China.Hawaii Chamber of Commerce ®
Hong Kong.Hawaii Chamber of Commerce ®
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  Listen to MP3 Business Beyond the Reef” to discuss the problems with imports from China, telling all sides of the story and then expand the discussion to revitalizing Chinatown - Special Guest: Johnson Choi, MBA, RFC. President - Hong Kong.China.Hawaii Chamber of Commerce (HKCHcc) and Danny Au, Manager, Bo Wah Trading

BRENDA FOSTER, PRESIDENT OF THE AMERICAN CHAMBER OF COMMERCE IN SHANGHAI; "An Update of the Business Climate in China" to the Hong Kong China Hawaii Chamber of Commerce (HKCHcc) at the Pacific Club 2/14/2008

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May 1, 2010

Hong Kong*: Tsang Yok-sing is prepared to resign as Legco president and vote for the government's constitutional reform proposal if its passage depends on his vote.

HSBC and Hang Seng Bank have pledged to install keypad covers for all their ATMs by the end of next month after a dozen customers lost money in a scam.

A Sheung Wan school that was barred from running a Primary One class has teamed up with a special needs charity in a HK$3.7 million fund-raising drive to run the class privately.

Former Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong, once the world's highest paid central banker, has a new job in academia. Yam has been appointed a distinguished research fellow at The Chinese University of Hong Kong's newly formed Institute of Global Economics and Finance. The part-time role means Yam will take part in research, share his experience and insights with top bankers and brokers, conduct classes for Chinese University students and deliver lectures. It is not known how much he will be paid. Before retiring as HKMA chief executive at the start of October, Yam was the world's highest paid central banker, receiving HK$11.9 million in 2008 compared to US Federal Reserve chairman Ben Bernanke's US$191,300. Yam was Hong Kong's first central banker and occupied the post from the authority's establishment in 1993. The People's Bank of China in December recruited him to be an executive vice-president of an advisory body to the central bank. It is not known whether the bank pays Yam for the work. The Institute of Global Economics and Finance has been set up to contribute concepts and policy ideas on opening up China's financial system. It will also launch educational programs related to global finance and banking issues, such as the internationalization of the yuan. Besides Yam, the institute has enlisted top professionals and academics including Nobel Prize-winning economists James Mirrlees and Robert Mundell. At a university event to announce his appointment yesterday, Yam slipped easily back into central banker mode, offering his views on the outlook for the yuan. "It will be impossible for the yuan to keep on rising forever," he said. "Mainland officials have also said the yuan has not been undervalued." Yam reiterated his view that the yuan could become the third major international currency, after the US dollar and euro. He also believed Beijing's tightening of credit and other measures to cool down the property market would have a positive economic impact.

The MTR Corp's HK$33 billion Nam Cheong Station project has attracted interest from 12 developers - four more than when it was first launched five years ago. In 2005, when the KCRC was managing the project in Sham Shui Po, eight developers expressed an interest before the residential development was shelved due to concerns of green groups that the 20 high-rise towers would cause a wall effect. The railway operator has since modified the design and lowered the density of the development on top of Nam Cheong Station, close to the Fu Cheong and Nam Cheong public housing estates. The 6.2-hectare site will now house nine seven- to nine-storey low-rise blocks and nine 42- to 46-storey high-rise residential towers, plus a 287,732-square-foot shopping centre. The project will provide 3,300 flats with a total residential floor area of 2.96 million square feet and is due for completion in 2016. All the major developers, such as Cheung Kong (Holdings) (SEHK: 0001), Sun Hung Kai Properties (SEHK: 0016), Sino Land, Kerry Properties (SEHK: 0683), Henderson Land (SEHK: 0012) and Nam Fung Development were among the 12 to express interest yesterday. MTR is currently negotiating the land premium with the government and will put the project up for tender in the near future, a spokesman said. Even though there has been a better response this time it does not mean the developers are more optimistic about the property market's outlook, according to analysts. Alnwick Chan Chi-hing, executive director at Knight Frank, said only a few of the developers could afford the large investment cost and he expects only four of them to eventually join the tendering process. "But it does present an opportunity for the developers to get the inside information on land premiums if they submit expressions of interest. It can also show the MTR that you are still a market player," Chan said. According to the transaction data of Centaline Property Agency, prices at the seven-year-old Metro Harbor View in the area range between HK$4,964 and HK$5,137 per square foot. A further indication on the state of the property market will be available over the next three months when the Lands Department sells four development sites in Fanling, Tung Chung, Ho Man Tin and The Peak. The two residential sites at Mount Nicholson Road on The Peak and Fat Kwong Street in Ho Man Tin are expected to be major targets as they offer an opportunity for luxury residential projects. Chan said Nam Cheong Station was still competitive, being a mass residential project on top of an MTR station, although he did not believe the developers would be submitting aggressive offers for it or any of the other sites due to the uncertain market outlook. "The latest housing policies show the government is paying special attention to the property market. The government may release new measures to curb the growth in property prices." he said.

Customs has stepped up its blitz on counterfeit goods ahead of the May Day Golden Week. Over the past fortnight, officers have seized 4,500 pirated items worth about HK$1 million and unearthed five "storage warehouses" in Yau Tsim Mong. Nine men and seven women aged 24 to 49 have been arrested. Most are shop owners. The fake goods include mobile phones, cosmetics, luxury watches, brand-name bags and - ahead of the FIFA World Cup in South Africa - football strips. Intellectual Property Investigation Bureau divisional commander Koon Hon-chuen said it will strengthen surveillance in tourist shopping areas. There were 167 cases in the first quarter this year, the same as in 2009. A total of 1,014 cases were recorded for the whole year. Meanwhile, traffic at Kowloon West's Olympic City during the May Day Golden Week is expected to increase 15 percent to 157,000 people and bring in HK$7.26 million in sales. Sino Group is predicting overall growth of 13 percent for Olympic City, Golden Coast Piazza and Island Resort Mall. with 262,000 visitors. To attract more high-spending mainlanders, Olympic City is offering a one-night stay and buffet breakfast for two. It is also hosting a South African Festival from today until May 9. The 10-day Golden Week lasts from May Day until Mother's Day on May 8. Spokespersons for major shopping malls including Times Square and Elements said mainlanders are becoming a force to be reckoned with. Times Square has increased its cross-border bus service to 30 a day to pick up tourists from Shenzhen, Foshan and Guangzhou. Elements expects mainland shoppers to contribute 40 percent to its overall turnover. The Hong Kong Tourism Board reported tourist spending rose 3.2 percent to surpass HK$160 billion last year. Chairman James Tien Pei- chun said average spending of transit visitors also went up 20 percent.

 China*: Insurers rush to launch yuan-denominated policies - Expectations of an appreciating yuan has spread to the insurance sector as policyholders seek out yuan-denominated policies.

French President Nicolas Sarkozy and his wife, Carla Bruni-Sarkozy, arrive at the Great Hall of the People. Wen pledges that China will play a bigger part in global issues - China yesterday pledged to take a greater role in global issues as it vowed to work with the European Union on nuclear non-proliferation, energy security and climate change. In wide-ranging talks between Premier Wen Jiabao and European Commission President Jose Manuel Barroso, the two sides also agreed to fight protectionism and tear down trade barriers. "China will undertake greater international responsibilities," Wen said in a joint media appearance with Barroso after their talks. "This is not only to meet international expectations but also serves China's interests." The two sides also agreed to set up a climate change hotline between top environmental officials of the EU and China to help both sides co-ordinate their positions in global greenhouse gas negotiations, Barroso said. On the Iranian nuclear issue - a key concern of the EU and United States - Wen did not say whether Beijing would support new sanctions against Tehran. He said only that China was committed to the global nuclear non-proliferation regime and upholding peace in the Middle East. Wen said: "China will remain in touch with the relevant parties and will play a positive and constructive role for the early and proper settlement of the Iranian nuclear issue." Western nations are calling for a fresh round of UN sanctions but Beijing - a veto-wielding permanent member of the UN Security Council - has so far resisted such a move. "China and the European Union have far more consensus than differences," Wen said. "We both stand for world multi-polarity and diversity and we both believe that major decisions in world affairs should be taken in an open, democratic and transparent manner." Barroso and his delegation will leave Beijing today to attend the opening of the World Expo in Shanghai. French President Nicolas Sarkozy and his wife, Carla Bruni-Sarkozy - who will also attend the expo - yesterday walked the Great Wall and wandered the imperial Ming Tombs on a sightseeing stop during their visit to China. Sarkozy's trip is being billed as a return to healthy diplomatic relations between the countries after spats over Tibet. The French leader is also pressing Beijing to support further sanctions on Iran over its nuclear program. Hours before Sarkozy's planned meeting with NPC chairman Wu Bangguo , the French first couple visited the tombs and a section of the Great Wall usually closed to the public, French officials said. The tombs, on Beijing's outskirts, were chosen by 13 of the 16 Ming dynasty emperors, who ruled between 1368 and 1644, as their last resting place. Sarkozy will travel to Shanghai today, where he will attend the opening ceremony for the expo and visit France's stand at the fair. On Wednesday, the couple went to Xian to visit the terracotta warriors.

More than seven years ago, after Shanghai won the right to host the 2010 World Expo, thousands of people whooped it up on the city's streets. People from all walks of life believed the big show would help Shanghai catch up with Beijing, which was splashing out roughly US$40 billion on the 2008 Olympics. The municipal government mobilised enormous resources to ensure that expo-related projects were completed on time, allowing the city to show its best face to the world. Real estate firm Jones Lang LaSalle says Shanghai has spent US$95 billion on expo-related infrastructure, with analysts describing the scale and pace of development over the past two years as something never seen before - anywhere. Now the Shanghai government and people are hoping it all pays off. Xinhua has reported that the international fair could create as many as 250,000 jobs in the city and increase Shanghai's gross domestic product growth by 5 percentage points. If the expo attracts the 70 million visitors that have been forecast, income from ticket sales and food and beverage sales could top 10 billion yuan (HK$11.4 billion). The hospitality sector will be one of the top beneficiaries of the six-month event, which looks like being a windfall for the city's 310 star-rated hotels and 6,000 or so inns, which have 334,000 rooms and 557,000 beds. Cheng Meihong , a deputy director of the Shanghai Tourism Administration, told a press conference this month that hotel prices were expected to rise slightly during the expo, as thousands of travellers from other parts of the country and abroad flocked to Shanghai. But economists say that while the expo may boost the retail and hospitality sectors in the short term, it will be difficult for Shanghai to sustain rapid growth after the event. "After all, the economy doesn't necessarily hinge on the event," Morgan Stanley analyst Allen Gui said. "Taking a long view, the outlook is still unclear because it's too early to assess whether the massive infrastructure investments are redundant or properly needed." When the expo opens tomorrow, Shanghai's Metro system will have 420 kilometres of track in operation - nearly double last year's total. That breakneck pace of subway expansion has seen "decentralised" office blocks sprout up outside the central business district. At the end of last year, Shanghai had 415,000 square metres of decentralised Grade A office space, Jones Lang LaSalle said. It predicted the figure would jump to 1.8 million square metres by the end of 2013. More corporate tenants are leaving the city centre to take advantage of cheaper rents in the suburbs. Shanghai, one of the mainland's two main economic locomotives, failed to dodge the bullet when the global financial crisis struck two years ago. Shrinking external demand knocked the steam out of Shanghai's economic growth and robust retail sales, which grew 13.6 per cent last year, were not enough to offset the export slowdown. The city's GDP grew 8.2 per last year, 1.7 percentage points less than in 2008, and the second consecutive year of single-digit growth. Shanghai had posted double-digit growth in the previous 16 years - from 1992 to 2007 - as exports from the Yangtze River Delta boomed and foreign capital flooded in. To add to the blushes of the city's leaders, including Mayor Han Zheng , Shanghai's GDP growth last year was also among the lowest recorded by any of the provincial-level regions. "Shanghai would have to draw a lesson from the slowdown in the past two years," Zhang Youwen , the chief world economy researcher at the Shanghai Academy of Social Sciences, said. "It will be difficult to gauge how much the expo can help the local economy in the long term." The city took a hammering from the global financial crisis, lagging behind mainland rivals whose economies kept growing rapidly, fuelled by Beijing's 4 trillion yuan stimulus package. Shanghai has been striving to shift its economic focus from manufacturing to services, seeking to become a big-name metropolis on a par with New York, London and Paris. Beijing drew up an ambitious blueprint for the city last year, encouraging Shanghai to transform itself into a global financial and shipping centre. However, in the absence of substantive liberalization policies, economists have seen the plan as nothing more than an empty promise. Without full convertibility of the yuan, they said, Shanghai's dream of becoming an international financial hub centre would remain illusory. An official with the Pudong Financial Services Office said district government and city government officials were preparing to host several events during the expo where they would lobby for accelerated market deregulation and seek to attract more overseas investors. Some other governments around the country have also sniffed out opportunities during the expo, hoping to promote investment and trade when influential government officials and businesspeople visit the big show. "We can't afford to miss the big party because it provides a good chance to get to know the big shots," said Guo Yi , a deputy director of the economic research department in Jining , Shandong . "It will be a platform to promote Jining's trade and draw investment to the city."

Leaders from 20 countries are due to gather in Shanghai today as the city prepares to raise the curtain on the biggest and most expensive World Expo in history.

To outdo each other in impressing visitors to the World Expo in Shanghai, participating countries are putting on display their national treasures, many of which had never been taken abroad. The Little Mermaid statue from Denmark, Impressionist paintings and a Rodin sculpture from France, paintings by the Italian Renaissance master Caravaggio and other national treasures are part of the countries' bids to showcase their best. Entertainment will also be a major part of some pavilions' offerings. Among the 20,000-strong performances will be big names such as Orchestra del Teatro alla Scala from Italy, Russian singer Vitas and jazz pianist Herbie Hancock from the United States. Representatives of these pavilions see the higher profiles as a way to promote their countries' culture, as well as boost their tourism and economy. This is the first time, for example, The Little Mermaid has left Copenhagen since it was dedicated in 1913. Even during the six-day "soft opening" of the expo, thousands of visitors swarmed to the Denmark pavilion to view the lady from Hans Christian Andersen's fairy tale, which is well known in China. Wang Jing , the pavilion's deputy director, said it was an honour to share the statue with tourists from all around the world. "Denmark has never valued an expo to such an extent. [Moving the statue] was meant as a cultural exchange, and in the meantime, it can be helpful to business and trade between [Denmark] and China," she said. The France pavilion will exhibit six paintings by Impressionist masters, such as Paul Cezanne and Vincent van Gogh, and a sculpture by Pierre Auguste Rodin, all borrowed from the Musee d'Orsay in Paris. Italy is showing two paintings by Michelangelo Merisi da Caravaggio, Basket of Fruit and Boy With a Basket of Fruit. The Czech Republic removed two bronze Plaquettes of Good Fortune from Charles Bridge in Prague and installed them at the expo, and Nepal is displaying Buddhist relics. Luxembourg is also competing for Chinese people's attention by exhibiting the Gelle Fra (Golden Lady in English) statue, a national monument. Completed in 1923, the statue had never been out of the country. Professor Xu Mingqi , of the Shanghai Academy of Social Sciences, said the expo was a good opportunity for mainland people to learn about other countries, since most of them have never gone abroad.

While Google's mainland business has suffered from a quixotic stand against Beijing's internet censors, Baidu is reaping a mighty windfall from it.

If Beijing does not speed up approvals for hydropower projects it may not meet its clean-energy goals for 2020, the China Electricity Council says.

President Hu visits Shanghai World Expo Park.

Chinese President Hu Jintao (C) visits China Pavilion at the Shanghai World Expo Park in Shanghai, east China, April 29, 2010. Hu Jintao paid a visit to the Shanghai World Expo Park Thursday, two days ahead of the opening of the global event.

Chinese President Hu Jintao use sign language to express greetings to a volunteer at Life Sunshine Pavilion in the expo site in Shanghai, east China, April 29, 2010. Chinese President Hu Jintao paid a visit to the Shanghai World Expo Park Thursday, two days ahead of the opening of the global event.

Enjoy sleepless city of Shanghai.

As Western investments into mainland companies go, Goldman Sachs, Morgan Stanley and UK private equity firm Actis Capital's decision to plough US$73 million into yoghurt drink maker Hunan Taizinai may qualify as one of the worst. On April 12 the company, which operates across China but is legally based in the Cayman Islands, was wound up by a court in the balmy British territory, owing creditors 2.7 billion yuan (HK$3.1 billion). But back in January 2007, the company and its founder, Li Tuchun, were the stuff of private equity managers' dreams. Li was a self-made, energetic entrepreneur who left a state-owned enterprise in Shenzhen in 1990, aged 30, with 300 yuan in savings. He built Taizinai, which produces probiotic drinks similar to Japan's Yakult, into a supermarket brand that tapped into the vast potential of China's nascent consumer goods sector. But by August 2008, Taizinai was insolvent, according to a confidential report by accountants Deloitte. After he won the foreign investment, Li massively overexpanded his business, the accountants said. Deloitte also said it suspected Li of inflating sales and assets and making payments out of the company that "drained cash". The report was not an audit, but a draft discussion paper that the accountants prepared for the private equity investors after addressing detailed questions to Taizinai's management, including Li.

April 30, 2010

Hong Kong*: The Hongkong and Shanghai Banking Corporation Asia-Pacific chief executive Peter Wong Tung-shun said on Wednesday the bank would conduct a review of its ATM services.

Greece was pushed to the brink of a financial abyss and started dragging another eurozone country – Portugal – down with it, fuelling fears of a continent-wide debt meltdown.

Anti-drug push `driving down narcotic crime' - Drug offences involving teenagers slid 40 percent in the first quarter of the year, amid a decline in overall crime, according to the security chief.

After days of intense speculation, the future of outgoing Swire Pacific (0019) heavyweight Philip Chen Nan-lok is now clear. He will join Hang Lung Group (0010) and subsidiary Hang Lung Properties (0101) as managing director of both firms. And he will get HK$21 million a year for his services. Chen - the first Chinese to head Cathay Pacific (0293) - announced on April 19 that he will step down as chairman of John Swire & Sons (China), deputy chairman of Cathay Pacific and all other Swire posts on July 1. He said the decision was prompted by his "desire to pursue other interests." The shock announcement triggered media speculation that Chen will join PCCW (0008) - which issued an immediate denial - or Hysan Development (0014). Hang Lung chairman Ronnie Chan Chi-chung said he looks forward to working closely with Chen, and that their appointment talks began "a few months ago." "Chen is a well-rounded person, with experience in all aspects and also has a good personality," Chan said. "I think he is a management professional who is hard to come by," he told The Standard. Chan said though Chen lacks property experience, the departing Swire executive will prove to be a good leader for Hang Lung's property experts. "I believe the group will have bright prospects with Chen as managing director," he said. Chen will succeed Nelson Yuen Wai-leung on July 15. That is the day Yuen retires after 32 years of service with the group to become a board adviser. He has been managing director for the past 17 years. Chan noted Chen's pay will be "exactly the same" as Yuen's was because he will have similar responsibilities. According to Hang Lung's statement to the bourse, Chen is, apart from the HK$21 million a year, entitled to a bonus of HK$5.2 million at the end of June next year. In addition, Chen will be granted the option to apply for 10 million Hang Lung Properties shares and receive a director's fee from Hang Lung Group. His total remuneration from the Swire Group in 2008 and 2009 was HK$15.1 million and HK$14.2 million, respectively. Hang Lung Group closed down 3.3 percent at HK$39 and Hang Lung Properties ended 2.7 percent down at HK$29.20 before Chen's appointment was announced.

Cathay Pacific Airways (SEHK: 0293) said on Wednesday its operations had returned to normal after its flights to Europe were disrupted for a week after ash from an erupting Icelandic volcano covered a huge part of the European continent. Cathay Pacific’s chief executive Tony Tyler said although the airline’s business had been affected, it was too early to decide whether it would adjust its fares like other airlines. “The closure of the European airspace has some impacts on our revenues, but I am pleased to say we are recovering very quickly. “It’s too early to calculate the total financial impact, we will probably make a statement about it later,” Tyler said.

Unionists say they have the figures to back up their demand for minimum hourly pay of no less than HK$33, which they say is vital to halt a widening gap between rich and poor.

'Referendum' push has failed, top adviser says - Think-tank polls say most oppose poll campaign. The campaign to make next month's Legco by-elections a "de facto referendum" on democratisation is a failure, the government's chief adviser declared yesterday. Professor Lau Siu-kai, the head of the Central Policy Unit, said its surveys had consistently shown that more than half the people opposed the campaign. Five lawmakers from the League of Social Democrats and the Civic Party resigned from their seats to trigger the polls, hoping to offer voters the chance to show they wanted "genuine" democracy. Campaign organisers rejected Lau's claim. Lau said the unit had conducted more than three public opinion polls in recent months - he could not recall how many exactly, nor over what time period they had been done. Each had a sample size of about 1,000. In each survey, more than half the respondents said they opposed the movement for a "de facto referendum" and thought it had failed. Citing the findings and those of others, Lau said people did not think the campaign would put pressure on Beijing to compromise on electoral reform, and felt it lacked large-scale support. League chairman Andrew To Kwan-hang dismissed Lau's conclusion. "Uncle Kai already maxed out his credit limit when he wrongly predicted the turnout of the march on July 1, 2003." Lau reportedly predicted only about 30,000 would join the protest, which saw an estimated 500,000 people take to the streets. Meanwhile, a minister had a message for pan-democrats unhappy with the government's proposal for electoral reform in 2012: take it or leave it, and don't expect any second helpings. Since the government had already "racked its brains" in preparing the proposal - which pan-democrats look likely to veto - there would be no room to come up with one more democratic, constitutional affairs chief Stephen Lam Sui-lung said. Under questioning from Democrat Cheung Man-kwong, Lam said if Legco voted down the proposals there would not be enough time before 2012 to restart the five-step process Beijing has set down for drawing up electoral reforms. But Cheung said after the meeting that the government would have no option but to come up with a new proposal if its refusal to make concessions meant the current one was vetoed. The government is proposing to create 10 new Legco seats. But five of them would be functional constituency seats voted on by 405 district councillors. The membership of the Election Committee that picks the chief executive would rise by half, to 1,200. Pan-democrats have rejected these proposals on the grounds they are too conservative and lack a road map to universal suffrage.

A top executive of the MTR Corporation (SEHK: 0066) acquired his degree from a diploma mill in the United States that was ordered to close seven years ago. According to the MTR's annual report last year, operations director Andrew McCusker holds a degree in mechanical engineering from the now-defunct Kensington University in California. The school, however, was never accredited by a recognised accrediting agency or association recognised by the United States Secretary of Education, shareholder activist and former HKEx (SEHK: 0388, announcements, news) director David Webb has found. "[McCusker] may well be a highly experienced and competent engineer, certainly the MTRC seems to think so," Webb wrote in his online newsletter. "But he might benefit from dropping his claim to a degree in engineering." The school, according to the Los Angeles Times in 1996, had no classrooms, laboratories or dorms; the campus was housed in a small office building, while students earned their degrees at home without attending a class or meeting instructors. The First Circuit Court of Hawaii, where the university was incorporated, ordered it to be shut down in 2003 and tuition fees to be refunded to all students since 1999, after it failed to obtain degree-awarding status. The MTR Corp said McCusker, 65, had more than 15 years of experience when he joined it as operations engineering manager in 1987, and the company looked not just at education, but also at work experience, when recruiting for senior positions. It was understood McCusker had worked for about eight years when he began his Kensington degree in 1980. Edmund Leung Kwong-ho, former chairman of the local branch of Britain's Institution of Mechanical Engineers - where McCusker is a chartered member - said the institute required members to have an accredited degree, but an engineer with ample work experience could also apply as a mature candidate.

Swire Properties, which aims to raise up to US$2.7 billion from a Hong Kong IPO, has tapped Bank of China Group Investment for US$100 million worth of shares, sources said.

Automated Systems Holdings, the leading information-technology services provider to the Hong Kong government, plans to accelerate expansion on the mainland and across Southeast Asia after recording virtually flat sales in its last fiscal year. "We are working closely with Beijing Teamsun Technology, the group's controlling shareholder, to capture more business opportunities throughout the mainland," Automated chief executive Lai Yam-ting said yesterday. Lai said potential mergers and acquisitions were being considered for growth in Southeast Asia, where Automated already had operations in Thailand. The company posted a HK$115.8 million net profit in the year to March, up 171.4 per cent from HK$42.7 million a year earlier, boosted by a one-off gain from the disposal of its global managed services business in August last year. Revenue fell 2.3 per cent to HK$1.33 billion, due to a slowdown in information-technology hardware and services sales. Lai, however, noted that the improving economy helped the company grow in the January-March period, when it generated HK$28.8 million in profit before taxation that was higher than those of the previous three quarters combined. He said Automated would focus more on growing its technology solutions business - which includes professional, maintenance and outsourcing services - as it further develops operations on the mainland and across Southeast Asia. About 61.2 per cent of the firm's revenue for the year to March still came from its traditional infrastructure business, which is based on sales of hardware such as computer servers and storage systems. Market research firm International Data Corp forecast the mainland information-technology services market this year to reach 82 billion yuan from 73.09 billion yuan last year. Lai said Teamsun, which bought the 68.4 per cent holding of US-based consulting and outsourcing specialist Computer Sciences Corp for HK$262.4 million in September, provides Automated with strategic support on the mainland through its 30 branches nationwide.

Kong Siu-kau, 63, has a tea break at the entrance to his cage home. Cages can cost HK$1,500 a month. The redevelopment of old buildings in Hong Kong is cutting down the supply of "cage homes" in centrally located areas and forcing up rents for the unemployed and underemployed who can least afford to meet higher living costs. On a per square foot basis, those who occupy "cages" of no more than 15 sqft created by subdividing old apartments into up to 50 separate living compartments now pay landlords from several hundred dollars to up to HK$1,500 in rent each. That translates into a rental charge of HK$100 per square foot, which is at least 25 per cent higher than the per square foot cost of renting a luxury house on The Peak, where effective rents for a 3,000 sqft house range between HK$70 and HK$80 per sq ft.

 China*: Shanghai opens the World Expo this weekend, with 192 countries taking part in the massive six-month showcase of ideas and technology – the latest display of China's growing global clout. China’s most cosmopolitan city will kick things off on Friday night with fireworks and an opening extravaganza at the riverfront Expo site in the city centre, a day before visitors are allowed in.

French President Sarkozy seeks to bury the hatchet with Beijing - French President Nicolas Sarkozy and his wife, Carla Bruni-Sarkozy, arrive at the airport in Beijing on Wednesday. French President Nicolas Sarkozy arrived in Beijing on Wednesday for a visit aimed at reinvigorating ties tested two years ago over Tibet and at winning China’s support for new sanctions against Iran. The French president, making his second state visit to China, was to head straight into a meeting with his opposite number Hu Jintao and address the media to kick off the official part of his three-day trip. Sarkozy – along with his wife Carla Bruni-Sarkozy and a delegation of top ministers – began the day with an initial stop in the ancient capital of Xian, where the couple visited the famed terracotta warriors under tight security. The French leader will also meet Premier Wen Jiabao and other top officials during his time in Beijing before heading to Shanghai on Friday for the start of the World Expo. “China has become an absolutely indispensable actor on the world stage,” Sarkozy told China’s state Xinhua news agency in an interview published on Wednesday. “Today, there is not one major issue that we can handle without you.” Paris hopes to win China’s support for fresh UN sanctions against Iran over its disputed nuclear program, but first Sarkozy has to seal France’s reconciliation with Beijing, two years after a heated row over Tibet. In March 2008, just four months after Sarkozy’s first state visit to China, ties soured when the French leader expressed shock at the security crackdown in the Chinese-ruled region after protests there led to deadly violence. A month later, the Chinese leadership was incensed when pro-Tibetan demonstrators booed and jostled the Olympic flame as it was carried through Paris on its way to the Beijing Games. Tensions peaked when Sarkozy met the Dalai Lama, Tibet’s exiled spiritual leader, in December 2008, before starting to ease when the French leader met Hu at the G20 summit on the financial crisis last year. French Prime Minister Francois Fillon, during a visit to China in December, said any “misunderstandings” between Paris and Beijing were a thing of the past. In his talks with Hu, Sarkozy is expected to seek Beijing’s backing for an overhaul of the global monetary system by the G20, but a French official said the leaders would not directly discuss foreign concerns over the yuan’s value. On Thursday, he will meet China’s top legislator Wu Bangguo, the second highest-ranking figure in the Communist hierarchy, before seeing Wen on Friday. The French president will mix politics with sightseeing during the trip, with scheduled visits to the Great Wall, the Ming Tombs and the Forbidden City. Sarkozy will on Friday head to Shanghai, where he will officially open the French pavilion at the World Expo and take part in the opening ceremony for the six-month exhibition. Cooperation agreements on ecology, higher education and the creation of new businesses are to be signed during Sarkozy’s visit, according to French officials. “New chapters are about to be written in China’s relationships with France and with the European Union,” the China Daily said Wednesday in an editorial. “French President Nicolas Sarkozy’s three-day visit shows how each side has let bygones be bygones. It could be seen as a formal announcement to the world that the China-France relationship is now back to normal.” Hu is scheduled to make a state visit to France later this year.

VIP guests take a look at the Aston Martin concept Rapide, a 12-cylinder, four-door sports car at the Beijing Auto China on Sunday. Luxury auto market zooms ahead in mainland - The businessman climbed into the Rolls Royce Phantom with the gold-plated Spirit of Ecstasy hood ornament and sank his feet into wine-red carpet. He says he has a Mercedes S600 sedan and a Jaguar sports car at home but needs something for work. “I just have to consider whether it’s too flashy. But otherwise there’s no problem. The price isn’t a big problem,” said the 32-year-old visitor to the Beijing auto show, who would give only his surname, Liu. Free-spending new rich who have made mainland a key growth market for luxury goods makers are more important than ever to US, European and Japanese creators of high-end automobiles. Sales here are surging while they sag elsewhere and manufacturers are pulling out the stops to woo mainland buyers. Mainland is “increasingly becoming the engine of our industry”, said Dieter Zetsche, CEO of Daimler AG. Sales of its Mercedes-Benz cars in mainland soared 112 per cent in the first quarter of this year to 23,600 vehicles. Volkswagen AG’s Audi unit, BMW AG’s Rolls Royce, Fiat SpA’s Ferrari and other makers of high-priced wheels are seeing similar gains. The surge has been propelled by an economic boom that created a new crop of millionaires and several dozen billionaires in a country that had almost no private cars 15 years ago. Mainland now has 825,000 people worth at least 10 million yuan (HK11.35 million), according to Rupert Hoogewerf, a researcher of wealthy mainlanders. The new rich “need some luxury products to validate themselves”, said Wang Honghao, editor in chief of the automotive magazine Trends Car. “Whether it’s luxury cars or luxury luggage, or perfume, clothes, accessories, it’s all the same.” Mainland’s auto market, the world’s biggest since last year, defied the global downturn on the strength of Beijing’s 4 trillion yuan, which boosted stock and real estate prices. Luxury car sales in mainland soared 66 per cent in the first quarter from a year earlier, well ahead of 14 per cent growth in the United States and a 6 per cent fall in Germany, homeland of Benz and BMW, according to JD Power and Associates. BMW AG’s Rolls Royce says sales in mainland, its third-largest market after the United States and Britain, rose 200 per cent in the first quarter from a year earlier to more than 20 vehicles despite a base price of 6.6 million yuan. Rolls Royce’s mainland sales are so strong that it added a production line and hired more workers partly to meet the demand. “I see China will even overtake the UK, our home market, this year and that we will see the Chinese market as the second-most-important market after the US,” CEO Torsten Mueller-Oetvoes said. As mainland’s jet-setting elite gets more sophisticated, luxury automakers are focusing on building their brand image with this niche audience. Rolls Royce publishes a Putonghua luxury lifestyle magazine and invites customers from mainland to visit its factory in Goodwood, England, to see their cars being made. Mercedes-Benz hired movie stars Zhang Ziyi and Li Bingbing to promote its cars. Luxury automakers are opening dealerships in cities as farflung as Chengdu and holds private gatherings for buyers who want to share their enthusiasm for cars. Mainland customers are getting more discerning and companies need to work to reach them, said Matthew Bennett, regional director of Aston Martin Asia Pacific. “It’s simple things like increasing the number of people in the company who can speak Mandarin,” he said. “The growth in China doesn’t come for free. You have to invest and it will come.” China’s most popular luxury car is the Audi A6L, favoured by government officials. Sales were up 14 per cent in March over a year earlier to 9,983, though that was driven partly by stimulus spending that is winding down this year. Aston Martin – which showcased a DBS like the one James Bond drove in Quantum of Solace – sold about 80 cars in mainland last year. Bennett said mainland is likely to become the company’s top market in Asia by next year, though he would not give a sales target. Bennett got a surprise when he showed the company’s concept Rapide, a 12-cylinder, four-door sports car, to VIP customers in Beijing in January. “We had about five or seven people on the night who said, ‘Yup, fine, I’ll take it’,” he said. “They hadn’t seen other colours. They hadn’t driven the car. We hadn’t confirmed the price at that point. They said, ‘No, no, I’ll have it’.” The price: 3.6 million yuan. The luxury car market already is big enough that manufacturers are willing to make basic changes to suit wealthy mainland customers. Mercedes unveiled an extended E-class sedan at the Beijing auto show aimed at mainland buyers, who are more likely to sit in back and have chauffeurs. The new Mercedes gives them an extra 140 millimeters of legroom in back. Zetsche said the company is open to changing other cars. “I don’t think it would be wise generally to adjust and change the vehicles to become ‘more Chinese’,” he said. “On the other hand, there are specifics in this marketplace. … To acknowledge these specifics makes sense and therefore we have this extended version.”

Mainland will place a moratorium on capital raising by real estate firms as part of a broader campaign to rein in property price rises, state media reported on Wednesday. The move could stand in the way of about 110 billion yuan (HK$125 billion) in share issues planned by 45 companies, unnamed sources close to the China Securities Regulatory Commission told the China Daily. The suspension will allow the Ministry of Land and Resources to examine whether companies have used illegal methods to manipulate market prices, the newspaper said.

Forty-eight Chinese fishermen arrived in Taiwan on Wednesday, the first group to start work under a new agreement which shows rapidly improving ties between Beijing and Taipei.

China's steel industry body will allow mills to sign individual supply deals with global miners, as it seemed to abandon efforts to preserve annual pricing.

Sinopec (SEHK: 0386) plans to issue up to 20 billion yuan (HK$23 billion) worth of corporate bonds to repay bank loans and top up its war chest for overseas acquisitions, a report said on Wednesday. Asia’s largest oil refiner will issue the exchange-listed bonds on the Shanghai Stock Exchange in May, marking the country’s biggest issue of its kind. An official at Sinopec confirmed the fundraising plan but said the exact timing would depend on market conditions, according to Dow Jones Newswires. Sinopec officials were not immediately available to comment when contacted.

April 29, 2010

Hong Kong*: Despite the impact of the global economic downturn, tourists in Hong Kong spent HK$162.89 billion in 2009 - 3.2 per cent more than they did the previous year, according to figures released by the tourism board on Tuesday. Hong Kong Tourism Board chairman James Tien Pei-chun said on Tuesday the increase was mainly due to a greater number of mainland visitors, who were spending more. The reasons for this were the introduction of new measures to make it easier for Shenzhen residents to visit Hong Kong and the mainland’s robust economic growth, Tien said. The number of mainland visitors increased to 17.95 million in 2009, 6.5 per cent higher than 2008. “Mainland visitors have become the highest spenders among all markets, contributing about 70 per cent of total visitor spending,” said Tien. On average, spending by “overnight” visitors increased by 6.1 per cent per person in 2009 over 2008, while spending by “same-day in-town” visitors increased by 20 per cent per person. Most of the spending of overnight and same-day visitors was on shopping - with total spending on shopping increased by 17.3 per cent in 2009, the HKTB figures showed.

Hong Kong’s exports jumped 32.1 per cent in March, official data showed on Tuesday, as shipments returned to pre-financial crisis levels due to a strong rebound in regional trade.

Hong Kong, under pressure to fall in line with international standards to combat money laundering and terrorism financing, is planning controls on cross-border currency movements that would require travellers to declare cash over a set amount. The threshold would be set with reference to controls elsewhere, such as the US$10,000 (HK$78,000) set by the US, but a public consultation would be held before the amount was decided, a senior government official familiar with the proposal said. Hong Kong has no foreign currency controls or restrictions and mainland travellers are known to bring large sums to make investments and buy luxury goods, despite a ceiling on the amount they are allowed to take in and out of the mainland. The travel industry warned that controls could damage the city's reputation as a free port. The Financial Action Task Force (FATF), the international body promoting currency control policies, pointed the finger at Hong Kong in 2008 over its lack of a system to detect or seize cash or financial instruments related to money laundering.

New mortgage loans drawn down in March soared 60.3 percent month-on- month to hit a 13-year high of HK$27.4 billion. New loans approved surged 38.7 percent to HK$36.9 billion, the Hong Kong Monetary Authority said, partly as approvals for primary market transactions and refinancing loans more than doubled. But "second-quarter home transactions are expected to fall and mortgage loans will be affected," said Centaline Mortgage Broker managing director Ivy Wong Mei-fung, following government moves to cool the property market and improve show flats. However, Sharmaine Lau Yuen- yuen, chief economist at brokerage mRefferal, believes inflationary pressure has brought de facto negative interest rates, which will sustain new mortgage loans this month. The proportion of new mortgage loans based on interbank best lending rates gained 12.2 percentage points to a new high of 76.5 percent, according to the monetary authority. Wong attributed the increase to the Hongkong and Shanghai Banking Corp's introduction of a one-month HIBOR plus 0.65 percent plan in February. The mortgage delinquency remained at 0.03 percent, but Financial Secretary John Tsang Chun-wah reiterated that a 3 percentage point increase in rates will raise mortgage burdens by 30 percent. Tsang said the property upside has eased as home prices gained 1.1 percent in each of the past two months, down from 2.5 percent in January, but he also warned of the risk of a bubble resulting from a short-term home shortage and hot money influx. Realtors said many recent secondary transactions were completed after buyers lowered their asking prices. A penthouse in Mei Foo Sun Chuen has just been sold for HK$2.48 million, or HK$4,276 per square foot, after the owner asked for HK$200,000 less, according to Midland Realty. But Ricacorp Properties' statistics show that transaction prices at 50 major residential projects were up 0.5 percent last week, despite a 25 percent drop in total deals to 377.

Concert collects HK$37m for Qinghai victims - More than 300 singers and artists yesterday took part in a five-hour charity concert to raise funds for the victims of the Qinghai earthquake. Jacky Chan and Andy Lau Tak-wah were among the entertainers from Hong Kong, the mainland and Taiwan who performed at the Artistes 414 Fund-Raising Campaign at Hong Kong Coliseum. By midnight, when the show had finished, donations had reached about HK$37 million, with HK$10 million coming from media mogul Sir Run Run Shaw. Other donations, including those from the audience, had yet to be counted. The show started at 6pm was broadcast live on radio and television. Mainland website also carried the event. Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan and Secretary for Home Affairs Tsang Tak-sing led a minute of silence before the concert started. Other performers included Jacky Cheung Hok-yau, Alan Tam Wing-lun, Kay Tse On-kay and Eason Chan Yik-shun. Entrants to the 6,000-seat venue had to donate at least HK$100 each to watch the show. Jacky Chan, who took 15 tonnes of materials to Qinghai days after the quake, said he was sorrowful when he met the survivors. Sammi Cheng Sau-man and Nick Cheung Ka-fai also visited victims. The concert honoured Hong Kong volunteer Wong Fuk-wing, who died while trying to rescue victims in an orphanage.

Be more Chinese and more global to compete, HK told - Our government departments aren't a patch on Shanghai's or Beijing's, both cities have a better living environment than us and we're not as good at innovating ... but Hong Kong is, for the fifth year in a row, the nation's most competitive city. The lead is narrowing, though, and to stay ahead of the other 293 Chinese cities, Hong Kong should become more of a world city - and integrate more with the mainland - says the state researcher in charge of compiling the national competitiveness index. Specifically, Ni Pengfei says we need to focus more on the higher end of the global financial services market and that the government should put more emphasis on science and technology. "Hong Kong's competitiveness and ability to research in science and technology is still very strong, but ... Hong Kong is not necessarily stronger than the mainland," Ni said. Beijing was on track to surpass Hong Kong in this field, the report, the Blue Book of Urban Competitiveness, by the Chinese Academy of Social Sciences said. Ni had words of warning for the city, too. Shenzhen might not need to rely on Hong Kong to export its products given its rapid development in recent years. The border city came second in the survey, followed by Shanghai, Beijing, Taipei and Guangzhou. The order was unchanged from last year. The report ranks cities by criteria including economic scale, development costs, industrial structure, talent and the living and business environments. Hong Kong has the highest incomes, the best talent, the best business environment and the biggest economy, it says. However, its advantage over Shanghai in terms of economic scale has narrowed because the coastal city has developed more rapidly than Hong Kong. Shanghai's gross domestic product exceeded that of Hong Kong for the first time last year, growing 8.2 per cent year on year to 1.49 trillion yuan (HK$1.69 trillion), compared to HK$1.61 trillion for Hong Kong. The city, which aspires to be an international financial centre, has already seen its stock market surpass Hong Kong's and its port overtake Hong Kong's to become China's biggest. Responding to the report's findings, a government spokesman said that since the economic structure in the Pearl River Delta region had been evolving rapidly, Hong Kong had been striving to enhance its co-operation with the mainland so that they could complement each other. "We are facing global competition although Hong Kong ranked top in China. We must improve our competitiveness at all times and move towards a high-value-added, knowledge economy to maintain our advantage, as well as creating more quality jobs," he said. The spokesman noted that even though Shanghai was rated higher than Hong Kong for innovation and the competitiveness of its enterprises, Hong Kong was still No.1 overall among 294 Chinese cities.

Major theme parks in Asia were hit harder by the financial downturn than their counterparts in America and Europe. A global survey found that total attendance in Asia dropped 3.5 per cent to 65.5 million last year, compared to a 1.3 per cent fall in the Americas and no change in Europe. Like most leisure travel, theme park holidays are discretionary purchases that consumers are likely to cut back on in lean times. In Asia, the economic downturn and fears about the spread of human swine flu led many visitors, including mainlanders, to stay home last year, hurting the attendance of every major theme park in the region except Hong Kong Disneyland and Lotte World in Seoul, according to data compiled by the Themed Entertainment Association and the consultancy, AECOM Economics. Hong Kong Disneyland recorded attendance growth of about 2 per cent to some 4.6 million last year, making it the 16th most visited theme park in the world, up two places. Local rival Ocean Park suffered a 4.6 per cent drop but still managed to attract 4.8 million visitors, ranking it number 14 in the world, up one spot from the previous year's list. Both parks are embarking on ambitious expansion plans to add more attractions, a move they say is essential to boosting attendance and the bottom line. Disney's Magic Kingdom in Florida again topped the rankings. Worldwide, Disney parks dominated the top eight spots on the list with Universal Studios Japan coming in at number nine with 8 million visitors, down 3.6 per cent. The theme park that enjoyed the biggest improvement last year was De Efteling in the Netherlands, up one-quarter to 4 million visitors. Islands of Adventure at Universal Orlando in Florida saw the biggest drop, with attendance down 13.8 per cent to 4.5 million visitors. The figures in the report are based on the calendar year. Ocean Park's financial year ends on June 30 while Hong Kong Disneyland's ends on September 30. AECOM uses various sources for its numbers. "Most operators in Asia were cautiously optimistic for the 2009 season, and that caution was justified. The season turned out to be challenging due to the global financial crisis, outbreak of H1N1 and poor weather conditions in some markets in Asia," Christian Aaen, AECOM's regional director in Asia, said. "Still, new parks opened in China and key markets in Asia have a significant development pipeline compared to anywhere else in the world." The opening of Universal Studios Singapore this year marked the beginning of a decade in which Asia would dominate in terms of growth for the industry, he said.

Asian universities racing to top, scholar says - Asia will produce several world-class universities to rival Harvard and Cambridge within 20 years, including up to three in Hong Kong, the chairman of the Research Grants Council has said. Asian universities will rise to the top rank in a fraction of the time leading institutions in the United States built global reputations, Professor Roland Chin Tai-hong told an international media conference at the University of Hong Kong yesterday. "A new centre of excellence in higher education will emerge in Asia," he said. "It took new universities like Stanford and the University of Chicago half a century to get to the stage of being world class. "But perhaps in a decade or two we will see world-class universities like Stanford and Berkeley emerge in Asia. I hope Hong Kong has a few - one, two or three. I think [mainland] China will have more. Japan and Korea will have some and India will definitely have some." Chin said Asia's new elite universities would not supplant top ranking Western institutions such as Harvard and Cambridge but would stand alongside them, attracting academics and students from around the globe. "This development will relate importantly to the geopolitical situation, the environment and the economy," he said. "Higher education could be a tool or vehicle for training, leadership and innovation." Chin said Hong Kong's higher education system was "quite well funded" compared to the rest of the world, accounting for a quarter of government expenditure on education, which in turn made up a quarter of all public spending. "Government funding of research is not enough, but we can't just depend on government resources," he said. "The private sector has to generate the extra resources." The announcement of a fifth matching grant scheme would help generate further private finance for universities, while the government's HK$18 billion research endowment fund had provided HK$900 million for research this year - 50 per cent more than research grants last year. "Hong Kong universities will have to work hard to be in the world-class league in Asia," Chin said. "Internationalisation is a key part of it. We have to let the world know that we have some great universities and you can come here and we will help you to become a world leader." However, Chin said he did not favour the approach of inviting foreign universities to set up campuses. "Singapore is trying to get brand names from abroad," he said. "They brought Johns Hopkins University, Massachusetts Institute of Technology and [leading French business school] INSEAD. "In Hong Kong, we don't buy brand names, we grow our own, such as the University of Hong Kong. And Hong Kong University of Science and Technology is very new but it has a good name."

3 days in Thailand, HK$29,000 in roaming fees - Anthony Lam displayes his phone bill from 3 Hong Kong. When Anthony Lam Yue-yeung landed in Bangkok last September bound for what he expected to be a pleasant three-day holiday on the resort island of Koh Samui, he switched on his iPhone. Like mobile phones everywhere it was swiftly flooded with welcome text messages offering roaming discounts and other services. Lam selected an unlimited data roaming service offered by his provider, 3 Hong Kong, at a rate of HK$138 per 24 hours, confirmed and activated it, and proceeded to browse the internet from his phone as he usually does. But Lam, a host for online radio station Hong Kong People Reporter, had a rude shock when he got his bill a month later. Despite the discount rate he had selected, the bill included HK$29,026 for "additional roaming charges" during the three days he had spent on the island. The catch was that the discount applied only to True Move, a partner network of 3 Hong Kong, and during his travels his phone had connected to different networks depending on his location. He and 3 Hong Kong are now in a deadlock, with him refusing to pay and the company demanding that he do so, and cutting off his service every few days to force him to pay. "They told me the discount was only available in specific partnership networks and a standard rate applied when I roamed onto other networks," Lam said. "It is ridiculous. How am I supposed to know which network is their partner? And I wonder who will notice which network is in use when we are roaming overseas." But 3 Hong Kong insists the bill is justified. "The welcome SMS clearly states that customer can enjoy data roaming service at a daily charge while roaming on True Move, as well as the subscription details," a spokeswoman said. "Mr Lam responded ... and subscribed to the service." Record showed that Lam had roamed onto other operators' networks with which standard charges applied, she said. Lam said he was preparing to file complaints with the Consumer Council and the "telecoms watchdog Ofta". The service operator said it would contact Lam this week in an effort to resolve the case. The Consumer Council has received 134 complaints regarding mobile operators' GPRS charges in the first three months of this year. A spokeswoman said the council had received several complaints on similar cases, and strongly advised the customers to check with their local operators before departure about the tariffs on roaming services. "If consumers are to use overseas operators' economical plan for data roaming, they should change the network setting from auto-connect to manual connect," she said.

TVB and ATV will air four matches live and screen highlights from soccer's World Cup, which starts on June 11 - but only on their digital channels.

Labor unions across the political spectrum have called for an hourly rate of HK$33 to HK$35 as the city's first minimum wage level. Some 270 representatives from about 180 unions met in Wan Chai last night over the hotly debated issue. Some of the unions belong to the pro- democracy Confederation of Trade Unions, the pro-government Federation of Trade Unions, and the Federation of Hong Kong and Kowloon Labor Unions. Li Fung-ying, a lawmaker from the Federation of Hong Kong and Kowloon Labor Unions, said those at the meeting agreed that the minimum wage level should be set at between HK$33 and HK$35 an hour. She said the unions are now polling their members on their views. The unions also want the authorities to better define the role of the government in the proposed panel to review the minimum wage level on a routine basis after the related law comes into effect, Li said. She said the panel should also include some members of the Labor Advisory Board, a non-statutory body which advises the government on labor affairs. Li said some participants at the meeting expressed hope that the minimum wage law will also protect foreign domestic helpers. She did not rule out meeting with the Labor and Welfare Bureau officials on the issue. The unions did not discuss the bottom line of negotiations with the government in last night's meeting, Li said. FTU chairman Ng Chau-pei also raised doubts over the government's role in the minimum wage review panel. He too expressed hope that some Labor Advisory Board members would be on it. The government hopes the main bill of the minimum wage law can be enacted before the the Legislative Council breaks for summer around mid-July. The Provisional Minimum Wage Commission is tasked with advising the chief executive on the city's first minimum wage level. It is collecting opinions from various groups. The deadline for submitting views is Monday. Earlier, catering-sector legislator Tommy Cheung Yu-yan said his sector will only accept a minimum wage level that is not over HK$24 an hour. Cheung, who is also a member of the pro-business Liberal Party, had previously suggested a rate of HK$20 an hour, leading to much criticism. He was forced to apologize after a public outcry. The Liberal Party also suggested the level be set at HK$24 an hour.

 China*: Bank of China, the country’s third-biggest lender, posted on Tuesday a 41.2 per cent rise in first-quarter profit on healthy new lending boosted by a strong economic recovery.

Bayer plans big push into booming Chinese market - German drug and chemical maker Bayer plans to roll out 20 products in China as it expects mainland’s medical market to grow nearly 10-fold over the next decade.

Persistent attempts by China's famed Shaolin temple to stamp its trademark on instant noodles and coffee may have hit a brick wall after a court ruled against the move.

Mainland will have to resume movement of its yuan exchange rate to manage a convergence of strong economic growth, exports and inflation in the second quarter, an economist said.

Internet portal forecast a return to year-on-year growth in the second quarter, as it posted a first-quarter fall in profit that was in line with expectation. said it will offer e-payment services on its new online commerce platform from eBay’s PayPal, in the first such tie-up between the former arch-rivals.

Mainland’s key stock index fell 2.1 per cent on Tuesday to its lowest close in six and a half months, with banking stocks active as worries mounted over their fund-raising.

Top US officials study in China for first time - Washington has sent 17 senior officials to an elite Chinese university on a training program, the first of its kind, intended to help the US government learn more about China. The organiser of the week-long program at Tsinghua University, which has been in preparation for two years, said it was designed to bridge the gaps in understanding between two countries whose diplomatic relationship has become one of the most important in the world. The participants in the US-China Government Executive Global Leadership Course, which ended on Friday, attended lectures and round-table discussions with leading academics who have been involved in government decision-making. The officials included executives and heads of 12 US government departments and organizations - among them the departments of homeland security and commerce, the National Aeronautics and Space Administration and the Federal Executive Institute. While China has sent batches of officials to the US for similar courses since the 1990s, this was the first time the training had gone in the other direction, said Professor Sun Zhe, the program's planner and director of the Centre for US-China Relations at the university in the capital. "The US government has begun to attach importance to China in its training for officials in recent years," Sun said. He said the program was first conceived to correct the imbalance of educational exchanges between the two governments. "China has sent so many officials to learn about the US, and finally there is a course to let the American officials to learn about China," he said. The US has been the favored destination for China's training programs about Western powers. Hand-picked officials are sent to top institutions such as the Harvard Kennedy School and Georgetown University to learn the ropes. Sun said another program would be scheduled around the same time next year. "We hope to make this an ongoing program, but it takes a lot of effort and time to prepare, so we don't know what will happen after next year," he said. To avoid the impression the intent was brainwashing, Sun said the course was designed to allow candid discussions between the officials and the scholars. "There were different opinions on some issues, such as China's rising economic clout in the region," he said. "But the students and the teachers had the opportunity to express themselves freely without having to arrive at a conclusion. This helped to narrow the gaps." Rear Admiral Yang Yi, former head of strategic studies at the National Defense University under the People's Liberation Army, told the class that the US military was the greatest perceived threat to the PLA, state media said. Other issues touched on in the program included China's political system, military strategies and energy policies. Sun said efforts were made to have speakers who were fluent in English to allow discussions with the students. An official with the US Department of Health and Human Services, who spoke on condition of anonymity, said he had gained a lot of understanding of the broader structure of the Chinese government and how things work in the country through the program. "We covered a broad regime of topics," he said. "We talked about 1989, Taiwan, Tibet, energy policy, military, everything you can imagine that would normally be difficult to have discussions about between the two governments. We were able to have very open discussions. "It's a very good venue to have these kinds of discussions, because normally when the governments come together there is not really discussion. So I think it has been very helpful." The US officials, many of whom were visiting China for the first time, were also taken to tourist spots such as the Great Wall and shopping areas during their stay. They also visited the Foreign Ministry and had a round- table discussion with mainland journalists.

China is a facing a severe shortage of iron ore, which is likely to lead to higher prices and force some steel mills to stop production. "A massive shortage of iron ore supply has developed in China because domestic supply has not been able to keep up with demand," said Jim Lennon, senior commodities strategist with Macquarie, speaking in Hong Kong yesterday. "Prices are moving back up to their bull market highs of 2008." Iron ore spot market prices have leaped from US$60 a ton at the beginning of last year to around US$180 a ton. They have risen sharply this year on the back of a massive increase in steel production which has been driven by strong economic growth boosted by the 4 trillion yuan (HK$4.55 trillion) stimulus package introduced in December 2008 and the increase in money supply. Chinese steel production was running at an annualized rate of 425 million tons a year in October 2008 but in February production had increased to an annualized rate of 656 million tons. This required an additional 350 million tons of iron ore which meant that seaborne iron ore trade increased last year despite the biggest downturn in non- Chinese production since 1946. Iron ore prices used to be settled annually but recently shifted to a quarterly basis so as to better reflect spot market prices. The move was accompanied by increases of more than 90 per cent and has upset steelmakers around the world. The move has not gone down well in China, where the authorities have accused the big three producers of acting as a monopoly. Lennon said that when iron ore prices dropped in 2008 and early last year as a result of the global financial crisis, many of China's high-cost domestic ore producers stopped production since they needed at least US$85 a ton to remain profitable. Since then, ore grades have declined and domestic producers are thought to need prices of US$120 and in some cases US$150 to achieve profitability. As a result, when prices rose this year they were not able to ramp up production fast enough. At the same time the global production of steel has picked up sharply and the big iron ore producers of Vale, BHP Billiton and Rio Tinto have reduced exports to China and reverted to their traditional customers in Europe, Japan and South Korea. So, while ore imports into China were 30 million tons lower in the first quarter of the year than in the third quarter of 2009, steel production has continued to accelerate, Lennon said. "You've got fewer imports of ore but 120 million tonnes more of demand," he said. While Australian producers were going flat out, Brazil's Vale was down some 50 million tones on annualized rate because of serious production problems. Supply might ease over the next six months as Vale may solve its technical problems while BHP is expected to increase production. Lennon said there needed to be a slowdown in steel production to enable the iron ore market to rebalance. "But if there is no slowdown in steel production due to demand, there may well have to be a slowdown in steel production driven by the shortage of iron ore. That is, a shortage of iron ore may force some steel makers to stop production," he said. Lennon added that he had already heard of some steel makers having to shut down blast furnaces because they could not get iron ore. He said there was a chance that if the Chinese government's recent measures to cool the property market took effect, steel demand might ease. "But over the next two years we don't see enough iron ore supply globally to really change the situation significantly," he said.

Sarkozy to mend ties on second China visit - French President Nicolas Sarkozy will leave for China tomorrow for a visit intended to set the seal on a reconciliation, two years after he offended Beijing with comments on Tibet.

Yanzhou Coal Mining (SEHK: 1171) aims to more than double its annual output to 100 million tons by 2015, vice-chairman Li Weimin says. Yanzhou Coal aims to sell 43.55 million tons of coal this year, up from 38 million tons last year, which would surpass the 40 million ton mark for the first time in seven years and reach the highest level since the company floated on the Hong Kong bourse in 1997. After its output fell in 2004 and 2005 to as low as 32.5 million tons, Yanzhou Coal struggled to lift production owing to difficulties in land requisition and village resettlement in its densely populated home province of Shandong. However, the company has had a shot in the arm since completing the A$3.3 billion (HK$23.8 billion) purchase of Australian coal producer Felix Resources late last year. Felix's net output target is 13.5 million tons in 2015, from 7.35 million this year. It has 302.7 million tons of proved and probable reserves, against Yanzhou Coal's 1.83 billion tons at the end of last year. Holding a 15.4 per cent stake in the third coal export terminal in Newcastle, New South Wales, the world's largest coal exporting port, Felix will help Yanzhou Coal obtain much-needed export quota at the capacity-constrained port to expand sales at its Austar mine in the state. Chief financial officer Wu Yuxiang said upon completion of the second phase expansion of the port in 2012, Austar would be able to lift annual sales to 2.5 million tons from 1.63 million tons last year. Li said Yanzhou Coal "must consider" further acquisition opportunities in Australia by tapping into Felix's resources but added that reserves from existing mining projects are sufficient to meet Yanzhou Coal's 100 million tonne output target. Yanzhou Coal's domestic projects include the Yushuwan mine in Shaanxi province, which has a planned annual capacity of 20 million tons in five years, and the Wanfu mine in Shandong province, with a capacity of 1.8 million tons in five years. Yanzhou Coal is embroiled in a six-year-old shareholding wrangle and valuation arguments over the development of Yushuwan, where it was supposed to take a 41 per cent stake. Its partners include Thai-Chinese conglomerate Chia Tai Group and the local government, but a final investment has not been reached. In Ordos, Inner Mongolia, Yanzhou Coal completed this month the acquisition of a coal-to-methanol production project for 190 million yuan (HK$216 million). Construction of the 3.4 billion yuan plant started last month and is slated for completion in 2012. The firm posted a 36.6 per cent year-on-year fall in net profit to 4.1 billion yuan for 2009, but this year's first-quarter earnings jumped 191 per cent to 2.1 billion yuan on higher volume and prices. Li expected this year's domestic coal price to be higher than last year, with contracts signed so far commanding a 17.6 per cent price rise, while its Australian unit's sales price averaged US$131 a tonne in this year's second quarter, up a third from last year's average of US$98. Shares in Yanzhou Coal added 7.2 per cent yesterday to HK$19.42 in a market that rose 1.6 per cent.

Xiang'an Tunnel, China's first undersea tunnel linking Xiamen Island and the mainland in Fujian Province was put into traffic on April 26, 2010. The undersea tunnel has a length of 8.7 kilometers.

April 28, 2010

Hong Kong*: Hong Kong's economy was recovering well and would enjoy economic growth of over four per cent this year, Financial Secretary John Tsang Chun-wah said on Monday.

SHKP brings high-end brands to Pudong - From raw land 10 years ago, growth area given makeover for luxury-goods shoppers - Sun Hung Kai Properties (SEHK: 0016) is about to change the retail landscape of Shanghai's Pudong district by showcasing 25 world class brands in its soon-to-be-opened luxury shopping centre. Retailers such as Louis Vuitton, Chanel, Hermes, Gucci, Prada, Cartier and Salvatore Ferragamo will start opening their flagship stores at Shanghai IFC Mall from Wednesday, said Maureen Fung Sau-yim, a general manager of Sun Hung Kai Properties' leasing department. Fung said nearly all the retail space in the 1 million square foot phase one at the shopping centre in Lujiazui had been leased. The international brands will take up the ground level of 161,400 sqft, with the remaining 155 tenants occupying the other five levels. The leasing of the 100,000 sqft in phase two would be finalized next year, she said. "It is a major breakthrough for Pudong, which has not seen any high-end retailers for the past 10 years," said Albert Lau, the managing director of property consultant Savills Shanghai. Up to now Pudong has had only a Yaohan Department Store and the Super Brand Mall catering to the mass and middle markets. However, since residential prices in Lujiazui, in the heart of Pudong, have risen to as much as 160,000 yuan (HK$181,900) per square metre, he believed there was a demand for high-end retailers. "As luxury residential projects have been built along the Huangpu River in Lujiazui, the catchment area has changed dramatically from raw land 10 years ago," Lau said. "More importantly, the international brands' commitment to Pudong is a big thumbs-up for the area." Fung said some of the international brands which were focused in Puxi were reluctant to extend their reach to Pudong when the firm approached them six years ago. "But the rapid economic growth and infrastructure development in Pudong to host the World Expo has helped speed up the maturity of the luxury retail market," she said. A Bain & Co report said the mainland's luxury goods market rose 12 per cent last year, reaching US$9.6 billion and accounting for 27.5 per cent of the global market. It estimated that in the next five years the mainland would become the world's biggest luxury goods market with sales reaching US$14.6 billion. With the Lujiazui metro station located in the basement of the IFC Mall, Fung said the trip from Puxi, the city's traditional core business district, would take only 15 minutes. Of the 180 tenants that have committed to take space in the shopping centre, 15 per cent would be making their first appearance on the mainland, while 40 per cent would be opening their first store in Shanghai. The IFC Mall is part of a development comprising 4 million square feet of grade A offices in two towers, a five-star 276-room Ritz-Carlton Hotel, and 260 serviced apartments. It is also SHKP's first wholly owned development on the mainland. HSBC (SEHK: 0005) occupies 22 floors of the 45-storey Tower One. The Ritz-Carlton Hotel, due to open next month, occupies the top 15 floors of Tower One. Fung refused to disclose the rents but said overall rents for prime luxury space were US$10 to US$15 per square metre per day in Shanghai. Lee Hing-yin, a director of Colliers International's research and advisory department, said high-end retailers would not withdraw from Puxi, but Pudong would provide an alternative for international brands.

Chief Executive Donald Tsang Yam-kuen on Monday urged Hong Kong's legislators to try to find common ground over the government’s latest political reform package.

Swire Properties, a property arm of conglomerate Swire Pacific (SEHK: 0019) plans to raise up to US$2.7 billion from a Hong Kong initial public offering, two sources close to the deal said late on Sunday. Hong Kong-based Swire Properties, one of the leading property companies in Asia, is selling 907 million shares, or 13.8 per cent of its enlarged share capital, at a price range indicated between HK$20.75 and HK$22.90 per share, the sources said. Swire Properties’ spokesman declined to comment. The sources have direct knowledge of the offering but are not authorized to speak on the record about the deal. Swire Properties’ offering price represents multiple of about 9.5 to 18 per cent discount to estimated net asset value (NAV), one of the sources said. By comparison, Singapore-listed Hong Kong Land trades about 14 per cent discount to forward NAV while Great Eagle (SEHK: 0041) trades at about 35 per cent discount to forward NAV, according a Morgan Stanley report. Swire Properties, which was formed in 1972, was involved in one of Hong Kong’s largest redevelopment projects, transforming the territory’s Taikoo dockyards and sugar refinery into the 12,000 unit Taikoo Shing project in the 1970s. Swire Properties comprises three main businesses, including property investment, property trading and investment and operation of hotels. Property investment accounted for 90 per cent of the company’s total turnover last year. Morgan Stanley expects the company to increase underlying profit by 12.7 per cent to HK$4.31 billion this year, with a further 7 per cent rise to HK$4.6 billion next year. Swire Properties, which kicks off its formal marketing roadshow on Monday, issued a statement to the Hong Kong stock exchange on Sunday confirming the price range, but without mentioning the number of shares it plans to issue under the global offering. Goldman Sachs, HSBC (SEHK: 0005) and Morgan Stanley are underwriting the Swire Properties deal.

More than 1,000 young job seekers flocked to the International Commerce Centre (ICC) yesterday in the hope of landing a "high level" job at the city's tallest building. The one-day recruitment exercise sought to fill just eight "ambassador" posts, whose main role will be receiving guests and visitors at the observation deck on the 100th floor of the West Kowloon building when it opens in the fourth quarter next year. At 393 metres above sea level, it will be the highest observation deck in Hong Kong. Some applicants said the job, with a starting salary of HK$10,000, was "too good to be missed" and arrived at 7am, four hours before application forms were to be distributed. Ho Yiu-kun, a finance student who graduated last year, said he was desperate to find a job after months of looking. "I understand the market needs experienced talent. We 'greenhorns' may have to adapt to the market environment," Ho said when asked why he did not try for a job in finance. Cheung Ka-yiu said it was a dream job for someone just out of college. "Even if I cannot get the job, I hope I can take the chance to brush up my job interview skills," he said. An observation deck spokeswoman said they were pleased with the response. The city's unemployment rate dropped to 4.4 per cent in the first quarter this year, down from 4.6 per cent in the three months to February. Improvements were mainly seen in the insurance, arts, entertainment, recreation, and information and communications sectors. But the jobless rate for those aged between 20 and 29 was 5.6 per cent for the first quarter, a slight increase from 5.5 per cent for December to February. About 400 protesters from three labour groups staged a rally outside the government headquarters in Central yesterday, demanding the proposed minimum wage be set at up to HK$35 an hour. The Provisional Minimum Wage Commission is taking public views until next Monday and is expected to make a recommendation in July.

Contacts between Taiwan and Hong Kong have entered a new era now that the two sides have created semi-official bodies to negotiate with each other, Taiwan's top cultural ambassador to Hong Kong says.

Troubled fung shui master Tony Chan Chun-chuen could face criminal charges of tax evasion - even if he settles the HK$340 million he owes in outstanding profits tax, experts say. Veteran certified public accountant Patrick Wong Lung-tak, who specializes in taxation, explained the demand for tax payment filed with the court by the Inland Revenue Department last Saturday for unpaid profit taxes was a civil proceeding to get Chan to settle the tax bill. The writ claims Chan owes profit taxes of HK$115.6 million for the 2005-06 financial year and HK$231.2 million for 2006-07. Wong said unless a taxpayer can persuade the judge that the department has made an over assessment or that the money involved is not income or remuneration for any services, the taxpayer will have to settle the amount. Wong refused to comment directly on Chan's case but he said: "An income from any fung shui services or massage fees or any services provided by a taxpayer is subject to taxes. "Maybe a taxpayer needs to persuade the judge that the amount in dispute is a `present of love,"' Wong said. "The worst consequence for a civil proceeding is bankruptcy if a defendant refuses to settle the payment in dispute." The department can still press criminal charges of tax evasion even if a taxpayer is willing to settle the tax. It can also do so after the taxpayer has gone bankrupt, according to both Wong and lawmaker Paul Chan Mo-po. Under the Inland Revenue Ordinance, the maximum penalty for tax evasion is three-years' imprisonment. It also carries a maximum fine of three times the tax undercharged as a result of the tax evasion. But both Paul Chan and Wong agree the government would need strong evidence before it could bring tax evasion charges. Wong said even if Tony Chan has appealed the court's decision in the will battle against Chinachem Charitable Foundation which he lost in February, it is completely independent of the tax dispute. Paul Chan said it is not unusual for the department to file a writ against taxpayers. Tony Chan's assistant yesterday said Chan had no comment on the matter.

 China*: The World Bank recognized China's growing influence and agreed to elevate Beijing's voting power to behind only the US and Japan in the 186-nation lending organization.

Robert Zoellick, president of the World Bank, left, and Dominique Strauss-Kahn, International Monetary Fund managing director, talk at the start of the Development Committee meeting at the World Bank headquarters in Washington overnight on Sunday. The World Bank recognised China’s growing economic influence and agreed on Sunday to elevate Beijing's voting power to behind only the US and Japan in the 186-nation lending organisation. Lifting mainland above a number of western powers, including Germany, France and Britain, also gives other nations with emerging economies more voice and say in how the bank operates and lends money. Bank members also decided to increase the institution’s capital by US$3.5 billion; it was the first increase in more than 20 years. Mainland’s stake at the bank, in terms of voting power, climbs from 2.78 per cent to 4.42 per cent. The US, the world’s largest economy, remains No 1 spot at 15.85 per cent, effectively giving it veto power, followed by Japan at 6.84 per cent. Finance Minister Xie Xuren welcomed the shift, saying the change “represents an important step towards equitable voting power between developing and developed members”, according to Xinhua News Agency. Countries such as mainland, Brazil, India and Russia long have complained about the dominance of the United States and European nations in the bank’s decisions. Under an informal agreement dating to the end of second world war, an American is president of the bank and a European leads its sister institution, the International Monetary Fund. Robert Zoellick, the bank’s president, said at a news conference that the shift in voting power “recognises that we need to consign outdated concepts like ‘Third World’ to history. Today the world is moving toward a new, fast evolving multipolar economy.” Speaking after a meeting of the bank’s policy-setting Development Committee, Zoellick said countries with emerging economies are critical sources of demand in the global economic recovery under way and over time “can become multiple poles of growth”. But Oxfam, a development advocacy group, said the World Bank broke a promise made at its meeting last year in Turkey to protect the voice of the poorest countries. “Of 47 countries in sub-Saharan Africa,” said Caroline Hooper-Box, an Oxfam spokeswoman, “more than a third have lost share, stayed the same and one [Sudan] has gained”. However, World Bank spokesman David Theis said that was a misleading statement because it did not give the bank credit for voting reforms it had already made in 2008, which had increased African shares. The voting changes announced on Sunday built on the 2008 reforms. Zoellick said the capital increase “means that we will no longer face the possibility that we would have to cut back our lending later this year”. He said the bank has provided US$105 billion in financial support to its members since the financial crisis began to bite in July 2008. Treasury Secretary Timothy Geithner said the bank “made a strong and compelling case” for the capital increase and said he would seek approval of the US share – about US$117 million each year over five years – from Congress.

German carmaker Volkswagen will build two new plants in mainland as part of a €1.6 billion expansion plan to capture growth in the world’s most dynamic auto market.

French President Nicolas Sarkozy sets off to China on Wednesday for a visit intended to set the seal on a reconciliation, two years after he offended Beijing with comments on Tibet. The state visit, Sarkozy’s second to China, will have a political rather than a commercial focus and will include talks on possible new sanctions on Iran over its nuclear programme, the French presidency said. Sarkozy will be accompanied by his wife, Carla Bruni-Sarkozy, and will find time during the three-day visit for some private sightseeing in the ancient city of Xian, a former imperial capital. He will meet President Hu Jintao and chief legislator Wu Bangguo in Beijing before travelling to Shanghai on Friday for the opening of the Shanghai World Expo, a huge multinational cultural exhibition. “China attaches a great importance” to Sarkozy’s visit, said a source in Beijing. A source in Paris added that “this year will be an exceptional year for Franco-Chinese ties,” with “a return to unclouded relations”. The French president’s first state visit to China was in November 2007, six months after his election.

Hongkongers are piling into the yuan on hopes that the value of the currency will rise. Customers at city banks have switched their Hong Kong deposits into yuan deposits, mirroring a shift by large equity fund managers into stocks likely to benefit from such a trend. Hong Kong dollar deposits converted into yuan in February amounted to 2.57 billion yuan (HK$2.92 billion), according to data from the Hong Kong Monetary Authority, double the 1.26 billion yuan converted in February last year. Total deposits stood at 66.09 billion yuan at the end of February, up 22.46 per cent from February last year.

China is likely to stake out a position between the big nuclear states and the non-nuclear-armed countries at an international conference next month, a think-tank said on Monday.

Taiwanese President Ma Ying-jeou has decided to head a government-level free-trade agreement task force to show his determination to keep the island from being economically marginalised. "I have decided to take the rein of the free-trade agreement task force because I want to upgrade its structure and level," Ma announced during a televised debate yesterday. The 134-minute debate with Dr Tsai Ing-wen, chairwoman of the pro-independence Democratic Progressive Party - the first between a president and an opposition party leader - saw the two arguing heatedly over whether Taiwan should sign a semi-free trade agreement with the mainland. Ma and his government hope to strike the Economic Co-operation Framework Agreement (Ecfa) with the mainland as soon as June. But the DPP fears the deal could lead to political integration in the future. "The DPP has repeatedly claimed that Ecfa is a sugar-coated poison and boycotted such a deal," Ma said. "Taiwan is bound to be marginalised if it continues to oppose the pact." Stressing there was no time to lose, Ma demanded the DPP's support in the efforts to sign Ecfa. He said the mainland had already formed a trade bloc with the Association of Southeast Asian Nations in January. "The Asean-plus-three is expected to be formed in five years, and we have no time to lose, as we will stand to become marginalised economically when such a trade bloc is formed," said Ma, referring to the proposed trade bloc expected to be formed by Asean, the mainland, South Korea and Japan in 2015. But Tsai criticised Ma for exaggerating the impact of Asean-plus-three, pointing out Japan and South Korea were cautious about signing such a deal. "They are concerned that it would make China the core of the East Asian economy and expand its economic power," she said. She said Ma should carefully weigh the possible harmful effects to Taiwan, including huge job losses and stiff competition from the mainland once the mainland shipped tariff-free products to the island. Referring to the DPP's fears that cross-strait economic integration would lead to political integration, the opposition leader also criticised Ma for trying to use the mainland as a stepping stone. But Ma said other countries would be more willing to sign free-trade deals with Taiwan once Taipei signed Ecfa with Beijing. Analysts said while the debate would help increase public awareness of Ecfa, it would do nothing to bridge the gap between the government and the opposition camp. "It might consolidate support from the grass-roots Kuomintang members for Ma Ying-jeou's efforts to sign Ecfa with the mainland, but it would never change the DPP's mindset in opposing it," said political commentator Huang Kuang-chin.

The mayor of a city in the northeastern province of Liaoning lost his job for ignoring hundreds of petitioners who got down on their knees to seek fair compensation over a government land grab. At a city government meeting on Saturday, Sun Ming was ordered to resign from his posts as Zhuanghe's mayor and its Communist Party deputy chief under the official accountability system, Xinhua reported yesterday. Zhuanghe is a city of about 900,000 people under Dalian. It is rare that principal officials are held accountable for mishandling petitioners. The only similar case was last December when Shi Guozhong , party chief of Niuquanzigou county, Hebei , was fired after a Net posting revealed he told an elderly petitioner to jump off a roof. The accountability system has been under fire for its ineffective enforcement. Its credibility was in doubt after a large number of disgraced officials were sacked but then quietly restored to new positions. Sun's sacking came after more than 1,000 petitioners demanded to meet the mayor over land compensation and corruption. Many had even got down on their knees for more than 30 minutes, but Sun refused to meet them, Xinhua said. Sun was later penalised for the negative impact caused by his mishandling of the petitioners. The Xiaoxiang Morning Post in Hunan quoted petitioner Sun Zhihong as saying the complaints were about embezzlement, corruption and negligence of officials on the local land reclamation project in the Longwang Temple village area in Lushunkou district. "More than 1,000 of us arrived at the city government headquarters to talk about official corruption problems in our village," Sun said. "We waited for a long time, but no leaders received us. There was nothing we could do but kneel down in front of the city government, but even then, the city's mayor did not step out of his office to address us." The People's Daily reported that an official said during Saturday's meeting that the seriousness of the incident would be a lesson for officials handling petitioners. The Dalian government was very concerned after the incident was revealed and told officials to process the petitions. As of Wednesday, at least half of the residents had agreed to compensation for the requisitioned land.

Mainland is likely to introduce a property tax on residential housing in the first half of the year as part of its attempts to curb real estate prices, state media reported.

US clinical research company Charles River Laboratories International said on Monday it had agreed to buy mainland’s WuXi PharmaTech for US$1.6 billion.

April 27, 2010

Hong Kong*: The privatization of Hutchison Telecommunications International (SEHK: 2332) is nearing the home stretch, with less than three weeks to go before shareholders put the HK$4.23 billion buyout bid of parent firm Hutchison Whampoa (SEHK: 0013) to the vote. "We don't see any major problems to this deal being approved," Macquarie Research analyst Lisa Soh said. "We believe the bid, at HK$2.20 a share, is an attractive way for shareholders to realise value from Hutchison Telecom, given the company's guidance for continued operating losses this year, increasing capital expenditure and no dividends." Hutchison Telecom, in which Hutchison Whampoa has a 60.4 per cent shareholding, saw its operating loss increase 155 per cent last year to HK$2.07 billion from HK$813 million in 2008 because of investments at its Asian emerging market operations. The operator has committed to expanding its mobile-telephone network services across Sri Lanka, Vietnam and Indonesia. Hutchison Whampoa in January offered to take Hutchison Telecom private through a cash buyout offer. Following listing rules, the two companies on Thursday evening jointly announced in a filing with the Hong Kong stock exchange the closure of registers of members from May 7 to 12. The register records the names and addresses of shareholders and the number and class of shares held by each. The latest time for shareholders to lodge any transfers of Hutchison Telecom shares to qualify for attending and voting at the operator's court meeting and the extraordinary general meeting is 4.30pm on May 6. If the buyout offer is approved, the expected last day for dealing in Hutchison Telecom's shares will be May 17. The company's delisting from the stock exchange is expected on May 25. Its share price rose 1.4 per cent to close at HK$2.16 yesterday. Soh said shareholders' approval for the privatisation is also expected to help finalise Hutchison Telecom's exit from Thailand. The operator is negotiating to sell its stake in Hutchison CAT to the state-owned CAT Telecom, its joint-venture partner. Hutchison Telecom has been divesting strategic assets over the past three years to maximise returns to shareholders. Those included the disposal of its entire stake in India's Hutchison Essar in May 2007, the spin-off of Hutchison Telecommunications Hong Kong Holdings in May last year and the sale of its controlling stake in Partner Communications, Israel's second-biggest operator.

When word is out that twenty-somethings have hit the streets, images of protesting young people come to mind. But for Jann Wong Chun-wing, 27, and Joyee Chan Ching-ki, 28, yesterday's call was about love. The pair tied the knot after a four-year courtship in the bustling Great George Street pedestrian area in Causeway Bay. Shoppers witnessed the city's first street wedding.

A suspected cousin of Hong Kong's soaring dragon logo has lived a less high-flying existence in Wales for the last few years before being quietly retired this month. Sport Wales, a unit of the Welsh Assembly Government, used a dragon logo until April 1 which closely resembles the icon for promoting Hong Kong. Designer Eric Cheung Kai-wa, who led the team that created the original flying dragon logo for Hong Kong in 2001, said the Welsh logo and his design looked remarkably similar. "Their overall graphical execution is much the same and the two logos are 80 per cent similar in structure," Cheung said. "The dragon heads are 90 per cent similar except for the Welsh version's greater emphasis on the tongue." European dragons appear to have longer tongues than Chinese dragons in many illustrations. Sport Wales, formerly known as Sports Council for Wales, declined to say when and how its dragon logo was created. Spokeswoman Jane Williams said they "no longer have that information" when asked who the designer was. She said Sport Wales launched a new logo on April 1, when the name "Sports Council for Wales" was phased out.

The market (top) and an impression of the Urban Renewal Authority's renovation. There are many easy things in life, but selling flowers, apparently, isn't one of them. Even in one of Hong Kong's most famous streets. For more than 30 years, Cheung Yuk-hing and his family have run a flower stall near Mong Kok's Flower Market Road, selling peonies, orange trees and other plants they grow in a New Territories orchard. The hours are long, profit margins low and the family faces a constant battle with hawker control officers who regularly fine them for putting their plants on the footpath. "We were the first to put our plants out in the streets, before there were so many other flower shops. Now everyone does it," said Cheung, who was fined several thousand dollars during the run-up to the Lunar New Year. Business in the flower market has been tough for years as competition between vendors has increased and rents have soared. Now its merchants have something else to worry about: an Urban Renewal Authority plan to renovate Flower Market Road and a row of pre-war apartment buildings on Prince Edward Road West.

Sunny Lai in one of his shops in the flower market.

Why bar staff may sniff at your credit card tips - Not only are unscrupulous bar and restaurant owners keeping the 10 per cent service charge rather than passing it on to their staff, in many establishments owners also use the tips that customers add to their credit card payments to pay commission fees charged by card companies. Credit card companies charge businesses a commission for accepting their cards. If a customer foots his bill using a credit card, the card company charges the establishment up to 4 per cent on the final bill. But instead of paying the 4 per cent out of their own pockets, some bar or restaurant owners pay it out of the service charges or tips that are supposed to go to staff. Toby Cooper, director of the Globe bar in Central, is a staunch advocate of leaving tipping at the customer's discretion and then sharing out the tips among staff. He condemned the act of paying credit card commissions with staff tips. "On every credit card the merchant pays between 2 and 4 per cent commission," he said. "But what a lot of companies do is that they take this 2 to 4 per cent commission out of the tips. Then whatever tips are left are divided among the staff. "Basically the credit card commission is not paid by the company - it also comes out of the staff's tips. It's a joke, but it's done here all the time - which is ludicrous." Some bars and restaurants in Central take 10 per cent of all the credit card tips and put it towards the Mandatory Provident Fund contributions they must make for staff. This is not illegal. Since the Sunday Morning Post (SEHK: 0583, announcements, news) 's report last week about the common practice of pocketing the service charge among upmarket bars and restaurants, restaurant activism has emerged. Ronald Pineda, manager of Al Dente in Wan Chai, is one who is determined to do something about it. "I've spoken to managers and staff in other restaurants and we feel it's time that our voice was heard," he said. "That all this is taking place is a disgrace and we are all really sick of it. All we want is to be treated fairly." Pineda said the salaries of many staff were very low and that they depended on the tips to get by. Some companies say they are struggling to make ends meet and have no option but to keep the charge, while successful businesses see it as a way of improving profits. "We intend to fight for our rights and bring this to the attention of the government," Pineda said. Cooper added: "There were plenty of issues with it in Britain, where employees got sacked because staff were telling customers not to leave tips on their credit card because they didn't get them. It's ... another way of owners not having to pay themselves."

The World Cup dream lives on after Hong Kong pulled off a sensational 32-8 victory over South Korea in one of the most slick performances seen by a local team in recent memory.

 China*: Inflationary expectations are rising on the mainland even though inflation itself remains mild, a senior government researcher says.

The United States says it will resume dialogue with China on human rights next month after a two-year hiatus, pledging to raise concerns about internet and religious freedoms.

The Communist Party cadre who has ruled Xinjiang with an iron fist for nearly 15 years is being replaced, months after the region's capital, Urumqi, was rocked by deadly ethnic clashes. Wang Lequan's replacement as party secretary in the far-western region is a surprise - Zhang Chunxian, the soft-spoken and media-savvy party boss of Hunan. His appointment was announced yesterday in Urumqi by Vice-President Xi Jinping, a day after Xinjiang came up for discussion at a meeting of the party's Politburo chaired by President Hu Jintao. Xi described Zhang, 57, as having a liberal mind and a spirit of innovation, and indicated the central government considered him a safe pair of hands. He expressed the hope that all Xinjiang cadres could work with Zhang to "make the different ethnic groups happy". Speculation had been rife that Beijing would remove Wang since September, when a series of mysterious stabbing attacks using syringes occurred in Urumqi, weeks after the riots that left 197 people, most of them Han Chinese, dead. Protesters, most of them Han residents who had publicly expressed their anger two months earlier at the authorities' failure to stem the rioting by members of the region's Uygur minority, took to the streets chanting, "Down with Wang Lequan". They accused him of failing to stop the syringe attacks or protect their property. It is extremely rare for protesters to publicly call for the resignation of a senior official. Beijing did not take any action following the protests to avoid being seen as bowing to public pressure. But Joseph Cheng Yu-shek, a political scientist at the City University of Hong Kong, said Beijing was obviously unhappy with Wang, even though he was appointed to another seemingly powerful post; Wang will move to Beijing to become deputy head of the party's top law enforcement body, the Central Political and Legislative Affairs Committee. Cheng said: "Given the allegations of his corruption, especially his favour to enterprises from his home province of Shandong , it is obvious that Wang is an unpopular leader who has also been widely seen as an authoritarian, applying high-pressure and heavy-handed tactics. The change of leadership is necessary to indicate a new approach." Cheng said Zhang was "widely regarded as tactful and soft-handed in handling grievances and protests". He said a high-level Xinjiang Work Forum next month was likely to outline a softer approach. Jin Zhong, a Hong Kong-based political commentator, also thinks Zhang will be more moderate. "This is undoubtedly a time of change in terms of policy in the region," said Jin. "One can hardly say the separatist and ethnic issues in Xinjiang will disappear overnight along with the reshuffle of its top leader, but ... one thing for sure is that Zhang is likely to be milder and more open-minded than Wang. "After all, Wang was promoted to deputy chairman [of the Xinjiang government] in 1991, two years after the crackdown on student-led protesters [in Tiananmen Square] when the party was dominated by hardliners."

As communist cadres go, Wang Lequan and his successor Zhang Chunxian represent two extremes. Wang, 65 , earned the nickname "the emperor of Xinjiang " for his iron-fisted rule over the restive region, and for his fiery rhetoric. After deadly riots in the region's capital, Urumqi , in July, in which most of those killed were Han Chinese, he appeared on television calling the riot "a massive conspiracy" to sabotage ethnic unity and called on citizens to "point the spear towards hostile forces at home and abroad". Zhang, on the other hand, is famous for his populist style and his media savvy. When he was transport minister, he would patiently answer questions from reporters who buttonholed him at the National People's Congress. In 2006, he made a tearful appearance on television during a visit to the parents of a university student who died trying to save people from drowning. Wang cut his teeth as a rural cadre and climbed up the political ladder in his native Shandong province, where he was appointed vice-governor in 1989. In 1991 he was made deputy head of the Xinjiang government and in 1995 was promoted to party secretary. Wang's tenure in the province was unusually long. Since the 1990s, very few party secretaries in other provinces have served longer than two terms, or 10 years. The central government has shuffled leading cadres between provinces to avoid corruption and nepotism. Tibet, another border region deemed crucial for ethnic stability, is on its fourth party secretary since 1992. Zhang Qingli , a close ally of President Hu Jintao , was appointed in 2006. Wang's obsession with stability earned him another nickname - "the secretary of stability". Political observers believe he remained in office so long because Beijing was reluctant to make changes lest it cause instability in the border region, which is perceived as China's frontline against Uygur separatism and terrorism. In 1997 Wang presided over a crackdown on Uygur separatism. When riots erupted in the city of Yining after police arrested dozens of Muslims, and young Muslims battled police and attacked Han residents, police responded with force. Officials reported nine deaths, but an Amnesty International report concluded that hundreds, possibly thousands lost their lives or were seriously injured. Subsequently, many were executed and others jailed and "illegal" mosques and unauthorised religious classes shut down. In 2002, Wang was given a seat on the powerful Politburo, the party's inner sanctum. He has since become an important adviser to the central government on ethnic policies. In 2003, on his watch, Beijing labelled as terrorist organisations four groups linked to the movement to forge an independent state of East Turkestan in Xinjiang. Wang vowed to severely punish all terrorists in Xinjiang. His rigorous style won him the trust of Beijing. Announcing his new role yesterday, Vice-President Xi Jinping praised him for his staunch anti-terrorist efforts. But everything changed with the riots in July last year, when Han residents in Urumqi publicly showed their anger at the authorities' failure to put down Uygur violence. In contrast to his predecessor, Zhang, 57, is known for his tact and publicity skills. A manager in a machinery factory, he became assistant to the Yunnan governor in 1995 before a transfer to the Transport Ministry in 1997. In 2002, at age 49, he became the youngest minister in the cabinet when he was appointed transport minister. His marriage to famous CCTV anchor Li Xiuping has boosted his public image. If he shows his populist style can work in Xinjiang, observers believe Zhang stands a good chance of following Wang into the Politburo.

Inside World Expo museum.

Sand sculptures welcome upcoming Shanghai Expo.

April 26, 2010

Hong Kong*: The ICAC is interviewing members of the League of Social Democrats about an allegation linked to the political group's actions over the government's increase in tobacco tax last year.

The government is to press ahead with a controversial anti-terrorism law by the end of this legislative year. A senior official said the government was aware of the controversy but still had to make the law, which among other things will require people to answer questions or provide documents in an investigation into how terrorists move money.

Legislators yesterday criticized a government plan to allow the two operators of outlying islands ferry routes to apply for up to HK$120 million in public funds over three years to offset maintenance costs and, in effect, subsidise fare increases. They said it was wrong to use public funds to subsidize private operators, and urged the government to speed up a plan to extend Central pier buildings to provide the operators with additional rental income.

A Ming dynasty painting by classical master Shitao valued at almost US$15.5 million will be auctioned next month by Christie's, which says the work is the most valuable Chinese painting to go under the hammer in Hong Kong. Landscapes Inspired by Du Fu's Poetic Sensibilities is an album of eight ink and color works on paper and is among a group of more than 400 rare Chinese paintings and calligraphy works valued at more than US$45 million that will be sold on May 28. Christie's and rival Sotheby's have both expressed optimism about the Chinese art market despite the fact that the world is still recovering from the global crisis. They say a shrinking supply of top artwork and consistently strong demand for exceptional and rare items are driving up prices. Shitao, a renowned scholar-artist, was one of the most influential painters of his time. His work had a major impact on subsequent Chinese ink and brush artists, including early 20th century masters such as Zhang Daqian and Fu Baoshi. Shitao died in 1707 and the work on offer was created during his later years. The subject matter of this album is an ode to the poetic beauty of the ancient Chinese poet Du Fu, who often used metaphors of landscape to describe his anxiety about the rise and fall of the Tang dynasty, which is regarded as one of the golden ages of Chinese civilization.

A funeral will be held on May 6 for Hong Kong volunteer Wong Fuk-wing, who was killed trying to save victims of the earthquake trapped in the rubble of an orphanage. Members of the public who wish to pay their respects to Wong, 46, can do so between 4pm and 7pm at the Universal Funeral Parlour in Cheong Hang Road, Hung Hom.

Henry Tang tells arts hub architects to interpret public freely - The chairman of the West Kowloon Cultural District Authority has asked architects to interpret public views on the design for the district "freely". Henry Tang Ying-yen's request came after authority board members expressed concern yesterday at the diversity and conflicting nature of the views collected. The authority also announced the appointment of Louis Yu Kwok-lit, chief executive of the Arts Development Council, as an executive director of the authority in charge of steering its performing arts policy and management services. The board received the report of the first stage of public consultation, in which the chairman of the authority's development committee, Ronald Arculli, concluded Hongkongers wanted an arts hub with an artistic ambience, good green coverage and an opportunity to enjoy the waterfront. He said the authority would adopt the views as its strategic direction and the arts hub would be developed in a sustainable manner. Members asked the authority to present design models in exhibitions and on websites in the coming second stage of consultation, which starts in the middle of this year. Some urged the authority to give further direction to the three architects amid the diverse views collected in the first stage of consultation. Board member Yuko Hasegawa said the public views were diverse and sometimes conflicted with each other. She gave comments on the flagship museum M+ as an example. Some said the exhibition area should be enormous and create a "wow effect"; others said the museum did not need to be large. Some said it should be clustered with other performance venues to facilitate management and improve creativity; others said it should be a stand-alone building and separate from performance venues. Some wanted the museum far from shops; others wanted it to be an international art gift centre. "Will the authority give clearer instructions to the architects?" board member Ma Fung-kwok asked. Member Lee Chack-fan echoed Fung's views and said: "It will be very useful if the authority will provide further analysis of the public views." Henry Tang said the three architects had attended every public forum and "would make their own interpretations". "I can promise that the authority will continue communicating with the community," Tang said, adding that he expected the second round of public consultation to provide far more interesting results because the concept plans and models would be available for comment. Louis Yu will join five other executive directors working under the newly appointed chief executive of the authority, Graham Sheffield. Yu has more than 20 years of experience in arts administration and management and his appointment at the authority has been widely accepted in arts circles. Before he took up his role at the Arts Development Council, he worked as the executive director of the Hong Kong Arts Centre. Fringe Club founder Benny Chia said Yu had a good relationship with various arts groups. "His vast experience in the local arts field will be very useful," he said. Arts critic Ada Wong Ying-kay said Yu was a visionary: "Apart from turning the Arts Centre into a nursery ground for small arts groups, he is also a pioneer in advocating public arts."

 China*: As China confronts technical difficulties thwarting the expansion of its historic deployment to fight pirates in the Indian Ocean, regional rivals India and Russia are also seeking a greater role.

A wind power project under construction in Shanghai. China's wind power industry has seen over 100 percent year-on-year growth in the past four years. China will choose the sea off eastern Jiangsu province to build the country's first batch of offshore wind power projects, an energy official said on Friday. The four wind power projects include two near shore plants, each with installed capacity of 300 megawatts (mW), and two built on tidal flats with a capacity of 200 mW each, said Shi Lishan, deputy director of the new energy department under the National Energy Administration (NEA). Public bidding for the four projects will start at the beginning of next month, he said. "Construction of offshore wind power projects will be one focus of China's wind power industry in the future. As the country boasts rich offshore wind energy resources, China has great potential in this field," said Shi. Shi added that the construction of offshore wind power projects costs much more and requires more complex technology compared with wind power projects built on land. China has finished construction of a pilot offshore wind power project near Shanghai. Investment of the project is 2.5 times of an on land project with the same capacity, said Shi. China's wind power industry has seen over 100 percent year-on-year growth in the past four years. The country's installed wind power capacity has reached 25 gigawatts (gW), the second-largest in the world. The country plans to build seven wind power bases with a minimum capacity of 10 gW each by 2020, in a move to further increase the use of the clean energy. The seven bases are: Jiuquan in Gansu province, Hami in Xinjiang Uygur autonomous region, Hebei province, western Jilin province, eastern Inner Mongolia, western Inner Mongolia, and Jiangsu province. Once completed in 2020, the seven bases will have combined capacity of around 120 gW, when the country's total power capacity is projected to be 1,500 gW, Shi told China Daily earlier. Construction of these bases would require an investment of around 1 trillion yuan, he said. However, with the rapid development of the wind power industry, some problems in the sector also emerged. For instance, it is hard for many finished wind power plants to connect to the grid. Commenting on the issue, Shi said the government needs to improve its planning for the development of wind power and grid capacity. "In my opinion there is no problem in technology for wind power plants to connect to the grid," he said.

China Cosco Holdings (SEHK: 1919), the world's largest bulk vessel operator, said it will add fewer ships to its fleet than rivals and cut capital expenditure as it seeks to recover from a sea of red ink suffered last year. The shipping line saw 7.47 billion yuan (HK$8.48 billion) of net losses in 2009 as opposed to a restated net profit of 11.6 billion yuan a year earlier. Sales dropped 48 per cent to 68.46 billion yuan on plunging freight rates. Cosco's woes add to growing concerns that the global fleet that transports dry bulk - products ranging from iron ore and coal to agricultural products - may be growing too fast despite signs of economic recovery. The shipping conglomerate is scheduled to take delivery of 13 bulk vessels with 1.9 million deadweight tonnes this year, translating to 5 per cent of its fleet size as of the end of last year. "The net increase in capacity will be even less than that, taking into account the disposal and scrapping of vessels this year," said executive director Zhang Liang at a press conference yesterday. Marsoft, a shipping consultancy, said the capacity of dry bulk vessels increased 12.5 per cent year on year, outstripping the 10.5 per cent increase in demand. There are some positive signs for Cosco. Freight rates for dry bulk commodities would be higher this year, chairman Wei Jiafu said. The company predicted that the Baltic Dry Index, which tracks the average charter rates for bulk vessels, will trade at around 3,000 points this year, compared with 2,000 points last year. Geoffrey Cheng, a transport analyst at Daiwa Capital Markets, said the company will post a turnaround in the first quarter, helped by the rebound in dry bulk freight rates. He forecasts the company's bulk shipping division will make a profit of 500 million yuan at most while the container shipping division will post at least 300 million yuan in losses. Quarterly earnings will be released on April 30. Cosco's board approved a proposed issue of 10 billion yuan five-year note to finance ship deliveries as well as repaying bank loans and settling fixed-asset investment expenses. Capital expenditure is expected to drop 11.6 per cent in the year to 10.2 billion yuan as the company remains cautious about the pace of the global economic recovery. Cosco Container Lines has raised freight rates on the Asia-Europe routes, intra-Asia routes and transpacific routes this year. It is confident that it will be able to raise freight rates by US$800 and US$1,000 per box to the west coast and east coast of the United States in the annual contract negotiations which end next month. Sales from its container shipping division dipped 38 per cent to 27.5 billion yuan last year while Asia-Europe trade was the hardest hit, posting a 54.6 per cent decline in sales. The outstanding order book of the shipping company amounted to 54 container vessels with a total capacity of 414,926 20-foot equivalent units, representing 73 per cent of the existing fleet size. Nine vessels with 46,000 teu capacity are scheduled to be delivered in the year while six vessels will be chartered.

The opening ceremony for the World Expo in Shanghai is set to be the "biggest outdoor entertainment event in history", according to people involved in the preparations. Contrary to repeated official pledges to hold a "simple" ceremony with a frugal budget, the city is understood to be sparing no expense to ensure the Friday night show is an extravaganza of jaw-dropping proportions. The two-hour event will end with a fireworks and lighting show expected to eclipse the Beijing Olympics opening ceremony and outdo the closing ceremony at the Sydney Olympics in 2000 "by a factor of 10". Shanghai authorities have been tight-lipped about what the opening ceremony will include but told media it would be a relatively understated affair to keep the budget in check. Shanghai party secretary Yu Zhengsheng said earlier this month the ceremony would include indoor cultural perfomances followed by an outdoor fireworks display. He said the event would contain "surprises" but would be less extravagant than the Beijing Olympics opening ceremony in 2008. However, a number of contractors and professionals linked to the show said otherwise, and mainland media yesterday quoted Zhao Weiping, chairman of Panda Fireworks - one of the contractors supplying the display - saying the show would be record-breaking, using 100,000 shells, "20,000 more than the Beijing Olympics". The South China Morning Post (SEHK: 0583) can confirm the scale of Friday's display will be more spectacular than reported. The fireworks display is understood to involve 19 barges stationed along a three-kilometre stretch of the Huangpu River, firing 70 shells every second for a period of 30 minutes. The figures suggest close to 126,000 individual fireworks will be set off, which would almost double the current record. The Guinness World Records website says the largest fireworks display ever was held in Madeira in 2006 and used 66,326 fireworks. The lighting show will feature 1,000 computer-controlled seven-kilowatt searchlights. "These things could reach the moon," one person connected to the project said. "Nobody has ever used anything like that many 7,000-watt lights at one time before." A further 500 spotlights of 4,000 watts each are also being used in the multimedia show. The Post understands the Shanghai government and expo organisers have engaged Australian events organiser David Atkins Enterprises to produce the outdoor pyrotechnics and lighting theatrics. The company directed the opening and closing ceremonies of the Sydney Olympics in 2000, the Doha Asian Games in 2006 and the Vancouver Winter Olympics earlier this year. The company's Sydney office confirmed staff were in Shanghai but declined to give details of what they were working on. A spokesman for the expo bureau also declined to comment. "Everything related to the opening ceremony has been designated top secret," he said. "We are not allowed to accept any interviews whatsoever."

Guocoland, the developer controlled by Malaysian billionaire Quek Leng Chan, plans to double investment on the mainland to more than US$9 billion on confidence government efforts to avert a bubble will work. Guocoland, whose projects include shopping malls, apartments, offices and hotels, said a year ago it planned to invest 33 billion yuan (HK$37.52 billion) in new commercial properties in China. "We should very easily double that," Violet Lee, the head of Guocoland's mainland operations, said. "We have much more confidence now because we can sense the central government is taking things very seriously." "The recent policies focus on curbing demand, but China's urbanisation and the rising demand for housing are still there over the long term," Dai Fang, a Shanghai-based analyst at Zheshang Securities, said. "With the expectation of a yuan appreciation, it also makes sense for foreign companies to build up investment in China." Guocoland's new investments would focus on integrated projects in major cities like Beijing and Shanghai as well as provincial centres, Lee said. The company is also considering expanding its land holdings. Lee sees a "big opportunity" in the government's demand that 78 state-owned companies exit the property market because real estate is not their main business.

Hi-tech equipment important for police: senior leader - Zhou Yongkang(C),a member of the Standing Committee of the Political Bureau of the Central Committee of the Communist Party of China,also secretary of the Political and Legislative Affairs Committee of the CPC Central Committee,visits the 5th China international police equipment fair in Beijing,April 23,2010. A senior leader with the Communist Party of China (CPC) has urged China's police equipment to be updated to better safeguard national security and social stability. Zhou Yongkang, member of the Standing Committee of the Political Bureau of the CPC Central Committee, made the remarks when visiting the China International Exhibition on Police Equipment in Beijing Friday. "It is necessary to closely follow new police equipment developments worldwide, learning about advanced technologies abroad and accelerating import of sophisticated, practical scientific achievements and relevant application to better handle complicated situations, public incidents and natural disasters in China," Zhou said. While emphasizing the importance of training of personnel with skills, Zhou called for greater efforts in research and development of new police equipment with China's own intellectual property rights, and in speeding up modernization of police equipment. He said that having modern police equipment was an important symbol for overall police strength. The exhibition, held by the Ministry of Public Security at the Beijing Exhibition Center from Wednesday to Saturday, attracted more than 300 exhibitors from 14 countries and regions in attendance.

A Wing-In-Ground (WIG) aircraft called "Angel Bird" flies over water during a trial flight in Nanjing, East China's Jiangsu province, April 23, 2010. The aircraft, developed by Jiangsu Hengchuan Group with independent intellectual property rights, is 10.7 meters wide, 12.6 meters long and 3.5 meters high, Xinhua reported.

"Anything is possible in China," said GM's China Chief Kevin Wale, "Five years ago we forecast that auto sales in China will exceed those in the US by 2020, but the prediction came true last year, 10 years early." General Motors (GM), the biggest vehicle producer in China, announced earlier this month that it aims to sell more than 3 million cars in the country in 2015, up from 1.83 million units last year.

Smell the spring flowers of Wuzhen - The most important part of touring the town is experiencing the culture of the town and its waterways.

April 25, 2010

Hong Kong*: Cathay Pacific said Friday it had been granted immunity from any fine by British regulators in a price-fixing case with Virgin Atlantic, on condition that it offered full co-operation.

Cathay Pacific said on Friday it was working to ensure passengers stranded at Hong Kong International Airport could now get flights to their intended destinations.

Share Catering workers display a fake note with the face of lawmaker Tommy Cheung Yu-yan, who first proposed a minimum rate of HK$20. Ripple effect from minimum wage limited, UK expert says - Lessons from Britain show that a ripple effect of inflated wages following the introduction of a minimum wage is very limited, an adviser to the British Low Pay Commission says. The local catering industry and the Liberal Party have proposed setting a minimum wage of HK$24 an hour and warned that even at that level business would be severely affected by a ripple effect that would push up the wages of workers earning more than the minimum. But Professor Geoff White dismissed fears of such an effect. White, who is an adviser to the Low Pay Commission, was scheduled to attend a Baptist University forum, "Meeting the Challenges: Implementation of the Minimum Wage Legislation in Hong Kong", yesterday, but he could not make it because of the Icelandic volcanic ash cloud. In a keynote speech read out by Professor Edward Snape, head of the management department at Baptist University, White noted there was a sceptical predication that a minimum wage would lead to wage increases for many workers earning higher than the minimum as they would seek to reassert their differentials over lower-paid workers. "The evidence does not support this contention. In general, those above the minimum wage appear to have received a smaller pay increase over the period than those at the level of the minimum wage," White, who is also professor of human resource management at the University of Greenwich, wrote. He added that the wage structures of low-paying sectors might partly explain any effect. "In general, low-paying sectors have fairly flat pay structures so that the majority of workers are in the lowest-paid grades. Increasing their pay levels will therefore have minimal overall effect on the pay bill of higher-paid workers in the organization," White wrote. On the sidelines of the speech, Snape pointed out a ripple effect had not been apparent in Britain since the introduction of a minimum wage in 1999. "We have not seen any major ripple effect. We only see a wage increase caused by the minimum wage introduction to workers who earn just above the minimum," Snape, who is a native of northern England, said. Both Snape and White pointed out, however, that a minimum wage would have an adverse effect on profitability - even if no jobs were lost, job creation might be affected. Labor chief Matthew Cheung Kin-chung, who was at the forum, said it was a good opportunity for the city to explore various aspects of a minimum wage. He said the city needed to strike a proper balance between employers and employees as the Provisional Minimum Wage Commission was still determining the wage level and the government had no preconceived ideas at all. A survey of 143 people from seven fast-food chains by the Catering and Hotels Industries Employees General Union found that some workers earned as little as HK$19 an hour. The union demanded a minimum hourly rate of HK$33 so that workers could share the fruit of success that is now only enjoyed by restaurant owners.

Hong Kong's total advertising spending for January-March rose 24 per cent to HK$6.74 billion from HK$5.45 billion a year ago, led by the banking and property sectors. Advertising spending in Hong Kong accelerated in the first quarter, as the improving economy helped drive more campaigns into television, newspapers and online media. Led by robust investment from the banking and property sectors, total advertising spending in the January-March period rose 24 per cent to HK$6.74 billion from HK$5.45 billion a year ago, according to media-monitoring firm admanGo. It said all sectors, except for the entertainment industry, increased their media exposure last quarter. Last month, the Hong Kong Advertisers Association reported many companies were optimistic about the economy's health and aimed to raise their advertising budgets this year. It said the main focus of advertisers would shift from driving sales to building brands. Although television advertising generated the most revenue at HK$2.49 billion in the first quarter, spending on online media and newspapers recorded the highest growth rate year on year at 59 per cent and 32 per cent, respectively. "Entertainment-related advertising, however, fell 11 per cent to HK$276.74 million from HK$312.67 million in the previous year due to a double-digit drop in spending each by music recording companies, retailers and karaoke establishments," an admanGo spokeswoman said. The banking sector spent the most in advertising during the first three months of the year, with spending up 34 per cent year on year at HK$658.82 million. HSBC (SEHK: 0005) was the top banking advertiser, with an outlay of HK$56.15 million. Campaigns by the pharmaceutical and health-care sector reached HK$538.3 million, up 31 per cent year on year. The industry's top advertiser, GlaxoSmithKline, was also the city's largest spender, with a total investment of HK$88.95 million. Advertising by the property sector hit HK$314.21 million, a growth of 153 per cent, the highest among all industry categories. This was spearheaded by developer Sun Hung Kai Properties (SEHK: 0016), which spent HK$30.63 million.

The government on Friday again cautioned Hong Kong people that the black outbound travel alert for Bangkok was still in force – and people should avoid visiting the Thai capital.

Fields of dreams - Hongkongers are warming to fair-trade practices that help farmers get better deals for their harvests. It's not often that city folk get to wade in rice paddies. Bicky Wong Pik-yee and Lily Lo Kai-lei, rice importers from Hong Kong, had that chance when they took up a supplier's invitation to check out a farm in northern Thailand. Farmers gave the two women wellies to keep their feet clean while out in the fields. "The trip was described to us as a 'mystery tour'. We were definitely intrigued," Wong says of their visit in 2006. The pair wound up in Ubon Ratchathani, at a small farm co-operative designed to give marginalised farmers better market access and fairer payment for their harvests by reducing the role of middlemen. The concept of fair trade, however, had yet to enter their minds as they got ready to plough a field for the first time ever. "The boots were a bust," Lo recalls, smiling. "We got stuck in the mud and left behind by the buffalo." But by the end of their five-day visit - working the land, sharing meals and chatting with rice farmers and the co-op manager - the two friends came away with a new purpose. Within a year of their return to Hong Kong, Lo dissolved her sushi business and joined Wong to establish the Rise Plus Group to distribute organic and fair-trade produce.

A rare $2 stamp issued from 1914 to 1919 in China showing the inverted image of the Peking Hall of Classics may fetch HK$550,000. Extremely rare Hong Kong and mainland stamps with errors will be auctioned in the city, and one of them dates back to 1865. Zurich Asia, the leading stamp auction house in Asia, will hold its postal history spring auction from April 24 to 26 at the Excelsior Hotel in Causeway Bay. It will offer 2,258 lots, from Hong Kong and other Asian places, with an estimated total value of more than HK$15 million. A Queen Victoria 96 cent stamp is among the highlights. It was issued in Hong Kong in 1865 with an error in its colour. It is olive bistre but it should have been printed in grey brown and is expected to fetch HK$500,000. Another rare error stamp was issued between 1914 and 1919 in China. The image of the Peking Hall of Classics in the $2 stamp was printed upside down. It is expected to fetch HK$550,000. A rare full pane of red revenue surcharge stamps issued in 1897 during the Qing dynasty is expected to fetch HK$500,000. A rare and unissued stamp of Chairman Mao Zedong's inscription to a Japanese labour friend is expected to fetch HK$400,000. Stamp collector Poon Kam-leung said these stamps were valuable because of their limited number and the printing errors. "They are rare and valuable to collect. Some of them were unissued. It is rare to see the printing errors as well," he said. Zurich Asia director Louis Mangin said the market for philately had grown significantly. "There is a strong demand for a variety of rare stamps, and postal history of China... This phenomenon is enhanced by the rapidly increasing interest among mainland Chinese collectors who covet rare stamps with historical significance. The accessibility of stamps also makes it a highly desired category for collectors who are looking to invest in alternative assets from art, wine and jewellery."

Hong Kong's Chief Secretary Henry Tang greets Macau Chief Executive Fernando Chui. Tang to persuade HK entrepreneurs to tap Hengqin island development - Hong Kong entrepreneurs will be encouraged to take part in the development of Hengqin, a Guangdong island earmarked as a key base for cross-delta co-operation, Chief Secretary Henry Tang Ying-yen said in Macau after meeting Macau Chief Executive Fernando Chui Sai-on. Tang met Chui at the Macau government headquarters before attending a forum on cross-delta economic ties in the former Portuguese enclave. "Mr Chui invited Hong Kong to take part in the development [of Hengqin]," Tang said. "I'll further introduce Hengqin to Hong Kong enterprises and see what suitable investment opportunities there are." He said Hong Kong companies may have an advantage in Hengqin's development, which is centred on tourism, convention, exhibition, leisure and cultural industries. Guangdong officials said in December that the province would spend 72.6 billion yuan (HK$82.4 billion) to transform Hengqin, an island off Macau, from a bleak outpost with a gross domestic product of just 128 million yuan in 2008 into a key base for cross-delta co-operation. They said a new town would be built on the 86 square kilometre island, with a theme park, multi-functional power station and business district. Hengqin enjoys sub-provincial administrative status, joining the ranks of Pudong New Area in Shanghai and Binhai New Area in Tianjin. Tang said at the forum in the Macau Tower that Hong Kong entrepreneurs would be encouraged to upgrade their plants in Guangdong and expand mainland sales networks. "We believe the successful transformation of Hong Kong enterprises would be a huge contribution to the upgrade of the overall competitiveness of the manufacturing industry of the Pearl River Delta," he said. Tang said Hong Kong firms should expand their sales networks as Beijing unveiled more policies to spur domestic consumption in the wake of the global financial crisis. Guangdong deputy governor Lei Yulan and Macau finance minister Francis Tam Pak-yuen also attended the forum.

After an almost five-hour debate to remove HK$147 million from the government's budget, the resolution, moved by Federation of Trade Unions legislator Wong Kwok-hing, was rejected with only the Democratic Alliance for the Betterment and Progress of Hong Kong and two independents backing the union. "They are turning the by-election into a referendum [for universal suffrage] ...Why is the government forcing Legco the pass the funding?" asked Wong, who condemned the Civic Party and the league for having a political agenda, saying it contravened the Basic Law. Secretary for Constitutional Affairs Stephen Lam Sui-lung warned that the two parties would pay the price for exploiting what he called legal loophole. "I believe the Civic Party and the league clearly understand they are utilising a legal loophole. The people can see," he said. The five-hour debate on Wong's amendment is the last of the nine tabled to the financial secretary's budget, which was passed by a vote of 35-16 at the end of a two-day session. All pan-democrats present at the meeting voted against the budget saying it lacks measures to help the needy. The debate quickly degenerated into a shouting match between government allies and pan-democrats, with the issue of functional constituencies - of which existence was the theme of the de facto referendum exercise, became the triggering point. Tourism sector lawmaker Paul Tse Wai-chun accused the Civic Party, in particular Margaret Ng Ngoi-yee, for her participation in the legal sector constituency despite her party's opposition to the trade-base seats. Hitting back, Civic Party leader Audrey Eu Yuet-mee said: "Are you suffering from schizophrenia?" She referred to Tse's support of his partner Pamela Pak Wan-kam in running for a seat in the by-election, as well as opposing to the election funding. She urged people to vote in the election, as it would be a direct channel for them to air their democratic aspirations. A strong show of public support would deter Beijing from keeping these trade-based seats, she said. Ip Kwok-him, of the DAB, joined in the defence of Wong's resolution, saying his party would not participant, nor canvass for candidates, nor vote in the by-election. The Liberal Party, and other pro-government independents, said they had no choice but to reject the resolution because it was the government's duty to carry out the election. The vote was defeated by a large margin in both the geographical and functional constituencies. As lawmakers were debating, the University of Hong Kong released a survey of 1,012 respondents which found public dissatisfaction with the general performance of lawmakers had reached a five-year high. The figure has risen by 2 percentage points to 49 per cent comparing to a similar survey conducted three months ago, when the two parties first announced their plan to carry out the de facto referendum exercise. In September last year, the figure was 34 per cent. In the latest survey, 18 per cent of respondents said they were satisfied with Legco's performance. Robert Chung Ting-yiu, director of the university's public opinion programme, said the surge in dissatisfaction was probably due to the constitutional reform row and the lawmakers' resignations.

Casino tycoon Stanley Ho Hung-sun says he has been so touched by the "never give up spirit" of rescue workers and Qinghai quake victims, that he's donating HK$5 million to help them rebuild their lives. The octogenarian sent the donation through the central government's liaison office in Macau yesterday. "I wish to express my deepest sympathy to the earthquake victims," Ho said. "We are deeply touched by the never give up spirit of the rescue crew and the people there. China, Hong Kong and Macau are as close as flesh and blood and when one side is in trouble, the other side will show support," he added. Meanwhile, Cathay Pacific will launch in- flight fund-raising activities from today. Every dollar collected will be used to assist Unicef relief efforts to help children. The airline will also collect donations from Cathay Pacific and Dragonair staff.

Local property stocks took a pounding yesterday after the government outlined new steps to curb speculation and soaring prices. New World Development (0017) slumped 3.44 percent while Sino Land (0083) retreated 2.97 percent. The Hong Kong measures, plus a tighter mainland multi-home purchase policy, sent the Hang Seng Index 0.3 percent lower to close at 21,454.94 points. UOB Kay Hian analyst Sylvia Wong downgraded Sun Hung Kai Properties (0016) and Sino Land from "buy" to "hold" while Royal Bank of Scotland researchers recommended a switch from SHKP to Cheung Kong Holdings (0001). "Developers with higher exposure to the residential market will be more severely hit," Wong said.But she said even if the launches of SHKP's Larvotto in Ap Lei Chau and Sino's The Hermitage in Tai Kok Tsui are delayed, the impact will be limited. Wong said the increase in Hong Kong's land supply has led the public to believe that property prices will not rise sharply in the long term. There will be four land auctions in the next three months. CCBI executive director Adrian Ngan said the sector's near-term outlook is opaque but developers are likely to be restrained. Ngan said the provision of sales brochures and price lists in advance will dampen transactions and sales atmosphere. "The longer a person thinks, the less likely he will want to buy a home." Though interest rates are low and the economy is good, luxury unit prices may drop 3-5 percent this year, Ngan said. Given higher land supply, Wong expects home prices to drop by an average of 10 percent, with the luxury sector facing a stronger correction. RBS analysts see a potential minor price correction before an eventual 5 percent annual growth. But Citibank economists believe that with the mainland's tighter property policies and yuan revaluation expectations, "risks of a housing price bubble [in Hong Kong] will likely continue to form."

 China*: The corruption trial of former appliance tycoon Huang Guangyu, once the mainland's richest man, has ended and a verdict is pending, a lawyer involved in the case said on Friday.

Share WTO chief Lamy 'cautious' about criticising currency manipulation - World Trade Organisation (WTO) chief Pascal Lamy said on Thursday he was "extremely cautious" about deciding whether currency manipulation is a form of protectionism because a WTO rule on the issue has never been tested. “Now, true, there is one specific article of GATT-WTO that says that a country should not frustrate its trade-opening commitments in using its exchange rate policies,” Lamy said during a discussion on the sidelines of the World Bank and International Monetary Fund’s annual spring meeting. “The rule is there. It’s never been tested, which is why I’m extremely cautious on this,” Lamy said. Many US manufacturers believe China is acting in a protectionist manner by undervaluing its exchange rate, which they say subsidises exports and taxes imports. Over the years, there have been calls for the US to challenge Beijing’s exchange rate policies at the WTO, but neither the Republican administration of former President George W Bush nor the Democratic administration of President Barack Obama has taken that step. Asked if there was something the WTO could do about countries that manipulate their currency, Lamy said: “The politically correct answer is that it’s not a question for me, it’s a question for [International Monetary Fund Managing Director] Dominique Strauss-Kahn. Not Geneva-WTO, but Washington-IMF. That’s where legally the mandate for currency surveillance is,” Lamy said. In its semi-annual, World Economic Outlook report this week, the International Monetary Fund (IMF) repeated that the Chinese yuan is “substantially” undervalued. Critics say the IMF has been ineffective in pressuring Beijing to move.

Share China's 'most generous man' to donate entire fortune, US$470 million to charity - Philanthropist Yu Panglin, best known locally as the man behind the planned Bruce Lee museum, is to donate his remaining fortune of about US$470 million to charity. The move was announced by the 88-year-old in Shanghai yesterday at a ceremony which honoured him as the most generous philanthropist in China. Speaking at a news conference after the Hurun Report named him China's top philanthropist for the fifth consecutive year, Yu said he was donating US$470 million in cash and property assets to the foundation under his name. This brings the total he has given to the Hong Kong-registered charity to US$1.2 billion. Yu said: "This will be my last donation. I have nothing more to give away. It will all be for charity. No part of it will be inherited by anyone, no part will be used to do business or for investments." He also said he hoped his move would encourage other Chinese billionaires to do more, adding that his fortune paled in comparison to that of other magnates in Hong Kong and the mainland. "My fortune is just a drop in the bucket compared to them, but I have a point of view that is very different from others. I will not leave my fortune to my children," he said. The donation ensured Yu's position as China's top philanthropist, said Rupert Hoogewerf, founder of the Shanghai-based Hurun Report, which tracks China's wealthy. "Doing charity is much more difficult than making deals and there are even more difficulties if you want to do something real to benefit the poor. Providing timely help to the really poor people and making them live better are my aim and wish," Yu said. His foundation supports health and education charities and disaster relief. It has also funded more than 140,000 cataract removal operations across the mainland. Besides his generosity, Yu is best known in Hong Kong as the owner of the last home of kung fu legend Bruce Lee. Yu had planned in 2008 to sell the two-storey Kowloon Tong house and other properties to raise funds for Sichuan earthquake victims, but subsequently dropped the idea after receiving pleas to preserve the property. He later proposed to transform the Cumberland Road house into a museum commemorating the life of Lee, who died in 1973 at the age of 32. Yu, who was born in Hunan province and came to Hong Kong in the late 1950s, began to devote his time to charity work since the 1980s when he was shocked by the poverty he witnessed during a visit to his hometown.

Britain has spent £25 million on its striking dandelion-like pavilion and hopes the venue will generate more than 1,000 meetings between British and Chinese business leaders. Multinationals plan brand and guanxi blitz at expo - Foreign firms spending millions with eye on huge market. Coca-Cola is flying in hip-hop stars, Barclays is bringing English soccer's Premier League trophy and General Motors will offer a glimpse of the future as foreign firms woo China's massive market at the World Expo. Multinationals are seizing on the six-month event beginning May 1 to build their brand presence in the market of 1.3 billion people, but also the business and government connections - or guanxi - crucial to making money in China. "At this expo, because it's going on in Shanghai and in China, everyone wants to showcase their latest and best here," Jean Liu-Barnocki, GM's expo project manager, said. GM and Chinese partner Shanghai Automotive Industry Corp have built a state-of-the-art theatre that creates the sensation of soaring over Shanghai in the year 2030, with emissions and congestion eliminated by electric cars. Behind the scenes, corporations will be laying the groundwork for such visions by entertaining high-powered visitors to their pavilions. "Every pavilion has a hospitality programme or VIP experience as part of its overall design," Liu-Barnocki said. Signing on as an expo sponsor helped build brands and consumer contact that could translate into sales, but often the main goal was networking, Pippa Collett, managing director of London-based Sponsorship Consultants, said. In China, building guanxi (connections and social reputation) - often through lavish banquets and other wining and dining - is considered a key part of doing business. Collet said that expo sponsorships from the likes of GM are often "an excuse for a group of individuals to be in the same room at the same time". Britain has spent £25 million (HK$298.8 million) on its striking dandelion-like pavilion to promote business encounters. It hoped the venue would generate more than 1,000 meetings between British and Chinese business leaders, Katherine Dixon, Britain's political and economic consul in Shanghai, said. "This is the stuff you don't see. This is actually what the UK is focused on. So we haven't done retail, we haven't done catering," Dixon said, emphasising that unlike others, Britain is not selling souvenirs or snacks. "Our focus is on targeting the right people to interact with over six months." David Wright, vice-chairman of Barclays Capital, which is a £500,000 sponsor of the pavilion, called it "a major opportunity" to push the bank's brand deeper into China. Barclays, which sponsors the world's most popular soccer league, will show off the premiership trophy in Shanghai after the English season ends on May 9, and plans more generally to promote British financial services in September. ANZ's board would meet in one of the VIP rooms spread out over three levels in Australia's pavilion and would host forums on natural resources and agriculture, Nancy Wong, the bank's head of Asia-Pacific strategy, said. Coca-Cola had been at every World Expo since Belgium in 1905, and was making a "huge investment" in its pavilion, Neeraj Garg, head of the beverage giant's expo project, said. It will host events including a concert by rapper K'naan, whose song Wavin' Flag is Coca-Cola's anthem for the June-July soccer World Cup in South Africa.

Models pose near a Riich G5 car developed by the Chery Automobile in front of an advertisement featuring Argentine soccer star Lionel Messi at the Beijing Auto China 2010 in Beijing on Friday. China's biggest domestic car brand signaled its ambition on Friday to become a global player by signing argentine football star Lionel Messi as an international ambassador.

Air China (SEHK: 0753) swung into profit last year on the back of improving domestic demand and reduced fuel costs, the nation’s flag-carrier said Friday. The country’s second-largest airline by fleet size earned 5.03 billion yuan (US$736.9 million) in net profit, recovering from a net loss of 9.1 billion yuan in 2008, said a statement filed with the Shanghai stock exchange. In the first quarter of this year, net profit reached 2.17 billion yuan, up 121.3 per cent from the same period last year, helped by rapidly rebounding air traffic demand and gains from fuel-hedging contracts. The turnaround last year was a result of “rapid growth in demand from domestic air passenger market... the change in international jet fuel prices” and the company’s measures to cope with the financial crisis, it said. Total revenue fell 3.5 per cent year on year to 51.09 billion yuan last year due to weak international demand and a drop in fuel surcharges, it added. The company’s total costs declined 10.4 per cent to 48.9 billion yuan as fuel costs -- often an airline’s single largest expenditure – fell 8.1 billion yuan thanks to a decline in annual average oil prices, it said.

Share Nobel Laureate: forced appreciation of the RMB is protectionism - The famous Columbia University professor, Nobel Laureate in economics Joseph Stiglitz recently published an article in India's Economic Times, saying that The United States putting pressure on China for yuan appreciation is risking shaking up the foundation of world economic recovery. In the meantime, the United States should not launch the "trade war" against China. Stiglitz said,the act that US forced China to revaluate the RMB is a manifestation of protectionism. Protectionism often rises when the economic crisis happens. Currently, the U.S. Treasury Department is still evaluating whether China is a currency manipulator. The concept of Currency manipulation is flawed. Today, the financial measures taken by all the Governments will affect the domestic exchange rate irectly or indirectly .Uncontrolled fiscal deficits and low interest rate policies may lead to currency weakness. He said the United States has benefited from the low dollar against the euro exchange rate before the debt crisis that broke out in Greece weather the Europeans could also accuse the US for increasing its exports through currency manipulation?

China will pay US$40 million to build an opera house for trading partner Algeria, a gift likely to serve as a powerful symbol of Beijing’s growing economic influence in Africa.

Second-home buyers and developers which delay construction of their projects to benefit from speculation are among those targeted in new government measures to cool the market. China government is continuing to tighten the screws on second-home mortgage approvals as it tries to damp speculative demand. The Shanghai Securities News quoted China Banking Regulatory Commission director Yang Jiacai as saying that banks will identify whether the buyer is acquiring a second home by basing on the number of the flats the family owns and not on the number of properties that the buyer owns individually. Previously, the banks did not have a standard rule on identifying second-home buyers when approving mortgages. Investors could apply for mortgage plans with lower down payments and could access interest rates normally offered to first-time buyers even if their spouses or family members already owned properties. "Some investors would also buy flats in their baby's name," a property agent said. Investors who have paid up mortgages for their first homes also used to be treated as first-time buyers when acquiring a second home, enjoying the benefits of lower down payments and interest rates. However, under the new rules, these customers will be treated as second-home buyers. Last week, the State Council ordered banks to raise minimum mortgage rates on second homes to 1.1 times the central bank's benchmark lending rate instead of 80 per cent of the benchmark lending rate. The down payment on second homes was also raised to 50 per cent from 40 per cent. A property agent said some investors who bought flats in the past two months but had not yet secured bank finance might be caught out by the new rules. Yang said the CBRC has released guidelines to the banks in approving property loans to the developers. Under the new guidelines, developers which delay construction so that they can benefit from short-term speculation will not get a new property loan from the banks. Developers which hoard property to drive up prices or use loans to pay for the land price will also not be able to get a new property loan. Wang Ren, an analyst at CCB (SEHK: 0939) International Securities, said property sales are expected to decline in the next few weeks following the government's new policies on second homes. "The policy will squeeze out some of the demand. And other home-seekers will postpone their buying plans as they are worried that the government will announce more cooling measures," he said. According to the website of the Beijing local government, property sales in the capital have continued to fall since the central government released the new measures last week. Only 291 homes were sold on Tuesday, compared with 483 transactions on April 15. Wang believes property prices have peaked. "A sharp fall in property prices is unlikely to happen," he said. "Property prices are expected to drop 10 to 15 per cent by the end of the year. But prices would be still slightly higher than they were at the beginning of this year." SJS Markets expects the new policies will lead to a decline in property prices from next month. The prices will drop up to 5 per cent by the end of the year.

Music fountain in trial operation in Expo Park.

April 24, 2010

Hong Kong*: Hong Kong flights to Europe were starting to return to normal on Thursday - after being disrupted for almost a week when ash from an erupting volcano covered a huge part of Europe.

Hong Kong property shares retreated on Thursday after the government proposed rules requiring developers to increase transparency in their home sales to curb speculation.

The Legislative Council on Thursday passed Financial Secretary John Tsang Chun-wah’s budget – and rejected a move by pro-Beijing lawmakers to scrap funding for May’s by-elections.

Share Hong Kong’s inflation rate rose two per cent year on year in March, official figures showed on Thursday. The increase was mainly due to the end of government subsidies for electricity. Netting out the effect of the subsidy, the underlying inflation rate in March rose just 0.8 per cent year-on-year, the Census and Statistics Department said. Underlying consumer prices in the financial hub rose 0.2 per cent in the three-month period between January and March, compared with a 0.3 per cent rise in the December to February period, the department said. “Overall inflationary pressure on consumer prices remained modest,” a government spokesman said, adding that the city’s economic recovery will likely boost inflation “somewhat” going forward.

Customers enjoy wagyu beef at Katte Shabushabu, which says the export ban would not have a big impact as its supply could last for about two months. Lovers of wagyu beef may need to rein in their appetite for their favorite steaks. Japan has suspended beef and pork exports after detecting suspected cases of foot-and-mouth disease in a cattle herd. Doctors said that, while people could not catch the disease, they should cook meat thoroughly before eating it. Local restaurants said although the supply of wagyu from Japan was cut, customers could still choose beef imported from Australia and the United States. The Japanese export suspension, which was announced on Tuesday, came after the country's first foot-and-mouth disease outbreak in a decade. Animal health authorities culled a herd of 16 cows on a farm in the southern prefecture of Miyazaki on Kyushu island because three animals showed symptoms of the highly contagious disease, officials said. Foot-and-mouth disease affects cloven-hoofed animals, including sheep, goats and deer. It is rarely transmitted to humans but spreads easily between animals, causing them pain and often killing young animals. Japan exported 565 tonnes of beef last year, including 111 tonnes to Hong Kong, 347 tonnes to Vietnam, and 72 tonnes to the US, a farm ministry official said. In Hong Kong, restaurants said wagyu supply would not be greatly affected. Daikyo Japanese Cuisine in Wan Chai said their beef also came from Australia. "More than half of our customers prefer Japanese wagyu to Australian beef. The Japanese meat would melt easily as soon as you put it in your mouth," head chef Marco Chung said. He said the restaurant would now import more Australian beef to cope with the demand. Katte Shabushabu in Tai Hang, which offers Japanese beef hotpot, said its supply could last for about two months and so the export ban would not have a big impact. University of Hong Kong microbiologist Ho Pak-leung said consumers need not fear, as foot-and-mouth disease would not be passed to human beings. No sick animals could enter the city as their health would be checked at the border, he said. But it was important to have beef thoroughly cooked because raw meat might contain other viruses and bacteria, such as E coli. He said the export ban was implemented to stop animals from passing the disease to each other. The Centre for Food Safety said it would look into the export suspension with Japanese health authorities. Meanwhile, the centre advised the public not to eat certain batches of Jean Caby pre-packaged cocktail sausages, which are suspected of being contaminated with Listeria monocytogenes, a potentially fatal bacteria. European Union officials are recalling the batches with an expiry date before July 30.

Two premium urban sites at Ho Man Tin and The Peak are set to go under the hammer in June and July. The auctions underline official determination to increase land supply, Financial Secretary John Tsang Chun-wah said yesterday. Meanwhile, MTR Corp (0066) has invited developers to express interest in a Nam Cheong Station site by 2pm next Thursday. The site has a maximum GFA of 275,477 square meters for residential use and 27,660 sqm for commercial use. Together, these moves reveal government resolve in the short term to boost the supply of both high-end and mass- market residential property. Government coffers are expected to swell by up to HK$20 billion through the auction of the two choice urban sites. Midland Surveyors director Alvin Lam Tsz-pun valued the 173,849 square- foot plot at Valley Road Estate in Ho Man Tin at HK$12,600 per square foot of gross floor area. His valuation for the 250,930 sq ft Mount Nicholson Road site at The Peak was HK$30,000 psf. These much-sought-after sites received a combined 31 unsuccessful applications in the past three years. Cheung Kong Holdings (0001) executive director Justin Chiu Kwok-hung said the developer is interested in bidding for them, and expects fierce competition. He also welcomed official moves to increase land supply for luxury homes, which is low at present. The two sites - expected to provide 1,200 homes - are among the six urban sites the government included in the application list this year. Secretary for Development Carrie Lam Cheng Yuet-ngor said in February they would be put up for sale in two years' time if developers do not trigger them by then. However, Polytechnic University professor Eddie Hui Chi-man and Centaline Surveyors said the increase in luxury land supply will not cool the mass property market in the short term. "Luxury home [prices] will be hurt," Hui said. "But it will take time for the signal to be transmitted to the mass market, since they are two different markets after all." Centaline Surveyors managing director Victor Lai Kin-fai said the auctioning of the two plots is part of balanced official measures to increase home supply. "There is a saying that the luxury market is the price driver," Lai said. "After you have met mass-end needs, you also have to satisfy the need of the upper class." Lai believes the expectation of increased supply will help cool prices, while Hui feels its true effects will only be felt when the homes become available two to three years later. It is unlikely that the government will have to withdraw the two premium sites, Hui said. Four plots will go on the block in the next three months. The four prime urban sites may be made available based on market conditions. The government will invite tenders for the former Yuen Long Estate site early next year as part of a pilot scheme to provide small and medium-sized units.

Nine new measures are on the way to force developers to be more transparent in selling homes. The moves, announced by Financial Secretary John Tsang Chun-wah yesterday, come amid mounting anger over spiraling property prices and developers' sales tactics. The measures include providing sales brochures in advance of a launch, new price lists three days prior to any sale and ensuring show flats are realistic. The nine official guidelines announced yesterday to regulate property sales arrangement and transparency will be music to homebuyers but they may considerably constrain developers. Experts said the new requirements can help buyers make informed decisions. But they also raised doubts over the inflexibility the rules will impose on developers. It is common practice for developers to adjust prices according to sales when they put more homes on the market. Henderson Land (0012) sales general manager Thomas Lam Tat-man expressed his reservations: "The nine measures could be considered. "However, the market changes very quickly, so it will not be good for business if we are too inflexible." In February, Sun Hung Kai Properties (0016) sold more than 900 homes at Yoho Midtown within two days. Home prices at tower M5 were 3 to 5 percent higher than tower M2 launched earlier. Centaline Surveyors managing director Victor Lai Kin-fai said the moves mean developers will effectively have to "learn to sell homes from scratch." Polytechnic University profess or Eddie Hui Chi-man noted that developers will not be able to offload more units quickly now that they have to issue a price list in advance. But he also noted the asymmetry in information between buyers and developers will be reduced. Hong Kong Property chief executive Richard Li Chi-shing believes agents will also benefit from the measures. "With more time, they can better prepare important data, such as partitions, areas, directions and club facilities." Housing chief Eva Cheng Yu-wah will also work with the industry to increase transparency on show flats. The measures also require developers to have at least one showroom that is exactly the same as a finished flat. The other show rooms must clearly show how they are different from flats in terms of decor, walls and doors. The government aims to implement the new measures through the Real Estate Developers' Association "within the next few months." REDA vice chairman Stewart Leung Chi-kin believes the industry body may be able to meet the new requirements and will release further details after a small group meeting this week. The financial secretary warned: "Should they prove ineffective, we will not rule out the possibility of introducing legislative regulation." Meanwhile, housing chief Cheng made it clear it is not official policy to encourage the public to buy homes. "The decision to stop building Home Ownership Scheme homes was an important one. So we cannot and will not rashly return to the market." But she said the government is in talks with banks for HOS buyers to be allowed to settle land premiums in monthly installments. Transaction procedures will also be simplified. Democratic Party lawmaker Lee Wing-tat said the policy will fail to curb speculation. "I wonder why those selling pork chops and vegetables using inaccurate weighing and measuring equipment could be jailed, but developers selling flats worth of millions of dollars could escape with a fine," Lee said.

Hong Kong property shares were under pressure on Thursday after government announced a raft of decisions to cool the local property market. Hong Kong property shares retreated on Thursday after the government proposed rules requiring developers to increase transparency in their home sales to curb speculation and soaring home prices. The measures come as mainland announced some of its toughest moves in the past half a year to rein in prices in its own red-hot real estate sector, raising down payment minimums and urging banks to lend more vigilantly. Sun Hung Kai Properties (SEHK: 0016), Asia’s largest property group by market value, fell more than 3 per cent to HK$111.70, its lowest since March 5 intraday, before ending Thursday at HK$113.30, down 1.7 per cent. The blue-chip property index finished down 1.6 per cent, compared with a 0.3 per cent drop in the broader Hang Seng Index. Cheung Kong (SEHK: 0001) Holdings, the second-largest developer in Asia, closed down 1.4 per cent at HK$98.95, while Henderson Land (SEHK: 0012) fell 1.2 per cent to HK$50.75. In the latest measures, Hong Kong’s government plans to increase the stamp duty on property transactions above HK$20 million to 4.25 per cent and to disallow deferred payment of stamp duty for those transactions. “The two proposals are aimed at increasing the transaction cost of property speculation to reduce the risk of a property bubble and to ensure the stable development of the property market,” a government spokesman said in a statement. Since residential transactions above HK$20 million account for only 1.5 per cent of annual property transactions, the majority of homebuyers will not be affected the measures, the spokesman added. “Although the measures are relatively mild compared with regulations implemented in many mainland cities, we feel the Hong Kong government is getting more serious in cooling the market, with a threat of legislating the suggested guidelines if not followed by developers,” RBS said in a report. Mainland tightens loans - Mainland will adopt a stricter standard in identifying whether a house is a “second home” when approving mortgage loans, a senior banking regulator said in remarks published on Thursday. The government will consult the housing registry to determine whether a family already owns a home, Yang Jiacai, a China Banking Regulatory Commission director, was quoted as saying by the official Shanghai Securities News. Previously, regulators only looked at whether a family had an outstanding mortgage. Beijing has ordered that buyers of second homes pay higher down-payments than those purchasing first homes, and several banks are also charging higher rates on second-home mortgages as the government tries to crack down on property speculation. But some bank executives said the new definition of second homes might be difficult to apply in practice because the national housing registry is fragmented, frustrating banks’ efforts to determine whether a family already owns a home. Separately, some banks in Beijing raised down-payments on mortgages for third homes to 60 per cent and have started charging mortgage rates with a 15 to 20 per cent premium over the benchmark interest rate, the 21st Century Business Herald reported.

The yuan's appreciation against the US dollar is likely to push up inflation in Hong Kong and hurt exports but the general impact would be moderate, Financial Secretary John Tsang Chun-wah said yesterday.

Hong Kong Mass Transit - MTR kicks off tender process for HK$33 billion (US$4 billion) Nam Cheong station project - The MTR Corp yesterday kicked off the tender process for the HK$33 billion Nam Cheong station commercial and residential project, in line with the government's policy of releasing more sites to cool the overheated property market. A spokesman for the railway operator said the company would invite developers to submit expressions of interest today. Developers will have until next Thursday to show their interest. The project on top of the station in Sham Shui Po is close to two public housing estates - Fu Cheong Estate and Nam Cheong Estate. The 6.2-hectare site could house nine 7- to 9-storey low-rise and nine 42- to 46-storey high-rise residential buildings with a 287,732 square foot shopping centre. It could provide 3,300 units with a total residential floor area of 2.96 million sqft and is scheduled for completion in 2016. The MTR is negotiating the land premium with the Lands Department. The firm estimated the project's total investment cost, including the land premium levy and construction cost, at about HK$33 billion. As the project will be developed in two phases, the developer could pay the premium in two stages. According to Centaline Property Agency data, property prices at the seven-year-old Metro Harbour View range between HK$4,964 and HK$5,137 per square foot. Including four residential sites scheduled for land auction in the next three months, developers will have five development sites to choose from. Eric Wong Chun-yu, a co-head of Asia property research at UBS, believes the government's policy of releasing more sites could encourage developers to launch more flat sales. "They [developers] don't need to worry that it will be difficult to replenish their land bank. Property price growth will slow after the housing supply is increased," he said.

 China*: A home appliance dealer who once was mainland’s richest businessman went on trial on Thursday on charges of insider trading, bribery and other business offences.

Share China may scrap tax incentives for small cars next year if the market remains strong, and is rethinking plans to provide similar incentives for green-energy vehicles due to quality issues, a government researcher said. Mainland’s car sales zoomed nearly 50 per cent last year, even as sales in the rest of the world fell, thanks in part to a series of government incentives designed to stimulate spending during the global downturn. Car sales have continued to show strong growth this year, up 76 per cent in the first three months of this year from the same period of last year, according to government data. If such strong growth continues, tax incentives that helped to fuel the boom may not be necessary anymore, Xu Changming, director of the information resource department of the State Information Centre, said on Thursday. “The market was so good last year,” Xu said on the sidelines of an auto industry conference ahead of the Beijing auto show, the country’s largest, which begins on Friday. “Actually, growth last year was destructive for automakers and not good,” he said, adding more moderate growth over 10 per cent is considered healthy. Industry watchers are also widely expecting Beijing to roll out incentives for individual consumers to buy clean-energy cars, such as electric and hybrid vehicles, expanding a current program that awards incentives to government buyers. Carmakers such as BYD Co, SAIC Motor Corp and Chery Automobile are relying on such incentives to help boost sales of their newly developed clean-energy cars. But Xu said the government could take a different tack due to quality concerns about such new vehicles, many of which are based on newly developed and still unproven technologies. “The government might not give subsidies to individual buyers because quality is still a big issue for green cars at the moment,” Xu said. “They might set up a third-party institution to rent cars to buyers, and if they have any problems they can send the cars back to that third party. This is an option, but nothing has been finalized so far,” he said. Xu also added that the government was considering giving auto financing companies more flexibility, such as allowing them to issue corporate debt – something only a small number of financing firms can do now. Mainland overtook the United States to become the world’s largest auto market last year, as sales rose about 50 per cent boosted by a raft of government incentives.

China’s mutual fund industry posted an 88.5 billion yuan (HK$100.50 billion) loss in the first quarter, in stark contrast to a record profit last year, official media reported, after investors misjudged the country’s volatile stock market, one of the worst performing in Asia this year. Of 60 mutual fund companies, only Morgan Stanley Huaxin Funds and Minsheng Royal Fund Management Co made a profit, the Shanghai Securities News said on Thursday.

The outlook for mainland exporters remains grim because of the risk of a double-dip in global growth, the Ministry of Industry and Information Technology said on Thursday. In a statement issued ahead of a news conference, the ministry cited high US unemployment, eurozone debt strains and rising trade protectionism among the problems bedevilling the world economy. Although exports were now growing again in year-on-year terms, the situation remained “complicated”, Zhu Hongren, the ministry’s spokesman, told reporters. In the same vein, he said a brisk rebound in industrial production was mainly due to massive government stimulus; underlying factory output had yet to recover to normal pre-crisis levels. The pressure that some developed countries were exerting on mainland in many spheres, including their demands for a stronger yuan exchange rate, was weighing on mainland’s trade, Zhu added. “The world economy and trade have started to recover, but the global recovery is still very fragile. The process of recovery is fraught with difficulty,” he said. The comments underscore the divisions within the central government about the pros and cons of letting the yuan resume its rise after pegging it near 6.83 per US dollar since July 2008. The Ministry of Commerce, which speaks for exporters, opposes a stronger currency. The central bank, which would like a more flexible exchange rate to help it conduct monetary policy, is the leading advocate of abandoning the peg. A tight job market was adding to exporters’ problems, Zhu said. Labor costs in coastal areas, including the Pearl River Delta near Hong Kong and the Yangtze River Delta near Shanghai, jumped 20-25 per cent in the first quarter from a year earlier, he said. Firms in light industry, textiles and electronics were finding it tough to hire enough people, Zhu said.

Multi-nationals go for 'guanxi' at Expo - Coca-Cola is flying in hip-hop stars, Barclays is bringing English football's Premier League trophy and General Motors will offer a glimpse of the future as foreign firms woo China’s massive market at the Shanghai Expo. Multi-nationals are seizing on the six-month event beginning May 1 to build their brand presence in the market of 1.3 billion people, but also the business and government connections – or “guanxi” – crucial to making money in China. “At this Expo, because it’s going on in Shanghai and in China, everyone wants to showcase their latest and best here,” Jean Liu-Barnocki, GM’s Expo project manager, said. GM and Chinese partner Shanghai Automotive Industry Corporation have built a state-of-the-art theatre that creates the sensation of soaring over Shanghai in the year 2030, with emissions and congestion eliminated by electric cars. Behind the scenes, corporations will be laying the groundwork for such future visions by entertaining high-powered visitors to their pavilions. “Every pavilion has a hospitality programme or VIP experience as part of its overall design. Of course we wanted to make sure our friends and customers can be very well taken care of,” Liu-Barnocki said. Signing on as an Expo sponsor helps build brands and consumer contact that can translate into sales, but often the main goal is networking, said Pippa Collett, managing director of London-based Sponsorship Consultants. In China, building “guanxi” – often through lavish banquets and other wining and dining – is a considered a key part of doing business. And Collet, who has advised giants such as Shell and Unilever, said that Expo sponsorships from the likes of GM are often “an excuse for a group of individuals to be in the same room at the same time”. Britain has spent 25 million pounds (US$38 million) on its striking dandelion-like pavilion to promote business encounters. It hopes the venue will generate more than 1,000 meetings between British and Chinese business leaders, said Katherine Dixon, Britain’s political and economic consul in Shanghai. “This is the stuff you don’t see... This is actually what the UK is focused on. So we haven’t done retail, we haven’t done catering,” Dixon said, emphasising that unlike others, Britain is not selling souvenirs or snacks. “Our focus is on targeting the right people to interact with over six months.” David Wright, vice chairman of Barclays Capital, which is a 500,000-pound sponsor of the pavilion, called it “a major opportunity” to push the bank’s brand deeper into China. Barclays, which sponsors the world’s most popular football league, will show off the premiership trophy in Shanghai after the English season ends on May 9, and plans more generally to promote British financial services in September. ANZ’s board will meet in one of the VIP rooms spread out over three levels in Australia’s pavilion and will host forums on natural resources and agriculture, said Nancy Wong, head of Asia-Pacific strategy for the bank. “That’s to bring together very high-calibre CEOs and government officials and economists to talk about regional trends and show how we can help bring all these people together,” she said. Coca-Cola has been at every world Expo since Belgium in 1905, and is making a “huge investment” in its pavilion, said Neeraj Garg, head of the beverage giant’s Expo project. It will host events including a concert by rapper K’naan, whose song Wavin’ Flag is Coca-Cola’s anthem for the June-July football World Cup in South Africa. It too has VIP lounges, where the company will host retail executives and bottling company bosses, Garg said. He added: “Expo in China is going to be the largest showcase event ever.”

Shanghai will see between 450,000 and 500,000 square metres of new retail space added to the market every year until 2012. Luxury retailers snap up prime space in Shanghai - Shop rents rise 1.1pc amid demand from top brands.

Actress Zhang Ziyi (right) takes part in a CCTV fund-raiser in Beijing on Tuesday for the victims of the Qinghai earthquake. Actress Zhang Ziyi, her public image tarnished by allegations that she failed to deliver on a donation promised for Sichuan earthquake victims two years ago, is working hard to redeem herself after last week's quake in Qinghai. Zhang gave 200,000 yuan (HK$227,400) to Qinghai quake victims during China Central Television's charity show on Tuesday, state media reported. The actress, in a black dress, recited the poem We're Together with other mainland artists. It was recently revealed that she had also made an anonymous donation of 200,000 yuan to aid drought victims in southwest China. In February, Zhang handed over 160,000 yuan for Sichuan earthquake relief, and her agent apologized publicly after outraged mainlanders flayed her for overstating her donation. Mainland media had reported a significant shortfall in Zhang's promised donation of 1 million yuan. Online surveys showed that many internet users believed the scandal had damaged her reputation and that it could not be repaired quickly.

China Yurun Food said on Thursday its controlling shareholder was selling 166 million existing shares for HK$3.96 billion.

China Overseas Land & Investment (SEHK: 0688) posted a first-quarter operating profit of HK$2.44 billion amid recent measures by Beijing to cool surging home prices. Turnover was HK$6.06 billion, the company said on Thursday, without providing a comparison figure. But it said its property sales for the three-month period rose 48 per cent from a year earlier to HK$13.73 billion. Last month, the mainland developer posted a forecast-beating 62 per cent rise in second-half profit last year, but said it saw little growth in sales volume this year. Analysts said government measures to keep housing prices from rising too sharply may damp the financial performance of property developers.

April 23, 2010

Hong Kong*: Hong Kong flights to Europe were resuming on Wednesday - after being disrupted for several days after an Icelandic volcano covered the continent in ash dangerous for planes.

Share Chief Executive Donald Tsang Yam-kuen, Chief Secretary Henry Tang Ying-yen and other government officials observe a minute’s silence for victims of the Qinghai earthquake outside Central Government Offices in Central on Wednesday.

Hong Kong's jobless rate has fallen to a 15-month low and is expected to drop further as the economy picks up, with banks leading the charge to hire more staff. The seasonally adjusted unemployment rate for the three months ended March 31 slid to 4.4 percent, the government said yesterday. That was lower than the median 4.5 percent estimate of eight economists surveyed by Bloomberg. Secretary for Labour and Welfare Matthew Cheung Kin-chung said the fundamentals of the labor market remain robust. Hong Kong's retail sales rose at the fastest pace in more than 20 years in February as the jobless rate fell and gross domestic product expanded in the nine months through December after a year- long recession. The city's first-quarter economic report is due on May 14. Financial Secretary John Tsang Chun-wah budgeted HK$20.4 billion in February for the year starting April 1 to support growth. The stimulus package included personal income-tax rebates and property- rate waivers. Hongkong and Shanghai Banking Corporation's personal financial services unit said yesterday it plans to recruit more than 300 staff. The lender is aiming to double its professional force to meet rising demand from affluent mainland customers, according to unit head Francesca McDonagh. Positions available include Premier customer and wealth management managers, and general banking officers. In recent months, the bank recruited about 900 new staff, taking its strength at the personal financial services unit to 3,600. The recruitment period started on Monday and will end on May 16. The local banking sector has been the most aggressive in hiring staff. BOC (Hong Kong) (2388) signed up 200 employees, mainly frontline staff, at a recruitment day last Saturday. China Construction Bank (Asia) Corp - the local retail banking unit of China Construction Bank (0939) - aims to hire up to 400 people and plans to open seven new branches, spokeswoman Willa Wong said.

Billionaire Steve Wynn opened his latest hotel and casino in Macau on Wednesday and said he aims to start building a massive new resort in Macau next year. Wynn said the project – to be located in the territory’s Cotai area, a piece of reclaimed land seen as the next great hope for global gambling – would likely feature less than 2,000 rooms, about 400 tables, restaurants, shopping and meeting rooms set across some 50 acres of lush gardens and landscape. Next to the towering interconnected hotel-casino projects in Cotai from competitors like Las Vegas Sands, Wynn’s planned resort would stand in marked contrast. “What makes people happy and what don’t they get in China? .... What you don’t get in China is space, and the heart of a resort is space – gardens, places to gambol, not gamble,” Wynn, chief executive of Las Vegas-based Wynn resorts, said in Macau. “I know what I want to do on the 51 acres, not build four hotels or six hotels or any of that foolishness,” he said. “I am going to build one hotel of modest size with gardens and extended space wherever you are.” Wynn revealed details of the project ahead of the unveiling of the US$600 million Encore at Wynn Macau. The only major project to open in the booming gambling territory this year, Encore is geared toward high-end tourists and gamblers. With over 400 suites, four 7,000-foot villas and over 60 gambling tables, the project was described by Wynn as “the ritziest hotel in China” whose rooms would raise the standard for the region’s luxury tourism market. Macau, the world’s most lucrative casino market, bounced back strongly from the global recession with a bumper last year. So robust was Macau’s turnaround that the local government, under a new chief executive, said last month it would seek to limit the industry’s growth by withholding approval of new projects and capping the number of gambling tables over the next few years. Wynn said his project wouldn’t be opening during the government’s efforts to keep the local industry and economy from overheating. But he said he believed his project would be allowed to proceed. “No one like myself would be allowed to start a project unless they [Macau officials] wanted it finished,” he said. “If the goal is to stop our development, we would have been stopped or we will be stopped with plenty of time. There won’t be any games. They don’t do that here.”

People canoe in front of The Wynn Macao hotel (L) and Wynn Encore casino and hotel in Macao April 21, 2010. The $600 million Encore with 414 suites and villas, opened on Wednesday.

Taiwan's ruling nationalist party legislator Chao Li-yun is gagged during a parliament session inside the legislature Wednesday in Taipei. Dozens of Taiwanese lawmakers scuffled in parliament on Wednesday over a controversial bill to open local universities to mainland Chinese students. Several opposition legislators manhandled Chao Li-yun of the ruling Kuomintang (KMT) party to stop her chairing a review of the bill and struggled with others who tried to come to her rescue, television footage showed. A conference table was overturned and two lawmakers stood atop the podium shouting at each other in chaotic scenes that lasted about 20 minutes, local media said. Chao was later hospitalised after collapsing on the scene while several female opposition lawmakers told reporters they were also injured. Taiwan aims to admit mainland students for the first time as early as this year to help ease a shortage of students caused by the island’s dwindling birth rate and a tendency for Taiwanese students to enrol at mainland universities. The DPP warns that an influx of young people from the mainland could pose a threat to national security and worsen unemployment. The government “is selling out everything to China. We won’t allow selling out education to China,” said lawmaker Kuan Bi-ling of the opposition Democratic Progressive Party (DPP). But the KMT condemned the unruly behaviour – the second major incident of its kind in the past two years – and demanded the opposition admit responsibility, said its parliamentary whip Lin Yi-shih. According to forecasts, more than a third of Taiwan’s 164 universities will be shut down by 2021 because they cannot enrol enough students. Taiwanese students have been enrolling at mainland universities for years, attracted by relatively low tuition fees. An estimated 7,000 are currently studying in the mainland.

Financial Secretary John Tsang Chun-wah on Tuesday proposed new measures to help cool Hong Kong’s residential property market and curb excessive speculation.

Catering industry lawmaker Tommy Cheung Yu-yan - who got into hot water last month for suggesting a minimum wage of HK$20 an hour - has joined Liberal Party colleagues in proposing a rate of HK$24.

The Trade Development Council will consider hosting more trade fairs at AsiaWorld-Expo at Chek Lap Kok and enhance its co-operation with organisers in the private sector amid criticisms that the council is dominating the exhibition industry. Almost 40 industry representatives attended a Legco panel meeting yesterday, and were soon split into two camps in a heated debate over the dual role of the council - a government promotion arm and a competing trade show organiser. While many small- and medium-sized enterprises hailed the council's efforts to promote their trades to overseas buyers over the years, private exhibition organisers and the management of AsiaWorld-Expo had voiced their bitterness and branded the council "a structural problem" to the industry. Eddie Leung, the managing director of Paper Communication Exhibition Services, said the council should take a lesser role in organising trade fairs as its dominance was now edging them out of business. "Successful exhibitions are not necessarily being held by government bodies," he said. "The council is also responsible for supporting exhibition businesses in the private sector." The call was echoed by Global Sources, which organises the China Sourcing Fairs that anchor the AsiaWorld-Expo venue. The firm has also raised its opposition to the council's plan to increase the size of the Hong Kong Convention and Exhibition Centre (HKCEC) in Wan Chai. Company chairman Merle Hinrichs said the government had spent HK$2 billion to build the Chek Lap Kok venue and "the investment will be totally lost" if it is to expand the Wan Chai venue. Allen Ha, the chief executive of AsiaWorld-Expo Management, said the venue had met with fierce competition. "What we want is a level playing field to lure fairs to our venue," he said. Council executive director Fred Lam Tin-fuk said the body had never intended to compete with the private sector but rather wanted to create business opportunities and help the industry flourish. "Hong Kong is one of the most open cities for newcomers in the exhibition industry," he said. "In light of the comments, we will study, under prudent commercial principles, whether more trade fairs could be held in the HKCEC and improve our co-operation with the private sector." Professor Chan Kei-biu, the chairman of the Hong Kong Electronic Industries Association, said the council had spent three decades to establish its reputation in the industry and its efforts were recognised by many trades. "Many of us agree the council should continue its good work and an expansion could definitely help," he said.

 China*: China observed a day of national mourning on Wednesday for victims of its killer quake, with newspaper front pages bathed in black and flags lowered to half-mast.

Share Rescuers stand on ruins as they mourn for the victims of last week's earthquake, in Gyegu Town of the quake-hit Tibetan Autonomous Prefecture of Yushu in Qinghai province on Wednesday.

Top Chinese leaders pay silent tribute to quake victims.

Flag at half-mast to mourn quake dead.

Chinese pay respect to quake victims.

Chinese light candles to mourn Yushu earthquake victims.

Mainland banking regulators have ordered lenders to conduct quarterly stress tests on mortgages as the government tries to clamp down on bad loans and rein real estate speculation. All financial institutions must follow centralised rules for curbing property loans and ensuring risks are strictly controlled, Liu Mingkang, head of the China Banking Regulatory Commission, said in a statement late on Tuesday. Mainland has tried to clamp down on ballooning lending, which hit a record 9.6 trillion yuan (HK$10.90 trillion) last year, as it fears a growth of soured loans that could hit banks. Liu said this month banks had been ordered to reassess all loans to local government companies on a “project-by-project” basis. And policymakers have raised bank reserve ratios twice since the start of the year – effectively limiting the amount of money they can lend. Beijing has also recently announced a range of new measures to prevent the growth of asset bubbles and soaring property prices. Data showed property prices in 70 cities jumped 11.7 per cent in March, the fastest year-on-year rise for a single month in five years. Over the past week, the government has tightened restrictions on advance sales of new property developments, introduced new curbs on loans for third home purchases, and raised minimum down payments for second homes. Mainland’s economy still faces serious challenges this year even though the economy showed steady recovery in the first quarter, Liu said in the statement. Lenders must effectively control their full year new loan growth, adjust the pace of lending and optimise their credit procedures, Liu added.

China Mobile (0941) earned a first-quarter net profit of 25.5 billion yuan, up only a marginal 1.1 percent from a year ago amid intensifying competition. "In the first quarter of 2010, the group faced adverse factors such as increased mobile penetration rate and intensifying market competition," chairman and chief executive officer Wang Jianzhou said. Monthly average revenue per user continued to decline, falling 12.5 percent to 70 yuan, from 80 yuan for the same period last year. This is because new customers were mainly low-usage clients and more people continued to acquire multiple SIM cards. The margin of earnings before interest, tax, depreciation and amortization declined to 50.6 percent from 52.7 percent for the same period a year ago. Net additional customer growth slowed to an average of 5.5 million per month in the first quarter, compared with an average 6.6 million users it added per month during the same period last year. Net customers added in 2009 was about 88 million. Of the 5.97 million users added by China Mobile in March, 3.4 million were third-generation service subscribers, the first time new 3G users at the company outnumbered those for 2G. Meanwhile, rival China Telecom (0728) also posted a drop of about 3 percent in its fixed-line subscribers during the first quarter, to 184 million. The company lost 19.79 million fixed- line subscribers in 2009. But its broadband subscriber base increased by 2.38 million during the first quarter, to reach a total of 55.84 million users. CDMA mobile subscribers at the fixed- line operator increased by 9.36 million in the first quarter to 65.45 million. Net addition of mobile subscribers increased to an average of 3.12 million per month this year, from 1.64 million per month a year ago.

The State Council released more guidelines yesterday on how local hospitals should be rewarded if they keep consumers' medical bills down.

Mainland’s Australian iron ore imports keep rising - Imports of Australian iron ore into mainland reached 24 million tonnes in March, up 22.39 per cent from a year earlier and 16.85 per cent since February.

Industrial and Commercial Bank of China (ICBC) said it had acquired 97.24 per cent of Thailand’s smallest lender, ACL Bank, for about US$550 million after a tender.

Dongfang Electric Corp expects growth in wind and nuclear power equipment sectors to offset slowing thermal power orders, and aims to expand its overseas market.

Visitors wait to enter the Shanghai World Expo site April 21, 2010. The expo started trial operations on Tuesday with the participation of about 70 percent of the pavilions, Xinhua News Agency reported. China is the first developing nation to host the World Expo and officials hope the event, held from May 1-Oct 31, will improve Shanghai's position as a global city.

Retail prices of fresh salmon flown in from Norway jumped almost 50 percent at some supermarkets in the capital on Tuesday, as European freight remains grounded because of Iceland's enormous volcanic ash cloud. Several large supermarkets contacted by METRO said salmon supplies, which come primarily from Norway, might run short if European flights don't resume.

April 22, 2010

Hong Kong*: The Airport Authority said on Tuesday some flights from Hong Kong to European cities have resumed as European governments started opening the continent's airspace to new flights. Flights from large parts of Europe resumed on Tuesday under a deal to free up airspace, but strengthened eruptions from an Icelandic volcano threatened to unravel the plans.

Share Hong Kong stocks pulled back from a three-week low on Tuesday, with domestic plays such as China Mobile rising on expectations of consumption growth on the mainland.

If you bought the first issue of Monocle, you made a good investment. Three years ago the price of the magazine was £5. Now it's worth £100. The rise in value, although unexpected, doesn't surprise media maestro Tyler Brule, who founded the high-brow, high-culture, high-priced publication after laying down design-cum-lifestyle laws in Wallpaper*, the trendsetting magazine that made his name. "There are only 13 left [of the inaugural edition]," he says archly, suppressing, it seems, the urge to add: "Duh, as things become rarer, they increase in price." What's worked for the magazine appears to be doing the same for the store it spawned, which has tiny permanent outlets in London and Los Angeles, with more planned this year, in Tokyo, Toronto, New York and Hong Kong. In a run-up to staking its turf in Wan Chai in mid-year, Monocle last week set up shop in Lane Crawford, enticing neophytes and aficionados alike with limited-edition items and "entry-level" goods (meaning affordable if you shop at Lane Crawford anyway). At the "seasonal shop", which will occupy a corner of Lane Crawford Home Store for five weeks, a light bulb attached to a clamp sells for HK$1,850, a small wooden table for HK$11,000, and a BlackBerry for HK$11,650. Produced in collaboration with Monocle, and all limited editions, they sit (more or less) underneath the main item they support: Monocle magazine, whose strapline reads: "A briefing on global affairs, business, culture and design". Back issues, all 32 of them, are displayed on shelves out of reach of pint-sized paws. The May volume, which includes an urban survey of Hong Kong and is the only one at browsing level, sells for HK$95, a relative bargain because by the time the next issue comes out it will be twice the price. "There's no better way to say this has value, at a time when everyone's devaluing print," says Brule. Like the magazine, which has 13,500 subscribers in 82 countries, the store, he says, targets, "children of the late 60s or early 70s". Designs have a certain nostalgia to them, such as the oak Ovalen IV table, which is a remake of one of Swede Carl Malmsten's last designs. Brule, 41, who describes it as masculine in terms of material but dainty in form, says: "It's very 'granny's house', but that's why we love it." Also harking back to simpler times are the no-nonsense canvas Porter bags, made in Japan, which range from HK$1,950 for the wallet to HK$4,950 for the Boston bag. Their prices - like that of an old-fashioned pushbike (HK$10,500) parked at their stores as if Ingrid Bergman just dropped by - reflect their provenance and production costs. "The [Swedish-made] bicycle is not smacked together in a factory in Shenzhen," he says. "You have to pay for EU labour costs." So popular are the bags that a British newspaper article implied their sales will fund a Monocle bureau, opening in Hong Kong in conjunction with the permanent shop in June/July. An exaggeration, but they are among the store's biggest revenue generators, Brule says. Other bureaus have been set up in London, New York, Tokyo and Zurich. He says the space the company is leasing in Wan Chai is its new media model, which places back to back, literally, its journalistic endeavours and retail extension: the front will be the store and the back the bureau. "The shop pays for the real estate," he says. Although Monocle outlets and pop-up stores have gained an enthusiastic following, not everyone has warmed to such small retail spaces selling only a select number of goods. One reviewer, commenting on its nine-square-metre Marylebone venue, wrote: "It's a shop. For a magazine. About as big as a loo. It sells magazines. And, erm, some other design pfaff. But not much." Then there are those who recoil from a sales pitch that implies: "Pare back, but consume." Brule doesn't baulk at the apparent inconsistency. "You don't need to invest in 1,000 things," he says, "but you do need to invest if you want something that's going to last." The Monocle Shop at Lane Crawford Home Store in Pacific Place closes on May 23.

Hong Kong homes are the least affordable among the world's major cities and are rapidly becoming less affordable - a fact buyers may find to their cost when interest rates rise. This is shown by an international comparison conducted by a US consultancy at the request of the South China Morning Post (SEHK: 0583, announcements, news) , and Hong Kong government figures. A university professor specialising in real estate warned that a "short-term illusion" of affordability had been created by very low mortgage interest rates, which would evaporate when rates rose to a more realistic level - possibly as early as next year - pushing up mortgage payments. The survey found Hong Kong people pay more than 10 times their annual income to buy a flat, the most of 272 metropolitan cities and earning it a "severely unaffordable" rating along with London, Sydney and New York. This was backed up by Hong Kong government statistics which showed buyers paid 8.5 times their annual income for an average-sized flat in the last quarter of last year - up from 7.6 times in the second quarter, an increase of almost a year's income in six months. Despite this, Hong Kong buyers pay less of their annual income on mortgage payments than some of the other most expensive cities - 44 per cent, according to the survey, and 38.1 per cent, up from 34 per cent in the first quarter, according to government figures. Chau Kwong-wing, chair professor of the real estate and construction department at the University of Hong Kong, said the big jump in flat prices and a mild increase in mortgage payments illustrated that interest rates of just 0.8 per cent to 2.1 per cent were making housing look affordable. "But it is just a short-term illusion. People think they can afford an expensive flat with a reasonably cheap mortgage," he said. "Their dreams will burst and the flat will become unaffordable when the interest rate rises."

 China*: China will hold a national day of mourning on Wednesday for victims of the earthquake in Qinghai province as the official death toll from the disaster climbed to 2,039, the government announced on Tuesday. Another 195 people are still listed as missing following the quake, which struck Yushu county, a heavily Tibetan area in the province of Qinghai last Wednesday, the official Xinhua news agency said. The nation will pause to mourn the victims on Wednesday, a week after the quake hit, with national flags at half-mast and public entertainment curtailed, the cabinet in Beijing decided, according to the central government website. Despite dwindling hopes, rescuers continued searching for survivors in the flattened town of Gyegu, the county seat of Yushu with some 90,000 inhabitants, spurred by the discovery of three survivors the previous day. An elderly Tibetan woman and her granddaughter were pulled out alive, and a woman in her 30s was rescued after being trapped for 130 hours, state media reported.

Share Visitors queue to enter the Shanghai World Expo site on the preview opening day in Shanghai on Tuesday. Organisers of Shanghai's World Expo gave members of the public a preview of the massive event on Tuesday as they tested facilities and public transportation 10 days before the official start. “I’m so happy. The Expo looks great. I want to see all the foreign pavilions today,” said Wang Huifen, a 50-year-old hotel employee, as she waited to enter the huge Expo site. More than 1.25 million people were expected to visit over the six preview days before the official May 1 opening, with about 70 per cent of the pavilions ready to welcome visitors, the Shanghai Daily reported. For China, the World Expo is the latest showcase since the 2008 Beijing Olympics for its growing global clout, and Shanghai has planned an Expo on an unparalleled scale to show it can rival the world’s greatest cities. The six-month event is set to be one the largest gatherings of humanity, with 192 countries participating and organisers saying they expect up to 100 million visitors. A 23-year-old surnamed Cao spread his arms wide, waving Chinese and Expo flags in both hands in front of the China Pavilion, a 60-metre tall inverted pyramid that towers over the Expo site. “I am very happy to see Expo finally starting,” said Cao, adding he had just arrived in Shanghai from Beijing and planned to sell the flags over the next six months at five yuan a pair over the next six months. Foreign media were not allowed inside the site for the preview. Fang Qian, 12, got the day off school after her mother’s real estate company offered them two of the pink preview tickets the day before. “I’m very happy. I want to see the French pavilion because its design is very special. There’s an outdoor restaurant on the top and I’ve never been to France,” Fang said. “I also want to visit the China pavilion.” Mark Germyn, the USA Pavilion’s chief operating officer – and the overall operations manager at Vancouver’s 1986 Expo – called the preview days a “test and adjust period” to try out everything from new staff to air conditioning.

Mainland has tightened rules on advance sales of new property developments, in the third move of its kind in less than a week aimed at curbing rampant real estate speculation.

An early-morning tremor and a premonition of worse to come prompted a schoolmaster to evacuate 830 students and teachers ahead of China's killer quake, saving their lives, state media said on Tuesday. Yanli Duode’s foresight helped his school in a remote area of Qinghai province avoid the heavy death toll seen in other schools which toppled in last Wednesday’s 6.9 magnitude quake, the China Youth Daily said. The earthquake in the predominantly Tibetan region of Yushu which killed more than 2,000 people, including more than 100 students, was preceded by a smaller tremor which awoke schoolmaster Yanli Duode. An ominous feeling “made me uncomfortable but I couldn’t pinpoint exactly what it was,” said the deputy principal of the Number One Minorities Middle School in Yushu prefecture. He got out of bed and ran to the student dormitories with four teachers, telling the children to wake up and leave the buildings. The strong quake struck at 7.49am, razing the boys’ dormitory and causing heavy damage to the living quarters of the girl students and staff. “We were so lucky,” Yanli Duode was quoted as saying after all 830 students and teachers survived the disaster. The paper did not specify his ethnicity but his name suggests he is Tibetan. Other schools in the mountainous, high-altitude prefecture suffered similar damage but many students were killed because they remained indoors. At least 100 students and 12 teachers were killed as the buildings crashed down, according to official figures. The schools issue is extremely sensitive in the mainland after thousands of children died in a huge May 2008 earthquake in the southwestern province of Sichuan as school buildings collapsed while neighbouring structures stood firm. At the time, angry Sichuan parents levelled corruption allegations at local officials, saying corners were cut on safety and construction quality. President Hu Jintao, during a tour of the quake region on Sunday, promised new schools as soon as possible.

China Eastern Airlines said on Tuesday it swung back into the black last year as it was boosted by a recovery in domestic air travel and lower fuel costs.

Pupils donate money to quake-hit Yushu prefecture in Shantou city, south China's Guangdong province, April 19, 2010.

Moutai looks to int'l markets - Whilst many family-based enterprises in drought-stricken Guizhou have had to cease production, one of the country's leading liquor producers based there has managed to source enough water to continue production. Chairman, Yuan Renguo, said that the company, Kweichow Moutai, draws water from Chishui River, which can meet its demand. "We have spent millions to update our water project in recent years," he said. "As long as the Chishui River is not parched, our production will not be affected." The water in Chishui River is about two-thirds of its normal level. Smaller liquor producers in Guizhou are less well equipped and have been forced to stop production as they rely heavily on wells for water. Yuan remains confident about sales in the year ahead. Unlike other liquor, "it takes the company five years to make a bottle of Moutai," he said. "Thus, the wine we are selling this year was actually produced five years ago." Yuan said the company has increased its efforts to crack down on fake Moutai in the market. As one of the best-known liquors in the country, Moutai has the most copycats. The company has employed a special team of more than 100 people to combat fake producers, Yuan said.

April 21, 2010

China to mourn quake dead - The Chinese flag will be lowered to half-mast around the country and at embassies and consulates abroad Wednesday April 21 2010 in a show of respect for those killed in the Qinghai quake.

Hong Kong*: Hong Kong homes are the least affordable among the world's major cities and are rapidly becoming less affordable - a fact buyers may find to their cost when interest rates rise.

Share A satellite view of the ash plume of Iceland's volcano. The huge cloud of volcanic ash that has cut off much of Europe from the rest of the world is choking the global supply chain and leaving import-dependent economies such as Hong Kong's without the supplies and means to do business. In a stark reminder of how vulnerable and dependent the global economy is on air transport, the disruption to European air traffic is not only stranding travellers but quickly depleting the food and flower supplies of hotels and restaurants, and may even hurt business dealings, especially on the mainland. Suppliers say Norwegian fresh salmon is out of stock in Hong Kong. Each day of delayed or cancelled flights adds to a growing backlog of desperate passengers and mounting business losses. Cathay Pacific (SEHK: 0293) has scrapped seven scheduled flights between Europe and Hong Kong today and four more tomorrow. Virgin Atlantic, which operates a daily flight between London and Hong Kong, is estimated to have a backlog of about 1,500 passengers in Hong Kong over the past five days. A total of 35 flights between Hong Kong and London, Paris, Frankfurt, Milan and Amsterdam were cancelled yesterday, while 10 were delayed, the Airport Authority said. The Labour Department is urging employers to be flexible when staff fail to turn up for work, while the Immigration Department has so far granted about 200 visa extensions for travellers stranded in Hong Kong. When the affected airports reopen, airlines face a logistical nightmare of clearing up the backlog of passengers and cargo as soon as possible. Preliminary ticket rebookings appear to indicate a long delay. John Bednall, who organises exhibitions for the restaurant and bar trade and is stranded in Hong Kong, said his Cathay Pacific economy class ticket had been rescheduled from April 17 to May 5. "I have urgent business matters to attend to in the UK and my wife is due to undergo an operation in hospital, leaving no one to take care of my four-year-old daughter. I originally planned to move to another house early next week, but now I am trapped," Bednall said. "There have only been several days of cancelled flights, so how can they justify this delay of 20 days? ... I am staying in a hotel that charges HK$1,800 per night, but Cathay has yet to offer to pay for my accommodation for the extra nights." Hermione Tsoi, 18, who attends boarding school in Britain, is in a similar predicament. Tsoi was originally supposed to fly on Cathay Pacific to Britain on April 18 but was later told that she could leave on a May 7 flight. "I was very glad about not having to go to school in the beginning. But now I am worried that we can't finish the syllabus before the A-levels, which start on May 21," Tsoi said. "I am traumatised that I will miss three weeks of lessons." Tsoi is trying to catch up on her studies in the meantime by reading past papers and liaising with her teachers online. There are 5,000 Hong Kong students studying in British boarding schools, the British Council says. The council is liaising with schools, examination boards and universities to explore what can be done to help those who have not been able to travel back to Britain after the Easter holiday.

Polytechnic University will face an operating deficit of HK$1.67 billion in the three years to June 2012 because of several development projects.

Gremlins rained on Hong Kong's parade yesterday when Chief Secretary Henry Tang Ying-yen paid a visit to the city's HK$346 million presence at the World Expo in Shanghai. The two pavilions are intended to show Hong Kong off as a world leader in hi-tech lifestyle solutions and innovations. Tang was visiting the sites ahead of the May 1 opening. But he was left red-faced when a touch-screen repeatedly failed to respond. He spent a minute trying to operate it before being ushered to another screen. Shortly afterwards, he ended up briefly talking at cross-purposes via an internet link to colleagues in the main pavilion across the Huangpu River, due to a considerable time delay on the system. However, Tang refused to let the problems spoil his enjoyment of the exhibitions. "The mood inside was very good. You get to see a very moving multimedia experience," he said. "We believe that we will definitely be able to improve these [glitches]." The technical team would be able to use a test-opening period, starting today, to "strive for full marks". Hong Kong is represented at the six-month expo by two exhibitions, one on either side of the river. In the Urban Best Practices Area, the city's exhibition focuses on "smart card, smart city, smart life". The stand opens with a two-minute film introducing Hong Kong's landscape and culture. Visitors then get the chance to interact with the touch-screen portals, which introduce the Octopus card and other uses of smart-chip technology. The city's main pavilion is in the larger half of the park on the east bank, in the shadow of the China pavilion. The three-storey structure contains a variety of interactive games, a 3D film and a rotating theme exhibition to project the image of Hong Kong as an "open, inclusive, pluralistic society" with an environmental twist.The pavilion's roof is a woodlands and wetlands garden to highlight the city's country parks.

Hong Kong $120 millions set aside to subsidise rise in outer island ferry fares - The government will inject up to HK$120 million of public funds to subsidise any fare increase when contracts to run six outlying islands ferry routes are renewed next year. Officials said the move would help stabilise fares, under pressure because of rising costs and the dwindling population of the islands, and ensure the 41,000 islanders did not lose their only transport link to town. The Transport and Housing Bureau denied the move breached its long-standing principle of not paying direct subsidies to public transport operators, but it will in effect increase the ferry operators' financial dependence on the government. Under the policy announced yesterday, the government will subsidise half the fare increase after general inflation is taken into account. For example, if a HK$15 fare rose by HK$1.50, or 10 per cent, the passenger would pay the portion of the increase caused by the general inflation rate (say, 3 per cent) plus half the remainder of the increase (half of 7 per cent), with the government paying the other half - resulting in a rise for the passenger of about HK$1. Government economists have projected an average inflation rate of 2.5 per cent for the year. Passengers on six major routes - Central-Cheung Chau, Central-Mui Wo, Central-Peng Chau, Central-Yung Shue Wan, Central-Sok Kwu Wan and inter-islands - will benefit from the scheme. The three-year licences to run the six routes expire in June next year. Companies bidding to operate them - the tenders do not open until next year - will be required to narrow the gap between the price charged on weekdays and holidays from up to 40 per cent at present to within 20 per cent. Four of the six routes had to be put out for tendering a second time in 2008 because bidders proposed a fare rise so high that the government had to offer some subsidies to push down the increase. A bureau spokeswoman said the new policy was not much different from past practice, as the HK$120 million subsidy would be used to cover the operators' repair and maintenance expenses. "Operators can get the subsidy by claiming on the actual amount they spend on repair and maintenance of their facilities and vessels," she said. The government has poured tens million of dollars over the years into paying the operators' bills for pier maintenance, cleaning, water and electricity, and waiving all vessel- related fees. It even spent a one-off amount of HK$2 million in 2008 to encourage organisations to hold activities on the islands to encourage patronage. But Richard Tsoi Yiu-cheong of the Coalition to Monitor Public Transport and Utilities said it was obvious that the subsidy was a kind of direct sponsorship. "When operators propose a fare increase, they don't just look at their maintenance costs, but also at fuel expenses and wages," he said. The spokeswoman said the bureau strived to strike the best balance between the principal of non-intervention in private business and the interests of island residents. "Unlike other commuters, islanders have no other option but ferries, and without assistance, this business is simply financially unviable," she said. New World First Ferry, which operates three of the routes, said it had accumulated a deficit of HK$20 million since 2000, while Hong Kong and Kowloon Ferry, operator of the other three, said it made a small profit last year due to lower fuel costs. However, the cost of fuel has almost doubled since early last year and officials expect it to rise further in the coming months. Lawmakers and the community generally backed the plan, although Miriam Lau Kin-yee of the Liberal Party criticised the government for not rushing through a plan to add a floor to the pier building to boost the operators' rental income. If it had done so, it might not need to spend this HK$120 million, she said. The government said the plan required approval of the Harbourfront Enhancement Committee and the Town Planning Board and could take years to complete.

Sino Land associate director Allan Chan and Sincere director of operations Brandy Yu seal the retail space deal yesterday. Sincere, the city's oldest Chinese department store, is set to open an outlet in a Tsuen Wan shopping centre this year, its first expansion in the past 13 years.

Hongkong Electric has cleared one of the hurdles to erecting wind turbines in waters off Lamma after the government's environmental advisers gave the green light to the project. With approval of the environmental impact assessment from the Advisory Council on the Environment, the next step for the power firm will be a formal application to the Environment Bureau for the multibillion-dollar green energy project. But the company will still have to fulfil conditions attached to the council's consent to minimise the environmental impact of the project during construction and operation. A key condition is that Hongkong Electric (SEHK: 0006) should not conduct piling work from December to May, which is the peak sighting season for the finless porpoise in the area. It should also improve monitoring of piling noise at nearby sites and underground noise levels at selected locations. The power firm had said it could not adopt the non-piling method known as suction caisson, to be used by CLP Power (SEHK: 0002) to build another offshore wind farm near the Ninepin Islands in Sai Kung, because the seabed was not soft enough. The council also requires the secretary for the environment to closely monitor the fuel mix used for electricity generation to ensure that coal burning is be reduced proportionately after the wind energy project is completed. Under the proposal, 28 to 35 wind turbines of up to 3.6 megawatts each will be erected in a 600-hectare area between Lamma and Cheung Chau. The total generating capacity will be about 100 megawatts, about 1.6 per cent of the power firm's generation. The council also approved CLP Power's environmental impact assessment report for building two undersea gas pipelines linking its Black Point power station with a natural gas receiving depot in Shenzhen.

Young Creative Competition winners Law Ka-in (left), Gloria Fung Ka-ka and Cheng Ha-lo. Five young advertising professionals will soon have exposure on the world stage under a funding scheme by CreateHK. They will represent the city at two international advertising award shows, attending seminars and getting the chance to meet world-class talent. CreateHK used HK$600,000 from the HK$300 million CreateSmart Initiative to fund the trips by winners of the Kam Fan Awards and Young Creative Competition. The winners of the Young Creative Competition, organised by the Association of Accredited Advertising Agencies of Hong Kong (HK4As), will attend the ADFEST Young Lotus Workshop in Thailand and Young Spikes Awards in Singapore. The funding will cover participants' awards show registrations, air tickets and accommodation. Young Creative Competition winner Law Ka-in, 27, said it would be a valuable opportunity for him. "The international competitions will enrich my experience," he said. "Being an advertising professional, I want to have such chances to step on to the world stage." He said he wanted to contribute to society through advertisements, not only for commercial purposes, but also to help promote Hong Kong's development. "When my works reach the public, they are like my babies. If the public's reactions are not good, I will improve and make them better," he said. "When I retire or get old, all these works will be my good memories. I will feel satisfied with my career." Another winner, Cheng Ha-lo, 27, said: "My works can deliver to the public through different channels. I can even affect kids' minds."

Casino Business - Singapore Air to raise capacity on Hong Kong route - Singapore Airlines will increase capacity between Hong Kong and Singapore by 15 per cent next month, reflecting growing demand for business and leisure travel following the opening of the casino resort and theme park on Sentosa island. The five daily flights will be increased to six starting May 27, a resumption to pre-financial crisis levels. "We've seen double-digit growth in travel demand in the first quarter from the same period last year," David Lim Chee Seng, the airline's Hong Kong general manager, said at a media briefing yesterday. The opening of the casino resort and the Universal Studios theme park has attracted more tourists and Singapore hopes to get 17 million visitors a year, generating more than US$21 billion by 2015, up from 9.7 million visitors last year. Three of the six flights will continue using the Airbus 380 jumbo jet, while the other three will use refitted Boeing 777-200s starting May 29. The newly renovated aircraft, four to eight years old, will have first-class seats removed in order to make room for wider, although fewer, business-class seats. The new configuration has 38 business seats and 228 economy ones. This compares with 12 first-class seats, 42 business seats and 234 in the back in the old configuration. The three A380 flights continue to provide a first-class suite. Lim said filling up first-class seats was challenging as on average the load factor for the front-end cabin is 40 per cent to 50 per cent, compared with more than 80 per cent overall. The refitted B777-200 will also serve New Delhi, Mumbai and Bangalore from Singapore. More than 50 per cent of the Hong Kong passengers flying with Singapore Airlines actually go beyond to other international destinations, including Sydney, Melbourne, Zurich and London. The increase in passenger demand on the route between Hong Kong and Singapore also reflected a rebound in the demand for European and Australia routes, the company said. The newly added flights from Chek Lap Kok to Singapore will depart at 8pm and arrive in Singapore just before midnight, allowing passengers to catch connecting flights to Zurich and Copenhagen. Since the new flight arrives at a late hour, the airline is offering a promotional price of HK$1,200 plus tax and fuel surcharges when booked until April 30 with departures between May 27 and July 9. The appreciation in the Singapore dollar recently had not been reflected in ticket prices to overseas stations, Lim said. In fact, for every 1 per cent increase in the value of the Singapore dollar against other currencies, profit before tax decreased more than 11 per cent, the company said. About 45.8 per cent of total passenger revenues in Singapore come from East Asia while 21.2 per cent is from Europe. The southwest Pacific contributes 18.4 per cent while the remainder is shared by the United States, Africa and West Asia.

 China*: An elderly woman and a four-year-old girl were rescued yesterday from under the rubble of a collapsed building five days after the killer earthquake, state media said.

Share Trade protectionism in the United States could have prompted a cyber attack last week on Alibaba (SEHK: 1688), the world's biggest online trading platform, a spokesman for the mainland company said yesterday. Hackers launched a continuous attack on the company's website, an online trading platform for small business owners in the US, for two days from Friday, a statement posted on the company's statement said. The incident affected access to the website but no customer information was stolen, it said. " is a pure commercial platform developed by Alibaba to break into the US market and serve small business owners around the world," the company said. "Alibaba has always respected the common interests of Chinese and American small enterprises ... and strongly condemns hacking activities aimed at trade and business websites. "Alibaba will assist the authorities to carry out an investigation ... our plan to march into the US will carry on as planned." Company spokesman Wu Hao told Xinhua the attack could have been launched by hackers with protectionist sentiments. The company did not specify where the attacks came from or what was targeted. Lyon, a professional hacker and leader of the Honker Union of China, said that as mainland companies expanded around the world, cyber attacks from other countries, and especially from the US, would increase dramatically. "I would be surprised if these attacks were not launched by Americans," he said. "The government of the United States has built up the biggest cyber army in the world. Many of their cyber soldiers used to be elite hackers. China is the No1 enemy in their routine cyber warfare drills. They often use the websites of the Chinese government and businesses as white rats to test their equipment and strategies." In January, hackers hijacked the DNS server of Baidu in the US. At first, it was assumed the attacks were launched by Iranian hackers, but later investigation revealed that they originated in the US. "Compared to other Chinese companies, Alibaba and Baidu actually have more resources to defend themselves," Lyon said. "Most Chinese companies are vulnerable to internet infiltration and attacks. As the economic strength of China grows, Chinese companies will become the hottest target of American hackers." The cyber attacks issue has affected the diplomatic relationship between China and the US since Google announced in January that it had become the target of a sophisticated cyber attack that it said was related to the internet censorship imposed by the Chinese government. Chinese officials have denied that China played a role in the attacks, saying instead that China was world's biggest victim of hacking. In its initial response to the Google accusations, the Foreign Ministry said that cyber attacks from abroad had increased by 148 per cent in 2008. Later on, in the wake of a speech on internet freedom by US Secretary of State Hillary Rodham Clinton, the ministry stressed that it was "a major victim of hacking in the world", asked for international co-operation, and added that China "supervises the internet according to law". The China National Computer Network Emergency Response Technical Team, an official internet safety watchdog, said overseas hackers, especially those in the US, were illegally controlling computers in China by implanting malicious programs such as trojans and zombies. Last year, 262,000 IP addresses in China were hit by trojans planted by nearly 165,000 overseas IP addresses, it said, adding those from the US ranked first, accounting for 16.61 per cent. The Global Times - an English-language newspaper run by the People's Daily - went further, saying the US was a major source of hacking attacks. It has said Washington had a "cyber-army of 80,000 people equipped with over 2,000 computer viruses", citing US defence expert Joel Harker.

Home transactions in the mainland have fallen dramatically in the past few days as the chilling effect of Beijing tightening the screws sinks in. Analysts expect both buyers and sellers will adopt a wait-and-see attitude in the next few weeks while the real effect on prices will only be seen later. Sales have fallen in Shenzhen, where about 10 buyers decided to forfeit their deposits, said Centaline (China) Property Shenzhen branch general manager Andy Lee Yiu-chi. "Many clients and owners have been keeping an eye on policy execution," Lee said. "Some buyers failed to complete transactions because of their inability to borrow money." Despite the fall in sales, the number of units on the market has risen by 30 percent. Lee said many end-users are unaffected as those who buy homes below 90 square meters are not affected by the new measures. They continue to pay a 20 percent down payment and enjoy a 30 percent mortgage rate discount. But a realtor in Nanjing painted a gloomier picture. He said there have been no deals at any of its six branches in Xiaguan district since the measures came out, while both transaction volumes and home viewing have dropped significantly. He believes more initiatives to cool the property sector will be introduced. Last Thursday, Beijing ordered that down payments for second homes be raised to 50 percent from 40 percent and the mortgage rate to be 1.1 times the benchmark interest rate instead of 80 percent. Two days later, Beijing asked banks to be cautious about mortgages to non- locals and third-home buyers, especially in cities with high prices. CITIC Ka Wah Bank chief economist and China banking strategist Liao Qun said prices started surging in March again after moderating slightly in the first two months, so the recent official curbs were more forceful than before. "These will be effective for sure," Liao said. "The mainland property market is expected to see a period of adjustments. Transaction volume will fall considerably." While prices will be under pressure, he believes a sharp drop will be unlikely. Liao expects the full effects of the official curbs will be seen from next month, while Lee believes it will take three months. The CITIC Ka Wah Bank chief economist does not expect any more follow-up policies in the near term. He noted the introduction of a property tax remains a rumor.

April 20, 2010

Hong Kong*: Cosmetics retailer L’Occitane International plans to raise up to US$708 million in a Hong Kong initial public offering, a source close to the deal said on Sunday night. L’Occitane, which manufactures products including almond and olive-based creams would be the first French company to list in Hong Kong. The company was not immediately available for comment. The source has direct knowledge of the offering but was not authorised to speak on the record about the deal. The company would be the second, non-Asian business to list in Hong Kong behind Russia’s Rusal. Based in Manosque, a small town in Provence in the south of France, the company is selling 364 million shares, or 25 per cent of its enlarged share capital, at a price range indicated between HK$12.88 and HK$15.08 per share, the source said. CLSA, HSBC (SEHK: 0005) and UBS are underwriting L’Occitane’s deal. L’Occitane, which will kick off a formal marketing roadshow on Monday, is set to start its Hong Kong retail public offering on April 26, with a trading debut scheduled on May 7, the source said. L’Occitane, majority owned by its chairman, Reinold Geiger, plans to use the proceeds to open new stores globally and increase production capacity. L’Occitane has a presence in over 80 countries, of which the three largest markets – Japan, the United States and France – accounted for 55 per cent of net sales last year. The company plans to penetrate further into high growth emerging markets, including China, Brazil and Russia. UBS expects the company to increase net profit 30 per cent to €78 million (HK$816 million) this year, and a further 11.5 per cent rise to €87 million in 2011, boosted by faster network expansion.

Local banks have competed fiercely on rates driven by abundant liquidity, but the mortgage market is still healthy and not over-leveraged, insists Standard Chartered Bank (Hong Kong) chief executive Benjamin Hung Pi-cheng.

Share Police in ceremonial uniform at the Shenzhen Western Corridor checkpoint march ahead of a van carrying the coffin of Wong Fuk-wing as the body arrives in the city last night. Wong died trying to save children and teachers at an orphanage hit by the Qinghai earthquake.

Chan Ho-sun with Bodyguards' best film award. The all-star epic Bodyguards and Assassins, which recounts the story of how a group protects "father of the nation" Sun Yat-sen during his brief stay in Hong Kong, was the biggest winner at last night's 29th Hong Kong Film Awards, scooping eight titles, including best film. But the epic, which received 18 nominations, lost best screenplay to Alex Law Kai-yui's Echoes of the Rainbow, which won four prizes. Peter Chan Ho-sun, producer of Bodyguards, beamed when he took to the stage to receive the best film award. "This is the first time I have taken an award for a film I served on purely as a producer," Chan said. "Although I am widely known as a director, I would want people to remember me as a producer." Before last night's ceremony, Bodyguards director Teddy Chen Tak-sum was holding out hope the film would win at least nine prizes. Cheers erupted in the Cultural Centre's Grand Theatre when the host named as best actress Wai Ying-hung - who won the same award at the first Hong Kong Film Awards - for her role as an alcoholic single parent in At the End of Daybreak. The character also won her the best actress awards at the Asian Film Awards, Hong Kong Film Critics' Society awards and Golden Horse awards in Taiwan. A tearful Wai said: "I desperately wanted this prize. I don't know why I was `frozen' for some 10 years... I don't know why I was at a low point. I nearly gave up on myself and my life. But now I feel I confident. I know I belong to the acting industry," she said, thanking those who had given her a hand in difficult times. Simon Yam Tat-wah cheerfully took the best actor award for playing a shoemaker and father in Echoes, which is set in the Hong Kong of the 1960s and relates the experiences of a struggling cobbler couple and their two young sons. Echoes was shot in Wing Lee Street in Central, where 12 tenement buildings were saved from demolition last month after Hongkongers took the film and the street to their hearts. "I want to share this prize with people who are strong in the face of pitfalls. To make one's dream come true, one has to be strong and resilient," Yam said. Nicholas Tse Ting-fung, dressed in a red suit and sporting a red scarf, won best supporting actor for his character as a rickshaw runner in Bodyguards. Michelle Ye Xuan, who won best supporting actress for her portrayal of an assassin in Accident, burst into tears as she accepted the trophy. Aarif Lee Chi-ting won best new performer as one of the sons in Echoes and as the singer of the best original film song. Funeral story Departures took best Asian film award. Fung fu master Lau Kar-leung, who went from stuntman to movie director, received a lifetime achievement award from Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan to a standing ovation. The audience spent a sombre moment last night paying a silent tribute to the victims of the Qinghai earthquake and Hong Kong volunteer Wong Fuk-wing, who died rescuing victims. The film industry will mount a fund-raising campaign for those affected by the quake. For the first time in 13 years, the show was broadcast by ATV, Now TV and RTHK, breaking TVB (SEHK: 0511)'s long-time stranglehold on the broadcast.

Michelle Ye, best supporting actress with Bodyguards' best film award.

Wai Yin-hung and Simon Yam celebrate their best actress and best actor awards last night for their roles in At The End of Daybreak and Echoes of The Rainbow.

Swire Pacific (SEHK: 0019) said it expects its property arm to report an underlying net profit of at least HK$4.2 billion this year as it prepares for the unit’s US$3 billion initial public share offering. It would continue to focus most of its business in Hong Kong and mainland, it said in a filing to the Hong Kong exchange on Monday. Swire Properties has four representative offices on the mainland.

Mainland iron ore producer China Tian Yuan Mining aims to raise between US$400 million and US$500 million from a Hong Kong initial public share offering, two sources close to the deal said on Monday. Tian Yuan, which kicked off pre-marketing for the IPO on Monday, planned to issue 600 million new shares or 30 per cent of its enlarged share capital according to a term sheet. The proceeds of the offer will be used to expand mining and processing capacity, pay resources fees and exploration expenses at Yanjiazhuang mine, the term sheet said. Tian Yuan, which will kick off a formal marketing road show on April 28, is set to price its deal on May 11, with a trading debut scheduled for May 19. Citigroup is the sole bookrunner of the deal, while CLSA is co-lead manger.

Hong Kong's medical insurers may tighten benefits and limit the number of doctors who see patients in hospital as part of measures to curb abuse of the system.

Stepped-up security was in place at RTHK's weekly City Forum yesterday in the wake of boycott threats by pro-establishment lawmakers after they were "threatened" by members of the audience at a previous forum.

Swire Pacific (SEHK: 0019) on Monday announced that John Swire & Sons director Philip Chen Nan-lok has decided to leave the Swire group with effect from July 1. Cathay Pacific Airways (SEHK: 0293) also announced that Chen, who is executive director of Swire Pacific and deputy chairman and non-executive director of Cathay Pacific Airways, had decided to leave Swire with effect from July 1. “Chen joined the Swire group in 1977. He has been a director of the Swire group in Hong Kong since 1998. He has expressed his desire to pursue other interests,” the company statement said. John Swire & Sons (HK) chairman Christopher Pratt said Chen had been a valued member of the group. “He has contributed much to its success, particularly in the group’s aviation business. We are sad to see him go and wish him all the best in the future.” In the company announcement, Chen said, “It has been a most difficult decision, as I am leaving a group I have served for 33 years, since graduation.” He said he was grateful for the support and opportunities given him over the years.

Sands China said on Monday that a mega-resort being built on Cotai Strip on Macau is on track to open by September next year. A Cotai Strip mega-resort being built by Sands China, the Macau unit of US casino giant Las Vegas Sands, is on track to open by September next year, its chief executive said, brushing off recent fears of further delays for the troubled project. Between 2,000 and 4,000 labourers recently resumed work at its two half-completed projects, known as sites five and six, Chief executive Steve Jacobs said in a telephone interview on Monday. This follows a near two-year hiatus as the debt-laden company looked to conserve cash during the financial crisis. Shares in Sands China, the world’s second-most valuable casino operator after its parent, have fallen 4 per cent, underperforming its rivals, since it postponed a news conference in late March to officially announce it was restarting construction of the projects. “We’ve got a series of announcements coming up, so it made more sense to bundle them all together,” Jacobs said, dismissing speculation of delays caused by labour issues. The perception of delays – whether true or not – could weigh on Sands share price until the issue is cleared up, said Gabriel Chan, a Credit Suisse analyst, before the interview. “Once those problems are solved, the performance will be much better.” The project, whose first two phases will cost US$2.35 billion to develop, will house the world’s biggest casino as well as a Shangri-La, Traders and Sheraton hotels. They would complement Sands China’s three existing Macau casinos, including the massive Venetian Macau. With the addition of those properties, Sands’ market share in Macau could jump to 30-35 per cent, Jacobs said – about a 50 per cent rise from about 22 per cent that analysts estimate as the company’s current market share. The properties on sites five and six would help boost Sands China’s revenue from non-gaming operations to 20-25 per cent in two to three years, versus 12 per cent now, Jacobs said. “As we move to develop sites five and six … it would be in the not-too-distant future that non-gaming would become the majority of our profitability,” he said. Sands China aimed to fetch US$1.2-US$1.4 billion or more from the sale of its 1 million square feet of apartments attached to the Four Seasons Macau, Jacobs said. “Rest assured that we are acutely aware of the amount of value that can be unlocked through the sale of those apartments and it is the top of our agenda for 2010,” Jacobs said. “We believe there is ample interest from high net worth individuals from China, Korea, Vietnam and Japan.” The company was also “actively engaged” in discussions for expansion opportunities in Greater China, and was looking at Japan, Thailand, Korea and Vietnam, Jacobs said. “Japan remains incredibly attractive to us. We believe there’ll be a tender sometime in the near future,” he said. “We clearly have [Thailand] on our top-tier opportunities. But it’s nothing that would be between now and this time next year.” While Sands China would continue to target the more profitable mass-market gambling segment, Jacobs said he could not envision a future in Macau without junket operators, which ensure the flow of VIP gamblers to the former Portuguese colony.

 China*: Shanghai's this year World Expo has hit the pause button on a promotional song for the event after accusations the tune may have plagiarised an older Japanese composition.

The rising sons of China - The privileged offspring of the Communist Party elite are beginning to take a leading role in shaping the country's future. Mao Zedong claimed that "political power grows out of the barrel of a gun" but in modern-day China, political and economic influence are also the fruit of family ties, especially those whose roots were set by revolutionaries and senior Communist Party officials. Recent reports by domestic media outlets suggest that 91 per cent the mainland's richest millionaires, those with assets of 100 million yuan (HK$114 million) or more, are children of senior party cadres. Much outrage has been exposed in online forums of late over reports that 0.4 per cent of the population - the estimated 450,000 millionaires - possess 70 per cent of the mainland's wealth, but the "princeling capitalists" among the economic elite continue to extend and consolidate their influence. A major leadership reshuffle in 2007 saw several members of this elite group vault into positions of power while anointing the son of a late revolutionary as a future leader of the nation. Although the country remains a one-party state, it does now have ruling factions with competing points of view. Princeling capitalism emerged in the 80s after paramount leader Deng Xiaoping launched his reform and openness policy, to revive the mainland's stagnant economy. The economic privileges enjoyed by the princelings, though, began to infuriate ordinary people and became one of the prominent gripes of the protesters who congregated in Beijing's Tiananmen Square in 1989. After the Tiananmen crackdown, the business dealings of these fortunate few became more politically sensitive. A wrong move could have had implications for fathers still in power as well as for the businessmen themselves. Since then, the word taizidang, or princelings, has developed negative connotations, having come to mean one who is pampered, privileged, arrogant, egotistical and probably unscrupulous, and whose superiority comes from pedigree rather than merit. The term has also become synonymous with corruption and sleaze. Now, princelings are staking a claim in the political arena. The 16th Communist Party Congress, in 2002, saw princelings elevated to top positions in decision-making bodies for the first time. The first members of what has come to be known as the "princeling party" included the then vicepresident, Zeng Qinghong, a member of the Politburo Standing Committee, Hubei party boss Yu Zhengsheng and Commerce Minister Bo Xilai, who has gone on to make headlines as the gang-busting party boss of Chongqing. More princelings were promoted at the 17th National Congress, in 2007. The current 25-member Communist Party Politburo includes at least six men (Bo and Yu among them) and one woman who are considered princelings. Recent reshuffles in the ranks of the People's Liberation Army have given rise to the phenomenon of princeling generals. In December, General Zhang Haiyang - the third son of retired general Zhang Zhen, vice-chairman of the Central Military Commission (CMC) between 1992 and 1997 - was made political commissar of the Second Artillery Corps, the country's strategic-missile force, making him a candidate for a seat on the CMC - the supreme command - in the next party leadership reshuffle, in 2012. Zhang was one of three officers President Hu Jintao promoted to full general last year. All are children of former party leaders. Benefits conferred through family connections are exploited by people in every nation, of course, and, according to Steve Tsang, a political scientist at Oxford University, in Britain, such behaviour is nothing new in China, either. "Such a phenomenon happens in every new dynasty in China and the offspring of the founding generation's leaders have enjoyed huge advantages that enable them to become high achievers," he says. "The so-called princelings faction - or the grouping of senior cadres who are descendants of leaders of the revolution - has not visibly suffered" from the emphasis on merit-based promotion that has developed since Deng died, says Tsang. "Instead, many senior cadres of a princeling background have benefited from this new emphasis." Privileged upbringings, high-profile careers and family connections have enabled them to acquire the technical competence, personal networks and political skills needed to operate successfully within the party. "This puts them in a good position to gain promotion on the basis of merit or achievement," says Tsang, an author of several books on Chinese politics. "Thus, the princelings phenomenon represents both nepotism and meritocracy at the same time." The children of current or former leaders dominate the boardrooms of many of the nation's biggest firms. Relatives of Deng are believed to control the huge Poly Group. The family of ex-president Jiang Zemin has moved into telecommunications while the offspring of former premier Zhu Rongji are powerful figures in banking. His son, Levin Zhu Yunlai, is the chief executive of China International Capital Corp. Hu's son, Hu Haifeng is the party secretary of Tsinghua Holdings, the group that controls Nuctech, one of the top global providers of security scanning equipment. President Hu's daughter, Hu Haiqing, is married to the former head of internet giant Premier Wen Jiabao's son, Wen Yunsong, is executive chairman of Unihub, which provides telecommunications services to international corporations. Wen's daughter, Wen Ruchun, is married to one of China's richest people, Xu Ming, who runs construction-materials company Dalian Shide. Wen's wife, Zhang Peili, was the biggest shareholder in Beijing Diamond Jewellery when it listed in Shanghai. The most prominent example of a princeling business dynasty is the family of former premier Li Peng - who is himself a princeling, having been adopted by Zhou Enlai, Mao Zedong's long-serving right-hand man and popular premier. Li's family controls the country's energy sector. Daughter Li Xiaolin is chairwoman of China Power International (SEHK: 2380) Development, a state-run electricity giant, and son Li Xiaopeng used to head Huaneng Power (SEHK: 0902), another heavyweight, before being appointed vice-governor of Shanxi province. Many other princelings have learned to lie low and work under assumed names or keep their business activities out of the spotlight. A 2002 internal survey by a party watchdog, the Central Commission for Discipline Inspection, with the Ministry of Public Security and the Chinese Academy of Social Sciences (CASS) suggested some 98 per cent of the spouses and children of high-level officials held senior government or business posts, with incomes as high as 120 times the national average. Moreover, they accounted for 78 per cent of suspects in fraud cases involving more than five million yuan and were the second-most cited cause of public grievances, after the police. More than 600 relatives of high-level officials had fled abroad after having been charged with graft. One of the most high-profile scandals of recent times enveloped Hu Haifeng. Last July, Namibian anti-corruption investigators alleged that a state-controlled Chinese contractor had facilitated a US$55.3 million deal to sell the Namibian government security scanners with millions of dollars in kickbacks. President Hu's son ran the scanner company, Nuctech, until the end of 2008. Few cases of officials absconding with ill-gotten loot are ever confirmed through a public trial but one that was involved a former head of Chinese oil giant Sinopec (SEHK: 0386), Chen Tonghai, who was sentenced to death with a two-year reprieve in July last year. Chen was found guilty of graft involving 195.7 million yuan while he served as a top Sinopec official, from 1999 to 2007. Chen's father was revolutionary Chen Weida, party chief of Tianjin and deputy head of the Central Committee of Politics and Law. Xu Youyu, a liberal philosopher at CASS, says princeling capitalism is the result of China's monolithic political system, within which power is unchecked, allowing people to take advantage of family relationships with officials to make enormous profits. "The princelings enjoy virtually the same political protection and status as the officials. They are above laws and regulations and their business activities are off-limits to supervision or public scrutiny," says Xu, an author of several books on contemporary politics. Equipped with connections, they have been able to exploit opportunities thrown up by the mainland's economic transformation. Xu says that, whereas princelings once stuck to running state-owned enterprises, they have recently migrated to private companies, which can be hidden from scrutiny more easily. Xu says princelings are expanding their clout from business to politics in order to seek protection for their illegal activities. The choice of future leaders made at the 2007 party congress illustrates how princelings have split Chinese politics into factions. Xi Jinping, the then 54-year-old Shanghai party boss, and Li Keqiang, then 52, party secretary of Liaoning, are believed to be the successors to President Hu and Premier Wen in 2012. All future leaders must possess relative youth, a good education and a track record. Xi and Li are the youngest members of the nine-member Politburo Standing Committee and have PhDs from Tsinghua University and Peking University, respectively, and have had regional success. But for today's aspiring leaders without a princeling pedigree, a Communist Youth League (CYL) - Hu's power base - background is necessary. Xi is the princeling of the two while Li belonged to the CYL. Cheng Li, a China expert at the Brookings Institution, in Washington, in the United States, refers to the rival coalitions as the elitists, or the "blue team", and the populists, or the "red team". He says the Communist Party is no longer led by one strongman, such as Mao or Deng. Instead, the top decision-making bodies are run by the two informal coalitions, which compete against each other for power, influence and control over policy. The populists are led by Hu and Wen. Members of their core group, including Li Keqiang, party organisation chief Li Yuanchao and Guangdong Party Secretary Wang Yang, are known as tuanpai, denoting their CYL affiliations. Most tuanpai - they make up 23 per cent of the Central Committee of the Communist Party and number eight in the Politburo - served as local or provincial leaders, often in poor inland provinces, and many have expertise in propaganda and legal affairs. The elitist coalition was born in Jiang's era and though its two current leaders - Wu Bangguo, chairman of the National People's Congress, and Jia Qinglin, head of the Chinese People's Political Consultative Conference - are little known outside China, they are among the country's highest-ranking political leaders. In fact, Wu ranks above Wen. The core group of the fifth-generation (since the birth of the Communist Party) elitists includes Xi, Vice-Premier Wang Qishan and Bo. All are sons of vice-premiers. Most of the Politburo's princelings grew up in rich coastal regions and pursued careers in trade, finance, foreign affairs or technology. Cheng says that although political ties are not always strong among the princelings, the shared need to protect their interests, especially in a time of growing public resentment towards nepotism, is what binds them. "To a great extent, the differences [between the two camps] reflect the country's competing socioeconomic forces: princelings aim to advance the interests of entrepreneurs and the emerging middle class while the tuanpai often call for the building of a harmonious society, with more attention to vulnerable social groups such as farmers, migrant workers and the urban poor," Cheng says. The platforms of Xi and Li, for example, are strikingly divergent. Xi's enthusiasm for market liberalisation and the development of the private sector is well known to the international business community. Li is more concerned about the plight of the country's unemployed. He has made affordable housing more widely available and understands the importance of developing a rudimentary social safety net, beginning with the provision of basic health care, according to Cheng. Hu Xingdou, a professor at the Beijing Institute of Technology, sees the rivalry as beneficial "because it shows progress in the development of intraparty democracy". "Having different power coalitions is good and normal for a country," he says, because it increases the amount of bargaining and negotiating that goes on behind the scenes and helps avoid extreme rightist or leftist policies. Xu at CASS says both sides are aware that "open confrontation would [lead to] crisis" and adds that he sees compromise winning out. Cheng agrees, saying both camps will realise the need to coexist: "This 'one party, two coalitions' practice represents a major step forward for the party and the people."

Share Two-time survivor can't stop smiling - Wenchuan quake taught Li Yongjuan importance of fighting for your own survival. Surviving an earthquake once is enough luck for some, but Li Yongjuan has now done it twice - first in Wenchuan town, Sichuan, in 2008, then in Yushu, Qinghai, on Wednesday. She has bruises on her feet, incurred during her escape from Yushu's Sanjiangyuan Hotel. "I ran barefoot, no time to put on shoes," Li, 24, said from her hospital bed in Xining. Another bruise, on her left arm, was caused when she was knocked down by men on her way out. Compared with 2008, the injuries were more severe. During that quake, which killed nearly 88,000 people, only her right foot was bruised. Li said the main reason she had the strength to survive last week was her Wenchuan experience. She was in her last year of college in 2008 and was chatting and laughing with friends on the sixth floor of an office building in Mianyang, near the epicentre, when the computers on the desks started to shake. "`Earthquake!' people shouted. They rushed out of the rooms and scrambled down the stairs," Li said. "The building was shaking and I couldn't hold the stairway banister, which was shaking, too. Then I was knocked down from behind by the men on the third floor." Li fell at the edge of a lift shaft under construction and watched people rushing past without even glancing at her, a girl screaming for help. "I was crying after being pushed down. I was so scared, the bricks and other stuff kept falling and I thought I was going to die. I couldn't stand up by myself, because I was so weak, but nobody stopped and gave me a hand, even the people who knew me." The experience caused Li, now an auditor with an accountancy firm based in Xining, to realise the strength of the survival instinct hidden deep in people's hearts. It also taught her that at the moment of life or death, no one can help you but yourself. "At that brief moment, I found out how strong the human desire to live was," she said. So when the Yushu quake struck, Li and her boyfriend understood nobody should be blamed for their behaviour in the chaos, as people were just following their instincts. Li, who was on a business trip to Yushu with four colleagues, said she was frightened on Wednesday when she opened the door to the staircase, but this time she did not scream, cry or wait for help. Wenchuan had given her presence of mind and maturity. "When I was knocked down by those men in the hotel corridor last week, I just stood up by myself because I knew I could only count on me this time," Li said, smiling. The company car took Li and three other injured colleagues to hospital in Xining on Thursday. Her colleagues suggested she might need some psychological counselling, but she said she was strong enough. Wang Jinxue , Li's boyfriend, who was in Xining when the quake struck, joined her at hospital. As he listened to Li tell her story, he interrupted with a touch of cynicism. "What you want to report about this, that people united to save each other? No, no, not at that moment," he said, adding he believed people generally would try to save others only if they had saved themselves. He said he knew of a couple during the Wenchuan earthquake, and the husband had rushed out of the building without his wife. Though he soon realised his wife was not with him and returned to pick her up, the wife divorced him. During the interview, a nurse came by and asked Li and Wang to clean up the things brought by friends and colleagues that had collected under the bed - several bags of fruit, other food and gifts. There was even a camp bed that Wang used at night while staying with Li. "You guys have too much stuff here," the nurse scolded. Despite the terror of the second earthquake experience, Li managed to smile as she related her story, prompting Wang to say: "Your smile is a little too sweet. You don't look like a person who twice escaped from disaster areas." Li admitted he was right, saying a person who survived two quakes might have used up her quota of luck. Then she smiled again.

Music water curtain in trial operation at Shanghai EXPO park.

April 19, 2010

Hong Kong*: Family members have retrieved the body of Hong Kong volunteer Wong Fuk-wing from the orphanage where he worked and was killed while bravely trying to save teachers and orphans that were trapped by the Qinghai earthquake. Wong's brother and brother-in-law retrieved the remains from the debris of the collapsed orphanage building early yesterday and were due to arrive with them in the provincial capital, Xining , last night. Wong's brothers, both suffering from altitude sickness, took a military flight to Xining with the help of the Hong Kong government's Beijing office. A memorial gathering may be held in Xining; Wong's heroic deeds have struck a chord with many admirers both on the mainland and in Hong Kong, and several well-wishers have left messages on the website of the mainland charity for which he was a volunteer. Erick Tsang Kwok-wai, principal immigration officer in Hong Kong's office in Beijing, said Wong's family wanted his remains transferred to Hong Kong for cremation. Wong's sister thanked the public for its support. Chief Executive Donald Tsang Yam-kuen called Wong's sister and expressed sympathy and solicitude for his death on Friday, Tsang wrote in his blog. "His brave acts, high and upright in character, are an inspiration to people in Hong Kong," Tsang wrote. The chief executive paid his respects to Wong for his selfless sacrifices and said he was minded about the saying "blessed are the merciful" after he read about Wong's voluntary works. Home Affairs minister Tsang Tak-sing has recommended Wong be awarded the city's top honour for bravery. Wong, 46, escaped the quake but returned to the orphanage to save orphans and teachers trapped inside.

Share The Asian 'tiger' that ignored hi-tech - The debut of Apple's latest gadget, the iPad. Combining the ease of portable computing on a touch-screen tablet with an avalanche of internet applications, the iPad was an instant winner. Even in recession-beaten Palo Alto, long lines formed at the Apple Store. The success of Apple's series of i-products holds many valuable lessons for all Silicon Valley wannabes and hi-tech aspirants. First, it drives home the brutal reality that successful technological innovations are disruptive: just as digital technology killed Kodak's film business, more recently Apple's iPhone and Research in Motion's BlackBerry have wiped out the once-dominant Palm personal digital assistant. Now cloud computing - internet-based computing using shared resources - threatens to make desktop computing obsolete. Technological innovation is veritably Schumpeterian "creative destruction" in action. Second, as Stanford University's Professor Charles House puts it in the simplest terms, innovation is the implementation of invention. Scientific invention is one thing, but turning it into an innovative product is another. Apple founder Steve Jobs may have few scientific inventions to his name, but he is the only Silicon Valley entrepreneur to churn out one exciting product with broad consumer appeal after another. Third, the ability to make megabucks usually comes with possession of intellectual property. American communications giant Qualcomm, for example, derives much of its revenues from royalties for its CDMA wireless technology and other patents. China has learned the importance of intellectual property the hard way. If a DVD player made in China sells for U$32, the manufacturer typically collects a profit of US$1 while US$20 goes to the intellectual property owners. It is hardly surprising that nations (or cities) which prioritise technology-based innovations set high store by their population of engineers and the quality of their maths and science education. In the digital era, other ways of adding value without employing technology certainly exist - notably by branding, design and craftsmanship. But nothing can be won by copycat gimmickry. Among Asia's proverbial "Four Little Tigers" of the 1980s, Hong Kong remains the odd one out, still living in non-comprehending neglect of the power of technology. The city's puny size is no excuse for this staggering oversight; Singapore is smaller geographically and in population. Yet, determined to succeed, it has pulled out all the stops to lure technologically advanced multinationals and top-notch scientists. Taiwan, thanks to the true grit, courage and vision of its leaders in the 1970s, can now justly boast of being the world's largest electronic subcontractor; home to the most successful silicon foundries and many producers of competitive, hi-tech electronic products. Similarly, South Korea has developed a reputation as a leader in creative industries, computer graphics, internet games and applications. So where has Hong Kong fallen short? A confluence of factors has combined to hold it back: its time-honoured reliance on trade and traditional, laissez faire philosophy; a "borrowed place, borrowed time" mentality; windfall profits from China's economic ascendancy plus its leaders' lack of vision and expertise. All have contributed to entrenching Hong Kong's lopsided reliance on property and financial speculation and its underweighting of technology. Is it too late to turn the tide? As Guangdong plans to move into areas that Hong Kong has traditionally relied on for its livelihood, not striving to turn the tide is not an option. The government needs to move fast to foster an environment that will make technology-based enterprises thrive. With harder work, it may still be possible for Hong Kong to bring home the golden fleece. (Regina Ip Lau Suk-yee is a legislator and chairwoman of the Savantas Policy Institute).

The Hospital Authority, which is suffering from a serious shortage of nurses, is prepared to hire those in the Philippines. It will also consider former Filipino nurses now working as domestic helpers in Hong Kong if they meet the qualifications. There is a global shortage of nurses and the authority, which has 20,000 nurses, is losing about 800 a year to the private sector and overseas. The authority wants to recruit at least 1,300 nurses in this financial year but expects fewer than 1,200 posts will be filled. It is setting up a high-level task force to find ways to plug the brain drain and one solution is to recruit from the Philippines. "Whatever nationality you may be, you are all welcome to sit for the Nursing Council of Hong Kong's practising certificate. It's open to everyone," Joseph Lee Kok-long, the chairman of the Association of Hong Kong Nursing Staff, said. Nurses from overseas must pass a test certified by the council before they can be accepted as a registered nurse in the city. The test is in two parts - one written and one practical. It can be done in English. The applicants must also have recognised qualifications from their home countries before they take the test. They will then undergo interviews to assess their suitability, experience, knowledge and skills, an authority spokesman said. Many former Filipino nurses are already working in Hong Kong as domestic helpers. Some are working essentially as carers for the elderly in the families. The language problem is an obvious stumbling block. The authority said that as patients in public hospitals are predominantly Cantonese speakers, knowledge of the dialect would be a preferred attribute in the selection process. "One obvious criteria is that nurses speak Cantonese," Lee said.

Hong Kong Airlines announced yesterday that it would start a new service between Hong Kong and Shantou at the end of April as it seeks to cash in on growing tourist and business traffic on the route. The daily Boeing 737-800 service, with a two-class configuration of eight seats in the front and 154 in economy, will begin on April 30. The 45-minute flight will be the shortest route operated by the carrier, according to the airline's spokeswoman Eva Chan. Travelling to Shantou by car from Hong Kong takes about four hours. The service would target both tourist traffic and businesspeople, Chan said. Shantou Tourism Board and Shantou Airport yesterday signed an agreement with Hong Kong Air to provide commercial and operational support for the new service. The Tourism Board will help promote the service with businessman in Shantou and Shantou Airport would provide ground handling services, the company said. Hong Kong Air and its sister company Hong Kong Express, which share the same parent, HNA Group, operate in more than 20 Asian and mainland cities with seven Boeing 737-800 aircraft. The airline will take delivery of one more B737-800 in July and aims to expand its fleet to 23 in the near term. Hong Kong Air will also take deliver of an Airbus 330-200 in May, the first of six ordered by the carrier. The double-aisle aircraft will be deployed on the route between Hong Kong and Moscow from May 23. Last month, mainland and Hong Kong regulators ordered safety checks for some B737 aircraft over suspected mechanical problems with their horizontal tails. Eight B737-800 and B737-300 aircraft operated by Hong Kong Air and Hong Kong Express Airways were checked.

 China*: Four months after the widely criticised Copenhagen summit, key nations including China and the United States are trying to find out if they can bridge wide gaps on climate change. Representatives of 17 major economies which account for more than 80 per cent of global emissions gather in Washington today to try to grope forward amid disputes on the shape of a future treaty on fighting climate change. It is not the first meeting since Copenhagen - representatives in the nearly 200-nation UN Framework Convention on Climate Change met last weekend in Bonn, Germany, for talks that were again riven by disagreements.

Share An artwork entitled Image, on display at a gallery in Beijing, depicts a yuan note above the image of a tank. Pressure is growing on the mainland to let the yuan appreciate. The best currency to own when Beijing lets the yuan appreciate will not be the yuan, if history is any guide. It is everything from the South Korean won to the Singapore dollar and Indonesian rupiah. The won rose five times as fast as the yuan in the 12 months after officials in Beijing last relaxed the foreign-exchange regime in July 2005. The Singapore dollar rose three times as much, the rupiah five times and the Malaysian ringgit twice as fast. As the United States presses China to let the yuan rise at a faster pace, traders are betting on a repeat of five years ago as an appreciating currency boosts China's power to buy Malaysian palm oil to Indonesian coal and Indian copper. Revaluation may also enable Asian nations to do the same with their own currencies without damaging exports, while fuelling US trade as the global economy emerges from its deepest post-war recession. "A Chinese appreciation will kick off tightening in the whole Asian complex of currencies," said Richard Benson, who oversees US$14 billion of currency funds as an executive director at Millennium Asset Management in London and is backing the won and the ringgit to lead the gains. "These currencies are fundamentally cheap." US President Barack Obama reaffirmed to President Hu Jintao his view that it was "important" for China to move towards a "more market-oriented exchange rate", Jeff Bader, a senior director for Asia at the National Security Council, said after the two leaders met on the sidelines of a two-day nuclear security summit in Washington. Hu told Obama that China's actions must be based on its own "economic and social-development needs". Goldman Sachs Group had predicted Singapore would let its currency advance to keep inflation from accelerating after the economy grew more than anticipated in the first quarter. The Monetary Authority of Singapore last week said it would seek a "modest and gradual appreciation" in its currency and shift to a stronger range for rate fluctuations. Goldman has also said the rising cost of imports will spur Taiwan to let its currency appreciate. Bank of Tokyo-Mitsubishi UFJ said on April 8 the won and rupiah might climb about 13 per cent against the Japanese yen as central banks from Indonesia to Taiwan raise interest rates and reduce currency intervention. "The heavily managed Asian currencies are the biggest candidates for appreciation once the yuan starts gaining," said Thomas Stolper, a foreign-exchange analyst with Goldman. "Many of these countries are facing fiscal pressure and would like to see their currencies appreciate. A Chinese revaluation would give them the opportunity."

President Hu arrives in quake-hit Yushu to direct relief work.

Chinese President Hu Jintao (R front) gives a hug to injured student Zhoema of Tibetan ethnic group during his visit to those injured in the quake receiving treatment at a stadium in the Tibetan Autonomous Prefecture of Yushu, northwest China's Qinghai Province, April 18, 2010. Hu arrived in Yushu Sunday morning to direct relief work.

Chinese President Hu Jintao consoles a girl injured in the April 14 quake at a hospital in Yushu, Qinghai province, April 18, 2010.

Chinese President Hu Jintao shakes hands with a man injured in the April 14 quake at a hospital in Yushu, Qinghai province, April 18, 2010.

Chinese President Hu Jintao talks with rescuers in Yushu, Qinghai province, April 18, 2010.

Joining the SkyTeam will help China Eastern Airlines fend off the competition from major rivals and share more resources with other members.

PLA navy warships are this weekend exercising southeast of Japan's strategic offshore islands - part of a recent series of Chinese naval war games in East Asia unprecedented in their reach and scope. After two decades of double-digit annual increases in military spending, the PLA is rapidly proving it is capable of things once seen as only theoretically possible as it strives to develop a full "blue water" navy. The East Sea Fleet flotilla of crack Sovremenny class destroyers, frigates and submarines steamed through the so-called first island chain - the US-dominated stronghold that links Japan to Taiwan and the Philippines - and is practising anti-submarine warfare manoeuvres, according to a variety of sources. The ships moved out through the Miyako Strait just days after a North Sea Fleet flotilla sailed in the other direction on its return from a "confrontation exercise" deep in the disputed South China Sea. That flotilla, which comprised destroyers, frigates and auxiliary ships and had air cover, sailed some 19 days and covered 6,000 nautical miles. It included psychological tests for crew exposed to tough conditions. The ships traversed the Bashi Strait between the Philippines and Taiwan.

A submarine Japan's Maritime Self-Defence Force identified as part of a PLA flotilla navigates southwest of Okinawa last weekend.

Two new yachts put into use for Shanghai Expo - A yacht sails near China Aviation Pavilion at the site of the Shanghai World Expo in Shanghai, east China, April 18, 2010. Two new yachts were put into use on Sunday for the Shanghai World Expo. The two yachts will be used as the transportation vehicles on water with other 35 yachts during the 6-month-long world expo opening on May 1 in Shanghai.

Monks dispose of a body during the cremation on a hillside in Jiegu yesterday. Hundreds of bodies were burned amid sanitation fears attached to traditional sky burials. Tibetan monks broke with centuries of tradition yesterday by holding a mass cremation for victims of the Qinghai earthquake. Anwen Danbarenqing, living Buddha of the Jiegu monastery who was in charge of the cremations, said the death toll could reach 10,000, though the provincial government has put the death toll from Wednesday's 7.1-magnitude quake at 1,484, with 312 people listed as missing. Jiemi Zhangsuo, head of the main monastery, said the sheer number of corpses, in addition to sanitation fears, had made it impossible to perform sky burials, in which corpses are left on mountaintops to decompose or be eaten by vultures. "We have never had a disaster like this. We have never had so many people die. Cremation is the only way to send these souls off," he said. At least a thousand monks in crimson gowns gathered from 7am at the site on a hill overlooking the shattered Jiegu town as a convoy of trucks arrived with hundreds of bodies that had been kept at the monastery.

Former Guangdong deputy governor Wan Qingliang was appointed Guangzhou's new mayor yesterday as part of the largest provincial leadership reshuffle in a decade. Wan was elected mayor by members of the Guangzhou People's Congress yesterday. Last week, Guangzhou's city government announced Wan's appointment as the city's deputy party secretary, paving the way for him to become mayor. The South China Morning Post (SEHK: 0583, announcements, news) reported last month that Wan was tipped to be the city's next mayor. Wan, 46, was the youngest of the province's eight deputy governors and has been widely regarded as a rising star after being promoted to the key provincial position in 2008. He has been closely involved in cross-border issues and represented the province at the Hong Kong/Guangdong Co-operation Joint Conference in February. No announcement was made as to who would succeed Wan in taking charge of cross-border issues. Meeting the local press yesterday after taking up the new position, Wan said he felt honoured to take on the responsibility and would treasure the trust placed in him by the Guangzhou people. "Today is a meaningful day in my life, as it is the second time I have been elected as a mayor," Wan said. He was made mayor of Jieyang, in eastern Guangdong province, in June 2003. Wan said he planned to implement projects and goals laid out by former mayor Zhang Guangning. The new mayor also pledged to speed up economic transformation, unite Guangzhou's people and officials to put on a good show for November's Asian Games and address livelihood issues. "I will do my utmost to serve Guangzhou's people and address people's key concerns as well as striving hard to bring Guangzhou a bluer sky, clearer water, smoother traffic, prettier houses and a more beautiful city," he said. Wan did not take any questions from reporters. His appointment is being closely watched by political observers, as his new position will make him a strong candidate to move further up the political hierarchy in 2013. Zhang has been promoted to become the provincial capital's party boss, replacing rising star Zhu Xiaodan , who was appointed Guangdong's executive deputy governor in February. Acting Shenzhen mayor Wang Rong was appointed that city's party boss last week.

April 17 - 18, 2010

Share Hong Kong*: Fung shui master Tony Chan Chun-chuen was ordered by the High Court on Friday to pay almost all the legal costs incurred by Nina Wang Kung Yu-sum's charitable foundation in the battle for control of her multibillion-dollar estate. The High Court did not state the total amount of the legal fees, but it is estimated the costs would be approximately HK$140 million. Adding to his own legal costs - estimated at HK$200 million - Chan is expected to pay more than HK$340 million for his battle for Wang's estate.

Share A circular screen and LED displays feature at Hong Kong's Urban Best Practices Area exhibition. Hong Kong's exhibition at the Shanghai Expo to prove it is one of the world's most habitable cities will showcase the city's energy and strength in connectivity, a designer for the project says. "Hong Kong has energy and we want to create that impact," said Marc Brulhart, founder of Marc & Chantal Design, which designed Hong Kong's exhibition for the Expo's Urban Best Practices Area. "It'll take you through a journey about how smart cards bring you to life." The city's demonstration is built around the theme, "Smart Card. Smart City. Smart Life", and shows its extensive use of smart-card and radio frequency identification (RFID) technologies. Every visitor will be given a specially designed RFID wristband as a souvenir to begin a journey that will last about 10 minutes. The wristband, which has three different designs, will allow visitors to try the technology through interactive displays. With an area of 530 square metres, the exhibition is surrounded by vertical LED displays. A huge, circular screen will show a two-minute movie about Hong Kong. "Many new images of Hong Kong are used in the movie, and it's like showing the city in a kaleidoscope," John Chu Ka-yan, general manager of Centro Digital Pictures, which produced the movie, said. "There are contrasting images, from bamboo scaffolding in the urban area to birds' feet in the New Territories, from red wine to Chinese tea." The firm also produced 14 short clips to feature the application of smart-card and RFID technologies, such as the use of Octopus cards in shops and on public transport. Simulation devices, multimedia technology, animation and videos will also be used. Duncan Pescod, Permanent Secretary for Commerce and Economic Development (Communications and Technology), said the set-up would be completed in the next few days. The exhibition, which is part of Hong Kong's participation in the Expo, cost about HK$68 million. It can accommodate up to 5,000 visitors a day. Hong Kong is one of the 55 cities chosen from 106 candidates to exhibit in the Urban Best Practices Area.

Share Geoffrey Ma, Hong Kong's next chief justice, calls on lawyers and judges to embrace changes to the city's litigation culture brought about by civil justice reforms. In his first public speech since his nomination as the next chief justice, Geoffrey Ma Tao-li pointedly reminded judges and lawyers that their duty lay in the fair and efficient administration of justice, and warned lawyers to put an end to any delaying tactics. Concluding his speech at a conference on civil justice reforms yesterday, Ma said he wished to say a few words "to remind the legal profession that they form, together with judges, an integral part of the administration of justice". "Together with the benefits of the profession come great responsibilities," Ma said. A key objective of the civil justice reforms, implemented just over a year ago, was to prevent lawyers from abusing complex litigation procedures as tactical ploys to stretch out a case and outlast the opposing party financially. However, Ma said he noticed that lawyers were using the new rules "as tools to embark on tactical games". "These days are numbered," he said. Ma, the High Court's chief judge, chairs the committee that monitors civil justice reforms and is compiling data on whether they have been effective one year on. At the conference, jointly organised by the University of Hong Kong and University College London, Ma expressed his disappointment that the "many members of the legal profession are still unaware of their responsibilities of the new culture". "The most satisfactory aspect of the [reform] has so far been the recognition by many members of the legal profession and judges that the changes brought about by the reform heralded a change in litigation and procedural culture," he said. The least satisfactory aspect was the failure on the part of many more legal practitioners and judges to accept the reform was more than a cosmetic change. A lawyer's duty lay first to the administration of justice, next to the client and "lastly themselves". In a glimpse of the likely character of the judiciary after he takes over in September, Ma reminded judges that under the reforms, they now have a statutory duty to ensure cases are efficiently resolved, and indicated he would like to see judges crack down on lawyers who flout court procedures designed for efficient case management. "Most judges still continue to adopt a somewhat conservative approach; in other words, indulgences are afforded to the party in breach. I for one would not want to see a return to the days when indulgences were readily given to litigants in the face of breaches of earlier procedural orders or direction, which presumably were given with a view to effective case management," he said. "It should not matter whether the breaches of orders or directions have occurred through the neglect of legal advisers, or as a result of what can be called 'litigation tactics'." Yesterday's conference was attended by academics, lawyers and local and overseas judges. Ma yesterday posed for photographs with Chief Justice Andrew Li Kwok-nang, but said little about his appointment, since it has yet to be formally endorsed by the legislature. He said he would meet the press at a later date.

Share Chen Qiyuan, left, the founder and company chairman of Bawang, and chief executive Wan Yuhua at the herbal shampoo maker's annual results conference yesterday. Bawang International (Group) Holding, the maker of herbal shampoos, yesterday reported a nearly 30 per cent jump in earnings for 2009 and said it would diversify into herbal drinks, herbal household cleaning products, even a herb farm. The company, which listed in Hong Kong last July, reported full-year net profit of 364.1 million yuan (HK$413.95 million), up 29.2 per cent from a year earlier. Revenue rebounded after disappointing interim results last September, rising 24.4 per cent to 1.76 billion yuan. It will pay a final dividend of 4.24 HK cents per share. Bawang said it would introduce a line of herbal drinks at the end of the month and continue using celebrities to promote its products. Martial arts star Ronnie Yan will be on the packaging of the beverage line, just as Jackie Chan was used to help promote Bawang shampoo. "Herbal tea and beverages in general is a very attractive market to go into right now," said an analyst who follows the company. "Currently, Wanglaoji basically has a monopoly in the herbal tea market, but it depends how well Bawang can leverage their brand name in this sphere." According to the analyst's estimate, the company will spend 10 per cent of its revenue on marketing this year. Last year, Bawang's advertising expenditure reached 186.8 million yuan, or 10.6 per cent of revenue. The founder and chairman of Bawang, Chen Qiyuan, whose father was a self-made traditional medicine practitioner, said the diversification into other products was part of the company's mission to promote the use of Chinese herbs. In addition to herbal shampoo lines for men and women, the company last year launched a line of herbal skin-care products, Herborn, endorsed by singer Faye Wong. Chief financial officer Bill Wong said herbal household cleaning products were also in the pipeline to be rolled out later this year. "Before Western culture was introduced to China, how did people clean their houses? They used products made from Chinese herbs," Wong said. The company said capital expenditure this year would reach 150 million yuan. It will lease a new production facility in Baiyun district, Guangzhou, which would double annual production capacity for shampoo to 200,000 tonnes by the end of the year. Bawang will also expand its business upstream by leasing about 33.3 hectares of land in Guangdong province, with the first yields expected by 2011. Chen said the plantation would have some effect on controlling raw material costs, but the main goal was to ensure a steady supply of herbs. Shares in Bawang closed up 5.55 per cent yesterday at HK$6.28.

Share The clock's ticking on drivers who keep the engines of stationary vehicles running for more than three minutes. Failing to turn off an engine in that time will mean an automatic fine of HK$320 if the government has its way. The proposal goes to the Legislative Council on April 28, and if it's approved before the mid-year recess then it will be on the road to test drivers this summer. They will have to sweat it out without air-conditioners. The switch-off rule will apply to all private and commercial vehicles, though taxis and minibuses at pickup points can be rare exceptions along with hybrids. The plan is to have 270 traffic wardens dedicated to enforcing the no-idling- engine rule, with the effort concentrated in urban areas. Moving a car from one place to a nearby slot just before the three minutes is up won't buy time. And drivers could be given two or more tickets if they continue to keep engines running for long periods. There could be one loophole: as the ticket would go to the driver rather than the vehicle, a warden may not be able to act if a vehicle's driver is changed every three minutes. Besides hybrids, exceptions will be made for the first five taxis at a stand and the first two green minibuses at each route terminus. The first red minibus at a stand and the vehicle immediately behind it with at least one passenger are also exempted. Non-franchised buses such as those for tourists and which have at least one passenger on board are also in the clear. Taxi and Public Light Bus Concern group chairman Lai Ming-hung said taxi drivers are largely in agreement with the move, but he hopes certain taxi stops can be exempted. "If the sixth taxi is not allowed to switch on the engine the car will be very hot and customers will complain," he said. Drivers and operators of green minibuses are also set to fall in line, Lai said, though there is a hope red minibus stands will be clearly defined. "For red minibuses there are no real bus stands," he said. "The drivers hope the wording in the bill will specify what are the 'usual spots for getting on or off a minibus' instead of a 'stand.'" Green group Clear The Air applauded the proposed legislation as it would reduce roadside emissions. It suggested the government should encourage people to report stationary vehicles whose engines run for long periods. Officials have an answer ready for anyone with gripes about the heat going on drivers. For they have checked how authorities in Singapore and Japan have handled the challenge of idling engines and pollution. "There are no exemptions in the regulations on idling engines during hot weather," said one official, who pointed out that summer heat in those countries tops Hong Kong temperatures.

Share Prices at the city's three major supermarkets rose by an average of 3 percent last year, consumer watchdogs have revealed. Based on a basket of 200 products, the Consumer Council said price increases for the 12 main categories ranged from 0.8 percent to 8.4 percent, with milk powder and baby products rising the most. Dairy and yoghurt products were up around 7.6 percent, while sweets and snacks were 7 percent more expensive. Instant drinks fell 0.1 percent, while wines were down 7 percent. Of the 40 sub-category products, cheese jumped 25 percent, nuts 10.5 percent and milk powder 10.3 percent. The average rise in packaged rice was 9.2 percent, though various Australian rice brands rose from 20.1 percent to 31.5 percent. However, while the prices of two-thirds of items jumped, more than one-third decreased while the remainder remained unchanged. The council's Publicity and Community Relations Committee vice chairman Ron Hui Shu-yuen said the appreciation of the Australian and New Zealand dollars, as well as increasing demand for milk powder from mainlanders following the melamine scandal led to the price hikes. "Appreciation of the currency in both countries has led to the soaring price of imported cheese," Hui said. "In addition, mainlanders on holiday in Hong Kong take home many tins of powdered milk." Hui said since there is no law to regulate the prices of essential commodities, there is a need for more transparency in food pricing and supermarkets should not hike prices before giving discounts. Hong Kong & Kowloon Provisions, Wine & Spirit Dealers' Association vice chairman Lee Kwong-lam expects food prices to escalate a further 10 to 15 percent, given inflation in the mainland. Park'n Shop said price increments were the result of currency fluctuations, inflation, the increasing cost of materials and the weather. Wellcome said various factors have led to the price increments but that it has been actively stabilizing the prices and enforcing internal cost controls. CRC Vanguard said years of drought in Australia and the increased value of its currency, as well as the high demand for mainland rice, led to the price hikes.

Share Airlines in Hong Kong and across the Asia-Pacific region scrambled to reschedule or cancel flights on Friday after a vast cloud of volcanic ash closed swathes of European airspace. Cathay Pacific (SEHK: 0293) said it had delayed or cancelled a dozen flights to London, Paris, Frankfurt and Amsterdam. “Cathay Pacific continues to monitor the situation closely and will issue further updates once more information becomes available,” it said. About half the Cathay flights were delayed until Saturday, while the remainder were cancelled. British Airways cancelled two flights scheduled to depart Hong Kong on Friday evening bound for London’s Heathrow airport. KLM Royal Dutch Airlines cancelled one Friday evening flight to Amsterdam from Hong Kong, while German carrier Lufthansa pulled a Frankfurt-bound flight scheduled to leave Friday afternoon. From Wellington to Tokyo, passengers heading to Europe faced an uncertain wait as the eruption of Iceland’s Eyjafjallajokull volcano forced the biggest shutdown of airspace since the September 11 attacks in 2001. Airlines warned the fallout from the eruption could take days to clear, leaving thousands of passengers stranded. Australia’s Qantas Airways said it may not be able to resume flights to London and Frankfurt until Sunday. Qantas spokesman David Epstein urged passengers not to head to airports in the hope that flights may resume soon. “Do not be optimistic about flights tomorrow [Saturday],” Epstein said, adding that it “may take until Sunday unless we hear something better from European authorities.” Five 24-hour flights leaving Australia for Europe on Thursday were grounded after they stopped for refuelling in Singapore, Hong Kong and Bangkok, with passengers booked into hotels. Air New Zealand cancelled flights to and from London, and the company’s international group general manager Ed Sims said travellers faced “a very uncertain situation.” Japan Airlines (JAL) cancelled nine flights to and from Paris, Amsterdam, London, Milan and Frankfurt, affecting more than 2,000 customers. All Nippon Airways said it cancelled six flights, affecting more than 1,500 people. Although not visible from the ground, volcanic ash can be highly dangerous to aircraft, clogging up the engines and reducing visibility, experts say. An estimated 5,000 to 6,000 flights were cancelled on Thursday alone as grey ash blew across the north Atlantic. The disruption also hit court proceedings in the Indian resort state of Goa, where the British mother of a teenage girl murdered on a beach two years ago was meant to testify at the trial of two suspects. Fiona MacKeown, mother of 15-year-old Scarlett Keeling, whose body was found on a beach in February 2008, was unable to fly from London’s Heathrow on Thursday, a court official in Goa told reporters. Indian airlines Air India, Kingfisher Airlines and Jet Airways have all cancelled flights to London due to the drifting ash. Singapore Airlines said it had cancelled seven flights to and from Europe, while Malaysia Airlines said its flights to London, Amsterdam and Paris had been disrupted by the eruption. A scheduled flight to London from Kuala Lumpur was diverted to Frankfurt on Thursday, while two other flights to London and Amsterdam, and one to Paris were delayed until further notice.

Swire Properties has received approval from the listing committee of Hong Kong's stock exchange for a US$3 billion initial public offering, a source close to the deal said on Friday.

Share HK volunteer recommended for bravery award - Hong Kong volunteer Wong Fuk-wing would be recommended for a bravery award, Secretary for Home Affairs Tsang Tak-sing announced on Friday.

Scientists at three Hong Kong universities are joining a new human genome project, this time focused on cracking the code on cancer, researchers said yesterday. Two hundred scientists from 12 countries announced their collaboration in an article published in this week's edition of the scientific journal Nature. The International Cancer Genome Consortium will co-ordinate large-scale genome studies in tumours on 50 different types of cancer, mapping more than 25,000 genomes within five to 10 years. The Hong Kong team will focus on brain cancer, and hopes to map the genomes of 100 samples within the first two years, said Professor Hannah Hong Xue, director of the Applied Genomics Centre at the Hong Kong University of Science and Technology. She will lead the project with HKUST professor Matthew Yuen Ming-fai, acting vice-president for research and development, who also serves on the international consortium's executive committee. The team will initially include six HKUST researchers and four each from the University of Hong Kong and Chinese University. Initial funding for the project has been provided by HKUST, but the university plans to apply for government funding for the estimated HK$20 million project. Most of the brain cancer samples for the project will be collected from local hospitals. Because cancers are caused by a combination of genetics and environmental and lifestyle factors, data would also be collected on each patient's personal history, although researchers have established ethical guidelines to ensure privacy. The research is an opportunity to study the genetic roots of brain tumours, which remain largely a mystery. More importantly, studying the genetics of brain tumours may offer innovative treatments for a cancer that is especially difficult to treat.

Share China*: Soldiers, monks struggle to clear rubble in quake-hit Qinghai - Rescuers probed the rubble for sounds or movement on Friday in a rush to find anyone buried alive more than 48 hours after an earthquake hit Qinghai, killing almost 800 people.

Share Russia's President Dmitri Medvedev, Brazil's President Luiz Inacio Lula da Silva, President Hu Jintao and India's Prime Minister Manmohan Singh pose for an official photo at the BRIC summit in Brasilia on Thursday. The BRIC summit is a gathering of government and private business representatives from Brazil, Russia, India and China. Brazil, Russia, India and China wrapped up their second-ever BRIC summit on Thursday in Brasilia with boasts their bloc was becoming a formidable force for global change – and words of condolence after a devastating earthquake in Qinghai. The gathering of the world’s top emerging economies was truncated and brought forward a day to ensure the participation of President Hu Jintao, who announced he had to race home to oversee the response to the quake. “Brazil, Russia, India and China have a fundamental role in the construction of a fairer international order,” the summit’s host, Brazil’s President Luiz Inacio Lula da Silva, told a closing media conference. He, Russia’s President Dmitry Medvedev and India’s Prime Minister Manmohan Singh all extended their sympathies to Hu and the people of China after an earthquake struck the northwestern province of Qinghai on Wednesday, killing 760 people. Hu Jintao, who was to fly back to Beijing at 11.30pm to handle what he called “a huge calamity,” replied: “Your solidarity and sympathy have made us feel warm.” Singh called the summit “very successful” and described the BRIC grouping as key to “contributing to world economic growth and prosperity (SEHK: 0803).” Medvedev said the meeting showed “the BRIC format is becoming full-fledged and allows us to not only coordinate our efforts but to also make concrete decisions.” A joint statement emphasised the group’s intent to see a “multipolar, equitable and democratic world order” result from a shake-up of international financial institutions and the United Nations to better reflect the aspirations of their emerging economies. It also spoke of “the importance of maintaining relative stability of major reserve currencies and sustainability of fiscal policies in order to achieve a strong, long-term balanced economic growth.” That vague clause appeared to refer to the mainland’s reluctance to remove the peg between the yuan and the US dollar – a policy that has boosted exports but raised cries of unfair currency manipulation by countries including the US. Missing from the statement was any mention of Iran, even though a push by Western nations to obtain more UN sanctions against the Islamic republic figured in several meetings on the sidelines of the BRIC meeting. A trilateral summit between Brazil, India and South Africa held just before the BRIC summit agreed that more diplomacy was required in the international stand-off with Iran over its controversial nuclear program. Lula, Indian Prime Minister Manmohan Singh and South African President Jacob Zuma “recognised the right of Iran to develop nuclear programs for peaceful purposes” and underlined “the need for a peaceful and diplomatic solution of the issue.” That language, however, was noticeably missing from the BRIC statement. Russia and to a lesser extent China – both veto-wielding permanent members of the UN Security Council – have reduced their resistance to sanctions in recent weeks. But Brazil, a non-permanent member of the Security Council, has resolutely defended Iran. “Our impression... is that the effectiveness of sanctions is debatable,” Brazilian Foreign Minister Celso Amorim told reporters, adding that President Lula had set out that position in talks with the leaders of China and India. “President Lula gave an explanation, to provide better transparency, on what we’ve done in relation with Iran. And we see great affinity with the points of view of each country,” Amorim said. Lula also discussed the issue with Medvedev, Brazilian officials told reporters. The United States, Britain, France and Germany have been urging the BRICs to support sanctions against Iran.

Share Premier Wen Jiabao, centre, visits quake-affected local people in Gyegu Town, Yushu county, Qinghai Province on Thursday. Premier Wen arrived in Yushu on Thursday evening to check on rescue work and meet survivors. Rescue teams fought gusty winds and altitude sickness on Thursday as survivors faced a second night outside in freezing weather after strong earthquakes left more than 760 dead and thousands hurt in the mountainous Tibetan area.

Share In a surprise gesture, Premier Wen Jiabao wrote a moving tribute to late Communist Party general secretary Hu Yaobang on his 21st death anniversary yesterday. The article, titled "Back to Xingyi: Memories of Yaobang," was published on page 2 of the People's Daily. A supporter of economic and political reforms, Hu was forced to resign in 1987 by socialist hardliners in the party. His death in April 1989 and the government's perceived subdued funerary arrangements led to public mourning on the streets of Beijing and elsewhere. That, fed by other grievances against the party, soon escalated into the student movement that triggered the June 4 Tiananmen Square crackdown. In his article, Wen recalled that "Comrade Yaobang" had set a personal example in understanding the lives and problems of the masses. "A few days ago, I went to inspect the drought-hit areas of southwest Guizhou," Wen wrote. "Walking in this land, looking at the mountains and rivers here, I cannot help but think of Comrade Yaobang 24 years ago when we came here on an inspection together." During the Lunar New Year of 1986, Wen accompanied Hu on a trip to the poverty-stricken southwestern provinces of Guizhou, Yunnan and Guangxi. They interviewed farmers and the poor and Hu kept changing his itinerary to make sure he reached out to as many people as possible to understand their problems and needs, Wen wrote. Hu would often say he wanted to go to some places "without preparation," Wen said, adding that Hu had told him: "The greatest danger for leaders is to be alienated from reality." "Over the years, Hu's sincere and earnest words often echo in my mind" the premier wrote. Hu's insistence on going to work despite his illness also impressed Wen. He recalled Hu as "fair and impartial, open and above board," and praised him for giving "the last measure of devotion for the country's development." Wen had worked with Hu for about two years after Wen's move to the party central office in Beijing in October 1985. "What he said and did inspired me to work hard and not be lazy. "Hu's rigorous work style affected me, and I practised his spirit into my work, study and life as well." Wen accompanied a sick Hu for treatment on April 8, 1989. When Hu passed away a week later, Wen was among the first to rush to his hospital bedside.

China risks little damage to its economy by letting the yuan appreciate, and it would likely benefit from greater resilience to external shocks, the chief economist of the Asian Development Bank said on Friday. As the world’s third-largest economy continues to gather steam, speculation is growing that Beijing may be preparing to yield to international pressure for it to loosen its grip on the yuan, which it has kept pegged against the dollar since mid-2008. “I think the risk which might come from more flexible exchange rates is very low, and it may not have a huge impact on the export sector,” Jong-Wha Lee of the Manila-based ADB said in an interview with Reuters in Tokyo. As productivity in the export sector has improved, it is time for China to shift resources to domestic industries to correct current distortions so that it is better able to absorb external shocks, Lee said. A spokesman of the Chinese Commerce Ministry said on Thursday that Washington was wrong to argue that by holding down the currency Beijing was giving Chinese exporters an unfair competitive edge. But “the yuan’s flexibility would be in China’s interest as well as the global economy’s interest,” said Lee, a South Korean academic and chief spokesperson for the ADB on economic forecasts and trends. “Allowing the exchange rate flexibility sooner rather than later would be better for China,” he added. China’s currency reform, at the same time, would discourage other Asian countries from massively intervening in currency markets to weaken their own currencies to maintain export competitiveness. “What I see is that probably the next step is policy coordination,” allowing “a concerted regional appreciation of currencies,” he said. Cooperation among East Asian countries has intensified due to the global financial crisis, but getting to the stage of concerted action may take time because the region needs to gain the trust of other countries, Lee said. In the latest annual outlook report, the ADB said Asia and Pacific economies should co-ordinate on unwinding easy policy and freeing up exchange rates, while forecasting strong growth for the region this year and next. Lee said that withdrawing the Asian countries’ “exceptionally easy monetary policies” would be the right procedure, but their stimulative fiscal stance would be better left in place this year.

Share Australian farms lure investment from China - Cross-bred Friesian and Wagyu steers eat their morning feed at a cattle feedlot in Peechelba, Victoria, Australia. The country's agriculture industry represents about 12 percent of the economy and Australia has some of the largest farms in the world. Business increases 10-fold in six months as cattle, cotton snapped up - Chinese investment in Australian farms increased 10-fold in the past six months, real estate agents said, as Australia relaxed rules governing residential property purchasing and buyers see opportunities in agriculture. "They are interested in large scale cattle farms, they are cashed up and see a financial opportunity here in a secure investment environment," said Geoff Hickson, real estate manager at Landmark Operations Ltd. "There has been a big increase from Chinese buyers in the past six months, it has grown 10-fold." Australian farms lure investment from China - Companies like Landmark now use Mandarin translators, said Hickson, who last week showed Chinese potential buyers a 405-hectare cattle ranch near Mackay, in Queensland state. The interest in farms mirrors a trend in China's demand for minerals that helped the Australian economy avoid recession during the global financial crisis. Australia's agriculture industry represents about 12 percent of the A$1.21 trillion ($1.1 trillion) economy and the country has some of the largest farms in the world. Anna Creek, a South Australia state cattle ranch measuring 23,677 square kilometers or almost the size of Belgium, is its biggest. "Interest from Chinese buyers has gained at least 10-fold and we sold a Queensland cotton farm last week for A$15 million to Chinese buyers," said John Burke, an agent specializing in country properties for rural services company Elders Ltd. "Chinese are wealthy and they are looking for a secure investment in beef, cotton and grain properties." China is Australia's largest trading partner, buying A$83 billion worth of goods and services from the world's biggest exporter of coal and iron ore in the year ended June 30, 2009. Chinese investment in Australian resources has soared as demand rises in the world's fastest growing major economy. The Australian Competition and Consumer Commission on Wednesday cleared Royal Dutch Shell Plc and PetroChina Co's A$3.5 billion bid to acquire Arrow Energy Ltd. The purchase, the latest Chinese investment in Australian minerals and energy, needs Foreign Investment Review Board (FIRB) approval. The FIRB in 2008 relaxed rules for foreign investment in residential properties. That has seen overseas investment rise and house prices soar, according to real estate agents. House prices nationally have gained 14.4 percent, with a 22.5 percent increase in Melbourne and 14 percent in Sydney, according to RP Data figures. The increase in interest from overseas buyers, particularly Chinese, has been huge since the changes in foreign investment rules, said David Airey, president of the Real Estate Institute of Australia. "That has translated into tremendous price increases, shutting a lot of Australian buyers out of the market, and it has seen an increase in interest for rural properties." Reserve Bank of Australia Governor Glenn Stevens said on March 26 the central bank was monitoring how the FIRB changes affected the housing market. "The question of the role of foreign purchasers is an important one, and it's one that we're giving some attention to," Stevens said, according to a transcript on the central bank's website. The jump in house prices was among reasons Stevens boosted the benchmark interest rate this month for the fifth time in six meetings to 4.25 percent. A surge in foreign buyers may also hurt the government's efforts to make dwellings more affordable.

April 16, 2010

Hong Kong*: Global Sources, which organises the China Sourcing Fairs that anchor the AsiaWorld-Expo venue, said it would likely be forced to move its shows to the mainland if the Convention and Exhibition Centre in Wan Chai was allowed to expand a third time. A pullout would almost certainly sound the death knell for AsiaWorld-Expo. Global Sources has been vocal in its opposition to any plans to increase the size of the Wan Chai venue, and in criticising the dual role of the Trade Development Council - as the government's trade promotion arm and as a competing trade show organiser. "We were shown a letter of guarantee from the Hong Kong government to AsiaWorld-Expo stating that no further exhibition space would be built in Hong Kong until phase 2 of AsiaWorld-Expo was completed," the company says in a position paper for the Legislative Council's commerce and industry panel. "It is clear that if the third phase of the HKCEC proceeds, AsiaWorld-Expo will fail totally. We will certainly be forced to take our events elsewhere, likely to China where the government is extremely supportive of our activities." The apparent clash between the two venues resulted in two halls with room for 1,400 booths lying vacant at AsiaWorld-Expo during this week's China Sourcing Fair: Electronics and Components show, while the Wan Chai venue managed to fill its recently expanded atrium space during the council's Electronics Fair. Many chambers of commerce and business associations have privately admitted they cannot support shows at AsiaWorld-Expo for fear of angering the council, industry insiders say. A comparison of the two fairs this week shows none of the groups sponsoring the Electronics Fair, including the Federation of Hong Kong Industries and the Hong Kong General Chamber of Commerce, sponsor the Global Sources show. In documents submitted to Legco by the Commerce and Economic Development Bureau, the government said the council organised a quarter of the trade shows in 2008 and 29 per cent last year. "There is no monopoly by TDC as perceived by some parties," the bureau said. Despite calls for the council to stop organising trade fairs, the government highlighted its role in helping small and medium enterprises promote their products. It said it had asked the council, which holds four trade fairs at AsiaWorld-Expo each year, to consider staging more there. Lawmakers will discuss developments in the exhibitions sector on Tuesday.

Hong Kong travelers treasure their privacy more than their safety in the air, a global survey has revealed. Of the 11 nations and places surveyed, Hong Kong ranks second lowest in their support for a range of aviation security initiatives such as full body scans, biometric identification procedures or access to private information. Mexico scored lowest in the survey by Unisys Security. Fewer than half of the 896 Hong Kong respondents surveyed from February 10 to March 2 said they would be willing to submit to the procedures if it meant some loss of privacy. This is in sharp contrast with results from elsewhere, such as Britain, where an overwhelming nine out of 10 respondents said they would do so for security reasons. "Despite recent high-profile security infringements, such as the thwarted Christmas Day 2009 attack on a Detroit-bound flight, it appears Hong Kong residents are among the least willing of the world's population to forgo some level of personal privacy when it comes to specific security measures," Unisys Hong Kong practice director of the public sector Terence Wong Ming-yin said. "This may be because Hong Kong travelers have had relatively minimal exposure to security threats close to home. "As a result, they may be complacent or over-confident in the current levels of security." A spokeswoman for the Airport Authority said the airport does not implement full body scans nor request either biometric or personal data for security purposes, though it may be subject to the traveler's destination. However, the security process at the airport involves X-ray screening and explosive detection capabilities. "We understand that full-body scanners have been on trial at a number of airports for some time. We will closely monitor the situation and continually review our security measures with our regulatory authorities," the spokeswoman added. Wong acknowledged, though, that the results may point towards the positive image of the airport. "Alternatively, the results may simply be a reflection of Hong Kong International Airport being constantly ranked as one of the best in the world, and this includes security processing," he said. He does not think the results pose a potential threat to airport security.

Chief executive Nancy Hu talks down ATV's financial problems at a press briefing yesterday. ATV was financially sound, its management stressed yesterday, a day after the Court of First Instance heard disturbing testimony about the station facing running out of cash. The station was making a loss, but the size of the loss in the first quarter of the year was half the loss in the same period a year ago, chief executive Nancy Hu Gin-ing told a press briefing yesterday. The business would be able to break even in two years if management and the economy stayed on the right track, she said. Her confidence was in stark contrast to the grim picture painted by the station's legal representative, Daniel Fung Wah-kin SC, in the Court of First Instance on Tuesday. The station's cash in hand at the end of March was HK$28.9 million, while it required up to HK$50 million a month for operations, he told the hearing of an application by Taiwanese snack tycoon Tsai Eng-meng for an injunction against any ATV share deals with a third party. Creditors were becoming increasingly impatient, he said, because ATV had yet to fulfil last month's obligations. Granting of the injunction would exacerbate the financial situation and "it would be a huge tragedy to see [ATV] fold and to see the injunction contribute to that", he said. Since Fung's statement on the station's financial status, her office had been flooded with calls from worried staff and business partners, Hu said. But "ATV is very stable right now", she said. "We have no layoff plans and will hire more people... We can pay the salaries of staff." Hu did not comment on management's reaction to Fung's statements in court, but she said Fung was appointed by the board of directors and "[his comments] could be his strategy in court," she said. The station had enough money for now and was not using any new funding it had received, Hu said. Shenzhen property tycoon Wang Zheng is believed to have invested HK$23 million in the station. Hu said Tsai was still the biggest shareholder and had offered to inject HK$150 million at 30 per cent interest per annum to ATV, set off against advertising airtime. The board would decide whether to accept the offer. Although directors Payson Cha Mou-sing and his brother Johnson Cha Mou-daid were locked in a battle with Tsai, Hu believed they all supported the station. "The disputes do not involve us. We [the staff] just keep our heads down and work," she said. The station employs more than 600 people. The broadcaster has sacked more than 300 staff in the past two years.

London-listed Hutchison China MediTech, a subsidiary of tycoon Li Ka-shing's flagship Hutchison Whampoa (SEHK: 0013), has launched a range of organic products for the mass market in Hong Kong, and plans to introduce infant food and formula on the mainland this year. ParknShop customers will find herbal tea, crisps, chocolates, soup and cereal on the shelves, all branded as organic products and manufactured by the Hain Celestial Group, a US organic food company that has a joint venture with Hutchison China MediTech. Because the products are imported directly from the supplier, they are 30 per cent cheaper than similar organic items in the market, according to Christian Hogg, the Hong Kong-based chief executive of Hutchison China MediTech. "We feel there's a good opportunity in offering quality infant food and formula in China," Hogg said. "We'll have some products from Hain but we might also consider other producers." Despite being listed in the Alternative Investment Market on the London Stock Exchange since 2006, Hutchison China MediTech's business covers mainly China. Hogg has not ruled out a dual listing in London and Hong Kong. "When we first listed the company, we took into account that part of our business was invested in research and development and the London market had a stronger knowledge in biotechnology in comparison to Hong Kong," he said. "But we are less interested in financial engineering and we want to grow our business organically." On the mainland, the company produces prescription and over-the-counter drugs such as Banlangen, a remedy for flu and colds. While the research business made a loss of US$9.9 million for the year ended December, the operating profit for the health-care division increased 43 per cent to US$13.1 million.

Chief Secretary Henry Tang Ying-yen on Thursday paid tribute to Hong Kong volunteer Wong Fuk-wing – who died in Qinghai province on Wednesday trying to save the lives of earthquake survivors. Wong, a 46-year-old truck driver, rescued three children and an adult buried by the earthquake in Yushu. He was later killed in an aftershock, while trying to rescue more people. Tang told local radio he was deeply saddened by Wong’s death. The chief secretary said the government had contacted local authorities in Qinghai to offer aid. “We have also contacted his family members to provide assistance to them. In fact, in sacrificing his life to save others he has shown ‘Hong Kong spirit’,” Tang said. Tang said the government would provide financial support to Wong’s family from the disaster relief fund, if necessary. The Immigration Department in Hong Kong said Wong’s brother and brother-in-law would fly to Qinghai from Shenzhen on Thursday. Staff from the Immigration Department and the government would also travel to Qinghai to provide help. In Qinghai, on Thursday, rescue workers dug through piles of rubble searching for survivors. The earthquake killed at least 617 people and has left thousands more homeless. Strong winds and freezing temperatures combined with the lack of oxygen at high altitude have hampered relief efforts. Resuce teams were forced to use shovels, iron bars and their bare hands in the hunt through the ruins of the hardest hit town of Jiegu as doctors set up makeshift hospitals in tents. Thousands spent the night without shelter in freezing conditions following the 6.9 magnitude quake that hit mountainous Yushu county in Qinghai province on Wednesday, destroying almost all the houses in Jiegu, the local capital.

Accept this "golden opportunity" - there's no room for further concessions. That was the message to lawmakers yesterday as Chief Secretary Henry Tang Ying-yen unveiled revised proposals for electoral reforms for polls in 2012 for chief executive and Legco. The sentiments were echoed in Beijing a few hours later by National People's Congress Standing Committee deputy secretary general Qiao Xiaoyang. Qiao said the proposed electoral reform package represents "a major step forward toward the direction of broadening democracy" and called on Hongkongers to support it. Chief Executive Donald Tsang Yam- yuen, in a recorded address, also appealed for public support. "In 2005, we let a golden opportunity slip away. We cannot afford to let that happen again. Doing so would mean wasting a few more years and stalling further our constitutional development. And, the infighting will continue over this perennial issue." The revised package is similar to one proposed last November. Key proposals, such as increasing the Election Committee for the chief executive election from 800 members to 1,200 in 2012 and increasing the number of Legislative Council members from 60 to 70, remain unchanged. The only change is that the five additional Legco seats for the district council constituency will be elected by proportional representation instead of block voting as suggested by pan- democrats. The government hopes Legco can vote on the plan before the July recess. Tang said the government tried to find the "maximum latitude to enhance the democratic elements of the two elections in 2012, and to pave the way for implementing universal suffrage under the framework of the Standing Committee of the National People's Congress's decision and in line with the Basic Law." He said the pan-democrats should listen to the views of the public, since the package stands the best chance of being accepted by most people, Legco, the chief executive and central authorities. "It also addresses the two major reasons why the pan-democrats said they vetoed the last constitutional reform proposal in 2005 - the lack of a timetable for universal suffrage and allowing appointed district councillors to participate in the Legco election." Since the community remains deeply split on how to achieve universal suffrage for Legco, the future of functional constituencies will be the task of the next administration, he said. Tang said he will do his best to get the support of all legislators though some pan-democrats had made it clear they do not like the proposals. The chief secretary refused to comment on who should be blamed if the proposals are vetoed again - the public is intelligent enough to apportion any blame, he said. "Rome was not built in one day. By endorsing the 2012 package, we are building together our road to Rome," Tang said, ending his speech in Legco. The pan-democrats were unmoved. "How can you be sure we are indeed taking the train to Rome, or whether the train will not be derailed," Democratic party chairman Albert Ho Chun-yan said. Unionist Lee Cheuk-yan asked: "Are you taking us to Rome when fascism reigned or today's Rome?"

Qiao adds clout to Hong Kong reforms - Senior Beijing official Qiao Xiaoyang said the revised political reform proposals for Hong Kong in 2012 represent "a major step forward towards the direction of broadening democracy." Speaking 3 hours after Henry Tang unveiled the package, Qiao made an appeal in the Great Hall of the People in Beijing to urge the people of Hong Kong to support the proposals. He said the timetable for universal suffrage was set in 2007 after careful consideration by the National People's Congress Standing Committee, of which he is deputy secretary-general. "I understand there is a view within the Hong Kong community, hoping that I can, on the basis of the Standing Committee decision ... further clarify that not only `may' Hong Kong implement universal suffrage, but also `must' implement universal suffrage," he said. "In this regard, I wish to point out that, in 2007, the Standing Committee made clear the universal suffrage timetable for the Chief Executive and Legco by way of a `decision.' Its authority and legal effect is beyond any doubt." Qiao said the SAR government has done quite well in putting forth a package that it hopes will be accepted by political parties and meet their expectations. Qiao, who also heads the NPC's Hong Kong Basic Law committee, said the reason the Standing Committee ruled that Hong Kong "may" and not "must" have universal suffrage for the 2017 chief executive and 2020 Legislative Council elections was due to SAR law. Any change in electoral methods has to be approved by local lawmakers, he said, adding that passage of the reform package will create excellent conditions for universal suffrage in the future. But democrats are not buying it. Veteran politician Szeto Wah said Qiao's use of the word "may" means Beijing can break its promise. He also said Qiao has failed to come up with a timetable and roadmap. "The package is not progressive, but regressive and a step on a dangerous road," he said. But he added he backs continued dialogue with the authorities.

China*: Agricultural Bank of China, preparing for what is expected to be the world's largest-ever initial public offering, named the banks it chose for its more than US$20 billion dual-listing, in a selection that included a few surprises. While it’s unusual for a company to announce underwriters before the IPO prospectus, AgBank went ahead and identified the banks handling the long-awaited offering, which some experts think could raise nearly $30 billion. The IPO, if successful, could generate more than US$400 million in fees to be split among participating banks. With a 2 per cent deal fee anticipated, a US$30 billion IPO would generate around US$600 million in fees, likely the largest-ever pool of money generated by an equity offering. China’s fourth-largest bank said it had picked Goldman Sachs, Morgan Stanley, JPMorgan, China International Capital Corp (CICC), Deutsche Bank and Australia’s Macquarie to handle the H-share IPO in Hong Kong. AgBank also said that CICC, Citic Securities, Galaxy Securities and Guotai Junan Securities would handle the A-share portion of the offering in Shanghai. The AgBank release confirmed a Reuters report on Wednesday detailing the banks involved in the Shanghai A-share offering and the Hong Kong H-share listing. AgBank is the only one among China’s big four state-run lenders that has yet to float shares and its IPO is expected to surpass the US$22 billion that Industrial and Commercial Bank of China (SEHK: 1398) (ICBC) raised in its 2006 dual listing, a deal that remains the largest IPO ever done. ICBC is now the largest bank in the world by market capitalisation and by assets. The AgBank offering is widely expected to take place in the third quarter, sources involved in the IPO say. AgBank is meeting with the selected banks on Thursday, known as a “kick off” meeting which will formally get the IPO process going. Investment banks in the region waited a long time for the AgBank mandate, given the size of the offering and the fee potential. Among the surprises noted by banking sources in the aftermath of the AgBank selection process was the exclusion of UBS AG, an equity powerhouse in the region, that was not named as an underwriter. Sources told Reuters on Wednesday that UBS would be a financial adviser on the H-share portion, though that function typically involves a more minor role.

China's economic growth surged to 11.9 per cent in the first quarter but inflation was lower than expected, easing pressure on Beijing to hike rates and cool the boom.

President Hu Jintao has decided to cut short his planned tour of key South American nations and head home early after the BRIC summit in Brazil, in order to help better direct disaster relief after a 7.1-magnitude quake struck Qinghai early Wednesday.

Premier Wen arrives in quake-hit Yushu.

Chinese Premier Wen Jiabao (C) visits quake-affected local people in Gyegu Town of Tibetan Autonomous Prefecture of Yushu, northwest China's Qinghai Province, April 15, 2010. Wen arrived here on Thursday to inspect the disaster relief work and visit affected local people.

Rescuers get on the plane leaving for the quake-hit Yushu County at Caojiabu airport, Xining, capital of northwest China's Qinghai Province, April 15, 2010. Xining to Yushu airline was considered "airline for life" since the 7.1-magnitude earthquake hit northwest China's Qinghai Province early on Wednesday. Thousands of rescuers have been transported to the quake-hit Yushu County since the disaster occured.

Beijing will keep the yuan stable not only to help exporters weather the world economic downturn but also to check the inflow of hot money, the Ministry of Commerce said on Thursday. Ministry spokesman Yao Jian reaffirmed Beijing’s stance that the United States should not blame the China’s exchange rate for its domestic economic problems. China is under increasing US pressure to let the yuan rise after keeping it flat against the dollar since mid-2008. But at a regular news conference, Yao echoed other officials that China would act in its own interests and reform its currency regime in light of domestic and external conditions. “Do not let the yuan’s exchange rate issue become the scapegoat of US domestic economic problems, including their unemployment,” he said. Yao sounded a cautious note on the outlook for China’s exports. Net exports shaved 1.2 percentage points off first-quarter headline growth of 11.9 per cent year on year. China reported a US$7.24 billion trade deficit in March, its first monthly shortfall since 2004, and Yao said there would be other deficits in the first half of the year as domestic growth outpaces the global recovery. As a result, China’s full-year surplus would shrink from last year’s total of US$196 billion. “External demand has not shown a clear rebound, which is expected to lead to a slow recovery in China’s exports,” he said.

Taiwanese high school students will be able to choose to study in mainland universities this autumn under the latest measure announced by Beijing to promote cross-strait exchanges. The island's pro-independence camp, which sees the move as a united-front ploy aimed at wooing the Taiwanese people, has expressed its concern. Fan Liqing, a spokeswoman for the mainland State Council's Taiwan Affairs Office, announced yesterday in Beijing that Taiwanese students who had top results in the island's college entrance examination would be able to apply for enrolment at 123 mainland colleges and universities from September after passing an oral test. "We encourage exchanges between students across the Taiwan Strait," she said, adding that such exchanges would bring youngsters on the two sides closer together and contribute to the peaceful development of cross-strait ties. The new enrolment system for Taiwanese students was part of a consensus reached during a cross-strait forum between Taiwan's ruling Kuomintang and the Communist Party of China in May last year. Taiwan's pro-independence, opposition Democratic Progressive Party said it suspected that the new system would only bring more problems to the island. "Given that Taiwan is facing a low birth-rate problem and many universities or colleges are having problems finding students, the Chinese measure will create further disaster to our academic institutions," Liao Chih-chien, director of the DPP's information department, said. The measure was basically a mainland "charm offensive" to "win the hearts of the Taiwanese people", Liao said. He also warned of problems for Taiwanese students graduating from mainland universities because Taiwan has yet to recognise mainland academic qualifications. Taiwan's Education Ministry has proposed the recognition of mainland academic qualifications, but the proposal has faced strong opposition from sections of the public and the pro-independence camp, who say it could add to competition in the local job market. The legislature is to review the ministry's proposal during its current session. Jonathan Liu Te-shun, vice-chairman of the Mainland Affairs Council, Taiwan's top mainland policy planning body, said Taiwan did not restrict its students from studying at mainland universities, but students studying there needed to consider whether or not the academic qualification they obtained from the mainland would be recognised in Taiwan. Asked if a brain drain could develop if many top Taiwanese students chose to study on the mainland, Liu said students or their parents would evaluate academic and living conditions on both sides of the Taiwan Strait before making their choices. "I believe our education environment should be good enough to keep most students here," he said. Currently, 6,755 Taiwanese students study at 187 mainland universities or colleges, but they had to sit for joint entrance examinations by those universities before getting enrolled. The subjects tested include Chinese literature, mathematics, English, history and geography. With the mainland's rising economic power, some Taiwanese parents believe their children would benefit from studying on the mainland, where they could work and prosper after graduation. But there have been reports of some Taiwanese students quitting after studying on the mainland for one or two years, mainly due to the keen competition in classes and their failure to adapt to local life. Yang Yao-chung, a student at a Taipei high school, said yesterday he would not choose to study on the mainland. "I would rather stay in Taiwan where I can live freely, going to any game parlours I like and getting the fashion toys I want," he said.

President Ma Ying-jeou said on Thursday Taipei could sign an historic trade deal with Beijing as early as June and that it would bring major benefits to the whole region.

Dongfeng Motor Group chairman Xu Ping says the Hubei-based company will consider overseas acquisitions only if they raise its "core competitiveness". Dongfeng Motor Group (SEHK: 0489), the mainland's third-largest vehicle maker, hopes to increase its domestic market share to 11 per cent this year from 10.5 per cent last year and expects to be cautious about overseas acquisitions. The Hubei-based company said it planned to achieve above industry average sales growth this year. Its market share fell from 10.8 per cent in 2008 because of lagging sales growth in commercial vehicles, such as buses and trucks, which were badly affected by the economic slowdown. It had a share of 10.1 per cent in 2007. Dongfeng, which operates joint ventures with Japan's Nissan Motor and Honda Motor and France's PSA Peugeot, aims to sell 1.65 million to 1.7 million units this year. This is 15.4 per cent to 18.9 per cent higher than last year's 1.43 million. About 1.25 million to 1.3 million units will be cars - 18.1 per cent to 22.8 per cent higher than last year's sales - and 400,000 will be commercial vehicles, up 7.5 per cent. Dongfeng aims to grab shares from rivals. The management expects the mainland vehicle market's growth to slow from last year's break-neck pace, which was buoyed by government subsidies for small-car buyers and rural consumers. The company projects domestic market sales to grow 15 per cent to 15.7 million units. Last year's sales leapt 46.2 per cent to 13.64 million units. "Our view is that this year's economic outlook is more complex ... growth will still be relatively fast but whether sales will show a 'fast first' and 'slow later' trend, it is not easy to tell," chairman Xu Ping said. He said Dongfeng achieved a 78.2 per cent year-on-year sales increase to 470,000 units in this year's first quarter, compared with 72 per cent of the entire industry. Of Dongfeng's first-quarter sales, passenger cars jumped 71 per cent and commercial vehicles doubled. The 41.2 per cent first-quarter sales growth for Honda cars trailed Nissan's 69.7 per cent increase and Peugeot's 70.5 per cent gain. Honda did not produce cars with engines small enough to qualify for state subsidies. To cope with demand, Dongfeng plans to expand annual output capacity to 1.7 million units this year, up from 1.42 million at the end of last year. It is building a third Nissan car plant with 240,000 units of annual capacity, slated for completion in 2012. Asked about the firm's interest in acquisitions abroad, Xu said it would only consider those that would "raise its core competitiveness". Rival Zhejiang Geely Holding Group recently completed the purchase of the Swedish marque Volvo. For so-called "new energy vehicles", Dongfeng launched petrol-electric hybrid buses and placed 25 pure electric buses for consumer trials in Zhengzhou, Hubei province, and Tangshan, Hebei province. Xu would not give sales targets. Dongfeng is also developing hybrid and pure electric sedans, as well as natural gas and ethanol vehicles. Dongfeng also plans to sell 60,000 of its own brand of vehicles this year, after selling 18,000 last year. They are priced at 76,000 yuan (HK$86,400) to 96,000 yuan, compared with joint-venture products that sell for 70,000 yuan to 250,000 yuan.

Protectionist wind blows on stimulus - 'Buy American' drive to block aid to foreign firms - Some US politicians are concerned that foreign firms are benefiting from billions of dollars in US stimulus grants for clean energy projects. Chinese turbines powered by west Texas winds are sparking a debate over whether "Buy American" rules should be imposed on renewable-energy investments backed by the US government. A-Power Energy Generation Systems, of Shenyang in northeast China, will supply turbines to a joint venture planning to build a US$1.5 billion wind farm. The group, which includes two US partners, says it may seek financial aid from the US government because the project will create at least 1,000 American jobs. Lawmakers led by Senator Charles Schumer, a New York Democrat, say such assistance amounts to subsidising green jobs outside the country. They want to slap made-in-America requirements on renewable-energy initiatives aided by the US, like those already faced by highway and water-treatment projects helped by President Barack Obama's US$787 billion stimulus plan. "Congress is feeling pressure to make sure they won't be held accountable for green jobs going overseas," said Kevin Book, of Clearview Energy Partners, a Washington policy research firm. Buy American restrictions may be added to climate legislation that will be introduced in the Senate as early as next week, Book says. Producers of renewable-energy equipment, led by General Electric, the biggest US maker of wind turbines, say such restrictions would hurt their ability to compete in a global clean-energy market that relies on parts from many countries. Buy-American provisions may cause other nations to retaliate by curbing their use of US products, GE says. The wind industry will create 20,000 US jobs in the next decade and would generate more if the US adopted clear policies and incentives for clean energy, such as requiring the use of power generated from renewable sources, said Steve Bolze, head of GE's power and water unit. "What the US needs, which Europe, China and other countries have, is stable, long-term policy," Bolze said. GE, the world's No 2 maker of wind turbines, is planning to invest €340 million (HK$3.59 billion) in developing and expanding wind-turbine operations in Britain, Germany, Norway and Sweden, creating a total of more than 2,000 jobs in those countries, Bolze says. "We need to be very, very careful about any kinds of protectionist measures" in clean energy, US Commerce Secretary Gary Locke said in an interview this month. The Texas project's US partners announced the 600-megawatt wind farm on October 29. A-Power was designated as the wind-turbine supplier, John Lin, the company's chief operating officer, said. The US Renewable Energy Group, a Washington-based private equity firm, and closely held Cielo Wind Power of Austin, Texas, are in the joint venture with Shenyang Power Group, a Chinese energy alliance that has A-Power as its biggest investor. Schumer criticised the use of Chinese-made turbines at the time, and last month joined Democratic colleagues in introducing legislation that would make the Texas wind farm and projects like it that are dependent on foreign manufacturing ineligible for stimulus aid. "We can't sit idly by while China races to the forefront of clean-energy projects at the expense of US manufacturing, US jobs and US energy independence," Democratic Senator Sherrod Brown, a co-sponsor, said last month. "And we certainly can't shoot ourselves in the foot by helping to finance Chinese clean-energy production." Asia makes half the world's wind and solar energy equipment and is widening its lead. China invested US$34.5 billion in low-carbon energy technologies last year, according to Bloomberg New Energy Finance. The US spent US$18.6 billion. Partners in the Texas wind farm will fully fund the project and construct the plant using only American labour, according to Ed Cunningham, a managing partner with the US Renewable Energy Group. "We will then have the opportunity to apply for incentives," Cunningham said. "All incentives would be repaid within just a few years through the federal taxes generated by the wind farm, and this doesn't include the value tied to the thousands of high-paying, stable American jobs." The Buy American debate is growing as companies move renewable-energy jobs away from the US. London-based BP last month said it was ending US production of solar panels at a plant in Maryland, cutting 320 jobs, as it shifts production to joint ventures in China and India. Arizona-based First Solar, which received US$16.3 million in federal funds to hire 200 people at an Ohio plant, plans to do 71 per cent of its manufacturing hiring in Malaysia. As of mid-March, at least US$1.6 billion of US$2.7 billion in US stimulus grants for clean-energy projects went to companies based outside the US, says Denise Heckbert, an analyst at Bloomberg New Energy Finance. "It doesn't look good on paper, but actually the funds are supporting a substantial number of US jobs," she said. That is a theme sounded by energy companies opposed to Buy American restrictions. Partners in the 12,950-hectare Texas wind farm, which would power 180,000 homes, have emphasised that the "vast majority" of jobs would go to Americans. "A minimum of 70 per cent of each wind turbine, including the massive towers and blades, will be wholly manufactured in the United States and made of American steel," the US Renewable Energy Group said on its website. The Obama administration shares Schumer's goal of ensuring that government aid creates US jobs, says Matt Rogers, a senior adviser at the Energy Department. "The good news is these programmes have worked to create jobs and bring in a lot of foreign investment to the US," Rogers said. Two programmes under the stimulus act aimed at promoting renewable energy have created or saved more than 20,000 US jobs, according to the Energy Department. Concern that most wind-power jobs will flow overseas is exaggerated because of the heavy equipment required, says Walter Hornaday, president of Cielo Wind Power. "It doesn't make sense to haul 400,000 pounds of equipment around on the open ocean," Hornaday said.

Huawei Technologies has been tapped by money-losing smartphone maker Palm for preliminary acquisition talks, a person familiar with the matter said. Huawei was approached through its investment bank in February, the person said. "As a matter of policy, Huawei does not comment on speculation about possible mergers or acquisitions. Huawei is always open to consider opportunities that will further enhance its business development," the company said in a statement. Palm is understood to have hired bankers to explore several options, including a sale of the company, whose smartphone sales have suffered against those of rivals such as Apple's iPhone and Research In Motion's BlackBerry. Palm has been considered a target for larger companies hoping to enter or expand in the mobile market. Suitors are likely to pay more than US$1 billion for Palm. It had a stock market value of US$870 million as of last Friday and deals for technology companies are carrying a premium of about 30 per cent these days, according to bankers. In the past six months, the company's stock has dropped 69 per cent.

Construction has begun on a second railway linking China's northwestern Xinjiang Uygur Autonomous Region with inland cities, the railway company in Xinjiang announced Thursday.

Hongcun village, which looks like a traditional Chinese ink painting, is one of Anhui's most visited sites. The upcoming 2010 World Expo promises to be a bonanza for Shanghai's tourism industry, and many visitors attending the international showcase will also journey outside the city to nearby provinces such as Anhui, Jiangsu and Zhejiang. At least one third of the expected 70 million Expo visitors are expected to make a sojourn outside Shanghai to neighboring provinces, according to the National Statistics Bureau. Only three to four hours drive from Shanghai, the natural beauty and rich culture and heritage of Anhui provide a great escape from the urban vistas of the metropolis and are sure to attract many visitors. "Anhui has the Huangshan Mountains, which are just like a traditional Chinese ink painting, Hongcun village and Tunxi Old Street, which could well date back over 1,000 years, as well as the country's oldest paper and ink cultures," says Hu Xuefan, director of the Anhui tourism bureau. The Chinese writing brush, ink stick, ink stone and paper are known as the "Four Treasures of Chinese Study", and Anhui province can claim to be the place of origin of two of them: Xuan paper and Hui ink sticks. The majority of the ancient Chinese books and paintings by famous painters that still survive were created using Hui ink sticks and Xuan paper. Named after ancient Anhui's Xuanzhou prefecture, where the finest quality paper was traditionally produced, Xuan paper is renowned for its fine texture and durability, some Chinese calligraphy collectors believe that top quality Xuan paper will last forever. There are numerous kinds of Xuan paper and each paper manufacturer has its own carefully guarded secrets. Neighboring She county is renowned for producing Hui ink, the country's best ink sticks. With pre-mixed liquid ink available nowadays, why do painters and calligraphers still insist on grinding their own ink? People from She county know the answer: The texture and quality of freshly ground ink is better, and people like to relax their muscles and prepare for using the brush by grinding the ink. Hui ink sticks used to be known as Li sticks, as the late Tang emperor Li Yu (AD 936-978) was a great admirer of their qualities and it used to be said that it was easier to get gold than a Li ink stick. So if you are visiting the Expo and want a little relief from the hustle and bustle of Shanghai, why not pay a visit to Anhui province and discover these Chinese treasures for yourself.

April 15, 2010

Hong Kong*: Hong Kong's central bank is putting its growing reserves into higher risk, higher return hedge funds and private equity, the a British newspaper said on Wednesday.

Chief Secretary for Administration Henry Tang proposes a political reform package for the election of the Chief Executive and the Legislative Council in 2012 in the Legco chamber on Wednesday. The Hong Kong government announced its political reform plans for the 2012 elections on Wednesday. The proposals are largely similar to those introduced last autumn to the Legislative Council before the government’s three-month public consultation process. The government at that time proposed modest changes to the composition of the committee that selects the chief executive and the number of lawmakers elected to Legco. Chief Secretary Henry Tang Ying-yen told legislators on Wednesday the government wanted to expand the chief executive selection committee from the present 800 people to 1,200 for the 2012 election. Tang also proposed expanding the Legislative Council to 70 members – from the present 60 – while maintaining the present 50:50 ratio of those directly by the public and those elected by members of various functional constituencies. The government proposed adding five more geographical constituency seats directly elected by the public and five more functional constituency elected by district councillors. This new set of proposals differs from those proposed last autumn in that it states that the five new functional constituency seats will be elected using a proportional representation system.

Developers have agreed to disclose the sales prices of connected transactions involving senior executives after a meeting with the government. They find it an acceptable and easy measure to adopt if the disclosure of names is not necessary, a developer told Sing Tao Daily, sister publication of The Standard. About 10 members of the Real Estate Developers Association held talks with the Transport and Housing Bureau early yesterday on measures to raise pre-sale transparency and accuracy. REDA vice chairman Stewart Leung Chi-kin said the two parties also looked into preventing show flats and advertisements from misrepresenting facts, in keeping with Bureau chief Eva Cheng Yu-wah's call on Monday. Details yet to be discussed include what penalty developers will be liable to if they fail to fully follow the guidelines, Leung added. Cheung Kong Real Estate director William Kwok Tsz-wai believes more transparency will enhance public confidence and benefit the market. Kwok noted that Cheung Kong's show flats completely abide by official requirements. While Cheng believes the removal of walls in show flats misleads customers into believing the apartments are larger than they actually are, Kwok explained that such a measure may aim to ensure customer safety in crowded rooms. Sun Hung Kai Real Estate executive director Victor Lui Ting noted that transparency is beneficial to both developers and buyers. Separately, Centaline Property chairman Shih Wing-ching said property prices are still below the 1997 level, but there are signs of a bubble. Shih pointed out that some banks have even raised agent commissions to boost business. He said the resumption of Home Ownership Scheme flats may be advisable, since public anger over the wealth gap is mounting.

Pilots hailed as heroes over miracle landing - Two Australian pilots have been called heroes after a miracle landing of a stricken Cathay Pacific (SEHK: 0293) plane with hundreds of passengers on board in Hong Kong yesterday. Both engines on the Airbus A330-300 malfunctioned on its approach to Chek Lap Kok, the pilots told a colleague. For at least several seconds of the plane's descent it was flying with no power in either engine, effectively gliding at high speed towards the airport. Eight people, mainly Indonesians, suffered cuts and bruises sliding down emergency chutes after flight CX780 from Surabaya made the landing shortly before 2pm. Colleagues of the two pilots said it was a miracle the plane made it to the airport intact. The captain and first officer lost the use of the left-hand engine shortly after the aircraft reached cruising altitude after taking off from Surabaya in Indonesia on a four hour 40 minute flight to Hong Kong, one colleague said. They either shut the engine down or left it idling after unknown problems developed early in the flight, he said. With the plane able to fly and land safely on one engine - provided it is in range of an alternative airport - the Airbus, carrying 322 passengers and crew, continued towards Hong Kong. Shortly after it began its descent, however, the second engine began to cut out inexplicably, leaving the pair to cope with dips and surges in power and the prospect of the plane plunging into the sea short of Chek Lap Kok. Working together, the two pilots somehow managed to half glide, half fly the aircraft towards the runway in a tense and extraordinary 20 minutes as the power in the right-hand engine came and went. The second engine cut out and restarted several times as the two pilots struggled to bring the aircraft in to land at Chek Lap Kok without lurching off course, the colleague said. The pilots struggled to control the plane's approach as the dips in power left them flying too low while surges took them too high as they approached the airport at what the colleague said was "far in excess of the normal approach speed". As the plane was making its final, perilous approach over the sea, they managed to get enough thrust in the right-hand engine to carry it safely to the runway. Landing at a high speed, the pilots managed to use reverse thrust as well as other braking devices to bring the plane to a stop, setting the tyres on fire as they did so but bringing the aircraft to a safe standstill, the colleague said. Most, if not all, of the injuries were caused by people hurting themselves as they went down emergency chutes, not during the life-or-death approach to the airport. "It was an amazing piece of piloting in extremely testing circumstances," the colleague said. "One engine was shut down completely and the other was going on and off. They effectively landed the plane on half an engine. "The passengers who were on that plane should be praying to whatever God they have that they got down safely after what happened." The colleague said: "The two guys who landed the plane safely are pretty shaken up as you'd imagine and I expect they will be dreaming for some time about that second engine stalling and restarting." Another colleague of the two men said: "Their stories will come out in due course when the investigation is complete but what they did was nothing short of heroic. It's a miracle they managed to get the plane down safely. "If this had happened on another airline or if this had happened to less skilled and resourceful pilots, there is no way those passengers would have all walked away from that plane alive." A Civil Aviation Department investigation has been launched into the incident and both pilots were interviewed for about two hours yesterday afternoon as the probe got under way. One of the two pilots is based in Hong Kong and was expected to return to his family last night, while the other is based in Australia and will stay in a hotel in the city for the time being. Air traffic controllers were alerted 20 minutes before the emergency landing and firefighters stood by for the arrival of the plane. Several of the plane's tyres deflated in the hard landing. Cathay Pacific said the tyres were designed to deflate during such a high-pressure braking to stop them bursting. A Cathay Pacific flight quality controller said it was extremely rare for an engine to break down during a flight unless it was hit by an object such as a bird or birds. "Even with both engines dead, our planes still have a backup power supply that should allow it to glide for up to hour, with the help of flaps and spoilers." The aircraft in the incident went into service in 1998 and had a thorough inspection two years ago. A plane can have a lifespan of more than 25 years with the proper maintenance. The director general of civil aviation, Norman Lo Shung-man, said investigators would submit a report in four weeks, although it would take much longer to find out the reasons behind the incident. The northern runway was closed for two hours and 20 minutes due to the accident. But only 35 of the 125 flights supposed to take off during that period were delayed, and for an average of less than half an hour. Last Wednesday, a Swiss International Airbus 340 was forced to abandon take-off at Chek Lap Kok after four of its tyres exploded, with debris damaging an engine. An Air France Airbus A300-200 plunged into the Atlantic after engine failure last June, killing 228 people.

Share More than 400 Hong Kong parents have put their children's names down for the city's first international boarding school - months before building work is due to begin. Plans for the campus of Harrow International School Hong Kong, which will be built on the site of a former military barracks in Tuen Mun, were unveiled yesterday at the British Consulate in Admiralty. The school is being set up under a franchise agreement with Harrow School in Britain by Harrow International Management Services, which won a government tender for the site last year and is close to sealing a land grant. Executive headmaster Mark Hensman, who is leading the project, said the school aimed to recruit 50 per cent of its 1,500 students from the territory - the maximum number permitted by the government - but had set no minimum quota for local students. "An international school should reflect the culture of the local environment, so it is very important that we have a large number of Hong Kong students," he said. "Our ideal is 50:50. "We have had nearly 400 registrations of interest to date - all from Hong Kong. "We will be marketing the school from Indonesia to Korea and Japan and from the Philippines right across to possibly the Indian subcontinent." Hensman said children aged seven and above would be selected using tests of English, maths and non-verbal reasoning and interviews from August next year. Younger children would be observed in play sessions for English ability and social skills. The school would provide scholarships and bursaries for around 10 per cent of students. Scholarships would go to students with special or all-round ability in academic study, music or sport. Plans for the 3.7-hectare campus feature a nine-storey building set around a football pitch, three tennis courts and one multi-purpose sports pitch. The HK$700 million building, which is being bankrolled by Hong Kong tycoon Daniel Chiu, will provide 33.3 square metres of space per student in a campus that is less than one-fortieth the size of its mother school in London. The first phase of construction, due to be completed in 2012, also includes an indoor swimming pool, an underground sports centre and a housing block for 50 teachers. A performing arts centre and extra boarding house are due to be added later. Students will be allocated to eight "houses" - following the traditional pastoral system of British independent schools - with each house occupying one floor. There will be 44 students to five staff per house, with separate wings for boys and girls. Hensman said day students would also be allocated to houses for the school's extensive programme of extra-curricular activities and homework, on which students were required to spend two hours per day after lessons. The school's 100 teachers, who would have to live on campus, would be recruited mainly from the UK, he said. Permanent secretary for education Raymond Wong Hung-chiu, who met with the Harrow team yesterday, said the school would "definitely" help to address the educational needs of expatriate families and attract overseas students to Hong Kong. "We will continue to monitor the provision of international school places and take the necessary measures to meet the demand of the community," he said.

Hong Kong's secondary housing market has shown a patchy recovery from the collapse of prices that followed the 1997 Asian financial crisis. On Hong Kong Island, prices in Taikoo Shing in Quarry Bay and City Garden in North Point are now close to the peak levels reached before the crisis saw prices collapsing by up to 67 per cent across the market. The Island rebound has been much higher than the recovery recorded in Kowloon and the New Territories over the past 13 years, however, and for the overall mass residential market, prices are still 21.3 per cent down on the 1997 peak, according to the widely used barometer of home prices, the Centa-City Leading Index. The weekly index, which is based on Centaline's current preliminary contract prices, set 1997 prices at 100. On April 9, it stood at 78.64 - still 21.3 per cent below the 1997 level. In the luxury residential market, by contrast, prices have already rebounded above their 1997 peak levels. In the secondary market, Taikoo Shing and City Garden are now expected to be the first two mass housing estates to break through the 1997 peaks. Midland Realty research shows the average prices of flats in Taikoo Shing and City Garden in March were within just 3 and 4 per cent respectively of their previous highs achieved in November 1997. In Taikoo Shing, average prices reached HK$8,180 per square foot last month, up 7.69 per cent from the end of last year. "We will see average prices of the two estates exceed the peak levels this year," Wong Leung-shing, an associate director of research at Centaline, said. In some isolated cases, those previous peaks had already been breached, Centaline sales director Patrick Tsang said. "The larger 1,237 sq ft flats in the area are the only ones that come with a maid's room. In recent months the prices of these units have reached HK$14 million, which is a record," he said. By contrast, prices in housing estates in Kowloon and New Territories have a long way to go before they breach their previous highs set in 1997. Helped by an influx of investors, prices in Laguna City hit HK$7,255 per square foot in November 1997. But the current average price is just HK$4,780 per square foot - still 35 per below the peak level reached in August 1997. And prices in the estate have risen just 2.6 per cent in the last three months. In City One in Sha Tin, the average price in February was HK$4,449 per square foot - 26 per cent below the market peak. Buggle Lau Ka-fai, the chief analyst at Midland, said the reason that prices of housing estates on Hong Kong Island were now close to the market peak level was tight new supply of flats and development sites in good locations. "It is difficult to find a large-scale residential site for sale on Hong Kong Island, the new supply is also limited to luxury residential," he said. This shortage has forced home seekers to look to mass housing estates, added Centaline's Wong. Buyers were able to make this decision because they were generally better off and average household incomes on Hong Kong Island ranked top in the city. Economist Kwan Cheuk-chiu said prices in Kowloon and the New Territories were usually 20 to 30 per cent lower than prices on the Island. He expected that prices in a few major housing estates on the Island would exceed their 1997 market peaks in the second or third quarter, while the Centa-City Leading Index would rise by then to 85 or 86 points. But he said home seekers should be cautious about price trends. "Property prices will continue to rise in the short term as a bubble is forming in the market. But this may change. And it may become horrible once the bubble bursts," he said. This is a harsh lesson still being suffered by those who bought into new projects at the peak in 1997. Two such estates were Villa Esplanada in Tsing Yi, and Discovery Park in Tsuen Wan. Average prices in Discovery Park in November 1997 were around HK$7,747 per square foot and in March this year were only around HK$4,518 per square foot - still 42 per cent below their 1997 levels. At Villa Esplanada prices are still 22 per cent below their 1997 peak. Data also shows that even being located on Hong Kong Island does not guarantee a better performance for new releases. Units in the Legend in Tai Hang, released for sale in 2007, were bought at prices ranging from HK$16,200 to HK$21,000 per square foot. But prices achieved in secondary sales in the development in recent months have fallen to as low as HK$12,000 to HK$13,000 per square foot. Wong of Centaline said buyers of new projects would have to be patient about achieving an appreciation in capital value for their flats. "Developers are selling at prices that might be realised three years on. This means they have considered the upside potential of the flats in the next three years. If buyers are looking for a capital value gain, they should be prepared to wait for three years," he said. Economist Kwan said the latest market movements seemed to be following the same path taken in the run-up to the 1997 collapse of prices. "Home seekers today have a similar mentality to those who bought flats in 1997. They worry that property prices will rise further and so decide to buy, which boosts prices sharply. But they are neglecting the key element that supports property prices, namely household income. They are no longer questioning whether salary rises could catch up with the property price surge," he said. Even if salaries were to increase by around 3 per cent this year, this would still lag the rise in property prices, he warned. Last year, the median household income for Hong Kong was HK$17,500 a month, still 6 per cent below the median income measured before the global financial crisis happened in October 2008. In 1996 and 1997, the median household income was around HK$20,000 a month.

An award-winning actor who denied wounding a man and tearing his ear in a scuffle is now ready to admit to a lesser charge of assault. Francis Ng Chun-yu, 48, will appear at Kowloon City Magistrates' Court today. In February, he pleaded not guilty to wounding Ming Chi- hong at Ceres Boulangerie et Patisserie bakery in Kowloon City on January 1. But Ng - who is also known as Francis Ng Chi-keung - has decided to plead guilty to assault causing bodily harm, according to informed sources. Although an assault offense carries a maximum penalty of three years in jail, judges can pass a lighter sentence, such as a suspended sentence or a fine. Ng will enter his plea before Principal Magistrate Anthony Kwok Kai-on at Kowloon City Magistrates' Court today. Ng's lawyer is Lawrence Lok Ying- kam, who specializes in criminal cases. Lok was hired by Chinachem Charitable Foundation, which won against fung shui master Tony Chan Chun- chuen in the battle for the late tycoon Nina Wang Kung Yu-sum's estate. Ng is out on HK$5,000 bail. The prosecution originally arranged five prosecution witnesses, with a surveillance tape also offered as evidence. The court was told Ng and his wife allegedly argued with another couple at the bakery. Ng, whose career took off in the 1996 triad tale Young and Dangerous, has since won the HK Film Critics Society best actor award three times. It's not the first time Ng has been taken to court. In November 2008, he was sued by a decoration company seeking to recover HK$1.2 million owed for renovations at his house in Sai Kung. Shun Fai Decoration and Handicraft filed a writ in the High Court in 2006 to recover the money. Ng filed a counterclaim seeking HK$410,000 for alleged defects. But the judge found in favor of the decoration firm, ordering Ng to make the payment, plus legal costs.

China*: China property prices in 70 cities rose 11.7 per cent in March from a year earlier, up from 10.7 per cent in the year to February, the National Bureau of Statistics reported.

Chinese President Hu Jintao(4th R,front)poses for a group photo with other world leaders during the Nuclear Security Summit at the Washington Convention Center in Washington,April 13,2010. World leaders or international organization representatives attending the Washington Nuclear Security Summit (NSS) on Tuesday proposed in a work plan a series of detailed measures designed to secure nuclear material in response to the growing threats of nuclear terrorism. The seven-page work plan, released at the end of the two-day summit, recognized states' rights to develop and use nuclear energy for peaceful purposes, and noted the responsibility of each state for the use and management of all nuclear materials and facilities under its jurisdiction. The plan said highly enriched uranium and separated plutonium are particularly sensitive and require special precautions, including the consolidation of national sites where nuclear material is held and the exercise of particular care in ensuring the safe and secure transport of nuclear materials, both in domestic and international transport. The plan urged every participating state to be mindful of its responsibility to maintain effective nuclear security and a robust domestic regulatory capacity, including the establishment, review, adjustment and enforcement of related regulations as well as personnel training. The plan also emphasized the importance of the human dimension of nuclear security, the need to enhance security culture, and the need to maintain a well-trained cadre of technical experts. The work plan underscored the value of exchanging accurate and verified information, without prejudice to confidentiality provisions, to detect, prevent, suppress, investigate and prosecute acts or attempted acts of illicit nuclear trafficking and nuclear terrorism.

Chinese Vice Premier Hui Liangyu (third right) comforts a quake-affected villager in Yushu of northwest China's Qinghai province April 14, 2010. A 7.1 magnitude earthquake hit the region early on Wednesday, leaving about 400 dead and 10,000 injured. Yushu, Qinghai: Relief materials have been sent to Yushu by the Qinghai Bureau of Civil Affairs after a 7.1-magnitude-earthquake hit the region early on Wednesday. 5,000 tents, 10,000 beds, 5,000 articles of winter clothing and more than 200 emergency lamps have arrived in the quake-hit area. The bureau has allocated more than 10 million yuan as rescue fund. In addition, 120 firemen were also deployed by the Gansu Rescue Unit. Luo Huining, governor of Qinghai province, visited the earthquake area to comfort victims and assure them that adequate support will be delivered soon.

A magnitude 6.9 earthquake on Wednesday killed at least 400 people and injured 10,000, trapping many others in collapsed houses in the mountainous Tibetan plateau. Local people gather in the outdoors after being evacuated from buildings following the powerful earthquake that hit the Tibetan Autonomous Prefecture of Yushu, Qinghai province, on Wednesday.

Rubble of destroyed houses fills the street after an earthquake hit the Tibetan Autonomous Prefecture of Yushu, Qinghai province on Wednesday.

China's Dongfeng Motor Group (SEHK: 0489) said it sees opportunities for mergers and acquisitions in the global auto sector still reeling from the fallout of the global downturn. “The company will closely monitor opportunities for overseas acquisitions,” Chairman Xu Ping told reporters in a news conference on Wednesday. He added that appreciation of China’s currency, the yuan, which many believe will take place in the next few months, would further strengthen Dongfeng’s position in making any acquisitions. Dongfeng, the Chinese joint venture partner of Nissan Motor, Honda Motor and PSA Peugeot Citroen, had 17.4 billion yuan (US$2.55 billion) cash and cash equivalents on hand at the end of last year, up from 7.2 billion yuan at end-2008. It will target assets overseas and at home that can lift the core-value of the China state-owned company. Chinese car makers are eager to buy technologies and brands from overseas to enhance their competitiveness in the US and European markets. The parent of Geely Automobile (SEHK: 0175) signed a definitive agreement late last month to buy Ford’s Volvo car unit for US$1.8 billion. China, which last year overtook the United States as the world’s biggest car market, has been a bright spot for global automakers battered by the industry’s worst downturn in a generation. A massive stimulus package from Beijing included aggressive cuts in sales tax on small cars. Xu expects China’s automobile industry will keep growing at a relatively rapid pace this year. “China’s automobile market is entering a mass consumption era,” he said. The company estimated China’s vehicle sales will rise about 10 per cent to 15 million units this year after breakneck growth of 46 per cent last year. Dongfeng aims to sell 1.65 million to 1.7 million vehicles this year, up 15-18 per cent from a year ago. The company sold 1.43 million vehicles, up 35 per cent with sales of passenger vehicles rising 45.6 per cent to about 1.06 million. That will see its market share rising to about 11 per cent from 10 per cent last year. The strong sales last year lifted its net profit for the year by 58 per cent to 6.25 billion yuan.

Stephen Bloom explores China's pearl culture for his latest work on this "accident of nature" which has attracted mankind for millennia. Liu Jun reports - Stephen Bloom was running late. I stomped my feet on the cold cement floor to keep myself warm in Beijing's chilly early spring. At the Pearl Market, facing the Temple of Heaven, we were to meet a pearl dealer who had entertained Margaret Thatcher and other dignitaries. The professor of journalism from the University of Iowa clearly wasn't in a hurry. He planted himself on a stool in front of a pearl stand on the second floor, and asked the young girl named Tammy to bring out one hank after another. "I give you deal better than I give other customers," Tammy said in her broken English as Bloom finally got up, promising to come back once we finished an interview on the third floor. It was a great learning opportunity for a young journalist to interpret for a veteran American colleague, whose works like Postville, The Oxford Project, and Inside the Writer's Mind: Writing Narrative Journalism have become must-reads for journalism students. But his apparent disregard for punctuality was annoying, and the way he bargained with Tammy to get pearls for his wife - and my mother (I wanted a birthday present for her) - was more like a sharp-toothed customer than a professor. Three years later, with Bloom's latest work Tears of Mermaids: The Secret Story of Pearls (St. Martin's Press) arriving (in China this year), his unhurried approach finally makes sense. In the world of pearls, you've got to show patience to get past snobbish dealers and reach the bottom of the pearl business. In his review, the Wall Street Journal's Joseph Sternberg wrote that Bloom "tells us too much about his personal odyssey and not enough about the pearls themselves", but I found the opposite to be true. Bloom's firsthand account and wry humor add much value to an otherwise dry account of the global pearl trade. Inspired by his mother's modest string of pearls, Bloom took a 48,000 kilometer journey around the globe to understand why this "accident of nature" has fascinated men, and women, for millennia. The surprising array of people he met are more memorable than the huge rare pearls that landed in Bloom's palms: The Japanese "Pearl Emperor" who denies the demise of Japanese pearls; the Tahitian pearl farmer Daniel Tavere who found and lost a colossal 22 mm black pearl; the French pearl guru Jacques Branellec who piloted his chopper to show Bloom around his pearl farms in the Philippines; and Ricki Angelus, a middle-class woman in the United States who secretly amasses pearls. The chapters on Bloom's experience as a deckhand on a pearling vessel under the Australian pearl lord Nicholas Paspaley are full of action and insight. To Bri, Selena and Hannah, who sweat alongside men to haul, swing, clean, rinse and stack thousands of oysters that contain breathtaking pearls, wearing any of these shiny orbs remain a dream. But for me, the most revealing part of the book is about Zhuji (spelled Joo-jee in the book), East China's Zhejiang province, which is now the world's biggest fresh water pearl production base. Bloom's tour proves that the quantity and quality of Chinese fresh water pearls are improving quickly. From a single mollusk, the astonished author pulled out dozens of pearls of different colors. After polishing and other technical improvements, these pearls would seem to be identical to topnotch pearls for an average customer. Although China still lacks a smart marketing strategy to generate interest and bigger prices for the "perfect pearl", Bloom did meet ambitious pearlers like Faye Tian, who studied in New York and cultures colorful pearls at her family's farm in Zhuji. At the end of his odyssey, Bloom journeyed to Cubagua, a small island in Venezuela, which supplied Spanish King Ferdinand and Queen Isabella with huge natural pearls in the early 16th century and sparked a pearl craze throughout Europe. Shiploads of African slaves were chained and pushed into the sea to gather as many oysters as possible. Cubagua thrived on this bloody trade for decades, before the depletion of pearls called an end to it all. Five hundreds years later, a pack of dogs welcomed Bloom and accompanied him everywhere on the deserted island. He sat down, gazing at the sea and mused over the nature of pearls and human greed. That solitary scene void of any pearls is much more poignant than the auction of the world's most expensive pearl strands Bloom witnessed at New York's Christie's. "I wanted to track the global journey of an inanimate object and give it life," Bloom told me. He certainly did.

President Barack Obama said on Tuesday that China had yet to set a timetable for reforming the yuan despite "frank" conversations with President Hu Jintao.

Metallurgical Corporation of China Ltd has recently taken steps to expand its global footprint by making investments in overseas mining assets. Engineering, procurement and construction major Metallurgical Corporation of China Ltd (MCC) is in the running for the zinc assets owned by diversified miner Anglo American Plc, according to company officials. Anglo American's zinc assets include the wholly owned Skorpion and Lisheen mines in Namibia and Ireland and a 74 percent interest in the Black Mountain mine in South Africa. According to Reuters reports, the total value of Anglo American's zinc assets could be around $1 billion. No other details were immediately available. The London-listed Anglo American's major mining businesses include diamonds, platinum, coal and other industrial metals. The Shanghai and Hong Kong-listed MCC is a leading international contractor for metallurgical projects and also a domestic real estate developer. The company has recently taken steps to expand its global footprint by investments in overseas mining assets. "We intend to capitalize on the commodity price rally and the Anglo bid is in line with our strategy," said an investment relations manager from MCC on condition of anonymity. In February, MCC agreed to pay $200 million for a 5 percent stake in Australian miner Resourcehouse Ltd. MCC also agreed to buy coal from the Australian firm and to buy a 10 percent stake in its Queensland-based China First coal project. State-owned MCC has a good chance of winning the Anglo bid as it has deep coffers, said analysts. Most of MCC's mining assets are located abroad, and it is line with the nation's "going-out" strategy. "The $1 billion Anglo deal if clinched would offer returns only over the long-term and should be seen as a strategic agreement," said Peng Bo, an analyst at Guosen Securities. Cash-rich Chinese State-owned enterprises and China Investment Corp, the nation's sovereign wealth fund, have played lead roles in fostering outbound deals for resources.

China's fast-growing economy demands ever more energy, and since the world's factory is also the world's biggest polluter, it is steaming ahead with developing renewable energy sources. The drive to establish alternative energy supplies has seen the mainland overtake Germany to become the world's second-largest wind power nation in terms of installed capacity, according to a report issued on Monday by the Global Wind Energy Council, an industry association. China's installed capacity totalled 25.9 gigawatts (GW) last year, second only to the United States, after it installed wind farms capable of generating 13.8 GW last year - a third of the world's additional capacity. He Dexin, director of the Chinese Wind Energy Association, forecast a total installed capacity of 100 to 150 GW by 2020. With brisk growth in wind power installations expected to continue, some foreign industry players have called for steady, long-term policies from the government to ensure an orderly market. Tulsi Tanti, chairman and managing director of Indian wind turbine supplier Suzlon Energy, said the central government had to make a long-term commitment of at least 10 years so that any company interested in wind power could plan ahead. Tanti said the biggest obstacle to doing business in China was that "they are constantly changing the policy". For instance, he said, China halted tax exemptions for imported wind turbines of less than 2.5 megawatts in May 2008, affecting the whole supply chain. Suzlon is the world's third-biggest wind turbine supplier and was the only international player in the Chinese market until three years ago. Despite the wind industry's remarkable growth, difficulties in connecting to the grid have long been a troubling sign. Asked about its plans for China, Tanti said: "We are not using the full capacity. We want to utilise that first before we expand." Chinese Wind Energy Association director He said a 750-kilovolt power transmission project started last year would provide grid connectivity for wind farms in Gansu and part of the wind capacity in Inner Mongolia would be connected to grids in northern China. Despite the enormous potential, wind power accounts for less than 1 per cent of China's total electricity consumption. The goal for 2020 is around 3 per cent, He said. Besides traditional renewable energies like wind and solar, China has also been pushing ahead with clean-burning bio-fuel to achieve its commitment to a 40 per cent reduction in carbon intensity (from 2005 levels) by 2020. Working in partnership with Danish ethanol developer Novozymes, oil and gas giant Sinopec (SEHK: 0386) and China's largest food manufacturer and trader, Cofco, are planning large-scale commercial production of cellulosic ethanol, a second-generation bio-fuel produced from agricultural waste, in 2011. The three companies signed an agreement to co-develop bio-fuel last year, under which Cofco will be responsible for feed-stock plantation and logistics, Novozymes will provide core technology, and Sinopec will be engaged in production, blending and distribution. Novozymes launched the first commercially viable enzymes for production of bio-fuel from agricultural waste in February. Enzymes play an important role in converting bio-mass to ethanol. When the technology is used in commercial biofuel production next year, the supply of biofuel will be increased by 25 per cent from now, Michael Fredskov Christiansen, Novozymes's China president, said. Biofuel is cheaper than oil and emits less carbon dioxide than petroleum-based fuels.

Military exchanges between China and the United States are still suspended, a People's Liberation Army spokesman said yesterday, despite a recent warming of relations between the countries.

Taiwan's high-tech pavilion in Shanghai will be completed next week, marking the island's return to the World Expo after an absence of 40 years. The Taiwan Pavilion, the last to begin construction, cost NT$1 billion (HK$245 million) and is due to start trial operation on Tuesday before the expo's official opening on May 1. The pavilion features a spherical theater with 4D special effects, where visitors will experience the scent of flowers and the splash of water. Taiwan last attended the expo in Osaka in 1970, a year before losing its United Nations seat to China.

Workers inspect natural gas equipment at a Sinopec facility in Hebei province. Spending by Chinese companies on mining and energy acquisitions reached a record $32 billion last year. China Petrochemical Corp agreed to pay ConocoPhillips $4.65 billion for its stake in Syncrude Canada Ltd, a higher price than analysts expected, as Asia's biggest refiner seeks overseas petroleum reserves. China Petrochemical, the Beijing-based company known as Sinopec Group, will buy about 9 percent of oil-sands producer Syncrude through its unit Sinopec International Petroleum Exploration & Production Co, according to a statement issued by Houston-based ConocoPhillips on Monday. The price the group agreed to pay for Syncrude surpassed by $650 million the high end of an estimate by Macquarie Securities of the assets' worth, said Jason Gammel, an analyst in New York with the firm. ConocoPhillips received a premium of about 20 percent compared with the value implied last week by Canadian Oil Sands Trust's market worth, debt and cash, according to a research note from Raymond James. "What it reflects is China's insatiable appetite for resource accumulation overseas, not to mention the fact that Beijing has a pretty big checkbook," said Pavel Molchanov, an analyst with Raymond James who rates ConocoPhillips at "underperform" and doesn't own any of its shares. Molchanov said he thought the stake would fetch about $4 billion. Canadian Oil Sands Trust is the lead partner in Fort McMurray, Alberta-based Syncrude with a 36.7 percent interest. ConocoPhillips, the third-largest US oil company, said in October it planned to sell $10 billion of assets over two years to help cut debt. Oil sands are deposits of bitumen, an extra-heavy oil that must be treated for use in refineries to produce gasoline and diesel fuels. The Syncrude deal shows the Chinese are putting prices on resources out of line with criteria such as the rate of return, said Mark Gilman, an analyst at the Benchmark Co in New York who has a "hold" rating on ConocoPhillips shares and owns none. "You don't need a degree in rocket science to come up with the fact that this is more than twice its economic value," he said of the Syncrude transaction. Spending by Chinese companies on mining and energy acquisitions reached a record $32 billion last year. China, South Korea, Japan and India are seeking overseas resources to drive their economies. The International Energy Agency on March 12 raised its forecast for fuel demand in developing countries, led by China and India, to 41.2 million barrels a day and cut its prediction for Europe and the United States.

An Alibaba booth at a recent digital products exhibition held recently in Beijing. The company's subsidiary Alipay controlled about 50 percent of China's online payment market in 2009. Chinese e-commerce giant Alibaba Group said on Monday it will invest 5 billion yuan ($732 million) over the next five years in its online payments subsidiary Co Ltd as part of its effort to maintain its lead over rivals Tencent Holdings and EBay Inc. The new funds, according to Alibaba, will be used to improve the security of its payment infrastructure, the development of payment products and to attract new customers. The company said it would also commit additional resources to online safety and security, risk and data management, as well as innovation in new technologies such as mobile payments. "Online payments will continue to play an ever-growing and significant role in the development of e-commerce as well as the stimulation of consumer demand," said Lucy Peng, chief executive officer of Apilay and the chief personnel officer of Alibaba Group. She said Chinese consumers expect a safe, convenient and affordable payment platform. Alibaba's announcement came shortly after US-online payment firm PayPal Inc last month clinched an agreement with Chinese national electronic-payment network China UnionPay that enables Chinese users to make purchases on overseas websites. PayPal is owned by EBay Inc. Alibaba to delve deeper into online payments - Alibaba's online auction site said it plans to double its workforce in the Asia-Pacific region to 2,000 by the end of 2010 as it expands its China market share. Boosted by the country's increasing online population, Internet transactions through online payment firms in China more than doubled to 576.6 billion yuan last year and are expected to hit 2.75 trillion yuan in 2013, according to Beijing-based research firm iResearch. Alipay controlled about 50 percent of the market in 2009, compared with about 21 percent by rival Tenpay, offered by Internet company Tencent Holdings, the research firm said. "The new investment makes it clear that Alibaba still regards Alipay as an infant business that needs long-term investment, rather than a mature revenue generator," said Cao Fei, an analyst from domestic research firm Analysys International. Earlier reports have said that Alipay broke even last year and may consider a public offering in the near future. Since its establishment in 2004, Alipay quickly became China's most popular online payment tool. That's due to its unique business model that vouches for online sellers and buyers, thus significantly increasing online trades and transactions, analysts said. That partly helps Alibaba beat its rival EBay, which shut down its China site in 2006 after its market share declined by half due to the rise of, an online-auction site owned by Alibaba, analysts said. EBay then entered into a joint venture with Tom Online Inc. Alipay said on Monday that it has over 300 million users at the end of last month.

April 14, 2010

Hong Kong*: Secretary for Financial Services and the Treasury Chan Ka-keung said on Tuesday that in 2009 Hong Kong was one of the world’s most active global markets for initial public offerings (IPOs). Chan was speaking at the “Russia – Capital Raising and Investment Summit in Hong Kong” conference. He revealed that last year Hong Kong led the world in terms of funds raised from IPOs. “In 2009, Hong Kong was the most active market for IPO funds raised globally. Hong Kong ranked number one globally in IPO funds raised for 2009, and number four in the world in 2009 in terms of total funds raised,” he said. Chan also said the territory’s economy was continuing to recover from the impact of the global financial crisis. “We are cautiously optimistic about Hong Kong’s economic prospects in 2010. The global economy has not yet regained its vigour, and there remain a number of uncertainties and potential pitfalls,” he said. The treasury secretary also noted that, earlier this year, the Hong Kong’s stock market listed its first Russian company. “I am confident that more foreign based companies – including many more Russian companies – will be looking to list on the Hong Kong stock exchange in the near future. “Hong Kong can serve as the financial gateway for Russian companies to reach the Asian market. And there is strong potential for economic partnership between China and Russia,” the treasury secretary said. An IPO is when a company issues shares or stock to the public for the first time in order to seek capital for further expansion.

A new survey released on Tuesday showed that people in Hong Kong were more content in 2010 than they had been in either 2009 or 2008.

RTHK staff will be excluded from a proposed advisory board for the government-owned broadcaster because the board will not get involved in routine administration and staff matters, a senior official said. Rita Lau Ng Wai-lan, the Secretary for Commerce and Economic Development, also insisted that RTHK would preserve its editorial independence with the new charter. "The board, focusing on editorial principles, will act like a mirror to RTHK's performance," Lau told legislators. "Appointing staff representatives to the board could be like inviting it to involve in daily operations and staffing matters." Lau was speaking at a meeting of the Legislative Council information technology and broadcasting panel at which the proposal drew strong criticism from pan-democratic lawmakers. The panel may hold a public hearing on the proposal next month. RTHK staff representatives, who have expressed fears about editorial independence under the board, to be appointed by Chief Executive Donald Tsang Yam-kuen, have called on the government to scrap the idea. The draft of the charter, handed to lawmakers this month, states that the board will have no executive power and will not be involved in the day-to-day operation or staffing matters of RTHK. But it will be responsible for "advising the Director of Broadcasting on all matters pertaining to editorial principles, standards and quality of programming" and the director "shall report and explain to the board the reasons for not following the advice". Lau said the broadcaster would not be subordinate to the board, and the ultimate editorial responsibility would rest with the director. Director of Broadcasting Franklin Wong Wah-kay said RTHK's future working relationship with the government would be based on the principle of mutual respect. He, as the only RTHK representative on the board, would try to educate it about the operations of the broadcaster. Civic Party legislator Ronny Tong Ka-wah questioned the need for the board, as the government had already stated that RTHK had maintained its creditability for decades. "People say leave well alone," he said. "Why do we need a new body to monitor its performance? Is it doing too well so the government wants it to be monitored?" Democratic Party vice-chairwoman Emily Lau Wai-hing said the government might add a clause to the charter to prevent the board from interfering with the editorial independence. "It is not only an issue with the staff but the public as a whole. The charter has made people worried," she said. Fellow lawmaker Lee Wing-tat also doubted the promise that the board would not meddle with the handling of individual programmes. "The staff might pick less sensitive topics to avoid getting into trouble," he said. In a survey in November last year, 80 per cent of RTHK staff opposed the proposal to set up the board, while 36.4 per cent strongly opposed the idea. RTHK programme staff union chairwoman Janet Mak Lai-ching said the staff wanted the government to scrap the idea.

Eight passengers were injured on Tuesday afternoon when a Cathay Pacific Airbus made an emergency landing at Hong Kong International Airport because of engine failure.

Share Dr J Mark Hensman, Executive Head Master & Chief Operating Officer, Harrow Group of International Schools, attends a press conference on the first Harrow International School in Hong Kong. Pictured at The British Consulate-General, Admiralty. Hong Kong's education sector would benefit when the city's first international boarding school opens, Permanent Secretary for Education Raymond Wong Hung-chiu said on Tuesday. Wong was discussing the progress of Harrow International School (HK) – set to open in about two years. “The government is committed to supporting the development of a vibrant international school sector in Hong Kong to underpin our aspiration to be Asia’s world city and a regional education hub,” he said. Harrow International School (HK) will be located in Tuen Mun and will occupy a space of 3.7 hectares. It is currently in its planning stages. Construction is expected to start in August. The Hong Kong school is influenced by the famous British public school Harrow, and like that school will be built on top of a hill. Wong said Harrow International School (HK) plans to have 1,500 school places and 560 boarding places and was set to open in August 2012. He said that upon completion, the school could attract students from around the world. “This will definitely help address the educational needs of children of expatriates’ families who come to Hong Kong and attract overseas students to come to Hong Kong for studies,” Wong said. Harrow UK will maintain tight quality control on curriculum and boarding education of Harrow HK. The British-style curriculum will focus on the humanities and include a leadership program for students.

The University Grants Committee believes there are better uses for the HK$150 million a year which the City University of Hong Kong wants for the first veterinary medicine program in Hong Kong. A UGC source said yesterday that the same money could be spent on 50 medical, 150 nursing or 200 engineering or teaching courses. The source also pointed out the vet- to-animal ratio in Hong Kong is one to 600, which is satisfactory when compared with the United States where it is one to 1,600. "The public should have a real discussion on how to spend this money," the source said. But a City University spokeswoman said Hong Kong should not delay the establishment of the first veterinary medicine school any longer. "The threat to human health by zoonotic diseases has been a world-wide concern in the medical sector. Hong Kong, being strategically located, has the need and the responsibility to train local talent. We cannot afford to tarry any more in establishing our own school of veterinary medicine," she said. She said the university had submitted an application to the UGC last August but has not yet received a formal reply. The university had said it would not rule out the possibility of having the program fund itself. Under its plan, the school could start a six-year course in 2012 for 30 students in the first batch. The university last December signed a memorandum with the College of Veterinary Medicine at Cornell University in the hope the local degree will be recognized by the American Veterinary Medical Association. The plan is also supported by the municipal government of Shenzhen, where laboratories and a teaching hospital will be set up. Meanwhile, the UGC's Research Grants Council yesterday announced the launch of the first round of the theme- based Research Scheme. In the HK$18 billion Research Endowment Fund established by the government last year, HK$4 billion was set aside for theme-based research which would support projects on themes of a more long-term nature. RGC chairman Roland Chin Tai- hong said the funding of the first-phase would be focused on three themes: promoting good health, developing a sustainable environment; and enhancing Hong Kong's strategic position as a regional and international business center.

Share University of Cambridge vice-chancellor Professor Alison Richard says Hong Kong universities are well-established and respected. Cambridge seeks closer ties with HK universities - The vice-chancellor of the University of Cambridge has held talks with the leaders of Hong Kong's three biggest research universities to explore possibilities for closer links. Cambridge already has 31 academics involved in collaborative research or exchange programmes with universities in the city and is helping Chinese University develop its college-based education system. Professor Alison Richard is keen to develop the links further and during her visit, which ended yesterday, met Tsui Lap-chee, Lawrence Lau Juen-yee and Tony Chan Fan-cheong, the heads of the University of Hong Kong, Chinese University and Hong Kong University of Science and Technology, respectively. "They are in ongoing talks about what the future looks like and what the opportunities for more collaboration are," Richard said. "Our international activities are led by research and partnerships. We start with the academics and we build the institutional and strategic links around these grass-roots activities. "With Chinese University, we are in the process of developing colleges. They have been visiting Cambridge to understand more about what is the secret of making colleges into truly integral communities, where students from different fields live, work and play together. "The next question is whether there can be college-to-college relationships as part of the future. The colleges have been looking at that and there is one such relationship already in place between Emmanuel College and S.H. Ho College, which will involve student and staff exchanges. "One can see that Hong Kong universities have an important role. They are well established, respected and have international links around the world. I see them being important and strategic partners in the future not only for Cambridge but also for other universities." Richard also attended a reception at the Hong Kong Bankers Club along with 240 of the city's 1,500 Cambridge alumni - part of a drive started in 2006 to boost alumni relations in Hong Kong. The drive coincides with a £1 billion (HK$11.98 billion) fund-raising campaign to tie in with the university's 800th anniversary celebrations last year.

About one-fifth of the floor area of the former police married quarters on Hollywood Road will be for shops and a restaurant after it is turned into a creative industry hub. Helping conduct a tour of the 59-year-old compound yesterday, the chief assistant secretary of the Commissioner for Heritage's office, Robin Lee Kui-biu, said about 3,000 square meters of the 15,000-sqm floor area will be strengthened to allow for shops and a restaurant. The compound on the original site of the Central School includes a now-deserted eight-story residential block, a seven-story housing block and a two-story Junior Police Call Clubhouse building. Shops will be mainly on the first floor of the residential blocks. Antiquities Advisory Board member Greg Wong Chak-yan said it is appropriate to set aside areas for commercial use. "The proposed restaurant can help bring in more visitors," he said. "Few people will come by if artists just work in their studios with their doors shut." Planners want the roof and top floor of the seven-story block removed and replaced with glass curtain walls for the restaurant, but Wong said it would be better to preserve the top floor and put the restaurant near the main entrance of the compound at ground-floor level. Non-profit groups were invited on March 19 to offer ideas on creative industries. While no submissions have been received, Lee said, almost 40 groups have signed up for a briefing on project details on Monday. It will be up to a selected operator to decide whether to redevelop the Junior Police Call Clubhouse building, officials have said. Lee said yesterday that there is no height limit on the site, but he does believe it will be replaced by a high rise. The clubhouse and a basketball court in front of it should be converted for community use. Katty Law Ngar-ning, convener of the Central and Western Concern Group, called for a height limit. So did Central and Western district councillor Tanya Chan and the director of the University of Hong Kong's Architectural Conservation Programme, Lee Ho-yin.

Property developers who give potential buyers false or misleading information have been warned to get their house in order. Housing chief Eva Cheng Yu-wah yesterday revealed details of yet-to-be- announced guidelines developers will have to adhere to - or face the prospect of legislation to bring them into line. Cheng will meet the developers' industry body later this week to discuss the issue. After visiting a fourth lot of show flats in three weeks yesterday, Cheng said that all developers have room for improvement. "First, something can be done on show flats so that consumers don't have any misconceptions. For example, certain partitions or settings may make a room seem more spacious," she said. Along with the Real Estate Developers Association, officials are also investigating the possibility that developers must include a completely empty show flat to give a true sense of space. "We will require promotional materials to provide the correct region and address," said Cheng, adding that while sales brochures include comprehensive information, advertisements may tell readers nothing in this respect. "Also, in response to market feedback, we want the information disclosed to include connected transactions involving senior executives." K Wah International (0173) chairman Lui Che-woo welcomed official rules "as long as they are not too strict." REDA vice chairman Stewart Leung Chi-kin earlier raised concerns over the definition of "senior executives" and said there are already disclosure criteria for connected transactions at listed developers. Polytechnic University professor Eddie Hui Chi-man said: "Frankly, more could be done. The proposals concern what can be 'seen.' "People know about the locations even though they are not clearly spelled out. They also know that the decor [at show flats] is not for real." He believes transparency on prices may prove more important. While clearer floor plans have helped, how developers price different homes is not so clear. Cheng said regulation through the REDA has brought progress, as reflected in the disclosure of saleable area and transactions within five days. She said the government may revoke presale consent or further legislate if the rules prove insufficient.

China*: China's four largest banks could face a capital shortfall of 480 billion yuan (US$70.3 billion) over the next five years, ICBC President Yang Kaisheng said on Tuesday.

China to make its own decision on yuan, Hu tells Obama - President Barack Obama greets President Hu Jintao at the Nuclear Security Summit in Washington on Monday. Obama opened a 47-nation summit dedicated to keeping nuclear arms from terrorists and seeks momentum with China in his push for a new round of sanctions on Iran. China will chart its own course in reforming the yuan, President Hu Jintao said as US President Barack Obama renewed his call for a more flexible Chinese currency. The two heads of state, meeting for the first time since tensions over the yuan threatened in recent months to escalate into a serious trade dispute, chose their words carefully and, in the view of investors, left the door open for Beijing to resume appreciation in the coming weeks. Hu said that China would not be pushed by external pressure and would instead base any decision on the yuan on its own economic needs. But he also made clear that it was committed to reform. “China will firmly stick to a path of reforming the yuan’s exchange rate formation mechanism,” Hu told Obama, according to Xinhua’s account of their discussion. “In making reforms, we will give careful consideration to global economic developments and changes, as well as to China’s economic condition,” Hu said. The yuan edged down in the offshore forwards market for a second day on Hu’s comments, but investors were still positioning themselves for a gradual resumption of the currency’s appreciation. Beijing has frozen the yuan’s exchange rate against the dollar since mid-2008 to help cushion its economy from the global downturn, but the strength of the recovery in the mainland has fuelled criticism of this policy and market expectations that it is about to resume appreciation. Notable by its absence in Hu’s reported comments was a declaration, previously a stock phrase for China’s leaders, that a stable yuan was benefiting the global economy. Obama, for his part, touched only delicately on the yuan, with his focus on the summit at hand and securing Beijing’s backing for tougher sanctions against Iran’s nuclear activities. “The president reaffirmed his view that it is important for a ... sustained and balanced global economic recovery that China move toward a more market-oriented exchange rate,” Jeffrey Bader, a top White House adviser, told reporters. The US Treasury this month delayed publication of a report that politicians had urged Obama to use to name China a currency manipulator, potentially paving the way for punitive trade measures. China had warned repeatedly that foreign criticism of its currency policy would be counter-productive. Months of tensions – over trade, Internet freedom, Taiwan and Tibet – placed heavy expectations on the 90-minute talks on the sidelines of Obama’s nuclear security summit, even if the meeting was unlikely to produce concrete results. “Most importantly, it seems that the atmospherics surrounding the bilateral US-China relationship have improved, opening the door for movement on a number of issues,” said China expert Drew Thompson of the Nixon Center in Washington. “Political statements won’t prevail over economic and market realities. The trend for China to abolish the yuan/dollar peg this year remains intact, with the earliest move possibly coming late this month or in May,” said a senior dealer at a major bank in Shanghai. With China’s exchange rate policy under intense scrutiny, Hu also used the meeting with Obama to argue that a stronger yuan would not be a panacea for woes afflicting the world’s largest economy. “Yuan appreciation would neither balance Sino-US trade, nor solve the unemployment problem in the United States,” Hu said. He added that the mainland wants to increase its US imports, especially of high-tech products. Repeating a decade-old mantra from Beijing, Hu urged Washington to loosen its export controls of such goods. US politicians complain the value of the yuan is being held down against the dollar by Beijing to boost Chinese exports at the expense of US exports, and thus jobs, and want Obama to take a hard line to push for China to allow appreciation. China ran US$250 billion trade surplus with the US last year. Recent signals from Beijing have encouraged hopes that it was edging toward a more flexible yuan, which analysts say would suite China’s own interests as its economy takes off, with exports recovering strongly and inflation picking up.

Beijing said sanctions were not the answer to Iran's nuclear programme, after US officials said Beijing and Washington had agreed to jointly push for new punitive action.

Visitors to the 2010 World Expo in Shanghai will face some of the toughest security checks imposed at an international fair as the authorities tackle the mammoth task of ensuring that the six-month show passes without incident. Hundreds of X-ray machines and security gates have been installed at the site's eight entrances to cope with the crowds, but officials effectively admitted yesterday that it could take several hours to clear the backlog on busy days. Speaking at a press conference, Cheng Jiulong, deputy chief of Shanghai Public Security Bureau, called for expo visitors to keep their possessions to "a minimum" to help speed up the process. The stringent restrictions on what items visitors will be allowed to take with them into the 5.28 square kilometre fair site rival pre-boarding controls at airports. Cigarette lighters, matches and any liquids - other than medicines or milk for babies - will be banned, along with less conventional items such as blades, radioactive devices and explosives. Visitors will need to apply for special licences to take wireless electronics into the site, other than mobile phones, digital cameras and car keys. Cheng said the bureau estimated each security gate would be able to handle one visitor every 18 seconds, giving an expected passenger flow into the park of close to 200,000 per hour. Expo organisers announced this weekend they would cap daily visitor numbers at 600,000 to prevent overcrowding - meaning visitors could potentially have to queue for up to three hours to get in. However, Cheng said no decision had yet been taken on whether to begin letting visitors into the site earlier than the official opening time. "According to Shanghai Expo Bureau regulations, the park is to open at 9am and the pavilions will open at 9.30am," he said. "We will need to wait until the test opening to get an exact figure of our capacity." The site is due to be put through its paces in a series of test openings involving thousands of volunteers beginning next Monday, ahead of the official opening on May 1. An estimated 70 million visitors are expected to visit the site during its 184-day run. Only 5 per cent are expected to come from overseas. Before announcing the daily cap on visitor numbers, expo officials had suggested upwards of 700,000 or even a million might visit on the busiest days. Cheng admitted it was almost impossible to predict accurately how many people would go to the site on any given day, particularly as the vast majority of tickets were not tied to a specific "These tickets could be used on any day whatsoever. We don't know which day people will decide to use their tickets on," he said. "There could be days when fewer than 200,000 people come." Unlike major sporting events like the Olympics, the crowd flow would not be governed by the starting times of competitions. "Something like a big football match is much easier to control," Cheng said. Police would instead monitor hotel bookings and transport systems, and liaise with tour operators to estimate the likely numbers of visitors. "We don't just need to deal with local visitors. There are tourists coming from other places as well," Cheng said. He said he expected an early peak in visitor numbers next month while the show was still a "novelty", but that it would be quieter in June and July, when students would be taking university entrance exams. "August and September could be another high point," he said. "Then in October, it will not be long before the pavilions are closed, so there could be a final rush. The weather in Shanghai is also quite nice in September." Cheng said he was not prepared to reveal how many police officers would be deployed to monitor security in and around the expo site. "We have a regulation which states we are not allowed to make such information public," he said.

China plans to raise retail prices of diesel and petrol as early as Wednesday to keep pace with recent swift rises in crude oil prices, a source said on Tuesday.

China Southern Airlines, the nation’s biggest carrier by fleet size, said that it swung back to profit last year helped by a government bailout and improving domestic demand.

China announced anti-dumping duties of up to 64.8 per cent on US and Russian steel used by the power industry on Tuesday amid a series of disputes with the United States.

Shares in mainland carmaker Geely Automobile Holding dropped 5.28 per cent yesterday after the company reported 2009 earnings that were less than analysts had forecast.

Avon Products Inc has suspended four executives as it investigates alleged bribery that began with the company's China operation and now involves a dozen or more countries, according to the Wall Street Journal.

Chinese President Hu Jintao and other world leaders met in Washington on Tuesday for a nuclear security summit aimed mainly at preventing acts of nuclear terrorism. The leaders of the international delegations pose for a group photo at the Nuclear Security Summit 2010 in Washington, April 13, 2010. The leaders or their representatives from 47 countries are attending the summit at the Washington Convention Center. The United Nations, the International Atomic Energy Agency (IAEA) and the European Union are also participating in the summit, which was proposed by U.S. President Barack Obama. "The summit is dedicated to nuclear security and the threat of nuclear terrorism. And I think that it is absolutely fundamental to view this summit with the starting point of the grave nature of the threat of nuclear terrorism," Ben Rhodes, U.S. Deputy National Security Advisor for Strategic Communications, said at a briefing last Friday. "We know that terrorist groups, including al Qaeda, are pursuing the materials to build a nuclear weapon, and we know that they have the intent to use one. This of course would be a catastrophic danger to American national security and to global security were they able to carry out that kind of attack," he said. In a speech in Prague last April, Obama described nuclear terrorism as the most immediate and extreme threat to global security and called for a new international effort to secure all vulnerable nuclear materials around the world within four years. "We must also build on our efforts to break up black markets, detect and intercept materials in transit, and use financial tools to disrupt this dangerous trade," he said while proposing a summit on nuclear security. At the summit, President Hu will deliver a speech that will explain the importance of strengthening nuclear security for the sustained and healthy development of nuclear energy and international security and stability,elaborate on China's policy and practices on nuclear security and make proposals for cooperation in coping with international challenges,according to Chinese diplomats. During a telephone conversation with Obama on April 2, Hu said China attaches great importance to the issue of nuclear security, opposing nuclear proliferation and nuclear terrorism and supporting international efforts to enhance cooperation on nuclear security. China is ready to work closely with the United States and other sides concerned to make sure that the summit is successful and fruitful, Hu said. As a major power of nuclear energy development, China has taken a series of effective steps to ensure nuclear security and established relatively comprehensive nuclear security and safety regulations and monitoring systems. China has played an active role in the development of related international conventions on nuclear security and maintained close exchanges and cooperation with the IAEA and other countries. Earlier this month, Chinese Foreign Ministry spokesman Qin Gang described the summit "as an important multilateral meeting" when he announced Hu's attendance at the summit. "We hope the summit will achieve a consensus by all countries on nuclear security and yield positive results," Qin said. On Monday evening, President Hu and other leaders attended a kickoff working dinner, which was chaired by President Obama. The focus of the opening dinner, a component of the summit, was on the threat of nuclear terrorism and the magnitude of the threat.

April 13, 2010

Hong Kong*: Hong Kong's powerful property tycoons exert considerable influence over the city, and there are signs that this sway is growing with positions they control on advisory and statutory bodies increasing threefold since the handover. Directors of six major property companies had been given 54 seats on various advisory and statutory bodies as of the end of March, compared with just 16 in 1998 and 38 in 2007, according to research carried out by the South China Morning Post (SEHK: 0583). This gives credence to the perception that property giants wield what some claim is a disproportionate say in policy formulation in Hong Kong. An academic said the big presence of property firms on advisory and statutory bodies was also an indication of their growing awareness of the need to make their views known on various policy issues. The 54 seats occupied by directors from the six developers - Sun Hung Kai Properties (SEHK: 0016), Cheung Kong (Holdings) (SEHK: 0001), Henderson Land Development (SEHK: 0012), New World Development, Wharf (Holdings) (SEHK: 0004) and Sino Land - account for roughly 1 per cent of the 5,735 posts on 433 advisory and statutory bodies in Hong Kong. In terms of absolute numbers, the clout of directors of property giants on the city's advisory committees is negligible. But a closer look proves otherwise. The majority of the advisory and statutory bodies where directors from these property firms are serving are influential committees. Ten of the 54 seats occupied by property companies' directors are on bodies with substantial statutory power and resources, such as the Airport Authority, the Hospital Authority, the West Kowloon Cultural District Authority and the Mandatory Provident Fund Schemes Authority. Six property company directors, including Sun Hung Kai Properties vice-chairman Thomas Kwok Ping-kwong and Cheung Kong (Holdings) deputy chairman Victor Li Tzar-kuoi, serve on the Commission on Strategic Development, which advises Chief Executive Donald Tsang Yam-kuen on long-term development. The six property giants have a total of 96 directors on their boards. Dr Ray Yep Kin-man, associate professor with City University's department of public and social administration, said the number of property companies' directors appointed to advisory bodies underlined the importance attached by the administration to the views of large firms. He said property companies were increasingly inclined to woo reputable and high-profile people to join their boards. "As society is becoming more politicised, property giants recognise that behind-the-scenes lobbying is not adequate. They are aware of the need to make their voices known by participating in key advisory bodies," Yep said. Second-generation property tycoons, such as Victor Li, have become more high-profile in their service on advisory bodies. Li only served on two boards in 1998 but now finds time to sit on four advisory bodies.

Running a restaurant in Hong Kong can be a brutal business, with soaring rents and long hours forcing the closure of hundreds across the city in the past few years. The number of restaurants in the city dropped from 12,354 in 2005 to 11,539 in 2008, the latest government data shows - a loss of more than 800 lunch options for hungry residents. Those that have survived are increasingly bigger and run by large chains with deeper pockets. While the number of restaurants is declining, the number of employees in the catering industry grew from 185,853 in 2005 to 224,210 in 2008. But it is not all bad news for the little guy, with a number of family-owned restaurants surviving against the odds. The next Jamie Oliver or Gordon Ramsay may be just around the corner and more than likely he is a chef who not only runs the kitchen but owns the place. Their key to success is simple - good food and commitment only an owner can have. From the finest French dishes to the freshest sushi and dumplings, small chef-owned restaurants are giving their bigger rivals a run for their money but facing tough challenges. The fact the cooks can often have their life savings tied up in their business is adding to their taste for survival. Dimitri Bastiani, the executive chef who co-founded French restaurant Green Mouse in Central's Peel Street, says he enjoys more freedom as the boss than when he was an employee working for other restaurants. The 32-year old worked for a number of restaurants in France before coming to Hong Kong about five years ago. After cooking for other local restaurants, he established his own with business partners 18 months ago. "I can design the menu all by myself with no need to get anyone's approval," Bastiani said. "We can make changes to items on the menu quickly if we receive comments from customers." As the boss now, he can also decide who to hire and speak to customers directly - things he could not do when he worked for other restaurants. But there is also a price. Bastiani earns less than in his previous role as an employee chef. Generally, the executive chef of a French restaurant earns between HK$25,000 and HK$30,000 a month. As a boss he has to shoulder the losses his 30 per cent stake suffered. The restaurant was founded in October 2008 - at the peak of the financial crisis. "It was a very tough time when we first started," Bastiani recalls. "When I saw empty tables, I was so sad. This was so different from when I was an employee. [Back then] I would consider empty tables meant an easy and quiet day. "When I was an employee, I would receive my salary anyway. But now, even when the business is not good, I have to pay wages to my staff." After 18 months, the father of two young children now finds he can cope with the most difficult times. Word of mouth has helped and the restaurant is full during the weekends. But space is at a premium. "We can provide very good service for 10 tables but a big party may make life difficult," he said, adding expansion was a challenge for a small restaurant with limited resources. At the other end of the international food spectrum, 51-year-old Sato Naoyuki, executive chef and co-owner of the Naozen Japanese Restaurant in Wellington Street, is relaxed about his prospects. "It was always my dream to have my own shop so I do not care much about business volume," Sato said while cutting sashimi. "The most important thing for me is to see all my customers happy and satisfied with the food." Tokyo-born Sato learned to cook in Osaka and started his career with the prestigious Nadaman group of Japanese restaurants. Nadaman is a household name in Japan dating back to the first restaurant in Osaka in 1830. It now has restaurants around Japan and overseas, including two at Shangri-La hotels in Hong Kong. Sato came to Hong Kong in 1994 as executive chef for the Kowloon Shangri-La Nadaman. Even though he was boss of the kitchen, he still had to follow house rules. When Nadaman wanted to send him back to Japan in 2003, he preferred to quit and set up his own restaurant. The Japanese chef has not regretted his decision. "When I was an employee, I had to stick to what the restaurant traditionally did. I could not freely decide to use new materials or ways of presentation," Sato said. "Now, I am completely free to do anything with the menu or the dish. "Before, I was confined to the kitchen but now I can come out to meet my clients and ask what they think about the food." With a team of more than 10 chefs, Sato's restaurant can handle more than 130 people. This came in handy during last month's Hong Kong Sevens. No matter how good a good small restaurant is, it often struggles to get the word out. Unlike MacDonald's, which can easily afford to spend millions of dollars on advertising, small restaurants spend next to nothing. "We had not done any advertising but when the customers find the food delicious, they bring their friends," Sato said. "This is how we expand our business." Sato opened in the aftermath of the Sars outbreak, and business in the first six months was poor. Luckily, Sato's business partner is lawyer and racehorse owner Woo Po-shing, who owns the two-floor restaurant. A supplier is also a partner and they were able to support Sato during the start-up stage. But not everyone is lucky enough to have their landlord as their partner. Rising rents are a nightmare for 58-year old Wang Zong-yuan, head chef and owner of the Dumpling Yuan in Queen's Road East, Wan Chai, which serves traditional Chinese dumplings and noodles in soup. Rocketing rents were the reason he moved his shop from Central to Wan Chai seven years ago. Now, he said he may need to quit this site if the owners raised rent further when his lease expires in November. "When our shop was in Central, it cost HK$50,000, which was too high," Wang said. "We then moved here and the rent was lower than HK$40,000. But the owner has increased the rent every two years." Wang comes from a family of restaurant operators. His grand- father and his father owned one of the eight most famous restaurants in Beijing before the communists took power. After 1949, the restaurant was nationalised and his father moved into retailing and trading, raising Wang and his four siblings in their hometown of Yantai, Shandong province. Wang and his wife came to Hong Kong in 1986 to join his uncle's tablecloth trading business and started their own dumpling shop nine years ago. "For Shandong people, dumplings are their rice," Wang said. "My mother taught me how to make good dumplings and cook them in the traditional Shandong style." When business is good, he can sell more than 3,000 dumplings a day, which allows him to hire a team of five. But he and his wife still have to make the dumplings themselves and Wang handwrites the menu hanging on the wall. "My staff does not have any idea how to make dumplings. The mixture is very important and that is why my wife and I have to do it ourselves," Wang said. "It is also for cost reasons. A head chef has a salary of between HK$10,000 and HK$15,000. If we hire others to do the job, we could not afford it." He said the business had been hard hit by the financial crisis, and during the downturn people would order less or order the cheaper items. "Now the worst is over and we have seen more customers coming in." But Wang said rising costs for ingredients, such as oil, sugar and flour were eroding his profit margins after increasing 25 per cent to 50 per cent in recent years. Shortage of money is not the only problem facing many up-and-coming restaurant owners. They are also time-poor. Even chefs working for big chains work long hours, but for chefs that own their own restaurants the only holidays they have are the ones they dream about. Sato's restaurant is open every day except Sunday morning, while Bastiani only has Sunday off. Wang and his wife take alternative Sundays off. Wang misses working in a trading company. "When I was an employee I only needed to work about eight hours a day," he said. "Now I am a boss and it is very tough and I work long hours. My wife comes to the shop at 7am to do the preparation and I am here every day from 9am. We work all day through to 10pm ... you have no leisure time at all. "If the property owner increases my rent substantially in November, I will quit and retire. What is the point if all your long hours are just to pay the high rent?"

Christian Zheng Sheng College principal Alman Chan Siu-cheuk (centre left) and supervisor Jacob Lam Hay-sing (centre right) with college students. A Lantau drug rehabilitation school said it wants its long wait to relocate to Mui Wo to end, especially since a six-month probe by anti-graft officials recently cleared it of allegations of corruption and malpractice. But accountant Ernst & Young has pulled out of a project to split the accounts of the Christian Zheng Sheng College and its sponsoring body, the Christian Zheng Sheng Association. The only drug rehabilitation school in the city, the college was overtaken by a string of allegations concerning its operations last year. In August, the Independent Commission Against Corruption launched an investigation after it received a complaint. School supervisor Jacob Lam Hay-sing yesterday said the ICAC notified the school in a March 22 letter that the investigation had ended without uncovering any evidence to justify further investigation. "The probe was a huge disappointment to us but life goes on, and they have now cleared our name," Lam said. "It is the best response to the public concerns over our operations." He said the investigation had been thorough and detailed, and included the alleged use of students' government subsidies. ICAC officers had visited the school's projects on the mainland and in Japan and had looked into the financial statements of the association since its establishment in 1985. The ICAC refused to comment last night.

Budget carriers in the US and Europe have access to secondary airports, which are much less costly than main transport hubs. In Asia, budget airlines have to use main airports. They may have carried millions of budget-conscious Europeans and Americans to exotic locales over the past 30 years but in this region low-cost carriers are hitting serious turbulence. The recent failure of Viva Macau, a Macau-based budget carrier, nearly two years after the collapse of Hong Kong Oasis Airlines, has put the survival of so-called low-cost carriers in this region in question again. A lack of demand does not seem to be the problem. A lack of an "open sky" policy and an absence of a genuine low-cost operating environment in the region are the underlying reasons the two carriers shared the same destiny, transport experts say. The low-cost model originated in Britain in 1971 when Freddie Laker founded Skytrain, which served the transatlantic route. The model was later adopted with outstanding success by Southwest Airlines in the United States, Ryanair and EasyJet in Europe and more recently by AirAsia, a Malaysian-based carrier. Low-cost carriers generally refer to airlines providing discounted fares and a no-frills service to passengers. "If you think you can copy the business model of low-cost airlines used in the West to the East without any adjustment, you are meant to fail," said Zhang Wuan, an executive with Spring Airlines, a Shanghai-based budget carrier that started operation in 2005 and plans to list it shares by next year. One of the major reasons budget airlines in Hong Kong and Macau have struggled to lower their operating costs is a lack of pilots. Asian carriers, especially those on the mainland and in India, are growing at about 10 per cent a year, meaning a shortage of qualified pilots. That means low-cost carriers in the region are sometimes forced to offer higher salaries than other airlines to lure pilots, said Kelvin Lau, a transport analyst at Daiwa Capital Markets. Labour costs are the second-largest cost component of airlines after fuel expenses.

Two frontline employees of Bank of China (Hong Kong) have been charged by the Commercial Crime Bureau in connection with the sale of Lehman Brothers-related structured products. The two women, aged 38 and 51, were arrested last month by the police for "separately misleading and inducing eight customers on various occasions to purchase structured products between 2005 and 2008" in contravention of the Securities and Futures Ordinance. The police said at the time of the arrests that the case involved eight customers and HK$3.5 million. According to a voluntary statement filed yesterday by Bank of China (Hong Kong) with the Hong Kong stock exchange, a third employee was arrested by the bureau on March 26, also in connection with the sale of the structured products. The third employee has not been charged. All three employees are on bail and are also on compulsory leave from duties, according to the filing. The bank said in the statement that it would not comment on the case because an investigation was under way. Bank of China (Hong Kong) was the largest local distributor of the minibonds - credit-linked derivatives which paid high rates of interest to holders. The bank has repaid about HK$3.3 billion to investors in Lehman Brothers-related products. The charge against the Bank of China (Hong Kong) employees is the second prosecution relating to the sale of the structured products issued by Lehman Brothers. In January, a former Dah Sing (SEHK: 0440) Bank employee was accused of forging a customer's signature to buy minibonds from the bank. The employee, Chu Lai-sze, 32, denied one count of forgery when she appeared in Eastern Court on January 12. The court heard Chu was alleged to have forged the signature of Belinda Au Fung-yee on four applications to buy minibonds from Dah Sing Bank on April 30, 2008. The case was adjourned to April 19 and Chu was released on bail. More than 5,400 complaints of alleged mis-selling of so-called structured investment products have been filed since Lehman Brothers collapsed into bankruptcy in September 2008. Last month, the Commercial Crime Bureau said there were more cases under investigation but did not say how many. Bank of China (Hong Kong) and other local lenders agreed in July last year to pay investors a total of HK$6.3 billion following talks with regulators, who brokered the deal on behalf of investors who lost money after buying the complex Lehman Brothers products.

Graham Sheffield, the incoming chief executive officer of the West Kowloon Cultural District Authority, has a background that made him perfect to go into the arts from an early age. "My mother played the piano - I recall her playing Mendelssohn's Songs Without Words," he told the authority's e-newsletter. His mother, 87, who lives on the east coast of England, is half- French and half-Lebanese, and speaks four languages. His parents met in Cairo, where his paternal grandfather ran a jewelry business, while his mother's father was a lawyer in the government of King Farouk. His parents moved to Britain after World War II and settled in London's Little Venice, where Sheffield was born. Sheffield, 58, who took up the piano at eight, said: "I remember going to my first concert at the Albert Hall, probably aged nine, to hear Rachmaninov's 2nd Concerto." Then he was introduced him to opera. At junior school, he played the organ and sang in the choir. There was also "some acting at school, mostly in Shakespeare, and visiting lots of art galleries" before he earned a bachelor's degree in music from Edinburgh University. He has been artistic director at London's Barbican Centre for 15 years. His most significant accomplishment was "turning it, with a brilliant team, from an artistic lost cause into one of the most respected and forward-thinking artistic institutions in the world."

China*: After months of bickering, China is sending its president to the United States on a mission that speaks more about what it wants from the Sino-US relationship than its concern for the official pretext of the summit - nuclear security. President Hu Jintao arrives in Washington today for a summit on nuclear security. Many expect the two powers' strained ties will enter a new phase when he meets his counterpart, Barack Obama, for the first time since they hit a rough patch. China is expected to be given renewed pledges of support on issues that it considers "core interests" - Taiwan and Tibet - by offering what it sees as acceptable compromises on the yuan exchange rate and Iran's nuclearisation. But mainland critics said Hu would use the trip to reiterate China's principles without expecting to settle the sticking points. "China wants stability for its relationship with the US because this relationship is so important for not just both countries but also the world," said Zhou Zunnan , a professor at China Foreign Affairs University. "China is fully aware that it cannot afford to be as confrontational as Russia [during the cold war] against the US." The two-day trip will be a prelude to a state visit by Hu later this year, probably in the summer, returning Obama's visit in November. The Foreign Ministry said Hu would deliver a speech at the summit to explain China's stance on nuclear weapons. A state visit to Washington has long been a very important ritual for Chinese leaders. Painstaking diplomatic manoeuvring is involved to make sure the visits go well. There had been a big question mark over who Beijing would send to the nuclear summit, called by Obama to take place today and tomorrow, as many worried that Beijing might skip the event or downgrade the level of its delegation because of recent tensions. A scholar familiar with US politics said that until recently, many in Washington still believed Hu would not attend. Beijing was infuriated by Washington's two rounds of arms sales to Taiwan at the start of the year and Obama's meeting with the Dalai Lama, Tibet's spiritual leader - although previous US presidents have upheld both the treaty for the former and the tradition for the latter. US internet search giant Google's withdrawal from the mainland market also added salt to the wound. Although China's threat of sanctions against companies involved in the arms deals and repeated warnings over Taiwan have come to nothing so far, many noted that Beijing had become more assertive in defending its interests. Mainland analysts said Beijing had adopted the approach of "bickering without getting into a fight" regarding the continuing issues. Sino-US relations have taken interesting turns in recent weeks. US leaders have renewed their pledges on Taiwan and Tibet, and signs are growing that China could strengthen its yuan after Washington delayed the release of a report that could label Beijing a currency manipulator. A surprise meeting between Treasury Secretary Timothy Geithner and Vice-Premier Wang Qishan at Beijing airport on Thursday also paved the way for future talks between the two sides that many believe will lead to the yuan's revaluation this year. Fu Mengzi , a US expert with the China Institute of Contemporary International Relations, said Hu's attendance at the summit was "an important signal that the Sino-US relationship is making a new turn". But Yu Wanli , an associate professor of international relations at Peking University's Centre for International and Strategic Studies, said tensions and co-operation would continue in the relationship. "The fact that Hu is going to Washington does not mean the sticking points will be cleared up," Yu said. "The tensions will remain, but China and the US will remain very important partners that matter a lot on many international issues." Zhou said Beijing was aware that the lingering issues would remain, but it would keep the bickering from turning into a fight. China has yet to impose sanctions on American firms in the arms deals. It had also allowed two navy frigates, the USS Nimitz and the USS Blue Ridge, to dock in Hong Kong for port calls after announcing the cancellation of military exchanges. China has been under pressure from Western countries, especially the US, to push for a new round of sanctions against Iran because of its nuclear program. Chinese leaders sat down with other world powers in New York on Thursday to discuss what the next steps against Iran's nuclear programme might be, but it remains reluctant to proceed with further sanctions. Beijing has repeatedly said it prefers diplomatic negotiations. Zhou said China would not veto the sanctions, but it would still want to push for more talks. Yu said Iran's influence in Islamic countries was a key factor in China's decision on whether to support new sanctions. "The Iran issue is not as pressing as that in North Korea," he said. "And Iran is a very influential country in the Islamic world, which will be helpful for China."

Head of Hong Kong's Catholics says - Soft approach works best with Beijing - Bishop John Tong Hon with his predecessor Cardinal Joseph Zen Ze-kiun at a reception at the Vatican last month. It would have been unthinkable only a few years ago: hosting a top party cadre, one accused of helping to keep an unholy grip on religious freedom on the mainland, at the Holy Spirit Seminary in Aberdeen. But one year into his job as head of the Hong Kong Catholic Diocese, Bishop John Tong Hon did just that when Wang Zuoan, director of the State Administration for Religious Affairs, paid the diocesan leadership a visit last month. On the eve of his first anniversary of succeeding the outspoken Cardinal Joseph Zen Ze-kiun, Tong said the marked change in Beijing's attitude towards the diocese was partly due to his low-key approach. "Perhaps Beijing feels the way I do things is less provocative for them," he told the South China Morning Post (SEHK: 0583, announcements, news) . "I have always told them about my views and what I disagreed with. I am not a yes-man. It's just that I won't make my criticisms through the newspapers." It is likely to be modesty that leads the cleric, 70, to say there have been no achievements "worthy" of mention over the past 12 months. In reality, few would doubt that the better relations between the diocese and Beijing - at least on the surface - can be attributed to Tong. "I am not looking for any breakthrough. I only hope to maintain stability, so that we can move forward smoothly," he said. Before Tong took office, some activists had expressed concern that under his leadership the church would retreat from its role as a champion for social justice and political equality. Tong said that being personally quiet on these issues did not mean the church had scaled back its concern for underprivileged groups. He had delegated the matter to one of the vicars-general, Reverend Pierre Lam Minh, who oversees the work of the diocese's justice and peace commission, he said. The bishop himself has met more than 50 priests individually to listen to the difficulties they face in the parishes. And the queues for baptism are growing - there were more than 3,000 at Easter alone this year. Tong spent two decades as the diocese's top expert on mainland church affairs, a period that saw the state make sluggish improvement in religious freedoms. Nevertheless, he still believes that Beijing will honour its pledge on Hong Kong's democratic progress under the "one country, two systems" formula. "I haven't seen a single instance of Beijing not fulfilling something that was clearly spelled out," Tong said. "It is only when it is not clearly spelled out that Beijing can interpret things in favour of its own wishes." What constituted a gradual move towards universal suffrage had not been clearly defined, Tong said. But he believed that genuine universal suffrage would be introduced for the chief executive and Legco elections in 2017 and 2020, as promised by Beijing. "I do believe it. We haven't seen it happen yet, why don't we have faith?" Tong has already made two official visits to Beijing - once before he took office for the Olympic Games, and the other for National Day events in Tiananmen Square on October 1. Beijing had all but abandoned efforts to build a relationship with Zen after his visit to his native Shanghai shortly after he took office. Tong is also taking a conciliatory tone over the diocese's judicial challenge to the government's reform of school management. In February, the Court of Appeal upheld the constitutionality of the government's schools management reforms, introduced in 2004, which require the church to give up its previous 100 per cent control over its sponsored schools. The diocese has said the schools might lose their Catholic identity, but Tong vows not to close any if the diocese loses the final appeal. When he took office, Tong said he hoped to see more people joining the church and entering the priesthood. At Easter alone, more than 3,000 new members joined the church, bringing the total number of baptisms performed for adults and children to almost 5,000 over the past 12 months. Tong said there was a need to deepen the formation of faith among Catholics in the diocese, as well as more effort to seek young people who want to enter the priesthood. Despite the regular contacts between the Vatican Secretariat of State and the Foreign Ministry, Hong Kong continues to maintain its importance in the Sino-Vatican equation. The diocese acts as an important link between the church on the mainland and Rome, with mainland priests allowed to visit Hong Kong freely and interact with Catholics, and vice-versa. In recognition of Hong Kong's special status, Pope Benedict agreed to a request for a private audience made by Chief Executive Donald Tsang Yam-kuen - a Catholic - both in 2008 and in January this year, although on both occasions Tsang cancelled the appointments. It is understood the Foreign Ministry has given tacit approval for Tsang to meet the Pope. Tsang would be the highest ranking Chinese official to meet Pope Benedict. Meanwhile, Tong said taking a slow pace in life would help him better fulfil his duties. He still manages to maintain his lifestyle of going to sleep at 11pm and waking at 6am. He completes his work at the diocese's office in time to return to the seminary and pray before dinner with seminarians, he said. "I am a limited company, unlike people who appear to be able to do lots of things in one day. Trying my best doesn't mean overdoing it. How many times can you take out an overdraft?" he said. "I live the same life - playing the same weekly game of basketball."

Restricting vehicle use in Beijing helped bring blue skies to the 2008 Olympics, and Guangzhou's authorities are planning to do the same for the Asian Games in November.

The mainland and Taiwan are to open tourist offices on each other's territory for the first time in 60 years amid fast-warming relations between the former bitter rivals, officials said.

The United States wants constructive not confrontational talks with China about the value of the yuan, a top US State Department official says. Robert Hormats, undersecretary for economic, energy and agricultural affairs, said yesterday he did not know whether the currency would be discussed at talks in Washington this week between US President Barack Obama and President Hu Jintao . Hu will be in the US for a summit on nuclear arms control, which, Hormats said, was likely to be the focus of discussions. "I think the Chinese understand there is a lot of pressure on the president coming from the Congress and large numbers of Americans to address the currency issue," Hormats said on the sidelines of the Boao Forum in Hainan . "There is also the feeling on the part of the administration that as we address it, we want to do it in a constructive way not a confrontational way." Beijing has pegged the yuan near 6.83 per US dollar since mid-2008 to help exporters weather the global crisis. But this has drawn increasing complaints from Washington that the yuan is undervalued, handing Chinese firms an unfair advantage. Last week, US Treasury Secretary Timothy Geithner made a brief stopover in Beijing for talks with Vice-Premier Wang Qishan. "I don't know if [Geithner's visit] changed things," Hormats said. "I think he thought this was a good opportunity because he was in the region - he was coming from India, and this was a good chance for a face-to-face meeting. "The Chinese have very thoughtful people working on this who understand these issues very well. We have to give them time to address this and see what they can do about it."

Paulson calls for market-driven exchange rate - Flexible yuan 'in China's interests' - Former US treasury secretary Henry Paulson, who initiated the top-level strategic economic dialogue between Washington and Beijing, urged mainland leaders yesterday to press ahead with financial reforms, including liberalisation of the exchange rate. Stopping off in Hong Kong after meeting senior mainland officials, including Premier Wen Jiabao, at the Boao forum, Paulson, who was treasury secretary from 2006 to 2009 under president George W. Bush, told the South China Morning Post (SEHK: 0583, announcements, news) currency reform would benefit China. "Renminbi flexibility is very much in China's interests," he said. A market-determined exchange rate, he argued, would assist China's financial system to allocate capital more efficiently and help to rebalance the economy more towards domestic consumer demand. "It is not in China's long-term interests to have an economy dependent on low-value-added, highly energy-intensive exports," he said. Paulson's visit follows a week of intense economic diplomacy over the yuan, culminating in a surprise visit by his successor as treasury secretary, Timothy Geithner, to Beijing on Thursday for talks with mainland economics supremo Vice-Premier Wang Qishan. Both sides were keeping tight-lipped afterwards, but the meeting spurred feverish speculation that Beijing is on the point of revaluing the yuan, which it has kept steady at an exchange rate of 6.83 yuan to the US dollar since mid-2008. The yuan's 2008 repegging, which Chinese officials describe as an emergency measure intended to ensure stability during the economic slump, has attracted bitter criticism from US legislators who argue the currency has been kept artificially cheap to boost China's exports at the expense of other economies. Paulson, however, played down talk of deteriorating relations between Beijing and Washington. "The relationship is better and stronger than some of the press reports would indicate," he said. He praised China's response to the global crisis, emphasised that the rest of the world had benefited from Beijing's economic stimulus efforts and dismissed fears that government-mandated bank lending was inflating a bubble on the mainland. "I admire what China did," Paulson said. "You can't do something like that without creating some undesirable effects, but those are manageable." Paulson called on the US authorities to push ahead with regulatory reform, setting up a systemic risk regulator as well as an authority to wind up failed financial institutions, to minimise the impact of future crises. He defended his record as treasury secretary, saying his main errors were mistakes of communication, and rejected criticism of his decisions in the depths of the crisis in 2008. "With 20-20 hindsight, those decisions were right," he said.

Chinese Premier Wen Jiabao (C) inspects a cole field in Chizhou, east China's Anhui Province, April 10, 2010. Chinese Premier Wen Jiabao has called for enhanced efforts during the country's spring ploughing season to ensure a good harvest, during his inspection tour of Anhui Province from April 9 to 11. Chinese Premier Wen Jiabao has called for enhanced efforts during the country's spring ploughing season to ensure a good harvest. Wen made the remarks during an inspection tour of east China's Anhui Province from April 9 to 11. He said good work in the agriculture sector, especially in ensuring grain production, was significant for stabilizing the country's economy and prices. He urged governments at various levels to take every possible measure to ensure spring farming was done well. Wen visited farmland, villages, processing companies, farm supply centers, and irrigation projects in rural areas of Bangfu and Chizhou cities. He also held seminars to solicit opinions from farmers and local officials. Wen urged the authorities to guarantee the farm supplies, including chemical fertilizers, seeds, pesticides, and fuel for spring planting. At a water control project on Huaihe River, China's third longest river, Wen called for coordinated control efforts by provinces through which the river runs. Nineteen key water control projects under the Huaihe River management program have been completed, which improved greatly the ability to combat floods and droughts. The 1,000-km-long river, one of the most flood-prone rivers in China, flows through four central and east China provinces including Henan, Anhui, Shandong and Jiangsu.

April 12, 2010

Hong Kong*: Bank deposit protection will be raised to HK$500,000 per person per bank by January next year - although any worsening in the economy later in the year could scupper this and other changes to the four-year-old deposit protection scheme. The increase in protection from HK$100,000 to HK$500,000 will come as the government ends its guarantee of all deposits, a temporary move spurred by the global financial crisis. It is understood that the government does not want to continue guaranteeing deposits for fear banks will take more risks knowing deposits are fully insured. The government's withdrawal is timed to coincide with similar moves by Singapore and Malaysia, signalling that uncertainty about banks' health has diminished. But Financial Secretary John Tsang Chun-wah will need to heed other governments' actions as they look to each other for signs they can start withdrawing hundreds of billions of dollars of economic props used to stave off a global collapse since financial markets almost imploded about 20 months ago. There are fears Hong Kong could be affected by the premature withdrawal of stimulus measures elsewhere in the world. Deposit guarantees protect and reassure depositors at banks that become financially distressed. Without such schemes, customers would withdraw all their money at the first sign of trouble, resulting in a run on a bank. Most famously, this happened to British bank Northern Rock during the latest global financial crisis, and rumours of trouble saw a run on the Bank of East Asia (SEHK: 0023) in Hong Kong during the same period. However, Sidney Sze Tak-chee, president of the Society of Registered Financial Planners, said the local economy appeared unlikely to worsen in the short term given Hong Kong's buoyant property market and recovering financial sector. "This is a positive step and an appropriate exit market strategy," Sze said of the government's move. If approved by the Legislative Council, the scheme's new cap of HK$500,000 will mean about 90 per cent of depositors will be fully covered. This percentage is on a par with the higher end of international standards, according to Secretary for Financial Services and the Treasury Professor Chan Ka-keung. In Britain, the level of deposit insurance is limited to £50,000 (HK$590,650) for deposits at each bank, while the US covers up to US$250,000 per customer. Hong Kong's deposit insurance scheme, launched in 2006 and funded by banks, will offer up to HK$500,000 of protection for depositors in case of a bank failure. Under the scheme, every depositor will recoup up to HK$500,000 per bank, meaning three deposits of HK$500,000 each in three different banks will be insured for a total of HK$1.5 million. Foreign currency deposits as well as secured deposits used as collateral for loans like mortgages or credit card payments will also be covered. Colin Pou Hak-wan, deputy chief executive of the Hong Kong Deposit Protection Board, said raising the cap above HK$500,000 would only increase the level of coverage by one or two percentage points but would push up costs. At the moment, the scheme has about HK$1 billion available to protect depositors. About HK$300 million is collected each year from banks for this purpose. Under the HK$100,000 cap, it was estimated the scheme would achieve its target of HK$1.5 billion by 2012. But it will now take until 2018 to collect the HK$2.8 billion needed to insure depositors at each per bank for up to HK$500,000. The funds are mainly invested in US Treasury bills and other deposits, as well as exchange-rate and interest- rate contracts for hedging purposes. Hong Kong Monetary Authority data shows total deposits of more than HK$6.31 trillion in February, down from about HK$6.33 trillion in January. Legislators will discuss changes to the scheme on April 21 and, if approved, the changes will take effect on January 1.

Teaching hotel may bite hands that fed it - 5-star sector fears luxury PolyU venue will hurt it - Rising in the grounds of Polytechnic University in Hung Hom, a 28-storey tower is casting a shadow over the five-star hotels clustered in one of the city's prime tourist districts. The HK$1.3 billion edifice is a teaching hotel complex that was backed so strongly by hoteliers hungry for well-trained executives that they lobbied the government to waive most of the land premium. Many are now having second thoughts after it became clear that, rather than the modest teaching facility they had expected, the university was building a hotel to the highest luxury standards that could pose severe competition to them. Even without the land premium - estimated at HK$250 million to HK$300 million but eventually cut to a nominal HK$1,000 - the Hotel ICON is costing more to build than the average five-star hotel, people with knowledge of the industry say. "It is not a level playing field and unfair to other hotels, as PolyU didn't have to pay market land premium," a hotelier said. A source close to PolyU said: "Private hotels helped PolyU as they didn't expect the university would build such an upscale teaching hotel. Those in the neighbourhood of Tsim Sha Tsui East are particularly unhappy to see a potential competitor pose a threat to their business." Others question why the university is going into the top end when the trend is to more modest hotels catering to mainland visitors and business travellers on reduced budgets. But the university is confident it is on the right track. "The changing economic and market situations have favoured the development of an upscale hotel. This is also consistent with the growing hotel and tourism industry in Hong Kong," communications director Tracy Ng said in response to inquiries. PolyU, which suffered a HK$900 million loss last year and has been under fire over the way it operates subsidiary companies, has pumped in more than double the 2005 estimate of HK$500 million for the hotel. When it opens in the first half of next year, it will offer 233 deluxe rooms, 26 suites and three prototype rooms to showcase new hotel technology. All will be equipped with the best facilities, including docking stations for iPods and iPhones. The Club Floor on the top has a restaurant overlooking the harbour, a multifunction dining and meeting room with a wine cellar and kitchen. The publicly funded university hired British design house Conran and Partners - designers of the Mandarin Grill and Bar at the Mandarin Oriental - to sketch its Club Floor. It has yet to say whether the Club Floor will be for private members only. The world-class team of designers and architects also included Rocco Yim of Rocco Design Architects, responsible for the Four Seasons in Central, as well as French botanist and vertical garden designer Patrick Blanc, who decorated the Parlement de Bruxelles in Belgium and French embassy in New Delhi. The complex - redeveloped from PolyU's former staff quarters, Pak Sui Yuen, in Science Museum Road - includes offices for the university's School of Hotel and Tourism Management and about 30 flats in a separate wing for senior university staff. The university said its approved budget for the redevelopment was HK$1.3 billion and the total construction cost as of early April was about HK$1.1 billion, about a third of the university's fund - cut by a series of deficits from about HK$4.7 billion in 2007 to HK$3.5 billion last year. PolyU appointed a panel in November 2004 to compile a feasibility study for the development project. Ten months later - after its hotel school was ranked fourth in the world by the Journal of Hospitality & Tourism Research - it announced the hotel project. Professor Kaye Chon, head of the school, said at the time that the new facility would be a great boost to the school's long-term development and would attract more students and world-class scholars. The Town Planning Board turned down PolyU's rezoning application in 2006 but approved a blueprint for a 116-metre building the next year. According to university papers, PolyU revised the redevelopment budget upwards from HK$500 million to not exceed HK$1 billion in May 2007, with one document stating the revised budget was "mainly due to the increase of the property's plot ratio from 7 to 9 and upgrading the quality of the teaching and research hotel from 3+ star to upper 4 star/5 star level". The university council in June 2008 approved the second revision, to HK$1.3 billion, as a result of "the increase in fluctuation cost for contract works caused by high inflation and cost arising from design improvement". PolyU refused to disclose the latest cost distribution. A council meeting document in mid-August 2008 shows the HK$1.3 billion estimate was split into HK$741 million for the hotel, HK$161 million for conference and training facilities, HK$224 million for teaching and office facilities for the school, and HK$171 million for staff quarters. Based on this estimate breakdown, each room in Hotel ICON cost HK$2.8 million, while the 7,900-square-metre office block cost about HK$28,354 a square metre. This compares with the average building cost of a five-star room in the third quarter of last year - HK$2.3 million, Centaline Surveyors director James Cheung King-tat said, citing statistics from quantity surveyors. "The construction costs of standard education institutions and high-end office buildings were about HK$10,600 per square metre and HK$16,200 per square metre, respectively," Cheung said. The PolyU document shows the HK$1.3 billion does not include furniture and equipment for the school offices and staff quarters. The university would have had to pay more for the project if the Federation of Hong Kong Hotel Owners had not backed its case for a waiver of the land premium. "PolyU's former president Poon Chung-kwong told us that the university had to build a teaching hotel to train more hotel executives," federation secretary Michael Li Hon-shing said. "As he said the redevelopment would be of benefit to the entire hotel industry, we agreed to help him and wrote to the government." But Li said the federation was not told at the time about the scale and details of Hotel ICON. A source close to the issue said the government initially planned to charge PolyU a land premium of HK$250 million to HK$300 million for the redevelopment. Thanks to the help of the hotel owners' group, a nominal premium of HK$1,000 was approved in November 2008. Li said a three-star hotel with about 100 rooms would be more appropriate for teaching purposes. "Mainland tourists are now the major momentum to support Hong Kong's hotel market," Li said. "Mainland tours usually go to the low-end hotels, which charge about HK$300 per night. Individual mainland tourists at most choose medium-priced hotels for an average room rate of about HK$600. "Business travellers are more cost-cautious than before. Now they would not mind staying at four-star or boutique hotels. As demand for five-star hotels is weaker than the prime time in 1997, most new hotels, such as JW Marriott Courtyard (Connaught Road West), are built to tailor to this new business development." As the latest four-star boutique hotels only have one or two restaurants providing basic services, they employ fewer staff than the five-star hotel chains. As a result, the city's average staff-to-room ratio has fallen to 0.7 staff per room from about 1 to 1. This meant it was important for the hotel school to train students in multiple roles, rather than just boosting the number of students. PolyU projected in June 2008 that its teaching hotel could charge an average room rate of HK$1,820 - higher even than the harbour-view rooms of some neighbouring five-star hotels, such as the Harbour Grand Kowloon and Intercontinental Grand Stanford, and about the level charged by the Kowloon Shangri-La at Easter. In the February edition of the hotel school's magazine, PolyU said Hotel ICON would hire about 350 permanent staff in the second quarter of this year and 50 student interns. Another 100 interns would be hired when the hotel started operating. In its business projection in 2008, PolyU estimated the hotel could reach 80 per cent occupancy in its second year and would be able to increase room rates 3 per cent a year. "All profits made from Hotel ICON will be ploughed back to the university," a PolyU spokesman said. Li, of the hotel owners' federation, said the city now had more than 60,000 hotel rooms, double the number of 10 years ago, and would add 7,000 rooms in the next two years. Half the PolyU redevelopment is funded by the university, the balance by a bank loan. PolyU declined to reveal details, but Post inquiries found the university signed a HK$700 million facility with the Bank of East Asia (SEHK: 0023) in June 2009. The signing came nine months after a run on the bank and shortly after a consultant to the bank, Chan Tze-ching, was appointed a PolyU council member in May 2009. A council meeting document shows Chan declared his interest and refrained from voting on the loan.

Key role for Tung Chee Hwa as the go-between - Ex-chief executive's 'quiet diplomacy' valued in Washington and Beijing. Tung Chee-hwa, the former shipping tycoon who became Hong Kong's first chief executive, is back. Five years after he resigned, citing poor health but following a turbulent reign which culminated in a 500,000-strong mass protest, he has managed to forge an intriguing role as an elder statesman involved in Sino-US and cross-strait relationships. Tung last week hosted US Treasury Secretary Timothy Geithner and then former US President George W. Bush during their flying visits to Hong Kong. Next month he is almost certain to catch up with another American, Commerce Secretary Gary Locke, who will pass through Hong Kong heading a trade delegation en route to Beijing. Tung was also visible during US President Barack Obama's first state visit to Beijing last November. The Beijing loyalist met Locke, the first Chinese-American state governor and just the second appointed to a presidential cabinet, last year during one of his regular forays to Washington and New York. As well as chairing the Hong Kong-based China-United States Exchange Foundation he created two years ago, he maintains links with Harvard University's Asia Centre and close ties to the New York-based Committee of 100, an influential grouping of Chinese Americans prominent in business, politics and the arts. Closer to home, Tung became the chief director of the newly founded Hong Kong Association for the Promotion of Peaceful Reunification of China, along with other Beijing loyalists, which seeks to promote reconcilliation between Taiwan and the mainland. Chan Wing-kee, a Hong Kong delegate to the Chinese People's Political Consultative Conference, said Tung's long-time personal connections allowed him to be an unofficial bridge between China and the US. "He is neither an official representative nor an ordinary person," Chan said. "His special roles as a former chief executive of Hong Kong and a CPPCC vice-chairman give him flexibility to build ties with political and business sectors in the US. There are many channels for US-China communications. He is certainly one of the channels." Just like his father, Tung Hao-yung, founder of the Orient Overseas Container Line, who forged ties with US presidents Gerald Ford, Jimmy Carter and George H. W. Bush, Tung maintains both Republican and Democrat connections as well expansive business relationships. Elaine Chao, labour secretary in George W. Bush's cabinet, is considered a close family friend. "As a networker, he is the consummate operator and still moves in the upper stratosphere of both cities (Washington and Beijing)," said one person long familiar with Tung's connections. "I'm not sure Hong Kong people really appreciate it but he was at it long before he got the chief executive job and he continued it after he left office ... he doesn't just rely on old connections, but he keeps himself very current. "He has consciously positioned himself as a go-between between Beijing and Washington ... he is close to Beijing but he cares deeply about the relationship and believes he can play a role, straddling both cultures." A diplomat familiar with Tung's efforts described his "old school, backroom skills". "He is very courtly and quietly offers a useful perspective ... he is clearly loyal to Beijing but he still speaks as an outsider and the Americans and others still find that useful. He is also ultra discreet, too, and that is always appreciated." However, his discretion when dealing with the US is in marked contrast to his recent visit to Taiwan, which drew wide media coverage. Despite positioning the trip as a private one, he allowed cameras to film him sightseeing and speaking at a luncheon hosted by the Straits Exchange Foundation chairman Chiang Pin-kung - the island's top negotiator with the mainland. Unlike other mainland officials whose trips see the outbreak of pro-independence group protests, a relaxed Tung fronted Taiwan's press, talking about his favourite steamed dumpling (xiaolongbao) restaurant in Taipei and his appreciation of the island's high-speed railway. These scenes would seem unimaginable for those in Hong Kong who remember Tung as the chief executive who either remained silent or spoke sternly on thorny public issues. During his one-week visit, Tung also met Lien Chan, Kuomintang honorary chairman and former vice-president of Taiwan, whom he described as "an old friend". "Mr Tung's family has extremely close ties with Taiwan. Just look at the plum blossom flower in the logo of Orient Overseas Container Line - it is the national flower of the Republic of China. You can tell how profound the relationship is," Chan said. Tung's go-between role has increased because, while US administrations have dramatically expanded direct connections with various arms of the Communist Party, government and military in recent years, there is still the need for other perspectives, particularly during times of tension. It is often forgotten in the wake of his troubled tenure that his range of international connections was a key factor that put Tung in the running to become Hong Kong's first post-handover chief executive. Discontent with Tung's stewardship began growing almost from the day he took over on July 1, 1997. First came the Asian financial crisis and controversial approvals for developments such as Disneyland. And despite his appointment for a second term in 2002, the criticism continued with the administration's controversial decision to push for introduction of the Article 23 legislation - laws relating to national security that critics said would cripple free speech in Hong Kong. Disapproval of Tung's leadership intensified with the government's response to the Sars epidemic in early 2003. All this culminated with one of the biggest demonstrations in the city's history, when at least 500,000 people took to the streets. Tung outlined his vision of the Sino-US relationship - "the most important international relationship today" - in a speech in Hawaii at the 50th anniversary of the East-West Centre think tank in February. He also outlined his cultural perspectives, speaking of his pride in being a Shanghai-born Chinese but also his "great admiration" for the American people. "In 1960, I arrived in the United States and for the next nine years, I made this country my home," he said. "I was married in the United States, I worked in the United States, and began building a family in the United States." While attempting to explain and justify China's military build-up and Beijing's policies on Taiwan and Tibet, he repeatedly stressed the importance of an enduring strategic trust between Beijing and Washington. "This may be the hardest nut to crack in the history of mankind," he said. "But it is worth our while to try every means to crack it ... we cannot afford to bear the consequences of China and the United States becoming enemies. "For the sake of our next generation and the interests of the whole world, we must try our best. This requires vision, wisdom and courage." Reviewing current strains including US arms sales to Taiwan, Sino-US tensions over Google, Tibet and the value of the yuan, he said: First, "steady hands and cool heads" must be allowed to manage the issues. Second, decisions on such issues must not be based on "political expediency". Instead, a long-term view must dominate if strategic trust were to be forged. Jackie Hung Ling-yu, a former convenor of the Civil Human Rights Front who led at least 500,000 protesters against the Tung administration in 2003, said Tung would always be remembered for his controversial leadership in Hong Kong. "I have no expectations of him," Hung said. "He didn't even defend 'one country, two systems' during his office. What can we expect from him after he stepped down? "I am most furious about him seeking to have the National People's Congress Standing Committee interpret the Basic Law in 1999. He also pushed forward the legislation on Article 23 against the public's will. These are all bad precedents for the SAR government. "His vice-chairmanship of the CPPCC is just a reward for his selling out Hongkongers' interests."

A voluntary scheme allowing secondary schools to reduce the number of classes to ease the impact of falling student numbers has received a lukewarm response. Just 23 schools had signed up by the scheme's first deadline yesterday, well short of the target of more than 100 the government says it needs to make the scheme work. Not a single school in Tuen Mun and Yuen Long, two of the districts suffering the steepest drop in numbers, have agreed to take part, principals from the two districts say. The scheme protects teachers' jobs and offers subsidies while schools reduce the number of classes they run. Yesterday's deadline was for schools wanting to join in the next academic year. Those wanting to join later have until August next year. School representatives said the scheme had only been announced by the government on March 25 and they had been given too little time to make a decision. Yuen Pong-yiu, chairman of the Hong Kong Association of Heads of Secondary Schools, said it took time for schools to consult all stakeholders. "Schools have to mull over a lot of factors before pledging to join," he said. Under the scheme, a participating school will admit four classes of Form One pupils, one fewer than at present. No teachers will be fired for five years, by which time the number of pupils is projected to rise again. The government envisages teachers without classes can be put to work introducing the new secondary school curriculum that began last year. As an incentive to join the scheme, a school will be given extra funding of HK$250,000 a year. Schools can apply to increase the number of classes they operate if pupil numbers bounce back. Education Secretary Michael Suen Ming-yeung said more than 100 classes would have to be cut to ride out the fall in enrolments, which began in 2008 and is predicted to continue until September 2017. "Six thousand fewer students will be admitted to Form One in the 2010-11 academic year ... but the scheme is voluntary," he said. "In districts where the enrolment shortage is the most severe, like Sha Tin and Eastern District, schools within the districts must discuss among themselves how to improve education quality." The minimum enrolment for Form One students is 61. Schools that fail to reach the threshold are at risk of closure. Sha Tin is expected to have a shortfall of 500 Form One students in the coming academic year. A minimum of 16 schools would have to cut their Form One classes from five to four in September so that the students originally bound for the 16 classes could be assigned to schools that have difficulty attracting enough students. Sha Tin District Secondary School Heads Association chairman Chau Hau-fung said one district school had applied and two were seriously considering doing so. In Tuen Mun, where the numbers require a minimum of 10 participating schools, not one has signed up. "We have a year to consider whether to join before the final deadline next year," Tang Yin-ping, chairwoman of the Tuen Mun District Secondary School Heads Association, said. Kwok Wing-keung, president of the Association of Heads of Secondary Schools for Tai Po, said no school there had joined before yesterday's deadline. But he was confident schools would embrace the scheme. "We have a great sense of solidarity," he said. "Thirteen schools that are currently offering five classes have voiced interest in joining. All of them are schools that do not have difficulty in admitting enough students but want to extend a helping hand to those in need. They just need time to consult all the parties," he said. The best response was in Eastern District, where five schools had joined. Lo Sui-kwong, president of the Association of Heads of Secondary Schools for Eastern District, said schools wanted to band together to ride out the student shortage. Lo said: "Of the five which joined, Cheung Chuk Shan College is an English-medium school. The scheme could improve education quality [by having the same number of teachers teach fewer number of students]. "Quite a few schools have long been considering shrinking their class numbers voluntarily even before the government scheme was announced. The scheme, with its financial incentives and promise of keeping the surplus teachers for five years, only spurs them to take the plunge."

Lau Kar-leung, a kung fu master who went from stuntman to movie director, has been honoured with a lifetime achievement award from the Hong Kong Film Awards. Lau, 74, is the leader of the "Lau Brothers", a family at the heart of the martial arts tradition that defined the city's film industry in the 1960s. "Hong Kong movies are famous for their martial arts. It has everything to do with Lau," the chairman of the film awards association, Gordon Chan Ka-seung, said yesterday in making the announcement. Lau is suffering from cancer but was expected to attend the ceremony on April 18. Lau's kung fu goes back to the legendary Wong Fei-hung in the 19th century. Lau's father learned the art from master Lam Sai-wing, who belonged to Wong's faction. Lau started off as a stuntman in the 1950s but switched to directing action films in the 1960s. Over the next decade, he became a core director for the Shaw Brothers Studio. The 36th Chamber of Shaolin saw the rise of his brother, actor Gordon Liu Chia-hui, who later appeared in Quentin Tarantino's Kill Bill series. In 1994, Lau's work on Drunken Master II, starring Jackie Chan as the master Wong, brought him an award for best action choreography at the film awards. Lau's health returned to public attention in January when he was sent to the intensive care unit for complications of flu. In 1995, he learned he had lymph node cancer. "I saw him recently and he was in good condition," Chan said. Chow Lam, who heads the Hong Kong Cinematography & Television Lighting Association, will also receive a lifetime achievement award. He has been lighting more than 60 films since the 1980s, with the latest being Bodyguards and Assassins. Meanwhile, best actress nominee Zhang Jingchu said she tipped fellow contenders Wai Ying-hung or Sandra Ng Kwan-yu to scoop the prize. In Night and Fog, Zhang plays the role of an abused mainlander who comes to Hong Kong after marrying a local. She was up for the same award for her role in Protege two years ago. "This time my role is more passive. In Protege, my character was stronger and the nomination was not as surprising," she said. Wai won the best actress award at the Asian Film Awards, Hong Kong Film Critics' Society awards and Golden Horse awards in Taiwan for her role as an alcoholic single parent in At the End of Daybreak. Among those nominated for best new performer are Zhu Xuan, who starred in Prince of Tears, and Fala Chen, who starred in Turning Point. The film awards will be broadcast on ATV, meaning singers from four big record labels that are locked in a row over royalties with TVB (SEHK: 0511) will have a chance to appear in the show. Eric Tsang Chi-wai will be on both channels that night: his programme The Prize Master will be on TVB, while the actor himself will attend the awards ceremony. New awards were introduced this year for best dressed actor and actress on the red carpet.

Former US president George W. Bush was in town yesterday and managed to squeeze in a meeting with close family friend Tung Chee-hwa and a fitting for some suits in a whirlwind stopover. Bush arrived from Shanghai, where he was the keynote speaker at the 2010 Halter Financial Summit, which ended yesterday. The theme of the summit was "China in a Changing World" and Bush spoke at length about the dangers of protectionism, saying Americans should not fear Chinese growth. Bush immediately returned to the US after his brief stopover in Hong Kong. A spokeswoman for the US consul general in Hong Kong said she was not aware of the trip, saying, as a former American president, Bush was not required to notify it of any trips. Bush met Tung, the city's former chief executive and currently a vice-chairman of the Chinese People's Political Consultative Conference, in a private gathering during a low-profile visit, according to a person close to Tung. The Bush and Tung families are known to have long-time ties dating back to the 1970s, when the parents of Bush and Tung became friends. At that time, the Oriental Overseas Container Line, founded by the shipping tycoon and the former chief executive's father, Tung Hao-yung, was extending its global business network and Bush's father was the US envoy in Beijing. Bush senior, the 41st US president and the father of the 43rd, visited Hong Kong twice in 1999, both times meeting Tung, then the city's leader. Tung visited Washington three times during his tenure as chief executive. Since his resignation in 2005, Tung has been active in promoting Sino-US ties. Two years ago, he set up the China-United States Exchange Foundation, which organises exchange activities between academics, businessmen, retired military officers and people from other professions from the two countries. The former American president did not arrange a meeting with acting chief executive Henry Tang Ying-yen.

China*: Scientists on the mainland have demonstrated how arsenic destroys deadly blood cancer by targeting and killing specific proteins that keep the cancer alive.

Edgar Hui has been putting aside HK$20,000 every month in yuan since October in anticipation of a revaluation. These days Hui, who runs a small business, can hardly contain his excitement. Payoff is nigh. But is it really? Even if it the revaluation does happen, will it be worth the wait and the trouble? More importantly, what does a possible revaluation mean for those who do not have yuan holdings like Hui? How can they get on the revaluation train? The buzz over a possible yuan revaluation has intensified these past few weeks, especially with US Treasury Secretary Timothy Geithner's arrival in China. Most analysts predict the US government's efforts to mend frayed relations will result in a currency change, possibly within weeks. A change in China's currency policy was imminent, said Ben Simpfendorfer, Hong Kong-based chief China economist at Royal Bank of Scotland. The New York Times reported on Thursday that Beijing was very close to announcing a shift in its currency policy, including a "small but immediate" revaluation of the yuan. But others have been pointing to the likelihood of customs figures showing trade deficits for China, thus weakening US arguments that the nation is keeping its currency undervalued to gain an advantage. Economists have been expecting a deficit partly because of the rise in commodity prices. In fact, yuan forwards weakened against the dollar on Friday on speculation the government might not resume appreciation in the currency any time soon. A one-off currency revaluation looks unlikely, says Zhu Baoliang, chief economist at the State Information Centre (SIC), a think tank that comes under the National Development and Reform Commission, the mainland's powerful planning agency. "I believe a band widening is possible but another one-off revaluation is unlikely. The yuan might be pegged to a basket of currencies." Swiss bank UBS is also among those who believe a widening of the yuan's trading band against the dollar is a more likely scenario. "A one-time revaluation isn't feasible because no one knows how much it should rise in one step," said Wang Tao, an economist at the bank. Wang believes the band may be widened in the second quarter by as much as 2 per cent either side of a daily reference rate set by the central bank, from the current 0.5 per cent. Currency watchers are widely expecting a gradual appreciation of the yuan by up to 3 per cent this year. That translates into a straight 3 per cent gain for yuan depositors like Hui if they decide to cash out. "We are expecting an appreciation on the yuan but it won't be huge," said Catherine Cheung, head of investment strategy and Research at Citibank Global Consumer Group. "We estimate a rise of 3 per cent, with the exchange rate against the US dollar going up from around 6.82 now to 6.62 by the end of this year." Last year, the exchange rate of the yuan against the US dollar hovered in the 6.8 range. Yuan investors have had no capital appreciation for quite a while. This might tempt them to cash out at the first sign of a revaluation. But since the revaluation is widely expected to be staggered rather than a big bang, investors are advised against doing so even if it does happen, because it might just be the first of a series of small adjustments. For investors who prefer to have plain cash holdings, yuan deposits make a lot of sense. Interest rates on yuan fixed-term deposits in Hong Kong range between 0.5 and 0.8 per cent compared with virtually nothing on Hong Kong dollar deposits. For these investors, cashing out is a particularly bad option since the alternative is really bleak. But it is doubly so because Beijing is tipped to raise interest rates this year. If the banks choose to take the cue, yuan investors who prefer to keep their money in bank deposits would be ill advised to pull them out at the first sign of an appreciation. Standard Chartered Bank forecasts the central bank to raise rates twice in the second half of this year, with each rise of 0.27 percentage points. DBS Bank, though, expects the central bank to increase rates three times this year, by a total of 0.81 percentage points. However, that does not necessarily mean banks will raise deposit rates, said Nicolas Kwan, head of research for Asia at Standard Chartered Bank. "That will depend on the demand for yuan." Those who believe an appreciation - in one go or staggered - is imminent and want to cash in on it but did not have Hui's foresight can still benefit by getting into yuan deposits. This is fairly simple. All you need is to go to a bank with a valid ID. You are limited to exchanging HK$20,000 a day for yuan. A good way to be exposed to the yuan's capital growth is to invest in bonds. But there are no fresh issues of yuan-denominated bonds around the corner and the supply in the secondary market is so thin that these bonds are now too pricey for investors, said Daniel Chan, a senior investment strategist for DBS. Yuan-denominated bonds issued last year pay about 2 per cent annual interest. Although bondholders can choose to sell for a quick gain, most have chosen to hold on to them for now, said Chan.

Guangdong announced top leadership reshuffles yesterday in its two most important cities. Acting Shenzhen mayor Wang Rong has been appointed the city's party boss, and Guangzhou mayor Zhang Guangning is now the provincial capital's party boss. Zhang replaces rising star Zhu Xiaodan , who was appointed Guangdong's executive deputy governor in February. Guangzhou's city government announced yesterday the appointment of Guangdong deputy governor Wan Qingliang as the city's party vice-secretary, paving the way for him to succeed Zhang as mayor. Speculation had been rife for months that Shenzhen party secretary and provincial vice-secretary Liu Yupu , 60, would step down after former Suzhou party secretary Wang was parachuted into the city as acting mayor in June. Former Shenzhen mayor Xu Zongheng was toppled in a corruption probe linked to the downfall of several top provincial officials, including Chen Shaoji , the former chairman of Guangdong's top political advisory body. The Guangzhou appointments yesterday confirmed a South China Morning Post (SEHK: 0583, announcements, news) report last month. The reshuffles are part of the largest political realignment in the province in at least a decade. Governor Huang Huahua , 63, and several deputy governors will reach retirement age when their terms end in 2013. Wan's appointment is being closely watched by political observers. Wan, 46, is the youngest of Guangdong's eight deputy governors. The expected appointment of Wan as Guangzhou mayor will make him a strong candidate to move further up the political hierarchy in 2013. He has been closely involved in cross-border issues and represented the province in the Guangdong-Hong Kong Co-operation Joint Conference in February. It remains unclear who will take over from him in dealing with cross-border issues. Zhang, 57, a Shandong native who started working in Guangzhou as a steel worker in 1971, climbed the city's political ladder over the past four decades. But political observers mostly see him as a transitional figure, because he will reach 60, the retirement age for the party post, by 2013. The appointments nevertheless set the stage for the race for top provincial posts. A top candidate to succeed Huang is Zhu, 57, who has a strong resume, not only because of his Communist Youth League background, which has been a bonus point for advancement ever since President Hu Jintao , a former first secretary of the youth league's central committee, became party general secretary. Zhu is also one of three alternate members of the Communist Party Central Committee working in Guangdong. All eyes are now on the post of provincial vice-secretary of the party, left vacant by the retirement of Liu, because that person is likely to compete with Zhu for the post of governor, analysts say.

Warming ties with the mainland and a long spell of peace have taken their toll on the discipline, morale and professionalism of the Taiwanese army, with scandal after scandal breaking out within the military. In the latest such incident, a military security and anti-graft unit, which apparently had too little work to do, recently started offering fortune-telling services to soldiers. It is reportedly doing a roaring business. "It is just too ridiculous, and if they really have nothing to do, the defence ministry might as well consider shutting down itself," Lee Chun-yi shouted at a legislative meeting yesterday. The special unit, formed four months ago to crack down on security and intelligence leaks and bribery within the military, offered the free fortune-telling services through its internal website - accessible only by soldiers. Because of its accuracy and swift responses, the website has provided more than 1,000 services since opening in December. A military spokesman, Yu Sy-tue, said the fortune-telling service was merely one of many topics in public discussion areas for servicemen and that the officer who provided the service did not do it during office hours. "But to avoid creating misunderstanding, we will make sure that the discussion areas only involve official businesses in the future," he said. The latest fiasco is just one of many blunders and scandals that have come to light since Ma Ying-jeou, of the mainland-friendly Kuomintang, became president in 2008. The first to attract public attention was a video aired by a cable news channel in June last year which showed two soldiers clad in camouflage uniforms apparently engaged in oral sex while 40 other servicemen looked on and laughed. Although the military later disciplined 13 members of a reserve brigade and sent four others to prosecutors for involvement in public obscenity and spreading an obscene image, sex scandals have continued unabated. Female soldiers posted revealing photos on a website in December, with one sergeant lifting her uniform to show her brassiere and two others preparing to French kiss, forcing the military to apologise to the public. A month later, about 20 personnel, including a lieutenant colonel and an army captain, were caught by police for engaging the services of underage prostitutes. A female officer was sexually harassed by her superiors and a naval petty officer exposed himself in a women's underwear shop. Even military police, who are supposed to discipline military personnel, were allegedly involved in a sex scandal, with a senior officer taking his cadres to a girlie bar. Besides sex scandals, there have also been reports of corruption, including embezzlement by senior officers. Last month, military prosecutors indicted Lieutenant General Ho Yung-chien, a former head of the military police, on charges of embezzling NT$3 million (HK$738,000), and two other army colonels for helping Ho. In September, a court sentenced Yuan Hsiao-lung, a retired lieutenant-general, to 10 years and four months in jail on charges of bribery, blackmail and leaking secrets. In addition to scandals, the military has also been hit by a series of blunders, including warplanes failing to hit the drones and torpedoes missing their targets during military drills. The military came under fire last month for failing to intercept a Russian bomber which entered Taiwan's airspace. Although air force Major General Wang Hsuan-chou later explained that the bomber had only briefly entered Taiwan's airspace and had left immediately after it was warned, the incident provided a much-needed ammunition for the pro-independence camp to criticise Ma's mainland engagement policy. "Taiwan cannot continue the Ma government's China policy, or its military would stand to lose its combat readiness," said Lai Ching-te, a legislator from the Democratic Progressive Party. The party has attacked Ma's engagement policy, saying it is tantamount to a "surrender" policy, aimed at dismantling the morale and professionalism of the island's military. "Ma's China appeasement policy only serves to crack the military's morale and professionalism," DPP legislator Tsai Huang-liang said. "This explains why there is such a serious lapse in discipline." Even KMT lawmakers have expressed their concerns over the problems within the military. "The defence ministry must step up efforts to discipline its troops and sharpen up the morale as well as professionalism within the military, while continuing to maintain an effective defensive force," said Shui Hua-min, a retired general. He said such efforts were important, given that the military was adopting an elite force policy - cutting troop numbers to 215,000 by 2015, down from 350,000 in 1997. KMT lawmaker Lin Yu-fang accused the former administration, led by the DPP's Chen Shui-bian, of corrupting the military system by tolerating senior officers bribing their superiors for promotions. Ma ordered a clean-up campaign a year ago and military prosecutors have indicted 13 officers for alleged corruption.

A US judge has ordered China's biggest producer of plasterboard to pay US$2.6 million in damages to families whose homes were affected by defective product, a judgment that could lead to further litigation. The seven families lived in homes that contained defective drywall, as is known in the US, manufactured by Taishan Gypsum, a subsidiary of China National Building Material (CNBM), a Hong Kong-listed firm that is one of China's biggest building material producers. The ruling by Judge Eldon Fallon on Thursday could set a legal precedent for further damages caused by the plasterboard that has been blamed for everything from smells to electrical faults. "The general principles found applicable to the seven families will have relevance to all homes contaminated by defective Chinese drywall," Fallon said. The US Consumer Product Safety Commission (CPSC) has received 3,082 complaints about Chinese drywall. The US$2.6 million damages awarded to the seven households could result in US$1.1 billion of damages, assuming all 3,082 complainants are granted similar damages. The issue has taken a political turn. "Homeowners didn't cause this. The manufacturers in China did. That's why we've got to go after the Chinese government," said Senator Bill Nelson of Florida. At least 2,100 US homeowners have filed lawsuits against Chinese manufacturers and the US suppliers that sold defective drywall. One of the successful claimants discovered a foul smell on the first day they moved into their house. Subsequently, the water heater, heating and air-conditioning system, smoke detectors, computers and television failed, according to Fallon's judgment. Fallon called for fire alarm systems, electrical systems, gas pipes and fire sprinklers to be removed from homes suspected to contain Chinese drywall. CPSC and the Department of Housing and Urban Development made a similar recommendation to all homes with the Chinese drywall. "This is an important court case and they're realising it is a serious problem," said Ronald Kozlowski, an executive with Towers Watson, a leading US professional services firm. "Potentially, many more US households than the 3,082 complainants will look to see if their homes have Chinese drywall." Kozlowski and his colleague, Rachel Boles, last year estimated the total cost of Chinese drywall problem could be as high as US$25 billion, including house repairs of up to US$10 billion and legal fees of up to US$10 billion. Kozlowski yesterday said he and his colleagues were revising the US$25 billion estimate, and damages from Chinese plasterboard cannot be accurately estimated because there are still unknown factors. Last year, a US class action lawsuit was filed against Taishan Gypsum, which is majority-owned by the State-owned Assets Supervision and Administration Commission (Sasac), the government body that oversees state-owned enterprises. Taishan Gypsum did not respond to the lawsuit and did not show up in the US court. On November 20 last year, the US court made a default preliminary judgment against Taishan Gypsum.

Chi-X Japan KK will begin selling trading services in Japan by about July to capture a slice of the world's second-largest stock market.

April 11, 2010

Hong Kong*: A senior manager of KPMG, charged by the Independent Commission Against Corruption with offering HK$100,000 bribes to his subordinates in relation to the global offering of Hontex International Holdings Company, entered no plea when he appeared in the Eastern Court on Friday. Leung Sze-chit, 32, was released on bail at HK$100,000. He faces a charge of offering an advantage to a subordinate as a reward for preparing a misleading report for the accountants in the prospectus for the global IPO offering of Hontex - a Fujian based clothing firm that offered 500 million shares and raised HK$1 billion in December last year. The case was adjourned until May 7, pending more time for the prosecutor to investigate. Leung was ordered to surrender all his travel documents. He is also required to report to Tuen Mun police station. A lawyer for ICAC told the court that further charges might be laid against Leung following investigations in the coming weeks, local media reported. KPMG was the auditor responsible for ensuring the accuracy of Hontex’s prospectus in the share sale. In a separate case, the High Court has continued with an order to freeze assets of up to HK$997,400,000 in relation to Hontex and four of its wholly-owned subsidiaries. The order was made following an interim injunction granted to the Securities and Futures Commission (SFC) on an urgent basis on March 29. The SFC started the proceedings against Hontex following allegations the prospectus of Hontex contained materially false or misleading information. The interim injunction will remain in force until further orders. Trading in Hontex’s shares was halted before the market opened on March 30, at the SFC’s request. The last trading price of Hontex was HK$2.06 per share.

An artist's rendering of the winning design for the cruise terminal, which sources close to the project say belongs to Foster and Partners. The terminal is to go into operation in 2013 and contracts are expected to be awarded for work to begin in May. Foster 'shark' wins cruise terminal tender - Some hail concept for Kai Tak, while others say it looks like seafood dinner leftovers. World-renowned British architect Lord Foster, who designed the airport and HSBC (SEHK: 0005, announcements, news) headquarters and is in the running to design the West Kowloon Cultural District, is set to add the Kai Tak cruise terminal to his portfolio of iconic buildings. Foster's shark-like concept - variously described as modern and curvaceous or resembling the remains of a seafood dinner - is the design put forward with the winning bid. The winner has yet to be announced but a person close to the project said Foster had been working with French construction company Dragages, which has had an office in Hong Kong since it built the Kai Tak runway in the 1950s. The decision has sparked questions about why the design was not opened up for a public competition as with other major public projects, but the government said the approach taken was better because of the technicalities involved. Foster's design houses the terminal in a structure resembling a shark skeleton with its mouth open wide towards the sea. Images of the terminal were revealed in a paper submitted to Legco on Wednesday, which the government said were the design from the winning bid. A person told of the tendering result said the government had chosen Foster's design. "His works are always impressive," the person said. A spokeswoman for Foster and Partners did not confirm or deny that it had won the tender. Dragages is part of the Bouygues group, one of France's largest conglomerates. Its local arm is bidding for infrastructure contracts funded by the government's economic stimulus package, including extensions to AsiaWorld-Expo and the Convention and Exhibition Centre. It was among the six companies that made submissions when the government sought expressions of interest for a cruise terminal in late 2005, but none was accepted because of what the administration termed technical difficulties. "I won't comment on the design. But the news has already circulated in our circle for a while," an experienced architect said, adding that Foster had joined local architectural firm Wong Tung Group in seeking government projects. The group is chaired by veteran architect Edward Ho Sing-tin, a former lawmaker, former Executive Council member and former chairman of the Antiquities Advisory Board. Its projects cover Cyberport, Hong Kong Park, Taikoo Shing's Residence Bel-Air and the city's first private estate, Mei Foo Sun Chuen. The lawmaker representing architects, Patrick Lau Sau-shing, said the project should have been opened up for a design competition. This would have enabled the public to choose their favourite design - important for projects that were widely used by the public and were significant to the community, he said. But a competition would have delayed the project, which has a timetable for the first berth to open by the middle of 2013. Originally planned for 2014 or 2015, the terminal building is now due to open at the same time. The design-and-build tender attracted four bids and the contract will be awarded in time for construction to start in May. The building will be leased to an experienced operator. A Commerce and Economic Development Bureau spokeswoman said a world-class cruise terminal required a design that catered for the needs of the cruise vessels and passengers, customs, immigration and health quarantine facilities, as well as the practical requirements of other users of the terminal. "Because of the technicalities involved, it will be more appropriate and prudent to prequalify bidders with relevant experience and track records through an open tender exercise," she said. "This arrangement could ensure an iconic design." Lawmaker and Kowloon City district councillor Starry Lee Wai-king said the design looked modern and curvy, "but our priority is that the terminal will be well connected with the old districts nearby". Vincent Ng Wing-shun, a member of the defunct Harbourfront Enhancement Committee, said: "The design is like a sculpture with marine elements." But architects who did not want to be named said it looked like a half-eaten fish. A spokeswoman for Dragages declined to comment except to say the company had submitted a bid. The bureau's spokesman said it was not appropriate to reveal at this stage the name of the winner as the contract for the construction of the cruise terminal building had not been formally struck.

High Court Chief Judge Geoffrey Ma Tao-li will maintain a distance from his wife if, as expected, he becomes the SAR's second chief justice. But a limit on the relationship would be strictly in the cause of showing that justice - unlike love - is not blind. For Ma's wife is Maria Yuen Ka- ning, a Court of Appeal judge, and he will have to avoid any case in which she has been involved. Ma, 54, looks sure to succeed Andrew Li Kwok-nang as chief justice come September, but it is subject to Legislative Council approval. Li said yesterday he is confident Ma will be an outstanding successor: he will uphold the rule of law, protect judicial independence, and under his leadership the Judiciary will continue to safeguard the rights and freedoms of the individual. Chief Executive Donald Tsang Yam- kuen, in accepting the recommendation, described Ma as an outstanding lawyer with "exceptional judicial, professional and personal qualities." Tsang added: "He is a man of high integrity and commands strong respect within and outside the Judiciary, including that of the legal profession." To avoid a possible conflict of interest, it was stated in the recommendation that Ma would not hear appeals from cases in which his wife has sat. Nor would he deal with any administrative matter concerning Justice Yuen. The judicial power couple have a daughter. Judges of the Court of First Instance Johnson Lam Man-hon and Joseph Fok are tipped to succeed Ma to become High Court chief judge. Law Society president Wong Kwai- huen, who has known Ma for more than 20 years, described him as "eloquent, intelligent, meticulous" with an "easygoing" personality. Legislator and barrister Audrey Eu Yuet-mee hoped the new chief justice would safeguard judicial independence, while colleague Ronny Tong Ka-wah believed Ma would uphold justice but he could sometimes be a little too "conservative." Tong cited an appeal from September when Ma and fellow judges criticized the government for not disclosing information but eventually ruled in favor of an Immigration Department decision to deny entry to Falun Gong practitioners on "security grounds." Born in Hong Kong, Ma received his education in England from a young age. He was called to the English bar at Gray's Inn in 1978, to the Hong Kong bar in 1980, to the bar of Australia's Victoria state in 1983 and to the Singapore bar in 1990. He became a QC in 1993. He was in private practice from 1978 until he joined the Judiciary as a judge of the Court of First Instance in December 2001. He became a judge in the Court of Appeal in November 2002 and heard criminal and civil appeals as well as judicial review cases. The following July he became chief judge of the High Court. Besides hearing appeals, Ma has been responsible for the administration of the High Court, for the implementation of Civil Justice Reform and the monitoring of the working of the reformed system.

The number of non-permanent Hong Kong judges at the Court of Final Appeal has doubled to six following the appointment of Appeal Court justices Michael Hartmann, Frank Stock and Robert Tang Ching. Prior to the trio's appointment, there were three non-permanent local judges and 11 non-permanent judges from common law jurisdictions. The maximum number is 30. Chief Executive Donald Tang Yam- kuen, in accepting the recommendations, described the three appointees as outstanding lawyers who have "considerable experience in handling criminal and civil cases, including constitutional cases." He said they will provide the much-needed flexibility in deployment to deal with the case load of the Court of Final Appeal. Outgoing Chief Justice Andrew Li Kwok-nang also welcomed the appointments. The government will seek Legislative Council endorsement of the recommendations. The Hong Kong Court of Final Appeal Ordinance provides for a list of non-permanent Hong Kong judges and a list of judges from other common law jurisdictions. In hearing and determining an appeal, the Court of Final Appeal comprises five judges - the chief justice, three permanent judges and one non- permanent Hong Kong judge or one non-permanent common law judge. The three current non-permanent judges are Gerald Nazareth, John Mortimer and Henry Litton while the three permanent judges are Kemal Bokhary, Patrick Chan Siu-oi and Roberto Ribeiro. According to Article 88 of the Basic Law, the chief executive appoints judges on the recommendation of an independent commission composed of local judges, persons from the legal profession and eminent persons from other sectors. The Judicial Officers Recommendation Commission comprises the chief justice as chairman, the secretary for justice and seven other members.

Rio Tinto said it had moved to quarterly pricing of iron ore contracts, becoming the latest major miner to dump annual price-fixing, despite opposition from buyers.

Education Minister Michael Suen Ming-yeung said on Friday he expected a low level of participation in the voluntary class reduction scheme planned for Hong Kong secondary schools.

Geithner meets Tung and Yam in surprise visit - US Treasury Secretary Timothy Geithner met two influential former officials close to Beijing during a surprise stopover in Hong Kong yesterday. He met former chief executive Tung Chee-hwa and former Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong, and also paid a courtesy call on Chief Executive Donald Tsang Yam-kuen at Government House, the US Treasury Department said. The meetings were private and a US consular spokesman declined to elaborate on the agenda or purpose of the visits. US officials declined to explain why Geithner chose to meet Tung and Yam during the visit, which was announced less than 12 hours before he met Tsang and Financial Secretary John Tsang Chun-wah. Tung, Hong Kong's first chief executive until he resigned in 2005, is now a vice-chairman of the Chinese People's Political Consultative Conference. Yam, who retired from the Monetary Authority in October last year, is now a key adviser to the People's Bank of China and executive vice-president of the China Society for Finance and Banking, a research institute and think tank. The present chief executive of the authority, Norman Chan Tak-lam, did not meet Geithner. A spokeswoman said Geithner had asked for a meeting but Chan had already arranged to be in Beijing. In December last year, Yam publicly voiced support for allowing the yuan to appreciate. On December 18, Yam said that the yuan could become a "third pillar" of the global currency system, competing with and even surpassing the US dollar and the euro, if it was allowed to appreciate and the mainland authorities managed the economy prudently. Those two steps would provide the necessary foundation for the maintenance of currency stability and international confidence, he said at a financial conference in Beijing. Yam also said Hong Kong was the ideal testing ground "to quickly internationalise" the yuan. He suggested the central government scrap restrictions on yuan business in the city so that it could further develop in the market.

HSBC Holdings is aiming to expand its mainland branch network by 20 per cent or more this year, leveraging relationships with local partners to keep growing rapidly in mainland.

The really big picture - Hong Kong-Shenzhen-Guangzhou is the biggest "mega region" in the world, with 120 million people, according to a new United Nations report, "State of the World's Cities 2010-2011". It describes how the world's large cities are merging to form vast metropolises. The second-biggest is the Nagoya-Osaka-Kyoto-Kobe region in Japan, followed by the Rio de Janeiro-Sao Paulo region in Brazil. Then comes West Africa, an area of 600 kilometres linking Nigeria, Benin, Togo and Ghana as that region's driving economic force. India's mega regions centre round Mumbai and New Delhi. The report also notes that East Asia has four mega regions and 77 cities with more than 200,000 people each, stretching from Beijing to Tokyo via Pyongyang and Seoul. Urbanisation, it says, is now unstoppable. Just over half of the world's population live in cities and, by 2050, probably over 70 per cent will be urban dwellers. Mega regions around the world are the key drivers for wealth creation, the report notes; countries become less important from this perspective. This means regional authorities and city mayors are just as important as national leaders. While national governments chart broad policies, they are implemented at the local level; thus, the quality and ability of local leaders is very important. How Hong Kong and Guangdong develop the Pearl River Delta region, together with Macau, is very important, not just for us but also in world terms. We are responsible for how we evolve. The key is how we design our cities and what we prioritise. So, it does matter who leads Hong Kong, who the government appoints to public bodies, and who we elect as our legislators, because they are the people who will chart our course. Indeed, from this perspective, the leaders of our neighbouring cities are just as important because the more visionary and competent they all are, the better it should be for the whole region. Beyond competence is, of course, their vision and priorities for meeting new challenges. The UN report highlights the world's 40 mega regions and notes that they only cover a small fraction of the earth's land surface, are home to just 18 per cent of the world's population, but account for 66 per cent of economic activity and 85 per cent of scientific and technological innovation. Moreover, the top 25 cities account for more than half of the world's wealth. For example, the five largest cities in China and India now account for half of the wealth of those two countries. Migration of rural people to cities also has an important impact on rural areas, since most of their earnings are sent home. Hong Kong should pause and think. We are undoubtedly China's richest city. As such, we have special responsibilities to ensure developments in the city are thoughtful and focus on future needs. We have essentially completed building the physical hardware, such as highways, bridges, airports and ports. It is the software that needs to be strengthened, so development should focus on management and how people live. This means we must be wise with land use, clean up the environment, improve public health - including ensuring food safety - upgrade education and focus on the quality of work and play. The UN report notes that the growth of mega regions and cities is also leading to unbalanced development and income inequalities. This is true in Hong Kong, where one in six workers - or nearly 470,000 people - earn less than HK$33 an hour, and some 130,200 actually get much less. Raising pay levels is good for society as a whole, and the debate on where to set the minimum wage gives Hong Kong a chance to reflect on the kind of society we want. The challenge for those in government is that all these things have to be worked on at the same time. A silo mindset, reinforced by disjointed policymaking, and politics in which vested interests have a dominant say through functional constituencies, don't help. Perhaps seeing ourselves as the biggest mega region can give us all a sense of responsibility.

China*: Mainland’s agency overseeing big state-owned businesses has received plans from 78 state companies spelling out how they intend to sell out of the nation’s heady property market, a mainland newspaper said on Friday. The China Securities Journal also reported that the State-owned Assets Supervision and Administration Commission (SASAC) was compiling a general plan to achieve the divestment, intended to help cool fast-rising real estate prices. “In the specific implementation, divestment from commercial real estate will come first,” said the newspaper, citing an interview with an unidentified SASAC official. But the official said asset sales could be complicated and ”would be a process”, said the paper. The official gave no specific deadline. Last month, SASAC ordered the 78 bigger state companies whose core business is not property to submit plans on how they intend to retreat from the sector. The effort is part of a broader government campaign to rein in fast-rising housing and land prices. State-owned enterprises from arms manufacturers to tobacco producers have expanded into property development in recent years, attracted by big profits but bidding up prices in the process. In March, two state companies won land auctions in Beijing that smashed price records, generating a public outcry.

About 1,200 local artists will showcase their talent at the Shanghai World Expo in the largest cultural program organized outside Hong Kong. The artists from 24 performing arts groups will participate in 26 programs with more than 70 performances and four visual-arts exhibitions during the six-month exhibition which opens on May 1. More than 20 free performances will be staged at the showpiece Expo. A total of 13 shows will also be held at venues in Shanghai, including the Shanghai Grand Theatre and Shanghai Oriental Art Center, which have a total seating capacity of 20,000. Asked if politically sensitive productions will be screened out during the selection process, the chairman of the Leisure and Cultural Services Department's program and development committee Lo King-man said no limitations have been set on the themes. However, all art groups have to get approval from mainland authorities to stage their productions. The department has earmarked HK$25 million for the program - of which HK$21.6 million will be for the art groups and HK$3 million for a pair of painting exhibitions. Participating groups include Hong Kong Chinese Orchestra, Hong Kong Ballet, Hong Kong Arts Festival and the Chinese Artists Association of Hong Kong. The Hong Kong Police Band will also take part in the special Hong Kong Week Program. The Yat Po Singers will stage their first mainland performance with the production Rock Hard, which features 13 acapella singers. "It is a great opportunity for us to gain publicity in the mainland with such a cutting-edge form of art and, more importantly, to share a localized view of Hong Kong with a mainland audience," said stage director and designer Yuri Ng Yue-lit. The Edward Lam Dance Theatre will stage Charles Dickens' Great Expectations. "This sets a good example of how Hong Kong art groups can gain support from the government," said artistic director Edward Lam. City Contemporary Dance Company will stage a street performance entitled DELT.

Sales of passenger cars grew by almost two-thirds in mainland last month as buoyant consumer sentiment bolstered spending on big-ticket items in the world’s third-largest economy. But growth in what is now the world’s biggest autos market is likely to slow from the current quarter as year-ago sales were strong after Beijing rolled out incentives to boost consumption along with 4 trillion yuan (HK$4.5 trillion) economic stimulus plan. March sales totalled 1.26 million passenger cars, up from 942,900 sold in February, according to data provided by the China Association of Automobile Manufacturers. January-March car sales were up 76.3 per cent from a year ago, at 3.52 million. “March sales are much stronger than expected, but I don’t think that will last. It will be very difficult this year to match the near doubling of monthly sales in late 2009,” said Chen Lian, an analyst at Huatai Securities. Three analysts polled by Reuters last week had projected a 30-40 per cent increase in March car sales. Mainland has been a major bright spot for global automakers amid a sharp industry downturn, thanks to Beijing’s stimulus measures that included aggressive cuts in the sales tax on small cars. In India, too, car sales rose sharply in March, showing 20 per cent year-on-year growth as customers advanced purchases ahead of price hikes. Those increases, and higher fuel prices, are likely to subdue growth this quarter. Mainland, where car sales sped past 10 million units for the first time last year, is a safe haven for industry giants such as General Motors, Ford Motors and Toyota Motor. The growth in March is, however, slower than the 85.5 per cent in January-February, when sales rebounded strongly from depressed year-earlier levels at the height of the economic crisis. Analysts predict full-year growth in car sales of 10-15 per cent this year, though one Shanghai-based dealer for GM’s Chevrolet brand remained upbeat. “I’ve heard talk about a slowdown, but I’ve seen no signs of it. We sold more in April than in March and people still keep coming into the showroom,” Meng Ye, a senior sales consultant, said. “For some hot-selling brands like the new Sail, our customers have to wait for weeks before getting the car. It’s just hard to keep up with demand.” Across mainland, sales of GM Chevrolet models more than doubled to 46,139 units, according to company data. GM, which makes cars, minivans and light commercial vehicles with big state auto groups SAIC Motor Corp and FAW Group, sold a total of 230,048 vehicles in mainland in March, up 67.9 per cent from last year. First-quarter sales were up 71.4 per cent at 623,546 units. Shanghai-based SAIC, which on Friday said its first quarter profit quadrupled, sold 336,387 units in March, up 58 per cent from a year ago. Its first-quarter sales were up 64 per cent at 891,795 units. SAIC, which also operates a car venture with Volkswagen, aims to move more than 3 million vehicles this year, up from 2.73 million last year. Ford and its mainland ventures sold 153,362 vehicles in January-March, up 84 per cent on last year. Toyota sales increased 39 per cent to 179,000 units.

More people are having trouble getting drinking water in southwestern China as the region's worst drought in a century shows no signs of ending.

Vice-Premier Wang Qishan and US Treasury Secretary Timothy Geithner concluded whirlwind talks last night without announcing any concrete results. A brief statement afterwards made no reference to Washington's concerns about China's stance on the value of the yuan, which has strained relations between the two countries. Still, observers said their meeting would pave the way for both nations to resolve their differences on the issue at future forums, including the next round of their strategic economic dialogue. A statement released by the US embassy in Beijing, Xinhua and the US Treasury Department said: "The two sides exchanged views on US-China economic relations, the global economic situation and issues relating to the upcoming economic track ... of the second US-China strategic and economic dialogue, to be held in Beijing in late May." Geithner left for the US after the 75-minute meeting, which took place at the VIP terminal of Beijing International Airport, Bloomberg reported. "The currency issue is a very complicated one because any decision would have serious impacts on both economies. Thus Geithner's visit may have focused on the agenda for next month's Sino-US high-level talks," said Tao Wenzhao, a senior research fellow at the Chinese Academy of Social Sciences' Institute of American Studies. Geithner's flying visit came days before President Hu Jintao heads to Washington for an international summit on nuclear security - and suggests the two countries are getting their relationship back on track. Hours ahead of the meeting, a newly appointed adviser to the People's Bank of China, Xia Bin, said China should resume a managed-float foreign exchange system soon because the impact of the global financial crisis had faded. Xia's comments appeared to suggest China intends to end the yuan's de facto peg to the US dollar and allow the currency to rise, although the timing of such a move remains unclear. Last month, central bank governor Zhou Xiaochuan signalled Beijing soon would look to end the de facto peg. Between 2005 and 2008 it allowed the yuan to rise by 20 per cent against the dollar, but reimposed the peg after the global financial crisis hit. Xia said the peg was no longer necessary because "the worst of the crisis is over". But he did suggest that any rise in the yuan should be small, saying a large appreciation would not be beneficial to the domestic or global economies. Wang is in charge of economic and financial issues and heads the Chinese side for the strategic and economic dialogue with the US, with Geithner America's point man. Tom Orlik, an economist with research firm Stone & McCarthy in Beijing, said the flurry of diplomatic activity on the exchange rate issue, including Geithner's unscheduled trip to Beijing, had fuelled speculation the yuan would soon be allowed to begin rising again. Currency traders were yesterday betting on a 1 per cent rise in the yuan in the next three months - the biggest since July 2008. Traders said the US Treasury's decision on Saturday to delay by three months its report to Congress on whether China is manipulating its currency had given Beijing room to reform the mainland's rigid exchange regime and to allow a gradual appreciation of the yuan. Orlik said that, with the recovery in exports sluggish and inflation still muted, Beijing might want to wait a while longer before allowing appreciation to resume. The model for the coming shift in currency policy is Beijing's 2005 move to allowed the yuan to jump 2 per cent against the dollar overnight and then to trade in a wider daily range, but with a trend towards further strengthening.

April 10, 2010

Hong Kong*: US Treasury Secretary Timothy Geithner is in Hong Kong on Thursday on a surprise visit before heading to Beijing for talks, which are expected to focus on the US’ desire for a revaluation of the yuan. In Hong Kong, Geithner will meet with Chief Executive Donald Tsang Yam-kuen and others, including Tung Chee-hwa and Joseph Yam Chi-kwong, according to the US Treasury Department, which made the announcement around midnight. After the meetings in Hong Kong, Geithner will travel to Beijing to meet with Vice-Premier Wang Qishan, who is in charge of financial affairs and foreign trade. The surprise visits to Hong Kong and Beijing come days ahead of a nuclear summit in Washington, which President Hu Jintao is expected to attend. US President Barack Obama will raise the currency issue in meetings with Hu outside of the summit, according to the White House. The meetings in Hong Kong are not open to the press and a US Consulate spokesman declined to elaborate on the agenda or purpose of the meeting. It is unclear why Geithner is meeting with Tung and Yam, both prominent former Hong Kong officials who have since moved on to positions with close ties to Beijing. Tung was the first Chief Executive in Hong Kong, serving from July 1997 to March 2005. He is now the vice-chairman of the National Committee of the Chinese People’s Politics Consultative Conference which, under leadership of the Communist Party of China, advises the country’s policymaking body. Yam retired as Chief Executive of the Hong Kong Monetary Authority in October last year and currently serves as an honorary consultant for the People’s Bank of China. Beyond his ties to mainland’s central bank, Yam recently voiced support for allowing the yuan to appreciate. In December, Yam said that the yuan could become a “third pillar” of the global currency system, competing with and even surpassing the US dollar and the euro, if the currency was allowed to appreciate and mainland authorities managed the economy prudently. Those two steps would provide the necessary foundation for the maintenance of currency stability and international confidence, Yam said at a financial conference in Beijing. Yam added that Hong Kong was the ideal testing ground “to quickly internationalise” the yuan. He suggested the mainland government scrap restrictions on yuan business in the city, so that it could further develop in the market, giving important signals on how to best to determine policy. On Saturday, Geithner announced that he would delay publication of the report to US Congress on the economic and exchange rate policies of its trading partners, including mainland. The report was due on April 15, and Geithner has been under pressure from lawmakers to officially declare mainland a currency manipulator, a largely symbolic move but one that could strain already frayed relations between the two nations. “There are a series of very important high-level meetings over the next three months that will be critical to bringing about policies that will help create a stronger, more sustainable, and more balanced global economy,” Geithner said in announcing the delay. “...I believe these meetings are the best avenue for advancing US interests at this time.” Geithner nevertheless singled out mainland in his statement: “China’s inflexible exchange rate has made it difficult for other emerging market economies to let their currencies appreciate. A move by China to a more market-oriented exchange rate will make an essential contribution to global rebalancing.” While the White House attempts a diplomatic approach with mainland, US lawmakers are readying a more aggressive approach. This week, US Senator Chuck Schumer said he would introduce the Currency Exchange Rate Oversight Reform Act of 2010 within the next two months. Created in response “to the failure of both Republican and Democratic administrations to confront China’s currency manipulation”, the legislation would limit the Treasury Department’s flexibility when it comes to citing countries for currency manipulation. The bill has bipartisan support in the Senate and Schumer said he expects it to pass. It would also impose stiff penalties on countries cited as currency manipulators, including tariffs on the countries’ exports and a ban on companies from those countries receiving US government contracts. “If China won’t play by the rules , we’ll force them to play by the rules,” Schumer said, as reported by The Leader, a newspaper in Corning, New York.

The Chief Judge of the High Court, Geoffrey Ma Tao-li, has been named as the new chief justice, a government spokesman said on Thursday. He will replace Andrew Li Kwok-nang, who will step down in August. Ma, 54, will succeed Li with effect from September 1. Three judges, including Mr Justice Robert Tang Ching, Mr Justice Frank Stock and Mr Justice Michael John Hartmann, have been appointed non-permanent judges to the Court of Final Appeal. They are all currently serving on the Court of Appeal of the High Court. Chief Executive Donald Tsang Yam-kuen said: “Mr Justice Ma is an outstanding lawyer with exceptional judicial, professional and personal qualities. “He is a man of high integrity and commands strong respect within and outside the judiciary, including the legal profession.” Ma said he would do his best to ensure the rule of law and judicial independence were maintained in Hong Kong. Ma was in private practice from 1978 until he joined the judiciary as a Judge of the Court of First Instance in December 2001. He was appointed Chief Judge of the High Court in July 2003. Ma also has wide experience in civil law, arbitration, commercial, company, and constitutional law.

Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung said on Thursday the Legco by-elections due to be held next month were pointless.

A selection of Chinese imperial works of art smashed world records after fierce bidding at Sotheby’s sales on Thursday, as China’s rise sparked international interest in objects of its glorious past. An imperial white jade seal commissioned by Emperor Qianlong of the Qing Dynasty in the 18th century went to an Asian buyer for US$12.29 million (HK$95.6 million), breaking the world auction record for both white jade and imperial seals. The price was almost double its estimate of about US$6.4 million. Another star lot, a ceremonial pearl necklace believed to have belonged to Qing Emperor Yongzheng in the early 18th century, smashed the world record for any imperial jewel at auction after a telephone bidder snapped it up for US$8.7 million. The price was more than five times its highest estimate. “They are objects that crystallised imperial power. These are something that can easily capture our clients’ imagination,” said Nicolas Chow, Sotheby’s international head of Chinese ceramics and works of art. He said interest in Chinese works of art was booming. “Everything is about China today,” he said. “Our worry is actually not finding buyers. Our worry is how do we feed that monster that is growing on the other side of harbour, because great objects are getting scarcer and scarcer.” Other eye-catching “objects of power” included a three-tiered enamelled box from the 18th century, which broke the world record for Beijing imperial enamel ware at auction after it sold for US$3.53 million. Although the majority of bidders which packed the auction room were Chinese, Chow said there was also “very strong participation” in the bidding from Western buyers. Both Sotheby’s and rival Christie’s said Hong Kong has become the world’s third largest auction hub after New York and London, thanks to the rising political and economic prowess of China. The auction giants said mainland buyers often grabbed the top lots in their recent sales of works of art, jewellery, and fine wine, reflecting their growing wealth and increasingly sophisticated taste for fine art.

Hong Kong businessman, Beijing loyalist and philanthropist Dr Tsui Tsin-tong was cremated in Beijing on Thursday morning.

The Housing Society has received an overwhelming response to its sale of a final batch of 838 subsidised flats. The sale was 35 times oversubscribed, with more than 30,000 families applying to buy one of the so-called sandwich-class homes that are built for middle-income families who earn too much to qualify for public housing, but too little to afford private property. A spokesman for the society said: "The market response has exceeded our expectation and we believe all the flats will be sold out." Applications closed yesterday, but the society expects to receive some more by post in the next two days. A ballot will be held on April 22. The society is selling 181 flats at The Pinnacle in Tseung Kwan O, 161 at Highland Park in Kwai Chung and 32 at The Cascades in Ho Man Tin. These add to the 464 flats at The Pinnacle released for sale earlier. Homes at The Pinnacle range in size from 681 sq ft to 826 sq ft and have two or three bedrooms. They cost about HK$3,000 per sq ft, with prices ranging from HK$1.58 million to HK$2.64 million. The flats at Highland Park range in size from 727 sq ft to 816 sq ft and cost around HK$3,100 per sq ft. Those at The Cascades are between 681 sq ft and 688 sq ft in size and cost HK$3,700 per sq ft. The Housing Society said their prices were guided by recent secondary market transactions of the sandwich-class flats and those of private property in the area. The society then offers a discount, which is 23 per cent for the latest flats put up for sale. Concern group Caring Hong Kong will stage a protest on April 18 to press the government to resume building flats under the sandwich-class housing scheme and the Home Ownership Scheme (HOS). "Flat prices are crazily high," former legislator Dr Kwok Ka-ki, the group's convenor, said. "And after the government sells its remaining 4,000 HOS flats and the sandwich-class flats, those people - especially young people who are not qualified to apply for public rental housing but are not rich enough to buy private flats - will have nowhere to live."

China*: Former Rio Tinto executive Stern Hu will not appeal against a 10-year jail term handed down by a mainland court for accepting bribes and stealing trade secrets, his lawyers said.

The launching ceremony of China's stock index futures in Shanghai, April 8, 2010.

China Life will increase the proportion of its portfolio invested in bonds this year, anticipating volatility in stocks after a major market run-up last year, an executive said.

China on Thursday urged the United States to reduce its nuclear arsenal and pledged never to instigate an atomic war, in a response to a new US nuclear policy unveiled this week.

China and Nepal have found a solution to a longstanding dispute over the height of Mount Everest in the giant peak's rock and snow.

Rescuers pumped water in a fading bid to find more survivors in the flooded mine where 115 miners were dramatically rescued earlier this week after being trapped for eight days.

Angry customers mobbed Kentucky Fried Chicken outlets in the mainland this week, turning over tables at a restaurant in Beijing, in anger over a coupon promotion gone awry, state media reported on Thursday. The trouble flared on Tuesday as the US restaurant chain launched a promotion in which coupons downloaded from the Internet could be exchanged for food at KFC outlets, the Global Times newspaper said. Customers became angry after staff refused to accept some coupons for the “Super Tuesday” promotion, saying they were invalid fakes. Angry coupon-holders at one branch in Beijing’s central business district flipped over chairs and tables and had to be dispersed by police, the Global Times said. The report did not mention any injuries or damage. Crowds also gathered in at least one Shanghai branch, the newspaper said, adding that complaints were reported in at least four other major cities. “It is with great regret that the promotion activity caused trouble for some consumers. This was not the original intention of the activity we designed and for this we are deeply sorry,” said a KFC statement on Tuesday. The fast-food chain has more than 2,100 outlets in 450 cities around China.

Yang Shunping smiles while looking at water running through the pipe in Jinze county, Southwest China's Yunnan province, April 6, 2010. Since drought ravaged Yunnan in November last year, Greenpeace China has built solar-powered water pumping stations for free in areas with power shortage to provide irrigation water for local peasants.

China expressed concern on Thursday about a China Ocean Shipping (Group) Company (COSCO) coal ship that ran aground on Australia's Great Barrier Reef.

China’s central bank added three-year bills to its open market operations on Thursday, stepping up efforts to keep asset prices and inflation from rising out of control.

Nokia will offer free music with its mobile phones in mainland, as it looks to emerging markets to boost the download service that is struggling to compete with Apple’s iTunes.

Film star Jet Li plants coffee plant seedlings to help those suffering from the drought in southwestern China. Action movie star Jet Li, and staff of "Jet Li One Foundation" visited Mohei town in Puer city of southwestern China's Yunnan Province, on Wednesday, April 7, 2010, reports. Li along with actor Wen Zhang and some staffers from the charity organization spoke to locals who are suffering from the drought in southwestern China. They donated drinking water and brought plant seedlings of coffee and grape for the locals. The "Red Cross Society of China Jet Li One Foundation Project" (Jet Li One Foundation) was founded in 2007 by Red Cross ambassador Jet Li, under a strategic partnership with the Red Cross Society of China.

Renowned Suzhou Garden attracts tourists home and abroad - A female performer sitting inside an archaic boat entertains the excursionists with Suzhou Pingtan, a typical folklore art form of ballad-singing and story-telling, inside the Liuyuan Garden of Suzhou, east China's Jiangsu Province, April 5, 2010. The renowned Suzhou Garden put on series of tourist program typical of local Wu Culture to lure tourists from both home and overseas during the vacationing of Qingming Festival.

April 9, 2010

Hong Kong*: Nansha in Guangdong will be transformed into a Hollywood-type film and TV city under the new cooperation agreement between Hong Kong and Guangdong. The local movie industry generally welcomed the policy but called for more transparency. Hong Kong Motion Picture Industry Association chief executive Brian Chung Wai-hung said the plan is positive news for the industry. "The mainland market is full of potential. The box office may double in light of the soaring number of cinemas in the upcoming three years. This enables the survival of billion-dollar and small-scale productions in the mainland market. After Beijing, it is possible for Guangdong to become the second cultural brand in the country," he said. Association of Motion Picture Post-production chairman Percy Fung Tse-cheung said details about policies, such as taxation, should be more transparent. "The sector appreciates the agreement signed between Guangdong and Hong Kong governments that opens the market in the mainland. However, even after signing the sixth round of CEPA, policies have remained vague to us on things such as taxes, import and export of facilities and digital encryption," he said. "It is not about how much talent Hong Kong can train, but how flexible the market will be." Tourism lawmaker Paul Tse Wai-chun said it would help promote tourism to Hong Kong, but worried that it would be "empty talk" without anything concrete. "Hong Kong has been the `Eastern Hollywood,' so it is possible to sell travel packages linked to famous movie scenes in Hong Kong, such as Wing Lee Street in Echoes of the Rainbow," he said. Tse said it would also increase the number of visitors from Guangdong, benefiting sectors such as catering and retail.

Chinese Vice President Xi Jinping (C), Donald Tsang (R), the chief executive of the Hong Kong Special Administrative Region (HKSAR) government, and Huang Huahua, the governor of Guangdong Province, arrive to attend the framework agreement on Hong Kong/Guangdong cooperation signing ceremony in Beijing, capital of China, April 7, 2010. Hong Kong and south China's Guangdong Province reached a framework agreement here Wednesday to secure closer economic cooperation.

Signing launches Hong Kong's enlarged role in nation - Ceremony marks breakthrough for delta integration - Central government support for Hong Kong to take the lead in financial services and for its policy initiatives to be integrated into China's 12th five-year plan has marked a significant breakthrough for greater integration of the Pearl River Delta. But in what form, how and when depends very much on the details of a framework agreement on Hong Kong and Guangdong co-operation signed in Beijing yesterday. The agreement, endorsed by the State Council before being signed, is designed to set in motion measures that have been discussed for years, if not decades. Although many of the measures are not new, securing Beijing's blessing will help ensure they are realised and pave the way for Hong Kong and Guangdong to become a "world-class economic zone" in the words of the pact. Covering financial services, the environment, education, transport, manufacturing and more, as well as Macau, the agreement puts Hong Kong's agenda at the national level for the first time. The central government named Hong Kong the leader in financial services, for example, and ordered Shenzhen and Guangdong to provide all necessary support. At yesterday's signing ceremony in Beijing, Guangdong Governor Huang Huahua said the agreement heralded a new phase of co-operation between the two economies. According to the agreement, both sides will set an agenda for their co-operation each year. "The framework agreement will draw ties between Guangdong and Hong Kong closer," Huang said. Chief Executive Donald Tsang Yam-kuen said the agreement would not just be beneficial for the development of Hong Kong and Guangdong but would also serve as a model for integration in other areas of the mainland. A top priority for Hong Kong's co-operation this year is furthering the use of the yuan in settling cross-border transactions, he said. "In the 10 years since Hong Kong's handover of sovereignty, China's economy has seen rapid growth," he said. "In order for Hong Kong to step up another level, we must strengthen our integration with the mainland." The city received just a passing mention in the previous five-year plan and none at all before that. A government official said the agreement would help speed up decision-making and implementation of policies, as a certain amount of authority would be delegated to Guangdong from the central government, as in the Cepa free-trade pact. Authorities on both sides plan to expand the multi-destination travel scheme under Cepa to all of Guangdong, the official said. Baptist University finance professor Billy Mak Sui-choi said the agreement might end the subtle grappling between Hong Kong and Guangdong. "In the Pearl River Delta alone, we have five airports," Mak said. "Territorial competition could lead to overlapping and wastage of resources, while co-operation could boost the country's economy. Beijing knew that well and it wants local governors to stop fighting each other. "It is not a case of Beijing favouring us so much that it tips all policies in Hong Kong's favour. Rather, it is us who have proved our worth to the mainland economy." Over the years, mainland companies have listed their shares in stock markets across Asia, including Japan and Singapore, but Hong Kong received the biggest transactions. Xu Xinpeng, an associate professor of economics at Polytechnic University, said the agreement was designed to put in perspective Hong Kong's role and position in the region over the coming decades. By paving the way for incorporating the various initiatives into the 12th five-year plan, the agreement essentially made Hong Kong's integration with the mainland official with central government support, Xu said. But there were questions about Hong Kong's readiness to integrate with the Pearl River Delta region, particularly in such areas as education, he said. The two sides have agreed to cross-border traffic infrastructure, such as the HK$66.9 billion high-speed rail link, and strengthening the flow of people. Authorities have also promised to simplify the clearance and inspection procedures for goods at the border by greater use of electronic tagging technology. In financial services, the mainland will expand its yuan cross-border trade settlement services to more regions, banks and industries. Hong Kong financial institutions and insurance firms may also be able to set up banks or lending facilities in Guangdong's towns and villages without having to establish joint ventures. The two parties will also work towards a cleaner and greener environment. Up to 100 million yuan (HK$113.74 million) will be allocated for the development of a mangrove conservation area along the border over the next five years, while more will be done to promote the use of electric vehicles on the roads. Officials also plan to set new regional air quality objectives before the end of the year. Hong Kong's tertiary institutions will also jointly offer education programs or set up branches in Guangdong. What the two sides agreed: Hong Kong and Guangdong to be a world-class economic zone; Hong Kong to take the lead in creating a regional financial hub, with backup from other Pearl River Delta cities; A pilot scheme for settling cross-border trade in yuan to be expanded; More Guangdong enterprises to be encouraged to list on the Hong Kong stock exchange; Arrangements to be made in Hong Kong for bank financing for, and the issuance of yuan-denominated bonds by, Guangdong enterprises; Cross-border flows of people, goods, information and capital to be facilitated; Construction of cross-border transport infrastructure to be speeded up; Liaison and co-operation between the region's five airports to be strengthened; Clearance and inspection of cross-border cargo to be simplified; Support to be given for Hong Kong to become an international logistics hub and maritime centre; A regime to protect the region's ecology and environment to be implemented; Objectives for regional air quality management to be fulfilled this year; Electric cars to be introduced in big cities; Collaborative development to be promoted; Tertiary education institutions in Hong Kong to offer programs in Guangdong; Joint laboratories and research centres to be set up. Vice-President Xi Jinping is flanked by Huang Huahua and Donald Tsang at the signing ceremony.

A system aimed at getting ambulances to more serious emergencies faster is to start next year - but not everyone is happy with the plan. Response times will be based on the level of the emergency. But it will be up to the 999 caller to assess how serious the situation is, sparking ambulance union fears. For the most critical cases, ambulances are expected to arrive in nine minutes, compared with 12 minutes for serious, non-life-threatening cases and 20 minutes for non-acute cases. The current response rate for all cases is 12 minutes. According to a paper to be discussed in the Legislative Council on Tuesday, the three-tier mechanism will be implemented by 2014. The Fire Services Department paper said the government will consult with the medical profession on guidelines for operators, who will receive training to identify cases by asking a series of questions about patients' condition. The department said the system will be designed based on public views received in a four-month public consultation from July to November last year. The government received more than 560 written submissions. The consultation also covered all 18 district councils, the medical sector, patients groups and elderly welfare groups. Around 70 percent supported the proposed response time targets, according to the document. But the Fire Services Department Ambulancemen's Union vice chairman Wat Ki-on criticized the system, saying it could mislead the public to believe they will all receive a quicker response. "In fact, the response time for the lowest emergency cases will be delayed from the current 12-minute standard to 20 minutes," Wat said. He also warned the success of the new mechanism will be determined by effective communication between the caller and the operator on accurately identifying the degree of the emergency. "It is rather difficult to achieve within a short period of time, especially to educate the public, on how to determine if their calls are urgent. Public education is long-term and cannot be easily achieved in a few months."

All frontline firefighters will today be equipped with the latest type of breathing apparatus, after a five-year wait for it. The city's firefighters had complained about the length of time taken to provide them with new equipment - including the breathing apparatuses - after senior fireman Yeung Chun-kit, 47, died in a factory fire in Cheung Sha Wan on March 8. The 1,600 sets of the new apparatus had been distributed to all fire stations and would be ready for use from this morning, a Fire Services Department spokeswoman said. The breathing apparatus allows easier movement, and can monitor and record conditions. In addition, 6,000 face masks that can show oxygen levels will be distributed to all firefighters. The department began the process of upgrading equipment in 2006, at a cost of HK$45.7 million. The Fire Services Department Staff General Association will hold a meeting today seeking views from members. Last week, some firefighters called for association chairman Chiu Sin-chung to stand down after he said Yeung's death had had nothing to do with inadequate equipment. Chiu yesterday said that only a small group of firefighters had been calling for him to stand down. The association will today send all members a document about their work. An extraordinary general meeting will be held next Thursday to discuss members' concerns about the blaze. Meanwhile, the union representing console operators - who work at the call centre - has called for additional personnel following a 4 per cent staff turnover in the past two years. Fire Services Control Staff Union chairman Lee Chung-wing said the pressure of the job was one reason for a high turnover.

Macau casino stocks are back on a bull run. After trading mostly flat for the past six months, shares in Hong Kong and US-listed casino operators are up as much as 59 per cent in the year to date, far outpacing the 0.26 per cent gain in the Hang Seng Index or the 6.67 per cent rise in the Standard and Poor's 500 Index. Investors in the sector are doubling-down as Macau's casino revenues continue to surge, rising nearly 60 per cent in the first quarter. Shares in most operators are now trading at their highest since the September 2008 collapse of Lehman Brothers. Both Sands China and SJM Holdings saw their stocks hit fresh highs yesterday as the rally added steam. Sands rose 5.64 per cent to HK$13.48 while SJM gained 4.31 per cent to close at HK$5.33. Melco International Development (SEHK: 0200) rose 6.82 per cent to HK$3.76 and Galaxy Entertainment (SEHK: 0027) finished up 5.56 per cent at HK$3.80. The stocks reacted to preliminary data published over the long Easter holiday weekend indicating a near-record 13.569 billion patacas in casino revenue last month, up 42.4 per cent from a year ago. "Although gross gaming revenue has been exceeding expectations for many months now, Macau gaming stocks have failed to excite as the market is still discounting the potential impact from China's credit tightening," Credit Suisse gaming analyst Gabriel Chan wrote last month in a research note. Chan tips stocks in the sector to rise further as investors upgrade expectations given the booming revenues and the government's limited ability to adopt measures to rein in growth. Nasdaq-listed Melco Crown Entertainment has led all operators with a 59.2 per cent rise in the year to date. US-listed Las Vegas Sands Corp is up 56.8 per cent and Wynn Resorts has gained 40.4 per cent. In Hong Kong, Sands China has led with a 42.49 per cent gain this year while SJM and Wynn Macau are both up 24 per cent. Galaxy has risen 18.4 per cent, while holding company Melco International is a comparative laggard with a 5 per cent gain. The stock market rally is being driven by red-hot growth in Macau, which in turn is being driven by high-rolling gamblers from the mainland. Casino revenue in the first three months of the year rose to a quarterly record of 40.91 billion patacas, up 57.2 per cent from a year earlier and 13.1 per cent from the fourth quarter of last year. Macau is on pace to hit a record 160 billion patacas in casino revenue this year, which, if sustained, would result in annual growth of more than 40 per cent. High-stakes play has fuelled the surge. Deutsche Bank gaming analyst Karen Tang estimates Macau's VIP casino revenue rose nearly 80 per cent in the first quarter. But Macau's heavy reliance on high rollers means concerns continue to linger over a potential contraction of liquidity on the mainland driven by tighter lending requirements and rising interest rates.

Hong Kong travel agents have called off all tours to Thailand that were supposed to start today after a new round of drama and alarm in Bangkok.

A huge HK$3 billion is to be injected into the battle to stem the rising tide of youth drug abuse. Earmarked by Financial Secretary John Tsang Chun-wah for this financial year, the cash boost will beef up anti- drug programs under the Beat Drugs Fund, the government says. Officials have pledged to come up with new and innovative treatment and rehabilitation programs, including the possibility of sponsoring voluntary school-based drug testing. Government statistics show a 54 percent rise in the number of reported young drug abusers under 21 in the past five years, from around 2,200 in 2004 to 3,400 in 2009. That surge was also reflected in overall numbers, with the young making up 24 percent of all drug users, from 14.7 percent in 2004. "Fighting drug abuse cannot be a one-off or short-term effort. It is imperative that everyone collaborate in tackling the problem," a government paper says. Officials have pledged to ease the difficulties faced by treatment and rehabilitation centers over planning, land issues, relocation, project implementation, or in raising funds. The paper which goes before lawmakers next week adds that "upgrading these centers to meet licensing standards, relocation and/or expansion is important to ensure adequate and appropriate provision of services to drug abusers." The fund will also use the money to strengthen preventive education programs, and enhance the roles and skills of parent-teacher associations, schools, youth groups and non-governmental organizations, as well as reaching out to high-risk young people to strengthen their resolve against drugs.

China*: US Treasury Secretary Timothy Geithner begins a surprise visit to Beijing today, apparently to seek a deal for revaluation of the yuan. But China is likely to allow only a symbolic rise in the currency's value for now, said a senior banker familiar with the mainland leadership's thinking. Geithner's visit was announced yesterday amid a flurry of speculation that Beijing will soon let the yuan resume its rise. The whirlwind trip, during which he will meet Vice-Premier Wang Qishan, in charge of financial affairs and foreign trade, comes days ahead of a security summit in Washington, hosted by US President Barack Obama, which President Hu Jintao will attend. The two leaders will hold talks on the sidelines. The White House said Obama would raise the currency issue in his meeting with Hu, but Foreign Affairs Vice-Minister Cui Tiankai declined to say whether the leaders would discuss it specifically. Cui acknowledged that both nations had "different views" on financial and economic issues despite also having "broad common interests". If history is any guide, Beijing will make a goodwill gesture before an important meeting with an American president. Informed mainland bankers said yesterday that Beijing could widen the yuan's daily trading band and allow it to resume the gradual appreciation that was halted when the global financial crisis struck two years ago. Beijing allowed the yuan's value against the US dollar to rise by roughly 20 per cent between 2005 and 2008. Even so, any rise could be limited to between 3 per cent and 5 per cent this year, said the banker familiar with the thinking of the leadership. Analysts agreed any appreciation of the yuan would be mild, in the range of a few percentage points. A US embassy spokesman in Beijing said the only meeting Geithner had scheduled was with Wang. "They [Geithner and Wang] have been trying to schedule a meeting for a very long time," an embassy spokesman said. Confirmation of the meeting had only come through on Tuesday, he said. A US Treasury spokesman accompanying Geithner on a visit to India would not discuss the subject matter of the meeting. Analysts saw Geithner's visit to China as a last-ditch effort to make some progress on the yuan issue because the Obama administration was coming under mounting pressure from Congress and businesses, which argue an undervalued yuan is undermining the US economy.

Visitors watch illuminated screens inside the US pavilion during a press preview at the site of the 2010 World Expo in Shanghai yesterday. Organisers say only minor decorative work remains to be completed. Organisers of the US pavilion at the 2010 World Expo in Shanghai confounded critics yesterday by announcing they had reached their US$61.5 million fund-raising target. Allowing media into the pavilion for the first time, US expo commissioner general Jose Villarreal said a US$5 million donation from financial conglomerate Citigroup had pushed the campaign over the finishing line. Villarreal said that when he made his first visit to Shanghai as pavilion commissioner in July last year, he made the "fairly audacious" prediction that the project would meet its fund-raising target and be finished in time for the expo's opening on May 1. "I am very pleased today to announce that we have achieved both," he said. Only minor decorative work on the interior remained to be completed and the exhibit would be ready to participate in the park's test openings, starting on April 20. The US building has been one of the most controversial pavilions constructed for the massive six-month-long fair, with the country being one of the last to sign up and break ground on the project, due in part to the way its pavilion is funded. US federal funds cannot be used to pay for expo participation, meaning every penny had to be solicited from private donors. The US$61.5 million budget is divided roughly equally between design and construction, operations and entertainment. But Villarreal said he would not turn away extra contributions. "Every additional dollar that we raise will allow us the ability to enhance the programme of entertainments we are offering," he said. "I don't want at all to communicate that we are not accepting any more money." US pavilion organisers said yesterday they planned to bring out Grammy Award-winning acts Herbie Hancock, Ozomatli and Dee Dee Bridgewater during the first month of the expo. But while journalists were allowed to view the building's three showrooms - audio-visual viewing spaces designed to accommodate 500 visitors at a time - organisers refused to give a preview of the programs. "We want the first visitors waiting in line on the opening day to be the first to see the show," Villareal said. The building's design has been widely criticised in Shanghai's expatriate American community and by online expo aficionados for lacking the visual power of past US pavilions. The project's architects say the building is intended to resemble an eagle with outstretched wings "welcoming" visitors, but critics unfavourably compare it to an out-of-town shopping mall or multiplex cinema. The interior of the 6,000 square metre building is essentially a show space featuring three eight-minute films aimed at giving mainland visitors a taste of America, and culminating in a "4D" cinema which will include rain and wind effects. Greg Lombardo, a director of BRC Imagination Arts, which produced the pavilion's entertainment, said the content was intended to express American values and the aim of "making the world a better place". Tom Cooney, a deputy commissioner of the expo pavilion, said the shows would make repeated references to the strong "American spirit of freedom and innovation". "The pavilion stands for everything that America is about. There is nothing off-limits here," Cooney said. "That would certainly include our democratic system of government."

ZTE Corp (SEHK: 0763), the mainland's largest listed telecommunications equipment manufacturer, saw its shipments of mobile phones and wireless data cards last year hit a record 60.17 million units as demand rose in international markets. "Seventy per cent of wireless terminals shipped by ZTE last year were to the global markets and this helped us move up [in ranking] to become the world's No 5 handset manufacturer," executive vice-president He Shiyou said. The Shenzhen-based firm, which will report its financial results tomorrow, shipped more than 40 million mobile phones and 20 million data cards to achieve about 33 per cent year-on-year growth in total wireless terminal unit shipments, according to US market research firm iSuppli. An impressive milestone was reached by ZTE in data cards, which are the small devices plugged into laptop computers to access 3G cellular networks. The company's unit shipments grew 200 per cent year on year, which He claimed made it the fastest recorded data card business growth in the industry. Estimates by iSuppli showed mainland suppliers, including ZTE and privately held Huawei Technologies, control more than 80 per cent of the world's data card market. ZTE has 35 per cent global market share and 40 per cent share on the mainland. It attributed the rise in mobile phone shipments last year to its expansion across Europe and North America, where internet-ready smartphones are in high demand. Last October, ZTE stepped up talks with cellular network service providers in Europe about supplying low-cost, operator-branded smartphones in the continent. Market analyst firm Gartner, however, has reported that Nokia, Samsung Electronics, LG Electronics, Motorola and Sony Ericsson remained the top-five mobile phone suppliers last year, when global shipments totalled 1.21 billion units.

Facebook, the world's largest online social networking service, plans to enter China this year, according to mainland media reports yesterday. The reports, which cited unnamed sources, said Facebook would formally set up shop in the country within the next three months, but provided no details. The United States-based site has been blocked by government censors since July last year, making it inaccessible to domestic social networking users eager to connect with friends abroad who subscribe to the service. Sandy Shen, a mainland-based analyst at market research firm Gartner, said establishing a local presence would be "no guarantee that Facebook will be successful in China". "Chinese social-networking service providers have seen strong growth in recent years due to their ability to cater to local preferences," Shen said. The country's top social networking site is QQ Space, which has more than 200 million subscribers. It is operated by internet messaging and gaming giant Tencent Holdings (SEHK: 0700). Baidu Space, with more than 100 million users, is the No 2 social networking service on the mainland and is part of domestic online search giant Baidu. Third largest is privately held Renren Network, with about 80 million subscribers. Shen said rumours that Facebook might set up a mainland operation have been around since 2007, when speculation was rife that the company made overtures to acquire social networking service and search engine provider Facebook's shareholders include one investor with strong China connections: Li Ka-shing, the chairman of Hutchison Whampoa (SEHK: 0013) and Cheung Kong (Holdings) (SEHK: 0001), invested in Facebook in 2007 through his namesake charitable foundation. There are also millions of Facebook users, including Li, in Hong Kong.

China Life Insurance (2628) said net profit surged 71.8 percent to 32.88 billion yuan (HK$37.39 billion) last year from 2008 thanks to strong growth in investment yield.

An anti-explosion drill for the upcoming Shanghai World Expo is held in Changshu in East China's Jiangsu province on April 6. The local public security bureau, criminal police, traffic police, fire-fighting, environmental protection and emergency aid departments took part in the drill.

China poised to be world's largest LCD TV market - LG Electronics Inc, the world's second largest TV brand and third biggest mobile phone maker, expects to double its sales in China this year as the global economic recovery spurs demand. "LG Electronics is on track to a 100 percent growth in China," Choong Bong Cho, chief executive officer of LG Electronics Greater China Region said in an interview with China Daily. China poised to be world's largest LCD TV market. Sales of LG Electronics in China reached approximately $22 billion last year, according to the company. He added that the company's sales in China grew by 80 percent year-on-year over the first quarter, mainly led by rising demand for mobile phones, LCD (liquid crystal display) TVs and other home appliances bolstered by government subsidies for residents in rural areas launched in late 2008. China is currently the sixth largest market for LG Electronics, and the company hopes it will play a bigger role in its global business. "We've just redefined China as a market equally important with South Korea," said Cho, adding that the company hopes to increase the manufacturing force in China. The company is now waiting for approval from the Chinese government for LG Display Co, the world's second largest LCD maker that LG Electronics is the largest shareholder in, to set up a plant in China to produce eighth-generation LCD displays. According to Semiconductor Equipment and Materials International (SEMI), China is likely to be the largest LCD TV market in the world this year, with its LCD TV sales forecast to grow by nine million units this year. SEMI is an industry association serving the manufacturing supply chain for the microelectronic, display and photovoltaic industries.

April 8, 2010

Hong Kong*: More lawmakers register for by-election - Former pan-democratic legislators Tanya Chan Suk-chong and Alan Leong Kah-kit on Wednesday registered to stand in Legislative Council by-elections in May.

Hong Kong and Guangdong on Wednesday signed a new agreement aimed at enhancing mutual economic and financial co-operation. Chief Executive Donald Tsang Yam-kuen and Governor of Guangdong, Huang Huahua signed the “framework agreement” in Beijing. The signing ceremony was observed by mainland vice-president Xi Jinping. Tsang said the agreement would be an opportunity for Hong Kong to contribute towards economic development in the mainland. A Hong Kong government spokesman said the agreement would boost the competitiveness of Hong Kong’s service industries and Guangdong’s manufacturing industries. This would help them develop a global manufacturing and services base. “The framework agreement builds on years of close co-operation between Hong Kong and Guangdong,” the spokesman said. The agreement – approved by the State Council – would increase co-operation in several areas. This includes: Developing financial services industries in Guangdong so it can build an international financial centre with Hong Kong; Using Hong Kong’s service industries and Guangdong’s manufacturing industries to develop a global manufacturing and services base; Building an international aviation, shipping and logistics hub; and Promoting more co-operation among Hong Kong and other Pearl River Delta cities.

Donald Tsang (front, L), the chief executive of the Hong Kong Special Administrative Region (HKSAR) government, and Huang Huahua (front, R), the governor of Guangdong Province, exchange the framework agreement, as Chinese Vice President Xi Jinping (back, C) looks on, in Beijing, capital of China, April 7, 2010. Hong Kong and south China's Guangdong Province reached a framework agreement here Wednesday to secure closer economic cooperation.

A rare 5.16-carat blue diamond is to be auctioned in Hong Kong on Wednesday. Auction house Sotheby’s said the pear-shaped gem from a private collector was expected to fetch up to US$5.9 million (HK$45.8 million) at the sale. The stone is the first blue diamond from the celebrated De Beers Millennium Jewels Collection to appear at an auction. The collection, displayed in London’s Millennium Dome in 2000, consists of 11 high-quality blue diamonds from the Premier Diamond Mine of Transvaal, South Africa. It was reported that the mine could produce only one blue diamond of such high calibre each year. Sotheby’s said gem sales in Hong Kong were on the rise - the city has overtaken New York to become the company’s second biggest market after Geneva. Terry Chu, deputy head of Sotheby’s jewellery department for China and Southeast Asia, said diamonds were particularly appealing to new Asian buyers because of their stable prices and assured quality. “There have been a lot of new diamond buyers from the mainland, Hong Kong, Singapore, Taiwan and elsewhere in the region,” Chu said. “I think after the financial crisis, the Asian buyers realised that the prices of diamond are relatively stable compared to other types of auction items,” she said. In December, a five-carat chickpea-sized vivid pink gem set a per-carat world record price for a diamond when it fetched US$10.8 million at an auction in Hong Kong. The price beat the US$10.5 million paid by a Hong Kong property tycoon for a seven-carat blue diamond in Geneva in May last year. According to Sotheby’s, Hong Kong has become the world’s third largest auction hub after New York and London, spurred by China’s growing wealth and increasing taste for fine art.

The Macau government stands by its decision to revoke Viva Macau's operating licence as the troubled budget airline begins to wind down operations, blaming the government move.

China*: The World Bank sharply raised its forecast for economic growth in East Asia to reflect reviving global demand, sustained fiscal and monetary stimulus in the region and a rapid rebound in consumer spending. The developing economies of East Asia will grow by 8.7 per cent this year, the bank said in a semi-annual economic update published on Wednesday. In November, it had projected 7.8 per cent growth. Stripping out China, growth will spurt to 5.5 per cent this year from 1.3 per cent last year, the Washington-based lender said. Vikram Nehru, World Bank chief economist for the East Asia Pacific region, said policymakers needed to plan for slower growth in developed countries, tighter global financial conditions, rising concerns about developed countries’ debt levels, and a more difficult environment for global trade. “In that setting, the developing countries of East Asia will need to carefully manage the withdrawal of fiscal stimulus measures in the short term while returning to their structural reform agendas to promote growth in the long term,” he said in a statement. For mainland, structural reform means rebalancing the economy, including a larger role for the service sector and private consumption and moving away from investment-heavy export-led growth as well as encouraging environmental sustainability. “Largely thanks to China, the region’s output, exports and employment have mostly returned to the levels before the crisis,” the Washington-based lender said. “But it may be premature at this stage to withdraw fiscal stimulus in many countries as private investment is yet to become the engine of growth and the poor are still suffering.” “Recovery in demand abroad and rapid rebound in consumer spending and sustained fiscal stimulus at home should help boost economic growth in developing East Asia in 2010,” it said. Developing East Asia excludes Japan, Taiwan and South Korea, according to the World Bank, which provides financial and technical aid to developing nations. The region could maintain rapid growth for the next decade, even as the developed world slows, as long as policymakers carry out necessary structural reforms, it said. In China, this means reducing the export-driven economy’s heavy reliance on overseas shipments to drive growth by boosting domestic consumption and promoting the services sector. The World Bank said the priority for middle-income countries such as Vietnam, the Philippines, Thailand, Indonesia and Malaysia was “moving up the value chain” in the manufacturing sector. “New policies are required to escape from the ’crowded middle’ of industrial development and break into knowledge and skill-intensive sectors,” it said. Poorer countries such as Cambodia and Laos needed to break into manufacturing and reduce their dependence on agriculture and mining, it said. Faced with slower growth rates in the West, developing countries in East Asia should deepen regional economic ties to boost trade, reduce costs and increase international competitiveness. They also needed to promote green technology and energy efficiency, the bank added. “The region has enormous scope to move rapidly towards the green technology frontier,” said Ivailo Izvorski, lead economist and main author of the report. “This will not only improve the livability and sustainability of East Asia’s ever-growing cities, it will also give the region a competitive advantage in an industry poised for rapid global growth.”

US Treasury Secretary Timothy Geithner will visit Beijing on Thursday for talks with vice-premier for economic affairs, Wang Qishan, a spokesman for Geithner said. Geithner will meet with Wang, spokesman Andrew Williams said Wednesday, as the Treasury secretary ended a two-day visit to India. “The secretary and the vice-premier have been working together to find an opportunity to meet for some time,” Williams told reporters in Mumbai, the Indian financial capital. Williams gave no details of the agenda for the Geithner-Wang meeting, but the decision to have such a high-level encounter suggested Washington and Beijing are moving toward settling dispute over yuan controls. Washington and other western trading partners are pressing Beijing to ease exchange rate controls that they say keep its yuan undervalued, giving mainland’s exporters an unfair price advantage and swelling its multibillion-dollar trade surplus. The two governments have tried to keep the dispute contained to avoid straining relations as they co-operate on reviving global economic growth, containing Iran’s nuclear program and other issues. President Barack Obama vowed in February to press for an end to exchange rate systems that he said depress the value of currencies and harm US companies. Some American lawmakers are pressing for punitive tariffs on mainland imports if Beijing fails to act.

Workers labor on top of the USA Pavilion for the Shanghai Expo on Wednesday. Organisers for the USA Pavilion at the Shanghai Expo say they have met a US$61 million fundraising target after a struggle to win corporate support. Organisers for the USA Pavilion at the Shanghai Expo say they have met a US$61 million fundraising target after a struggle to win corporate support in hard times but would welcome more money to help improve entertainment. A US$5 million sponsorship by Citigroup announced on Wednesday means the pavilion is fully funded, said Jose Villarreal, the San Antonio, Texas-based lawyer who is serving as commissioner general of the USA pavilion. “By no means am I saying we won’t take any more money,” Villarreal said. “We continue to receive expressions of interest and every dollar we raise will allow us to enhance the entertainment aspect of our offering.” USA Pavilion organisers received no government money and struggled to get recession-stricken companies to commit to the event, which opens May 1 and is projected to attract 70 million visitors. Organisers appealed to Secretary of State Hillary Clinton, who helped to win over many sponsors, Villarreal said. Citigroup joins Wal-Mart, PepsiCo, Microsoft, Johnson & Johnson, General Electric, among others, in becoming a major sponsor. Citigroup reported a US$7.77 billion fourth-quarter loss due to failed loans and the costs of repaying US$20 billion in government bailout money. “The US pavilion will nurture even greater understanding between the peoples of our two great nations, and the Citigroup is proud to be part of that process,” said Andrew Au, chief executive officer for Citi China. About one-third of the US$61 million budget paid for the building, which includes several large halls that will seat hundreds of people at a time. Roughly another third paid for multimedia shows that will run during the six-month event, said Tom Cooney, deputy commissioner general for the pavilion. The rest will pay operating costs and the expenses of the pavilion’s American student volunteers and entertainers. Artists due to perform there include jazz legend Herbie Hancock, jazz singer Dee Dee Bridgewater and hybrid rockers Ozomatli. “Jazz music was invented in the United States. We think it’s a great example of American society and culture,” Cooney said.

China has an understanding with the United States for each to respect the core interests of the other, a senior Chinese diplomat said on Wednesday, calling for positive ties ahead of a Washington trip by China’s president following a period of tension. An April 2 telephone call between President Hu Jintao and US President Barack Obama “reached an important new consensus”, Chinese Vice Foreign Minister Cui Tiankai told a news conference before Hu’s trip to attend a nuclear security conference on April 12-13 hosted by Obama. The two agreed their countries should “respect each other’s core interests and major concerns, appropriately handling disputes and sensitive issues, strengthening communication and cooperation in various spheres,” Cui said. Cui declined to say whether the two presidents would specifically discuss China’s currency, the yuan. The US has said it will delay a Treasury Department report that might have labelled China a “currency manipulator” from its original, April 15 deadline, a concession that allows Hu to visit without embarrassment and that the US side hopes will sow co-operation from the Chinese to allow the currency to gradually appreciate. China and the United States had “different views” on financial and economic issues but also had “broad common interests”, Cui said. US politicians have seized on the issue of the yuan, which some critics say is pegged at such an undervalued level that Chinese exporters enjoy an unfair advantage, thus distorting global trade. Beijing has repegged the yuan near 6.83 per dollar since July 2008 to help its exporters weather the global credit crunch. In the preceding three years it had let the yuan gradually climb 21 per cent against the dollar. US Treasury Secretary Timothy Geithner said on Tuesday that he was confident China would see that it was in its own interest to adopt a more flexible currency. Ties between the world’s biggest and third-biggest economies have also been ruffled by disputes over Chinese internet controls, US arms sales to Taiwan, and Obama’s meeting with exiled Tibetan spiritual leader the Dalai Lama. Beijing defines Taiwan and Tibet as “core issues” of its sovereignty, regarding self-ruled Taiwan is an illegitimate breakaway province, and condemning the Dalai Lama as a “separatist” for seeking self-rule for his homeland.

Logitech International, one of the world's largest makers of peripheral gadgets for computers and consumer electronics devices, is sharpening its focus on China.

Shanghai promotes World Expo in Taiwan - In terms of cultural exchanges, Han adds that his city is actively pushing for the establishment of a regular direct flight schedule between Shanghai's Hongqiao Airport, and Taipei's Song Shan Airport. Han Zheng, Shanghai Mayor, said, "I believe that strengthening cooperation between Shanghai and Taipei will definitely benefit both cities." The Mayor also says that Shanghai will actively participate in the 2010 International Flora Expo, which will be held in Taipei in November. This week's City Forum was highlighted by the signing of several memorandums of understanding dealing with cultural, tourism, environmental protection, and high tech concerns involving the two metropolitan areas.

April 7, 2010

Hong Kong*: James Wong's noodle shops sell most dishes for HK$11. Make that HK$15 if Hong Kong's first minimum wage is set at the HK$33 unionists want, he says.

It would cost about 20 per cent more than the last pay rise for civil servants, an eighth of the price of the new Hong Kong-Guangdong express railway, less than half a per cent of gross domestic product or about HK$1,100 for each Hongkonger. Social scientists say it is equivalent to no more than "a penny" in terms of the overall economy. Employers say it is "enormous" and potentially lethal to business. Unions say it is the least they would accept. Whoever is right about the impact, a statutory minimum wage of HK$33 an hour would cost a bit over HK$8 billion a year, calculations based on figures from the Census and Statistics Department show. A minimum wage of HK$25, which employer groups say is the most that business could sustain, would cost about HK$1 billion a year. The calculations were made using figures from a survey by the department that will be a key factor in determining the statutory minimum wage, due to be announced by the Provisional Minimum Wage Commission as early as July. The Hong Kong General Chamber of Commerce is finalising a submission to the government on a minimum wage of HK$24 or HK$25 an hour. Several major labour unions have called for HK$33 an hour.

Hong Kong may be aggressively pursuing tax treaties allowing greater exchange of information with trading partners, but it has missed an international deadline to prove it is not a tax haven. The Group of 20 major economies threatened to impose sanctions on tax jurisdictions that had not signed 12 such treaties by last month to meet new standards set by the club of rich nations in the Organisation for Economic Co-operation and Development (OECD). Still, no penalties have been handed out yet, and the city's tax chief says Hong Kong is negotiating with other countries "at full pace". He is confident it will soon meet the standard. Hong Kong has signed comprehensive agreements for the avoidance of double taxation (CDTAs) with three countries and agreed to sign CDTAs with another six. "We believe the deadline is not the most important as long as we are trying our best to achieve it," Chu Yam-yuen, the commissioner for inland revenue, said. "I believe we can soon have 12 CDTAs." Double taxation arises when the same source of income or profit is subject to tax in more than one jurisdiction, hence impeding trade. To avoid this problem, countries sign CDTAs to establish guidelines for the taxation of individuals and corporations working in each jurisdiction, often to the benefit of those working abroad. Their home countries withhold less tax on passive sources of income such as dividends and interest. The city has been under mounting pressure to conform to the OECD tax transparency standard. At a G20 meeting in London a year ago, leaders of the world's 20 major developed and developing economies, including China, agreed to name offshore tax havens. Hong Kong, which narrowly escaped the blacklist, has been striving to meet the standard since then. The Legislative Council passed legislation to adopt the OECD standard in January. It permits the government to collect tax information on behalf of another country or tax jurisdiction. In the past, the city could collect information only for domestic tax purposes, which was a major stumbling block in previous tax treaty negotiations. The city has since signed CDTAs with the Netherlands, Brunei and Indonesia.

HKEx chairman Ronald Arculli says a large Brazilian resource company has started preparatory work and may become the first South American firm to list in Hong Kong. First it was the Russians, now Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) is looking to attract South American and African companies to list on the Hong Kong bourse. "It is part of our three-year strategic plan to have more international companies to list here and establish Hong Kong as an international financial centre," HKEx chairman Ronald Arculli said. He said a large Brazilian resource company, which he declined to identify, had expressed interest in listing in Hong Kong and had already appointed lawyers and investment bankers to do the groundwork. "Brazil is an emerging market, while a lot of its companies have trade relationships with Chinese companies. A listing in Hong Kong would allow them to get closer to the Chinese investors," Arculli said. If it gets approval, it will become the first South American company to list in Hong Kong. In addition, Arculli said members of the exchange would visit Nigeria, where some resources companies had been identified by investment bankers as listing hopefuls. "Nigeria is a very rich country and has many good-potential resource companies that may be suitable for listing here." Arculli added that mining and resource companies from Brazil and Nigeria could benefit from proposed improvements in the HKEx rules to make it easier for them to list here. But the chairman said the exchange would not go as far as relaxing rules to allow mining companies at an exploration stage with no production date to apply for a listing. "We have to safeguard the interests of investors and cannot relax the rules too far. It would be better to gradually introduce the rule changes step by step," he said. Arculli has recently been to Moscow, Vancouver and Toronto to meet listing hopefuls. The exchange has been eager to attract more international firms, especially as it is likely to face stiff competition from Shanghai. Since 1993, more than 300 mainland firms have listed in Hong Kong, representing 58 per cent of of the bourse's market capitalisation. Arculli said for Hong Kong to go a step further, it must become not just a listing centre for mainland firms but also for other international firms. "Unlike the European and US markets, where financial institutions have been hard hit by the economic crisis, many Asian firms and investors are full of liquidity," Arculli said. If companies come to list in Hong Kong, they can tap funds from Asian investors through HKEx. They can also get closer to the mainland and Asia markets, which are the fastest-growing in the world, he said. Efforts to internationalise the exchange attracted the world's biggest aluminium firm, Rusal, to list in Hong Kong in January, and Arculli said more Russian companies were on the way. Mongolian coal miner SouthGobi Energy Resources also listed in Hong Kong in the first quarter. Cosmetics retailer L'Occitane en Provence will become the first French company to list here, having chosen Hong Kong ahead of Paris. Arculli believes Hong Kong can compete with London as an international listing centre because of our good banking structure, rule of law and proximity to the China market.

People who cheat on property tax are dead center in the sights of Inland Revenue Department investigators. Commissioner of Inland Revenue Chu Yam-yuen warned yesterday that his officers are closely monitoring property speculators with the help of a supercomputer as they step up efforts against would-be dodgers. The high-tech-backed officers identified 4,300 suspected greenhorn property speculators in 2008-09 compared with 6,700 in 2007-08, Chu said. This was after just 2,500 were rumbled in 2006-07. Corporations that make quick money by speculation should pay profits tax at a rate of 16.5 percent while non- corporations pay 15 percent, Chu said. So IRD officers are, as a matter of routine, seeking to identify speculation- related transactions with the help of computer programs. Then come in-depth investigations of individual cases. In an interview with Sing Tao Daily, a sister publication of The Standard, Chu said officers check for speculators by how often someone buys and trade premises, how many properties they acquire, and how long they hold the ownership of a property. The shorter the period of ownership, Chu said, the more likely someone will be checked. The snag, however, is a lack of a law that clearly defines speculation. So the IRD checks why people buy property and then refers to court judgments and the Inland Revenue Board of Review. In a judgment handed down by the board in January 2002, a company that decided to sell a flat within a month of purchase was ordered to pay profits tax. It was on October 5, 1998, that Company A, with two people as shareholders, purchased a 1,942-square-foot property from Company G for HK$8.38 million. Early the following month Company A hired an agent to sell it - which it did to Company J for HK$10.5 million within a few days. The minutes of a meeting of Company A directors on November 16, 1998, showed the sale was approved without reasons for the transaction being noted. A shareholder of Company A admitted he had not inspected the property before or after its purchase. In another troublesome area - double taxation - Chu said that in an attempt to avoid the problem the department recently reached a deal with the Netherlands, Indonesia and Brunei under which taxpayers do not have to pay on income already taxed elsewhere. It is expected to take effect in six months. Hong Kong already has similar pacts with Japan, Austria, France, Hungary, Ireland and Liechtenstein.

More candidates have emerged for the Legislative Council by-elections next month, ahead of the deadline for nominations tomorrow. But political academics say the numbers will not result in more heated competition because there is still a lack of heavyweight competitors running against five former lawmakers from the League of Social Democrats and the Civic Party who resigned to trigger the polls. By yesterday, 18 people had filed their candidacies or expressed a firm intention to stand. Among the latest to declare was Spencer Tai Cheuk-yin, a core member of the pro-Taiwan camp. A standing committee member of the Kuomintang's local branch and a former chairman of the defunct pro-Taiwan 123 Democratic Alliance, Tai said he would submit his nomination on Hong Kong Island today. No pro-Taiwan candidate has won in an election since the alliance's former legislator Lawrence Yum Sin-ling lost his seat in 1998. Tai's platform includes fighting for a road map for universal suffrage, abolition of functional constituencies, and raising awareness of the importance of the Hong Kong-Taiwan relationship.In Kowloon West, the most crowded constituency so far, Hong Kong Small and Medium Enterprises Association vice-chairman Wilson Shea Kai-chuen announced that he would file as an independent today. Shea said he hoped to be a voice for small and medium businesses. He also supports dual universal suffrage in 2012 and the scrapping of functional constituencies. "Many businesspeople are capable of running in direct elections. But the present functional constituency lawmakers often fail to represent small and medium enterprises. I think their seats can be abolished," Shea said. Former ICAC deputy director of operations Alex Tsui Ka-kit is reported to be considering standing in the same constituency. Without confirming or denying the reports, Tsui said he would "speak when things are confirmed". Democratic Party veteran Martin Lee Chu-ming yesterday joined a march to drum up support for the by-elections, which are being viewed by the league and Civic Party as a "de facto referendum" on the pace and scope of democratisation. He said the turnout for the polls was bound to be lower than for an ordinary election due to the boycott by the pro-establishment camp. March organisers believed about 2,600 people took part, close to the 3,000 they had set as a benchmark. Police at the scene said about 900 people left the starting point in Victoria Park. Political analysts Ivan Choy Chi-keung of Chinese University and James Sung Lap-kung of City University said the increase in candidates would do little to boost turnout, as the atmosphere of two major political blocs "fighting a duel" was lacking.

Chief Executive Donald Tsang Yam-kuen has taken most of his Cabinet ministers to Beijing to sign a ground-breaking pact with Guangdong today, which may make Hong Kong part of the nation's next five- year plan. Chief Secretary for Administration Henry Tang Ying-yen and Secretary for Justice Wong Yan-lung will attend the signing ceremony for the Framework Agreement on Hong Kong-Guangdong Co- operation. Other major officials attending include Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung, Secretary for Financial Services and the Treasury Chan Ka-keung, Secretary for the Environment Edward Yau Tang-wah, Secretary for Transport and Housing Eva Cheng, and the Director of the Chief Executive's Office Raymond Tam Chi- yuen. Guangdong Governor Huang Huahua is expected at the ceremony while state leaders will witness the signing ceremony in the Great Hall of the People in Beijing. Details of the pact had still not been released by yesterday. However, it is understood that the pact is about boosting cross-border cooperation in areas such as services, infrastructure, education, finance and environmental protection. The pact will be the first top-level deal recognized at central government level signed between Hong Kong and Guangdong on closer cooperation. Priscilla Lau Pui-king, associate professor and co-originator of the Hong Kong Polytechnic University's China Business Studies master program, said support from Beijing is important for the integration of Hong Kong and Guangdong. Lau, a deputy to the National People's Congress, said the pact will help upgrade and restructure enterprises in the Pearl River Delta.

China*: The devastating drought in the southwest is forcing once-a-week blackouts at Dongguan factories due to power shortages from the nation's hydroelectric dams. Since April 1, Hong Kong manufacturers say power supplies have been suspended one day each week in Dongguan, and some expect the mandatory rationing will spread to industrial towns in Shenzhen. Several factory owners said they were left with little choice but to generate their own electricity through diesel-powered generators, a dirtier and more expensive alternative. Some warned that the supply crunch could balloon into a crisis next month, when the peak-production season begins. This would exacerbate recent challenges such as labour shortages, soaring raw material costs and wages, a possible appreciation in the yuan and weak demand in the United States and Europe. "The export sector improved obviously in the first quarter, but new challenges come from all fronts now," Toys Manufacturers' Association of Hong Kong vice-president Yeung Chi-kong said yesterday. "Some costs such as electricity are rising so fast and are beyond our control that it will be lucky if a factory doesn't lose money." To keep production lines moving, Yeung, who is also vice-chairman of toy exporter Blue Box Holdings, said the company's factory in Dongguan was forced to produce its own electricity, which cost 30 per cent more than power from the state supplier. He estimated that higher fuel costs, together with about a 21 per cent rise in the minimum monthly wage in Dongguan to 920 yuan (HK$1,046.70) and at least a 20 per cent jump in prices of plastics and paper-packaging materials, would in turn jack up overall operating costs by 5 per cent. This would erode the factory's wafer-thin profit margin, he said. "We are trying to pass the extra costs on to customers, but so far they are bargaining extremely hard," Yeung said. The once-in-a-century drought ravaging Yunnan, Guangxi and Sichuan provinces has hobbled hydropower plants, which have reduced electricity supplies to Guangdong by about 23 per cent in the first three months of this year. Electricity from the western provinces supplies about one-third of Guangdong's power needs. The Guangdong provincial government placed priority on supply to residential users, and discouraged consumption by energy-consuming industries such as electroplating and cement and steel production. The province signed agreements last month with Hong Kong supplier CLP Power (SEHK: 0002), which will export more power across the border, particularly in summer. Wilson Shea Kai-chuen, a premium product manufacturer in Dalong in Shenzhen and vice-chairman of the Hong Kong Small and Medium Enterprises Association, said he expected compulsory power blackouts would begin in a few weeks, when the busy season begins. He said that on April 1, state supplier China Southern Grid recommended factories in Dalong suspend operations a day every week or minimise power consumption. Dennis Ng Wang-pun, the managing director of exporter Polaris Jewellery, said electricity supply in Panyu in Guangdong remained normal but warned that the electricity crunch would come on top of labour shortages. His factory in Panyu, which has about 400 workers processing jewellery, was still short of about 100 workers, Ng said. He said new orders improved in the first quarter from the same period last year, at the height of the global financial crisis, but shoppers' appetite remained weak. "I don't see a marked improvement in demand in the US until the second half," he added.

Shanghai Mayor Han Zheng arrived in Taiwan yesterday amid protests by islanders fearful of the consequences of closer ties with the mainland, officials said.

Taiwanese visitors to Shanghai will be able to directly convert New Taiwan dollars into yuan at Bank of Communications branches starting May 1 - the day Shanghai's World Expo opens - Shanghai mayor Han Zheng said yesterday, on his historic arrival in Taipei. Currently, Taiwanese visiting the mainland are required to bring Hong Kong dollars or other currencies to exchange for yuan in China. Han, the first Shanghai mayor to visit the island in 60 years, also said he looks forward to the resumption of direct flights that will reduce travel time between his city and Taipei to just 80 minutes. Political commentator Johnny Lau Yui-siu said Han's announcement indicates that similar arrangements will be made with other mainland cities. A research economist said the currency convertibility will certainly put pressure on Hong Kong, though the competition will be good for the SAR. Citi Investment Research economist Shen Minggao said the move will also strengthen the yuan's internationalization, making it one of the main global currencies in the next 10 to 15 years. Han, speaking shortly after his arrival at the head of a 260-member delegation, said the main purpose of his trip to Taiwan is to promote the expo. "This tour is bringing the hearts of 20 million Shanghai residents to Taipei. Apart from promoting and facilitating the cooperation and communication between our two cities, our visit is to promote and recommend the Shanghai expo to Taipei citizens," Han said. Protesters from the pro- independence green camp shouted slogans before police told them to leave the airport. Han met his Taipei counterpart Hau Lung-bin and attended the "Shanghai- Taipei Forum," and the two cities signed four memorandums of understanding on culture, tourism, technology and environment. It was during the forum that Han announced the convertibility of the two currencies starting May 1. Han also attended a tea party hosted by the honorary chairman of the ruling Kuomintang party, Lien Chan. The Shanghai delegation will also visit Taipei county, Taichung city and Taoyuan before leaving on Friday. Lau said the currency convertibility would tighten the financial as well as the political relationship between the mainland and Taiwan, which could survive any change of government on the island. Citi's Shen said: "This is a mutually beneficial issue, and the economic and trade relationship between the mainland and Taiwan will definitely become closer and closer in the future." CITIC Ka Wah Bank chief economist and China banking strategist Liao Qun said the impact on Hong Kong will not be too great as the SAR enjoys several other advantages. "Whatever, this is a positive sign for cross-strait economic and trade relationships," he added.

Taiwanese visitors to Shanghai will be able to directly convert New Taiwan dollars into yuan at Bank of Communications branches starting May 1 - the day Shanghai's World Expo opens - Shanghai mayor Han Zheng said yesterday, on his historic arrival in Taipei.

Beijing reiterated yesterday that its exchange rate policy is not to blame for a ballooning trade imbalance with the United States, and warned Washington against labeling China a currency manipulator. The comments came after the US Treasury announced the delay of a report expected in mid-April that could have slapped the mainland with the "manipulator" tag, paving the way for sanctions against Beijing. US lawmakers accuse China of deliberately undervaluing its currency, leading to a flood of inexpensive goods and contributing to a trade deficit that soared to nearly US$227 billion (HK$1.77 trillion) in 2009. "The [yuan] exchange rate is not the reason for the trade deficit between China and the United States, and the appreciation of the [yuan] is not the way to address the trade imbalance," said foreign ministry spokeswoman Jiang Yu. "China has never used this so-called currency manipulation in an effort to benefit from international trade - we hope the US side can view this question in an objective way." Jiang said Beijing would continue to adapt its exchange rate regime in a "proactive and gradual manner." China's trading partners claim the current exchange rate of about 6.8 yuan (HK$7.735) to the dollar gives China an unfair trade advantage by making Chinese exports cheaper. But in announcing the delay of the report, US Treasury Secretary Timothy Geithner said there were better ways to advance US interests. "There are a series of very important high-level meetings over the next three months that will be critical to bringing about policies that will help create a stronger, more sustainable, and more balanced global economy," he said. Jiang also told reporters that such consultations would be more conducive to finding a solution. President Hu Jintao is due in Washington for a nuclear security summit on April 12-13 - just before the report was to have been issued - prompting speculation that a deal was reached to ensure a smooth visit. Jiang dismissed as "groundless" allegations that the delay of the Treasury report was part of an arrangement under which China would support a new round of UN sanctions against Iran over its nuclear program. Dollar/yuan six-month offshore forwards fell yesterday to their lowest since August 2008, implying greater future yuan appreciation, after Geithner put off the report. Mirza Baig, Deutsche Bank's Asia FX strategist, said China was more or less getting ready to change tack on the currency, with the move happening in the next four to five weeks.

China's outstanding external debt reached 428.6 billion U.S.dollars by the end of 2009, up 14.4 percent from a year earlier, the State Administration of Foreign Exchange (SAFE) said here in a statement on its website Tuesday.

China-bashing based on bad economics - The United States' fixation on the "China problem" is now boiling over. From Google to the renminbi, China is being blamed for all that ails the US. Unfortunately, this reflects a potentially lethal combination of political scapegoating and bad economics that could end in tears. The political pressures are grounded in the angst of American workers. After over a decade of relatively stagnant real compensation and, more recently, a historically sharp upsurge in unemployment, US labor is being squeezed like never before. Understandably, voters want answers. It is all because of the trade deficit, they are told - a visible manifestation of a major loss of production and employment to foreign competition. With China and its so-called manipulated currency having accounted for fully 39 percent of the US merchandise trade deficit in 2008-09, Washington maintains that American workers can only benefit if it gets tough with Beijing. However appealing this argument may seem on the surface, it is premised on bad economics. In 2008-09, the US had trade deficits with over 90 countries. That means it has a multilateral trade deficit. Yet aided and abetted by some of America's most renowned economists, Washington now advocates a bilateral fix - either a sharp revaluation of the renminbi or broad-based tariffs on Chinese imports. A bilateral remedy for a multilateral problem is like rearranging the deck chairs on the Titanic. Unless the problems that have given rise to the multilateral trade deficit are addressed, bilateral intervention would simply shift the Chinese portion of America's international imbalance to someone else. That "someone" would most likely be a higher cost producer - in effect, squeezing the purchasing power of hard-pressed US consumers. Ironically, Washington's penchant for the bilateral fix to a multilateral problem risks turning the tables on American workers just at a time when they are struggling to get back on their feet in this feeble post-crisis recovery. Instead of counterproductive China bashing, the US would be far better served if it took a deep look in the mirror and faced up to why it is confronted with a massive multilateral trade deficit. America's core economic problem is saving and it's not China. In 2009, the broadest measure of domestic US savings - the net national savings rate - fell to a record low of a -2.5 percent of national income. This is the sum total of depreciation-adjusted savings by households, businesses, and the government sector. Depreciation is removed to get a sense of how much savings are left - after providing for the normal obsolescence of antiquated or worn-out capacity- for the expansion of capital stock. In the case of the US, there isn't any. That means the US must import surplus savings from abroad to fund the sustenance of its future growth. This is where China enters the equation. In order to attract the foreign capital that the US needs to sustain its growth, the US must then run a large current account deficit. In the case of the US, the cross-border multilateral trade deficit in goods and services has accounted for an average of 95 percent of the total current account deficit over the past five years. In other words, for a US economy without savings, there is no escaping large multilateral trade imbalances. Yes, China is the biggest piece of America's multilateral trade deficit. But that is because high-cost US companies are increasingly turning to China as a low-cost offshore solution. And it also reflects the preferences of US consumers for low-cost and increasingly high-quality goods made in China. In other words, the US is actually quite fortunate to have China as a large trading partner. No, China is hardly perfect. Like the United States, it, too, has a large imbalance with the rest of the world - namely, an outsized current account surplus. And just as responsible global citizenship requires the US to address the savings deficiency that lies at the heart its international imbalances, the world has every reason to expect the same from China in reducing its surplus savings. Those adjustments must be the essence of any successful global rebalancing agenda. But these adjustments must be framed in the multilateral context in which the imbalances exist. Just as China is one of over 90 countries that the US runs trade deficits with, US-China trade now represents only 12 percent of total Chinese trade with the rest of the world. Consequently, it is wrong to fixate on the relative price between these two nations - specifically, the foreign exchange rate between the US dollar and the Chinese renminbi - as the solution for the deeply rooted savings disparities that drive these multilateral imbalances. Yet some of America's most prominent economists are saying the opposite - claiming that a revaluation of the renminbi vis--vis the dollar would not only create over one million jobs in the US but that it would inject new vigor into an otherwise anemic global recovery. Economists should know better. Changes in relative prices are the ultimate zero-sum game - they re-slice the pie rather than expand or shrink it. When nations have large imbalances with a large cross-section of their trading partners - as is the case with both China and the US - there can be no bilateral solution. Currency, or relative price, adjustments between two nations are not a panacea for structural imbalances in the global economy. What is needed, instead, is a shift in the mix of global savings. Specifically, the US needs deficit reduction and an increase in personal savings, while China needs to stimulate internal private consumption. Washington's scapegoating of China could take the world to the brink of a very slippery slope. It wouldn't be the first time that political denial was premised on bad economics. But the consequences of such a blunder - trade frictions and protectionism - would make the crisis of 2008-09 look like child's play. The author is the chairman of Morgan Stanley Asia and author of The Next Asia.

China Eastern Airlines Co Ltd signed a strategic cooperation agreement with China Airlines, Taiwan province's premier airline on Tuesday to extensively cooperate on cargo flights, passenger flights, logistics, aircraft maintenance and marketing.

April 6, 2010

Hong Kong*: Hong Kong is to sign a pact with Guangdong tomorrow in Beijing to boost cross-border co-operation in sectors including finance, environmental protection and infrastructure projects. The move forms part of the city's campaign to be part of the nation's next five-year plan. It will also be the first deal on closer co-operation struck between the two jurisdictions and recognised at central government level. Chief Executive Donald Tsang Yam-kuen, who will lead senior officials visiting the capital today, is expected to sign the agreement tomorrow with Guangdong Governor Huang Huahua at a ceremony in the Great Hall of the People. State leaders are expected to attend the ceremony, according to a Hong Kong government statement. Hong Kong has been eager to be part of the fast-growing capitalist market across the border. While details of the pact were not made available, the statement yesterday said the agreement "translates the macro strategies on deepening Hong Kong-Guangdong co-operation ... into concrete policies and measures". This would also lay "a foundation for seeking to incorporate the agreement's content into the national 12th five-year plan". The Pearl River Delta region, including Hong Kong and Macau, was positioned as a "reform test field" in a report by the State Council in 2008. Under the plan, the region is to become a globally competitive area in the Asia-Pacific by 2020. The report calls for closer co-operation among service industries in cities in the region, focusing on the development of finance. It also calls for greater efforts in environmental protection.

USA's Green card loses allure as taxman takes bigger cut - Once a symbol of security in uncertain times, the US passport has lost its appeal for an increasing number of people in Asia and across the globe, who are giving up their citizenship in record numbers. For those in Hong Kong, the combination of relative political stability, growing regional economic opportunity, and increasingly complex and costly tax requirements are driving people to give up the safety net of US citizenship. In the last quarter of 2009, 502 people relinquished their citizenship or long-term permanent residency status in the United States, a nearly eight-fold increase compared with the last quarter in 2008, when 63 people did so, according to the US Federal Register, which publishes the names of such people on a quarterly basis. In recent years, the number of people worldwide giving up US citizenship or permanent residency has ranged from 22 to 144 people per quarter. The numbers dipped to double digits in 2008, when the government created an "exit tax" on assets that made it expensive for the wealthy to give up their passports or green cards. But the devaluation of assets, along with the economic crisis, has seen the expatriation rate shoot up over the past six months. An analysis by the South China Morning Post (SEHK: 0583, announcements, news) found that about 150 people with Chinese, South Korean or Japanese names gave up US citizenship in the last three months of 2009, including 87 with Chinese surnames. For the same period in 2008, only nine people with Chinese surnames did so. The rising numbers were a result of the costly and increasingly complex taxation system in the US, said Joseph Field, senior regional partner for Asia at the law firm Withers Worldwide, which works with clients from Hong Kong and Taiwan to navigate the complex American tax requirements for citizens living abroad. Field also noted that the global crackdown on offshore tax evasion has inadvertently had an impact on Americans living abroad in "dramatic and perhaps unfair" ways, especially for those who do not even know they are "US persons" in the eyes of the taxman. One example, Field said, was when people who, born of one American parent and a foreign parent, are considered US citizens. They may have never travelled to the US, learned English or obtained a passport, but they are subject to reporting and tax laws in the US. Another common case involves people who have a green card, but have been away from the US for so long that they can no longer use it to enter the country. But if they did not file forms to formally declare their expatriation with the US Internal Revenue Service, they may still be liable for taxes and reporting requirements. "This could apply to people living in Hong Kong or Taiwan who took a green card decades ago, out of fear because of possible political instability in the region, who never set foot in the US, who now could owe taxes or penalties for failure to file or for taxes owed," Field said. "For immigration purposes, it's dead. But for tax purposes, it may be very much alive, depending on the circumstances. Timothy Burns, Field's colleague at Withers, said: "We see people who are enraged when they come to us and they say, 'I never knew any of this, and you're telling me that I'm either poor or I'm a criminal. I either have to willfully ignore what you are telling me, making me a criminal, or I have to give my life savings to the IRS and I've never been to America.' "That's why we are seeing a lot of people give up US status." There are an estimated 60,000 US citizens living in Hong Kong, according to the US State Department. There are also many Hong Kong residents who hold a US green card, or permanent residency status, though the department could not provide a specific number. In addition to paying local taxes, these citizens and residents must regularly declare their earnings to the Internal Revenue Service, the tax enforcement arm of the US Treasury Department. The US is one of the few countries that taxes its citizens and permanent residents living abroad, and those who made more than US$91,400 in annual income are also subject to US taxes. US taxpayers must also disclose the combined value of their personal overseas bank accounts if they exceed US$10,000 at any time in a given year. Last month, US President Barack Obama signed legislation that forces foreign financial institutions, trusts and corporations to hand over information about their US clients. The new law imposes additional reporting requirements for people with foreign assets. Taxpayers must now report foreign assets cumulatively valued at more than US$50,000, including accounts in a non-US bank, non-US investments, and passive foreign investment companies. Failure to report could result in fines of US$10,000 or more, on top of the previous fines and penalties. Because of the Byzantine rules, "many people think in good faith that they are in compliance with the American rules, when they in fact are not", Field said. "As a tax lawyer, I know a bit better; but it cost me a lot - three years of law school and 30 years of practice in the field - for me to understand these issues." And for some, the cost of compliance is no longer worth the benefits. "Now that I'm spending more time overseas, I definitely feel like people with green cards don't enjoy the upside, but get all the downside," said one Hong Kong-born, US green card holder. Educated in the US, she received an Ivy League education and has worked for prominent international firms in America and abroad. She has had a green card for most of her life, but has been weighing whether to give up her US status. The reasons, she said, ranged from the practical to the personal. "The universal taxation. That is actually a major disincentive. On the personal level, my family is in Hong Kong and they've decided not to retire in the States," she said. Last month's new tax rules were "definitely something that's on my mind", she said. "It creates the appearance that the paperwork and the hassle are going to be even more of a pain in the future. "Most people I know living in Hong Kong with US green cards, they all give it to accountants to do it. I know some friends who make special annual trips to the US just to talk to their US accountant. It is crazy. "A lot of people in the '80s got citizenship because they were afraid of the handover. They didn't know what awaited them in Hong Kong. But the handover has already taken place, and China is becoming more developed and stronger. And Hong Kong is so international and it's politically and economically stable. You could argue that some of us are more marketable in the labour market here than we are in the US," she said. "I actually have relatives who have moved back to Hong Kong. "And frankly, there are people in Hong Kong with multiple citizenships ... you can argue that some countries also offer the same political clout that the US offers to its nationals overseas. The relative value of the US passport has diminished."

[From right] Union committee member Vera Wu; chairwoman Dora Lai and vice-chairwoman Becky Kwan Siu-wah at the meeting yesterday. Cathay Pacific (SEHK: 0293) passengers have been spared flight disruptions - for now. The company's flight attendants have agreed to abandon plans for industrial action today - the peak time for Easter holidaymakers returning to work. But there could be more threats of chaos ahead, with negotiations on other issues between the union and the airline still unresolved. Cathay's Flight Attendants' Union signed an agreement with the airline at the Labour Department yesterday after more than 300 of the 350 voting cabin crew members ruled out a strike. Under the agreement, the airline will remove a controversial condition on shift swapping, management will consult the union before it brings in new policies, and bi-monthly meetings will be held with the union. More than 700 attended yesterday's special staff meeting, although only half stayed behind to vote. Twenty-three voted for cabin crew to work to rule, which could have meant flight delays of 10 to 15 minutes. Another 19 abstained from the vote. Dora Lai Yuk-sim, the union's chairwoman, welcomed the airline's cancellation of a policy requiring staff to work a minimum of 70 hours per month before they could swap shifts, which had triggered the dispute. But she said that was not enough to end the saga. "The management has until the end of this month to respond to our demand that they stop replacing local staff with our foreign colleagues on certain routes," she said. Lai said that after last night's deal was struck, both sides had agreed to hold another meeting on April 23. The union would stage a rally on May 1, Labour Day, if Cathay failed to offer a satisfactory resolution, Lai said, adding she would not rule out more disruptive action if necessary. One flight attendant said management had recently replaced local cabin crew with staff from Thailand and Singapore on better-paying routes - including direct flights between Hong Kong and Melbourne and Hong Kong and Tokyo - while some local staff were told to take up routes between Bangkok and Colombo, or Bangkok and Bombay. "The daily allowance for Japanese and Australian routes can be up to five times higher than that of some other services, so those flights are more desirable," the flight attendant said. The airline could also get more from their staff by putting foreign employees on those routes because local staff were entitled to fewer holidays, the flight attendant said. Cathay said it was a trial scheme that would end in May. A person familiar with the situation said Cathay's management had acknowledged the union's growing power. The airline's union comprises about 70 per cent of its staff. "[The union] always uses the long holidays to their advantage. In some cases, a strong union could seriously cripple a company's operation when it stands in the way of wage cuts, layoffs and staff restructuring," the person said. Lai, however, said it was never the union's intention to use passengers as their bargaining chips. "We don't want to disrupt passengers' travel plans - it just so happened that this negotiation happened around Easter, so it attracted wide media attention." The agreement reached yesterday between Cathay management and the union came after four days of discussions.

An iPad owner is protective of his purchase in Mong Kok. Online forums were swamped with iPad reviews, some giving it the thumbs up while others highlighted shortcomings. First iPads fetch HK$6,000 as tech-savvy mainlanders add to buying competition - Apple's new iPad arrived in Hong Kong yesterday with retailers reporting almost half of the stocks they imported from the US were sold to technology-savvy mainlanders. It was estimated that about 1,000 iPads arrived yesterday as parallel imported goods. They received an enthusiastic response, despite a price tag of more than HK$6,000 for the basic model. Retailers said mainlanders were active buyers, unlike for the release of Apple's iPhone three years ago, when the majority of buyers were Hongkongers. "Mainlanders are getting richer and are more interested in new gadgets," said Lau Chi-kong of G-world Mobile, one of the first retailers in the city to sell the iPad. The much-awaited computer went on sale in the United States on Saturday but it was not known when it would officially be released in Hong Kong. Some local retailers had the products speed-freighted to the city and sold them at a profit. An iPad with 16GB of memory, which can connect to the internet via Wifi, costs US$499 in the US but sells in Hong Kong for between HK$6,000 and HK$7,000. Models with larger memory capacity cost even more - an iPad with 64GB of memory fetches more than HK$8,000. It is expected that Apple will release a newer model, which would also support 3G connections, by the end of this month and these could be available in Hong Kong early next month. Alex Tang, from Esatto, another iPad vendor, also reported many mainlanders were buying the iPad. He said some Hong Kong buyers would resell them on the mainland for a profit. "If they bought the products at HK$6,500 and sell it for 6,500 yuan, they can already make a 10 per cent profit [on the exchange rate]," he said. Tang said most people bought the devices in order to stay trendy, whereas others wanted one to read e-books. "Hong Kong is a good place to use iPads as we have a lot of Wifi access points," he said. Jacky Lai, an Apple fan who rushed to get an iPad yesterday, was satisfied with its performance, despite it failing to support a number of applications. "The internet speed is four to five times faster than the iPod, and it is smooth when loading high-definition videos onto YouTube," Lai said. "One shortcoming is that it does not support flash, so some animations cannot be played. Also, the interface does not support traditional Chinese characters, but I believe it could be fixed in future patches." Online forums were swamped with iPad reviews yesterday. While some gave it the thumbs up, many posts pointed out shortcomings such as the absence of a camera. "Most of iPad's features can already be found in the iPhone. Its only advantage is the larger screen, with which we can play games and read books," a user wrote. "But the iPad is too large to be a portable game console, and its configurations are too low to be used as a personal computer at home."

China*: US Treasury Secretary Timothy Geithner's announcement that a report to Congress on China's currency policy will be delayed suggests that Washington and Beijing are taking more time to resolve the tough issue, according to analysts. But most said Beijing would not yield to pressure and dramatically reform its rigid exchange regime; instead, it would move gradually in its own time and be guided by what its domestic economy does. On Saturday, Geithner said meetings between China and the US over the next three months had been scheduled and provided a reason for the delay. The meetings, he said, "are the best avenue for advancing US interests at this time". The department was due to issue its semi-annual report to Congress on the currency policies of major trading partners on April 15. Geithner's statement did not label China a manipulator but included strong language about the country's currency policies. "The Treasury's action has signalled to the market that Washington and Beijing prefer to resolve the dispute diplomatically rather than going for a showdown," said Professor Jin Canrong, associate dean of Renmin University's School of International Relations.

US delays yuan report "to prevent showdown" - US Treasury Secretary Timothy Geithner said on Saturday he was delaying an April 15 report on whether China manipulates its currency, amid growing debate on the revaluation of the yuan.

China's PMI of the non-manufacturing sector rose to 58.4 percent in March, 12 percentage points higher than the previous month, the China Federation of Logistics and Purchasing said Saturday., the mainland's biggest retail portal, is attracting more shoppers from Hong Kong looking for bargains, more variety - not to mention offbeat goods - across the border.

The tales behind the Wangjialing Coal Mine miracle are starting to emerge after more than 110 miners were brought out alive from the flooded mine in the northern province of Shanxi. They tell of how the men, trapped underground for eight days and eight nights, ate tree bark and strapped themselves to shaft walls by their belts to avoid falling into the water while sleeping. Their lamps provided the only light for the trapped men - the 153 who did not make it to surface when the mine flooded on March 28 - as they held on to the hope that rescuers would be guided to them in the pitch black shaft. Their strong will to live saw them overcome 190 difficult hours trapped in flooded shafts as toxic gas levels rose. Above ground, some 3,000 rescuers had almost given up hope. But all that changed early yesterday when a team of 100 rescue workers discovered the first nine survivors. The first to make it to the surface, just after midnight on Sunday, was 36-year-old Jin Qunhong. By mid-morning, up to 300 rescuers were in the pit looking for more survivors. "How fantastic to be on the surface again," Xinhua quoted one 27-year-old survivor as saying after the rescue. The country watched as the miracle survival story played out on national television. One by one, 115 soaked and exhausted miners were carried out on stretchers and taken to hospital. Most were rescued from a platform above which rescuers had drilled a hole last week, ensuring those trapped had oxygen. Of the 153 initially trapped, there are still 38 miners in the shaft. Rescuers expressed confidence last night that they could be saved but did not say whether there had been any contact with the men. "Strive with all your might and make each second count, doing everything possible to rescue the workers who are trapped," President Hu Jintao and Premier Wen Jiabao said in a message issued by Xinhua. The head of the State Administration of Work Safety, Luo Lin, told CCTV he was excited about the "two miracles" after the accident, which authorities blamed on lax safety standards at the mine. "The first is that these trapped people have made it through eight days and eight nights - this is the miracle of life. Secondly, our rescue plan has been effective - this is a miracle in China's search-and-rescue history," Luo said.

Japan's Finance Minister Naoto Kan (L) talks to China's Vice Premier Li Keqiang during their meeting in Beijing April 3, 2010. Naoto Kan said Friday he has no plans to pressure China to reform the yuan's exchange rate, according to a Kyodo News report.

Evergrande plans 3 billion yuan tourism investment in Chongqing - Evergrande Real Estate Group, the mainland's third-largest developer, is to beef up its Chongqing presence with a three billion yuan (HK$3.41 billion) tourism investment.

The mainland's top offshore oil producer CNOOC (0883) said net profit last year plunged 34 percent to 29.49 billion yuan (HK$33.54 billion), in line with market expectations, as crude oil prices declined.

Two years from old shipyard to Expo Park - The combination photo shows a building of the Jiangnan Shipyard Corp. during its removal (lower, taken on Sept. 8, 2008) and the Expo Museum of the Shanghai World Expo Park reconstructed on the site of the factory building (upper, taken on April 5, 2010) in Shanghai, east China. The shipbuilder, a subsidiary of China State Shipbuilding Corp. (CSSC), moved from its Huangpu River site in Shanghai to Changxing Island on the mouth of the Yangtze River, to make room for World Expo 2010.

At the burial ground people arrive to mourn their relatives in Kunming, capital of southwest China's Yunnan province, April 4, 2010. The traditional Qing Ming Festival or Tomb-sweeping Day falls on Monday April 5 this year.

April 5, 2010

Hong Kong*: Hong Kong, Taiwan poised to open new line of communication - Taiwan will set up a semi-official organisation to hold economic and cultural talks with Hong Kong in April, a month after the establishment of its Hong Kong counterpart.

Wine investment yields high returns, withstands tough times - Investing in wine, not just top Bordeaux from great vintages but even cheap varieties, could be good for your portfolio and is especially useful during a financial crisis, according to a new study. "Wine in a portfolio has produced higher returns and lower risks than the Russell 3000 equity index ... Especially in times of economic downturns," economists Philippe Masset, of Lausanne Hotel School, and Jean-Philippe Weisskopf, of the University of Fribourg, both in Switzerland, told the American Association of Wine Economists. Their study comes as auction houses reported holding sales of fine wines totalling more than US$12 million in the last two weeks. The pair looked at auction hammer prices from The Chicago Wine Company from January 1996 through January 2009. They accumulated data from 144 auctions with a turnover exceeding US$237 million and covered a period that included two significant economic booms, 1996-2001 and 2003-2007, as well as the two most recent major financial downturns, 2001-2003 and 2007-2009. They then created a General Wine Index (GWI) and other indices that tracked different price categories as well as ones that followed five major wine regions. The GWI and the Russell 3000, which measures the performance of 3,000 publicly held US companies, both rose between 1996 and 1998. But while the Russell 3000 declined between 2001 and 2003, when the internet bubble burst, the GWI steadily rose. "Neither the terrorist attacks in New York, nor the burst of the internet bubble nor the boycott of French goods after the Iraq invasion have had much effect on wine prices," the authors said. From 2005 to 2008, the GWI doubled. Since mid-2008, it has fallen 17 per cent as a result of the global financial crisis. Meanwhile, the Russell 3000 index lost 47 per cent in the same period. The economists also found that wine had a more positive effect, with a lower amount of risk, on investment portfolios than stocks. Wines selling below US$200 a bottle steadily increased over the 13-year period and yielded a return of 120 per cent, while those selling for under US$100 a bottle, which are considered cheap in the world of wine auctions, generated a 170 per cent return. Wines selling for more than US$200 and especially those over US$400 a bottle, such as Chateau Lafite or Haut-Brion, had a three-to-four-fold price increase. These wines also suffered the most declines during the financial crisis, losing about 25 per cent. Wines under US$200 a bottle lost between 5 and 10 per cent during that time. The pair also created model portfolios mimicking the broad categories of investors from conservative to aggressive and found that no matter the investing style, allotting 20 per cent of a portfolio to wine had a positive effect on performance.

Every two months, a box of 12 tins of milk powder is posted from Shenzhen to a mother in Beijing. Her eight-month-old daughter consumes at least five of the one-kilogram tins a month. Even though Beijing's supermarkets stock many varieties of milk powder - from overseas and domestic producers - she prefers to have shipments sent by friends in Shenzhen because of the frequent food safety scandals on the mainland. The mother, who does not wish to have her identity revealed, says she is reluctant to take any risks after so many babies suffered kidney damage in 2008 from drinking milk made from powder produced by Sanlu that was adulterated with melamine. A 31-year-old television reporter, she fell pregnant in 2008 and decided to travel to Hong Kong to give birth so that the child would qualify for permanent residency in the special administrative region. One month before the baby was due, she left Beijing with her film director husband and they rented a small flat in Shenzhen. After paying more than 60,000 yuan (HK$68,300) to give birth at a private hospital in Hong Kong in June, they took their newborn daughter back to Beijing in July, along with eight tins - all they could carry - of Japanese milk powder. Since returning to Beijing, she has relied on friends in Shenzhen to buy milk powder for her in Hong Kong and send it to her in the capital. She said it was cheaper and safer to buy milk powder in Hong Kong. A tin of Meiji milk powder, made in Japan, for a baby aged under 12 months, sells for 336 yuan in Beijing's Shin Kong Place supermarket, but for only HK$195 in Hong Kong. She said: "The price of milk powder in Hong Kong is at least 30 to 50 per cent cheaper than in Beijing. And every time my friend mails me a box of 12 tins from Shenzhen I pay just 125 yuan in postage. "With express delivery the milk powder is delivered to my home - so convenient." The Beijing mother is luckier than most mainland mothers, who are left with the option of buying milk powder locally or ordering from online shops that claim to be able to provide milk powder from Hong Kong. Zhou Peipei, who has a 13-month-old son, said: "I dare not buy milk powder on the internet because I don't know where it comes from. You can't imagine how skilful people are at making fake products on the mainland. "I would buy diapers from some online shops because they are cheaper, but I would never buy food for my baby from the internet." After the Sanlu melamine milk powder scandal, imported milk powder became the first choice for mainland families who could afford it. But parents have complained that despite the high cost of imported milk powder in mainland shops, what they get is not as good as the same products sold overseas, including Hong Kong. On internet forums about raising children, mothers question why the Abbott milk powder sold on the mainland does not contain sialic acid, an ingredient believed to help the healthy development of babies' brains, while the same products sold in Hong Kong do contain it. The difference was confirmed by an Abbott staff member on the mainland. A mother in Guangzhou said on the internet that she had compared Wyeth S-26 Promil Gold sold in Hong Kong and on the mainland. The Hong Kong version was whiter, looked drier and was less sweet. The formula was also slightly different. The online consensus - buy milk powder from Hong Kong if you can.

Hong Kong housing prices hit a 12-year high in the first quarter after increasing 7.5 per cent from the end of 2009.

China*: US Treasury Secretary Timothy Geithner said he was delaying an April 15 report to Congress on whether China manipulates its currency.

Mainlanders last year invested £116.5 million in central London property such as prestigious residential project One Hyde Park. Cashed-up mainlanders are on a multibillion-dollar binge of overseas luxury-home buying in the United States and Britain, where bargains abound, as well as in long-favoured destinations such as Canada and Australia. Home prices in many struggling developed countries fell significantly during the global economic downturn. But China's economy has been minting millionaires, and its relatively strong currency and soaring domestic housing market has sent rich mainland investors flooding overseas to get more for their money. Property agents overseas say wealthy mainlanders out to take advantage of falling real estate prices are the perfect clients: they make decisions quickly, pay in cash, focus on high-end property and don't ask for discounts. Where all the money comes from and how it gets overseas - given the mainland's strict currency controls - isn't always clear. But the legal hurdles that exist for mainland buyers generally don't concern overseas sellers, who are happy to take their cash and often ask no questions. Many mainland buyers are entrepreneurs from major cities such as Shanghai and Beijing, but overseas estate agents say they are seeing more nouveaux riches from places such as Shaanxi province joining the rush to buy. "These cashed-up mainland individuals are opportunistic investors," Lee Hangyin, the director of research and advisory for East Asia at Colliers International, said. In California, median home prices have plunged as much as 45 per cent from their peak in 2007, according to US property information provider DataQuick. Property values in central London dropped 16.5 per cent from their peak in January 2008 to their trough in April 2009, according to the British Land Registry. Between April and January prices rebounded 13.4 per cent, it said.

Indian Foreign Minister S. M. Krishna will visit China this week. Krishna will hold talks with counterpart Yang Jiechi and call on Premier Wen Jiabao during the four-day visit.

China should make the yuan fully convertible with the Hong Kong dollar as the first step towards making it a global currency, said Dai Xianglong, chairman of the National Council for Social Security Fund. However, Dai, who was head of the People's Bank of China from 1995 to 2002, said it would take 15 to 20 years to make the yuan an international currency. That did not mean it would replace the US dollar, which would remain dominant in the global currency system for a long time, he said during a speech in Shanghai last night.

Hu's visit to US signals Beijing may let yuan rise - It is the number that lurks behind much of modern economic life, a figure that helps shape the fortunes of nations and the price of nearly everything. The number hovers around 6.827.

China needs to expand the Renminbi, or yuan, cross-border settlement efforts when conditions allow, the People's Bank of China (PBOC) said Friday.

April 4, 2010

Hong Kong*: The Hong Kong Monetary Authority said it will pay its staff an average of almost 3 per cent more this year, in contrast to a government decision just months earlier to slash the salaries of about 18,200 senior civil servants by 5.38 per cent. Adding to the confusion is a recommendation that the starting salaries of civil servants with university degrees should be reduced by about HK$2,000. The pay level of government employees is a highly sensitive topic that is usually based on pay trends in the private sector but is often seen as a leading indicator of where corporate wages should be. "It's not really consistent. With civil service pay cut by more than 5 per cent and Hong Kong Monetary Authority staff getting about 3 per cent more, the gap is about 8 per cent," unionist legislator Lee Cheuk-yan said. "As long as these people get taxpayers' money, the level of government pay should be consistent." The authority's pay hike in the current environment reinforced the notion that the financial sector could act independently of the general market, Lee said. Former authority head Joseph Yam Chi-kwong was paid more than HK$10 million a year, including his bonus. The authority, a government department, said an annual pay review by the governance subcommittee of the Exchange Fund Advisory Committee recommended that staff wages be increased by an average of 2.94 per cent. One-off variable payments averaging 2.3 months' salary will be awarded to individual staff based on their performance. Last year, the fixed pay of authority staff was frozen while variable payments averaging two months' salary was paid. The subcommittee's recommendation is used by the financial secretary along with other findings from independent consultants in the financial sector to determine the pay level of the authority's staff each year. Critics argue that compensation at financial firms is usually not a useful barometer in determining salary levels for the authority's staff given the rich pay packages at banks. In the aftermath of the global financial crisis, which many financial firms are accused of contributing to, executive pay has come under scrutiny with growing calls to impose restrictions on bankers' pay. Last month, the authority told all banks to curb executive packages by linking them to a risk management system.

Hong Kong welcomed 2.866 million visitors in February, setting a record for the month thanks to a 49.4 percent surge in Mainland arrivals during the Lunar New Year Golden Week, the city's Tourism Board said Thursday. The number of visitor arrivals in February, which represents a rise of 32.5 percent from the same period last year, reflected the global economic recovery and improved consumer sentiment to travel, the Tourism board said. For the first two months of the year, total arrivals stood at 5. 826 million, 17.5 percent higher than the same period last year. All long- and short-haul market regions recorded positive growth. Taking the two months together, Mainland arrivals advanced 21 percent, followed by South and Southeast Asia. Meanwhile, for long-haul regions, Europe, Africa and the Middle East continued to be the leading performer with a 9.9 percent growth in the first two months. In the first two months of the year, overnight and same-day arrivals rose 13.8 percent and 22.5 percent respectively. About 56 percent of all arrivals stayed in the city for at least one night, up from 57.8 percent last year. The proportion of same-day visitors grew from 42.2 percent to 44 percent. Hotel occupancy across all hotel categories in February was 79 percent, up three percentage points from the same month last year.

A board appointed by the chief executive to advise the head of RTHK on editorial principles will be formed by the end of this year in the face of objections by staff that it will interfere with editorial independence. The appointment of the board is part of a draft charter for the government-owned broadcaster released yesterday that also says RTHK should remain a government department under the "policy purview and housekeeping oversight" of the Commerce and Economic Development Bureau. A government official said consultation with staff would be launched at the end of this month and the charter was expected to be signed in the summer. He said the board would be formed by the end of the year. RTHK program staff union chairwoman Janet Mak Lai-ching said the government's "stubborn decision" to set up a board of advisers was unacceptable, adding that the proposal had been opposed by 80 per cent of staff in a survey in November. But the government released results of a telephone survey by the Central Policy Unit in November in which almost 70 per cent of respondents backed the charter and approved of the board. Under the charter, the head of the Commerce and Economic Development Bureau would provide guidance and support to the RTHK chief on defining program areas and agreeing on "underlying activities". The board would be responsible for "advising the director on all matters pertaining to editorial principles, program standards and quality of RTHK programming". The charter includes a paragraph on editorial independence stating that "RTHK is editorially independent" and "impartiality is the core value and guiding principle for RTHK programs".

Forty-three per cent of prepackaged food products in Hong Kong have not yet complied with the new nutrition labelling regulation which will come into effect in three months, a government survey shows. The study, commissioned by the Centre for Food Safety and conducted last month, showed that only 57 per cent of the 2,360 prepackaged food products sampled had met the requirement of the new law, according to a document to the Legislative Council. The figure has increased by 10 percentage points compared to previous research done between October and January, which indicated that less than half of the surveyed items met the new restriction. "Items at supermarket chains have met the standard already because since January 1, large retailers only take goods that have complied with the new law," the chairman of the Hong Kong Food Council (HKFC) and the Association of Green Organic @ Living (Go@l), Simon Wong Ka-wo, said. "What's left are the small shops selling products for ethnic minorities," Wong said, adding that they might still need time to get government exemption. He said food traders should be able to make changes to their products before the deadline. Enacted by the Legislative Council in 2008, the labelling law's two-year grace period will expire on June 30. The law requires packaged food sold by retailers and wholesalers to carry the "1+7" (energy + 7 core elements) label. Food products also need to comply with the standards before making nutritional claims such as low in sugar or no trans-fats. But low-volume products - with annual sales of 30,000 units or below - that do not make any nutritional claims can apply for an exemption. Another survey done by the HKFC and Go@l showed that about half of the 50 food trading firms polled said none of their products would be taken off the shelf because of the new law. About 20 per cent said up to 5 per cent of their products would leave the local market.

A mere agreement among bidders not to compete with each other in an auction is not a criminal offence, a court held yesterday. The ruling was given by the Court of Appeal in the case of 17 stallholders convicted by the Fanling Court in May 2008 of conspiracy to defraud the Food and Environmental Hygiene Department in an auction for food stalls in a market. They had been sentenced to nine months' jail. They were accused of collusion by drawing lots to allocate stalls before an auction and agreeing not to bid against each other. Represented by Martin Lee Chu-ming SC in the appeal, they said the charge against them under the Prevention of Bribery Ordinance should be struck down. The appeal judges - Mr Justice Robert Tang Ching, Mr Justice Wally Yeung Chun-kuen and Mr Justice Derek Pang Wai-cheong - quashed the conviction on March 15 and gave their written judgment yesterday. The operators are Chan Wai-yip, 31, Fung Moon-kwai, 58, Wong Lit, 80, Sin Kam-sing, 65, Choi Kwai-sing, 59, Chan Chun-kim, 62, Lee Chi-ying, 58, Cheung Chi-keung, Wong Chung-tit, 50, Li Yuk-fai, 55, Wong Tak-hing, 50, Cheung Mui-fong, 54, Fung Moon-kwong, 49, Tang Yiu-kwan, 52, Li Sai-hung, 53, Wong Oi-kwan, 46, and Hung Chau-ming.

The dragon that will continue to represent Hong Kong with a few additional adornments was decided on after extensive opinion research covering a wide spectrum of the community, the government said, responding to fierce criticism by designers. It said the HK$3.3 million survey found that those who wanted to keep the BrandHK dragon outnumbered those who opposed it, even though no one was asked what they thought of the dragon. "Opinion research shows that the dragon icon has built up equity and gained a high level of awareness with international and local audiences," Mary Leung Lai Yim-ming, the Information Services Department's assistant director for public relations outside Hong Kong, said. "Taken in totality, there is considerably more support for retaining the dragon symbol than changing it. In view of this, we required the service provider to maintain and enhance the dragon logo." The modified logo with three flying ribbons added to it, designed by Alan Chan Yau-kin for HK$1.4 million, was unveiled on Saturday. Critics, including top designers Kan Tai-keung and Freeman Lau Siu-hong, complained about the closed process used in selecting a designer, saying it killed off Hong Kong's reputation as a design hub. Leung said that between May 2008 and April last year more than 20 consultation sessions, numerous focus group interviews, workshops and a dedicated website and two creative competitions were staged to gauge the community's views. Those expressing their thoughts included businessmen, academics, students, environmentalists and district personalities, as well as people from tourism, creative and cultural sectors and think tanks. Asked if rejected designs would be revealed, Leung said this would not be possible. "[The designs] are the intellectual property of those who submitted them. We are not supposed to make them public," she said. Leung said creative methods had been adopted during the consultation. In one survey, interviewees picked one of at least 56 pictures - ranging from a nest of three golden eggs to a row of coloured pencils - and asked which they considered "most representative of my ideal Hong Kong in 2020". She admitted that there was no specific question asking people what they thought about the dragon logo. "But people still offered their opinions during consultation sessions," she said. "When people were asked what kind of animal sign would best represent Hong Kong, many actually suggested a dragon, which was followed by a horse and a bird." In response to criticism of the closed selection process, in which chosen candidates were asked to submit proposals, Leung said it was in line with government regulations on requisition of services. These required written quotations from five service providers for jobs paying more than HK$50,000 and less than HK$1.43 million. Fourteen design firms were invited to submit the quotations, said Leung, after earlier saying the selection was conducted by a panel of government officials. Art critic Oscar Ho Hing-kay said it was an example of the government failing to admit a mistake. "If our creative image is decided by bureaucrats, it is a big joke ... Why can't they just admit that yes, we have bad taste, and leave it to the professionals?"

Tina Leung Kwok-hing, the legendary screen siren widely known as Ti Na who reinvented herself as an entrepreneur, pro-Beijing activist and political commentator, has died aged 65. The actress, who gained notoriety in the 1970s for nude scenes that she said she later regretted, died on Wednesday morning after working on her latest book to the last, Chan Wing-hong, a close friend and family spokesman, said yesterday. In a note Chan read to the media yesterday, her daughter Michael Ma Tin-yu, who had gender reassignment surgery to become a man at the age of 30, said Leung did not want to have any open funeral arrangements. "She wanted everybody to remember her jaunty and chatty persona. She doesn't want people to see her expressionless face after death," the note said. Chan said Ma was too devastated by her death to speak to the media. "Her death was quite sudden. Her health worsened much faster than before," he said. Chan said Leung worked on her upcoming book till her last breath. "She wrote it during the whole time she was sick." News that Leung was ill came in 2005 when she was diagnosed with cervical cancer. Ma was at her bedside when she died in the Hong Kong Sanatorium & Hospital from organ failure. Chan said before Leung died she penned a note to the media urging them to exercise their social conscience to do constructive work to speed up the progress of society. Her soon-to-be-published fourth book, Movies - My Absurdity, chronicles her glamorous career as a movie actress and her views on the entertainment industry. The former screen siren, whose voluptuous body and torrid performances on screen earned her the moniker "flesh bomb", was the first local actress to appear nude in films. Dubbed by some as Hong Kong's Marilyn Monroe, Leung made 54 films in the 1960s and 1970s, in many of which she immersed her skimpily-clad body in a bubbly bathtub and titillated the audience with her slender legs. Her ascent to the status of screen goddess was thanks to the generosity of a high-ranking Thai official who financed her film career during their courtship. She was flown to Bangkok where she finished two films during her two-to-three-year stay in the 1960s.

Hong Kong housing prices hit a 12-year high in the first quarter after increasing 7.5 per cent from the end of 2009.

Property portfolio manager-turned-chocolate maker Baldwin Ko checks out his new Wong Chuk Hang warehouse and food manufacturing centre. Sweet success greets career switch - Life is like a box of chocolates. You never know what you are going to get. If you are in any doubt about that home-spun wisdom, consider the case of property doctor turned confectioner extraordinaire, Baldwin Ko. Ko's future in the property business seemed clearly mapped out. He joined developer Swire Properties in 1996 and worked his way up the property ladder to the point of becoming assistant portfolio manager involved in leasing retail space in the group's blue-ribbon Pacific Place in Admiralty, and Festival Walk in Kowloon Tong. After working for Swire for 10 years he joined AIG Asset Management as a senior manager responsible for acquiring under-performing shopping centres and restoring them to health by repackaging the assets to add value and improve their rental income. But after 12 years in the industry and with steady progress up the property management ladder assured, Ko could no longer resist the temptation to run his own business, and so he set about thinking about what to do. "The choice was to sell either diamonds or chocolates as both are high in value and small in size. That means there is no need to rent a big store and this would help keep costs low," he said. Chocolates got the vote. "At that time, the market for top-end chocolate seemed to have ample potential for expansion as only two brands dominated sales," Ko said. So armed with years of experience and a network of useful connections, Ko approached upmarket fashion retailer Agnes b - which had already expanded to operate cafes and flower shops - with the suggestion it join him in a joint venture selling hand-made chocolate under its brand. In October 2007 the joint venture started selling chocolates in shopping centres such as apm in Kwun Tong, Harbour City in Tsim Sha Tsui, and from a ground level store in Causeway Bay. Today it operates nine stores and plans to open another three this year. Ko, whose company employs 60 staff, also plans to expand into Taiwan and open three stores that are already on the drawing board. To differentiate his product from that of his rivals, his chocolate is handmade in Hong Kong with ingredients from France and elsewhere in Europe. "Freshness is our major drawcard. Our chocolate has a shelf-life of just three weeks and if it is still unsold after this period we take it off the shelves and write it off," he said. As a retailer and manufacture, opening a store in the right location is equally important as food quality control. "I learned a lot from my leasing experience at Swire. That gave me a good feel for what locations work or not and a sense of the rental value they commanded," he said. But true to his original intention to keep rental costs down, most of the outlets where his businesses operate are below 400 square foot in size, which helped make them affordable for a start-up operation. He also chose to rent outlets instead of buy as this would give him more flexibility, he added, but he did recently buy a 10,000 sq ft industrial space in Wong Chuk Hang for a warehouse and food manufacturing centre for about HK$22 million or HK$2,200 per square foot. To help fund the investment Ko sold his flat at Regent On the Park on Kennedy Road, Mid-Levels early last year. "Apartment prices in the area had already risen a lot and I preferred to buy something that lagged behind, like industrial properties, which now offer better upside potential," he said. Already that strategy is showing dividends, added Ko, since prices of industrial spaces in Wong Chuk Hang have gone up to about HK$2,500 per square foot since his move. Besides offering capital appreciation, the space enabled him to increase production capacity to as much as 25,000 pieces of chocolate a day. "It will meet the demand for our expansion at home and overseas," he said. But not all the chocolates in that box have been as sweet for Ko. "In 1997 I bought a unit at Amigo Mansion in Happy Valley for HK$4.09 million and sold it for HK$3.8 million in 2000. It was a big loss for me," he said. But the experience did not stop him from investing in property and he joined his father in buying two units at Rose Court in Happy Valley at HK$8.5 million each. He resold one for HK$17 million in 2005 and the second for HK$20 million a year later. "Never develop sentimental feelings for a property," Ko advises. "I will always be prepared to sell if the property generates a handsome profit." Ko now leases a unit and says he will re-enter the market as a buyer only after an expected price correction has occurred. "I hope prices will peak next year and they could then fall by 20 to 30 per cent."

Leslie Cheung tops most beautiful men from Hong Kong cinema.

Following her return from Thailand, she quickly shot to fame for playing sexy girls in comedies, including Wise Wives and Foolish Husbands, and Diary of a Lady-Killer. But it was her role in late director Li Han-hsiang's The Warlord in 1972 that etched Leung's sultry image indelibly in Hong Kong's memory. Playing one of the warlord's wives, she was filmed emerging nude from a bath to greet a lover. But that legendary scene was not done without remorse. Last year, in an interview with the Chinese-language East Week magazine, Leung said of this scene: "I have done some stupid things in the past. To this day, people still use the pictures of the sexy scene ... It is more important that you should study more to increase your knowledge, and to make yourself smarter. "Beauty cannot last forever. Once you get old, you may not be beautiful any more. But if you are educated and cultivated, you will shine wherever you go and everyone will be attracted by you," she added. Her patriotic leanings gained wide public attention in the early 1970s when she proclaimed herself a supporter of the proletarian revolution, and went to the mainland to work alongside the Red Guards. In a 2008 interview with Cable TV, she claimed she had collected intelligence for China during her days in Thailand, taking advantage of her popularity there and her relations with the Thai leadership. "The first film I made was entitled Spy. And I was a real-life spy," she said in the interview. Her love-hate relationship with communism was revealed in her tirade against the June 4 Tiananmen crackdown in her book, War Tactics: The Corporate War in Beijing. "The gun barrels were aimed at their own people. Such an incompetent government ... why open fire on children? ... I must continue my quest to develop the country and improve people's livelihood. I can't let the feudal lords who hold leadership power shut the door to opening and revert to the old isolationist days," she wrote in the book. Her patriotism brought her back to the mainland to make inroads into the fledging business world in the 1980s. During her stay on the mainland, she proved herself a savvy businesswoman. Among other ventures, she helped China acquire sophisticated military and aeronautical equipment. Her business acumen was revealed in her successful forays into the mainland aeronautical industry. Being the marketer for Galileo, a global satellite navigation system launched by the European Space Agency, she managed to get the airports in most mainland cities to install the system by the end of the 1980s. Her showbiz calling got her back into the local limelight in 2005 when she became a host for the TV programme, A Century of China, for TVB (SEHK: 0511). Dripping with caustic wit and barbs, her commentary on the development of China earned her critical kudos and good ratings. For all the glamour and business success, her family and love life was filled with crises and heartbreaks. In 1967, she gained notoriety by becoming pregnant while unmarried. She married sports coach Ma Yik-cheung the same year. Several months later, she gave birth to a daughter, Tin-yu. The marriage failed and the couple divorced in 1972. Ma, said to be Tin-yu's father, publicly declared in 1989 she was not his child after hearing that she had had a sex-change operation. Tin-yu finally became Michael and settled in Europe. In a book on business tactics Leung told of the suffering she went through before her daughter's sex-change operation. "I saw how my child developed a stooped back as she tried to cover her female attributes on the chest by leaning herself forward when walking. It was heart wrenching. I knew [the sex-change operation] would be a bumpy ride, but how can I let her go on the quest on her own?" she wrote. Leung has published three books - one detailing her relationship with her daughter and the other two portraying her dealings with mainland cadres and her views on global finance and business tactics. Film historian Law Kar said that Leung had a reputation as a sex symbol early in her career but did not shoot to fame until she made The Warlord. Law said that although she only showed her back, it was enough to make the headlines. "But she was not given that many roles that allowed her to demonstrate her acting flare," Law said.

China*: President Hu Jintao will attend a two-day nuclear security summit in Washington in a week's time, Beijing announced yesterday, in a clear sign that the two powers are attempting to decrease tensions.

Number of US students set to soar in 4 yrs - US students in China are set to become one of the largest overseas groups with Beijing and Washington working together to bring 100,000 students to China in the next four years.

Premier Wen Jiabao is talking the talk when it comes to reining in overheated property prices but has shown his political savvy by not walking the walk. In his seven years as head of the central government, Wen has talked constantly about the need to curb soaring prices. Since 2004 he has reiterated his determination on at least a dozen high-profile occasions, ranging from State Council meetings to his annual address to the National People's Congress and his post-NPC press conference. However, all that talk has come to naught. Wen has overseen an economy riding the crest of a development wave, leapfrogging France and Britain to become the world's third largest under his stewardship. But that prosperity (SEHK: 0803, announcements, news) has been accompanied and partly fuelled by a buoyant property market. China was the first major economy to recover from the global economic downturn, expanding by 8.7 per cent last year. That amazing V-shaped recovery has been matched by an equally amazing jump in its housing prices, which, after a brief retreat, are breaking records in many cities. Housing prices in Shanghai and Beijing doubled in less than four years before the global financial crisis and have doubled again since, largely fuelled by the central government's pro-growth policies. People are becoming frustrated as buying a home slips further out of reach and Wen is clearly concerned, having chosen to express his sympathy for their plight several times in the past few months. On December 14, Wen chaired a special cabinet meeting to discuss measures to deal with the problem. On December 27, in an exclusive interview with Xinhua, he said: "I know that Chinese internet users are deeply concerned about this issue because I surf online every day. I've seen ... some rather sharp critiques." In an online chat with internet users on February 27, just days ahead of the annual NPC meeting, Wen said he was determined to tame the "wild horse" that was the country's soaring housing market and to keep prices at a reasonable level during his tenure as premier. He even acknowledged that he had watched the popular television drama Snail House, which depicts white collar workers struggling to claw together down payments or pay off mortgages. The show has struck a nerve in Chinese cities, where discontent about runaway real estate prices is widespread. Wen also highlighted the issue three times during the annual NPC session last month. Joseph Cheng Yu-shek, a veteran China watcher at City University of Hong Kong, likened Wen's approach to the problem to that of Chris Patten, the last Hong Kong governor between 1992 and 1997. "Wen and Patten have the political savvy to know that politics is sometimes about talking not doing," Cheng said. He said Wen was well aware that any harsh action against property prices would cost him a lot economically and politically, even though cooling the market might please grass-roots families on medium and low incomes. "Politically, a cooling property market would hurt powerful interest groups - regional governments, state-owned commercial banks and developers - who benefit most from soaring prices," Cheng said. "Economically, a slowdown or an even worse slump would mean slowing economic growth and fiscal revenue, and rising unemployment." Official data suggests property development has become a key engine of economic growth and the chief source of local government revenue in many urban, coastal regions. The mainland's local governments reaped 1.59 trillion yuan (HK$1.8 trillion) from land sales, 63.4 per cent more than in 2008, according to the Ministry of Land and Resources. China sold 5.3 trillion yuan of land between 1999 and 2008. Fiscal revenue from land sales in Shanghai, Beijing and Hangzhou exceed 100 billion yuan last year, contributing the lion's share to local coffers. Cheng said the central government would prefer a relatively buoyant property market, citing the property slump in Hong Kong after 1997, following then chief executive Tung Chee-hwa's introduction of tough policies designed to cool the market that cost the local economy dearly and became one of reasons behind Tung stepping down 2005. Cheng said that even if Wen was determined to cool the market, there was little he could do to bring regional officials and powerful business interests to heel. That was why the markets had ignored each of Wen's pronouncements. When he talked tough in the Great Hall of People at the opening of the NPC session on March 5, mainland property stocks in Hong Kong shrugged off the news, with the Hang Seng Property Sub-Index rising on the day. And a day after Wen's post-NPC press conference on March 14, the Beijing municipal government auctioned off three plots of land for record prices. "What concerns Wen most is economic growth that can create enough jobs and derive larger revenue to pay bills for increasing demands for social security, pensions, education and medical reform," Cheng said, adding that only a buoyant property market could help accomplish that goal.

The doors are set to open in less than a month on the largest World Expo in history as Shanghai seeks to stamp itself on the map as one of the top international cities. An army of workers are frantically racing to put the finishing touches to the international extravaganza's vast 5.28 square-kilometre site, while a number of national pavilions are involved in a mad scramble hoping to complete their buildings in time. Yesterday marked the 30-day countdown to the opening of the massive event, which is expected to draw 70 million visitors. Shanghai party secretary Yu Zhengsheng celebrated the occasion by issuing nearly 7 million free tickets to the event - one for every permanent household in the city - each of which was accompanied by a travel card worth 200 yuan. The bonanza give-away was described as a "thank you note" to the city's residents for their patience. "We thank the ordinary people of Shanghai for the contribution they have made to the expo," Yu told the city's official news portal yesterday. "During the preparations for the expo, our infrastructure building and construction of the site has had a considerable impact on everyone's life. Shanghai residents have put up with everything silently."

Offshore yuan forwards (NDFs) hit nearly a three-week high against the dollar on Friday after the US currency eased on global markets, but dealers said China’s central bank’s strong intention to maintain a stable yuan policy will keep trade boxed in a tight range for now. The White House on Thursday repeated President Barack Obama’s view that Beijing’s move toward a more market-oriented exchange rate would help rebalance the global economy. Also, Democratic Senator Charles Schumer said that China’s decision to send President Hu Jintao to Washington for a nuclear security summit this month should not stop the United States from pressing Beijing to revalue its currency. HSBC (SEHK: 0005, announcements, news) bank said in a research report it believed the latest positive development on the political front should encourage Beijing to make a move on the yuan, which was in China’s interest. “We believe that the latest development should make it more likely for Beijing to start moving away from the renminbi’s current de facto peg within the next few months, if not weeks,” said Qu Hongbin, HSBC’s Chief Economist for China. Dollar/yuan one-year non-deliverable forwards hit an intraday low of 6.6420 on Friday, its lowest level since March 15, little changed from Thursday’s close of 6.6450. Twelve-month yuan appreciation implied by NDFs rose to 2.77 per cent measured from the Chinese central bank’s daily mid-point, versus 2.73 per cent implied at the previous close. “China’s strong intention for stable yuan policy will keep the yuan stable now,” said a dealer at an Asian bank in Shanghai. “And, if China records a trade deficit, it will be less possible for the yuan to rise now.” China was highly likely to record a March trade deficit due to a surge in imports, Vice-Commerce Minister Chen Jian told a forum on Friday. Zhou Qiren, a Peking University economics professor and newly appointed central bank academic adviser, said in remarks published on Friday that China can achieve only nominal yuan stability by pegging to the dollar because the US currency is unstable. “Keeping the value of the yuan stable is the most important thing both internally and externally (for China),” he said. But Liu Daokui, a member of the central bank’s monetary policy committee, told reporters in an interview that a successful visit by Chinese President Hu Jintao to Washington this month could open the door for an adjustment in yuan policy, but another one-off revaluation should be avoided. The US dollar index, measured against a basket of six major currencies, rose slightly on Friday, after surging overnight. Spot yuan ended slightly higher at 6.8256 per dollar on Friday compared with Thursday’s close of 6.8263. The Chinese central bank fixed the yuan’s daily mid-point, or reference rate, at 6.8260 per dollar, barely changed from the previous session’s 6.8261.

Beijing has delayed the long-awaited consumer subsidies for alternative-fuel vehicles because of disagreement within the car industry over whether to favour hybrid cars or pure electric vehicles. A Ministry of Industry and Information Technology meeting last month, which included more than 10 car executives, ended without an agreement on subsidies, according to one executive who attended. "Some carmakers want the government to subsidise more for hybrids, which is the technology that manufacturers [are better at]," the executive said. "But the government in fact doesn't want hybrids to dominate the [domestic] market." Beijing originally planned to begin the subsidies in the first quarter. But car executives and the government could not come up with a compromise. The plan was to give individual consumers a huge subsidy, as much as 60,000 yuan (HK$68,274) for a pure electric, plug-in car, while hybrids would get 3,000 yuan per unit.

97% of China's richest do charity work - Beijing is home to the largest number of the country's wealthiest lot, with 151,000 people owning more than 10 million yuan ($1.46 million) and about 94,000 people with more than 100 million yuan in personal assets, according to a recent report.

April 3, 2010

Hong Kong*: Hong Kong stocks started the second quarter on an upbeat note on Thursday, reaching their highest closing level in more than two months as investors snapped up consumer stocks.

The ongoing drama over control of free- to-air television station ATV has taken another twist with the Broadcasting Authority taking up a role. The independent regulator has broken its long silence and asked ATV to clarify its current shareholding structure and investment commitments, according to a source who has read its letter to the broadcaster. The authority "learned from media reports" that mainland property tycoon Wang Zheng vowed to buy ATV shares, invest HK$2 billion over 20 years, launch a nationwide Putonghua channel and transform the broadcaster into the CNN of Asia. While the broadcaster notified the authority in a letter that director James Shing Pan-yu has become an executive director, the regulator only learned through the media that Shing was a close family relation of Wang. It is concerned that Wang now may have de facto control of the broadcaster through Shing. Under the Broadcasting Ordinance, unless granted an exemption, the license holder of any broadcaster must maintain the shareholding structure as it was when it applied for a free-to-air license. The regulator requires ATV to apply for approval as soon as possible before any stake changes become effective, the source said. During an interim review of ATV's FTA license in December, the broadcaster committed to investing HK$2.3 billion from 2010 to 2015. As such, the regulator would like to know whether Wang, reported to be a new shareholder, will honor the investment commitment or keep the existing programs. Wang's avowed intention to start a national Putonghua channel and transform loss-making ATV - long in the shadow of local rival Television Broadcasts - into Asia's CNN also drew the regulator's attention as to whether its service will keep Hongkongers as its major audience. "In accordance with its license, ATV is required to provide a domestic free television program service primarily targeting Hong Kong," the source said. Meanwhile, Wang did not proceed with the share purchase from ATV non- executive director Chan Wing-kee and Phoenix Satellite Television chairman Liu Changle as agreed by the deadline yesterday, another source said. However, there is no indication there are any hitches with the deal. Dragon Viceroy - jointly held by Changle and Chan - holds 26.85 percent of ATV. Their stake is second only to Antenna Investment's 47.58 percent, which is owned by Payson Cha Mou- sing, his brother Johnson Cha Mou-daid and Want Want China Holdings (0151) chairman Tsai Eng-meng. Taiwanese snack billionaire Tsai got an interlocutory injunction against certain stake transfers of ATV on March 10. Tsai is suing the Chas, their legal consultant Peter George Brown, Antenna, Panfair Holdings, which holds a key stake in the station, and ATV itself over the issuance of convertible bonds with a lower conversion price than the shareholders' agreement.

Hong Kong's Octopus card and the Shenzhen Tong - the neighboring city's smart card - will be interchangeable by the end of this year, according to the Octopus Card Company. The Shenzhen Science & Technology, Industry, Trade and Information commission deputy officer Lu Jian told the mainland media yesterday the technical problem between the two cards has been solved. He said the problem related to the differences in the two systems, as well as the currencies in Shenzhen and Hong Kong. With the problem solved, the Octopus card can be used in Shenzhen soon, he added. However, an Octopus spokesman said the interchangeable card is not expected to be available until the end of the year at the earliest. He said the company had formed a working group with Shenzhen Tong to examine the possibility of integrating the two cards and the group is now focusing on the technological area. "The exact timing to sell the integrated card must be decided by the result of technological research and business arrangements," he said. Octopus had been holding talks with the Shenzhen Tong company for years over an integrated card. The two companies have already discussed issues such as security and financing, but the difficulties were on how to upgrade software to smooth integration.

The celebrated actress and businesswoman Tina Leung died on Wednesday. She was 65 years old. The mainland-born actress died due to multiple organ failure, according to her friend Chan Wing-hong. Chan told a press conference on Thursday he was making the announcement on behalf of Leung’s son, Michael Ma. “Leung Kwok-hing, also known as Tina, died at 11.10am on March 31,” Chan told reporters on behalf of Ma. Ma said his mother wanted the public to remember her as the happy, smiling person she had been. She did not want a public funeral. Leung had suffered from cervical cancer since 2005. Local media reported that her cancer deteriorated rapidly in March. She was hospitalised two weeks ago. Tina Leung born in 1945 in Xingning in Guangdong. She began her acting career in the 1960s, when she appeared in films such as Beauty & Seven Beasts and was famous for her nude scenes in the popular Shaw Brothers comedy The Warlord. In the 1970s, she gave up her successful acting career and developed profitable business interests in aerospace and satellite systems in the mainland. Recently, Tina appeared in TVB (SEHK: 0511) as a talk show host for the programme Rise of Great Powers on China’s history and development. In an interview with local television, the actress confessed she had been a spy for the Communist Party during the 1960s while filming in Thailand. Ironically, Leung played a spy in her first film. Leung married mainland swimming coach Ma Yi Chang. The couple had a daughter called Ma Tin-yu. In 1995, Ma Tin-yu received sex re-assignment surgery and became Michael Ma.

There's some rare good news for wildlife in the city, with birdwatchers reporting a 40 per cent rise in the local population of the endangered black-faced spoonbill. That helped the global population of the rare waterfowl to a new high. Birdwatchers are in an upbeat mood after the release yesterday of the latest census on the endangered black-faced spoonbill showing a 15 per cent increase this year in the worldwide population to a record high of 2,346. The city's bird lovers have even more reason to celebrate because a fifth of the spoonbill's world population have been seen wintering in Hong Kong this year. Some 462 of the birds have been spotted, a rise of 40 per cent compared with last year, and the biggest increase among all places reporting an upward trend. But the number of the birds found along the mainland's coastal areas this year dropped 5 per cent to 234, comprising about 10 per cent of the world's total. "It is possible that development of the coastal areas on the mainland has forced some black-faced spoonbills to move to other places such as Hong Kong and Taiwan," Yu said. "Climate change that drove temperatures down in the northern mainland last year could be another reason that the birds came to Hong Kong for food." Vietnam recorded the biggest loss, 27 per cent, to 46 birds this year. Despite the rosy picture, veteran birdwatchers warn of the risk of deadly threats such as water contamination that would decimate the population, especially since the two main wintering sites are in Hong Kong and Taiwan. Some 20 per cent of the world's black-faced spoonbill population come to Hong Kong and 55 per cent winter in Taiwan. Yu Yat-tung, co-ordinator of the survey, conducted between January 8 and 10 worldwide, cited an incident in 2003 when more than 70 spoonbills died of poisoning in Taiwan because of water contamination. "If we have a big flock ... in one place, the bigger the threat to the bird," Yu said. "If there was a disastrous incident in either Hong Kong or Taiwan, it could wipe out the population." Yu credited the increase to good breeding and a high survival rate last year. "The record high number of the birds in Hong Kong is very encouraging," Yu said. "But we should not take pride in having an endangered bird here. We should hope that one day the bird is no longer endangered." It is also the first time this year that the species has remained in Long Valley, where birdwatchers counted 10 spoonbills. The birds usually winter from October to March at the Wetland Park in Yuen Long and the Mai Po Marshes near Deep Bay. Last year the number of birds in Hong Kong dropped, the first decline in a decade. The endangered bird, which has a spoon-like black bill and a yellow patch beside its eyes, is found mainly along coastlines in East Asia. The conservation group BirdLife International once listed it as a critically endangered species in the 1990s after the worldwide total plunged to 300. The spoonbill, which breeds in the islets near the demilitarised zone between North and South Korea, and travels south in winter, is still on the red list of the International Union for Conservation of Nature.

Henderson Land Development says sales of 24 apartments in its Mid-Levels residential building could not be completed on time because of tighter restrictions on mortgage lending in the luxury market. Henderson Land (0012) will have to submit a new explanation for 24 uncompleted transactions at its luxury project 39 Conduit Road, an official source said.

The University of Hong Kong medical faculty and Queen Mary Hospital are to lose their leading bone marrow transplant specialist to the private sector, adding to concerns that a brain drain of experienced doctors will affect public services. Professor Raymond Liang Hin-suen, the head of the HKU medical faculty's bone marrow transplant team and former dean of medicine, will join the Hong Kong Sanatorium and Hospital in October as the head of a newly established department of medicine and oncology. The hospital will also appoint retired HKU chair professor in surgery William Wei to lead its surgical department in June. With his expertise in bone marrow transplants and treatment of leukaemia, Liang, 55, has been an iconic figure at the HKU medical school. He is also the president of the Hong Kong Academy of Medicine, the body responsible for training specialists. Liang admitted yesterday that the medical school had been suffering a brain drain but said his case was not an example. Queen Mary Hospital, the HKU's teaching hospital, and Prince of Wales Hospital in Sha Tin are Hong Kong's only two bone marrow transplant centres. Liang said he had formulated a plan to ensure continuation of HKU services. "There are seven other doctors in our team, and many are on consultant grade," he said. "There is no problem of succession at all." The HKU head of liver transplants, Professor Lo Chung-mau, has previously expressed frustration at how development of liver transplants was being "suffocated" by a brain drain. Liang's resignation follows those of three liver transplant surgeons from Queen Mary Hospital in the past few years. Liang said he had decided to take early retirement from the university to share his experience with the private sector. He said earlier that restrictions on university doctors seeing private patients was one of the factors prompting senior doctors to quit. Doctors said while a public hospital consultant made about HK$2 million a year, a popular private surgeon could earn more than HK$10 million. But Liang said more money was not the reason he quit. "My income in the private sector will be just about the same as at the university because most leukaemia patients are under public hospital care. It is time for me to start a new chapter in life after spending 25 years at the university My departure can also give opportunities to younger doctors to lead the team." He would continue to spend a fifth of his time at the medical school. The superintendent of the Hong Kong Sanatorium and Hospital, Dr Walton Li Wai-tat, said the hospital wanted to set up more departments to make prices more transparent and clinical audits more systematic. "Having our own departments in different specialities can also expand our spectrum of expertise," Li said. Having more doctors with a university background serving the hospital would strengthen links between public and private health care. Dr Chu Kin-wah, a former consultant surgeon at Queen Mary Hospital, said a rigid pay system and heavy administrative work at public hospitals had also prompted some experienced doctors to go private. Chu, who started private practice in 2004, said more than 10 senior surgeons had quit Queen Mary Hospital in the past five or six years, and many had made a lot more money after turning private. "The brain drain of senior public doctors may not be good for public patients, but in another sense, patients who can afford private services can have access to senior doctors in the private sector," Chu said. Another HKU doctor said staff morale had been poor since the imprisonment of the faculty's former dean Lam Shiu-kum. Lam was jailed for 25 months in September for inducing patients to make payments of almost HK$4 million to his company. Cheung Tak-hai, vice-chairman of the Alliance for Patients Mutual-Help Organisation, said his group had raised the issue of the loss of expertise with the Hospital Authority but understood there was not much the hospital management body can do. "It is a vicious cycle, when one doctor from a department leaves, the hospital may not be able to hire a replacement because of manpower shortages," Cheung said. "Those who stay on have to face extra workloads and at the end of the day, some of them cannot tolerate the increasing pressure and they want to leave too."

Tsang Tak-sing (left), Charles Lee and John Tsang announce the establishment of two councils, in Hong Kong and Taiwan, that will ensure closer working ties between the city and the island. In a reflection of warming relations between Taiwan and Beijing, Hong Kong and the island are establishing a quasi-official framework under which deals on economic and cultural co-operation can be negotiated. The Hong Kong-Taiwan Economic and Cultural Co-operation and Promotion Council, headed by top ministers, will be authorised to hold talks and sign memorandums of co-operation with a soon-to-be formed Taiwanese counterpart. The council, being established today, will be registered as a limited company, bypassing political obstacles to direct negotiations. Announcing the launch yesterday, Financial Secretary John Tsang Chun-wah, who will be the council's honorary chairman, said officials from both sides could exchange views on issues of mutual concern "in appropriate capacities under this umbrella". The council will be registered as a limited company under the Companies Ordinance, with the Constitutional and Mainland Affairs Bureau providing secretariat support and the government as a whole providing "full support and resources", Tsang said. Executive councillor Charles Lee Yeh-kwong will chair the new body. The four vice-chairmen are Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung, Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan, Secretary for Home Affairs Tsang Tak-sing and businessman David Lie Tai-chong. Lie, a local delegate to the Chinese People's Political Consultative Conference who has extensive business links in Taiwan, will also chair a new Hong Kong-Taiwan Business Co-operation Committee, where local and Taiwanese businessmen in Hong Kong will discuss issues relating to trade, tourism and investment between the two places. The Taiwan counterpart, the Hong Kong Economic and Cultural Co-operation Council, headed by high-ranking Taiwanese government officials, will be established soon, according to Taiwan media reports. Tsang said the two councils would hold their first joint meeting in the coming few months. "We expect to see multifaceted and multilevel exchanges with Taiwan," a government spokesman said. These could include health issues such as infectious diseases, medical services, clinical trials and the exchange of drug-related information and financial topics such as co-operation in financial regulations and the avoidance of double-taxation. In Taipei, Chiang Pin-kung, chairman of the Straits Exchange Foundation - the island's top representative body for talks with the mainland - said there would be closer economic ties between the mainland, Taiwan and Hong Kong. Chiang was hosting a lunch with Hong Kong's former chief executive Tung Chee-hwa, who was visiting the island. Tung, now a vice-chairman of the Chinese People's Political Consultative Conference, said he believed there were "very good achievements" ahead. China affairs commentator Johnny Lau Yui-siu said the council as a quasi-official body could provide greater flexibility in negotiations. "From Hong Kong's perspective, the Taiwan government is a municipal administration, but from Taiwan's perspective it is the central government of the Republic of China. Talks under a semi-official framework will avoid these political problems."

A Taiwanese official says President Ma Ying-jeou will engage the opposition leader in a debate this month on a contentious trade agreement with China.

The Illinois Gaming Board has informed MGM Mirage that it is aware of New Jersey’s recent findings on the company’s Macau joint venture and will be conducting its own investigation. The casino operator was told of the plans at a meeting of the Illinois regulatory board on Tuesday, according to general counsel Michael Fries. Officials at MGM Mirage did not immediately respond to a request for comment. MGM owns a 50 per cent stake in the Grand Victoria Casino, a riverboat casino about 64km from Chicago in Elgin, Illinois. MGM said earlier this month it would sell its 50 per cent stake in the Borgata casino-hotel in Atlantic City after New Jersey gambling regulators said the company’s Macau partner, Pansy Ho, had links to mainland organised crime. Pansy Ho is the daughter of Macau casino magnate Stanley Ho. Macau, the only place in the country where gambling is legal, has surpassed Las Vegas to become the world’s largest gambling centre. Regulators in Nevada, where MGM operates 14 casinos, said they have no plans to reopen their inquiry into the Macau joint venture, which was formed in 2004. “Nevada’s position has not changed and there are no plans to reassess the joint venture relationship between MGM Mirage and Ms Ho,” Randall Sayre, a member of Nevada’s Gaming Control Board, said in an e-mailed statement. But a spokesman for the Michigan Gaming Control Board said that agency will likely reexamine MGM Mirage following the New Jersey events. MGM owns half of the MGM Grand Detroit casino. “It’s already under review,” said Michigan board spokesman Eric Bush. In the United States, MGM also operates two casinos in Mississippi. The Mississippi Gaming Commission is reviewing the New Jersey report on MGM Mirage and Pansy Ho, said Allen Godfrey, the commission’s deputy director. MGM said in a statement earlier this month that all of the jurisdictions in which it operates were well aware of the Macau joint venture, “had access to the same information as the New Jersey gaming regulators, and have all either determined that the company’s relationship with Pansy Ho is appropriate or that further action was not necessary”.

The Securities and Futures Commission has applied for a court order to recoup HK$1 billion raised by mainland sportswear-fabric maker Hontex International Holdings in its initial public offering three months ago - the first such move by the stock market watchdog. The writ submitted to the High Court yesterday alleges Hontex contravened sections of the Securities and Futures Ordinance covering deception and fraud. If successful, the money raised in the share sale will be paid back to initial subscribers and those who have bought the stock since the company listed on Christmas Eve.

China*: China's vast manufacturing sector moved up a gear in March as orders climbed, two business surveys showed on Thursday, pointing to brisk first-quarter GDP growth.

Chinese President Hu Jintao will attend the Nuclear Security Summit and the second summit of BRIC nations.It is widely expected China, as a major developing nation, will play important roles in the summits and join the international community in meeting global challenges.

Hong Kong-based Bank of China Group Investment, has agreed to buy a 4.5 per cent stake in Beijing-Shanghai High-Speed Railway Co, its parent Bank of China announced on Thursday. Bank of China, the country’s third-biggest lender by market value, said on Thursday it planned to invest up to 6 billion yuan (HK$6.81 billion) in a state-owned firm building a high-speed railway linking Shanghai and Beijing. It said its Hong Kong-based unit, Bank of China Group Investment, has agreed to buy a 4.5 per cent stake in Beijing-Shanghai High-Speed Railway Co using foreign currencies, “The investment is expected to generate reasonable return and will help the bank diversify its services,” the Beijing-based lender said in a statement to the Shanghai Stock Exchange. “It will also help the bank win more businesses in China’s large-scale railway investment and construction, which is in line with our development strategy.” Mainland last year unveiled a 4 trillion yuan, infrastructure-focused stimulus package that boosted railway investment by 67 per cent last year. Beijing will continue to boost railway investment, which had lagged economic growth in the past decade. Planned investment in the 1,318km-long high-speed railway linking Beijing and Shanghai totals 220.9 billion yuan. The project, which started in April, 2008, will be completed within five years. Bank of China and state rivals such as China Construction Bank (SEHK: 0939) and Bank of Communications (SEHK: 3328) benefited from a government-directed lending spree last year aimed at reviving the economy, but they plan to curb expansion this year as Beijing starts to tighten monetary policies. Bank of China Group Investment is buying the stake from China Railway (SEHK: 0390) Investment Corp. The deal is yet to be approved by regulators, according to Thursday’s statement.

The United States heralded a potential breakthrough on Wednesday in building support for UN sanctions against Iran, saying China was now ready for "serious" talks

China could have its first aircraft carrier operational in two years, according to the most senior US military official in the Asia-Pacific region. Admiral Robert Willard, commander of the US Pacific Command in Hawaii, told a recent US congressional hearing that the Soviet-era carrier Varyag, bought from a Ukrainian shipyard in 1998, would be "operational around 2012 and likely be used to develop basic carrier skills" after a 10-year refit. His statement is the most specific yet from the Pentagon on Beijing's aircraft carrier ambitions. Several military analysts and diplomatic military attaches said the Varyag had recently left dry dock at a Dalian shipyard revealing extensive work to its hull and superstructure. It had also been demagnetised in order to avoid mines. They said they believed the Varyag would almost certainly be kept close to the mainland coast to train pilots and crew until China's first domestically built carriers were completed, possibly as soon as 2015. It is not yet known whether Varyag's engines have been fully fitted. A full-scale concrete replica of its flight deck and superstructure is near completion next to a technical college in Wuhan, Hubei province. Willard told the armed services committee of the House of Representatives late last week there was a need for deeper engagement with Beijing amid international doubt that its military modernisation was "purely defensive" as stated. "Frank and candid" discussions were needed, he said, but they required "a stable and reliable US-China military-to-military relationship - a relationship that does not yet exist with the PLA". "Over the past few years, China has begun a new phase of military development by beginning to articulate roles and missions for the PLA that go beyond China's immediate territorial concerns, but has left unclear to the international community the purposes and objectives of the PLA's evolving doctrine and capabilities," Willard said. An operational Varyag is widely seen as a crucial step on the path to China fulfilling its aim of achieving full blue-water naval capability. Even if the Varyag is operational in two years, it remains unclear whether China will be able to obtain planes capable of flying from its take-off ramp. While pilots have been in training with Ukrainian advisers, Beijing has yet to complete a deal with Moscow to purchase carrier-capable Su-33 fighters. Talks have dragged on for four years, with Moscow - wary of having its military technology reverse-engineered - wanting to sell at least 50 planes and China wanting a far smaller number. China has already obtained an Su-33 prototype from Ukraine for research purposes. The PLA will also need to perfect theconfiguration of the Varyag's radars, wiring and communications - all highly complicated on a cramped carrier. It will also have to learn to use the ship in tandem with the support ships and submarines vital to its protection. Andrew Erickson, a China scholar at the US Naval War College, said getting the Varyag operational was merely the start. "China's refitting of Varyag to make it operational around 2012 seems to be part one of a two-part approach - outfit a foreign-purchased platform to enable basic training, while preparing a more capable [domestically made] platform for higher-level military operations," he said. "Some time after 2015, personnel that initially trained on the Varyag could be transferred to China's first indigenous operational carrier." Whether the home-grown design would be based on the Varyag remained to be seen. Analysts have noted that the ramps used on the Soviet-era carriers limit the type and weight of aircraft that can be deployed compared to flat-deck carriers that use steam catapults, such as American and French carriers. Xu Guangyu, a Beijing-based retired PLA general, said the Chinese side had yet to reveal a detailed schedule for carrier development. "I think Admiral Willard's report comes the closest to Beijing's answer because the US is the most experienced aircraft carrier expert." Gary Li, a PLA specialist at the London-based International Institute of Strategic Studies, said it was clear that PLA officials were well aware of the limitations of the Varyag and were still looking at other designs. "It does seem they've got little option at the moment but to push ahead with the Varyag for training ... it is clear they know just how long a road they have embarked on, so they've got to make a start on integrating all the necessary components," he said. "Although carrier technology is very old, it is still extremely complex to acquire from scratch. Even the welding techniques to withstand such stresses are closely held secrets." The 67,500-tonne Varyag was partially completed in a Ukrainian shipyard when the Soviet Union collapsed. Stripped of technology, the hull and superstructure were sold to Beijing for US$20 million in 1998. China later paid extra for the blueprints. The then-rusting hulk of the ship was towed to China via Macau, prompting early speculation that it might be used for a casino.

SAIC Motor Corp said on Thursday its net profit for last year jumped 904.6 per cent, beating market expectations, after Beijing’s stimulus measures spurred a surge in sales.

The mainland's top offshore oil producer CNOOC (0883) said net profit last year plunged 34 percent to 29.49 billion yuan (HK$33.54 billion), in line with market expectations, as crude oil prices declined.

Shanghai Industrial (0363) posted a record net profit of HK$2.86 billion for last year, up 36.1 percent from a year earlier, aided by a net gain from divestment of noncore business.

Comba Telecom Systems Holdings (2342) said net profit soared 148.1 percent last year to a record HK$564.5 million on the back of strong revenue from 3G network backup services in the mainland.

Trial illumination marks 30 days counting-down of Shanghai Expo.

April 2, 2010

Hong Kong*: A new council to encourage greater co-operation between Hong Kong and Taiwan would be launched on Thursday, a government spokesman said on Wednesday.

Shoppers' return brings retailers HK$27b as economy improves - New cars, electronic gadgets and jewellery topped shopping lists last month as consumers spent almost HK$27 billion, up more than a third from the period a year ago, according to data from the Census and Statistics Department. Although the strong growth in retail sales last month was skewed by the timing of the Lunar New Year holiday from last year, February's 35.8 per cent jump in the value of sales failed to meet the 43.2 per cent rise economists had expected. By volume, total sales climbed 31.5 per cent. In January, sales improved 6.5 per cent in value and by 3.2 per cent in volume. Taking January and February data together gives a more accurate reading of retail sales as they are usually distorted by the floating date for the Lunar New Year. This year's holiday was in February but it was in January last year. Over the two-month period, retail sales increased 18.8 per cent in value and 15.1 per cent in volume. A government spokesman said consumer sentiment should stay firm as the economy picked up. "The improvement in labour market conditions along with the economic recovery has reinforced consumer confidence. The robust performance of inbound tourism has also been highly supportive," the spokesman said. Consumers were quick to cut back on their spending, particularly luxury goods and non-essential items as global financial markets crashed amid the downturn. Businesses struggled and shed jobs, fewer people travelled for leisure or work and those who were still well-off shunned displays of wealth. Hong Kong Retail Management Association chairwoman Caroline Mak Sui-king said that while the 55.2 per cent surge in the volume of car sales over the past two months was a positive sign, many everyday items, such as books, newspapers and fruit and vegetables, were experiencing virtually no growth. Mak said it was still too early to declare an economic recovery as many people were still cautious about their spending. A clearer indication of economic health should emerge in the second quarter of this year, as orders trickle in from retailers for the Christmas shopping season, she said. Other than car sales, the volume of sales of electrical goods in the past two months rose 27.9 per cent while jewellery, watches and clocks jumped 24.7 per cent. Department store sales improved 17.2 per cent, furniture and fixtures climbed 17.1 per cent, clothing increased 16 per cent and footwear rose 13.4 per cent.

The Hong Kong Consumer Satisfaction Index rose to 69.9 in 2009 – a figure close to the record high it reached in 2007, a new survey released on Wednesday showed. The survey by the Department of Management Sciences at City University of Hong Kong interviewed 13,057 people during June and August last year. The index uses a scale of 0 to 100 to indicate the level of consumer satisfaction. Associate professor at the university, Dr Geoffrey Tso Kwok-fai, said the index had shown a steady increase since 2008. “Its reading dropped from a peak of 70.2 recorded in 2007 to 69.1 in 2008, but it rebounded 1.2 per cent to 69.9 last year,” he said. “The global economic environment had suffered from the financial tsunami, but has gradually recovered since the second quarter of last year, and consumer sentiment, which is affected by people’s confidence in the future of the economy has also rebounded,” Tso said. Items consumers are most satisfied with are transport services and products, which scored 73, followed by clothing and personal care (72.8) and information and entertainment services (71.4). Although housing recorded the biggest improvement, it scored only 67.5, the index showed. The index covers 69 goods and services in six categories. They include clothing, food, transport, communication and housing sectors and items not included in consumer price index.

About 80 Hong Kong people, who have joined four package tours to Russia, continued with their trips on Wednesday, travel agencies said.

The assets of the Exchange Fund, which is used to back the Hong Kong dollar, totalled HK$2,201.7 billion at the end of February, the Hong Kong Monetary Authority (HKMA) said.

The daughter of late kung fu legend Bruce Lee said on Wednesday she was thrilled his fame had endured four decades after his untimely death, and hoped Hong Kong would soon have a museum in his memory. Shannon Lee Keasler was visiting Hong Kong with her mother Linda Lee Cadwell to launch an exhibition dedicated to the “Enter the Dragon” star, who died of brain swelling at the peak of his film career in 1973 aged just 32. “We are absolutely thrilled that so many people continue to be inspired by him and find so much value in his life and work,” Lee said, adding that she would be in Tokyo next month to launch another exhibition of her father. Keasler, who is an actress in the United States, said some of the exhibits were from the family’s collection, including a pair of sunglasses, boxing headgear, film costumes, and samples of her father’s handwriting. The exhibition, which will end on April 6, is part of a series of events to pay tribute to Lee during this year’s Hong Kong International Film Festival. The future martial arts hero was raised in Hong Kong before moving to the United States in his late teens. Keasler said they were raising funds for a US museum, and hoped a government plan to transform Lee’s former home in Hong Kong’s Kowloon Tong district – now a seedy love hotel that rents out rooms by the hour – would begin soon. “We hope there will be some sort of symbiotic relationship between the museums in Hong Kong and the US, so that the two museums can share some of the exhibits.” A local design contest ended earlier this year. But the Hong Kong museum’s final look, building costs, and the project’s completion date have yet to be determined.

Cheung Kong Holdings (0001) chairman Li Ka-shing is not handing out any investment tips this year - even though he's expecting a stable and positive property outlook. Hong Kong's richest man said those who had followed his suggestion a year ago and bought homes would have profited. But with an already red-hot property market in the SAR, Li - who generally appeared more cautious than in previous years - was on his guard yesterday. "It's truly a crime to tell the public anything inaccurate or exaggerated, so I tend to be more cautious," Li said, noting he had "bared his soul." The billionaire added: "One has to be very careful with what one says." Property prices depend on two factors these days, Li said. Land costs appear stable, but construction costs have been rocketing. In Cheung Kong's statement to the stock exchange, Li wrote that "the local property market is expected to remain stable and positive in the medium to longer term," in view of the prevailing low interest rate environment and official measures to increase land supply flexibility. His son and Cheung Kong deputy chairman Victor Li Tzar-kuoi noted the property giant almost ran out of homes to sell recently, but added that flats will be on the market as soon as consents are given in order to ensure market supply. Victor Li urged people to be always cautious when it comes to buying a home, but noted that demand surged in the past two years while supply remained low. "In the past few decades, out of every 10 homebuyers who held their homes for an extended period, nine made money," he said. "I don't think this formula will change." Asked whether the government should tighten regulations on property sales, Li Ka-shing said it has been trying its best to stabilize property prices. "I think the government has done a nice job," he said. Victor Li added official regulations will not cause them any trouble. The elder Li did not address the resumption of construction for the Home Ownership Scheme directly. "I am very supportive of providing public rental housing to low-earners," he said. "As for HOS homes, I think there has been much discussion and people have different views." Victor Li added Cheung Kong does not want to pressure the government and prefers to leave room for it to come up with ideas. He said developers can increase the supply of smaller homes for aspiring homebuyers only if the government increases the maximum number of units officially allowed. Chairman Li said the mainland's steady growth has given solid support to the local economy, while accelerated cooperation presents the city with good growth opportunities. "In the first quarter this year, almost all our businesses performed better than budgeted," Li said. "It proves that many businesses are faring better than last year." He added: "Unless anything extraordinary arises, Cheung Kong and Hutchison (0013) will see good growth this year." Li also said that he would buy more shares of the two firms, particularly when their P/E ratios are still low.

Media tycoon slams attacks on Ronny Tong - Sorry to say this ladies, but shame on you! Not quite his words, but this was the gist of Sing Tao News Corp chairman Charles Ho Tsu-kwok's admonishment of the Civic Party's Audrey Eu Yuet-mee, Margaret Ng Oi-yee and Tanya Chan Suk-chong. Ho was chastising the three women for not rushing to the aid of party colleague Ronny Tong Ka-wah, who has been verbally attacked by "Mad Dog" Raymond Wong Yuk-man of the League of Social Democrats, crucified by Wong's followers on the internet, abused by other netizens, and even threatened with death. Barrister Tong's "crime" was that he did not agree with the so- called election-referendum, first mooted by the LSD and later joined by the Civic Party. "Ronny Tong received severe verbal attacks and threats. He was a teammate of the three ladies when they started the Civic Party. Why didn't they speak out for him?" Ho said at last night's Leader of the Year 2009 award presentation ceremony. Ho added he was amazed at how the Civic Party and league became an alliance. "It is a story of three women and three wolves. The three ladies are Eu Yuet-mee, [Margaret] Ng Oi-yee and Tanya Chan, while the three wolves are [Raymond] Wong Yuk-man, Leung Kwok- hung, and [Albert] Chan Wai-yip," he said. "The only explanation I can think of is that the two sides started to have feelings for each other. As time went by, they eventually chose to get together," Ho said.

Chan teams up with Thai giant in $3b hospital bid - Former executive councillor Bernard Charnwut Chan and a world-renowned Thai company are planning to mount a bid to build a HK$3 billion hospital in Aberdeen. Asia Financial Holdings, of which Chan is president, has submitted an expression of interest with Bumrungrad International to build the 350-bed private hospital at Wong Chuk Hang. The companies made their submission to the Food and Health Bureau yesterday. Bangkok-based Bumrungrad owns the Bumrungrad Hospital, one of the world's largest medical tourism facilities, which treated more than a million patients last year. It also owns, operates and manages hospitals and health-care facilities in seven other countries in Asia and the Middle East. Today is the last day of submission for expressions of interest to build private hospitals at four sites. Members of a prominent city family last week said they are teaming up with Chinese University to bid for 2.6 hectares at a Tai Po site. The other sites are at Tung Chung and Pak Shing Kok in Tseung Kwan O. Others known to be interested are Union Hospital, Henderson Land and Great Eagle. Chan, who also chairs the Antiquities Advisory Board, said it is envisioned that the Aberdeen facility will be an integrated hospital offering comprehensive services. The second phase of the hospital will involve room for another 150 beds if necessary, said the former legislator. "We have decided to come up with a plan to develop the site. Our idea is to split the plan into two phases." The first phase will be opened together with the MTR South Island Line "so that we don't have to wait for the entire completion of the subway to start [building]," he said. The second phase will depend on whether there is a demand and on whether there is sufficient medical personnel. Chan said the HK$3 billion investment does not include land premium, which the government has yet to reveal. "The one single factor that will determine whether we will go ahead or not is the land premium," he said. For the government to attract the private sector, it will have to offer "a huge concession" in the land premium. "Their challenge is how can they justify giving a land to a private operator with any form of concession," he said.

A heritage headache that's hard to relieve - One of the biggest headaches about preserving heritage buildings is deciding how to use them. It is easy to say something should be turned into a museum, but how many museums do we really need? There is also a limit to what government can afford to spend in any area. In principle, there is nothing wrong with relying on the private sector to play a role, although it can be controversial. A developer obtained a 50-year land grant for the old marine police headquarters in Tsim Sha Tsui in 2003 on condition that the structure was maintained. There was controversy, however, when the developer altered the grounds substantially; there were also complaints about the use of the site for mostly high-end luxury retail outlets. In all fairness, the building itself has been preserved and is actually quite striking to look at. It is popular with tourists, but less so with local people. That sort of solution would probably not be acceptable to the community these days. Down in Stanley, the old police station has also been turned into retail premises: a Wellcome supermarket. This has also drawn some complaints, but I am not sure they are justified. The layout of the interior, the old wooden floorboards and many fittings are still intact. All Wellcome has done is put a supermarket into a very unusual space. The space still very much belongs to the community. The important thing - though it may be subjective - is whether a particular use brings out a building's historical significance. Bernard Charnwut Chan, chairman of the Antiquities Advisory Board, sees culture from all perspectives.

COSCO Pacific (1199), China's largest port operator, said net profit for 2009 plunged 37.2 percent to US$172.5 million (HK$1.34 billion), from the previous year as international trade shrank because of the global financial crisis. A final dividend of 1.199 US cents was proposed.

Sales of flats at the Larvotto (above) and the Hermitage are keenly watched for their impact on how upcoming projects are priced. A flood of new luxury homes is expected to hit the market next month and industry watchers are divided on how potential buyers will respond. Interviews with people who are looking for a new home reflect the range of views held by analysts and agents. Self-employed engineer Jason Wong, for one, plans to buy a flat at Festival City, a development by Cheung Kong (Holdings) (SEHK: 0001). "We have two children. We need a bigger living space, and Tai Wai has better transport connections," he said. But Jeff Pao, who works in a news agency, prefers to wait. "I don't want to buy at the market peak. Prices may drop once interest rates increase in the middle of this year. I will buy once prices drop 10 per cent," he said. Pao sold his flat at Ocean Shores in Tseung Kwan O in June last year and is now renting a flat in the same estate. Buyers' concern about whether prices have peaked will lead to a slow take-up of new flats, some analysts and agents say. But others remain bullish, pointing to the strong demand. The first phase of the 4,304-unit Festival City was launched for sale last Friday, getting to the market just ahead of the release by a consortium led by Sun Hung Kai Properties (SEHK: 0016) of Larvotto, a luxury project in Ap Lei Chau, over the Easter holiday. A consortium led by Sino Land is also expected to launch the Hermitage in West Kowloon for sale next month. All three projects target the higher-income groups. Although Festival City is located in the non-core area of the New Territories, the minimum price of the first batch of 20 flats released last week was HK$8.95 million. The 715-unit Larvotto project is pitched at an average of HK$25,000 per square foot, with the minimum price of a flat at about HK$60 million. Analysts expect prices of the Hermitage, which will offer 852 flats, to reach HK$13,000 per square foot. These three luxury residential projects are expected to ease demand significantly and consume a good portion of the market's buying power, analysts say, stirring concerns about the strength of support for new releases due later this year. Property seekers are becoming wary of rising home prices, said Michael Wu, a director at Fitch Ratings. He points to Festival City's slowing sales. Fewer than 400 flats at a cost of between HK$8,000 and HK$11,000 per square foot were sold in the first three days of sale. Of this number, 300 were sold on the first day. This compares with the developer's weekend sales forecast of 1,360 flats.

China*: China central bank on Wednesday reaffirmed its appropriately loose monetary stance but said it would implement the policy more flexibly. The brief statement made no mention of the yuan and shed no light on what, if any, tweaks to monetary policy might be in store. In a statement released a day after the quarterly meeting of its monetary policy committee, the People’s Bank of China vowed to maintain appropriate credit growth but said achieving that goal while preventing financial risks would be a tough challenge. “Currently, the economic and financial situation is extremely complicated,” it said. Growth was recovering but the government faced an urgent task to adjust the structure of the economy. The central bank said it would keep its overall policy setting steady but would “make the policy more targeted and flexible”. “We will apply various policy tools to keep banking liquidity reasonably ample and steer an appropriate rise in overall money supply and credit,” it said. So far this year, the central bank has twice raised the proportion of deposits banks must keep on reserve and has been draining more and more cash from the banking system to reduce the risk of inflation. The meeting was attended by three new academic members to the policy panel, which plays a vital role in framing key policy changes including interest rates and currency. Two of the new committee members, Xia Bin and Li Daokui, have recently called for the yuan, which has been virtually pegged to the US dollar since mid-2008 to cope with the global crisis, to resume its gradual rise. Earlier Caijing Magazine reported in its latest issue that central government is reviewing proposals to adjust its currency exchange rate system next month. The proposals include giving the yuan a more flexible exchange rate by widening the narrow daily trading band, the weekly Caijing Magazine reported, citing unnamed sources. Currently the yuan may rise or fall 0.5 per cent against the US dollar each day from a mid-point set by the central bank and three per cent for non-dollar currencies such as the euro and Japanese yen. The magazine said it had been proposed the change should take effect in April. The timing would be significant, with US lawmakers pushing the Treasury Secretary Timothy Geithner to label Beijing a “currency manipulator” in a report due April 15 that could trigger tougher action on mainland. Washington has led the international charge in ramping up the pressure on Beijing to let the yuan – effectively pegged at about 6.8 to the US dollar since mid-2008 – appreciate. The dispute over the value of the yuan is one of several issues that has fuelled tensions between the United States and mainland in recent months. US President Barack Obama said on Monday he was determined to further develop a “positive relationship” with mainland, in comments welcomed by Beijing as the two powers seek to overcome the deep strains in their ties.

Chinese auto maker Zhejiang Geely Holding Group is ready to inject 900 million U.S. dollars operating capital into Volvo on top of the 1.8 billion U.S. dollars purchase price, Geely chairman Li Shufu said Tuesday.

A sea lion pounds on a drum to mark the 30-day countdown to the opening ceremony of Shanghai World Expo at Shanghai Changfeng Ocean World, on March 30, 2010. Ocean World will put on stage live animal performances in April. April 1 marks the 30-day countdown to the opening ceremony of Shanghai World Expo.

Beijing denied on Wednesday it has "hijacked" water from the Mekong River, causing its lowest levels in 20 years for countries downstream in Southeast Asia.

Beijing subway stations on alert after Moscow tragedy - A police dog and its handler, a policewoman, patrol at a Beijing subway station, March 30, 2010.

Dai Wensheng visited Vietnam for the first time in September - and came back with a wife. The 42-year-old Nanjing dance school owner has been back seven times since, leading groups of mainland bachelors looking for the marital bliss described on his blog. Vietnamese women were young, virtuous, pretty, hard-working, obedient and gentle, he wrote, unlike their money-worshipping, greedy mainland counterparts. That description struck a chord with male internet users, with almost every major online forum on the mainland featuring fevered discussion of his success and thousands of bachelors from across the nation calling him, seeking to copy it. Reports of a gender imbalance that will see the mainland home to 24 million unmarriageable bachelors in 2020 has added to the urgency of their search and prompted many to look south, towards Vietnam. It all started with a 15-day trip to Vietnam that cost Dai a total of 35,000 yuan (HK$39,800). Dai, who previously had a Chinese wife, spent about 80 yuan to publish a marriage-wanted advertisement in a Vietnamese newspaper and, with the help of local matchmakers, met about 100 Vietnamese women. A month later, he registered his marriage to 23-year-old Ngan in her hometown of Haiphong, northern Vietnam, and now lives with her in Nanjing. "Marrying a Vietnamese girl is very simple and there is a plentiful supply too," Dai said. "You only need to obtain the girl's parents' consent and then you can organise the banquet, and the marriage certificate can be done soon after.

Huawei Technologies said its profit more than doubled last year and forecast strong revenue growth this year, fed by an ambitious export drive and strong 3G spending in mainland.

Emerging markets face the risk of asset bubbles that could burst dangerously once the United States raises interest rates, a vice-governor of mainland’s central bank said.

Two female celebrities and a large amount of money were the star attractions in Tuesday's bribery trial of Wang Yi, former vice-president of State-run China Development Bank. Wang, who stood trial at the Beijing No 1 Intermediate People's Court, pleaded guilty to the charge of accepting bribes of more than 11.96 million yuan ($1.76 million), and confessed that he "used his power and his influence to make profit for others and himself". No verdict was reached. However during the trial testimony by Li Tao, a businessman from Hong Kong who bribed Wang with 5 million yuan, unexpectedly named two famous celebrities - movie star Zhao Wei, and the anchor of China Central Television, Liu Fangfei, the Beijing Evening News reported. Li, who has also been arrested, said that years ago he invited Wang to attend an opening ceremony for his company in Shenzhen in South China. Zhao arrived with Wang and was later given a 300,000 yuan ($43,944) "appearance fee", the report said.Banker's bribery trial names two female celebrities Zhao's agent, Chen Rong, denied Li's remarks. "Zhao did attend an activity in Shenzhen 10 years ago, but it was completely a commercial event, just like a commercial performance. We were invited by a public relations company and we do not know Wang or Li at all," Chen told, a popular online portal. Li said Wang also asked him to give Liu 2 million yuan ($292,960) so that Liu could pay off her housing loan. In 2008, Wang then asked Liu to give the money back to Li when the police started to investigate his case, according to the report. Liu could not be reached for comment on Tuesday because her mobile phone was switched off. According to charges brought by the No 1 branch of the Beijing Municipal People's Procuratorate, Wang received all of his bribes by helping others to get loans. He helped Li get a loan for a highway construction project and received about 5 million yuan ($732,402) in return. Wang also allegedly took advantage of his post to help Zhou Hong, chief executive of a steel slag company in Southwest China's Yunnan province, with business operations and loan applications, in which he received bribes of 6.3 million yuan. Wang, 54, had an impressive career path before he was investigated for possible corruption. He graduated from the history department of Peking University in 1984. At the age of 39, he became the vice-chairman of China Securities Regulatory Commission and he was vice-president of the China Development Bank from 1999 to 2008, when he was investigated and removed from his post. Wang is one of eight ministerial-level officials being investigated for corruption last year. Others include Huang Songyou, former vice-president of the Supreme People's Court, and Chen Shaoji, former top political adviser of Guangdong province in South China.

April 1, 2010

Hong Kong*: The government said on Tuesday that consumer sentiment soared last month as the city’s shoppers boosted retail sales by 35.8 per cent over the previous year.

The government was allocating more money and resources towards reducing domestic violence in Hong Kong, Director of Social Welfare Patrick Nip Tak-kuen said on Tuesday.

Hong Kong and New Zealand have ratified a free-trade agreement that will allow people travelling on business between the two places to stay for up to three months.

Li Ka-shing, chairman of Hutchison Whampoa Limited and Cheung Kong Holdings waves to reporters after a news conference to announce the annual results of the company in Hong Kong on Tuesday. Hutchison Whampoa (SEHK: 0013), billionaire Li Ka-shing’s ports-to-telecoms flagship company, is looking to acquire assets for its ports business, seeking bargains in the global shipping sector, as it focuses again on its core businesses after a difficult 3G foray. The Hong Kong conglomerate aims to tap into guarded optimism that the shipping market has bottomed out, a view that has helped lift shares of Asian liners across the board this year with firms such as Orient Overseas (International) (SEHK: 0316) and Hanjin Shipping up by about half this year. “It is very difficult to buy port assets in good times, but in such a weak operating environment, we see more opportunities and are looking to buy more port assets,” Hutchison’s chairman Li told a news conference on Tuesday after announcing its results. The outlook on the ports front contrasts with the view on the loss-making third-generation (3G) mobile phone business, which has long been a drag on earnings and continued to lose money last year, albeit at a slower pace. “The bleeding on its 3G business is finally slowing,” said Francis Lun, general manager of Fulbright Securities. “Ports will be the single biggest factor driving earnings this year, and that is really the area they should concentrate on right now.” The ports business, which contributed more than a quarter of total earnings before interest and taxes (EBIT), however, had a rough last year in the global downturn, with revenue slipping 16 per cent and EBIT falling 21 per cent. Shares of Hutchison closed down 2.7 per cent on Tuesday at HK$56.70 after the release of its results, which lagged forecasts. Volume was heavy, with 12.5 million shares changing hands on the day, up nearly 80 percent from the 90-day average. Hutchison, one of the top conglomerates in Asia-Pacific by market capitalisation, has been boosted in recent years by one-off gains, which helped shield it from the worst of the global economic downturn. It recorded more such gains last year for the sale of assets from its emerging markets telecoms unit and the merger of its Australia 3G business with Vodafone’s. But those failed to set off weak performance from its ports division. The widely diversified group, whose businesses include telecoms operator 3 and Watsons retail stores, reported net profit of HK$8.4 billion in July-December, according to Reuters calculations using company figures. This was higher than the restated HK$4.09 billion recorded the same time in 2008, but lower than the HK$9.44 billion market forecast according to 10 analysts polled by Thomson Reuters I/B/E/S. Hutchison’s Li is the richest man in East Asia with an estimated net worth of US$21 billion and his companies make up about 15 per cent of the Hong Kong’s stock market’s total capitalisation, Forbes magazine said earlier this month. By comparison, Mongolia has an annual GDP of about US$5 billion. Separately, Cheung Kong (SEHK: 0001) Holdings, which holds nearly 50 per cent in Hutchison, reported a second-half profit of HK$8.4 billion, quadrupling from the previous year’s restated second-half figure and beating market expectations for a HK$6 billion profit. Hutchison’s loss-making third generation (3G) mobile phone services unit, which offers service in markets in Europe and Australia, reduced its loss before interest and taxes (LBIT) by 67 per cent last year to HK$5.3 billion. “Hutchison’s been saying that 3 will return to profit for a while now, but its failure to turn it around is going to disappoint the market,” said Andy Lam, a strategist at Harris Fraser, adding he was neutral on the company. Hutchison shares are up about 6 per cent this year, outperforming the roughly 2.3 per cent decline on the benchmark Hang Seng Index.

Construction of the Kai Tak cruise terminal building will start in May if the Legislative Council approves the higher cost. Latest estimates given to Legco's panel on economic development put the total construction cost of the terminal block, plus site formation works, at HK$8.156 billion - up from HK$7.2 billion in September 2008. Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan said the latest estimate is within budget and close to the 2008 estimate in real terms. Permanent Secretary for Development Mak Chai-kwong said the rise in cost is due mainly to inflation. If the 2008 estimate is expressed in last September's prices, it is equivalent to HK$7.512 billion, he said. This year's estimate is slightly lower, standing at HK$7.408.3 billion in September 2009 prices, Mak added. The government plans to seek funding of HK$5.8521 billion for the terminal's construction from the Legco public works subcommittee on April 14, and the Finance Committee on April 30. If approved, the design-and- build contract will start in May, with the completion of the terminal building brought forward to mid- 2013 from the initially planned 2014-15. Last November, the Finance Committee approved HK$2.3039 billion for site formation works, which are underway. The first berth is slated to come into operation in mid-2013 and the second in 2014. Kowloon East legislator Chan Kam-lam said he is pleased to hear that the terminal block will be ready a year earlier than scheduled. But he expressed concerns on whether the number of parking spaces will be enough to meet the demand. Director of Architectural Services Marigold Lau Lai Siu-wan said about 200 parking spots and 100 pick-up or drop-off spaces will be available in the terminal building. Mak said more parking lots will be set up in the Kai Tak area on top of those inside the terminal. Democrat lawmaker Emily Lau Wing- hing urged the government to ensure easy access for people with disabilities, and more washroom stalls for women. Construction work will create about 3,000 jobs, and the terminal will provide 5,000 to 9,000 jobs when it comes into operation.

Try-then-buy flats for elderly - Senior citizens looking for a quality retirement are to get the chance to try out new housing in troubled Tin Shui Wai for free before committing to buy. Speaking at a ground-breaking ceremony yesterday, Hong Kong Housing Society chairman Yeung Ka-sing said six show flats will be ready by November next year and those seriously seeking retirement in Tin Shui Wai "will be able to get the feel" of the facilities for free. "Tin Shui Wai is not as far away as urban residents think," Yeung said. "A mere 30-minute drive will get you to a peaceful and green lifestyle." He said the society would rather promote a new living environment than get a few weeks' rent. The project, which is close to the Wetland Park in North New Territories, will cover 64,400 square meters in Tin Shui Wai Area 115. It will provide about 1,000 residential units for the elderly, a wellness center, a residential care home for the elderly and a hotel, as well as various training and recreation facilities. It is anticipated that Phase I, comprising 630 units ranging in size from 500 to 1,100 square feet, will be completed and start operation in 2014. Phase II, with a further 370 units, will be completed by 2018. The project will also create about 1,200 jobs in the transport, hospitality management, catering services and elderly nursing services sectors. "The first beneficiaries will be the residents in Tin Shui Wai," Yeung said, "Women, minority groups and the young who are unemployed will get proper training." A second site, Area 112, comprising 30,000 square meters, will be developed into a Vocational Training Council center, offering 1,500 training opportunities annually, and some ancillary commercial facilities such as shops. The proposed center will provide training programs in hospitality services, catering and medical care services. It will be equipped with a training kitchen and dining facilities, a dormitory, classrooms, an adventure-based training center, a greenhouse and an organic farm. These short-term facilities, which will be completed after mid-2011, are expected to create about 200 jobs. The overall construction cost of Area 112 is expected to be around HK$100 million with an annual operation cost of HK$10 million.

John Rowan, a vice-president of the Savannah College of Art and Design, says the school does not have a student quota and welcomes top students from around the world. One-third of applicants to Hong Kong's first private American art college are from the city, another third are from the United States and the rest from elsewhere. But the Savannah College of Art and Design will not reserve any places or provide financial aid specifically for local students to attend its Hong Kong branch, which is due to open in September. College leaders have begun interviewing prospective students for the 300 school places at its art gallery in Wyndham Street. Tuition fees are US$29,000 per year for the four-year undergraduate programmes and US$31,000 per year for master's programs. The school, based in Savannah, Georgia, plans to offer 14 degree programmes in digital arts at the new campus being developed at its own expense in the former North Kowloon Magistracy in Sham Shui Po. SCAD was awarded the historic building last year at a nominal rent in a government revitalisation scheme, beating a bid by the Chinese Artists Association to use it for Cantonese opera - a decision which drew protests from the arts community. John Rowan, a vice-president at SCAD Hong Kong, said it had received applications from as far afield as Chile, and there had been "very strong interest" in Hong Kong. He declined to reveal the number of applications or the breakdown of admissions by country and region until the process was complete. "We are not subject to any limit or quota on the number of non-local students," he said. "We want the top students from anywhere in the world. I would love to see a number of top Hong Kong students come to SCAD." Victor Lai Ming-hoi, an associate head of the cultural and creative arts department at the Hong Kong Institute of Education, said SCAD's fees were more than twice the typical level for degree programs. "It is quite expensive and, if it is their policy not to reserve any places for local students, I think that is unacceptable as they have free use of a public building," he said. Connie Lam, an executive director of the Hong Kong Arts Centre, which runs a fine arts school with 200 full-time students, said there was a lot of unmet demand for art degrees and society should welcome new schools. Rowan said the charitable foundation that runs the Hong Kong branch is required to keep any surplus income it generates within the city and reinvest the money in improving and expanding the school. "Once we reach full capacity in about three years, we will be looking for another site to expand the university further," he said. "And we would like to collaborate with other universities in Hong Kong to develop shared courses both within visual art and other programmes, such as humanities, business and even science." Ginger Hansen, the director of recruitment and admissions, said all applicants were considered for scholarships based on academic merit and artistic ability. The school also provides 80 private endowment scholarships. "At SCAD, about 50 per cent of incoming students receive academic, artistic or combined honours scholarships each year," she said. "These range from US$1,500 to full tuition per year. But there are no needs-based scholarships and we do not restrict scholarships to any one campus, so there is no SCAD Hong Kong internal scholarship fund." Students in Hong Kong will be eligible for the government's non-means tested loans scheme and travel subsidy scheme, she said. More than 9,500 students attend SCAD's two US campuses and study centre in France.

Fall in HK expats joining Chinese citizenship queue - In 2001, the then Invest Hong Kong director general Mike Rowse made headlines when he became the first expatriate civil servant in Hong Kong to become a naturalised Chinese citizen. Lan Kwai Fong and Ocean Park chief Allan Zeman did the same in 2008. Both have spent about four decades living and working in Hong Kong. But now, with the mainland opening up internationally, increasing numbers may choose to be based there rather than in Hong Kong, resulting in fewer people applying for Chinese citizenship in Hong Kong. Local immigration department data shows the number of applications for such citizenship fell to 1,295 last year from 1,541 in 2008, a 16 per cent drop. The number of applications has fallen steadily since peaking at 1,840 in 2006. Before the severe acute respiratory syndrome outbreak in 2003, the number mostly remained below 1,000 applications a year and then almost doubled from 702 in 2003 to 1,342 the following year. Dr Chung Kim-wah, an assistant professor of applied social sciences at Polytechnic University, said he believed that after 13 years of Chinese sovereignty in Hong Kong, many locally based foreigners who had been using the city as a stepping stone to the mainland had decided to take on Chinese identity. "Usually, people will settle down after more than 10 years and would make this choice," he said. "But people now have direct access to the mainland and do not need Hong Kong as a stepping stone. Maybe this shows there is less tendency to use Hong Kong to apply to be a Chinese national. I think this is a trend." For many foreigners whose lives, families and businesses revolve around Hong Kong and the mainland, the decision to relinquish their citizenship in favour of a Chinese passport can be an obvious and easy one. Gregory De'eb, managing director of Crown Wine Cellars and a former South African consul general to Hong Kong, said he was planning to apply for Chinese citizenship after becoming a permanent resident of the city about 12 years ago. "For me, it's been a journey of about 12 to 14 years," De'eb said. "I just realised that this is the place I care about the most - the place I feel most passionate about." South African-born De'eb said obtaining a Hong Kong passport would give him a sense of belonging, as he had not been back to his birthplace for a long time. His wife had encouraged him to apply for a Dutch passport several years ago, but he felt being a citizen of a second country without any intention of committing or contributing to that nation would be silly. "When people ask me about who I am and where I'm from, I always have great pleasure in saying that I passionately belong to Hong Kong. But I can't say that about the citizenship I have," De'eb said. Generally, mainland laws allow foreigners to apply for naturalisation if they have close relatives who are Chinese nationals, have settled on the mainland or have other legitimate reasons. To qualify, they must live there for more than nine months a year for at least five years. The mainland does not allow dual citizenship, meaning that applicants must renounce their existing citizenship.

Regional rebound favors SJM wagers - Tycoon Stanley Ho Hung-sun's gaming flagship SJM Holdings (0880) said its net profit jumped by 14 percent to HK$907 million last year, as improved economic conditions in China and Asia boosted the gambling hub of Macau.

Fifty-four examples of endangered species of animals and plants have been seized at customs checkpoints in Hong Kong between January and mid-March this year.

PCD Stores (0331) posted a 39.3 percent jump in profit last year to 242.1 million yuan (HK$275.32 million) as more stores opened in China in the second half and revenue rose on more direct sales.

Taoists take part in the opening ceremony of the 10th Hong Kong Taoist Festival at Queen Elizabeth Stadium in Wan Chai yesterday. The city's Taoists want the birthday of their religion's founder, Lao Tzu, to be declared a statutory holiday, saying a poll showed that a majority of the population supported the idea. The Hong Kong Taoist Association yesterday proposed the 15th day of the second month of the lunar calendar be made a public holiday to promote their religion and to honour Lao Tzu. The association also suggested it would be an extra holiday, thus bringing the total number of general holidays in a year from 17 to 18. According to a survey of 1,012 people in February, 41 per cent backed the proposal, 30 per cent opposed it and the rest had no opinion or said the question was too difficult to answer. It also found that 54 per cent of respondents said they took part in Taoist activities such as picking a fortune stick, burning incense sticks and worshipping Taoist deities - but only 2 per cent of people polled called themselves Taoists. Association chairman Tong Wai-ki said that during the Lunar New Year, more than 1.35 million people visited popular Taoist temples, such as Wong Tai Sin Temple and also Che Kung Temple in Sha Tin, reflecting a tight bond between Hong Kong people and Taoism. "When the birthday of Lord Buddha was designated as a public holiday 10 years ago, we wanted to apply to the government to turn Lao Tzu's birthday into a public holiday too," Tong said during the opening of the Hong Kong Taoist Festival. "But people did not know much about Taoism at the time, so we scrapped the plan. "After 10 years of promotion and active participation in charity works, we think it is a suitable time to submit an application now," he said. He estimated that there were about 1.2 million Taoists in Hong Kong. The Confucian Academy applied to have Confucius' birthday on August 27 declared a holiday, replacing the Easter Monday holiday. But the government said the public had not reached a consensus and it would not consider the proposal.

China*: Huawei-Symantec partnership to go global to boost sales growth - The mainland joint venture between Huawei Technologies, the country's largest telecommunications equipment manufacturer, and US-based software supplier Symantec Corp is going global.

Gold consumption in China is likely to double over the next decade, boosting prices as burgeoning demand will outpace the growth in supplies, said a report released on Monday by the World Gold Council (WGC). Gold prices set to soar as demand outpaces supplies. With gross domestic product set to grow at above 9 percent this year, China, the world's second largest gold consumer after India, has the potential to double its gold consumption from the 2009 level of 500 tons a year, the report said. Aram Shishmanian, chief executive officer of the WGC, said gold demand will remain bullish this year and for the next five years as investors consider the yellow metal a safe haven amid uncertain recovery trends and inflation expectations. The only way for the Western countries to resolve the economic crisis is to slowly repay their debts and print more money, which devaluates the currency and results in inflation, said Shishmanian. Conventionally, gold is priced against the dollar and performs inversely against the greenback. "The dollar is now being challenged as the world currency and the US economy will struggle for a number of years before recovering. In such a scenario gold prices would continue to remain robust," said Shishmanian. "If gold demand continues to increase, domestic supplies would be unable to keep pace. Whatever the outcome, China's outlook will have implications for the global gold market," said Eily Ong, investment research manager at WGC. During the past five years, demand for gold increased at an average annual rate of 13 percent in China. The bulk of this demand has been satiated through domestic supplies.

Zhejiang Geely Holding Group, mainland's biggest private carmaker, said on Tuesday that it is prepared to pump up to US$900 million into the Volvo unit it is buying from Ford, as part of its plan to return the Swedish carmaker to the black. Geely had secured US$2.7 billion in financing for the landmark deal, which includes a previously announced US$1.8 billion purchase price plus the additional US$900 billion in working capital, chief financial officer Yin Daqing told a media briefing in Beijing. He added that half of the money would come from mainland sources, while the rest would come from overseas sources. From a broader perspective, Geely’s plan to turn around Volvo would involve giving the company the scale it needed to become profitable, with a focus on tapping the fast-growing mainland market, said Geely chairman Li Shufu. “Profit will only emerge if we expand the business scale, thus making costs per vehicle lower,” Li told reporters in Beijing, after returning from Sweden where his company signed the deal to buy Volvo. He added that the two brands would remain separate, with Volvo and Geely each continuing to produce their own cars. “Volvo comes from Northern Europe and is rooted in Sweden. Volvo will not be Volvo any more if taken out of the soil,” Li said. “Relations between Geely and Volvo in the future will be like brothers, not father and son.” Geely is counting heavily on its home market to revive the money-losing Volvo brand, with plans to double the Swedish company’s production by building a major new plant in mainland. Owning a global brand like Volvo will also give Geely a chance to build up its profile in the country, where it is known more for small, inexpensive cars, and to catch up with bigger state-owned rivals that have partnered with the likes of GM and Volkswagen. Mainland overtook the United States to become the world’s largest auto market last year, with sales zooming 46 per cent to a record 13.6 million units, driven by economic incentives from Beijing aimed at boosting consumption during the global downturn.

PBOC adviser Li Daokui wrote on Tuesday that mainland should change its yuan policy before September because the yuan debate could become a more heated political issue ahead of the mid-term elections in the United States in November. China should adjust the yuan exchange rate before September to head off rising foreign pressure on Beijing, a newly appointed central bank adviser said in remarks reported on Tuesday. “One way of relieving pressures on the renminbi [yuan] exchange rate is to make an adjustment on China’s own initiative,” Li Daokui, an economist at Tsinghua University, was quoted as saying in a report on Caijing magazine’s website. Mainland should change its yuan policy before September because the debate on the yuan could become a more heated political issue ahead of the mid-term elections in the United States in November, he added. On Monday, Li was appointed to the central bank’s monetary policy committee along with two other economists. Another new appointee, Xia Bin, said on Tuesday that mainland should let the yuan resume its gradual appreciation as quickly as possible. For his part, Li said mainland should improve its communications with US lawmakers and various state leaders to reduce what he called a long-running “misunderstanding” about the currency issue. Beijing has effectively pegged the yuan near 6.83 to the US dollar since mid-2008 to help its exporters ride out the financial crisis, but its stance is under growing fire from Washington. US lawmakers and quite a few economists argue that the undervalued yuan has given mainland goods an artificial competitive edge that is distorting the global economy. A semiannual US Treasury report due in mid-April could label mainland a “currency manipulator”, fuelling pressure on Beijing. Calls to let the yuan rise steadily are rising among mainland economists, fuelling a debate on the currency policy. Separately, Huang Haizhou, a managing director of the China International Capital Corp (CICC), a joint venture investment bank, said mainland should let the yuan rise and press ahead with internationalising the currency. In the latest issue of a Beijing policy journal, Huang asserted that lifting the value of the yuan would ultimately benefit mainland’s own growth, by dampening inflationary pressures and making imports relatively cheaper. “An appropriate appreciation of the renminbi would be to China’s own benefit,” Huang writes in the March issue of the International Economic Review. “This could increase the flexibility of monetary policy, develop financial markets, expand domestic consumption and promote structural adjustment of the economy, helping to keep a balance between inflation and exchange rates,” Huang wrote.

President Obama wants US to have a 'positive relationship' with China - US President Barack Obama is determined to further develop a "positive relationship" with China, the White House said in comments welcomed by Beijing as the two powers seek to overcome deep strains in their ties. Obama made the remarks late on Monday after receiving the mainland’s new ambassador to the United States, Zhang Yesui, according to a statement from White House spokesman Robert Gibbs. “During their meeting, the President stated his determination to further develop a positive relationship with China,” Gibbs said. Ties between the two powers have been dogged in recent months over a host of issues, including a long-standing dispute over the value of the yuan, US arms sales to Taiwan, internet freedom, and a visit by the Dalai Lama to the White House. Obama stressed Washington and Beijing must “work together and with the international community on critical global issues including nonproliferation and pursuing sustained and balanced global growth,” Gibbs said. He also “reaffirmed” Washington’s “one China” policy, under which the US recognises Taiwan and Tibet as part of China, Gibbs said, adding the US leader supported “efforts made by Beijing and Taipei to reduce friction across the Taiwan Strait.” China in response said it welcomed Obama’s pledge to develop positive ties. “China praises the positive attitude of US President Barack Obama... in promoting China-US relations,” foreign ministry spokesman Qin Gang said in a statement. He added that Beijing “values the reaffirmation by the United States of its commitment to China on the Taiwan and Tibetan issues.” Taiwan and China have been governed separately since 1949, but Beijing considers the island part of its territory. Relations between the two have improved considerably since Taiwan President Ma Ying-jeou came to power. Washington angered Beijing with a US$6.4-billion arms sale to Taiwan in January, and Obama’s talks with the Tibetan spirtual leader the Dalai Lama at the White House the following month. The US is also pressuring Beijing to allow the yuan to appreciate, with lawmakers pushing the US Treasury to label Beijing a “currency manipulator” in a report due out next month. Qin acknowledged the recent difficulties, saying they were “not in the interest of the two countries.” “China and the United States are nations that have important influence in the world,” he said. “A good Sino-US relationship is in the fundamental interest of the two countries and their people, and is beneficial to peace, stability and prosperity (SEHK: 0803, announcements, news) in Asia and the world,” Qin said. Beijing expressed willingness last week to move past strains in relations, with Qin insisting “dialogue and consultations on an equal footing” was the best way to put paid to bilateral tensions. The next round of high-level strategic and economic talks between the countries are expected to be held in Beijing late in May. US Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner are expected to represent the US side, while Vice Premier Wang Qishan and State Councillor Dai Bingguo will lead the mainland delegation. The talks will be the highest-level meeting between the two sides since ties broke down earlier this year. The first round of the dialogue was held in Washington in July last year. Chinese Prime Minister Wen Jiabao said last week he was confident the two nations could work through the ongoing concerns, saying the dialogue would be “an opportunity to address the problems” between them.

China has expressed appreciation over the "positive remarks" made by U.S. President Barack Obama and other officials on Sino-U.S. relations. China valued the reaffirmation by the U.S. side on its commitment to China on the Taiwan and Tibet-related issues, Foreign Ministry spokesman Qin Gang said in a press release Tuesday.

Flower prices bloom as supply dips, demand up - Dounan Flower Market in Chenggong county, Kunming, where drought has cut production as Ching Ming approaches. The crippling drought and the approach of next Monday's Ching Ming festival, when Chinese traditionally commemorate the dead, have driven flower prices sky high in Kunming , China's largest flower supplier. Zhao Lei, who works at the Kunming International Flower Auction Centre (KIFA), said production of top quality flowers had been hit hard by the drought. "Prices for class A and B carolas [red roses] have at least doubled compared with the same period last year," he said. Because good quality flowers had stricter cultivation requirements, their supply was now half what it was last spring. The prices of white flowers have climbed as Monday's festival draws near. Xiaohui, a flower dealer at the Dounan Flower Market, Kunming's largest, could not hide his excitement when asked how business was going at present. "At least 1,000 yuan (HK1,135) a day," he exclaimed. He deals in violets, which come in 12 different colours. The most expensive ones he sells are white, the colour of mourning in China. He said white violets usually sold for between two and three yuan a bunch (10 stems) but he was now selling them for between 14 and 15 yuan. At the Lianmeng Shangyi Flower Market in central Kunming, white chrysanthemums have replaced red roses and pink lilies. Traders were busy tidying up chrysanthemums that had just arrived from farms in nearby Chenggong county, the major flower production base in Kunming. A woman bundling white chrysanthemums in front of her stall said she expected prices to increase by 50per cent, from the usual 10 yuan to 15 yuan a bunch. Known as "The World's Garden", Yunnan produces more than 2,500 flower species and its flower industry is growing by 30 per cent a year. Kunming, the provincial capital, provides half of China's fresh-cut flowers. KIFA was established in 2002 in an attempt to follow in the footsteps of the world's biggest flower producer, the Netherlands. It introduced a new flower trading system, suggesting a maximum price, where bidding starts, and a minimum for each species. Buyers come from across the mainland and also overseas, including Japan, Korea, Singapore and Russia. According to KIFA's 2009 rose trading report, average prices and trading volumes increased by 13.2 per cent last year. Zhao, the KIFA staff member, said weddings and Valentine's Day were the two occasions that consumed most of the fresh flowers in China. But Valentine's Day had been exceptional this year because supply was tighter, he said. The trading volume of roses in the first half of February dropped by nearly half compared with the same period last year - from four million yuan to two million yuan. And unlike previous years, when prices slumped after Valentine's Day, they had remained steady this spring because of the drought. "Even class C and D carolas are selling for 25 yuan a bunch. Not a low price at all," Zhao said.

Workers put final touches to decorations in China Pavilion at World Expo site in Shanghai, east China, March 30, 2010.

 *News information are obtained via various sources deemed reliable, but not guaranteed

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