute of Scientific and Technological Information of China. The figure had increased more than 20 per cent from 2006. China has greatly stepped up its applications for new patents and will pass Japan, which currently has the greatest volume of new patents, by 2011, research shows. The study found that the mainland was moving away from traditional agriculture and manufacturing and concentrating more on innovation, especially in areas such as chemical engineering. "China is set to dominate the patent landscape by 2012 ... to become the world's leading innovator," said Bob Stembridge, a spokesman for Thomson Scientific, one of the research arms of Thomson Reuters, and which carried out the study. "Inventions from China have been growing at a faster rate than from any region in the world," he said. "This has been driven by government incentives." These included bonuses worth a year's salary given to inventors who received new patents, said Eve Zhou, the consultant who wrote the report. China, beset by food and drug safety scandals, has blacklisted dozens of websites for making false claims about traditional Chinese medicine, state media said. The 74 websites, most of them targeting Chinese consumers, sell drugs for high blood pressure, diabetes and tumors. Some feature testimonials from Western doctors and medical companies. Despite the ban, many of the websites are still accessible and selling their "cures." Only websites licensed by China State Food and Drug Administration are authorized to sell drugs online to individuals.
December 11 2008
Hong Kong should take steps to boost its fiscal stimulus plan in the next budget to weather an economic downturn, the International Monetary Fund said. "An acceleration of infrastructure investments and possibly a permanent reduction in direct tax rates" will be needed in February's budget, according to the IMF in a report yesterday. "The government should target budget balance or a small fiscal deficit for the year as a whole." However, the government's just- announced plans to boost infrastructure spending would only bring a little help to the local economy as construction is projected to start in 2010 or 2011, said Hang Seng Bank senior economist Irina Fan Yuen-yee. "The government should implement more measures for the short term," she said. "It should provide one-off tax rebates in order to boost consumption in the short term as a permanent reduction in tax rates may bring an adverse effect on the city's fiscal balance." She estimated that a set of tax rebates of HK$50 billion could lift Hong Kong's economic growth by 0.5 percent. The IMF predicts that Hong Kong's growth will slow to 2 percent next year from 3.7 percent for this year. Hong Kong saw 6.4 percent growth last year. "Hong Kong is highly exposed to the unfolding crisis in international financial markets and to the slowdown in the global economy," the IMF said. "There are now clear signs of economic deceleration largely attributable to falling private consumption growth and declines in financial services." Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong said the body will keep a close eye on global market developments. The IMF reiterated its support for the linked exchange rate system, which "proved to be an anchor of monetary and financial stability in Hong Kong."
Fast-food chain operator Cafe de Coral (0341) estimated the total revenue of the Hong Kong food and beverage industry would plunge by HK$10 billion this year, pinched by the global financial tsunami.
December 10 2008
Donald Tsang Yam-kuen said yesterday he would seek state leaders' help to shore up Hong Kong's shrinking economy when he makes a duty visit to Beijing this month. The chief executive also said any proposals he put forward would be designed to benefit the long-term economic development of both Hong Kong and the mainland. "When I met President Hu Jintao last month in Lima [during the Asia-Pacific Economic Co-operation forum], President Hu clearly stated that the nation is a strong backer of Hong Kong and will take effective measures to support Hong Kong through the difficulties," Mr Tsang said. "My confidence on the future is also based on the support from the central government." In Beijing, he would "discuss further with the central government various proposals of assistance, which will also benefit the nation's long-term development". "Win-win solutions" he mentioned included co-operation with Guangdong and neighbouring authorities, seeking ways to step up assistance for Hong Kong businesses investing across the border. A government source said financing aid, tax rebates and helping businesses to switch from exports to sales in the mainland markets, would also be discussed, and the Trade Development Council would help. Other measures to be discussed included expanding yuan-related business.
DBS Bank (Hong Kong) said the city's mortgage rates may increase further next year as the rates are already at a low level. Chief executive Amy Yip said yesterday that for the level of mortgage rates to be less than the best lending rate is exceptional. "The mortgage business is nearly not profitable now," she said. Asked if DBS will relax lending next year, Yip said it will follow the market but there will be no room for a cut in Hong Kong if the US Federal Reserve lowers interest rates again. She said DBS has no plans to follow HSBC Holdings (0005) and set up a fund to increase credit access for small and medium-sized enterprises during the financial crisis. Dah Sing Bank and Mevas Bank, which are both part of Dah Sing Banking Group (2356), said yesterday they will raise mortgage rates for new customers by 25 basis points. This followed increases by other major players. They will charge prime minus 1.5 percent, or 3.75 percent, for mortgages of less than HK$1 million, with plans including a cash rebate of 0.25 percent. The two banks will charge prime minus 1.75 percent, or 3.5 percent, for loans of more than HK$1 million, and offer a cash rebate of 0.5 percent. The changes, which take effect today, mean new customers taking out a HK$1 million home loan will pay HK$2,500 more each year. Last Tuesday, Bank of China (Hong Kong) (2388) raised its mortgage rates 50 basis points to offer effective rates of 3.5 percent to 3.75 percent. On Monday, HSBC increased its mortgage rates by 50 to 75 basis points to provide effective mortgage rates of 3.5 percent to 4 percent.
A computer festival that drew 450,000 people to the streets of Sham Shui Po in a scramble for heavily discounted products closed yesterday with buyers having spent more than HK$230 million, the organisers said. Exhibitors said the sales figures were higher than expected, but predicted the outlook would remain grim at least until the Lunar New Year and that prices of electronic products would rebound by about 30 per cent after the festival. Organisers Sham Shui Po District Council and the Chamber of Hong Kong Computer Industry originally expected a total turnout of 400,000, with sales topping HK$180 million. Leung Ding-kau, chairman of the chamber, said the festival had given a boost to firms whose business had been stagnant. He said that during the four-day festival some of the retailers had made what they normally made in a month. He said the businesses could still make a profit despite the goods generally being sold at a 30 per cent discount because retailers could buy cheaper stock from suppliers as orders from North America and Europe dropped amid the economic slowdown. Exhibitor Wong Kwan-shing, marketing manager of a shop selling DVD recorders, said the company had made a profit of about 10 per cent. However, he now expected business to drop by about 30 to 40 per cent. Fellow exhibitor Cheng Hang-ha, director of a shop selling display monitors, said: "We expect a [drop in business] after the festival, but it will be better than doing nothing."
The former vice-president of the Supreme People's Court, Huang Songyou , who is under investigation for corruption, has surprisingly won an award recognising his achievements in legal studies, mainland media reported yesterday. Mr Huang won third prize in the official Qian Duansheng Law Achievement Award on Saturday. It is considered the most prestigious of its kind on the mainland. He was given 5,000 yuan (HK$5,640) in prize money for his article "The power of Judicial Interpretation", published in 2005, local media reported. The awards ceremony was held at the Great Hall of the People.
The Hebei Supreme Court has refused to accept a lawsuit against a dairy filed by dozens of families whose children were sickened by tainted milk, saying investigations are continuing. Tang Keshuai has been down in the dumps for months, ever since he began to feel the pinch of a constrictive money supply since mid March. Tang, manager of Langyu Plastic and Rubber Co. Ltd., a plastic and rubber product producer based in east China's Wenzhou, Zhejiang Province, used to settle his accounts with raw material suppliers once every four months, on the traditional Chinese lunar festivals of Dragon Boat, Mid Autumn and Spring Festival respectively. But the rule was changed in mid March when raw material suppliers asked for accounts to be settled once each month. The change was not a good one. The original four-month span allowed Tang to have sufficient active money in his capital chain. Capital pressure from upstream was one part of the story. Tang received smaller orders over the past months. In the first three quarters, Tang's company had only 3 million yuan (439,090 U.S. dollars) sales turnover, compared with 20 million yuan in 2007. Tang had to dismiss 30 out of the 50 staff workers in August and transferred most orders to other plants, in order to lower production costs by 10 percent. Tang was amazed to find it hard to transfer the orders. "I felt curious in the beginning why it was hard to seek processors, since orders became fewer on the market," said Tang. Longgang Town, home to Tang's company, currently has only about 100 plants of his type, while there were about 600 such plants a year ago. In early June, Tang's company had almost exhausted its supply of cash, with only 200 yuan left in the account. Tang had nothing else to do except to driving his three-year-old daughter to the kindergarten. Two days later, he had to borrow money from his sister to "have meals". He continued for 10 days, and only pulled through the crisis when a Russian client remitted 30,000 U.S. dollars to his account. "I was lucky to stick it out. But many companies have closed down because of a broken capital chain," said Tang. During the current Wall Street-ignited global financial crisis, China's small and medium-sized enterprises (SME), largely labor-intensive and vulnerable to fluctuations in domestic and external demand, are affected most. In the first half of 2008, 67,000 SMEs, each with sales income exceeding 5 million yuan, closed down, laying off more than 20 million employees, said the National Development and Reform Commission (NDRC). The figure didn't include service industry firms and SMEs whose sales were less than 5 million yuan, since there were no authoritative figures available on those categories. Industry officials attributed the SME difficulties mainly to high raw material prices (leading to higher production and operation costs), financing difficulties, sharp export plunges and RMB appreciation. Data from the China Association of Small and Medium-sized Enterprises (CASME) showed that compared with the second half of 2007, the country's SMEs have suffered a 20-percent rise in labor costs, an 11-to-15-percent rise in raw material costs, and a 40-percent rise in borrowing costs. But the average product ex-factory price is up only about 5 percent. These factors, accompanied by surging land prices and the appreciation of the RMB, have almost pushed SMEs to the limit. SMEs are an important pillar of the Chinese economy. More than 95 percent of the 4.3 million SMEs are privately owned and many are in the export sector. They generate almost 60 percent of the nation's gross domestic product (GDP), 50 percent of tax revenues, 68 percent of exports and 75 percent of new jobs every year. Spokesman: Chinese maritime patrol near Diaoyu Islands irreproachable - The patrol of Chinese ships in its territorial waters is irreproachable, said a Foreign Ministry spokesman Monday night. The comment by spokesman Liu Jianchao came in response to a question regarding the reported marine surveillance by Chinese ships in the seas near the Diaoyu Islands on Monday. "The Diaoyu Islands and adjacent islets are Chinese territories since ancient times. The usual cruising of the Chinese ships within Chinese seas is irreproachable," Liu said. December 9 2008
The planned high-speed rail link between Hong Kong and Shenzhen airports may hook up with Hong Kong's local railway network in a bid to create a larger pool of passengers and boost development in the northwestern New Territories, sources said. That means the express rail link, originally planned as a direct link taking just 17 minutes to travel between the two airports, would have a stop connecting it to West Rail. The stop would be in Yuen Long or Tuen Mun, and the government is looking at which option would offer the best opportunities. Tuen Mun councillors have been mobilising the community to fight for the station to be built there, but a source said the government was leaning towards Yuen Long. More than half of the 26 bus routes serving Eastern District may be axed or have the number of their trips cut if a proposal by the Transport Department is approved. And cuts in the other 17 districts may follow. Hong Kong Island could lose at least 163 bus trips a day, or 4,890 trips a month, if the department's latest development plan to remove four routes that either end at or pass by Eastern District wins support from the district council. Another 11 bus routes may be shortened, or run less frequently.
After rising steeply for the past two years, rents for prestigious residential properties in Hong Kong are tumbling, with landlords scrambling to grab good tenants as international investment banks lay off expatriates or cut their housing allowances. Property consultants expect rents for luxury accommodation, which were at record levels earlier in the year, to drop by 15 per cent in the fourth quarter of this year and fall a further 25 per cent next year. "The top-end luxury segment may even fall a bit deeper," said Anne-Marie Sage, regional director of residential at international property consultant Jones Lang LaSalle.
The Central Economic Working Conference, being held today through Wednesday in Beijing, aims at setting China's policy direction for 2009. The most important topics will center on issues such as determining loan quotas and fiscal policies and exchange rate management, economists say. China's official government website said the conference will focus on how to ensure minimum GDP growth of 8 percent, while striving to achieve a higher number. Credit Suisse said: "[The conference] normally determines loan quota, fiscal stance and exchange rates for the following year ... but with massive fiscal stimulus and monetary easing already launched in November, we think the focal point is the policy nuance from the post-conference statement, instead of specific measures." Currency exchange is expected to be discussed. Last week, the State Council announced nine monetary measures to boost the mainland economy, including improving exchange rate management. "More monetary policy easing is likely for China to support liquidity, before fiscal efforts can pick up more momentum ... [We] continue to believe that a soft landing is the most likely scenario, as fiscal stimulus [will take] time to lift growth next year," Citi's Huang Yiping and Ken Peng wrote in an earlier report. Citi said the yuan's appreciation against the US dollar will slow next year, while depreciation would be unlikely. On Friday, the United States urged China not to roll back its currency reform. US Treasury Secretary Henry Paulson said the main reason for job losses among Chinese exporters was slowing global demand - not currency appreciation. China's Commerce Minister Chen Deming said the mainland will not rely on yuan depreciation to boost the country's export sector.
The Ministry of Railways (MOR) said here on Sunday that the world's longest high-speed rail line, connecting the capital and Shanghai, is nearing completion. MOR spokesman Wang Yongping said 91 percent of the track length, or 1,203 km, has been completed. Remaining major tasks include bridges over the Huaihe and Yangtze rivers and the main terminal in Shanghai, he said. More than 110,000 workers are busy with the remainder of the project. Trains will take less than five hours to make the run, which is now at least 11 hours. The MOR has said it plans to have 120,000 km of rail lines in service by 2020, of which 16,000 km would be dedicated to only passenger services. By the end of this year, China will have more than 79,000 km of rail lines. To meet the 2020 target will require about 5 trillion yuan (US$732 billion), the MOR said. The central Chinese province of Hubei is preparing for the construction of the country's first inland nuclear plant, a local planning official said on Sunday. Local authorities have relocated residents from the land designated for the plant in Xianning City, and completed road construction for the project, the official from the city's planning commission said. The cost of the first two phases of the project, with an installed capacity of 4 million kw, is estimated at 50 billion yuan (US$7.3 billion). The third phase could cost 45 billion yuan. Construction will start as soon as the environmental assessment report is approved, the official added. China Guangdong Nuclear Power Group (CGNPG) and the Hubei provincial government agreed in March to jointly build the plant. CGNPG and Hubei Energy Group established a joint venture, known as Hubei Nuclear Power Ltd. Co., in June to develop nuclear power in the province. China has 11 nuclear plants at six sites, all on the east coast, with a combined installed capacity of 9.07 million kw. The capacity of the CGNPG project is equivalent to 43.5 percent of the total. Faced with an energy crunch resulting from fast economic growth, China plans to develop more nuclear power. The country plans to have 40 million kw of installed nuclear capacity by 2020, which would be 4 percent of projected energy supply, or double the current level. December 8 2008
Hong Kong was in violation of its international obligations to fairly assess asylum seekers' claims that they might face torture if returned to their home countries, the High Court ruled yesterday.
China and the United States yesterday completed their last high-level economic meeting under the Bush administration with vows of US$20 billion of trade financing to boost commerce in a time of crisis. "We are both committed to strengthening the global economy," Treasury Secretary Henry Paulson, the US envoy to the Strategic Economic Dialogue, told reporters, standing with his Chinese counterpart, Vice-Premier Wang Qishan. The two countries' export-import banks will provide the credit to "credit-worthy importers" in developing countries to buy US and Chinese goods, with the US bank giving US$12 billion and China US$8 billion, Mr Paulson said. He said that would help economies where traders have seen credit dry up. "The most pressing task at hand is to quickly take effective measures to contain and curb the spread of the financial contagion and avoid a global recession," Mr Wang said. China has also agreed to allow foreign incorporated banks into China to trade bonds on the inter-bank market for their customers and in their own name on the same basis as mainland-invested banks. It will let foreign banks increase their liquidity through either guarantees or foreign currency loans from overseas affiliates on a temporary basis, though it did not offer a clear definition of "temporary basis". China previously set a quota for how much funding a foreign bank could bring into the country because of fears about an excessive inflow of foreign capital. In return for China's market-opening measures, the US agreed to speed up the approval process for Chinese financial institutions to invest in the country and promised to offer them fair treatment in terms of market operation and regulation. The US said China's sovereign funds would be welcomed to invest in the US, an issue that had drawn flak from US politicians who thought foreign government-backed wealth funds could pose a threat to US economic security. Mr Paulson also said the US would support China joining the Financial Stability Forum, a club of central banks and finance ministries from the world's richest nations, including the US, Japan and Germany. US officials also said Beijing promised to continue reforms that have let its yuan rise against the US dollar. Both governments vowed to combat protectionism amid the financial crisis and agreed to step up co-operation in areas like international trade, energy, environmental protection and food safety. "Both sides believe that in the face of the growing challenges posed by the crisis, we must fully oppose all forms of protectionism," Mr Wang told reporters. He also pledged to work with other countries to promote the early resumption of the World Trade Organisation talks. The last round of the Doha trade talks collapsed in July when the US and India clashed over measures to protect poor farmers against import surges. The dialogue started on Thursday and was the fifth and last for Mr Paulson and the administration of US President George W. Bush before president-elect Barack Obama takes office next month. Mr Obama has not said whether the existing dialogue mechanism would continue under his watch. Blacklist to be drawn up targeting unsafe food additives - Beijing will issue a blacklist of food additives that could be harmful, state media said yesterday in the wake of a scandal over milk tainted with melamine, believed to have killed six children and made hundreds of thousands ill. The government would also step up testing of foods for banned additives, the official English-language China Daily newspaper reported. "The Ministry of Health is working with related departments on the blacklist, that would be updated constantly," Su Zhi, the ministry's deputy director of the health supervision bureau, was quoted as saying. Mainland dairy suppliers are accused of adding melamine, a nitrogen-rich chemical used in the production of plastics, to milk. It was the latest product-safety scare to hit mainland-made products, prompting stores to pull items from shelves ranging from baby formula to cookies. Awareness of the widespread use of food additives has increased in the wake of the milk scandal. A front-page article last week in the Southern Weekend newspaper questioned whether the addition of bleaching agents to flour was healthy. Mainland officials have been working to restore public confidence in the food production chain. "We will conduct stricter tests on blacklisted substances while checking food production lines," Mr Su was quoted as saying by the China Daily. He made the remarks on China Central Television on Thursday, the paper said. The mainland now has several different standards for food additives, the paper said, but they were not necessarily consistent. The new regulations would start with the dairy industry first, and then modify existing food-safety standards after a draft food-safety law was passed. Premier Wen Jiabao said last month that the melamine scandal would spur the introduction of the mainland's first major food-safety law, which was currently being reviewed. The measure is expected to impose safety standards on food additives, ban all harmful chemicals and allow the government to recall unsafe food if companies fail to do so.
China setting up institutions to
help finance smaller enterprises - Smaller enterprises are expected to get
better access to loans as new institutions will be set up specifically for that
purpose. Container producer cuts production, 22,000 employees on leave - China International Marine Containers (Group) Co suspended its trading on the Shenzhen Stock Exchange Friday, admitting it had stopped the production of dry vans for two months.
December 6 - 7 2008
Home sales in Hong Kong dropped last month to the lowest level in 17 years as the worsening global financial crisis scared away buyers. Only 3,786 properties were sold.
A record 307 kilograms of ketamine and 10kg of methamphetamine with a street value of HK$41.3 million have been seized from a shipment from Singapore, the Customs and Excise Department said yesterday.
The governor of China's central bank, Zhou Xiaochuan, has warned the country to be prepared for the worst- case scenario as the global economic crisis deepens. But Zhou also expressed confidence that Beijing can sustain economic growth and financial stability if it adopts "timely, effective and preemptive measures."
December 4 - 5 2008
Hong Kong tourist Fung Man-wai, whose husband was killed while traveling from Bangkok to Phuket airport, has absolved the driver of the vehicle from blame, saying it was a pure accident. China's first spacewalker Zhai Zhigang and two fellow Taikonauts land in Hong Kong on Sunday - however it appears the frenzy that greeted the nation's first man to orbit the moon, Yang Liwei, will not be repeated. HSBC private banking part of US probe - The US Justice Department has launched a criminal investigation into whether HSBC's (0005) private banking division illegally helped American clients avoid paying taxes by hiding their money in undeclared offshore bank accounts, according to media reports. Bank of China (Hong Kong) (2388) said yesterday it will raise its interest rates for new mortgages by 50 basis points and cut some cash rebates in a move that keeps the lender's rates lower than HSBC's newly-raised charges.
The United States is hoping for a productive round of high-level economic talks with China, which start from tomorrow amid the global crisis, and the value of the yuan is bound to be discussed again, US officials say. During the next session of the Strategic Economic Dialogue (SED), the US planned to press Beijing to allow the yuan to rise further against the US dollar and to avoid raising trade barriers, Treasury Undersecretary David McCormick said in Washington on Monday. The US believed the need for Beijing to pursue currency reform was "as important now as it has ever been". The US and other major trading partners have long complained that the yuan is undervalued, which makes Chinese exports less expensive. The yuan has risen 20 per cent in value against the US dollar in the past three years, though that climb has faltered in recent months. The top US environmental official also said he expected a fruitful meeting. "I'm very encouraged by the continued co-operation and collaboration with our Chinese partners, and I expect great things from our next SED meeting," US Environmental Protection Agency administrator Stephen Johnson said. He will take part in the talks in Beijing tomorrow and on Friday. President Hu Jintao and US President George W. Bush agreed to create the dialogue in 2006. The meeting this week is the fifth. "Part of our SED agenda, we will be talking about, obviously, the financial system and issues of global economics," Mr Johnson said in Shanghai. The US side will be led by Treasury Secretary Henry Paulson. As for environmental issues, the US and Beijing might reach agreement on an action plan for air quality and launch an initiative to establish "eco-city" partnerships between cities in the two countries, Mr Johnson said. Officials would also discuss other issues regarding energy and the environment. Mr Johnson said the US and China should continue such high-level talks after US president-elect Barack Obama took office on January 20. Other Bush administration officials have called for the SED to continue to help foster bilateral ties. "That relationship needs to and should continue to grow and develop under some form, whether it's the Strategic Economic Dialogue or some other means," he said. "It's important that we work together in a collaborative way to address issues." He also stressed the importance of environmental protection despite the economic crisis and the desire for development. "We are dealing with a global financial crisis, but we should not let that adversely impact the environmental progress that we have made or need to make," Mr Johnson said after a speech to students at Tongji University. "And so again, environmental protection and economic development must go hand-in-hand." US electronics giant Apple has won a trademark infringement suit against a mainland corporation that used a logo similar to the US company's distinctive symbol. December 3 2008
Former US president unveils philanthropic commitments - Former US President Bill Clinton announced the first three new commitments by his global philanthropic group on Tuesday – including a plan to develop a Hong Kong Beach Authority to keep city beaches clean. During the opening plenary session of CGI Asia, Mr Clinton applauded the efforts of the Café Deco Group – a restaurant group in the city. “They have made a commitment to attempt to establish a Hong Kong Beach Authority to co-ordinate both public and private efforts to clean up Hong Kong’s beaches,” Mr Clinton said. “There are two components to this commitment,” he added. “First, Beach Savers will energise and motivate the community to make a consistent lifetime effort to keeping the beaches clean. “Second, they will attempt to leverage the momentum from the awareness campaign to encourage the Hong Kong government to establish a Beach Authority, tasked with the co-ordinating efforts to clean up all categories of beaches and to arrange for the placement of disposal bins there.” Mr Clinton said the commitment would impact on 191,000 students, as well as Hong Kong residents and visitors. “Of whom I am one,” said Mr Clinton. “So I’m very grateful for this commitment.” Additionally, Standard Chartered Bank has teamed up with a non-governmental organisation called Vital Voices to help improve the financial education of women in China, India, Pakistan, Indonesia and Vietnam. The commitment “will build the capacity of women to become economically literate, to manage their finances, to start and grow small or medium-sized enterprises through an annual training summit,” explained Mr Clinton. The other commitment involves literacy in Laos. Big Brother Mouse, a publisher, “aims to improve literacy in Laos by helping 90 per cent of villages in rural areas have access to a wide range of books by 2016,” Mr Clinton said. It “will establish a series of locally owned libraries to provide books to five million people in Laos, of which half are children.” Nearly 1,200 commitments have been made through The Clinton Global Initiative since it was established in 2005. The commitments are valued at US$46 billion (HK$357 billion) and have helped over 200 million people in 150 countries. “We ask each participant to make a specific commitment to action, to do something new and measurable to address problems like poverty, education, health care, climate change, religious and ethnic conflicts or other challenges which exist today in the world,” Mr Clinton said. “We don’t require anyone to do anything specific or to spend any particular amount of money,” he said. “We don’t get involved in the implementing or the funding of the projects except to offer help with our full-time office of implementation when people need it.” “Commitments can be of money, time, skills, even changes in core business practices which can have a huge impact on the climate change problem,” Mr Clinton added. Galaxy Entertainment Group (SEHK: 0027), which has delayed the opening of a planned new casino in Macau amid a harsh market for gaming firms, on Tuesday offered to buy back US$350 million worth of bonds at a steep discount to their face value. The deal is intended to reduce the firm’s indebtedness, and will be funded with internal sources, Galaxy said in a statement. Late last month, Standard & Poor’s lowered its long-term credit rating on the firm’s Galaxy Casino unit to ‘B’ from ‘B+’, with a negative outlook, citing the delayed opening of the firm’s Galaxy Cotai Mega Resort to 2010 from the middle of next year. On Tuesday, Galaxy offered to pay US$530 per US$1,000 in face value for floating rate notes worth US$250 million due in 2010, and will offer between US$375 and US$450 per US$1,000 face value in a modified Dutch auction for up to US$100 million in fixed-rate notes due in 2012. Galaxy said that the maximum amount payable will be about US$180 million. The delayed opening is the third for Galaxy’s planned resort since the original target of the end of this year, S&P said, and comes as restrictions on visas for visitors from mainland and fierce competition have battered the development plans of casino operators in Macau. Last month, US gaming giant Las Vegas Sands halted construction on its Macau expansion and laid off most of its 11,000 construction workers there due to a financing crunch. S&P said last month that it believed the delayed opening of Galaxy’s new casino would weaken the firm’s ability to generate cash to repay US$250 million in notes due in December 2010. Merrill Lynch is handling the deal. Shares of Galaxy have had nearly their entire value wiped out this year. Galaxy’s stock hit a peak of HK$9.56 in October last year, the same month that UK private equity firm Permira agreed to pay US$840 million for a 20 per cent stake in the company. Shares of Galaxy opened the year at HK$7.50 and steadily dropped. The shares fell 1.56 per cent on Tuesday morning to HK$0.62 apiece, giving the firm a market value of US$313 million.
December 1 - 2 2008
The Hong Kong General Chamber of
Commerce (HKGCC) on Monday called on companies to try to refrain from laying off
workers. Direct trains to Guangzhou put cross-border links back on track - Choi Wai-hang was one of the frequent travelers on the Guangzhou-Kowloon through trains in the early days of its resumption of service in 1979. He knows well how the service made the cross-border journey less tiresome. After the through service between Guangzhou and Kowloon was suspended in 1949, travelers from Hong Kong had to cross the border on foot to Shenzhen to catch another train to Guangzhou after the Kowloon-Canton train from Hung Hom reached Lo Wu. "We used to catch a train from Hung Hom at 7am and would not arrive in Guangzhou until 3pm or 4pm that day. "It's hard for the younger generation to imagine that a trip between Hong Kong and Guangzhou would take up to nine hours," said Mr Choi, director of Reiss, Bradley and Company, a British trading firm in Hong Kong in the late 1970s. The direct service between the two cities opened in 1911 but was suspended in 1949 after the founding of the People's Republic of China. Starting from the late 1950s, Mr Choi used to travel to Guangzhou to attend the China Import and Export Fair, popularly known as the Canton Fair, held twice a year in the spring and autumn. The Canton Fair, which was inaugurated in 1957, is the mainland's largest trade fair. "Until the late 1970s, you could not return to the mainland unless you held a permit applied for by your relatives on the mainland or an invitation issued by Canton Fair organizers," Mr Choi explains. Cross-border journeys became easier following the re-introduction of direct trains to Guangzhou on April 4, 1979, a few months after the mainland embarked on the path of opening up and reform. Hong Kong 1980, the colonial government's annual report, described the resumption after a 30-year suspension as "the most momentous event" of 1979 for the Kowloon-Canton Railway Corporation. The trains were air conditioned with 640 reclining seats. "There was only a pair of trains operating daily between Hong Kong and Guangzhou in 1979 and the fare for a single trip was about HK$20," Mr Choi said. "Most passengers were Hong Kong businessmen and people visiting their relatives on the mainland." Mr Choi, who is a veteran specialist in China's trade and a former Hong Kong deputy to the National People's Congress, said a journey between Kowloon and Guangzhou on a through train took nearly four hours in the late 1970s. "It was just half the time spent before the resumption of the through train service and we no longer had to get off the train in Lo Wu and walk across the border to catch another train," he said. "From then on, it became more convenient for us to travel to the mainland." There are now 12 pairs of trains operating daily between Hong Kong and Guangzhou and the journey time is 100 minutes. The fare for a single journey is HK$190. However, the travel time to the provincial capital is set to be cut by at least half, thanks to a rail link set to be completed in 2014-2015, under a HK$39.5 billion cross-border project approved early this year. Under the project, Hong Kong will be integrated with the mainland's rail network. Starting in West Kowloon, the link will cut travel time between Hong Kong and Guangzhou by 48 minutes, from the 100 minutes of the Kowloon-Guangzhou link, and will dovetail with all mainland networks from the Guangzhou hub. KCRC operations were merged with those of the MTR Corporation (SEHK: 0066) in December last year. Mother files writ against Century Legend directors - When business is good in casino-land, every deal is a winner, every partnership a sure bet. But when things go south, watch out for the fallout ...Century Legend - a family-owned Macau real estate investor, and former owner of the Holiday Inn casino hotel and attached Macau Diamond Casino - put out a stock exchange announcement this week saying three of its directors were being sued by their mother. Szeto Yuk-lin has filed a writ against her children - company chairman Samuel Tsang Chiu-mo, his brother and his sister - over their stakes in two holding firms that control a combined 43.36 per cent of Century Legend. Ms Szeto was perhaps the first VIP room operator in Macau, having opened the original Diamond VIP gaming hall inside casino magnate Stanley Ho Hung-sun's original Lisboa back in the early 1980s. Century Legend did not give details about the nature of the legal action, but stated that the matter "is purely a family dispute among family members of the controlling shareholders ... which does not involve the assets of the group".
A HK$32 billion proposal to stimulate the economy that includes tax rebates, free homes, one-year free transport passes and the creation of 20,000 jobs has been unveiled by the leading pro- establishment political party.
Financial deleveraging in the West
could easily exceed US$12 trillion (HK$93.6 trillion), analysts said, and the
phenomenon could spread to Asia as hedge funds are forced to unwind their trades
and dump their holdings on the market to quickly raise cash. Hongkong Post issued a set of special stamps to salute the Judiciary in the special administrative region on Thursday, the first of its kind in the city. The stamps feature the Statue of Justice, the Court of Final Appeal, judicial robes of the various court levels and the Chief Justice's mace, with their par varying from 1.4 HK dollars to 5 HK dollars. Also on sale at all post offices across Hong Kong were official first day covers for one dollars each and other associated philatelic products. At the special stamps' launching ceremony, Chief Justice Andrew Li said the stamps highlight the importance judges attach to the administration of justice and the maintenance of public confidence in the judiciary. According to Li, there are 180 judges in Hong Kong, half of whom sit at the magistracy and tribunal level while the others sit at the District Court, the High Court and the Court of Final Appeal. Hong Kong's total goods exports grew 9.4 percent year on year to 276.9 billion HK dollars (35.73 billion U.S. dollars) in October, also up from 3.6 percent in September, revealed the Census and Statistics Department here Thursday. However, the department indicated that the global financial crisis has mutated into a synchronized global economic downturn, whose impact on Hong Kong's trade is likely to show up more fully in the coming months. Within the total exports, re-exports grew 10.9 percent to 268.9billion HK dollars (34.7 billion U.S. dollars) while domestic exports rose 23.1 percent to 8.1 billion HK dollars (about 1 billion U.S. dollars). The visible trade deficit for the month was 16 billion HK dollars (2.06 billion U.S. dollars), equivalent to 4.9 percent of the city's goods imports, according to the department. Taking the first 10 months this year together, total goods exports grew 8 percent over the same period last year while goods imports grew 9.4 percent. The 10-month period saw a visible trade deficit of 181.6 billion HK dollars (23.4 billion U.S. dollars), equivalent to 7.1 percent of the goods imports. The department said the notable year-on-year growth in October was mainly driven by an exports rebound to the Chinese mainland and some major markets in Asia.
China Mobile (SEHK: 0941) Peoples, the Hong Kong operation of the mainland's largest mobile operator, said yesterday it would offer unlimited free incoming mobile telephone calls in Hong Kong and Guangdong in a move to expand its market share. The new monthly plan comes before a change in April next year in the city's fixed-mobile interconnection fee settlement, which governs the collection and delivery of calls between operators. The securities regulator will not allow China State Construction Engineering Corp, the country's biggest home builder, to proceed with plans for a large initial public offering in the near future given the weak market conditions, the Shanghai Securities News reported. A China Securities Regulatory Commission official denied rumours that the listing - which at US$6 billion would be the country's biggest this year - would soon go ahead. The regulator approved China State Construction's share offer application in early June but has since put the process on hold, as the market tumbled amid an economic slowdown and worries about a heavy supply of new equity from share issues and reforms of state shareholdings. "The CSRC is keeping a firm grip on the pace of issuance in line with the demands of the market," the official was quoted as saying. The Shanghai Composite Index is down about 70 per cent from its record high in October 2007.
China will launch a new remote sensing satellite "Yaogan " on Monday at the northwestern Jiuquan Satellite Launch Center in the northwestern province of Gansu, an official with the center said on Sunday. The satellite was to be aboard a Long March-2D carrier rocket into the space "at an appropriate time", the official said. At present, both the rocket and the satellite were in good condition and the preparation went on well. The satellite would be used for scientific research, land resources surveying, crop yield estimate and disaster prevention and relief. "It will play a positive role in the country's economic development," he said. Its predecessor "Yaogan III" was launched from the Taiyuan Satellite Launch Center in north China's Shanxi Province on Nov. 12, 2007. The "Yaogan I" satellite was launched from Taiyuan on April 27,2006, and the "Yaogan II" was launched on May 25, 2007 from Jiuquan. Singapore and eastern China's Jiangsu province have increased their bilateral ties by signing 20agreements worth about 2.03 billion U.S. dollars and identifying economic cooperation areas on Friday. Among the 20 agreements signed on the sidelines of the second Singapore-Jiangsu Cooperation Council meeting is a landmark memorandum of understanding (MOU) by both sides to support a commercially-driven project by a Singapore consortium to develop an eco high-tech city in Nanjing, the capital of Jiangsu province. Both sides agreed to deepen bilateral economic cooperation in key areas of business process outsourcing, logistics and environmental services among others. As the top recipient of Singapore's foreign direct investments among the provinces in China, Jiangsu has enjoyed close bilateral economic relations with Singapore since the early years. Singapore has invested 3,150 projects and a total paid-in capital of about 14 billion U.S. dollars in Jiangsu. This year, the trade between Singapore and Jiangsu will exceed 10 billion U.S. dollars.
*News information are obtained via various sources deemed reliable, but not guaranteed
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Hong Kong: 
Thousands flocked to Canton Road in Tsim
Sha Tsui last night for the Christmas countdown street party. Organizers were
expecting 300,000 participants, while police expected 400,000 people to turn out
on both sides of Victoria Harbor. Special traffic control measures were in force
in Tsim Sha Tsui, Central and Causeway Bay.
A pair of giant pandas take food
in the Taipei zoo in Taipei, southeast China's Taiwan Province, Dec. 23, 2008.
The 4-year-old giant pandas, Tuan Tuan and Yuan Yuan offered by the Chinese
mainland arrived in Taiwan by air on Dec. 23, 2008. 
China:
Shanghai conglomerate Fosun International has paid US$150.11 million for a 13.33
per cent stake in advertising firm Focus Media Holding, expanding its
diversified investment portfolio into a new industry. The company bought 17.27
million American depositary shares of Focus Media between November 17 and
December 22 on the Nasdaq Stock Market, Fosun said in a statement filed with the
Hong Kong stock exchange yesterday. Fosun on average paid US$8.69 for each
share, a 9.38 per cent discount to the advertising firm's closing price of
US$9.59 on Tuesday. Focus Media shares have slumped 83.12 per cent this year.
"We'll hold the shares as a strategic investment," said Sun Jun, the assistant
president of Fosun. Fosun's businesses range from retail to pharmaceutical,
financial services and strategic investments, property development, mining and
steel. The purchase, which will make Fosun the biggest shareholder in Focus
Media, could boost its investment in consumer-related sectors that would benefit
from Beijing's economic stimulus to boost domestic consumption, Mr Sun said. He
said media and advertisements would not be Fosun's core business, although the
sector's prospects were bright. He declined to comment on whether the firm would
increase its stake in Focus Media. Fosun, which has more than 10 billion yuan
(HK$11.33 billion) in cash and 14.7 billion yuan of credit facilities, last week
said it would continue to seek acquisitions over the next two years as falling
asset values created new opportunities. It said priority would be given to
overseas-listed mainland firms in sectors including consumer goods,
pharmaceuticals, retail and financial services, all of which have been heavily
sold off by investors. Focus Media said on Monday it would sell its out-of-home
operations to Sina Corp, operator of the mainland's most popular website, for
about US$1.3 billion in stock. As Focus Media plans to distribute 47 million
Sina shares to shareholders after the deal is closed, Fosun will also hold a
stake in Sina. Fosun's Shanghai-listed unit, Shanghai Fosun Pharmaceutical,
earlier bought an 8.56 per cent stake in New York-listed Tongjitang Chinese
Medicines for US$10 million. In October, Fosun spent HK$632 million to increase
its stake in Shanghai Forte Land. 
Visiting Chinese Vice-Premier Li Keqiang is greeted by a welcome delegation on
his arrival at an airport in Cairo, capital of Egypt, Dec. 24, 2008. At the
invitation of Egyptian Prime Minister Ahmed Mahmoud Mohamed Nazef, Chinese Vice
Premier Li Keqiang arrived here on Wednesday afternoon for an official visit to
Egypt. "I believe my visit will promote the China-Egypt strategic partnership of
cooperation to a higher level," Li said in a written speech upon arrival at the
airport. He noted that China attaches great importance to developing relations
with Egypt and is ready to make joint efforts with the Egyptian side to
consolidate the traditional friendship, deepen the strategic partnership of
cooperation and enhance coordination in international and regional issues with
Egypt. 
A key feature of the mainland's
export-friendly measures, the new VAT rebate on certain electronics and
machinery items marks the fourth round of increases since August. The State
Council has unleashed a fresh package of measures to increase exports and
domestic consumption to help the mainland ride out the global economic crisis.
At a meeting yesterday, Premier Wen Jiabao revealed several additions to the
stimulus plan: value-added tax rebates will be increased on high-value,
high-technology electronics and machinery exports; export credit and insurance
will be strengthened; and a yuan settlement scheme on trade will be implemented
in Guangdong, Yunnan and Guangxi. Domestically, distribution networks will be
expanded to boost the flow of agricultural products to urban areas and white
goods into rural areas as a key strategy to spur demand. The expanded measures,
which follow the 4 trillion yuan (HK$4.53 trillion) stimulus package announced
last month, are intended to ensure the mainland economy grows at about 8 per
cent next year as the global economic crisis eats further into the nation's
foreign trade. Some economists said the State Council's latest moves showed top
policymakers were worried about the growing adverse impact of the crisis on the
nation's economy, which is heavily reliant on exports. As a key feature of the
export-friendly measures, the new VAT rebate on certain electronics and
machinery exports marked the fourth round of increases since August. This will
be a hearty Christmas gift to about 55,200 Hong Kong processing trade exporters,
many of whom are struggling to ride out the recession in their top three markets
- the United States, Europe and Japan. However, Mr Wen has yet to specify the
details of the latest VAT change, such as the new rebate rates on the exports in
question and the effective date. While Toys Manufacturers' Association of Hong
Kong executive vice-president Yeung Chi-kong welcomed the move, he called on
policymakers to offer more tax incentives and revise the controversial new labor
contract legislation. "The VAT rebate on toys can be raised further as the
rebate on garments is now at 17 per cent, which means VAT-free," Mr Yeung said.
Sir Run Run Shaw, executive chairman of
Shaw Holdings pictured at the Shaw Brothers Annual General Meeting at Kowloon
Shangri-la, Tsim Sha Tsui earlier this year. On Tuesday, shares in Shaw Brothers
surged after Sir Shaw floated a bid to buyout the firm. Movie mogul Sir Run Run
Shaw’s plan to buy out his listed unit, Shaw Brothers (Hong Kong), for HK$1.33
billion after he failed to sell his stake in the firm, propelled the stock as
much as 58 per cent higher on Tuesday. The move could facilitate a possible sale
of the firm’s crown jewel, Television Broadcasts (SEHK: 0511) (TVB) by Sir Shaw,
analysts said, referring to the centenarian tycoon who helped fund the 1982
science fiction film Blade Runner. “The privatization plan could remove a
potential executive hurdle should Shaw Brothers decide to sell its TVB stake in
the future, as minority shareholders’ approval would no longer be necessary,”
UBS said in a research note on Tuesday. But a bid for TVB was unlikely in the
near term, as any potential buyers would probably be constrained by tight credit
due to the global financial crisis, it added. Shaw Holdings, controlled by Sir
Shaw, would pay HK$13.35 per share for all the Shaw Brothers shares it does not
already own, the company said on Monday. The stock closed on Tuesday’s morning
session up 55 per cent at HK$12.64, after earlier surging to as much as
HK$12.86. TVB shares rose 2.7 per cent to HK$24.45. Entertainment conglomerate
Shaw Brothers’ studio produced up to a thousand titles and its influence is also
evident in the films of Bruce Lee, Jackie Chan and John Woo. But in 1980, Sir
Shaw focused on television, becoming the chairman of TVB, which became the
city’s dominant terrestrial TV broadcaster. The company now derives 100 per cent
of its earnings from TVB, in which it has a 26 per cent stake. It also has a
large piece of land in Hong Kong’s Clearwater Bay. The offer price represents a
64 per cent premium to the stock’s last close of HK$8.13 on December 12, prior
to a trading suspension. The stock resumed trading on Tuesday. “That’s a good
price and close to its asset value of about HK$15 per share,” said Francis Lun,
general manager at Fulbright Securities. He expects the offer will be approved
by minority investors. Arnhold and S. Bleichroeder Advisers, which represents
about 10.2 per cent of Shaw Brothers’ issued shares, had agreed to vote in favor
of the offer, the company said. Shaw Brothers’ market value fell more than 67
per cent from its peak in June to HK$3.2 billion on December 12 after hopes to
sell Sir Shaw’s controlling stake in the company were dashed amid the global
financial crisis. Sir Shaw owns about 75 per cent of Shaw Brothers and has a 6.5
per cent interest in TVB. Shaw Brothers hit a record high of HK$24.30 on June
25, boosted by reports that Yeung Kwok-keung, chairman of property developer
Country Garden Holdings, would buy Sir Shaw’s interest in Shaw Brothers to get
control of TVB. But Shaw Brothers said in October that talks by Shaw Holdings to
sell its stake in the firm had ended due to the tumultuous situation in
financial markets. In May last year, talk that Sir Shaw may sell his slice of
the entertainment giant ahead of his 100th birthday in October that year lifted
its shares as much as 32 per cent in two days.
Professor Ron Hui Shu-yuen at City University's Department of Electronic
Engineering shows how his battery-charging plate works. An international
consortium founded in Hong Kong wants to cut the last cord that limits the
mobility of wireless consumer electronic devices. Member-companies of the
Wireless Power Consortium aim to develop a universal standard for people to
charge over-the-air all of their portable electronic gadgets - including mobiles
phones, media players and laptops - almost as simply as they access the internet
through Wi-fi networks. A conservative estimate from consortium co-founder
ConvenientPower, based in the Hong Kong Science Park, projects the market for
universal wireless power-charging solutions and accessories could be worth US$15
billion a year. "Seamless, safe charging that is available everywhere for mobile
electronic devices can only be achieved through a universal wireless
power-charging standard. Wireless power cuts the `last wire' after wireless
communications and data," said Camille Tang, president of local wireless
charging systems developer ConvenientPower. Ms Tang said a number of wire-free
technologies for transferring electric power existed, such as those used in
electric toothbrushes. Ron Hui Shu-yuen, a professor at the Department of
Electronic Engineering at City University, had earlier developed his version of
an "unplugged" power charger - a wireless battery-charging plate. The charger
uses so-called near-field electromagnetic coupling, allowing various devices to
be charged simultaneously when placed on a charging plate plugged into a normal
power outlet. Ms Tang said ConvenientPower had licensed Professor Hui's
technology from the university. ConvenientPower chief executive Mike
Mastroyiannis said the key would be contributing elements of that and other
technologies to a universal wireless charging standard accepted by the industry.
Otherwise, proprietary wire-free charging technologies will still prevent
different power chargers from being used on a single device or different gadgets
from being charged at a common power source. Having a universal wireless
power-charging standard would ensure the compatibility of consumer electronic
products and charging stations, Mr Mastroyiannis said. ABI Research has
estimated sales of mobile phones will reach 1.3 billion units this year.
Worldwide sales of all portable, rechargeable electronic devices in the
telecommunications and consumer electronics sector are estimated to be more than
2 billion units. Demand for universal wireless power-charging systems could
hence be significant when the standards are set and manufacturers start churning
out their solutions. The consortium will first establish a standard for
low-power electronic devices using 5 watts and below, such as mobile phones,
portable media players, laptops and video game accessories. A standard for
higher power portable electronics and electrical equipment is also planned.
"This is a crucial moment in the development of wireless power," said Menno
Treffers, a senior director for standardisation at Philips Electronics and the
consortium chairman. Mr Mastroyiannis said the consortium would draw up the
standard "as soon as possible". Stephen Chau Kam-kun, the chief technology
officer at cellular-phone network operator SmarTone-Vodafone, said: "This is a
good first step forward to help boost people's mobility with their devices." The
global initiative for a universal standard was launched by the consortium last
week at the Hong Kong Science Park. Other consortium members include Royal
Philips Electronics, Texas Instruments, Sanyo Electric, Logitech, National
Semiconductor, Fulton Innovation and Shenzhen Sang Fei Consumer Communications.
The consortium will initially focus on a wireless charging technology that
transmits power to a product near a charging station. The power transfer is
based on the principle of magnetic induction. Magnetic induction, or transformer
technology, is used in all kinds of electronic equipment because it is simple,
efficient and safe. It makes rapid battery charging possible and will not
interfere with data or devices nearby. In addition, it is reliable in demanding
environments where there may be water, sand and dirt. "To establish a robust
standard, we embrace diverse expertise and collaboration. The Wireless Power
Consortium seeks as many electronics groups and companies as possible to join as
members," said Wolf Oelschlegel, a general manager at Shenzhen Sang Fei.
Global luxury retailer DFS Hong Kong,
which operates duty-free shops, plans to expand its outlet in Tsim Sha Tsui by
40 per cent to cater for strong demand from mainland tourists. In strong
contrast to the declining sales suffered by many retailers in the neighborhood,
DFS sales remain on an upward trend, according to Maureen Fung Sau-yim, the
general manager for leasing at Sun Hung Kai Real Estate Agency. DFS Galleria,
which sells prestigious international brands including Louis Vuitton, Gucci and
Chanel, will rent an additional 35,000 square feet at Sun Hung Kai Properties (SEHK:
0016)' Sun Arcade in Tsim Sha Tsui. "The group is proceeding with the expansion
despite the deepening financial turmoil. We just signed the leasing agreement
last week," Ms Fung said. DFS Galleria's retail space at Sun Arcade, which
generates shopper traffic of up to 120,000 visitors during weekends, will expand
to 120,000 sq ft from 85,000 sq ft now. Ms Fung said retailers that remained in
a strong financial position were able to take advantage of the economic downturn
to expand in light of the declining competition for prime space and landlords
becoming more flexible in discussing leasing terms. "DFS Galleria will expand
its cosmetics and jewellery and watch zone in a bid to capitalise on
mainlanders' strong appetite for luxury goods," she said, adding that cosmetics
sales this month jumped significantly compared with December last year. As
mainland tourists account for up to 50 per cent of DFS Galleria's sales, she
said, the financial turmoil had a limited impact on its sales, and the retailer
would add 17,500 sq ft of space this month and the remainder by the end of next
year. After the completion of the expansion, DFS Galleria will account for 57
per cent of the 210,000 sq ft Sun Arcade, the biggest store in the shopping
centre. Ms Fung declined to disclose the leasing terms but said the rents for
the additional space to be committed to by DFS Galleria were higher than in
previous leases. Currently, rents at Sun Arcade were HK$150 to HK$300 per square
foot, she said. Aside from DFS, several global retailers are expanding their
outlets. Spanish fashion retailer Zara will soon enlarge its store at IFC Mall
in Central by 25 per cent to 16,000 sq ft. Sources have said Zara would close
its IFC store on January 31 and the new store would open on April 1 next year.
Rival luxury retailer Prada intends to expand from 2,800 sq ft to 8,000 sq ft,
while Ferragamo plans to enlarge its space from 1,500 sq ft to more than 3,000
sq ft. Industry watchers said international brands tended to open fewer big
shops instead of many small shops. 
Workers wave as pandas Tuan Tuan and Yuan Yuan are escorted from Yaan panda
sanctuary in Sichuan on Tuesday. A pair of giant pandas arrived in Taiwan on
Tuesday as a gift from the mainland, the latest move in rapidly warming ties
between the longtime rivals. A green-liveried Eva Airways jet carrying “Tuan
Tuan” and “Yuan Yuan” set down at Taipei airport after the three-hour flight
from Chengdu in Sichuan province. Taken together the pandas’ names mean reunion
– underscoring Beijing’s hopes that the animals’ arrival in Taiwan will spur
unity between the sides, 59 years after they split amid civil war. Tuesday’s
panda arrival follows by a week the initiation of expanded transportation links
across the 160-kilometre wide Taiwan Strait and other signs of friendship
between Beijing and Taipei. Since his inauguration seven months ago, Taiwanese
President Ma Ying-jeou has moved aggressively to link Taiwan closer to the
mainland, opening the door to a substantially increased flow of mainland
tourists and sanctioning a more liberalised regime for bilateral investments.
His steps contrast sharply with predecessor Chen Shui-bian’s efforts to
emphasize Taiwan’s political and cultural separateness, which enraged Beijing,
and prompted it to reaffirm long-standing threats to use military force against
the democratic island it claims as its own. After their arrival at Taipei
airport, the pandas were prepared for the short trip to the city’s zoo, where
they are expected to remain in quarantine for 30 days. Assuming they are
disease-free, Yuan Yuan and Tuan Tuan – and their new, two-story zoo habitat –
will be unveiled to the public during the Lunar New Year holiday in late
January. They are expected to double the zoo’s number of annual visitors to 5 or
6 million. For more than five decades, Beijing has used panda diplomacy to make
friends and influence people in countries ranging from the United States to the
former Soviet Union. The giant panda is unique to China and serves as an
unofficial national mascot. Beijing regularly sends the animals abroad as a sign
of warm diplomatic relations or to mark breakthroughs in ties. The offer to send
Yuan Yuan and Tuan Tuan to Taiwan was first made in 2005 when the
pro-independence Chen was still in charge. Citing various bureaucratic
obstacles, his government rejected it, but after Mr Ma’s inauguration in May,
the way was cleared to reverse that decision.
Chinese tourists seek ultimate US
souvenir - Caravans of cash-rich Chinese have been weaving through US
neighborhoods, looking for foreclosures and other bargain properties to buy. US
home-buying trips are becoming one of the more popular tour group packages in
China. New US visa rules and a loosening of foreign investment policies by China
have made it easier for people like Zhao Hongjun of Beijing to go house hunting
across the Pacific. The 48-year-old owner of a media firm went on a two-week
road trip last fall, checking out properties from Los Angeles to New York. He's
been following the swoon in prices since, and next month he may join another
prospecting group heading for San Francisco, Los Angeles and Las Vegas - three
of the worst-hit US housing markets. His budget: US$1 million (HK$7.8 million).
"LA is not bad; a lot of Chinese live there," said Zhao, whose interest is in
apartments and detached houses. Overseas Chinese have been buying southern
California properties for years. What's different now is they are starting to do
it in large groups and quite openly. Chow Ling, president of the Chinese
American Real Estate Professionals Association in Southern California's San
Gabriel Valley, says brokers and agents welcome the tours - anything to shake
the doldrums of the market crash. But Chow, who serves mainlanders mostly, is
skeptical. Unless they're willing to spend more than US$400,000, they'll likely
be disappointed in the available homes. Liu Jian, chief operating officer at
Soufun.com that is organizing next month's visit, said his group's tour would
focus on homes between US$200,000 and US$300,000, just at or below the median
for the region. More than 300 people have registered. James Chou of Coldwell
Banker George Realty in Alhambra, California, is preparing for several groups
early next year, totaling up to 200 people. His company will provide hotels and
tour buses. Jamie Lee, who runs Los Angeles Convention and Visitors Bureau
office in Beijing, has mixed feelings about these gou fang tuan, or home-buying
groups in Chinese. Lee has been working hard in China to publicize the biggest
attractions of Los Angeles - its great weather, beaches, Hollywood and theme
parks. "I'm promoting tourism to LA, but not to go to buy cheap houses," she
said. "Are we that desperate?" Mei Xinyu is ambivalent for a different reason.
As a researcher for China's Ministry of Commerce, Mei doesn't want to see a rush
of Chinese buying US homes and getting burned. "The housing price right now in
the US is fairly low already, but it's hard to say how long it will remain the
valley," he said. In some places, mainlanders could face a backlash, just as
there was when the Japanese went on a shopping spree in the United States during
the 1980s. What is more, he warned, some American cities may not bounce back at
all. "China is still in the process of urbanization. It's unlikely to turn into
ghost towns," he said. "But the United States is different." Yuan Lixin says his
group's tour is meant to address precisely that concern - to give mainlanders a
deeper understanding of US life over 14 days before they buy. "What we sell is
the culture, American culture," said Yuan, a planning department official at
Beijing Youth, a newspaper enterprise that has been organizing group tours since
late 2006. "In the past, people who traveled to the United States might carry
back a large luggage with American goods. It's just that this time, what they
bring back are papers showing hundreds of thousands of dollars of a house."
Hong Kong Disneyland's planned expansion would increase its size by more than
one-third and cost about half the price of the cruise terminal to be built at
Kai Tak, managing director Andrew Kam Min-ho said yesterday. The government
estimates the terminal will cost HK$7.2 billion, meaning the park-expansion bill
would be HK$3 billion to HK$4 billion. Three new themed "lands" would occupy
about 12 of the 20-plus hectares available for development at the theme-park
site, Mr Kam said. Hong Kong Disneyland currently features Main Street USA,
Fantasyland, Tomorrowland and the largest Adventureland in the world. Disney,
which has long expressed its willingness to finance the expansion, is still
negotiating with the government, its joint-venture partner, on the way forward.
The government holds a 57 per cent stake in the theme park. Mr Kam said the
administration would remain the majority shareholder and only suffer a slight
decrease in its stake if no taxpayers' funds were used to help pay for the
expansion. It is understood that the lack of a proportionate injection of funds
from the government would dilute its majority stake, and further progress would
depend on whether it was willing to inject matching funds or accept a smaller
stake. Bill Ernest, Walt Disney Parks and Resorts president and managing
director for Asia, said the talks were expected to continue for a while. "I
think the business is complex because any time we go in with our own level of
capital, it puts it into the overall mix and then the government has to
determine how it wants to handle it," he said. "So it's not an easy negotiation,
but it is ongoing and frankly it has been for a while." A spokesman for the
Commerce and Economic Development Bureau reiterated that different financing
arrangements would change the capital structure of the theme-park joint venture.
The spokesman said the government needed to consider the public's interests and
the return on its investment but declined to put a deadline on the talks. Mr Kam
said both sides understood the urgency of the negotiations given that the
expansion plan would create thousands of much-needed jobs during the economic
downturn and capitalise on falling commodity prices and labour costs. It was
estimated that construction would take about two to three years, he said. "We've
always said that our expansion plan is like the 11th major infrastructure
project," Mr Kam said, referring to Chief Executive Donald Tsang Yam-kuen's
recent call to speed up 10 key projects to prop up the economy. Hong Kong
Disneyland is seeking to cater more to the young-adult market, as people in
their 20s account for about 50 per cent of visitors to the theme park.
A group of non-Guangdong residents of
Shenzhen arrive to enjoy the attractions of Hong Kong Disneyland yesterday.
Rules for non-Guangdong residents of Shenzhen visiting Hong Kong in tour groups
may be relaxed or simplified, said Wang Fugang, assistant general manager of
China Travel Service. Under a pilot scheme, rules currently require mainland
visitors to have lived and worked in Shenzhen for at least a year, and for them
to obtain approval from their employer. Mr Wang's comments came as the scheme
kicked off yesterday with the arrival of 153 mainland visitors from Shenzhen at
Hong Kong Disneyland, as part of a tour. More tour groups were expected, said Mr
Wang, but they would "probably wait until after Christmas as hotel rooms in Hong
Kong are more expensive during the peak season". To draw more tourists, Hong
Kong Disneyland managing director Andrew Kam Min-ho said he was considering
introducing some hotel promotions - like buffet meals - during the traditionally
quiet period after the Lunar New Year. Cheaper tickets for evening admission to
the theme park was also being discussed, he said. It is estimated that about 200
non-Guangdong residents from Shenzhen would join these tours to Hong Kong every
day. 
A policeman guards two giant
pandas, Tuan Tuan and Yuan Yuan, at the Bifeng Gorge base of the China
Conservation and Research Centre for the Giant Panda in Sichuan yesterday. Giant
pandas Tuan Tuan and Yuan Yuan, whose names said together mean "reunion", will
be flown by chartered Taiwanese plane from their native home in Sichuan to the
island today, with steamed corn buns and fresh bamboo in their luggage and a
supply of airsickness pills. Armed police and more than 500 security guards were
stationed at an airport in Sichuan yesterday, from where the pair will take off
for their new home in Taiwan, China Central Television said. An Eva Air jet from
Taiwan landed at Shuangliu Airport in Chengdu at midday yesterday to pick up the
pandas. Roads would be blocked when the pandas, which lived at a sanctuary 120km
outside Chengdu, travelled to the airport in a convoy, CCTV said. The report did
not explain the need for such high security, which was on duty around the clock.
Beijing first offered the pandas to Taiwan in 2005, hoping they would strengthen
Taiwanese public support for reuniting with the mainland, an offer rejected by
the island's leader at the time, Chen Shui-bian, who supported independence.
Current Taiwanese President Ma Ying-jeou accepted the pandas as a goodwill
gesture. A veterinarian and panda keeper would travel with the two four-year-old
animals, CCTV said. A two- storey glass-and-stone house will serve as the
animals' new home in Taipei. After a month-long quarantine period, it will open
for public viewing around the Lunar New Year, which begins on January 26. The
pandas' previous home, the Wolong Nature Reserve, was damaged in the May 12
earthquake. "I am reluctant to let them leave here," Wang Xiaofang, owner of a
shop several hundred meters away from their breeding base, told Xinhua. "Their
departure for Taiwan represents the mainland people's wishes to promote
cross-strait relations. I hope they will bring goodwill to Taiwan."
Promotion personnel pose during a press
preview ahead of the Asia Game Show 2008, which starts today at the Hong Kong
Convention and Exhibition Centre. The 7th Asia Game Show begins today amid hopes
that it will attract more than 400,000 fans of video and computer games with
money to spend. Organizers said yesterday they were optimistic after the success
of two recent shows, the computer festival in Sham Shui Po and the Hong Kong
Brands and Products Expo, which both attracted free-spending crowds. "When the
economy goes down, more people will find playing video games to be a cheap and
easy way to relax," the show's project manager, Johnny Chan Siu-lun, said.
However, he declined to estimate how much the visitors would spend. The four-day
show runs until Monday at the Convention and Exhibition Centre. Mr Chan said it
had attracted 56 local and foreign exhibitors, 10 more than last year. Nearly
one-fifth of them were mainland game developers. Sony, the Japanese game
developer taking up almost one-third of the exhibition's floor space, will be
featuring about 60 of the latest games for its PlayStation console. James Hong
Ming-sang, deputy general manager of Sony's marketing department, said he
expected the firm to take in HK$18 million at the show, similar to last year's
figure. He said almost one-third of last year's customers were mainlanders, but
the economic slowdown might make the tourists spend less. However, he was
optimistic that a discounted package for the console and the latest games would
boost sales. Sony has recruited about 200 temporary staff from Tin Shui Wai and
Kwai Tsing, about 50 more than last year. Salaries were raised from HK$35 an
hour last year to HK$40. Meanwhile, EGL Tours said it was recruiting 100 extra
staff in the next year, including tour guides and marketing and IT employees.
The travel agency also plans to give a total of HK$3 million in annual bonuses
to its 650 staff members.
Citic Pacific (SEHK: 0267) shareholders
are expected to call on chairman Larry Yung Chi-kin and managing director Henry
Fan Hung-ling to step down amid doubts about their credibility in handling the
company's massive investment losses. The call is expected to come today at an
extraordinary general meeting being held to obtain approval from shareholders
for a rescue package that management proposed. Democratic Party lawmaker James
To Kun-sun said shareholders were angry with Mr Yung and Mr Fan. Shareholders
authorised Mr To and party chairman Albert Ho Chun-yan to attend the meeting and
ask questions. "They wonder if Mr Yung and Mr Fan are still covering up
something regarding the massive investment losses," Mr To said. "Only if the top
management is replaced by new blood will shareholders have a clearer picture of
what has been happening in the company." The losses stem from "foreign currency
accumulator" bets on the Australian dollar that oblige the firm to buy dollars
at a fixed price up to 2010. The rapid decline in the currency means the firm is
paying far more than market value, and forced it to look to its mainland parent,
Citic Group, for extra funding. Noting that the Securities and Futures
Commission's investigation of the company was still under way, Mr To expressed
doubts whether the rescue package would be resolved today. A postponement would
remove shareholders' doubts about the effectiveness of the rescue package if the
commission discovered mismanagement, he said. The lawmakers will attend the
meeting today with a group of people who hold small numbers of the shares. The
shareholders are prepared to question the management's responsibility and
handling of its six-week delay in making an announcement about its losses, put
at more than HK$18 billion. The Democratic Party has been collecting signatures
from Citic Pacific shareholders, as 100 signatures can cause the financial
secretary to launch a broad investigation of the company's management. Citic
Pacific's share price rose yesterday 12.9 per cent to HK$8.25.
Deng Xiaoping's role in the reforms
holds a young reader's interest & President Hu Jintao addresses top Communist
Party leaders at the Great Hall of the People. The Communist Party yesterday
marked the 30th anniversary of the launch of economic reforms which have
revitalized China and reshaped the world - with a pledge of further change and
even greater opening up. Speaking before ranks of current and retired state
leaders at the Great Hall of the People, President Hu Jintao hailed the nation's
astonishing rise since the party embarked on the road of reform in 1978. He
promised China's people a "prosperous and harmonious society" in the years to
come. But he warned the party against self-satisfaction and said that only by
implementing more reforms could it lead the country to greater prosperity (SEHK:
0803, announcements, news) and retain its legitimacy to govern. "Comparing our
achievements with our long-range goals and people's expectations of a better
life, we have no reason to feel content and stop moving forward," he said. China
still faced many challenges, including a low level of industrial innovation, a
weak agricultural foundation, its less developed rural areas and deficiencies in
party and government work. "Reform and opening was a key choice for the fate of
China," Mr Hu, who is also the party's general secretary, said. "The road has
been correctly chosen. There is no way we will turn back." The meeting marked
the anniversary of the start on December 18, 1978, of the third plenary session
of the 11th Central Committee of the Communist Party at which the economic
reforms were launched two years after the end of the chaotic, decade-long
Cultural Revolution. The president reminded the public how the reforms had
brought the mainland from the brink of collapse 30 years ago to the economic
power it is today. The historic shift came after the party leadership, under
late paramount leader Deng Xiaoping , decided to throw open its doors to the
rest of the world. "Only development makes hard sense," Mr Hu said, quoting a
famous slogan used by Deng at the peak of ideological disputes in the 1990s over
the way forward. Looking ahead, Mr Hu said China must continue to keep its feet
firmly on the ground and focus on economic development, particularly wth the
international financial crisis escalating. "Making economic development the
focus is the key to national rejuvenation, and it is the fundamental imperative
for our party and our country to achieve prosperity and development and enduring
peace and stability," the president said. "We must earnestly implement the
measures [which the government has announced] to further expand domestic demand,
boost economic growth as well as cope properly with the international financial
crisis and various risks in the internal economy to maintain stable and
relatively rapid economic growth." The nationally televised gathering seemed
designed to be a show of unity after China's successful staging of the Olympic
Games this summer. The event featured a rare joint appearance by more than 6,000
current and retired mainland leaders. Mr Hu said the goal of building a well-off
society would be reached in 2021, when the party celebrates its centennial.
China would become a "prosperous, democratised, civilised and harmonious modern
socialist country" when the People's Republic celebrated its centenary in 2049.
China yesterday surprised the market by cutting prices for petrol, diesel and
jet- fuel one day after OPEC slashed crude oil production. The mainland cut fuel
prices for the first time in nearly two years, after crude oil slumped 70
percent from its peak of US$147 (HK$1,147) per barrel in July, seeking to lower
costs for companies and consumers. The ex-factory price of petrol was reduced by
14 percent to 5,580 yuan (HK$6,327) per ton, diesel by 18 percent to 4,970
yuan, and jet fuel by 32 percent to 5,050 yuan, the National Development and
Reform Commission announced yesterday. This price reduction has factored in the
fuel tax reform and will take effect from today, the nation's top economic
planning agency said. The government will increase fuel consumption taxes to
replace road maintenance fees to encourage energy conservation, effective
January 1, the NDRC said.
Fok Siu-wing has vowed to fight on after a
court rejected his claim that higher fees for pregnant mainlanders were
unconstitutional. The policy of charging pregnant mainlanders a higher fee to
give birth in Hong Kong's public hospitals is justified, even for those with a
Hong Kong husband, the High Court ruled yesterday. Mr Justice Jeremy Poon
Shiu-chor said that when the policy was introduced in 2005, "there was clearly a
genuine and urgent need" to address the "mischief" caused by the surge of
non-eligible people giving birth in public hospitals. The policy was "plainly
legitimate", he said. He dismissed a judicial review launched by Hongkonger Fok
Siu-wing on behalf of his son, Fok Chun-wa, and mainland daughter-in-law, Zeng
Lixia, saying her position was "materially different from that of a Hong Kong
resident" and did not change merely because she had married into a Hong Kong
family. "If a mainland woman wishes to give birth in Hong Kong, which is
entirely a matter of her choice alone, she, as a visitor, cannot possibly expect
to enjoy the same treatment as Hong Kong resident women," he said. Mr Fok, 68,
had claimed the policy was unconstitutional and discriminatory. He also
challenged the lack of a discretionary waiver of fees for pregnant mainlanders
from families which, like his, depended on public assistance. He yesterday vowed
to appeal against the decision, saying the judge had been unfair to
differentiate between his daughter-in-law and local mothers. "The government
does not have a chance if I appeal because the policy violates our Basic Law,"
he said. "It would be very wrong to treat her merely as a visitor because she
married my son, and my grandson is a resident of Hong Kong." Under the policy,
non-local women are charged HK$39,000 to book a bed. Those who have not made a
booking, and often require the services of an accident and emergency department,
have to pay HK$48,000. Asked if he would pay medical fees totalling HK$132,312
incurred by Ms Zeng when she came to Hong Kong to give birth last year, he said:
"Of course not. I don't have the money to pay. Even if I had the money, I
wouldn't pay." Ms Zeng is a two-way permit-holder awaiting approval by mainland
authorities for a one-way permit, which would give her Hong Kong residency. She
was married in 2005 to Fok Chun-wa, who has mild mental disabilities. She gave
birth to her son, Man-kuen, on December 26 last year through the accident and
emergency department of a public hospital in Hong Kong. She was admitted to the
hospital three times for follow-up consultations and treatment. Making his
ruling, Mr Justice Poon said the charging policy was justified to tackle the
problem of an influx of pregnant mainlanders seeking to give birth in Hong Kong
hospitals. The amount of the fees - set in 2005 and last year - was also
justified. He said the policy ensured local women were given priority and
non-local women were not attracted to Hong Kong's public hospitals by their low
prices. "A responsibility to pay for obstetric fees is no more an infringement
of [the Basic Law] than a responsibility of parents to pay for food and
clothing," the judge said. Caritas social worker Tsang Koon-wing said the policy
was affecting about 5,800 mainlanders. According to the Hospital Authority,
9,428 non-local mothers had babies in public hospitals from January to November
this year.
Chief Executive Donald Tsang
chats with National Development and Reform Commission director Zhang Ping in
Beijing. Chief Executive Donald Tsang Yam-kuen arrived in Beijing yesterday for
a three-day duty visit, during which he is expected to gain approval for Hong
Kong to carry out more renminbi business, through talks with state leaders and
mainland officials. Aside from the widely expected expansion of renminbi
business, Mr Tsang will also use the trip to discuss plans to expand the
Individual Visit Scheme before meeting President Hu Jintao and Premier Wen
Jiabao tomorrow. Among the options to be considered for expanding renminbi
business, Mr Tsang is expected to discuss the possibility of yuan clearance and
issuance of yuan-dominated bonds in Hong Kong. A source familiar with the
situation said last night that there would be "results" tomorrow when Mr Tsang
met Mr Hu and Mr Wen. "It [the expansion] won't be a big bang approach, it will
be a gradualist approach in line with China's economic reform over the past 30
years," the source said. The source cited Beijing's currency swap accord reached
with South Korea as an example of a model Hong Kong may follow. Last week
Beijing and Seoul agreed on a 38 trillion won (HK$212.8 billion) currency swap
accord to ensure financial stability in both countries. The government is also
seeking to expand the Individual Visit Scheme by adding more mainland cities to
the list. It has also sought to entice more tourists already permitted to visit
by making it easier for them to come to Hong Kong. The source said there were
many people on the mainland whose residency permits did not correspond to where
they lived. "It's a lot of hassle for them to go back to the home city to get a
visa for Hong Kong," the source said. "Maybe we can try to make it easier by
allowing them to get the visa in the city they live in now," the source said.
Earlier in the day, Mr Tsang held talks with National Development and Reform
Commission director Zhang Ping. "[I am] grateful for the NDRC's attention on
Hong Kong, including the assistance on progress made in the Hong Kong-Macau-Zhuhai
bridge and the natural gas supply," Mr Tsang said. Hong Kong signed a deal with
the commission this year that secured a further 20 years of gas supply from
state-owned China National Offshore Oil Corporation. Mr Zhang said in the
meeting that the financial crisis would have a significant impact on China. A
scheduled meeting with People's Bank of China governor Zhou Xiaochuan yesterday
was postponed to today. Mr Tsang's trip followed Mr Zhou's remarks on Tuesday
that the central bank was ready to expand Hong Kong renminbi business. The State
Council issued a directive on Sunday announcing that it would "support yuan
business development in Hong Kong" and increase the use of the currency in trade
settlements.
Mike Rowse says he is proud of InvestHK's
part in reviving the city's Sars-battered economy. Retiring InvestHK director
general Mike Rowse will release his version of the HarbourFest saga in a
tell-all tome by the middle of next year. "I'm really looking forward to that.
Most of the work has already been done," he said yesterday. Tentatively titled
No Minister, the book is one of two planned by Mr Rowse, who turns 60 on Sunday,
and follows a July court ruling that effectively cleared him of wrongdoing in
the controversial HK$100 million concert series in 2003. The book will be the
first time Mr Rowse has publicly given his account of the HarbourFest
controversy. He retires tomorrow. The other book he has planned will be an
autobiography. "I don't think the full story has been told yet and that's why
one of my books is going to tell it," Mr Rowse said yesterday. "I think
HarbourFest illustrates a number of important constitutional and administrative
points. I don't think those have been focused on at all. I think the immediate
concern was that a lynch mob was on the rampage, and they needed someone to
hang. And they did." A disciplinary panel fined Mr Rowse HK$156,660 and severely
reprimanded him over the handling of the HarbourFest concerts. To help revive
the economy after the outbreak of severe acute respiratory syndrome in 2003, the
government agreed to underwrite HarbourFest for up to HK$100 million. The
American Chamber of Commerce was given the task of putting the event together.
"We then had a choice as a department - we could either abandon AmCham and leave
them to take the criticism alone or we could stick with them and deliver. It
seemed to me that, since our job was to reach out to the international business
community, if we had run away from them and left them on their own, we might as
well have closed the department down. So it was conscious decision not to run
away. I knew then that we would be subject to a lot of criticism, most of it
unjustified," he said. Despite the finger-pointing surrounding HarbourFest, Mr
Rowse cited his department's work in helping to revive the Sars-hit economy in
2003 as a successful highlight of his 34-year civil service career.
SJM yesterday marked the formal opening of the 430-room hotel attached to the
Grand Lisboa. Gaming magnate Stanley Ho Hung-sun said despite a sharp slowdown
in Macau's casino industry, SJM Holdings' balance sheet was solid and the
company's new projects were proceeding on schedule. "We are all aware of the
impact that the current economic situation is having on Macau and the gaming
industry, but SJM's strong financial position and our prudent steady growth
strategy has left us well placed to weather this storm," the SJM chairman said
yesterday. "Our development plans are moving ahead as scheduled and we ... will
come through these times stronger than ever." SJM yesterday marked the formal
opening of the 430-room hotel tower attached to its HK$7 billion Grand Lisboa.
While the casino hall and restaurants opened in February last year, construction
of the hotel had been ongoing and the formal opening was further delayed by
several months as a result of the sluggish government approval process for hotel
operator permits in Macau following a major corruption scandal. Chief executive
Ambrose So Shu-fai said yesterday that despite the slowdown, the company had no
plans to implement lay-offs and instead of new recruits it would transfer
existing staff over to new projects as they opened. SJM plans to operate a
franchise casino at the Arc opening in the first half of next year. The casino,
hotel and residential project is being jointly developed by Mr Ho's wife, Angela
Leung On-kei, and GEM-listed International Entertainment, controlled by the
family of New World Development chairman Cheng Yu-tung. SJM also plans to launch
Oceanus, a HK$1.1 billion owned-and-operated casino to be refitted in the former
New Yaohan department store opposite the ferry pier with 300 mass market gaming
tables by the end of next year. Management confirmed the VIP gaming segment had
contracted in the credit crunch as players delayed repayment or defaulted on
debts to junket operators, but reiterated that SJM's share of the high-roller
market was holding at 26 to 30 per cent. Mr So said that a recent spate of
gaming industry lay-offs, cutbacks, and mothballing of projects was because some
competitors had "overleveraged, over-borrowed and over-projected the market".
Situated opposite the original Lisboa, the new property features 50 square metre-plus
rooms equipped with steam rooms. SJM is forecasting 70 to 80 per cent occupancy
and expects to set room rates at HK$1,600 to HK$1,800 on weekdays and HK$2,000
to HK$2,200 on weekends.
Senior citizens will continue to enjoy holiday fare discounts from the four
biggest bus companies until the end of January 2010. The U-turn came just hours
before the Legislative Council was due to debate a member's motion on
transportation costs, which included the retention of discounted fares for
seniors. Spokespersons for Kowloon Motor Bus, Long Win Bus, CityBus and First
Bus said Sunday and public-holiday fare discounts for seniors holding Octopus
cards will continue for another year even though rising fuel prices, wages and
tunnel-toll costs are affecting their operations. KMB and Long Win Bus said they
have lost HK$163 million during the first half of the year, while CityBus and
First Bus added there is no further room for concessions.
Beijing steps up move to
boost property sector - The country's ailing property market was given a fresh
boost yesterday with the announcement of tax relief for homebuyers and measures
to loosen liquidity constraints for developers. As part of the package of
measures unveiled by the State Council, buyers may also acquire a second flat on
the same preferential terms as for their first home, if the size of the first
property is below the average of the city. Analysts and property consultants
said the measures would boost transaction activity in the short term. However, a
full recovery was possible only in the second half of next year once cuts in
interest rates had flowed through to new demand, and a clearer picture emerged
of the nation's economic outlook. In its announcement yesterday, the State
Council said homeowners would be exempt from paying sales tax - set at 5.6 per
cent of the sales price - on properties sold two years from their purchase date.
Previously, the property had to be held for five years to qualify for exemption.
For properties sold within two years, the tax base will also be changed and will
be calculated on the profit from the resale of the property, rather than the
sale price. The provision that will allow the purchase of a second flat on the
same preferential terms as the first means that down payments on second homes
will be reduced to 20 per cent from 40 per cent, and the mortgage rate will be
cut from 1.1 times the benchmark rate to 0.7 times. The measures were formulated
after a meeting of the State Council chaired by Premier Wen Jiabo yesterday. The
meeting also urged mainland banks to increase loans to developers of low and
medium-priced housing and to support mergers and acquisitions by large
developers. "These moves are much more significant than those announced in the
past few months," said Peng Wensheng, a property analyst at Barclays Capital
Research, in a report. Previous measures announced last month included an
interest rate cut, a reduced down payment, a cut in deed tax and reduced
mortgage costs. Chris Brooke, the president and chief executive of CB Richard
Ellis' Greater China division, said the central government had made continued
efforts to support the property sector because it was an important component of
the nation's domestic growth and sales had fallen 20.6 per cent in the first 11
months. Hurt by recessions in the global markets, the country's economy is
projected to expand 7.5 per cent next year, the slowest pace in almost two
decades, according to predictions by the World Bank. David Ng, a property
analyst at Royal Bank of Scotland, said the latest measures were positive and
would give a short-term boost to sales activity. But he said price and volume
declines might only stabilise by the middle of next year as buying sentiment
gradually improved. The duration of the slump beyond that was still uncertain,
and would be subject to the performance of the mainland economy, Mr Ng said. Lee
Wee Liat, a senior analyst in the equity research department of Nomura
International (Hong Kong), predicted a further reduction of 50 to 100 basis
points in interest rates next year, which could help sales activity reach its
bottom. Highly geared companies such as China Vanke and Guangzhou R&F Properties
would benefit from the looser liquidity measures on low and medium housing
development, Mr Lee said. Shares of mainland developers surged after yesterday's
positive news. China Overseas Land (SEHK: 0688) & Investment closed up 4.5 per
cent at HK$11.60, China Resources (SEHK: 0291) Land increased 4.82 per cent to
HK$10, and Guangzhou R&F surged 7.41 per cent to HK$7.83. Separately, the
People's Bank of China and China Banking Regulatory Commission last night
jointly released a directive granting developers of low-end housing a 10 per
cent discount on borrowing rates from corresponding benchmark rates set by the
central bank. However, the loan term must not exceed five years. The equity
portion of new-build projects' investment must not be less than 20 per cent,
while that of renovation projects must not be below 30 per cent, it added.
Nobel Prize-winning physicist Steven Chu
speaks in Chicago after being unveiled as the energy secretary nominee by Barack
Obama. Environmentalists have hailed the appointment. Barack Obama and his
nominee as US energy secretary, Nobel-prize winning physicist Steven Chu, have
committed themselves to the search for alternative fuels as the president-elect
tries to live up to his vow to end US reliance on foreign oil and tackle global
warming. Mr Obama unveiled Professor Chu as his nominee, saying the decision
should send a signal his administration would "value science". "We will make
decisions based on the facts, and we understand that facts demand bold action,"
Mr Obama added. The Bush administration has had a rocky relationship with the
scientific community and was accused of ignoring scientific evidence in its
efforts to make political points on issues such as global warming. "I look
forward to being part of the president-elect's team, which believes that we must
repair the economy and put us on a path forward towards sustainable energy,"
Professor Chu said. He said the purpose of the Energy Department was to support
energy research and development that "will lead to innovation in the private
sector, to nurture broad-based scientific research that is essential for our
future prosperity, and to provide scientific leadership to minimize the
proliferation and use of nuclear weapons". Professor Chu said: "President-elect
Obama has set the tone and pace for moving our country forward with optimism and
calm determination. I hope to emulate his example. With these virtues, the
United States and the world can and will prevail over our economic, energy and
climate-change challenges." Professor Chu, director of the Lawrence Berkeley
National Laboratory, heads a quartet of appointments including ex-Environmental
Protection Agency chief Carol Browner as energy and climate policy coordinator,
former New Jersey environmental protection commissioner Lisa Jackson as EPA
administrator and Los Angeles deputy mayor Nancy Sutley to run the White House
Council on Environmental Quality. With this team, some environmentalists expect
Mr Obama's White House to break from what they view as the Bush administration's
record of overlooking science in favor of politics. "It's such an incredible
contrast, compared to the years of darkness under the current administration, to
see a scientist in such a position of authority," said Alan Nogee, who directs
the Clean Energy Program for the Union of Concerned Scientists, which has
accused the administration of silencing scientists in policymaking. "It's night
and day." Professor Chu - whose academic parents left China to study in the US
in the 1940s and never returned - would be the second ethnic-Chinese member of
the cabinet, after incumbent labor secretary Elaine Chao. The winner of the 1997
Nobel Prize for physics, Professor Chu was an early advocate for finding
scientific solutions to climate change. "In the 21st century, we know that the
future of our economy and national security is inextricably linked with one
challenge: energy," Mr Obama said. The president-elect, who takes office on
January 20, pointed out that other presidents over the past three decades had
pledged to make America less dependent on foreign energy supplies. "All of us
know the problems that are rooted in our addiction to foreign oil. It constrains
our economy, shifts wealth to hostile regimes and leaves us dependent on
unstable regions. "To control our own destiny, America must develop new forms of
energy and new ways of using it. And this is not a challenge for government
alone - it's a challenge for all of us." Mr Obama would soon name Colorado
Democratic Senator Ken Salazar as secretary of the interior, aides said. The
Department of the Interior leases public land for oil and gas drilling.
An elderly woman collects cardboard in
Wan Chai. Critics claim that, in its current form, the social welfare system is
unable to respond quickly enough to emerging needs. Is Hong Kong finally going
to fix chronic problems in how it plans and funds social welfare, a system often
criticised as "ad hoc", "short term" and hostage to "whoever shouts loudest"?
Wilfred Wong Ying-wai believes so. He is confident that another page will be
turned for a welfare system under increasing stress from rapid economic and
social change. Mr Wong, a senior civil-servant-turned-businessman, recently
stood down after six years as chairman of the government's 22-member Social
Welfare Advisory Committee (SWAC). It was asked last year to produce a blueprint
for Hong Kong's future social welfare system, along with "strategic principles"
to guide future planning, a process expected to take another year. Separately,
Mr Wong will soon complete an independent review for the government of its
problematic "lump sum grant" system, introduced in 2000 as a mechanism for
dispensing funds to some 160 non-governmental organisations providing welfare
services. He said the committee he chaired would recommend many changes. A key
issue is how to reconcile the fact that many NGOs need to plan for the longer
term in light of changing welfare demands while the government only commits
funds year by year, with amounts varying according to the state of the public
coffers. 
The launch of real estate investment trusts (reits) on the mainland was back on
the policy agenda at the weekend in a 30-point program of measures planned by
the State Council to revitalise the country's finance sector. Included in the
wide-ranging policy initiatives unveiled on its website on Saturday was a
restatement from the cabinet of its proposal to develop reits on a pilot basis –
a comment that was widely welcomed in Hong Kong. "It makes sense to consider
it," said Angela Lee Wai-yin, a partner in the law firm Baker & McKenzie. Talk
that the mainland would launch reits as an investment class first surfaced as
early as five years ago and there was no commitment in the weekend statement to
a time-table for their introduction. But expectations have now been rekindled
that their debut could be imminent. Ms Lee said reits – investments written on
underlying physical property assets – could provide a more liquid exit point for
investors wishing to take a position on property price movements on the
mainland. They would also allow investors with a lower risk appetite and a
preference for a stable return to participate in property investment at a much
lower entry fee, she added. Lee Hing-yin, director of research and advisory at
Colliers International, East China, agreed on the importance for investors
seeking exposure to mainland property to have an exit strategy. "The
availability of an alternative exit mechanism would enhance the attractiveness
of property acquisition in China to foreign investors and hence is expected to
boost the investment sales market," he said. Reits could also throw a lifeline
to the floundering property market, Ms Lee said, citing examples in the United
States. "In the early 1990s US property prices were in free fall. Reits provided
a floor to the falling prices because they were able to pull investors and funds
together to pick up those dirt-cheap assets which provided a return." No matter
how depressed sentiment might be, if an asset was able to provide a reasonable
return, people would be interested in it, she said, and the China reits would
pool funds to pick up those assets and thereby create a floor for the
deteriorating market. Some players such as Lead Reits Asset Management – a
Tianjin-based investment company that takes positions in yield-bearing
properties – had already stepped into the investment proposition, said Ms Lee.
These players were positioning themselves as reits with listing plans awaiting
approval from Beijing. It was also reported that officials of Shanghai Pudong
New Area and Binhai New Area of Tianjin had submitted proposals to the central
government and were ready to be the testing sites for the launch of a reit.
However, some analysts said the poor market sentiment meant it was not a good
time to launch a reit. "I don't think you can launch a reit in a period when
asset prices are depressed and yields are abnormally high," said c, a senior
resident fellow for real estate finance at Washington-based research firm Urban
Land Institute. Assets could be sold to a reit only at low prices in today's
depressed market, said Mr Blank. Since the abnormally high yield that resulted
was not sustainable it might be better to wait until the market returned to a
stable situation before launching reits, he added. Other analysts said it was
important to see the fine print of how reits would be launched before
commenting. Tax benefits needed to be addressed, they said. Mr Lee said
investors would also want certainty over issues such as the types and quality of
assets to be injected into the reits, assets and gearing restrictions, capital
structures, and tax exemptions. Though these details have yet to emerge, most
analysts believe it would be good to line up reits for release on the market,
because they would provide an alternative source of funding for developers in
the long run. There were also many potential institutional investors such as
insurance companies and individual investors looking for investments with stable
returns.
Pandas Tuan Tuan and Yuan Yuan,
names together mean 'reunion', are seen at a panda base in Ya'an, southwest
China's Sichuan province. The pandas will be sent to Taipei next week. China
said on Wednesday it plans to send two pandas to rival Taiwan next week — the
latest symbols of warming ties between the two sides. Beijing first offered the
pandas to Taiwan in 2005 but Taiwan’s former leaders resisted the move, saying
it was part of Chinese efforts to persuade the island to unify with the
mainland. Taiwan’s current President Ma Ying-jeou, however, has tried to nurture
closer ties with the mainland and accepted the pandas as a goodwill gesture.
“Judging from the circumstances now, the pandas will hopefully be sent to Taiwan
on December 23,” said Li Weiyi, spokesman for the Cabinet-level Taiwan Affairs
Office. Chinese state media said last week that crate training and comfort food
were part of the preparations for the trip for the two pandas. The two are named
“Tuan Tuan” and “Yuan Yuan,” which when linked mean “reunion” in Chinese. State
media reported the two will travel to the Taipei Zoo accompanied by a
veterinarian and a panda keeper, who will bring along a week’s supply of the
pair’s favorite foods — bamboo, apples and steamed cornbread — to ease the
adjustment. In return for the pandas, Taiwan will send to China two Formosan
serows, which are goat like mammals unique to Taiwan. China and Taiwan split
amid civil war in 1949. Beijing continues to claim the self-governing island as
part of its territory, and has been using a blend of threats and diplomacy to
try to bring Taiwan back into its fold.
Liu Hao, who moved to the countryside, was one of seven students accepted into
Beijing's rural development scheme out of 400 applicants from his college. More
than a million Chinese college graduates unable to find work could make coping
with unemployment harder now than it was during the Asian crisis, the head of
China’s largest vocational training organization said. The country will also
have to find a way to absorb migrant workers who have lost jobs but are unable
to return to farming in their villages, said Chen Guangqing of the National
Association of Vocational Education. China is worried that the thousands of
factories shutting or laying off workers, especially along the export-dependent
coast, could lead to unrest if the unemployed hit the streets, threatening
Communist Party rule. “The employment situation may be worse than the 1990s ...
This time, college graduates are not finding work, and there are so many of
them,” Mr Chen told Reuters. In the late 1990s, China’s government weathered
mass unemployment as the Asian financial crisis and bankruptcies of state-owned
enterprises slowed the economy to a crawl. Many college graduates now lacked the
skills needed to compete for jobs in a fast-changing economy and were unwilling
to take less respected jobs, Mr Chen said. More than six million students will
try to enter China’s workforce next year, half a million more than last year. Up
to a quarter could have difficulty finding jobs, the Chinese Academy of Social
Sciences said on Monday. At least four million migrant workers who have lost
jobs have left the cities and are looking for part-time work in large towns and
county seats, rather than going back to their villages. Urban unemployment is
already at 9.4 per cent, according to the Chinese Academy of Social Sciences.
Labor strikes, small scale protests and land disputes are already cropping up
across the country. Disappointed students who will soon graduate add to the
problem. A leading newspaper said on Wednesday that China faced an arduous task
to maintain social stability in the face of its economic challenges. “We are
facing new contradictions, especially this year with the conflict of the
financial crisis and global economic recession, and our economic development
faces serious challenges,” said the commentary in the Communist Party
mouthpiece, the People’s Daily. “The factors for social instability have
increased, contradictions happen more frequently and more easily, and
maintaining social stability is still an arduous task.” The commentary said the
key was to make sure protests — often termed in official parlance “mass
incidents” — did not spin out of control. “If the problem is grabbed early and
when it is small, contradictions can be nipped in the bud and will not become
big incidents,” it said. “Every department must do its job and fulfil its
responsibilities; that way social stability can be maintained.” Faltering
economic conditions have raised the spectre of growth falling below 8 per cent,
which the government regards as a benchmark to create enough jobs to sop up
excess labor and guarantee social stability.
The restaurant trade and lighting and
electrical appliance shops on Hong Kong Island said Hongkong Electric (SEHK:
0006)'s 5.9 per cent tariff cut, announced yesterday, was too small. The
businesses, which use a lot of electricity, said the company should have
announced a double-digit cut. "They have to have a cut of at least 10 per cent,"
said Catering Industry Association vice-president Thomas Woo Chu. "This will
help businesses. Business is so hard right now. Electricity is a very big
expenditure." 
Workers check a pipe for China's
south-to-north water diversion project in Beijing. The project, consisting of
the eastern, middle and western route sections, was initiated to ease the water
shortage in northern China around Beijing, Tianjin, and Hebei province by
diverting water from the south of the country. China will accelerate
construction of the south-to-north water diversion project next year, the Xinhua
news agency quoted the head of the project office, Zhang Jiyao, as saying. The
project, criticised by some environmentalists for encouraging the wasteful use
of water, will divert water from the Yangtze River in western and central China
to arid northern regions through three channels: eastern, middle and western. A
number of projects along the eastern and middle routes would start next year,
Zhang said, drawing on investment of up to 254.6 billion yuan (HK$288.3 billion)
authorised by the State Council, or the Cabinet, for the eastern and middle
routes. As of the end of last month, 4.16 billion yuan had been spent on the
eastern route and 18.23 billion yuan on the middle route, from a total 45.67
billion yuan that has been earmarked. Sections of the project in coastal
Shandong province and eastern Jiangsu province have been completed. A middle
section linking Shijiazhuang, capital of Hebei Province, and Beijing, has also
been finished, and an emergency diversion was started in September to supply
about 300 million cubic metres of water to the capital through March 10. About
one billion cubic metres of water could be diverted to Beijing annually, when
that part of the project is completed in 2010. Environmentalists say the
diversion project encourages wasteful water use in Beijing, reduces the water
supply to arid surrounding regions and takes little account of the potential
long-term impact. The western route, which would involve drilling tunnels
through the high mountains on the Tibetan plateau to bring water from the
Yangtze to the Yellow River, is in the planning stage.
Migrant workers wait to board a
train home from Taiyuan, Jiangxi province. Officials in several provinces are
voicing alarm about how they will feed the huge numbers of laidoff workers
returning home. And a drop in incomes is expected to fuel unrest. Swarms of
migrant workers driven back home by the economic downturn in eastern provinces
are putting huge social and employment pressure on the governments in their
hometowns. In Yunnan province authorities are not only facing the tough task of
creating jobs for 510,000 returned workers, but are also struggling to secure
enough food to feed the swelling population in some areas, according to the
provincial government's website. "The hundreds of thousands of returned rural
workers have increased grain consumption by the local population by 500,000
tonnes per day, and we are feeling the strain of preparing enough rice in the
bowl," Liu Guoquan, director of Zhaotong's Rural Human Resources Development
Office, told fellow officials at a provincial meeting to discuss the crisis. The
annual grain output in Zhaotong had fallen well short of local demand and the
authorities had to import more from other provinces to make ends meet, the
website quoted Mr Liu as saying. Mainland businesses, especially those in the
Yangtze and Pearl River Delta areas, have started to feel the crisis bite.
Thousands of small and medium-sized companies cut their payrolls or simply
closed as overseas orders shrank rapidly. Waves of jobless rural migrant workers
began to head home as early as October, three months before the traditional
Lunar New Year break. Pressure on grain supplies eased as farmers migrated for
work but had abruptly increased as they headed back home.
High profile telecom executive Ricky Wong
Wai-kay has resigned as chief executive of Asia Television — less than two weeks
after his appointment to the position, the private broadcaster’s new chairman
said on Monday afternoon. Mr Wong’s resignation was announced by ATV’s executive
chairman Linus Cheung Wing-lam, who appointed to his new role on December 4th,
the same day that Mr Wong was appointed. At the end of a press conference for
the Miss Asia Beauty Pageant 2008 on Monday, Mr Cheung confirmed Mr Wong had
earlier tendered his resignation and he had accepted it.
Relief for 50,000 workers after bosses
sign 'no-layoffs charter' - More than 50,000 jobs have been guaranteed after
more than 100 businesses, including retail and catering firms, signed a charter
pledging there would be no layoffs for a year.
Controversial new stock-exchange rules will prevent listed company directors
from trading their firms' shares for half the year and will hurt the Hong Kong
market's international competitiveness, influential market participants warn.
"Hong Kong will lose its appeal as a destination for companies to go public," Lo
Ka-shui, a former chairman of the stock exchange's GEM Listing Committee and
chairman of local property developer Great Eagle Holdings (0041), told The
Standard yesterday. Starting on January 1, the current one-month "blackout"
period that prevents listed company directors from trading in the company's
shares just before a results announcement will be extended. The rule will be
changed to bar company directors from such share trading between the time the
financial period ends and when the results are publicly announced - a gap that
is often two or three months, meaning directors cannot trade shares for a total
of six to seven months when both the interim and final results are considered.
"That would affect the competitiveness of Hong Kong as an international
financial center," Lo warned. The rule change has already been approved by the
board of the stock exchange and the Securities and Futures Commission, following
a market consultation. "The current one-month `blackout' period may fail to
ensure that insiders do not abuse the market while in possession of unpublished
price-sensitive information," the stock exchange said in a November report
following a market consultation on the rule change. The exchange said the
proposal to extend the "blackout" period had attracted "considerable debate" but
added it had already considered most of the arguments "at length" before it
drafted the new rule proposals. "No new significant points were added to the
debate as a result of the consultation exercise," the exchange said in the
report. Mike Wong, chief executive of The Chamber of Hong Kong Listed Companies,
said an extension of the "blackout" period would make it more difficult for
directors to exercise stock options they are given as part of their remuneration
package. The change will not be good for those companies that use stock options
to reward their directors, Wong said. Meanwhile, Lo said a stock- exchange plan
to make main board-listed companies issue quarterly management updates could
mislead investors. "The move would make management more shortsighted," Lo said.
"Releasing unaudited operational information may mislead the market." The stock
exchange is considering introducing Britain-style quarterly reporting for main
board companies, which would require them to issue quarterly management
discussions on the state of the company without providing exact results figures.
The stock exchange conducted a market consultation on the proposal last year. In
October, the exchange said it "continues to work with the SFC on implementation
of the consultation conclusions regarding quarterly financial reporting." Wong
said the proposal for quarterly reporting would increase the costs of being a
listed company, which he said is not a good idea given the current market
environment. "It will also distract management's focus onto preparing the
quarterly report, making it harder for them to focus on the business," Wong
added. 
Shaw may offer high premium to take firm private - Centenarian media mogul Run
Run Shaw may privatize holding company Shaw Brothers (0080), the firm said
yesterday, in a move that could make it easier for it to sell off its stake in
Television Broadcasts Ltd (0511). Chairman Shaw may need to spend up to HK$1.5
billion, or HK$15 per share, to buy the 25 percent of Shaw Brothers he does not
already own, according to market watchers. They said shareholders may be offered
a premium of up to 85 percent to the stock's last closing price of HK$8.13 to
get them to accept the deal. Trading in Shaw Brothers was suspended yesterday
pending the release of an announcement about a possible privatization by the
controlling shareholder. The firm's main asset is its 26 percent stake in TVB,
making it the broadcaster's largest shareholder. Shaw Brothers currently has
market capitalization of HK$3.24 billion, and its TVB stake is worth HK$2.73
billion. Run Run Shaw will need to offer between HK$10 and HK$15 a share to Shaw
Brothers shareholders, a premium of 23 to 85 percent, to show his privatization
bid is serious, First Shanghai Securities Linus Yip Sheung-chi said. An offer
below HK$10 a share would show that Shaw just wants to stabilize the stock price
by signaling to the market he thinks it is undervalued, Yip said. The stock hit
a peak of HK$23.50 in June, when Shaw was trying to sell his stake to Guangdong
property magnate Yeung Kwok-keung. The shares have since lost 65.4 percent of
their value. "Shaw Brothers is not a stock that is actively traded usually,"
Ample Finance Group director Alex Wong Kwok-ying said. "In this kind of market
situation, I think they need to pay a very high premium to attract those
long-term investors to give up their shares." For small shareholders to accept
the deal, Run Run Shaw will need to offer at least HK$10.98 per share - or twice
the firm's unaudited net asset value of HK$5.49 per share as at September 30,
said Redford Securities head of research Kenny Tang Sing-hing. 
The day's first direct flight from Shenzhen, mainland China arrives at Taipei's
Sungshan Airport on Monday. China and Taiwan have started a new era of direct
air and shipping services Monday with planes and ships travel directly across
the Taiwan Strait, formally ending a nearly six-decade ban on regular links.
The two sides also signed three
other agreements last month to that will allow direct shipping, direct postal
exchanges and food-safety co-operation. Six freighters from the island's three
major harbours - Keelung in the north, Taichung in central Taiwan and Kaohsiung
in the south - set off on direct shipping services at about 10am. Mainland
freighters also arrived in Taiwan yesterday. Taiwanese shippers have long wanted
the government to lift the ban on direct shipping. "This is good for us, and
also for the development of Taiwan's economy. The government should have allowed
direct shipping a long time ago," said a crew member of one of the Taiwanese
vessels that was leaving Keelung. While the majority of the public welcomed the
start of the direct transport and postal links, lawmakers of the
pro-independence Democratic Progressive Party lashed out at the Kuomintang
government for failing to get approval from the legislature to validate the four
agreements. "This is a total disrespect to the legislature, and a sell-out of
Taiwan," DPP legislator Lai Ching-te said.
The first ships, from Evergreen and Yang
Ming Marine in Taiwan, are scheduled to depart from Kaohsiung and Keelung
harbors for the mainland around noon. Two ships of mainland companies China
Shipping and China Ocean Shipping (COSCO) will set sail from Shanghai and
Tianjin. A total of 20 ships will set sail on the first day. Wang Yi, minister
of Taiwan Affairs Office of the State Council, Chen Yunlin, president of the
mainland's Association for Relations Across the Taiwan Straits (ARATS), and Lien
will attend the Tianjin ceremony to see off the COSCO ship. The ship will reach
Taiwan in four days, Liao Xiaoyu, director of Taiwan affairs office of Tianjin,
said yesterday. Earlier, a ship taking an indirect route needed seven to eight
days to reach the island. Sixteen passenger flights will take off from the
mainland and Taiwan on the first day of direct links, expanding the weekend
charter services that began in July. China Southern Airlines will be the first
mainland carrier to carry cargo across the Straits, from Guangzhou to Taipei. Up
to 60 cargo planes will fly across the Straits every month, according to
agreements signed on Nov 4. 
Remote-sensing satellite "Yaogan V" is launched with a Long March-4B carrier
rocket from the Taiyuan Satellite Launch Center in north China's Shanxi
Province, Dec. 15, 2008. The satellite will be used for data collection and
transmission involving land resources surveys, environmental surveillance and
protection, urban planning, crop yield estimates, disaster prevention and
reduction, and space science experiments. 
Spokesmen of Volkswagen's two joint-venture auto plants in China on Sunday
denied the recent reports that they were suspending production. There were
reports that two auto plants, FAW-Volkswagen Automobile Co., based in
northeastern Jilin Province, and Shanghai Volkswagen Automobile Co., were
planning to partly suspend production lines to conduct maintenance work.
Eagle Mountain's jockey Kevin Shea tosses his goggles into the crowd after
winning the Cathay Pacific Hong Kong Cup at Sha Tin. The Cathay Pacific (SEHK:
0293) Hong Kong International Races set a new benchmark for quality yesterday,
with the highest betting turnover for six years, repeat wins from two of last
year's champions and the anointing of a new middle-distance champion in Cup hero
Eagle Mountain. Punters bet more than HK$1 billion on the end-of-year
extravaganza, up HK$7.6 million on last year but a significant figure given the
economic downturn and current turnover trend - down 3.4 per cent for the season
so far. "This has been an absolutely smashing day," said Jockey Club chief
executive Winfried Engelbrecht-Bresges. "This was the best atmosphere ever at
the Cathay Pacific International Races. This meeting goes from strength to
strength and I believe that our visitors from all around the world will be
marking the second Sunday in December in their diaries as something not to be
missed." He said caps that were given away at the gates were a huge success, and
estimated that 80 per cent of the 52,243 crowd wore them. "This day has proved
our claim that these are the turf world championships," Mr Engelbrecht-Bresges
said. "We had tight, world-class racing, we've had fairy-tale stories coming
true, we've had Good Ba Ba establish himself as the best miler in the world and
Eagle Mountain confirm that he is the emerging force at the 2,000 metres
distance." The HK$20 million Hong Kong Cup was described as " the roughest race
I've ever ridden in" by Douglas Whyte, with three jockeys - Christophe Soumillon,
Garrett Gomez and Ioritz Mendizabal - later suspended for careless riding by
stipendiary stewards.
Public spending will exceed 20 per cent of
gross domestic product this financial year and is likely to do so again in the
next one, breaching a pledge made by Financial Secretary John Tsang Chun-wah in
his budget and violating a principle cherished by finance chiefs for decades and
enshrined in the Basic Law. As a guiding rule for financial prudence, the
government has held that growth in public spending should not exceed the growth
trend in the economy in any year. As spending was about 20 per cent of GDP when
the policy was set, this means in practice that it should be held at this level
or below. The higher spending will contribute to a surging deficit that some
estimate will hit a record HK$88 billion this year - more than 10 times the
administration's original forecast. Mr Tsang had kept spending within the target
in the 2008-09 budget he announced in February. But, since then, growth has
steadily declined while public spending is going up. Public spending was set at
HK$332.1 billion, amounting to 19.2 per cent of GDP, forecast by the government
to grow 5.5 per cent to HK$1.7 trillion this year. But that was then. A package
of handouts and public spending initiatives that is expected to top HK$9 billion
in total has since been announced. They include: Handouts of HK$8.5 billion
Chief Executive Donald Tsang Yam-kuen announced on July 16; Old-age allowance
starting next year, upon approval by the Legislative Council, that is estimated
to cost HK$511 million; and Speeded-up recruitment of civil servants and
economy-boosting infrastructure projects, the cost of which has yet to be
announced. The handouts and old-age allowances alone push public spending up
from 19.2 per cent to 20 per cent of GDP. With the likelihood of zero growth or
a contraction in 2009-10, and more ambitious spending plans on the drawing board
to boost the economy, the target is set to be breached again next financial
year. It stands in contrast to the government's approach during the previous
recession when Antony Leung Kam-chung, financial secretary at the time, slashed
government spending. Donald Tsang told businesspeople at an economic forum last
week that he was trying to preserve Hongkongers' way of life and living
standards, which would not be achieved by spending cuts. Keeping spending growth
in line with the growth trend is a principle in Article 107 of the Basic Law,
which also requires the government to keep a balanced budget. But Chinese
University associate professor of economics Terence Chong Tai-leung said he
would not be too worried if public spending exceeded 20 per cent of GDP for a
year or two. "It may not cause a lot of problems ... in fact, this level of
public spending is quite low. I would not start to worry until the public
expenditure consistently exceeds 25 per cent or more of GDP," he said. Tan Kim
Eng, director of sovereign and public finance rating at Standard & Poor's, said
the weakness of Hong Kong's public finance was its heavy reliance on volatile
sources of revenue. He expected the government would incur deficits in the next
year or two, which would raise the possibility of a cut in its sovereign debt
rating, making it more expensive to borrow money.
The
central government will support Hong Kong's development of yuan business, as it
seeks to expand the adoption of the yuan as a settlement currency in trades. As
part of a 30-point directive issued at the weekend by the State Council, Beijing
said it "supports yuan business development in Hong Kong" and would expand the
currency's scale of settlement in trades with neighbouring nations. "This will
lower the foreign currency risk in external economic activities," the State
Council said. It also said Hong Kong companies and financial institutions with
"relatively abundant" business on the mainland would be permitted to issue yuan
bonds in Hong Kong. Beijing will study allowing overseas institutions and
enterprises to issue yuan bonds on the mainland. Chief Executive Donald Tsang
Yam-kuen is due to report this week to leaders in Beijing on Hong Kong affairs
and is expected to discuss the expansion of yuan business. Central bank
officials last month said Beijing was considering letting Hong Kong banks
incorporated on the mainland issue yuan bonds in Hong Kong, conduct currency
swaps and use yuan to settle Hong Kong-mainland trades. They said Beijing was
exploring the possibility of using Hong Kong as a centre for trade settlement
between Taiwan and the mainland. Hong Kong Monetary Authority chief executive
Joseph Yam Chi-kwong has called for fewer restrictions on yuan bond issues in
the city, saying it would promote wider use of the currency in global markets.
Yuan bond sales in Hong Kong have so far been limited to financial institutions.
Separately, the State Council said listed banks would be allowed to trade bonds
on mainland stock exchanges on a trial basis, as part of policies to develop a
"multi-tiered" financial market. It will also encourage insurance firms to
"enhance their role as investors" by buying government and corporate bonds,
bonds of transport, telecommunications and energy projects, and equity in state
energy and resource companies.
HSBC Holdings has no plans to move its
group headquarters back to Hong Kong from London "at the moment" although it has
put China at the top of its expansion plans, according to executive director and
Asia-Pacific chairman Vincent Cheng Hoi-chuen. "At the moment, we have no plans
to change the location of our headquarters although we have big expansion plans
in China," Mr Cheng told the South China Morning Post (SEHK: 0583). "I should
note also that our Asian headquarters has always been in Hong Kong, which is
part of China." The Post reported last month that Beijing had said it "would
welcome" any consideration by HSBC Holdings - the parent of Hong Kong's biggest
lender - of bringing back its headquarters to Hong Kong and was working on
incentives to lure the global banking giant back. The comments came from banking
sources as well as a central banker in charge of Hong Kong affairs. Although
Beijing has not finalised its plans, it is believed that one possible item on
the agenda could be an easing of the current restrictions on HSBC's investments
on the mainland as well as on its holdings in state-owned banking and insurance
institutions. In an interview, Mr Cheng also said that HSBC would consider
acquisitions in emerging markets when such opportunities arose. The Hongkong &
Shanghai Banking Corporation was founded in 1865 in Hong Kong and Shanghai. It
moved its headquarters from Hong Kong to Britain in 1993 after it bought Midland
Bank. The relocation was related to Hong Kong's return to Chinese sovereignty in
1997. Mr Cheng would not confirm or deny if mainland officials had approached
the bank about the possibility of making a move back to its roots.
Veteran democracy activist Emily Lau Wai-hing has been confirmed as the
Democratic Party's first vice-chairwoman in its near-15-year history, also
sealing the merger with The Frontier.
City Telecom HK (CTI), Hong Kong's
second-largest provider of fixed-line telephone and broadband services, said the
appointment of its chairman, Ricky Wong Wai-kay, as chief executive of Asia
Television will not disrupt its ambitious growth plans. "Mr Wong began
transferring some of his responsibilities as the company chairman to me several
months before his ATV appointment was announced," CTI chief executive William
Yeung said last week. Mr Yeung, who was promoted to chief executive earlier this
year, added: "I should say he gave 80 per cent of his responsibilities to me
when I assumed the post." Mr Yeung said CTI was now on the way to achieving its
goal of becoming Hong Kong's largest broadband service provider by 2016. Mr
Wong, CTI's founder and chairman, surprised the market earlier this month by
accepting the ATV appointment, although he remains executive chairman and a
board member of CTI. Mr Yeung, however, said CTI had no plans to co-operate with
ATV and Mr Wong's appointment at the free-to-air broadcaster would not change
CTI's business direction. Instead, the company would continue to focus on
expanding its market share in the local residential broadband market. The
company has around 316,000 broadband subscribers and has surpassed I-Cable
Communications (SEHK: 1097) to be the city's second-largest broadband service
provider. It has set a target of becoming the biggest broadband player by 2016.
CTI offers its broadband service through Hong Kong Broadband Network, which
provides high-speed home broadband service with transmission speeds of 100
megabits per second. "We are confident we can achieve our target and we are
going to add 5 million households to our network coverage in the next two years,
which will be our growth engine," said Mr Yeung. In the year ended August, CTI
added 69,000 new broadband subscribers, which accounted for a chunk of net
market additions. Mr Yeung said over 80 per cent of new additions were from
rivals. "With our increasing subscriber base and word-of-mouth promotion among
users, more customers have joined our service with fewer leaving us," Mr Yeung
said. City Telecom plans to invest HK$650 million in the next two years to
expand its network coverage to 2 million households by 2010. In addition to the
residential market, the company will also connect to 1,800 commercial buildings
in next two to three years. Mr Yeung said the company would still put high-speed
broadband service as its core service, while other value-added services such as
residential fixed-line and pay-television services would be the supplements for
bundled packages to compete with rivals. The company charged users HK$191 per
month in average for the broadband service at the end of August, up from HK$175
a year earlier. Mr Yeung said the company would offer a HK$199 monthly tariff
for broadband, fixed-line and television service to compete with rival offerings
of around HK$137 per month for broadband rental, down from around HK$200.
November cargo traffic throughput at Hong Kong International Airport was heavily
hit by the threatening global recession, slumping 18.7 percent compared with a
year earlier - the largest drop since Chek Lap Kok commenced operations in April
1998. 
Police carry out anti-terrorism
drill at hotel - Armed police have conducted an anti-terror drill at a hotel in
the capital to boost their response capabilities against Mumbai-style militant
attacks, state media said yesterday.
Photo taken on Dec. 13, 2008 shows a part of the paper-cut work of "Riverside
scenes at the Qingming Festival", created by Li Tongzhu, a 64-year-old retired
man, in Zaozhuang City, east China's Shandong Province. Li has spent 7 months to
finish the 3.10-meter-long paper-cut work. "Riverside Scenes at the Qingming
Festival" is an antique painting by Zhang Zeduan during the Song Dynasty
(960-1279), which vividly depicts the bustling everday life in the Northern Song
capital Bianliang (present-day Kaifeng) in extensive details. 
The first China-made 2,210 kilowatt
coal mining machine passed check and appraisal on Saturday in the northwestern
Shaanxi Province, reducing the reliance on exports. Trial operation showed the
remote control machine, produced by Xi'an Coal Mining Machine Co. Ltd, can mine
eight million tons of coal annually, according to the Shaanxi Provincial Science
and Technology Department. The price for each was 16 million yuan (2.3 million
U.S. dollars), more than 40 percent lower than exported ones. China's coal
production doubled in the recent decade and reached 2.5 billion tons last year.
But it can only produce coal mining machine with power capacity below 1,800 kw.
Machines above 2,000-kw were exported from the U.S. and Germany.
The China Merchants Bank (CMB)
plans to lend no less than 5 billion yuan (730 million U.S. dollars) in 2009 to
help domestic smaller enterprises develop, compared with a total of less than 10
billion yuan for the purpose in the past two decades, the bank said on Saturday.
Visitors yesterday look at one of the remaining sturgeon at the aquarium, which
will be shut for a check and clean. Ocean Park has lost its second sturgeon,
this time from an infection that staff are still trying to identify. Two of the
remaining eight sturgeon had shown similar symptoms and were moved out of their
aquarium. They were now out of danger, a park spokeswoman said. The fish died on
Wednesday after symptoms of an infection that did not respond to treatment, she
said. It was 10 years old, about 2 metres long and was bred in captivity. "Right
now, I really can't tell what caused the death and the infection. We are still
investigating and waiting for results from the laboratory," the spokeswoman
said. The six sturgeon still in the aquarium will be moved while it is closed
for checking and cleaning, she said. Ocean Park lost a sturgeon in June when one
died from a bite by a barracuda kept in the same tank, triggering criticism the
park was wrong to house the species together. After mainland experts inspected
the facilities, Beijing decided to send five more sturgeons, considered
"national treasures", taking the total to nine. Park chairman Allan Zeman
pledged at the time they would do their best to ensure their safety. Chinese
sturgeon, which have changed little in 140 million years, are rarer than pandas,
with fewer than 1,000 in existence.
Workers set up a booth at the
brands and products expo. Some exhibitors at the Hong Kong Brands and Products
Expo say they are offering "the biggest-ever discounts and offers" to attract
people to spend amid the economic downturn. And organisers say they expect
bargain hunters to swell the crowds above last year's attendance. The fair,
which has drawn 365 exhibitors, opens at Victoria Park today and will last until
January 4. One of the largest exhibitors, home appliance brand German Pool, is
offering an electric heater, originally costing HK$370, for HK$1 with the
purchase of other products costing HK$588 or more. "We have never had an offer
as low as HK$1," Karen Chan Ka-yin, the company's marketing and project
development vice-president, said. Compared to a 30 per cent product discount at
last year's fair, she said the company would cut prices from 40 to more than 60
per cent to counter poor buying sentiment. "We will also give out more free
gifts, such as a free pots on purchase of an electric stove, and a free packet
of rice and a stainless steel pot on purchase of an electric cooker," Ms Chan
said. Having invested HK$4 million to decorate the booth, the company hoped
revenue would surge 30 per cent this year compared with last year, she said.
Another exhibitor, Sau Tao Noodles, will sell 30 packs of noodles for HK$60 - 40
per cent of the original HK$150 price. "It has never been that cheap," brand
manager Colour Tse Lai-ho said. Ms Tse said she expected visitors to the fair to
be cautious when spending money, a huge contrast compared to the quick-buying
decisions at last year's show. "Before, we were a bit worried that sales would
be worse at the expo this year. But [the crowds at] the computer fair last week
show that people have strong purchasing power and that gives us a lot of
confidence," she said, adding that she still expected a 10 per cent growth in
sales this year. Raymond Chow, assistant general manager of two restaurants in
Quarry Bay, said his stall would offer South African abalone at HK$18 each, or
six slices of ready-to-eat abalone at HK$15. "With such low prices, we are not
making money, of course," he said. "Instead, we want to promote our restaurants
... which have been facing a hard time since the economic turmoil began." But
not everything at the fair is going for "cutthroat" prices. Many are close to
market prices. A spokeswoman for the Chinese Manufacturers' Association of Hong
Kong, which organises the expo, said the association was optimistic that the
23-day fair would attract about 2 million visitors, up from 1.9 million last
year. "We believe exhibitors will use all means, including price reductions, to
attract customers this year," she said. "Thus many people will want to come to
buy cheap products."
Posters of the former first family
and others linked to the corruption case are discarded after the briefing. Eight
Taiwanese prosecutors have made history by indicting the former first family,
including ex-president Chen Shui-bian, on corruption charges. Standing in line
to pose for news photographers in the basement conference room of the Supreme
Court Prosecutors Office in Taipei yesterday, they breathed a sigh of relief
after the completion of what has been dubbed the indictment of the century. The
probe into alleged corruption against Chen and his family has been highly
sensitive from the start, especially as Chen is the first of the island's
presidents to have such charges levelled against him. Throughout their
investigation and write-up of the official indictment, the eight have faced
mounting pressure from both Chen's pro-independence camp and politicians from
Taiwanese President Ma Ying-jeou's government. While the pro-independence camp
has been highly critical of the probe, calling it "political persecution" by the
mainland-friendly Ma government, lawmakers in Ma's camp have been equally
critical, alleging the prosecutors are on Chen's side and have tried to stall
the investigation. "All the prosecutors have been criticised and scolded
constantly," prosecutor Wu Wen-chung said. "We go to work in the day and get
snubbed at night. Yet we have to face the pressure and achieve our goal in
gathering enough evidence to bring up the charges against the guilty parties."
He lamented that politicians, however, had attempted to turn a judicial case
into a political one. "We have to work hard to gather all the necessary evidence
to prove that they [the corrupt politicians] are wrong and to prevent them from
using ethnic differences to obstruct justice." Chen was born in Taiwan. The
Kuomintang, of which Mr Ma is a member, came to the island at the end of China's
civil war. From the beginning, Chen has insisted he is innocent and even claimed
that he is the victim of political persecution by Mr Ma, saying Mr Ma wants to
placate the mainland by imprisoning him because of his pro-independence stance.
Chen was detained on November 12 on suspicion of corruption. Since then he has
claimed political persecution and spent his time in detention staging a hunger
strike and writing a book to promote the building of a Taiwanese nation, He
apparently hopes to garner support from pro-independence groups and build an
image of someone who would die for his cause. Prosecutor Lin Tse-wei called on
politicians such as Chen to treat the law with respect. "Some politicians in
Taiwan have taken the constitution and the vows they have made as if they were
nothing," Mr Lin said. "When a president has pledged to abide by the law and the
constitution, he is subject to severe punishment if he breaks his pledges."
Prosecutor Chen Yun-nan went further by saying that it was inexcusable for the
former first family to use the power and influence granted to them by the
constitution for wrongdoing. He also criticised the former first lady, Wu
Shu-chen, for using her position to "actively interfere in government
administration, taking as much money as she could and messing up the government
system and order". Prosecutor-general Chen Tsung-ming said the prosecutors were
all neutral. "All of us have remained neutral, fair and objective," he said.
Chinese Premier Wen
Jiabao (L), Japanese Prime Minister Taro Aso (C) and South Korean President Lee
Myung-bak shake hands after signing a joint statement for Tripartite Partnership
after a tripartite meeting in Fukuoka, Japan, Dec. 13, 2008. Leaders of China,
Japan and South Korea Saturday signed a Joint Statement for Tripartite
Partnership after a tripartite meeting. In the statement, Chinese Premier Wen
Jiabao, Japanese Prime Minister Taro Aso and South Korean President Lee
Myung-bak said they gathered here to help lay a solid foundation in promoting
their tripartite cooperation. The tripartite cooperation will not only
contribute to create a peaceful, prosperous and sustainable future for the
region and international community, but also be crucial to address the serious
challenges in the global economy and the financial markets, said the statement.
The mascot Dongdong of the game
shows up at the ceremony held at the Speed skating Gym for the 24th Winter
Universiade, in Harbin, capital of northeast China's Heilongjiang Province, on
Dec. 13, 2008. The Game will be kicked off on February 18, 2009.
Zhang Ziyi (R) and Leon Lai, who
played leading role in movie "Forever Enthralled", view an embroidery painting
during the Shanghai premiere of the movie in Shanghai, east China, Dec. 3, 2008.
Director Chen Kaige's latest film, "Forever Enthralled," a biopic of the late
Peking opera star Mei Lanfang, has had a great opening weekend with a box office
income exceeding 42 millon yuan, or about 6.2 millon U. S. dollars. "This is a
satisfying result," said Wong Li, spokesperson of the film's co-producer China
Film Group. The total box office is expected to exceed 120 million yuan,
according to Wong. According to Shanghai United Cinema Lines, the city's largest
cinema chain, the movie reaped 3.7 million yuan (537,947 dollars) in the city
since its global release last Thursday. "It is a good performance for an arty
film without many stunts and action scenes," said Gu Min, a marketing manager
for the chain. "Chen's films still have a loyal fan base." So far, Yonghua
Cinema at Xujiahui has made more than 350,000 yuan from the film. "The film has
attracted many middle-aged people who understand traditional Chinese opera,"
said Li Lan, the manager of the cinema. The film depicts Mei's 50-year career
and his romances. Pop idol Leon Lai plays Mei, with actress Chen Hong playing
his wife and Zhang Ziyi playing Meng Xiaodong, a female Peking opera star. This
is China's golden screening time. Every year in the run up to Christmas and the
Spring Festival, the box offices are abuzz with the year's biggest releases.
From Thursday, "Forever Enthralled" will face competition from the romantic
comedy "All About Women", made by Tsui Hark, and next week three more films
open. "Ip Man" is a semi-biographical account of Yip Man, a master of Wing Chun
kungfu. Feng Xiaogang's highly anticipated comedy "If You Are The One" also
premieres. On Christmas Eve, action-packed Hong Kong police film "Lady Cop and
Papa Crook" will hit mainland screens. Among all these films, Feng's comedy,
which stars comedian Ge You, is expected to be the biggest rival to "Forever
Enthralled." The movie, which is slated to open on Dec. 18, revolves around a
man's attempts to find a wife, but it will be a tight contest. "Chen's film
might be more popular in northern China, where there's a strong nostalgic
ambience for Peking opera and a large number of Peking opera fans," said Chen
Hua, a local movie buff.
Checks on poultry farms will be mounted by the government in the next few days
after a chicken-trade leader blamed smuggled fertilised eggs for causing the
latest bird flu outbreak - confirmed yesterday to have been caused by the deadly
H5N1 virus strain. Secretary for Food and Health York Chow Yat-ngok said he
would not rule out any possibility, including smuggled eggs, as the cause of the
outbreak, which killed 200 chickens at a Yuen Long farm early this week and led
to the culling of 90,000 birds.
Two League of Social Democrats
members, lawmaker "Long Hair" Leung Kwok-hung and district councillor Andrew To
Kwan-hang, were convicted yesterday of assaulting a police officer. Magistrate
Rickie Chan Kam-cheong deemed the pair had used "illegal force" outside
Government House at a protest during the visit of a top Beijing official when
they scuffled with police on December 29 last year. 
The outgoing president of Polytechnic
University says the city is suffering because government officials working under
the "accountability system" are too cautious and might have stymied
well-intentioned projects. "The political climate is different now," said Poon
Chung-kwong. "Government officials in the past were bolder in decision-making
... thinking that no mistakes will be committed if you do nothing, the current
government tends to be more prudent." Professor Poon recalled the debacle over
the proposed merger between Chinese University and the Hong Kong Institute of
Education (HKIEd) to prove his point. "[Former education secretaries] Arthur Li
Kwok-cheung and Fanny Law Fan Chiu-fun had good intentions. The merger could
have benefited both universities in terms of student admission. But the results,
with Mrs Law's resignation, were disheartening." When he was education minister
Professor Li was accused of putting pressure on the HKIEd president to merge
with Chinese University. Mrs Law, former permanent secretary, was said to have
asked the president to curb two academics who were critical of education policy.
Professor Poon was sharing his thoughts about politics and education yesterday
as he unveiled a book about his four decades in higher education ahead of his
retirement at the end of the month. Having served the university for 18 years,
Professor Poon, 68, a devout Buddhist, said he would spend more time helping
poor university students on the mainland and promoting traditional Chinese
values. "I will concentrate more on the work of my charity foundation, the Virya
Foundation, which was set up by me and my wife four years ago. Because of the
extensive network I built up with the business sector when I served in Legco [in
the 1980s], I have so far raised HK$20 million, which will go towards
subsidising the university education of poor mainland students." He has also
promised to serve as a college head at Xian Jiaotong University, in Shaanxi.
Hongkongers are not letting the
financial gloom east into their appetite for Christmas buffets, with hotels
reporting increasing reservations for the coming Yuletide feasts. Many
restaurants reported a spike in reservation rates despite the rising prices of
buffets. At the Palm Court Restaurant in the Kowloon Metropark Hotel, 60 of the
180 buffet seats have already been booked for their Christmas Eve, Christmas Day
and New Year's Eve buffets. "At this point last year we didn't have so many
bookings, so it's looking to be a good year," manager Nelson Yeung Kwok-fai
said. In response to the economic downturn, the restaurant is offering 20
percent off its buffet if tables are reserved before December 15. Prices for the
same menu went up from HK$428 to HK$448 due to food price increases, Yeung said.
He attributed the brisk business to Palm Court's relatively inexpensive menu.
"We are a restaurant at a four-star hotel, so I think people are probably
cutting down on their budget and coming to us instead of some of the five-star
hotels," he said. Restaurants at five-star hotel restaurants, however, are also
enjoying booking trends on par with last year, if not better. At the Sheraton's
three restaurants, bookings are already between 70 and 80 percent filled,
despite a price jump for its buffet at The Cafe restaurant from HK$548 to
HK$728, a spokesman said. Other restaurants at the Island Shangri-La and Harbour
Plaza Resort City are also reporting increased bookings. But according to Hong
Kong Dining managing director Simon Miller-Jones, the positive Christmas booking
trend may have more to do with the city's robust dining industry than its
seasonal merriment. "Normally the fourth quarter is the biggest quarter with 20
to 25 percent increases in business over any other, and we are right on target
to hit that this year," he said. He said his restaurants had seen little
slackening in business amid the downturn. The only challenge this year is that
restaurants have had to contend with corporate cancelations or downscaling of
Christmas parties, he added. Eclipse Management managing director Clayton Parker
agreed. "The extravagant spending from corporate customers with holiday parties
has been hollow this year," he said. "(Even) companies that are financially
sound seem to feel a bit awkward being extravagant, because it sends the wrong
message." Parker said the mid-range business was still there, but some
restaurants under Eclipse Management were starting to feel the pinch. He added
business was similar to last year, but did not grow as expected. Parker was not
as upbeat in his forecast for next year. "Things are still okay, but if we see a
real downturn it will come in the first and second quarter of next year," he
said.
US president-elect Barack Obama has chosen Nobel Prize-winning physicist and
green-energy proponent Steven Chu as his energy secretary, Democratic sources
said. Dr Chu would become only the second Chinese-American to hold a US cabinet
post - after current Labour Secretary Elaine Chao - and the first Nobel
laureate. In picking Dr Chu, winner of the 1997 Nobel Prize for physics, to head
the energy department, Mr Obama is signalling he will fulfil his pledge to put
an emphasis on science when crafting energy policies aimed at transforming the
US economy into one fuelled primarily by low-carbon power sources. "He certainly
needs somebody who can focus on the science and energy policies and I can't
think of a better guy than Steve," said Mike Lubell, a physics professor at City
College of New York, who has known Dr Chu for 30 years. Robert Birgeneau, the
chancellor of the University of California, Berkeley, said that since taking
over as director of Lawrence Berkeley National Laboratory in August 2004, Dr Chu
had pushed the scientists there to focus on climate change and on developing new
carbon-neutral sources of energy. On a visit to Hong Kong last July, Dr Chu
urged the city to improve its energy efficiency by increasing electricity
charges and banning incandescent light bulbs. On a 2006 visit, he said it would
be a mistake for China to follow the American model and design its cities around
the car. Dr Chu played a leading role in Berkeley being selected by BP as the
home of a US$500 million research programme to develop a new generation of
renewable fuels. Berkeley Labs is funded by the Energy Department. "He has been
relentless about addressing the technical challenges of renewable energy in a
deep way," said Professor Birgeneau, who has known Dr Chu for three decades
since they worked at Bell Laboratories in the 1970s. Michael Loy Ming-tak, chair
professor of Hong Kong University of Science and Technology's department of
physics, said Dr Chu, who he had known since the 1980s, was a suitable choice,
describing him as being very clever and very competent. "He is not only a
scientist, he has very good interpersonal skills and a strong character." Dr Chu
will be taking on one of the most challenging jobs in government at the
Department of Energy. He will be responsible for the maintenance and development
of America's nuclear weapons stockpile, as well as for modernising the country's
electrical power delivery system. He will also play a central role in directing
the research and development of alternative energy sources, needed to replace
fossil fuels in an era of constrained carbon emissions.
The prospect of deflation has reared
its ugly head after mainland consumer prices fell sharply to a 2.4 percent
growth rate last month from 4 percent in October. Economists said the
deflationary risks and the slowdown in economic activities inherent in the
consumer price index data mean Beijing needs to launch more measures to revive
confidence. More interest rate cuts and moves to help property investment
recover are imminent, they said. Beijing should rely more on bank financing to
boost the economy as the world undergoes a deleveraging process, UBS head of
China economic research Wang Tao said. The fall in the inflation rate - a
22-month low that followed declines of seven consecutive months - was led by
food prices, which fell to 5.9 percent, from October's 8.5 percent. The rise in
non-food prices slowed to 0.6 percent from 1.6 percent.
Lawmakers last night vowed to plug
loopholes in the civil service system to prevent "collusion between officials
and businesses", when they authorized a select committee to probe the Leung
Chin-man affair. The 12-member investigation panel, which will be given
statutory powers to demand papers and witnesses, will look into the approval
process for retired senior officials working for businesses and investigate
whether Mr Leung, the former housing director, was involved in any conflict of
interest. Mr Leung was cleared last year by the government to work for property
developer New World Development, one year after his retirement. But during Mr
Leung's time as director of building, director of housing and permanent
secretary for housing, planning and lands, he had approved several controversial
projects - including one to sell a public housing estate in Hung Hom to New
World. The incident sparked a public outcry. "The Leung Chin-man affair made the
public realise top officials can still ... make big money after retirement,"
Democratic legislator Cheung Man-kwong said during the debate. "We will plug
loopholes to prevent collusion between officials and businesses." Mr Leung has
since resigned from the post. A government review panel on the post-retirement
employment process was quickly set up, but it failed to pacify outraged
Hongkongers, nor prevent a subsequent plunge in Chief Executive Donald Tsang
Yam-kuen's popularity. In yesterday's debate to formalise the creation of the
select committee, which was supported by both government allies and
pan-democrats, lawmakers were united in saying the integrity of the civil
service must be maintained. Lee Cheuk-yan of the Confederation of Trade Unions
said the committee should probe whether it was a common practice for officials
to provide benefits to businesses and be rewarded by them with positions or
other benefits after retirement. "We cannot allow these new forms of corruption
to happen," Mr Lee said. Liberal Party chairwoman Miriam Lau Kin-yee said
loopholes in civil service rules should be addressed, while independent Cyd Ho
Sau-lan said top officials should be banned from joining private businesses
after retirement. But Lau Kong-wah, of the Democratic Alliance for the
Betterment and Progress of Hong Kong, said: "We should not begin the
investigation with a verdict already in mind." Secretary for the Civil Service
Denise Yue Chung-yee, who had been criticised for her lack of political
sensitivity in approving Mr Leung's post-retirement appointment, said the
government would respect the decision to set up the investigation. She said that
in light of public concerns, the government's review panel would seek public
views soon and submit a report by June.
Firemen tackle the bus in Queen's Road
East. All 70 passengers were evacuated safely. Police thought a short circuit
might be to blame.
Regina Ip (left) joins other lawmakers in
a show of hands in favour of her amendment to abolish the levy on employers of
foreign domestic helpers yesterday. Hopes of quashing a levy on employers of
foreign domestic helpers were dashed yesterday when lawmaker Regina Ip Lau
Suk-yee's proposed amendment to abolish the levy for good was voted down. The
failure to pass the proposed amendment meant employers of migrant domestic
helpers will only enjoy a suspension of the levy for five years - from August
this year to the end of July, 2013. Money raised from the levy, which was
introduced in 2003, goes to the Employees' Retraining Board. Twenty-one
lawmakers from geographical constituencies voted for Mrs Ip's proposed
amendment, while seven objected to it. Only seven legislators from functional
constituencies supported the amendment, while 21 voted against it. To pass, it
would have needed a majority among both geographical and functional constituency
legislators. Mrs Ip said the amendment was voted down after the government had
lobbied certain lawmakers. She said she did not feel defeated and would try to
have the levy scrapped in the future. 
Hong
Kong is seeking mainland advice on the need to switch vaccines to safeguard
local poultry. The question on whether the current vaccine is effective arose
earlier this week when treated chickens were among those found dead at a Yuen
Long farm. Secretary for Food and Health York Chow Yat- ngok immediately ordered
a "serious" bird flu alert, the culling of more than 90,000 chickens and a
three- week suspension of live-chicken imports from the mainland. Yesterday Chow
said he has requested academic assistance from the mainland. "We have been using
the H5N2 vaccine manufactured in the Netherlands and which was one of the most
effective vaccines," Chow said. "Over the past few years it has been proven to
be effective." However, possible virus mutation in the six years since the
vaccine was first used has prompted a government review. "The mainland
introduced an H5N1 vaccine a few years ago and that has been modified every now
and then, so we are exploring the option of changing to H5N1 too," he said. Hong
Kong University head of microbiology Yuen Kwok-yung suggests looking at mainland
vaccines for livestock protection.
Hong Kong's
top judge says the city's social, political and economic problems should be
resolved through the political process rather than the courts. Chief Justice
Andrew Li Kwok-nang made the comments while addressing the issue of a growing
number of judicial review cases here and overseas. He made no direct mention of
the most recent controversial case that saw a judge rule this week that
prisoners have the right to vote. The ruling came at the end of a judicial
review launched by two inmates at Stanley Prison - one of them a convicted
robber - and a lawmaker. But, in an opening address to a conference on
"Effective Judicial Review: A Cornerstone of Good Governance Today," jointly
organized by Chinese University and Britain's Cambridge University, Li said: "It
is only through the give and take of the political process after consultation
and dialogue that viable solutions may be found." Li added that the legislative
and executive procedures are better suited to reconciling society's various
interests. "It is to the political process that the citizen must look for an
appropriate resolution to these problems," he said. "The judicial review is a
cornerstone of good governance," said Li, but he added that the public should
understand that the decisions of the courts in such cases are concerned with
"what is legally valid and what is not." Li said courts dealing with judicial
reviews were "not decision-makers" and warned that the courts of law were not
the solution to political, economic or social ills.
Top civil
servant Henry Tang Ying-yen is set for a grilling over the accountability of top
officials in the wake of recent public gaffes when he attends the Legislative
Council tomorrow. The chief secretary for administration is expected to come
under fire from lawmakers over where the buck stops when something goes wrong,
and in attempting to explain when a bureau chief can be held accountable for
administrative errors or the principle of collective responsibility should come
into play. Such issues arise as a result of the government's U-turn on chartered
flights for residents stranded in Thailand and the handling of the recent taxi
driver blockadeat Hong Kong airport and at Happy Valley. Tang will attempt to
explain the role of acting secretaries and why the system went awry in the plane
fiasco. He and secretary for constitutional and mainland affairs Stephen Lam
Sui- lung will attend Legco's house committee meeting where they are expected to
be bombarded with questions by pan- democrats. The government initially rejected
sending a chartered flight to Thailand to bring home Hong Kongers stranded by
demonstrations at Bangkok airports.
Guangdong party secretary Wang Yang says the province will keep pushing to
upgrade its industrial base even though many labour-intensive factories are
collapsing amid the financial crisis. The policy has been criticised by small
businesses and experts who say it is not friendly to business and is difficult
to implement. Guangdong, with roughly 60 per cent of its gross domestic product
coming from export-oriented enterprises, has been hit hard by the global
financial crisis as consumption in developed countries drops sharply. A further
decline is expected next year, with the global economy tipped to enter an even
deeper recession. Mr Wang, a Politburo member, said the economic slump should
not discourage Guangdong from promoting hi-tech enterprises that used less
energy and were environmentally friendly, and encouraging labour-intensive
enterprises to move elsewhere. "This crisis offers us the opportunity to change
the model of Guangdong's economic development ... and we should be firm in
promoting the industrial structure upgrade," Mr Wang said in an article
published in the overseas edition of People's Daily. Mr Wang's remarks appear to
be in response to a row in the province over whether upgrading its industrial
structure or saving labour-intensive enterprises should be its top priority.
Zhuang Jian , an economist with the Asian Development Bank, said Mr Wang was
focused more on long-term development than bailing out labour-intensive
industries, but the policy could be hard to execute. 
Li Changchun (5th R, 2nd row), member of
the Standing Committee of the Political Bureau of the Communist Party of China
(CPC) Central Committee, poses for photos with artists after a concert
celebrating 30 years' reform and opening-up in Beijing Dec. 10, 2008. Li
Changchun, member of the Standing Committee of the Political Bureau of the
Communist Party of China (CPC) Central Committee, watched on Wednesday night a
performance that marked the 30th anniversary of the country's reform and
opening-up. The concert in Beijing featured poem recitation and chorus of songs
as an ode to the achievements China has made in the past 30 years. It was one of
a series of performances organized by the China Literature and Arts Federation
to commemorate the anniversary. Liu Yunshan, member of the CPC Central Committee
Political Bureau and head of the CPC Central Committee Publicity Department, and
State Councilor Liu Yandong also attended the event. 
Hong Kong was on alert last night
after the dreaded bird flu was found at a farm in Yuen Long. The government
immediately shut down all poultry farms and markets, culled 80,000 chickens and
halted imports of mainland chickens. The H5 virus killed 200 chickens at the
farm, sending the government scurrying to find out what went wrong with its
much-vaunted anti-bird flu control program. As results of tests to confirm if
the bug is the deadly H5N1 strain were awaited, questions were being raised over
whether the virus had mutated or the Dutch-made vaccine being used on local
chickens had failed. Of particular concern is the fact that the dead chickens
included vaccinated as well as unvaccinated birds. All 68,000 birds on the
affected farm - owned by New Territories Chicken Breeders Association secretary
Wong Yee-chuen, in Lau Fau Shan, Yuen Long - were killed, together with 12,000
chickens at a nearby uninfected farm. About 10,000 chickens at the Cheung Sha
Wan wholesale market will be culled from today. All wet markets will be closed
even though they have shown no signs of infection. The Aviary Pagoda in Yuen
Long Park has also been shut indefinitely. The outbreak comes seven months after
the poultry trade was shut down following the discovery of the virus in wet
markets. The overnight keeping of live chickens at markets was banned following
the outbreak in June. The last outbreak on farms, in 2003, led to vaccination of
chickens. Secretary for Food and Health York Chow Yat-ngok declared a "serious
alert", which means a 21-day shutdown of the trade - until December 29 - unless
there is another outbreak. He expressed concern that both "sentinel" and
vaccinated birds had died since the first death at the farm on Monday. 
The government is studying the urban
renewal strategies of several countries, including one that will allow residents
to have a stake in the redevelopment of their homes. According to sources, the
government has commissioned Hong Kong University to study various overseas
models. The HKU team, headed by former legislator and associate professor of
social work and social administration Law Chi-kwong, has since July examined the
urban renewal experience of several "comparable cities," including Singapore,
Taipei, Guangzhou and Shanghai and those in Japan and Korea. According to the
sources, Korea allows residents to have a share in any redevelopment to ensure
their participation. "We are open-minded to all possibilities and do not have a
set agenda," a Development Bureau spokesman said. Academics and officials from
several cities have been invited to Hong Kong to share their experiences in a
seminar on Monday organized by the Urban Renewal Authority, which aims to drum
up public discussion before the Legislative Council's development panel
discusses the review of the strategy on December 19. Among the guest speakers
are academics from Tongji University in Shanghai and Seoul National University,
two urban redevelopment officials from Taipei and Guangzhou, Law and his HKU
colleague Ernest Chui Wing-tak. Law said his study will be completed by the end
of the month. He is not sure when the government will make his full consultancy
report public. According to sources, the steering committee on Review of the
Urban Renewal Strategy chaired by Secretary for Development Carrie Lam Cheng
Yuet- ngor plans to visit several cities early next year. But Sze Lai-shan of
the Society for Community Organization described the issue of ownership of old
buildings in Hong Kong as complicated and said that it will be difficult to copy
from overseas models. "Most owners do not live in those districts but rent their
flats out to a number of tenants who share each unit. So I really wonder how
many owners and tenants would bother to participate in urban redevelopment. It
seems their priority is more about the amount of compensation they will
receive," Sze said. 
Hong Kong is to host the world's first
major platform for pairing wines with Chinese food during the International Wine
and Spirits Competition's inaugural Asian event next year. The IWSC, Britain's
oldest and most prestigious wine and spirit competition, will tailor the event
to meet regional tastes. For the first time, it will include a best China- made
wine, director Allen Gibbons said. "We are in a renaissance for Chinese tastes
in wines. This is about promoting the Chinese palate and its preferences. We
expect the brands that win here next year to be very different from those that
win in Australia or San Francisco," said Simon Tam, director of the Hong Kong-IWSC
event. "Everyone knows the liaison between steak and certain wines, but what do
you drink with Chinese food? It's along that line that we are inviting some of
the most celebrated Chinese chefs and wine tasters to help us identify what
works with things such as braised abalone. "Wine tastes and descriptions can
vary considerably, even within the same language. "The competition is important
in nurturing the Asian market's tastes because they differ significantly from
those in the West." The competition will rate how various vintages complement
dishes such as braised abalone, Kung Pao chicken, Peking Duck and dim sum. Going
against prevailing wine dogma, the event will also explore which wines pair well
with foods containing chili, Tam said. Hong Kong Trade Development Council
assistant executive director Raymond Yip Chak-yan said the arrival of the
40-year-old competition will attract huge international interest from the trade.
He added that this year's wine fair drew 240 exhibitors from 25 countries and
regions. It was attended by more than 8,700 trade and 10,000 public visitors.
Hong Kong Exchanges and Clearing
(0388) said it is ready to introduce the local bourse to mainland investors in
preparation for the "through-train" program. HKEx has prepared introductory
literature and brochures to explain the Hong Kong market, chairman Ronald
Arculli said yesterday. Financial Secretary John Tsang Chun-wah said on Monday
the scheme allowing mainland investors to buy Hong Kong-listed shares is still
on track. "I think what the financial secretary has said is that, under the
current climate it might be a bit difficult but they [the Hong Kong and mainland
governments] are still working on it," Arculli said. Currently, mainland funds
can buy Hong Kong stocks through the qualified domestic institutional investor
scheme. "In our view, it is premature to suggest that the long-awaited through-
train program is launching anytime soon," said Citi analyst Bob Leung in a
report. A banking and settlement system for dual-currency transaction in Hong
Kong dollar and yuan is needed for mainlanders to directly buy shares here,
without affecting China's overall capital control, said Leung. And he said the
local bourse is not diversified enough for the huge flow of funds from China. As
for market speculation that HKEx this year may cut the current 90 percent
dividend payout ratio, Arculli said he has not heard of any changes on the
policy. 
Beijing is launching a four-month
food safety campaign today that will include inspections of foodmakers to weed
out illegal or excessive chemicals in products, in the latest move to restore
trust hurt by the tainted milk scandal. The drive, jointly conducted by nine
central government departments, will target food and additive producers across
the country, the Health Ministry said. The announcement comes amid efforts to
address concerns at home and abroad about how China is tackling its worst food
safety crisis in years. The ministry acknowledged last week that six babies
likely died and 294,000 infants suffered urinary problems from drinking infant
formula contaminated with the industrial chemical melamine. Such campaigns are
part public relations drive, part crackdown by the authorities, as they try to
address chronic food product safety woes. In January, the government claimed
success in an earlier four-month food safety drive that sought to ease worries
about the safety of the food supply ahead of the Beijing Olympics in August.
Despite that claim, the milk scandal broke in September, with the government
later saying the dairy at the center of the crisis knew as early as last year
that its products were tainted, and that the firm and local officials covered it
up. "The tainted milk scandal shows illegal production of food products and the
use of nonfood substances are not isolated incidents," Health Vice Minister Chen
Xiaohong was quoted as saying by the China Daily newspaper. Illegal chemicals
from past domestic food scares will be among those targeted, including malachite
green, a possible cancer-causing chemical used to treat fungal infections in
fish, and the cancer- causing industrial dye sudan red, which was found used to
color egg yolks.
Streets with the arcade-style
housing typical of Guangzhou's heritage buildings will be conserved, under a
redevelopment plan for the city. The Guangzhou government has revived a massive
urban redevelopment project after it stalled for six years because of a lack of
funding. Guangzhou's Bureau of Urban Planning uploaded an outline of its
redevelopment scheme for 300,000 square metres of downtown Haizhu district on
its website yesterday, inviting the public to comment before January 9 on the
preliminary scheme drafted by Guangzhou-based South China University of
Technology architectural experts. Any demolition work will be paid for by the
government and redevelopment will be funded by private developers. Under the
plan, the government will pull down or repair all the old buildings in the area
on the south bank of the Pearl River, relocating more than 20,000 people in the
process. All the streets in the area with arcade-style housing typical of
Guangzhou's heritage buildings would be preserved, the government said.
Dangerous, termite-riddled arcade houses on Tongfudong Road would be turned into
shops. The revival of the scheme was not related to any economic stimulus
package but rather stemmed from an announcement by Guangzhou Communist Party
secretary Zhu Xiaodan two years ago to improve living conditions, a district
official said. He said companies hired to assess the cost of the project
estimated that the relocation bill alone would run into the billions of yuan.
Once the relocations were completed, the government would invite public bids for
the development of the land, the official said. Residents and businesses on
Tongfudong Road, one of several streets with arcade housing to be affected by
the relocation proposal, welcomed the plan but said they wanted to be treated
fairly. 
Chief Executive Donald Tsang
Yam-kuen yesterday unveiled a rescue plan that will provide HK$100 billion in
loan guarantees to businesses, vowing to save struggling firms and protect jobs.
The government will also create more than 60,000 jobs through speeding up civil
service recruitment and infrastructure projects. "We must be prepared that the
next 12 months will be very tough as we see the first economic recession since
1998," Mr Tsang said after a meeting of the Taskforce on Economic Challenges.
"As we consider ways to tackle the economic slowdown, there is a recurring
theme, and that theme is to preserve employment, to keep people gainfully
employed." Saying the government would take a more active role in intervening in
the economy, Mr Tsang said he would have "no baggage" when considering new ways
to help the city weather the storm until, he believed, a silver lining would
appear in 2010. "Small and medium enterprises are the lifeline of our economy.
To help them in this difficult time is the key to preventing job loss," he said.
Key measures include the expansion of the special loan guarantee scheme for
businesses, under which the government will guarantee 70 per cent of loans
companies receive from banks. While the guarantee percentage remains the same,
the loan ceiling for each application has been raised from HK$1 million to HK$6
million, including up to HK$3 million of revolving credit. All firms except
listed companies, which are better able to secure resources, can apply and the
loans can be used not only as operating funds but for other purposes such as
commercial overdrafts. The government's total commitment for the scheme, which
would be launched by Christmas pending approval by the Legislative Council, will
be HK$100 billion. To reduce the impact of rising unemployment, Mr Tsang said
the government would create more than 60,000 jobs by speeding up infrastructure
projects, bringing forward next year's civil service recruitment and opening
temporary positions. As well as liaising with mainland authorities to help Hong
Kong businesses, the government will also cut red tape in such areas as
licensing procedures and improve the funding process for non-governmental
organisations. Although he admitted that many of the jobs promised under his
earlier stimulus plan of launching 10 major infrastructure projects would not be
created until 2010, Mr Tsang denied the measures were "too little, too late" to
address what he warned would be an inevitable surge in unemployment next year.
"Despite all the difficulties ahead, we must not lose heart. I am confident that
once the external environment improves, Hong Kong will be among the first to
rebound," he said. Lawmakers and business chambers generally welcomed the
measures, although most believed more should have been done. Liberal Party
chairwoman Miriam Lau Kin-yee said the expansion of the loan scheme could not
adequately address banks' doubts about lending to businesses. She said the
government should raise the guarantee percentage in order to save businesses.
Civic Party leader Audrey Eu Yuet-mee said the government should pay more
attention to helping underprivileged groups affected by the downturn, while
unionist Lee Cheuk-yan said that securing loans from banks through the
government scheme should be conditional on firms not firing staff. "The number
of new jobs created is just too few in light of the number of unemployed," Mr
Lee said. But Chinese University political scientist Ivan Choy Chi-keung said:
"[Mr Tsang] has taken the right direction because at least he will be seen as
doing something by stressing the job creation message." Chief executive's
stimulus package
The darkest time for the world economy
is yet to come as the first three or four months of next year will be an
"extremely difficult" time, Standard Chartered (2888) chairman Mervyn Davies
warned yesterday. "The consumer has lost confidence and there's a lot of fear
around," Davies said. "I think it's going to be a very tough economic
environment for the first few months of 2009." However, the staff cuts in Hong
Kong's financial industry seem to be mostly over, he said. Hong Kong is very
resilient and jobs will be created in other sectors such as construction, even
though jobs have been lost in the financial sector, according to Davies.
"Financial services is going through a period of a little bit of shrinkage ...
Other industries might grow," he said. "For a period of time, the economy
changes a bit." He added these changes will only be short-term and said Hong
Kong's financial services industry still has an "extremely bright future."
Meanwhile, Davies said Standard Chartered has recently been increasing its
lending to small and medium-sized enterprises in Hong Kong despite the financial
crisis. November was the second most active month this year in terms of the
amount of unsecured SME loans extended by the bank, Standard Chartered Bank
(Hong Kong) chief executive Benjamin Hung Pi-cheng explained. Davies said: "It's
important that banks like Standard Chartered continue to support their customers
... at a time when things are difficult." Davies, a member of the SAR
government's Task Force on Economic Challenges, said Hong Kong should focus on
creating jobs and protecting people who have very little money. "It's very
important that the government launch some initiatives around infrastructure," he
added. Hong Kong should also work to keep tourism numbers up. Davies said
governments around the world should focus on four key issues: financial
stability, climate change, alleviation of poverty and working out a new
architecture for running the world. 
50 top managers guilty of
HK$3b in deceit in past 5 years, ICAC says - Fifty people from the top
management of locally listed companies have been convicted of dishonesty in the
past five years, with the total amount of fraud and corruption topping HK$3
billion, the ICAC said. Commissioner Timothy Tong Hin-ming said corporate
governance and the integrity of directors should be stressed amid the financial
meltdown. The Independent Commission Against Corruption revealed that 18 cases
concluded since 2004 involved HK$2.5 billion of fraud or scams on letters of
credit. Another HK$200 million involved bribery or kickbacks, and embezzlement
totalled HK$300 million. Those convicted included company chairmen, accountants
and other top management figures. "Our experience tells us that these serious
problems usually occur when top management fails to lay down ethical standards
for the corporation," Mr Tong said at the Conference on Corporate Governance in
the Financial Sector yesterday. "Even though an ethical framework was laid down,
they may have failed to set up a sound mechanism for its implementation.
Regardless of the circumstances, every corruption and fraud scam impairs the
interests of investors, dampens the confidence of the market and erodes the
leading position of Hong Kong as an international financial hub." Mr Tong said
there were no signs showing the problem had plagued a particular region, but he
stressed the importance of co-operation with the mainland authorities and
Macau's anti-graft watchdog. Speaking at the same conference, Secretary for
Financial Services and the Treasury Chan Ka-keung said good governance could
enhance the risk management of businesses and thereby improve the confidence of
investors.
Hong Kong's largest telecommunications operator, PCCW (SEHK: 0008), has
partnered technology vendor Huawei Technologies to link their mobile and fibre
optic networks to achieve mobile internet connections at transmission speeds
faster than the existing 3.5G services or dedicated private data links. Dubbed
"Next Gen" mobile technology, the link will provide mobile phone users with
internet access through a fibre optic network with a bandwidth of at least 1,000
megabits per second, 500 times faster than the existing internet link offered by
standard "E1" connections. The need for speed follows a drive by mobile
operators to sign up subscribers for low-tariff mobile broadband services, which
has come at the cost of increasing network congestion. Market sources said
mobile operators such as Hutchison Telecom (SEHK: 2332) were planning a similar
upgrade. The company will reportedly pilot faster mobile internet access in the
areas of Hong Kong and Kowloon that circle Victoria Harbour where service demand
is the highest. The new Next Gen technology involves connecting mobile base
stations with optical fibre networks rather than conventional E1 cable
connections. To boost the transmission of mobile traffic between PCCW's mobile
network and switching centre the company will use High Speed Packet Access (HSPA+)
technology to serve its 3G network. The platform will triple the maximum
download speed of 7.2 megabits per second to 21 megabits per second. PCCW is
expected to launch Huawei's first compatible modem in the second quarter of next
year. Several mobile phone makers also plan to launch handsets with faster
transmission speeds next year.
Three
senior Asia Television executives and a deputy chief of news have resigned less
than a week after high-profile telecom executives were appointed to run the
loss-making broadcaster. The resignations of ATV's executive vice president Dewy
Ip, senior vice presidents Peter Kwan Wai (news and public affairs) and Howard
Ho (engineering) were accepted by ATV. "They have resigned ... to pursue
personal interests," an ATV statement said. The company said it respects their
decisions and is grateful for their contributions. It was also confirmed that
media veteran Leung Ka-wing, once seen as a future head of RTHK, also resigned.
Tammy Tam, ATV news controller and a veteran reporter who covered the Iraq war
in 2003, will take over Leung's role for the time being. Last Thursday, former
Cable and Wireless HKT chief executive Linus Cheung Wing-lam was appointed ATV
executive chairman. Ricky Wong Wai-kay, chairman of City Telecom (Hong Kong),
was made chief executive. Kwan said his departure has nothing to do with the
management reshuffle. It is understood Leung tendered his resignation to Kwan
yesterday and both announced their departure in front of 20 to 30 staff from
News and Public Affairs and related departments after the 6pm newscast. "They
did not explain why or mention anything about being laid off during the
meeting," a witness said. "They merely said the new management highly regard the
news department." But when ATV admitted it sacked staff earlier this year Leung,
described as passionate and demanding, told his subordinates the station needed
people to cover news. "If any layoffs are needed, they would have sacked Kwan
and I first," Leung was quoted as saying at the time. It has been rumored that
the commercial broadcaster, which has lost more than HK$5 billion since the
1980s, would lay off more staff after the Miss Asia Pageant. In response to
media inquiries, ATV said last night that the station and Hong Kong Broadband
Network are two individual companies. "The news departments of the two companies
have their own editorial direction and maintain editorial independence. The
operation of the news department will be maintained as usual," it said.
At the tender age of 25, Yang Bingyang
has carved out a career in modelling, in acting, as a casual event host and as a
writer. But Yang is better known on the mainland as an internet celebrity under
the name of Ayawawa, a name she prefers. Ayawawa shot to virtual fame a few
years ago for her unflinching and controversial postings about relationships and
her occasional bragging about her beauty and intelligence. Her infamous
statement that "all women who are prettier than me are not as smart and all
those who are smarter than me are not as pretty" started out as a chat-room
signature before drawing a barrage of unflattering comments and the attention of
"human flesh searches" in which Web surfers tried to dig up dirt about her.
Criticised for being too narcissistic, Ayawawa said she spoke of nothing but a
simple truth about herself. "Just as Han Han [a rebellious but popular young
mainland writer] once said, Chinese people are used to talking humbly, and
you're considered normal speaking that way and you're labelled abnormal if you
talk sincerely," she said. After her first taste of the internet 12 years ago,
Ayawawa spent many of her formative years online and is at the vanguard of a
younger generation that values individuality and freedom of expression. When she
graduated from Southwest University's law school in Chongqing in 2005, she
decided not to look for a full-time job and opted instead to freelance, an
increasingly popular trend among her generation. Ayawawa said the country had
come a long way in terms of tangible improvements since her earliest memories.
For instance, in the past an ordinary family might have to save for years and
even have to borrow some money before they could afford a television set. But
she said she was particularly impressed by what she perceived as a gradual move
towards democracy and the country's strides towards greater openness. "China has
increasingly adopted the mindset of a major nation that is powerful enough to
face up to the media glare," she said. On a personal level, Ayawawa said she was
not worried that her high profile and sophistication would scare off anybody
interested in her, even though she lived in a culture where women were not
valued for their wit and self-esteem. "I don't worry - I will marry myself off
one day," she said with a grin, adding that she would not let her beauty and wit
get in the way of finding that special someone. Ayawawa said she did not
particularly oppose sex before marriage as long as there was a loving
relationship. "Not every relationship leads to marriage, but we should at least
start one with that goal in mind."
Shanghai will start
building a seabed observatory off its southeast coast early next year to monitor
earthquakes and tsunamis. The multi-billion yuan facility will give residents at
least seven "precious seconds" to find shelter before a quake and several hours
in the case of a tsunami, according to a researcher involved in the project. A
hub spanning about 4 sq km will be built near Yangshan Island. At the centre
will be a metallic tube going 300 metres down into the seabed and connected to
hundreds of kilometres of cabled sensors. Shanghai approved the project in 2006,
but the central government held back on political and financial support until
the Sichuan earthquake rocked the country in May. Beijing hesitated partly
because deep-sea projects cannot generate as many political benefits as
eye-catching space projects for the same outlay, according to a marine
geologist. "But many people are against the proposal because Shanghai does not
really need such a fancy scientific facility as the possibility that it may be
hit by an earthquake or tsunami is quite low," the geologist said. Shanghai has
not recorded any fatalities from earthquakes or tsunamis in the past five
centuries. The United States and Canada started to build the world's largest
cabled seabed observatory - the 3,000km North-East Pacific Time-series Undersea
Networked Experiments (Neptune) - in 2006 with a budget of US$300 million. But
the job was more difficult than predicted and the completion of the US side was
postponed until 2015. "If there is a place that really needs such a facility it
should be Guangdong, Fujian or Hainan . These southern provinces all have
dangerous seabed faults and record frequent destructive tectonic activities,"
the geologist said. "But it is understandable that Shanghai has more resources
and a better capacity to protect itself as the nation's most important economic
centre." Wang Pinxian , a leading scientist working on the project, told the
Xinmin Evening News that each kilometre of cable would cost about 2 million yuan
and the observatory would be maintained by underwater robots and manned
submarines. Tongji University associate professor Yang Ting , who has also been
involved in the project, said the observatory was still an experimental facility
facing many technological challenges including how to distinguish low frequency
sound waves generated by a ship from those of an earthquake.
HSBC global fund for small firms has HK flavor - The fingerprints of Hong Kong,
whose lifeblood is trade, are all over the US$5 billion global loan fund just
announced by HSBC Holdings (SEHK: 0005, announcements, news) to keep credit
flowing to small and medium-sized enterprises during the present crisis. Just as
SMEs are the backbone of world trade, trade credits through banks and
intercompany loans are estimated to underpin 90 per cent of about US$14 trillion
in international trade each year. Little wonder that trade finance is both the
origin and mainstay of many banks in Hong Kong. In recent weeks, Li & Fung Group
chairman Victor Fung Kwok-king spoke passionately about the "clear and present"
danger of a contraction in global trade finance. As the first Asian chairman of
the Paris-based International Chamber of Commerce, he exhorted world leaders to
take Hong Kong as a role model in expanding export credit insurance so that
banks would feel more inclined to provide trade finance. The need to unchoke
trade finance is urgent. In the current conflagration, manufacturers and traders
are being burned at both ends. They don't just produce the consumer products for
which demand is now plunging in major markets and orders are being cancelled
daily. Many also arrange the finance for the sophisticated supply chain behind
the products and for the logistics to get them into overseas stores on time.
It's one of the reasons Hong Kong SMEs are so competitive in international
trade. Another is trustworthiness, which allows many a deal to be sealed with
only a handshake. Yet in these dire times even trust built over many years is
being put to the test. The financial turmoil unleashed when banks stopped
trusting other banks has landed on the "real economy". With shrinking margins
and orders, fear is setting in, corners are being cut and "non-contractual"
actions between partners are on the rise, those at the front line of trade and
shipping say. They anticipate a surge in disputes over money. For all these
reasons, nobody understands better than Hong Kong why the financial knot
tightening around the throat of the SMEs that drive international trade must be
cut - and quickly. The HSBC fund, of which HK$4 billion is committed to Hong
Kong firms, builds on expanded government guarantees for SME loans. It will make
working capital available to those already vetted and accepted under the
government schemes, among others. This should shorten the time it takes to get
credit into the hands of local companies that are crucial to arresting the
downward spiral in Hong Kong's economy. They are also well placed to help
restart the motor of global production in the Pearl River Delta as external
conditions improve. No one can say for sure how much Hong Kong influenced this
multibillion-dollar decision by a global bank. But it certainly feels, at least
on this occasion, as if the "H" has returned to the fore at "HSBC".
Astronauts (from
left) Liu Boming, Zhai Zhigang and Jing Haipeng join the crowd in song at Hong
Kong Stadium in So Kon Po. More than 20,000 fans of the Shenzhou VII astronauts
packed a variety show at Hong Kong Stadium yesterday afternoon to honor the men
to took part in the nation's first spacewalk mission. On the third day of a
visit by a 40-strong space programme delegation, the three astronauts soaked up
a passionate welcome from the crowd as they were driven around the stadium in
golf carts, amid a sea of national flags, so people could get a closer look at
them. 
A quiet shopping day at the Elements
mall in Kowloon MTR station. Frustrated tenants at the 14-month-old Elements
shopping mall in Kowloon station are considering petitioning the MTR Corporation
(SEHK: 0066) for temporary rent concessions, sources familiar with the situation
say. They want the concessions to help tide them over as they suffer from a drop
in customers amid the economic downturn. Many shops and restaurants at the
upscale mall, owned by the MTR Corp, are struggling to make money. "Elements has
been quiet for more than a year," one source said. An MTR Corp spokesman said
customer traffic had grown 12 per cent year on year and that Elements was seeing
more tourists, office workers and others with the opening of the W Hotel and the
International Commerce Centre development. 
Executive director Ivan Ting says the Sanda Kan takeover will raise production
and streamline Kader's labour-intensive operation. Hong Kong-listed toymaker
Kader Holdings, the target of a violent protest on the mainland two weeks ago
after it sacked nearly 600 migrant workers at its Dongguan factory, is focusing
on raising productivity through acquisitions. The process, referred to by
executive director Ivan Ting Tien-li as an "economic shortcut", began with last
month's US$8.5 million takeover of distressed rival Sanda Kan, one of the few
veteran Hong Kong producers of collectable train sets. The purchase would also
save the group from building another factory at its Dongguan production base, Mr
Ting said. The deal was sealed about a week before disgruntled workers at the
Dongguan plant that makes Bachmann brand model trains were sacked and launched a
violent protest against the company's management on November 26.
A former Trade Development Council veteran has emerged as the frontrunner to
succeed retiring InvestHK director general Mike Rowse, say sources familiar with
the situation. Dennis Yau Tat-wang, director general of the Federation of Hong
Kong Industries, boasts extensive mainland and overseas experience and business
contacts after spending 32 years with the council from 1970 to 2002. Before
joining the federation in April last year, he was an executive director at Dah
Sing (SEHK: 0440) Banking Group. His employment contract with the federation is
for three years. "Dennis is regarded as a very good diplomat with strong public
relations and networking skills. He has strong trade links in Europe, Japan and
the US and is well liked by Chinese officials," a source said. "At the TDC, he
was known as Hong Kong's ambassador." He is also close to key government
figures, including Secretary for the Civil Service Denise Yue Chung-yee, whom he
first met in Washington, where they were posted in the 1970s, the sources said.
It is understood that two of the six candidates vying for Mr Rowse's position
have been shortlisted. Both Mr Yau, 60, and Mr Rowse, 59, declined to comment.
The latter, who became embroiled in controversy over his role in the handling of
the HarbourFest concerts after the outbreak of severe acute respiratory syndrome
in 2003, retires on December 19. He was appointed to his position in July 2000
after first joining the Independent Commission Against Corruption in 1974. In
2001, he became the first expatriate civil servant in Hong Kong to become a
naturalised Chinese citizen. One obstacle for Mr Yau could be his close ties
with the council. As head of InvestHK, he would probably assume Mr Rowse's other
duties, specifically as AsiaWorld-Expo chairman, a venue that competes with the
council's Convention and Exhibition Centre in Wan Chai. Although it does not
appear necessary that both positions be filled by the same person, finding other
government candidates without a conflict of interest to be Asia-World chairman
would not be easy.
Green groups have called for
legislation to curb night-time illumination, citing various studies that suggest
prolonged exposure may cause cancer. Studies by the Journal of the National
Cancer Institute in England have shown night-shift workers are 60 percent more
likely than those on day shifts to develop breast cancer and 35 percent more
likely to have gastrointestinal cancer. Israeli researchers have also found
causal links between breast cancer and night-time illumination by overlaying
satellite imagery of Earth taken at night onto cancer registries. Sleeping in
the dark is required for the body to produce melatonin, a hormone essential to
regulate many of the body's regular functions. The hormone helps prevent tumors
from forming and may also enhance the immune system.
PCCW's (0008) independent board committee
and an independent financial adviser have given their blessings for Richard Li
Tzar-kai's privatization offer, despite cries from some shareholders they are
being short- changed. "We believe the terms of the offer are fair and
reasonable," said PCCW independent director Aman Mehta, who recommended PCCW
shareholders vote in favor of the proposal on December 30. Independent financial
adviser NM Rothschild & Sons recommended PCCW shareholders accept the offer of
HK$4.20 per share from Li's Singapore-listed holding company, Pacific Century
Regional Developments, and China Network Communications. The offer values PCCW
at 7.5 times EBITDA, a 66.7 percent premium to the average valuation of
comparable telecoms firms. PCCW shares have consistently closed above the
privatization offer price over the past three years. However, Rothschild said
PCCW's historical share price may have been inflated by investors' hopes of the
company selling assets, being acquired or expanding in China - actions which
have all failed to materialize. Sun Hung Kai Financial strategist Castor Pang
said most retail investors will still refuse the offer. "Most of the investors
... think they are being cheated," Pang said. "It seems that the benefit to the
major shareholder is much larger than to the minorities." If the privatization
proposal does not succeed, PCCW shareholders "should be prepared" for the stock
to possibly trade at lower levels than before, a PCRD spokesperson warned. "This
proposal provides PCCW shareholders certainty of cash in an uncertain market,"
the spokesperson said. "With a low liquidity company, this offers a chance for
shareholders to exit." 
Shenzhen, which has set itself up to
become China's innovation centre, has won a strong endorsement from the United
Nations after it was given the title of "Unesco City of Design" yesterday -
making it the only non-Japanese city in Asia to carry the title. Shenzhen now
joins Berlin, Montreal, Buenos Aires, Nagoya and Kobe in the exclusive club
after passing a rigorous assessment by experts from the UN Educational,
Scientific and Cultural Organisation, the city government announced yesterday.
Cities are selected for their creativity, innovation and quirkiness. In August
2005, Buenos Aires became the first Unesco City of Design. The other four cities
were named over the next few years, before Shenzhen joined their ranks. To
qualify, each had to meet basic requirements laid out by Unesco on cultural
diversity and creativity. Hailing the achievement as "a great honour for
Shenzhen as well as for China", Mayor Xu Zongheng pledged that Shenzhen would
continue to invest heavily in innovation and create a conductive environmental
to attract fresh design talents and investments.
Since March, the lights have burned day and night for overworked judges at one
court in the Pearl River Delta, dealing with an increasing number of bankrupt
factories. Tangxia Town Court in Dongguan , Guangdong, had come to be regarded
as the mainland's busiest this year, with its 13 judges dealing with more than
7,500 cases, the Nanfang Weekend reported. The court had accepted 7,540 cases -
most involving labour disputes and bankruptcies - up to November 15. That meant
each judge had to handle about 600 cases a year, compared with the mainland's
average of 42 cases per judge last year. Gong Qingcai , a senior lawyer from the
Tangxia Shangrong Law Firm, said a new labour law and the global financial
crisis were to blame. Tangxia is home to thousands of private and Taiwanese- or
Hong Kong-funded factories that make toys for export, bags and electronic
instruments. Mr Gong said the population of more than 500,000 migrant workers
from the factories had contributed to a sharp increase in lawsuits involving
labour disputes since January. "You can see a long queue of migrant workers
waiting outside the court every day," he said. "Under this new law, workers have
been able to challenge unfair pay and working conditions. "They will feel free
to try to put the bosses in court, asking for overtime fees, compensation and
better working conditions." The enthusiasm of migrant workers to secure their
labour rights has seen a doubling of the number of cases at the Tangxia court.
Nanfang Weekend said judges were under great pressure to complete their cases.
They worked day and night, with no weekends off, no holidays and even no lunch
breaks. The report said some judges' assistants had been found weeping with
exhaustion. However, the judges were still being pushed by their superiors to
speed up their work, Mr Gong said. "The workers will soon launch mass protests
or clashes against enterprises and governments if the court does not solve their
cases in time. The judges' efficiency also contributes to making society
stable," he said. Mr Gong estimates the judges will be just as busy next year if
factories continue to fail. But he said the judges might be able to take
holidays later, when migrant workers left town.
Li Changchun (front, R), a member of the
Standing Committee of the Political Bureau of the Communist Party of China (CPC)
Central Committee, shakes hands with performers after a concert in Beijing,
capital of China, Dec. 6, 2008. Li attended on Saturday night a publishing
showpiece exhibition and a concert in celebration of 30 years' reform and
opening-up. 
The deputy head of China's space program
Zhang Jianqi leads astronauts (from left) Zhai Zhigang, Liu Boming and Jing
Haipeng. Hong Kong has received a high-level vote of confidence in its ability
to weather the financial storm - from China's spacewalk astronauts. Colonel Jing
Haipeng, who arrived in the city yesterday with 39 other members of the Shenzhou
VII spacewalk mission team, praised Hongkongers for their "excellent traditions
of working and striving hard". "We believe the hard-working and quick-witted
Hong Kong people will be able to conquer the temporary difficulties ahead of
them," the astronaut said a few hours after their arrival. "I can feel the
openness of the Hongkongers and I believe I will love Hong Kong after this trip.
I think I will learn from Hong Kong people, their will to keep striving,
innovating and excelling." His teammate Zhai Zhigang, who made China's first
spacewalk, also said he hoped Hong Kong people would "fly highest and quickest"
to a better future. At a press conference, Colonel Zhai, who was hailed as a
"Space Flight Hero" after completing the mission in late September, greeted
reporters in Cantonese and thanked them for their support. Like all visitors, he
said, he hoped to have the chance to savour the city's famous food and shopping.
The third Shenzhou VII astronaut, Colonel Liu Boming, said he was prepared to
share his flying experience with Hong Kong people. Those who want to take up his
offer may take heart: Zhang Jianqi, the delegation head and deputy chief
designer of China's manned space programme, said Hongkongers would be welcome to
take part in the country's space missions, and encouraged them to undergo
training. The team was welcomed by about 300 primary school students and Chief
Secretary Henry Tang Ying-yen on their arrival at the airport yesterday morning.
They attended a welcome dinner with Chief Executive Donald Tsang Yam-kuen, who
said Hong Kong people facing the financial turmoil should learn from the
astronauts the spirit of never giving up. The delegation will tour the harbour
this morning, on the second day of their four-day visit, before launching an
exhibition on the Shenzhou VII mission at the Science Museum. More than 50,000
free tickets to the exhibition had been given out, the Leisure and Cultural
Services Department said yesterday. The astronauts will also meet undergraduates
at a seminar at Chinese University in the afternoon to brief them on their
mission. 
Three taikonauts of the Shenzhou
VII manned space mission, Zhai Zhigang (right), Liu Boming (second from left)
and Jing Haipeng (left), taikonauts' delegation head Zhang Jianqi (middle) and
Hong Kong Special Administrative Region (HKSAR) government's Chief Secretary for
Administration Henry Tang cut the ribbon at the opening ceremony of a spacewalk
mission exhibition at the Hong Kong Science Museum on Saturday, December 6,
2008. 
Johnson Electric chairman Patrick Wang
says the firm will not benefit much from lower commodity prices in the second
half. Johnson Electric Holdings (SEHK: 0179), a Hong Kong-listed micromotor
maker, yesterday announced a 43 per cent drop in first-half net profit as a
result of weaker end-user demand in the North American vehicle and power-tool
markets. Including a one-off loss of US$27.5 million from the cessation of its
mainland-based scrap metal trading business, net profit fell to US$45.5 million
in the six months to September, compared with US$79.8 million in the same period
last year. Sales rose 3.3 per cent to US$1.13 billion while gross margin
remained at about 26 per cent. Excluding the effect of foreign exchange changes,
the company's sales fell about 3 per cent as increasing sales in Europe could
not offset the decline in the United States. "The sales trend in October and
November displayed a marked weakening, showing the drop in economic activity
spreading from North America to Europe and Asia," said Johnson Electric chairman
and chief executive Patrick Wang Shui-chung. "We are anticipating and preparing
for weaker sales and contributions to profit from our automotive division for
the second half and well into the following financial year." Mr Wang said the
company would not benefit significantly from softening commodity prices,
especially copper and steel, in the second half, but anticipated a positive
impact in the next financial year if current price trends persisted.
Shoppers line up for bargains at
the outdoor computer festival in Sham Shui Po yesterday. The recession may be
forcing people to tighten their belts, but who can resist a 4GB memory card for
HK$49 or the latest laser printer for half price? The answer is: no one. At
least that seemed to be the case at an outdoor computer festival yesterday.
Thousands flocked the narrow streets of Sham Shui Po to buy laptops, monitors,
printers and cameras at what exhibitors touted as "tsunami prices". The
organisers - Sham Shui Po District Council and the Chamber of Hong Kong Computer
Industry - said that turnout was larger than expected on the first day, with
sales topping HK$50 million. Police had to implement crowd management measures
as more than 5,000 people packed the festival in the first two hours. The annual
festival, which runs until Monday, has attracted more than 80 exhibitors. The
organisers expect total turnout to exceed 400,000, with shoppers spending more
than HK$180 million. Eddy Wong, manager of a shop selling display monitors, said
most products were selling at cost price, or 40 per cent off regular prices. He
has more than a thousand monitors in stock. Some had sold out in the first few
hours and he said: "I am confident that all the stock will be sold." Computer
salesman Calvin Tse said his shop sold about 10 laptops during the morning. He
said most people had stopped spending in recent months. "Business had been so
quiet in the past few months, down about 40 per cent." He predicted the outlook
would be grim after the festival as "we don't know when the economic downturn
will be over". Vincent Leung, who went shopping in his lunch break, said he had
been waiting for the festival to buy a monitor and a television set-top box for
a total of HK$3,000, saving himself about HK$600. Housewife Portia Li said the
sale had encouraged her to spend. "I have bought two extra display monitors
because they are very cheap."
US Treasury Secretary Henry
Paulson is followed by Vice-Premier Wang Qishan at the end of the Strategic
Economic Dialogue yesterday. When US Treasury Secretary Henry Paulson arrived in
Beijing last for the fifth and, for him, final round of the Strategic Economic
Dialogue, few people expected substantial results. They turned out to be right
because there were few breakthroughs on the thorniest economic and trade issues
between the two sides, such as currency, despite all the talk about progress on
many important fronts. Although the cabinet-level dialogue is hailed by Beijing
as a landmark step and an effective mechanism in bilateral ties, it has been a
target of criticism in Washington, being perceived as more about form than
content. But for Mr Paulson - who has staked his credibility on the high-level
talks, which began in 2006 partially at his instigation - there seems to be
little reason to worry. His reputation as China's best US friend and his immense
popularity among the Communist Party elite remain high despite his departure
next month and a pool of disputes and differences that remain between the two
countries, according to analysts. It was laid bare in Chinese hospitality this
week and a list of "important consensus and agreements" that both sides
announced at the end of the two-day meeting. President Hu Jintao and Premier Wen
Jiabao also went out of their way to meet him yesterday, in a mark of respect to
his decades-long China experience, his connections with state leaders and his
contributions to reducing antagonism towards China in Washington. Fudan
University economics professor Zhou Dunren said Mr Paulson was familiar with
Sino-US politics and knew co-operation and engagement were the best ways towards
an open China market. He had undertaken a difficult task to increase
understanding between the countries, calm China bashers in Washington and try to
avoid confrontation, Professor Zhou said. "While he won applause on Wall Street
by urging China to open its market, he has also earned his name in China by
persuading Congress not to impose sanctions over China's alleged manipulation of
the exchange rate," he said. The establishment of the dialogue would be a large
part of his legacy, analysts said. Mr Paulson also made it clear in his closing
remarks yesterday that "through engagement, the United States and China can
build a stronger relationship that benefits our citizens and the global economy.
The achievements speak for themselves." Tao Wenzhao , American affairs
researcher at the China Academy of Social Sciences, said Mr Paulson's case
showed how China rewarded foreigners once they were recognised as friends.
"Whether he is in office or not, he will always be a friend of Chinese people,
and his warm reception is guaranteed," Professor Tao said. Mr Paulson appears to
know Chinese tradition well. He paid a tribute to his former counterpart, former
vice-premier Wu Yi , who jointly inaugurated the dialogue mechanism. He is also
aware of the concerns prompted by his departure about whether the dialogue will
be modified under the new US administration. "I don't think I should speculate
in terms of what form it will take in the future," Mr Paulson said. "I just have
great confidence that when any initiative demonstrates success over a period of
time, it is generally continued."
A Chinese officer tries an Indian
weapon during the China-India army joint anti-terrorism training in India's
Belgaum on Dec. 6, 2008. The China-India army joint anti-terrorism training,
code-named "Hand in Hand 2008" was kicked off in India's Belgaum on Dec. 6,
2008. The training is scheduled to end on Dec. 12.
China's first private airline, OK
Air, suspended passenger service on Saturday, 10 days ahead of schedule as a
result of financial and management problems, according to a spokesman of Junyao
Group, a major shareholder of OK Air. 
Siemens yesterday said its sales and new
orders in China both saw 19 percent growth in fiscal year 2008 despite the
economic slowdown. Last year sales and new orders of Siemens China surged to 57
billion yuan and 65.5 billion yuan, respectively. "In face of a global economic
downturn the results of our China operations again contribute significantly to
our global performance," said Richard Hausmann, CEO of Siemens Northeast Asia
and president & CEO of Siemens Ltd China. The company is mapping out a series of
mid-term strategies to sustain its growth momentum and boost market positions,
said Hausmann. "Reflecting China's 4 trillion yuan economic stimulus program, we
will continue to focus on rural development, environmental portfolio and local
innovation," he said. Siemens has recently announced a reorganization of its
businesses into three sectors - industry, energy and healthcare. In the last
year the company secured big deals in China in all three areas. For instance, in
the energy sector, Siemens secured a contract of more than 1.7 billion yuan to
build the high voltage direct current transmission (HVDC) link from the
Xiangjiaba hydro-electric power plant in southwestern China to Shanghai. With a
transmission capacity of 6,400 megawatts and a length of more than 2,000 km, the
planned HVDC transmission link will be the longest in the world and will have
the highest capacity of its kind. Siemens earlier said its environmental
portfolio would generate order intake of 4 billion euros in China in 2010, which
equals 40 percent of the company's total orders in China for the year. More than
half of the company's 1 billion euro mid-term investment in China until 2010
will go into energy-saving and environmentally friendly technologies and
solutions. China now is the third largest market for Siemens, next to Germany
and US. The company has a nationwide network of more than 90 operating companies
and 61 regional offices.
China to kick-start fuel tax reform
on Jan 1 - China has proposed a reform of the fuel tax that would raise tariffs
for gasoline and diesel while eliminating other fees for drivers.
Ricky Wong (left) and Linus
Cheung field questions about their new roles at ATV. Asia Television yesterday
appointed two high-profile telecom executives to senior roles, in the latest
attempt to turn around the struggling broadcaster that has lost more than HK$5
billion since the 1980s. Linus Cheung Wing-lam, the former chief executive
officer at Cable & Wireless HKT, was named executive chairman, while Ricky Wong
Wai-kay, chairman of Hong Kong listed City Telecom (Hong Kong), will be chief
executive officer. The two men are expected to change the focus of ATV's
programming to attract wealthier viewers with new lifestyle shows and
documentaries. That could make it a more serious rival to TVB, whose popularity
is based on a steady supply of drama series. ATV is also seen as more
pro-Beijing than TVB. Mr Wong's appointment raised the question of cross-media
ownership as City Telecom also operates an online video service with about
150,000 subscribers. But it does not breach government rules because City
Telecom does not have a television licence. "As City Telecom does not own a
terrestrial or pay television licence, Mr Wong's appointment does not breach the
rule on the limitation of cross-media ownership," a government spokesman said.
Mr Wong, who is also controlling shareholder of City Telecom, denied ATV would
seek a back-door listing through his company. ATV has been trying to list on the
Hong Kong stock exchange since 2003 but has failed to meet profitability
requirements. Yesterday's move, however, has sparked speculation there could be
some amalgamation of content. Vivek Couto, executive director at Media Partners
Asia, said Mr Wong's appointment was a good one as he "has many good ideas".
"Both ATV and City Telecom may co-operate on content distribution through the
latter's broadband network," he said. This is the second major management
shake-up at ATV after the Cha family, local property developers, took more than
a 50 per cent stake in the broadcaster in April last year. The Cha family
appointed former Television Broadcasts (SEHK: 0511) executives Louis Page and Ho
Ting-kwan to top management roles last year to lead reforms at the broadcaster.
Both Mr Page and Mr Ho resigned recently on speculation they had failed to
deliver on improving ATV's operations. ATV launched a new logo in October last
year and kicked off digital broadcasting in December. However, its share of the
local advertising market still lags way behind TVB's. Research firm Media
Partners Asia figures estimated TVB held 75 per cent of the television
advertising market, while ATV's was only 15 per cent this year. Total Hong Kong
television advertising revenue is expected to reach HK$3.4 billion in 2008.
ATV's audience share is similarly estimated to average 15 per cent. Mr Cheung
said the new management believed ATV could perform more strongly and break even.
The station's latest business plan will be released in two to three months. "ATV
has lost around HK$5 billion in the past," Mr Cheung said. "With only two
terrestrial TV stations in Hong Kong, it's unreasonable that ATV's performance
is so weak." Mr Cheung said ATV needed to grow by itself and could not just seek
new funds from shareholders. He added that the Cha family did not rule out
putting new cash into ATV, but did not wish to comment on the station's current
financial situation. Mr Wong said ATV programming would be aimed at the middle
class and top-end market, with an emphasis on non-drama programmes. That
strategy is believed to be designed to avoid head-on competition with TVB, which
is strong in drama. "We don't treat TVB as our enemy. We need to do something
that our rivals are not doing well to tap market share," Mr Wong said, adding
that he wanted to expand the audience of terrestrial TV. "ATV will position
itself as a Hong Kong people's television broadcaster, with both viewers and
advertisers mainly from Hong Kong." Mr Wong declined to say whether the company
would lay off staff in the future. ATV now has around 1,000 staff and the
company laid off 63 employees last month to cut costs. "If the appointment [as
chief executive officer] was to axe staff, I would not have accepted it," he
said.
An empty shop is offered for rent in
Jordan Road. Despite plunging rental rates in many areas, landlords are having
trouble finding retail tenants as the financial crisis hits. Big changes in the
Hong Kong shopping landscape are coming as the economic crisis batters the city.
Increasing numbers of retailers are either closing down or freezing their
expansion plans. Some are going online to try to save on costs. Mr Kwok, who
gave only his surname and closed his shop at the Timeplus shopping centre in
Causeway Bay last month, said sales were very poor even before the collapse of
Lehman Brothers in September. "So I thought of selling my products online to
reduce costs. If shoppers are interested in our product after visiting our
website, they can either buy online or visit our showroom to view the genuine
products." In October, the owner decided to close Timeplus temporarily - to
reposition it with larger shops - after only 60 per cent of the 99 tenants
agreed to renew their leases, even though rents had been halved. With vacancies
set to rise, shop owners have had to lower their rents to compete for tenants,
many observers say. "Shop owners in less than prime locations are hit worst,"
said Pierre Wong Tsz-wa, chief executive at Midland Realty's commercial and
industrial division. About 10 units that were leased as restaurants in Austin
Road in Jordan have been vacant for two months. Another 10 shops selling jade
and jewellery in Reclamation Street in Yau Ma Tei have also closed, and are
available at rents 20 per cent lower than under the previous agreements,
according to Midland Realty. These shops, ranging from 600 to 1,000 sq ft each,
closed because of poor sales. "But lower rents still failed to drum up interest
from potential tenants," said Mr Wong. Helen Mak, a senior manager of retail
services at Colliers International, believes retailers will watch the level of
sales at Christmas and the Lunar New Year in January before making any move. "We
think lots of chain stores will review their budgets, and no major expansions
are likely to roll out this year," she said. Last December, many owners were
pre-leasing their retail properties even though it was traditionally a low
season for leasing, she said. "Now the market sentiment has changed. It is very
quiet." One case in point is a new 27- storey commercial building catering to
beauty salons, bars and restaurants, at 11 Stanley Street, Central, on offer for
pre-leasing in September. Last week, a South China Morning Post (SEHK: 0583,
announcements, news) reporter posed as a potential tenant interested in leasing
a floor of the new building to open a bar. The agent said the monthly rent for
the whole floor, with a net area of 700 sq ft, was HK$50,000, or HK$71 per
square foot. Asked whether the landlord would provide a rent-free period or
discount rate, the agent replied: "The terms are negotiable because of this
market condition." So far, only two floors have been leased. Had it come on the
market last year, the agent said, this building near Lan Kwai Fong would have
leased 70 per cent of its space in the first two months of pre-leasing. Average
retail rents on Hong Kong Island last month were down 28.9 per cent to HK$99 per
square foot, from this year's peak of HK$128 in June, Midland Realty said.
Retail rents in Kowloon have tumbled 48.34 per cent to HK$78 per square foot,
from a height of HK$131 in August, the agent said. 
Harilela Group chairman Hari Harilela
(left) congratulates Lan Kwai Fong Group chairman Allan Zeman at the awards
presentation. Allan Zeman, the chairman of Lan Kwai Fong Group, was yesterday
named Business Person of the Year of this year's DHL/SCMP Hong Kong Business
Awards. Mr Zeman was credited with turning Lan Kwai Fong in Central into a
popular entertainment and tourist destination. Lan Kwai Fong Holdings owns 28
restaurants in Hong Kong, Shanghai and Phuket. The company also has construction
and development interests in Asia, British Columbia and North America. "I won a
Hong Kong Business award before, so this is a bit of a deja vu for me," said Mr
Zeman, who took the Owner-Operator Award in 1998. "I didn't expect to get
another one this time." The entrepreneur said: "I love the energy of Hong Kong
and its people. Lan Kwai Fong is a street which has become a homegrown brand."
He said he had no intention of obtaining a listing for the company at present.
"I am happy with the way it is now - being a private company means you can run
it the way you want." Mr Zeman was also recognised for his role as chairman of
Ocean Park. According to a report released by the Legislative Council, in-park
revenue reached HK$242.6 million in the past fiscal year, up 7 per cent on the
previous year. Admission revenue reached HK$681.9 million - a 10 per cent
year-on-year growth - creating total revenue of HK$924.5 million. This is also
the fifth consecutive year the park has broken its attendance record with more
than 5 million visitors. "When Walt Disney came to Hong Kong, a lot of people
thought it was the end of Ocean Park," Mr Zeman said. "We have shown that we can
compete with the rest of the world." Other winners included Maxim's Caterers
chairman and managing director Michael Wu Wei-kuo, who won the Executive Award.
The Owner-Operator Award was given to Keith Griffiths, the chairman of
architectural firm Aedas, which was responsible for the redevelopment of the
Hongkong Land buildings in Central, including the Landmark, Alexander House,
York House and Chater House. Andy Ann, the chief executive and director of
digital media and advertising company New Digital Noise, took the Young
Entrepreneur Award. Hongkong and Shanghai Hotels (SEHK: 0045) claimed the
International Award at the event. Fast-food chain Cafe de Coral Holdings (SEHK:
0341) took the Enterprise Award and fabless integrated circuits design house
AppoTech won the SME Award. Harilela Group chairman and founder Hari Harilela
won the Lifetime Achievement Award. Mr Harilela was honoured because of "his
contribution to the community both as a businessman and a philanthropist". The
awards, now in their 19th year, recognise companies and individuals that have
made outstanding contributions to Hong Kong's businesses and industry.
As HKEx faces a slowdown in offerings, chief executive Paul Chow says now is the
right time to work with the Shanghai exchange. Hong Kong Exchanges and Clearing
(SEHK: 0388, announcements, news) is working with its Shanghai counterpart to
harmonise regulations in light of the increasing number of dual listings in the
two cities, said chief executive Paul Chow Man-yiu. Mr Chow told about 200
brokers at a Hong Kong Securities Institute luncheon yesterday that now was the
right time for HKEx and Shanghai Stock Exchange to work together to exchange
information and harmonise rules and regulations for listed companies and other
investment products. Market watchers said the plan was aimed at discouraging
mainland companies from choosing to list in Shanghai alone, thereby undermining
Hong Kong's reputation as a financial centre. The exchange is facing a dearth of
initial public offerings, with only 32 new listings so far this year compared
with 84 in 2007. "About 50 mainland companies are dual-listed in Hong Kong and
Shanghai, and we would like to see more," Mr Chow said, adding that senior
executives from the two exchanges had formed a working group recently and would
hold their first meeting early next year. However, he said investors should not
expect the two markets to adopt the same listing and suspension rules
immediately. Different suspension policies have meant some dual-listed
companies, such as China Life (SEHK: 2628, announcements, news) Insurance, have
had their shares suspended in Shanghai while the stock continued trading in Hong
Kong. "Hong Kong and Shanghai are different markets with different regulations,"
Mr Chow said. "For example, mainland investors open accounts with the clearing
house while Hong Kong investors open accounts with brokers. The yuan is not
fully convertible while the Hong Kong dollar is freely traded." He said the
working group would not be able to achieve cross-border trading immediately but
the exchanges were taking their first steps in harmonising rules and regulation
to ease co-operation. "This will make it easier for companies to list in Hong
Kong and Shanghai for the longer term," he added. Legislator Chim Pui-chung, who
represents the financial services sector, said the exchange was heading in the
right direction. "Hong Kong is part of China and it is the right move for the
exchange to work closely with the mainland exchange. This will strengthen Hong
Kong's role as a financial centre in China," he said. Mr Chow yesterday also
unveiled several other initiatives, including plans for its clearing house to
act as both nominee and custodian for banks which issue over-the-counter traded
equity linked notes. He said this would help boost transparency and facilitate
the transfer of shares to the note holders at the expiry of the contracts. The
exchange next year will also work with the Securities and Futures Commission to
push for a scripless market to help settlement efficiencies and prevent
fraudulent physical scrip. "We have been talking about the scripless market for
20 years. I remembered when I first joined the stock exchange in May 1989, this
was at the top of the agenda," he said. In other plans, Mr Chow said the
exchange would work on providing remote access for overseas traders to deal in
derivatives products, as well as launch more precious metal futures such as
silver contracts. It will also study how to change listing rules to aid
resources companies selling shares in Hong Kong.
The West Kowloon Cultural District Authority is looking for diverse and
long-term partnerships with top museums in Asia so that the city's flagship
museum M+ will showcase the continent's best art, the head of the authority's
museum committee says. In an interview with the South China Morning Post (SEHK:
0583, announcements, news) , Victor Lo Chung-wing, who will steer the
development of the museum in the next two years, said the M+ could not be
sustained only by local arts and culture. The authority would not seek just a
single international partner for M+, he said. Instead, it would foster many
collaborations to showcase the best exhibits from Asian museums, especially
those of Chinese arts and culture, to attract mainland tourists. M+ would be the
driving force of the arts and culture of East Asia, including Japan, Korea and
Taiwan, and of Southeast Asia, Mr Lo said. The museum's other role was to build
local audiences and spur the development of creative industries. "I hope the M+
will have a local character," he said. "But it requires time, effort and
resources to build up collections of our own. We need top curators to locate and
convince collectors of such treasures that they should donate them or lend them
for our exhibitions." Addressing concerns the 75,000 square metre museum would
become a white elephant, Mr Lo urged patience and expressed confidence that the
museum would be built up successfully in stages over time. Mr Lo, who is also
chairman of the Hong Kong Design Centre, said the centre would sell the project
to internationally renowned architects and curators at the annual Business of
Design Week starting on Monday. Held in partnership with the Netherlands, the
design week will feature forums, tours and an award gala. Among the top
architects attending will be Edward Uhlir from the United States, who designed
the popular Millennium Park in Chicago. The park is an open space famous for its
mixture of arts facilities. Mr Lo said it might be a good reference for the West
Kowloon art hub. Invited participants also include the president of the Centre
Pompidou, Alain Seban; Rem Koolhaas, who designed the landmark China Central
Television headquarters in Beijing; and Yuko Hasegawa, the sole overseas board
member joining the West Kowloon Cultural District Authority. "These people might
also be interested in our art hub project," Mr Lo said. Overseas and local
designers will also share their expertise in the protection of intellectual
property at one of the design week forums. Speakers at the forum will include
Richard Mille, a prominent US watchmaker and designer, and Dennis Chan, the Hong
Kong-born designer of Qeelin, a mainland jewellery brand. 
Government medics will visit gay hangouts to take blood samples following the
disclosure of 119 new cases of HIV infection from July to September this year,
many within the homosexual community. According to the Centre for Health
Protectionthere have been 3,941 reported HIV infections since 1984. Senior
medical officer Raymond Ho Lei-ming said the Department of Health is planning
systematic checks to collect consistent data to help tackle increasing infection
among homosexuals. All blood checks will be on a voluntary basis. He said the
ratio of male homosexual infections to total cases has increased from around 20
percent in 2006 to 30 percent this year. In laboratory studies between 2004 and
2007, 66 samples were found to have similar DNA to a strain of HIV, with 80
percent of these being gay males. Another study found only 55 to 60 percent of
gay men use condoms during sexual contact. The 119 new cases affected 97 males
and 22 females. Thirty-five people were infected via heterosexual contact, 34
via homosexual or bisexual contact, 14 through injecting drugs and one via a
blood or blood product infusion. The means of transmission in the remaining 35
cases was not determined due to insufficient data. Ho said there were 32 new
cases of AIDS in the third quarter, bringing the total number of cases since
1985 to 998. Meanwhile, renowned AIDS researcher David Ho Da-i said the mainland
government has to be given credit for its handling of the disease in the past
five years. "The Hong Kong situation is also relatively good," said Ho, a
pioneer of cocktail therapy treatment. He warned people to remain vigilant and
appealed to the media to spread the word and help educate the public on AIDS
issues. 
Leon Lai (R), who played the role of late Beijing Opera master Mei Lanfang in
movie "Forever Enthralled", poses with the wax statue of his image in the movie
at the Shanghai Madame Tussauds Wax Museum in Shanghai, east China, Dec. 3,
2008. The statue's unveiling ceremony was held here Wednesday. 
Chinese Vice Premier Wang
Qishan (front R) shakes hands with U.S. Treasury Secretary Henry Paulson at a
signing ceremony on energy and environmental protection cooperation during the
fifth China-U.S. Strategic Economic Dialogue in Beijing, China, Dec. 4, 2008.
China mobile-telephone services market
is entering a new phase of full competition, with China Telecom (SEHK: 0728)
introducing its Surfing brand and China Unicom (SEHK: 0762) preparing to launch
a 3G trial in seven cities. Although the two operators are pouring billions of
yuan into building new infrastructure and subsidising handset sales, their
combined market share will still remain small compared with that of market
leader China Mobile (SEHK: 0941). Credit Suisse said China Mobile could remain
the dominant player for the next seven years as China Telecom and Unicom
complete their restructuring and directly challenge the market leader. China
Mobile's market share based on service revenue could fall to 79.5 per cent in
2012 from a forecast 83.5 per cent next year. While Unicom and China Telecom
could take 14 per cent and 6.5 per cent respectively of the market by 2012, that
would still not be a significant threat to China Mobile. China Telecom, which
acquired Unicom's CDMA mobile business for 110 billion yuan (HK$125 billion)
earlier this year, last week unveiled its subsidiary responsible for mobile
device development. The high cost of CDMA mobile devices has long deterred users
from signing up for the service. More than 50 handset makers have taken part in
sourcing activities for China Telecom's CDMA operations. They include foreign
brands Samsung, LG, Motorola and Nokia and domestic brands such as ZTE Corp (SEHK:
0763) and Huawei Technologies. The company targets to reach 100 million mobile
subscribers in three years. China Telecom's Surfing is a new brand for the CDMA
mobile service, which will be differentiated from Unicom's previous New Horizon
brand. Surfing will have its own brand handsets for China Telecom's value-added
services such as yellow pages and mobile internet service. China Telecom has 28
million CDMA mobile users. It will need to add 24 million every year to reach
the 100 million user target. However, Credit Suisse estimated China Telecom
could add only 17.8 million subscribers a year. "[To achieve the 100 million
subscriber target] would require substantial marketing and handset subsidies of,
say, 700 yuan per subscriber," Credit Suisse analyst Jeffery Tan wrote in a
research report last week. China International Capital Corp analyst Chen Haofei
estimates that China Telecom may pay a subsidy of about 600 yuan for each new
CDMA customer and urge users to pre-pay a lump-sum fee. "Such prepayment and
subsidies arrangement could place competitive pressure on Unicom," Mr Chen
wrote. China Telecom's CDMA technology can smoothly upgrade from the existing
CDMA 2000 network to CDMA EV-DO, which is a 3G standard, and provide faster
transmission speeds of up to 2 megabits per second. The company says it could
launch 3G services within a month after the government issues a licence. Unicom,
the smaller GSM mobile operator, is reportedly preparing to launch 3G commercial
trials in Shenzhen, Wuxi, Shanghai, Baoding, Zhengzhou, Foshan and Liuzhou.
Unicom will provide 3G services based on the European WCDMA technology. Each
city will install 100 base stations. Analysts believe Unicom will focus on the
development of the 3G service, as it has the most mature technology, rather than
growing its 2G business. One of the catalysts will be the use of so-called
asymmetrical regulations such as preferential interconnection charges from China
Mobile. An interconnection charge is a charge between telecommunications
operators for phone calls. 
Beijing's city government plans to
raise the retirement age next year for female officials to 60 - the same as that
for men - from 55, in order to increase gender equality for bureaucrats. A boy
plays with snow in Shenyang, capital of northeast China's Liaoning Province,
Dec. 4, 2008. The heaviest snowfall and strongest cold front this winter hit
Liaoning Province along with many parts of the country since Dec. 3 and brought
down the temperatures to between minus 8 and minus 22 degrees Celsius in
Shenyang on Dec. 4.
Movie star Jet Li said that China is ready for
an explosion of volunteerism amid its growing prosperity at the Clinton Global
Initiative Asia meeting on Wednesday. The humanitarian community was still not
fully ready to deal with natural disasters, one panellist told Bill Clinton's
Global Initiative on Wednesday. “This is maybe a little shocking but I don’t
believe the humanitarian community is at all prepared to respond the way it
should when a disaster strikes,” Anthony Banbury, regional director, Asia, UN
World Food Programme said. “In the case of the tsunami, when it struck, the
different UN agencies, NGOs and government agencies had never prepared together
for that and never trained together for that,” he said. “That’s the biggest
priority, in my opinion now for disaster response, is getting organisations to
train together in advance under government leadership, not the United Nations.
Because the government’s going to lead whether it’s Indonesia, or Pakistan, or
Sri Lanka... China,” Mr Banbury added. He was seated with fellow panellists
Asean Secretary-General Surin Pitsuwan, actor Jet Li, China’s Vice-Minister of
Civil Affairs Jiang Li, and Kuntoro Mangkusubroto, who’s helping to oversee
reconstruction efforts in Indonesia. The group spoke about post-disaster relief,
as well as the need to prepare for unforeseen natural events. Dr Pitsuwan
discussed the importance of making use of preventative measures – rather than
simply reacting to a tragedy once it occurs. “I think not only governments, not
only civil society, but also the private sector will have to come together and
shift our mindset a little bit,” said Dr Pitsuwan. “Rather than wait for
disaster to strike we must think about how to prevent it.” If a tragedy does
strike, countries, affected by disasters, should welcome help from international
armed forces, Dr Pitsuwan said. “I think the entire armed forces are important
because they have the equipment, they have the training, they have the
experiences,” said Dr Pitsuwan. “But in some of our countries in the region that
is exactly where the problem is – external armed forces, ready, willing,
organised, ready to go in, but are not allowed to go in.” 
Hit by the global credit crunch and a
slumping stock market, Hong Kong banks have tightened lending to the property
sector. Home sales in Hong Kong dropped last month to the lowest level in 17
years as the worsening global financial crisis scared away buyers. Only 3,786
properties were sold for a total consideration of HK$10.65 billion, according to
the Land Registry. This was even worse than the property market's last big
downturn during the Sars outbreak of 2003. Home purchases plummeted 37.46 per
cent from 6,054 deals in October and were 79.09 per cent fewer than the 18,105
deals reached in November last year. The value of deals dropped 43.77 per cent
from HK$18.94 billion in October and was down 86.92 per cent from the HK$81.39
billion recorded in November last year. Transactions recorded last month dropped
to the lowest level since the registry included all property sales in its
statistics in 1991, said Wong Leung-sing, an associate director in the research
department at Centaline Property Agency. "Transactions in the property market
were more active during the Sars outbreak in 2003. There were 4,622 deals in
February 2003," he said. The previous record low was 4,035 deals in February
1995. Hit by the global credit crunch and a slumping stock market, Hong Kong
banks have tightened lending to the property sector. The city's real estate
market thus joins those in the United States, Britain and Australia in feeling
the pinch of the subprime crisis. Fredy Wu Yat-fat, the chief executive of Hong
Kong Property Services (Agency), said potential buyers hesitated to enter the
market after the bankruptcy of Lehman Brothers Holdings in September and the
stock market turmoil. "The market has been full of bad news since the second
half of September," Mr Wu said. "Average property prices are 30 per cent lower
than a year ago." He said some potential buyers had been tempted back into the
market in recent weeks, with transactions in the mass and high-end residential
sectors rebounding. Many buyers are civil servants or teachers who have job
security. He expected transactions this month would rise to about 4,500, but the
figure might hit a new low in January. 
Hong Kong Monetary Authority chief
executive Joseph Yam Chi-kwong on Wednesday said he been looking into the
financial difficulties facing Hong Kong enterprises in the mainland. On
Wednesday morning, Mr Yam visited Guangdong to meet with representatives of the
Federation of Hong Kong Industries, Hong Kong General Chamber of Commerce and
the Chinese Manufacturers’ Association of Hong Kong. During the visit, he also
met representatives from the People’s Bank of China in Guangdong and the China
Banking Regulatory Commission. Mr Yam discussed the challenges facing Hong
Kong’s small and medium-sized enterprises in China since the recent global
financial crisis. After Wednesday’s meeting, Mr Yam said the SMEs and banks in
China needed to improve their relationship. He said was important to strengthen
this in the long-term. Mr Yam said it was difficult for mainland’s banks to lend
money to Hong Kong-based SMEs because banks could not obtain sufficient
collateral and credit data. He said the authorities in Hong Kong and Guangdong
were now studying the possibility of implementing cross-border arrangements to
make lending easier. The global economic downturn resulted in tighter bank
lending and reduced credit. Small and medium enterprises (SMEs) in Hong Kong
therefore found their businesses in the mainland harder to operate. Some closed
down plants and factories in the mainland and laid off workers. In October, for
example, Hong Kong-based toy manufacturer Smart Union closed all its factories
in the mainland.
Ocean Park's attendance surpassed five
million during the 2007-2008 financial year, park board member and legislator
Patrick Lau Sau-shing said on Wednesday.
Lee Kuan Yew says farewell to another
political titan, Bill Clinton, at the Grand Hyatt Hong Kong. Asians rely on
state for answers: Lee Kuan Yew - NGOs did not flourish in Asian countries where
people looked to governments to solve their problems, Singapore's Minister
Mentor Lee Kuan Yew said yesterday. The founding father of the city state made
the comments yesterday in conversation with former US president Bill Clinton and
during a question-and-answer session afterwards. He said cultural differences
explained why civic groups in Asia were weaker than their European and US
counterparts, in response to a question from the floor. "In Japan and the
Confucianist societies of East Asia, such as Korea, China, Vietnam and the
Chinese communities in Southeast Asia, people have always been looking to the
authorities to solve problems," Mr Lee said. He noted that the Chinese system in
which an emperor sanctioned his officials and magistrates had existed for 4,000
years. Hence, the idea of citizens mobilising support for causes was often seen
as threatening. During the 40-minute session, Mr Lee, who has been outspoken
about Hong Kong issues during his previous visits, did not touch on the city's
development. But he said Japanese women were "rebelling against becoming slaves
of their husbands and in-laws", after Mr Clinton suggested education for women
could raise the marital age and curb population growth. "You have to couple the
education of women with equal job opportunities," Mr Lee said. "If you just
educate them and keep them at home, they are back to the old pattern of life and
they are homemakers and they produce children." 
Singers, Kosuke Atari, Liang Wen-yin and Fan Van pose during a press event for
Cape No 7 in Taipei in June. President Ma Ying-jeou says Beijing should not ban
a hit Taiwanese film because it could help mainlanders better understand their
neighbours on the self-governed island. In an interview on Wednesday with Radio
Taiwan International, Mr Ma praises Cape No 7 as a film that truly reflects
ordinary people’s lives. He says he hopes that mainland Chinese will have a
chance to view it. Beijing reportedly has reversed its decision to import the
Japan-themed film – about a Taiwanese rock musician’s love for a Japanese woman
– for fear it may be offensive to nationalist sentiment on the mainland. 
Former US President Bill
Clinton and Foreign Minister Yang Jiechi kick off the first overseas Clinton
Global Initiative Asia in Hong Kong on Tuesday. Former United States president
Bill Clinton launched his first-ever Clinton Global Initiative Asia event in
Hong Kong on Tuesday - saying Asia "was an obvious choice for this meeting".
Over 400 of Asia’s elite, including 11 former and current heads of state as well
as nearly 200 business leaders, are attending the two-day event in the Grand
Hyatt. The members will try to make commitments to solve problems in the areas
of climate and energy, public health and education. Mr Clinton said Hong Kong
was an important destination. “We decided to come to Hong Kong because of the
region’s leadership and capacity to make a difference on the major issues of our
time,” the former president said. Mr Clinton stuck to the business of the day,
remaining silent about the decision by US President-elect Barack Obama to select
his wife, Senator Hillary Clinton, as the next US Secretary of State. “In a
larger sense, the recent prosperity of Asia, as in America, has not reached
every household,” Mr Clinton said. “And, therefore, even before the financial
crisis, persistent inequality has seemed to be an unfortunate side effect of
many of the good things which are happening in the interdependent world. “Over
the past 20 years, the rise of India, the mainland and other nations in Asia
have impressed the rest of the world,” Mr Clinton added. “Asia was an obvious
choice for this meeting of the CGI.” Beijing’s foreign minister Yang Jiechi also
made live remarks – before Secretary General Ban Ki-moon was shown on screen
delivering a videotaped address. “By choosing to hold this meeting in Asia the
CGI has demonstrated the importance it attaches to this region,” Mr Yang said.
“Indeed Asia is one of the most dynamic regions in the world. “However, while
enjoying fast economic growth, Asia is also faced with difficulties and
challenges, such as environmental degradation, frequent natural disasters,
widening gap between the rich and poor, and underdeveloped public health and
education,” he said. Mr Yang also joined Philippine President Gloria Macapagal-Arroyo,
Hong Kong businessman Victor Fung Kwok-king, Japan House of Councillors Member
Yoriko Kawaguchi and Sun Group vice-chairman Uday Khemka for a panel discussion
led by Mr Clinton. The group discussed how countries and businesses could
balance growth with sustainability. Mr Clinton first asked Mrs Arroyo how the
financial crisis has affected her country. “The Philippines is doing relatively
well in this global crisis, but that’s small comfort to the average Filipino who
feels higher prices for the food that he or she has to buy, or the petrol that
he or she has to buy,” she said. “Therefore, one big challenge that we have to
address is how the impact is on the poor and the ordinary Filipino. “So it’s
very important for us to be able to make sure that the global crisis does not
become a crisis in our country,” said Mrs Arroyo. A few panelists congratulated
Mr Clinton on his wife becoming the next secretary of state. “I would like to
join President Arroyo in congratulating Senator Clinton on her being nominated
as the next Secretary of State. I’ve already sent a congratulatory message, but
I think that you are even closer to Hillary,” said Mr Yang to a roar of laughs
and applause. Mr Clinton smiled before taking a sip of coffee. “So please convey
my warm congratulations to her, and I’m looking forward to a very good working
relationship with now Senator Clinton, but Secretary Clinton later on, and to
further our friendship,” Mr Yang added. 
Michelin gives first
three-star rating to Chinese chef - Culinary bible Michelin on Tuesday gave its
coveted three-star rating to a Chinese chef for the first time, as French
gastronome Joel Robuchon brought his global total of stars to 24. Launching its
inaugural guide to restaurants and hotels in Hong Kong and Macau, Michelin
inspectors gave three stars to Lung King Heen, a Cantonese restaurant in the
Four Seasons hotel run by Chinese chef Chan Yan-tak. They also awarded three
stars to Robuchon’s Robuchon a Galera, in the Grand Lisboa casino resort in
Macau, and two to L’Atelier de Joel Rubuchon in Hong Kong. Lung King Heen, which
translates to “view of the dragon”, and Robuchon a Galera were the only
restaurants to secure three stars in the new guide. Jean-Luc Naret, director of
the Michelin guides, said the company had been monitoring Chan’s career very
closely, and that the restaurant had been inspected 12 times to give it the
three-star approval. “We have followed him for a few years, actually for 10
years.... We have been very impressed by his cuisine,” Naret told reporters at
the launch of the guide in Hong Kong. “He is the first Chinese chef to get three
stars.” A total of 40 stars were awarded to restaurants in the two former
colonies, with more than 250 dining spots and hotels featuring in the new guide
which will go on sale on Friday. More than 30 different types of food ranging
from Dim Sum to Swiss will be featured in the guide, which was founded in 1900
as a drivers’ companion to restaurants in France, but made the leap to Asian
cities last year with Tokyo’s first edition. Three stars indicate “exceptional
cuisine, worth a special journey” while two stars mean “excellent cooking, worth
a detour”. One star promises an “very good restaurant in its category”. “When we
launch a new guide in a city of a country, it’s because the gastronomic scene of
that city or that country is interesting, diverse, rich,” Naret said. “And that
is what the Hong Kong and Macau gastronomic scene is all about.” Naret said
Michelin was hoping to sell 100,000 copies of the Hong Kong Macau guide,
following the huge success of the Tokyo edition, which sold 300,000 copies in
its first few weeks after the city became the most starred in the world. He said
the 12 anonymous inspectors had each visited hundreds of hotels and restaurants
during the year in Hong Kong and Macau, and included one inspector from Hong
Kong and one from mainland China. Chan started cooking at the age of just 13,
and has since worked in top restaurants across Hong Kong in a career that has
spanned around 40 years. He was lured out of retirement to open the restaurant
in the Four Seasons Hotel three years ago. Robuchon holds the highest number of
stars for any chef, with a total of 24 awarded to his various restaurants across
the world. Compatriot Alain Ducasse has 16 stars, while British chef Gordon
Ramsay has 12, a spokeswoman for Michelin said. Secretary for Commerce and
Economic Development Rita Lau Ng Wai-lan on Tuesday praised the Michelin
Guide.“Michelin Guide Hong Kong Macau 2009 is the first bilingual Michelin guide
and is Michelin’s second Asian guide. I am delighted that Hong Kong has become
one of the first Michelin cities in China. Mrs Lau said the Hong Kong Tourism
Board would make good use of the guide to promote Hong Kong.
Hong Kong would face an increasingly
difficult time in the coming six month as the recession hit businesses and more
jobs were lost, Financial Secretary John Tsang Chun-wah said. Amid criticism by
lawmakers that the government had not done enough to help sacked workers, Mr
Tsang said he doubted a proposal to distribute shopping coupons would stimulate
sluggish spending. Briefing lawmakers in a meeting of the Legislative Council
financial affairs panel, Mr Tsang said the crisis caused by the financial
meltdown in the US would affect Hong Kong's economic growth. "We cannot predict
at this point when this financial crisis of the century is going to pass," Mr
Tsang said. "The impact of the crisis on Hong Kong's economy is starting to
show." The government's economic outlook for the next six months was
pessimistic, he said, but "whether it will improve in the second half of the
year will depend on how the financial crisis evolves". He said the government's
latest estimate for the economy was a slowdown of growth in gross domestic
product from the 7.3 per cent in the first quarter of this year to 1.7 per cent
in the third quarter, resulting in annual growth of 3 to 3.5 per cent. He said
that on top of a drop in exports and consumer confidence, the series of business
closures was expected to raise the jobless rate, now at 3.5 per cent. Mr Tsang
said the government had introduced measures to facilitate the creation of
employment opportunities by speeding up infrastructure projects. "The creation
of jobs is our top priority," Mr Tsang said, adding that his budget in February,
which would undoubtedly be in the red, would also focus on raising Hong Kong's
competitiveness and identifying long-term economic opportunities. On the call by
the Liberal Party and unionists for the government to issue shopping coupons to
boost spending, Mr Tsang said experiences in other countries had shown consumers
might use the coupons on necessities instead of on extra shopping, while
continuing to save. "Whether such measures can really stimulate economic growth
should be studied. It creates little impact on stimulating the economy ... in
some countries," Mr Tsang said. Lawmakers from across the political spectrum
criticised the government for failing to introduce adequate measures to help the
needy. Ronny Tong Ka-wah of the Civic Party said the jobs to be created by
infrastructure projects were not enough. "Are you asking restaurant staff and
office clerks who are out of work to roll up their shirtsleeves and dig at
construction sites?" Mr Tong said. Democrat Emily Lau Wai-hing said the
government should step up measures to help struggling small and medium-sized
enterprises. Starry Lee Wai-king, of the Democratic Alliance for the Betterment
and Progress of Hong Kong, said the government should not wait until the
February budget to introduce measures tackling rising unemployment and the
worsening economy. 
Hongkong and Shanghai Banking Corp has announced it will raise mortgage rates
drastically for new home buyers by 50 to 75 basis points. New customers who take
out a HK$1 million home loan will pay HK$5,000 to HK$7,500 more per year in
interest as a result. HSBC raised its mortgage rate, regardless of loan size, to
between prime minus 1 percent and prime minus 1.5 percent - equivalent to 3.5
percent and 4 percent, on a new mortgage - with effect from yesterday. The plan
includes a cash rebate of 0.5 percent. It has now cleared its original dividing
range of HK$1.5 million loans and unified mortgage rates for loans of all sizes.
The rate increase follows the same move by its peers, the bank said. "Hongkong
Bank may want to maintain its profitability at a reasonable level," said
Industrial and Commercial Bank of China (Asia) (0349) executive director Stanley
Wong Yuen-fai.
The Hengqin Economic Development Zone on Hengqin Island in Zhuhai, which could
soon be home to a theme park featuring giant pandas. Developer sought for giant
panda theme park on island near Macau - A decade-old idea to develop an island
next to Macau is finally about to get off the ground with Zhuhai tendering the
right to build a theme park, which may feature giant pandas, on Hengqin Island.
A hi-tech park will also figure in the near-term development of the 86 sq km
island to the west of the Cotai Strip. The Land and Resources Bureau of Zhuhai
will accept bids from December 12 until Christmas for a 1.3 million square metre
site on Hengqin. t appears Guangdong authorities plan to bring pandas onto the
island, as "experience in raising and exhibiting giant pandas and koalas" is
listed among prerequisites for bidding. Experience in running large theme parks,
safari parks and circus venues are also requirements. The minimum bidding price
is about 125 million yuan (HK$142 million) and a maximum plot ratio of 0.8 per
cent applies to the site. The Guangzhou-based Chimelong Group, which runs a
safari park in Panyu district, is believed to stand a good chance of acquiring
the site. A panda-themed park will go up on the site, according to the
Guangzhou-based Southern Metropolitan Daily. Economist and gaming analyst Zeng
Zhonglu said the development in Hengqin would benefit Macau by luring more
tourists to the area. "Macau and Hengqin will both be promoting leisure travel,
but they will offer different experiences to visitors," said Professor Zeng, of
the Macau Polytechnic Institute. "The two sides will be able to complement each
other." Macau's policymakers and developers have long been eyeing Hengqin to
ease the pressure of population growth at home. The former Portuguese enclave
has arguably the world's highest population density, with 557,000 residents
sharing 29 sq km of land. Just a few hundred metres from Cotai, Hengqin is three
times the size of Macau but has fewer than 7,000 residents. As early as 1992,
Guangdong earmarked Hengqin as a key area for the province's further opening to
the outside world. An economic zone was planned on the quiet island.
Workers from removals company
Relocasia help a family in Mid-Levels prepare to move abroad. The tinsel and
carols have gone up to signal that Christmas is on the way, but for John, a
banker, the past few weeks have been "a logistical nightmare". The reason? He
lost his job last month and has to head home this week. John has spent the past
month in discussions about breaking his lease, taking his children out of
school, packing up his home and also saying farewell to friends. "It has been
terrible. It was a surprise. It took everyone by surprise," said the Australian,
who has lived in Hong Kong for nine years with his wife and two children, aged 9
and 11. "In the current climate, we decided it was the best option," he said. He
plans to wait in Australia for the economic turmoil to calm down and apply for
jobs in Hong Kong as soon as possible. The Immigration Department, the Trade
Development Council and consulates do not keep figures on the number of foreign
workers leaving the city permanently, but many expatriates say they are going
home. Some predict an exodus and a repeat of the situation during the 1998
financial crisis and the outbreak of severe acute respiratory syndrome in 2003.
Restaurants, bars, recruiters and property companies are watching for a major
shift in business, while schools are monitoring changes in enrolment and
waiting-list numbers. Ben Tyrrell, director of removals firm Relocasia, said:
"This is not dissimilar to what happened during Sars, when we had people wanting
to move the next day. People don't do that unless they sense dark clouds on the
horizon." Mr Tyrrell has seen many foreigners - including chief financial
officers, middle-class corporate staff and recent graduates - deciding to move
and leaving the city within days. The company, most of whose clients work in
banks and live in upmarket areas, saw outbound orders rise by 65 per cent last
month and expects a 100 per cent increase for this month, compared to the same
month last year. Most of the orders for last month were made by Britons,
Australians and Americans. "They're either deciding to take redundancy packages
or are being forced to leave," he said. "It's been phenomenally busy."
Recruitment agencies predict expatriates will leave when they fail to find jobs.
The agencies would be able to source positions for lower-level staff -
compliance officers, auditors, product controllers and technical staff - but it
would be difficult for senior candidates, said Mark Enticott, associate director
of banking and financial services at executive search firm Michael Page. He
predicted that many people would move in the next six to 12 months. "Naturally
that happens. We saw it during the last two financial crises," he said.
Restaurants are bracing for a drop in business. "There's probably going to be a
bit of an exodus," said Chris Lenz, founder of Igor's Group of Restaurants,
which includes Stormy Weather, The Keg and Wildfire. He said one of his regulars
lost a job last Monday, and another last Tuesday. He expects a 20 to 25 per cent
drop in income next month and in February compared to the same months in recent
years, partly because expatriates would leave. Buggle Lau, chief analyst at
Midland Realty, said luxury property rents would drop when expatriates left.
"Even those who are lucky enough to keep their jobs upon the expiry of their
contracts will relocate or they will negotiate with their landlords," he said.
Rents on the south side of Hong Kong Island, in Mid-Levels and in West Kowloon
had dropped by 15 to 20 per cent up to October, he said. He expects another 10
to 15 per cent fall in the first quarter of next year. The only places reporting
stability are schools, possibly because parents do not want to uproot children
mid-term. Hong Kong International School and the English Schools Foundation say
enrolment and waiting list numbers have not changed from last year. The ESF even
received 10 per cent more applications than last year for first-year spaces,
said Peter Craughwell, head of corporate communications. But he said they were
monitoring the situation. Businesses say worse is yet to come. HSBC (SEHK: 0005,
announcements, news) , Citibank, DBS, Morgan Stanley, Goldman Sachs and Merrill
Lynch only announced job cuts last month. They say the period from now until the
end of the year will be the lull before the storm as the unemployed seek new
jobs. However, some expect fewer people to leave than in 1998 and 2003. "There
is a fundamental difference between expats now and then," Mr Lenz said, noting
they had started owning property, which was very rare in the 1990s. "A lot of
expats see Hong Kong as their home. Even if we see them losing their jobs, they
will try to look for work here," he said. Mr Enticott, from Michael Page, even
expects new arrivals. "Asia is still seen by banks as an area where they can
grow their revenue base," he said. Joe, a broker from Britain, lost his job
along with several others at his company last month, and his visa expires in
June. He says the mood among his friends has been very grim, but he wants to
tough it out in Hong Kong, where he has lived for several years. "I don't want
to go back to the UK unless I have to. I will stay as long as I have a visa," he
said. He plans to send out CVs in January and hopes to land a job with a visa.
"You have to look at the economies in the rest of the world. Our prospects are
better here," he said. "There are still firms coming to Asia."
Laminated fare charts returned to
taxis across the city yesterday as a new pricing system took effect. Despite the
HK$16 flagfall increasing to HK$18, cabbies took to the streets in recent months
in slow-drive protests to express dissatisfaction. The adjustment will reduce
long-haul fares and increase those of short journeys. A cabbie surnamed Wong
said he had received about 10 percent less income than normal and attributed it
to the changes. "I don't like the new policies at all. At this rate I'll lose
HK$1,000 per month," he said.
Beijing and the United Nations AIDS
agency have pledged to fight discrimination against people with the disease. A
massive red ribbon, the symbol of AIDS awareness, was unveiled yesterday - the
eve of International AIDS Day - at the Olympic Bird's Nest stadium in the
capital. Organizers said the fear of being stigmatized at work or in their
communities is discouraging many people at risk of HIV infection from being
tested. After years of denying that AIDS was a problem, Beijing has shifted
gears in recent years, confronting the disease more openly and promising
anonymous testing, free treatment for the poor and a ban on discrimination
against people with the virus. The topic, however, still remains sensitive and
authorities regularly crack down on activists and patients seeking more support
and rights. "About half of all Chinese would not want to share a meal with a
person with HIV/AIDS, and a quarter would not want to shake hands," said
Bernhard Schwartlander, country coordinator of UNAIDS in China. "People will not
come forward to be tested. They won't talk to their partners about HIV/AIDS -
putting themselves and others potentially at risk for HIV." Premier Wen Jiabao
has visited a village hit particularly hard by AIDS in Anhui province. State TV
showed him holding hands with children orphaned by AIDS and speaking to patients
in beds. Estimates put the number of people living with HIV in the mainland at
about 700,000, with about 85,000 people with full-blown AIDS, UNAIDS said.
