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July 31, 2010
The MTR Corporation will today consider ways to rescue Octopus Cards' credibility and the future of the company's embattled chief, Prudence Chan Bik-wah.
A sharp increase in the number of expatriate executives moving to Hong Kong with their families helped drive a 10.9 per cent rise in rentals of luxury residential properties in the first half of this year.
July 30, 2010
July 29, 2010
The China Investment Corporation (CIC), the nation's sovereign wealth fund, announced Tuesday it would start a new round of global hiring for "business development" reasons. The recruiting covers 64 job positions, including asset allocation and strategic research, risk management, strategic investment and private-equity investment, according to a statement on CIC website. Applications will be accpeted till August 9, it said. The CIC was established in September 2007 with a registered capital of 200 billion U.S. dollars from China's huge foreign exchange reserves.
The People's Liberation Army has conducted two more military drills in the Yellow Sea region - the second and third in 10 days - in an apparent response to ongoing joint US-South Korea military exercises nearby. China Central Television's noon news broadcast yesterday said an artillery troop from the Nanjing Military Command's land force had tested a new type of long-distance multi-launch rocket with support from unmanned aircraft, radar and other reconnaissance equipment. The report did not detail the location or date of the drill but said it was taking place near the Yellow Sea. Also yesterday, Xinhua reported that a military exercise involving rocket tubes, satellite communication vehicles and other facilities had been conducted by the Jinan Military Command in a coastal city on the Shandong Peninsula, which juts into the Yellow Sea. CCTV's report did not mention the Jinan Military Command exercise. Xinhua's report did not mention the Nanjing Military Command drill. CCTV said it was the PLA's first long-range rocket drill on such a massive scale. The TV broadcast showed a series of rockets being fired from 12-tube, 300-millimetre multiple-launch rocket systems, believed to be the PHL03 (known as the AR2 in its export version). A voiceover said the weapon played a key role in the army's long-range firepower. On July 17, the PLA conducted an unprecedented maritime safety emergency drill in the Yellow Sea, based on a scenario that China was engaged in war with other countries. Military observers said the PLA had seldom conducted drills in both land and sea areas in the Yellow Sea, close to the Korean Peninsula, in recent decades. With a firing range up to 150 kilometres, the PHL03 is similar to a small missile. Shanghai-based military expert Ni Lexiong said that the rocket drill was also aimed at hinting that the PLA's land forces were capable of protecting China's ally North Korea if it was invaded. "We realised that our navy is incapable of fighting with the USS George Washington, that's why we didn't conduct any anti-carrier missile tests in the Yellow Sea," Ni said. "However, the PLA's land force is strong enough to expel invaders under the support of long-distance rockets and missiles." Tensions between Beijing and Washington began to rise after reports that the Nimitz-class aircraft carrier USS George Washington would be involved in joint exercises with South Korea in the Yellow Sea, off the east coast of China. But those plans were dropped after repeated protests from Beijing, and the Pentagon said the carrier would just appear in seas east of the Korean Peninsula. A 10-yearly Sino-US relations survey conducted last year showed that up to 72 per cent of Chinese students and 65 per cent of the public had good feelings about the US - almost double the numbers a decade earlier. But Jiang Changjian , an international relations professor at Shanghai's Fudan University who took part in the survey, said the good feelings would be ruined by America's participation in the Yellow Sea drills with South Korea, which started on Sunday. South Korea also said another round of joint military exercises with the US would take place in the Yellow Sea in September. In Beijing, international law experts and retired PLA generals from the National Defence University, the Chinese Academy of Social Sciences and others held a forum to "look into the nature" of the US military's involvement in the Korean Peninsula crisis, China News Service reported.
China will make its "proactive fiscal policy" more flexible in the second half of the year after revenue soared in the first six months, Finance Minister Xie Xuren said yesterday.
July 28, 2010
Authorities in Dalian said on Monday an oil spill on the country's northeast coast had been "successfully controlled”, amid reports that the clean-up could cost one billion yuan. The spill happened 10 days ago after two pipelines exploded at an oil storage depot in Dalian, a port city in Liaoning province, triggering a blaze that burned for days. About 1,500 tons of oil poured into the Yellow Sea. “So far, large pieces of the pollutant have been successfully removed or controlled,” said Chen Aiping, executive deputy director of the Maritime Safety Administration, according to a statement posted on the ministry’s website. Official estimates say the spill covers over 435 square kilometers (170 square miles) of water but mainland media reports have said the slick has spread to 946 square kilometers. By Sunday afternoon, a total of 41 oil-skimming vessels and 1,200 fishing boats had been mobilized to contain the spill, according to the statement. The Liaoning maritime authorities were coordinating clean-up crews to focus on preventing the spill from expanding further north, it said. The China Business News on Monday cited a manager of a cleaning company working on the site as estimating that the clean-up efforts could cost more than one billion yuan (US$147.5 million). The manager, identified only by his surname Yang, added that it may take another week to clean up the spill. Authorities in Dalian said on Monday an oil spill on the country's northeast coast had been "successfully controlled”, amid reports that the clean-up could cost one billion yuan.
Beijing aims to cut back the number of crimes that carry the death penalty, and may also end executions of convicted criminals over 70 years old, it was reported on Monday.
July 27, 2010
Calls are mounting for stricter official controls on breeders after 18 bulldogs, which had effectively been used as puppy machines, were dumped on a dog rescue group. By the time the animals were delivered to the charity Hong Kong Dog Rescue, one had died and several more were bloated from lack of exercise after being kept cramped in cages. Two more dogs died after the group took them in. The charity was approached by a middleman representing an unidentified breeder in Sheung Shui last week and told that unless it took 20 British bulldogs off his hands they would be sold on to other breeders or handed over to the government kennels, where they would be destroyed after four days. The group had no option but to accept delivery and the animals were sent to their Tai Po kennels crammed into the back of two vans in small cages. On arrival, one of the dogs which had suffered from heat exhaustion died despite the efforts of volunteers to give it mouth-to-mouth resuscitation. Almost all were females. There were three puppies - two of which died the next day. Six remain at the kennel after the rest were adopted or fostered. The group hopes more adopters can give them a place they can call home. "We don't know exactly why the breeder gave up these dogs but it's possible that the breeder believed he couldn't make any more money out of them," Alice Lau, the group's adoptions manager, said. Most of the dogs had loose and swollen teats, skin rashes, and were overweight suggesting they did not get proper care and were over mated. "All of them are much heavier than they should weigh - one weighed double what she should be - because they were kept in cages, didn't exercise and were only allowed to continually reproduce," she said. Volunteers fear the breeder, whose identity was kept secret, may still be breeding the bulldogs because he only gave up 18 instead of the 20 originally promised. "Such breeders are not rare, but it's the largest batch we've ever received. It's inhumane to treat animals like that," she said. Since February, under government rules, licensed pet shops are bound to ensure all their animals come from legal and responsible breeders, using hygienic and humane practices. The Agriculture, Fisheries and Conservation Department has also indicated that it will step up inspections of licensed pet shops to check if pet shops and breeders are complying with the regulations. However, a Google search turns up several local breeders' websites, or auction websites, which do not display licence numbers.
Chinese steel producers are increasingly turning to Australia's magnetite iron ore sector, pouring in funds to explore and develop mines once considered uneconomic, as they nurture new supply sources.
The Washington-led ambush of China over the disputed South China Sea at the region's top security forum on Friday marks a landmark shift in Sino-US ties and exposes deepening strategic fault lines in Asia. Even as US Secretary of State Hillary Clinton figuratively waded into the South China Sea in Hanoi, US and South Korean naval vessels prepared to stage large-scale exercises in the Sea of Japan, or East Sea, close to China's northeast - adding to the tensions of the new landscape. What happened in Hanoi is particularly significant. When Clinton declared that resolving territorial claims in the South China Sea was now in the United States' "national interest" and "a diplomatic priority", she was not just reflecting growing US concern about the potential for Chinese maritime dominance. It showed Washington had firmly grasped an historic opportunity, too. For months now, a rising chorus of East Asian concern at Chinese assertiveness has been voiced in Washington, just as the young administration of US President Barack Obama mapped out ways to re-engage with a neglected region. Alarmed by the refrain that the US was a declining power, US officials spoke privately of the need to reassert US strategic primacy in Asia. Early rocket science lab demolished illegally - One of the earliest rocket science laboratories, which is part of the prestigious Chinese Academy of Sciences, has become an unusual victim of forced demolition. More than 100,000 people were evacuated as a tributary burst its banks and heavy rain continued in flood-hit regions along the swollen Yangtze River, state media said. Spending in the railways sector is to be increased in the second half of this year as only one third of the full investment quota was completed in the first half, the Beijing-based China Times reports. Fixed-asset investment in the railway sector amounted to 271.4 billion yuan in the first six months of this year, an increase of 17 per cent from the same period a year earlier, the newspaper reported, citing data from the Ministry of Railways. July 26, 2010
'King of the south' looking at life in jail - Chen Shaoji, known as the "King of South China" for his long-standing clout in Guangdong, was given a suspended death sentence yesterday.
July 25, 2010
Hong Kong-listed shares of Agricultural Bank of China rose 5.5 per cent on Friday after Morgan Stanley lifted its stake in the lender's H shares by about 1 percentage point. The Hong Kong Monetary Authority has warned of a loss in the Exchange Fund for the first six months of the year, citing tough times for investing. Shanghai-based developer Shui On Land (0272), controlled by Hong Kong billionaire Vincent Lo Hong-sui, plans to sell some of the group's retail and office properties outside its home city to help maintain cash flow. Proceeds from listings in Hong Kong this year are expected to reach a record HK$350 billion - the highest since 2007 - as more mainland and international firms queue up to tap the local market.
Mainland’s biggest military supply provider, Jihua Group, said on Friday it would launch an initial public offering worth about 3.25 billion yuan (HK$3.72 billion) next week mainly to fund production expansion. Jihua Group, which has a 75 per cent share of mainland’s market for military and police garment, among other equipment, planned to issue 1.157 billion A shares denominated in yuan for a later listing on the Shanghai Stock Exchange. Beijing's population surges near 20 million - Beijing municipal people's congress revealed this week that the Chinese capital now has 19.72 million inhabitants, growing by over 3% in the past 2 years. SouFun, the mainland’s No 2 online real estate website, is preparing for a US initial public offering worth up to US$300 million, in what could be the largest such listing by a mainland web company this year, sources said. JPMorgan Chase, Bank of America Merrill Lynch and UBS were working on the deal, although no final mandates had been given, sources at the three banks said on condition of anonymity because nothing had been finalised. Media reports have said Goldman Sachs Group and Deutsche Bank may also be vying for mandates. SouFun, 51 per cent owned by Australia’s Telstra Corp, aimed to list on the New York Stock Exchange and could make its offering by year end, said one of the sources working on the deal.
Former Japanese businessman-turned-ambassador to China Uichiro Niwa on Friday urged Tokyo to start free trade talks swiftly with Beijing, local media said. Niwa was appointed by Prime Minister Naoto Kan to the key diplomatic post, making him the first ambassador to China from outside the government sector since the two countries normalised ties in 1972. “Japan needs to quickly hold free trade talks with China,” said Niwa, who had served as a senior corporate adviser at trading house Itochu Corporation, in an interview with Japanese media. “Otherwise, Japan will sink,” he was quoted as saying by Jiji Press. China is expected to overtake Japan as early as this year as the world’s second-biggest economy. Niwa also called for Beijing to “heighten transparency” in its military buildup, Jiji said. “I expect China, as a leading nation, to realise the significance of its remarks and actions,” he said. Commenting on the fast turnover of leaders in Japan – which has had five premiers in four years – he said: “How can Japan earn trust when its top leader changes within a year, or months?” The appointment of Niwa, a straight-talker who has actively served on various key government panels, came as Kan has advocated a greater role for private sector figures as Japan’s ambassadors. Beijing's top negotiator is set to visit Taiwan next month, his first visit since he was mobbed and shoved to the ground by a pro-independence crowd on the island.
July 24, 2010
New loans for China's SMEs up 23% in Q1 - The total new loans for China's small and medium-sized enterprises (SMEs) grows faster than that for big companies, as the government measures to allow easier access to financing have begun to take effect.
Workers at a parts supplier for Honda's mainland operations have returned to work, the Japanese carmaker and a worker said on Thursday, ending a week-long strike.
July 23, 2010
Jobless still at 4.6pc - Hong Kong's unemployment rate stayed at a three- month high, dragging on consumption and the city's economic recovery.
Lenovo Group (SEHK: 0992), the world’s No 4 PC brand, said it will roll out its own tablet PC, becoming the latest technology company to jump on the bandwagon for computers styled after Apple’s popular iPad. Lenovo was developing a tablet PC, known internally as LePad, that would run on Google’s Android operating system, Lenovo spokeswoman Wu Hwa said on Wednesday, adding that no launch date had been set and the name of the product may change. “We want the tablet PC to be compatible with our LePhone smartphone, which is why we’re using Android,” Wu said. LePhone is Lenovo’s smartphone offering in the mainland, sold by China Unicom (SEHK: 0762), which also runs on Android. Tablet PC shipments are expected to grow by an average 57.4 per cent per year between 2010 and 2014, research firm IDC said, making the sector a lucrative growth area for companies selling heavily commoditised laptops. The tablet PC has already caught the attention of major PC companies such as Hewlett-Packard, Dell and now Lenovo, as they look to diversify beyond laptop PCs that typically offer low profit margins. Apple’s iPad, launched in April, sold 3.27 million units in the second quarter, prompting research firm iSuppli to revise upwards its full-year shipment forecast for the product to 13 million units from 7.1 million units. “iSuppli believe that the only limitation on iPad sales now is production and not demand,” iSuppli analyst Rhoda Alexander said. July 22, 2010
As Tropical Storm Chanthu approached the territory on Tuesday, the Hong Kong Observatory issued typhoon standby signal No 1 at 12.15pm.
China should boost interest rates or allow its currency to strengthen to help curb inflation pressures, the Asian Development Bank said on Tuesday. Second Zijin mine spill hits Guangdong - Toxic waste from a copper mine spill has been washed downriver into Guangdong province as scrutiny intensifies of the mining company's links to local government officials. Beijing renewed Google's license to operate in China after the company agreed to respect censorship laws, an official said on Tuesday in the government's first public comment. A strike by workers at a Honda parts supply factory in Foshan has entered its second week, but car production has so far not been affected, the Japanese carmaker said on Tuesday.
Beijing on Tuesday branded a group of US lawmakers as protectionist for seeking to block an investment by the country’s fourth-largest steel maker on national security grounds. SAIC Motor Corp said on Tuesday its estimated first-half net profit had more than quadrupled from a year earlier, although sales slowed slightly in the second quarter. US investment bank Morgan Stanley has sold its serviced apartment project in Pudong, Shanghai, for about 1.2 billion yuan (HK$1.38 billion), making it the second-largest residential deal by value in the city so far this year. Morgan Stanley Real Estate Fund has sold the 284-unit Pinnacle Century Park adjacent to the Lujiazui financial district to JP Morgan Greater China Property Fund, according to people familiar with the deal. The price tag represents about 26,000 yuan per square metre, against the cost of 18,000 yuan per square metre that Morgan Stanley paid in 2006. One person involved in the deal said it was time for Morgan Stanley Real Estate Fund to take profit and redistribute the earnings to investors. The deal, in which property consultant DTZ acts as the agent, would be the second-largest residential sale by value in Shanghai after Goldman Sachs sold its Shanghai Garden Plaza for 2.24 billion yuan, or 23,039 yuan per square metre, to Shanghai Forte Land early this year, Savills said. Shanghai Garden Plaza has a gross floor area of 97,227 sqmetres. Mirae Asset Financial Group's sale of serviced apartment Shama Luxe Xintiandi to Shui On Construction and Materials (SEHK: 0983) for 929 million yuan, or 58,824 yuan per square metre, ranked third. Mirae Asset is the largest equity fund manager in South Korea. "Lots of international funds are still looking for acquisition opportunities, but they are not as active as two years ago," said Albert Lau, executive director at Savills China. He said the global financial crisis and the deepening debt problems in Europe had given investors more challenges in raising funds. Douglas Sung, head of portfolio management at JP Morgan Greater China Property Fund, did not deny the acquisition. "I'm busy and let's talk later," he told the South China Morning Post (SEHK: 0583). In 2008, JP Morgan Asset Management raised US$600 million for the Greater China property fund. The closed-end fund received capital commitments from institutional and high-net-worth investors from the United States, Asia, Europe and the Middle East. The fund will be invested across all real estate sectors in the mainland, Hong Kong, Macau and Taiwan. Its primary focus is developing new properties and investments will be made in the office, residential, retail and hospitality sectors by creating project-level joint-venture arrangements with multiple operating partners in Greater China. It seeks to capitalise on the mainland's rapid economic growth, urbanisation, rising income levels and strong demand for real estate. Morgan Stanley declined to comment on the deal.
July 21, 2010
Forced tour group shopping unlikely to go away in a hurry - From grand pianos and garments to noodles and nightlife, the mainland is where the world goes for all things cheap. It is the ultimate paradox then, that the world relies on mainland tourists to spend lavishly overseas. Major retailers from Paris to Palo Alto, California, have Putonghua-speaking sales staff and shopping mall announcements are often multilingual, including Chinese. If the retailers are to be believed, mainland tourists are a godsend, snapping up pricey jewellery and cosmetics. Yet the mainland tour group appears to be an entirely different species. In Hong Kong, many are herded around by coach on a tight schedule of shopping and sightseeing in organised tours that are too cheap to provide adequate income to the travel agents, tour guides and coach drivers. The inevitable outcome is that tour guides and coach drivers, who are usually freelancers, expect to make money off their charges, mainly from commissions on tour group shopping. In 2007, for example, it was reported that a local travel agency, Pegasus International Travel, forced more than 70 mainland tourists, who were on a four-day tour from Shenzhen to Hong Kong, to shop all day in a jewellery shop in To Kwa Wan. On Saturday, the National Tourism Administration issued an advisory on travel to Hong Kong after a video of mainland tourists being insulted and "forced to shop" by a Hong Kong tour guide sparked outrage on the internet. Xinhua cited an unnamed spokesman for the administration as saying the regulator was concerned about measures taken by Hong Kong tourism officials over such practices.
The Travel Industry Council yesterday downplayed a Beijing warning on travel to Hong Kong as a video posted on the internet showing tourists being berated by a SAR tour guide sparked outrage. Executive director Joseph Tung Yao-chung, in welcoming the National Tourism Administration's travel advisory, said it served only as a reminder to holiday makers while visiting Hong Kong. Council chairman Michael Wu Siu-ying, while admitting the SAR's image has been damaged, said he expects the "advisory" would not deter visitors. "It is not an advice not to come to Hong Kong." The council, following a spate of complaints involving "zero-fee tours," has faced mounting pressure to reform the industry. Zero or low-fee tours appeal to mainlanders, but tour operators say the small amounts they pay cannot cover the costs. The council has said it may take action against the guide, nicknamed Ah Zhen, who was filmed calling the mainlanders "cheapskates" for not shopping enough, and threatening to lock them out of their hotel rooms. Wu said the guide's license had been suspended for a month last year because of her poor altitude. The council has also asked Golden Win International Travel Services, which organized the tour, to submit a report within two weeks. But the fact that Benny Chau Man-wai, who sits on the council's mainland inbound tour affairs committee, is also managing director of Golden Win, has raised concerns over independence. The council's compliance committee will then meet to discuss whether whether to take disciplinary action against the agency. Ah Zhen has two weeks to submit her defense, failing which she will be considered to have given up the right to defend herself, and a hearing will proceed with or without her presence. Wu did not rule out the possibility of revoking her license. Wu said the committee only provides advice, and is not involved in supervising travel agencies. The Tourism Administration has warned mainlanders to beware of shopping "traps." A spokesman said it is seeking further information and will investigate the case. Ip eyes District Council trade seats - Having secured two seats in the last District Council election, local think- tank Savantas Policy Institute's chairwoman Regina Ip Lau Suk-yee is considering running for the new District Council trade seats, along with the group's five newly recruited young bloods.
Green light for Chinese domain names - The web will soon be a lot more accessible for more than a billion people after the body that runs the internet's naming system gave the green light for the use of Chinese script.
July 20, 2010
Counter staff in 7-Eleven stores have been told by their bosses not to open bottles of alcohol for customers because they do not have a liquor licence - instead they are insisting customers open bottles themselves. The move comes after the Sunday Morning Post (SEHK: 0583, announcements, news) reported how bar owners were angry about a third 7-Eleven opening in Lan Kwai Fong - to be located beside Al's Diner and directly opposite Stormies - because it would affect their trade and promote under-age drinking. It was also alleged that staff at 7-Elevens in the area were opening the beer for customers to drink there despite the fact they had no liquor licence.
Buyers snapped up all 92 units of the first batch of Sun Hung Kai Properties (SEHK: 0016)' luxury development Larvotto to go on sale Saturday at an average price of HK$17,288 per square foot. Market sources said the flats, which went on sale at 9am, were all sold by the late afternoon amid what one agent said was "fierce demand". All are seaview apartments in blocks one and three of the development. The flats, ranging from 1,968 to 1,998 square feet, are priced between HK$31.11 million to HK$37.94 million, or between HK$15,811 and HK$18,992 per square foot. That compares to asking prices of HK$9,500 to HK$16,000 in Bel-Air Residence, the most expensive large housing complex in Island South. The development, jointly developed with Paliburg Holdings and Kerry Properties (SEHK: 0683), is in Ap Lei Chau and is the first project to be put on sale since the Hong Kong Monetary Authority instructed banks last October to lower the amount they lend to buyers of luxury homes priced higher than HK$20 million from 70 to 60 per cent of the property's value. Kerry is controlled by the Kuok Group, which is the controlling shareholder of the SCMP Group which publishes the South China Morning Post (SEHK: 0583s). There are 715 units in nine blocks in total in the development. Joseph Yuen, a 57-year-old garment manufacturer who said he had purchased one apartment, said he felt the prices were reasonable, but did not disclose how much he paid for the property. "I think the price is fine for this sort of apartment, it's very rare to have seafront apartments like this," Yuen said. He said the recent controversy surrounding Hong Kong's luxury property market had not deterred him. "There are two parallel markets in Hong Kong, a mass one and a luxury one, and in terms of the luxury one I think Larvotto is reasonably priced." Another man, who did not wish to be identified, said he thought the prices were "reasonable" and that he is still considering whether to buy a unit. One agent said that interest in Larvotto has been spread fairly evenly between local, mainland and foreign buyers for both residential and investment purposes. "The price is more attractive than other similar luxury developments, while the payment terms make for a good investment opportunity especially in this low-interest rate environment," the agent said. "Seafront properties are always going to be popular," he added. Another agent said that those who bought property as an investment still see "great upside potential" in the development.
Shanghai port reported an 18.8-percent year-on-year rise in container throughput in the first half amid strong economic recovery and booming trade. The country's largest port handled a record 13.86 million twenty-foot equivalent units (TEU) containers, the Shanghai border inspection authorities said Thursday in a statement. The port's container throughput would likely beat the earlier projection of 25.5 million TEUs for the whole of 2010, it said. The Waigaoqiao port area saw container throughput up 13.5 percent to 7.23 million TEUs in the first half. The Yangshan port area recorded an increase of 30.6 percent to 4.7 million TEUs. Guangzhou port authorities, however, said Saturday they expected to see slower growth in the second half due to plunging demand for coal, iron ore and steel products. In June, the port bore the brunt of slowing global trade. Cargo throughput was down 1.1 percent year on year to 34.1 million tonnes. July 19, 2010
Hong Kong police seized illegal betting records worth HK$361 million during the World Cup soccer - nearly a five-fold increase on the amount found during the previous World Cup tournament in 2006. During a month-long operation, police carried out 96 raids at 1,295 entertainment centres and 139 other locations, arresting 166 males and 69 females, aged 16 to 79. Officers seized 77 computers, a computer server and other betting tools valued at HK$34 million. Some HK$74.5 million in betting records were seized and 196 people arrested during the previous World Cup. Of the HK$361 million in betting records seized during the latest tournament, 40 per cent, or HK$143.8 million, was seized in two cross-border operations carried out jointly with officers in Guangdong. Hong Kong airlines are to operate 14 weekly flights to Shanghai's domestic Hongqiao Airport - slashing passenger transit time to the city centre - in a move that will help them compete with Taiwanese carriers. The announcement comes just a month after Taiwan launched direct flights between Taipei's domestic Sonshan Airport and Hongqiao. It has become a popular service as it reduces transit time to Puxi in Shanghai by about an hour compared with flights to the city's Pudong International Airport.
The Hong Kong government and local restaurants on Friday launched a variety of gourmet dishes inspired by geological concepts such as volcanicity and superposition, to promote the city's geological treasure. As a paradise for shopping and gourmet, Hong Kong should also stand out as a city of contrast and color, local authorities said. Visitors are offered with an enriching experience with the introduction of geopark gourmet dishes. About 40 guests sampled the dishes including "volcanic lava lao sha pau" which is actually local popular dessert "custard bun" and "golden hexagonal columns" which are actually deep-fried shrimp rolls. Edward Yau, Secretary for the Environment, noted that a major part of the geopark initiative is to connect geology and nature conservation with sustainable socio-economic development and management. "A geopark will not have a soul if local communities are not involved. Empowering them will increase their sense of ownership to conserve the resources while revitalizing the local economy," Yau said. "Hong Kong is famous for its city area, for its shopping, and also for things associated to the urban areas," said Jim Chi-yung, member of the Task Force of Hong Kong Geopark, "But tourists may not realize that we have an extremely beautiful countryside that is very sparsely populated and very natural, particularly the mountains, the hills, and the geological features, as well as the natural eco-systems." Since its opening in November 2009, Hong Kong's first National Geopark in Sai Kung attracted more than 500,000 visitors till the end of March this year. With diversified rocks such as sedimentary and volcanic rocks, the park offers visitors a refreshing experience in addition to Hong Kong's well-know metropolitan life. The park, covering a total of 5,000 hectares and including eight major scenic areas, has also aimed at being upgraded as one of the world-level geoparks.
The 16 state enterprises allowed by Beijing to continue their real-estate operations have spent a total of 29.5 billion yuan (HK$33.85 billion) on land since March, the 21st Century Business Herald reported. In a bid to rein in land prices, Beijing in March ordered 78 state enterprises to stop their property dealings. The 16 enterprises still in real estate have shown no signs of easing up on their land purchases, the report said.China State Construction Engineering Corporation, parent of China Rail Cons (1186), was the biggest spender, doling out nearly 10 billion yuan. The builder and materials trader won auctions for 10 plots worth 13.2 billion yuan in the first half - equivalent to spending 73 million yuan each day. Overseas Chinese Town (Asia) bought two sites in March and July for a total 8 billion yuan. China Poly Group Corporation spent around 5 billion yuan on land in the past three months. On the downside, the 78 enterprises told to exit the real-estate sector are doing so slowly, the report said. China Minmetals Corporation put its property arm on the market on June 12. It was only the 10th firm to do so at the time. Intertwined relationships among state firms is making securing independent buyers difficult. Also, the outlook for the mainland property market remains bleak. ING's latest findings show that 77 percent of Hong Kong investors agree there is an asset bubble in the mainland. Senior investment manager Michael Chiu expects Beijing to impose more property curbs, thereby worsening investment sentiment. "There will be a 10-to-15-percent drop in Chinese house prices from the peak on easing volume in the third quarter," said Chiu. July 16 - 18, 2010
The Housing Authority yesterday announced it planned to raise public housing rent by 4.68 per cent, the first such increase since 1997, but in a move to ease the burden on tenants, suggested waiving one month's rent - which would nearly offset the rise. The increase, which could take effect as early as September, means the city's 680,000 public housing tenants will have to pay HK$11 to HK$157 more a month. The average rent rise is HK$62. The decision follows a Census and Statistics Department survey which found that the average income of public housing tenants last year was HK$13,852, a 4.68 per cent rise when compared to HK$13,233 in 2007. The calculation did not include the rich and those living on social welfare. Anthony Cheung Bing-leung, chairman of the authority's subsidised housing committee, said the increase had to be imposed as it was stipulated by the Housing Ordinance.
Agricultural Bank of China's A shares rose a scant 0.75 per cent in Shanghai yesterday in a lacklustre debut that could overshadow its H-share performance when trading starts in Hong Kong today. The stock closed at 2.70 yuan (HK$3.09), 0.02 yuan higher than the initial public offering price of 2.68 yuan. The first-day gain was lower than expected as analysts predicted the A shares could gain more than 5 per cent on debut. The closing price represented a 3.3 per cent discount to ABC's H shares, which were sold at HK$3.20 each. ABC's first-day gain on the Shanghai Stock Exchange was the smallest among the mainland's Big Four lenders. However, its president, Zhang Yun, said management was satisfied with the price "because it reflected investors' confidence in the bank's long-term outlook". ABC raised US$19.2 billion in its Hong Kong-Shanghai dual listing. It could surpass Industrial and Commercial Bank of China (SEHK: 1398) as the world's largest IPO if the 15 per cent over-allotment is exercised, raising a combined US$22.1 billion. The bank said yesterday that the retail tranche of 1.27 billion H shares was 5.87 times oversubscribed. ABC chairman Xiang Junbo said the listing of the worst-performing lender among the Big Four was a significant achievement by Beijing in its efforts to reform the banking sector.
July 15, 2010
China and Argentina have agreed to invest about US$10 billion over several years to renovate the Latin American country's dilapidated railway system and build a subway in Cordoba, its second-largest city. Argentine President Cristina Fernandez is in Beijing to boost ties, promoting her land-rich nation as a natural partner for commodity-hungry China, and seeking to resolve a Chinese freeze on imports of Argentina soybean oil that has threatened a key hard-currency earner for Argentina. The bulk of the railway cash will be dispensed in three stages, with US$2.5 billion over the first four years going to repair two branch lines with more than 1,500 kilometres of track, the Argentine government said on an official website. Argentina's once-extensive rail network was largely dismantled during the privatisations of the 1990s. But as agricultural output soars, farmers and grain processors - who send more than 80 per cent of grains by costly road transport - have been calling for investment to revive far cheaper transport by railway.
July 14, 2010
HK's rich tend to be older than Asian peers - Hong Kong's affluent people are among the oldest in the region with many being members of the so-called DINK (double income, no kids) brigade, according to a HSBC survey.
Macao's visitor arrivals in package tours surged by 132.9 percent year on year to 569,803 in May this year, according to the figures released on Tuesday by the city's Statistics and Census Bureau (DSEC). The figure showed that visitor arrivals in package tours in May from the Chinese mainland (422,204), Japan (22,645), Taiwan (21, 293) and Hong Kong (20,368) rose substantially by 168 percent, 85. 9 percent, 38.1 percent and 14.5 percent respectively, and those from the Republic of Korea (14,714) and India (11,375) also registered notable increases. Officials from the DSEC explained that visitor arrivals in package tours surged dramatically year on year as visitors in package tours for May last year was adversely affected by the A/ H1N1 influenza pandemic. In the first five months of 2010, visitor arrivals in package tours increased by 23.2 percent year on year to 2,575,916. Meanwhile, the number of local residents traveling outbound in package tours in May increased by 43.6 percent year on year to 19, 101. The Chinese mainland, Japan and Taiwan were the most popular tourist destinations, according to the Bureau.
Taiwanese President Ma Ying-jeou's popularity has rebounded with the signing of a landmark trade deal with the mainland, a survey shows. About 47 per cent of Taiwan's public supports Ma's performance and 68 per cent back his efforts to improve relations with the mainland, the autonomous but government-backed Research, Development and Evaluation Commission found in a survey this month. Surveys earlier in the year by a range of institutions had put his overall approval rating at between 20 and 30 per cent. The commission's survey results reflect approval for Ma's Economic Co-operation Framework Agreement (ECFA) with the mainland last month, the biggest ever tie-up between the two sides, said the ruling Kuomintang's spokesman Su Jun-pin. The commission is Taiwan's oldest and most reliable polling agency, but faces growing pressure to flatter whichever party is in power, said Raymond Wu, of the Taipei-based political risk consultancy e-telligence. Its findings still point to a thumbs-up for the ECFA, he said. "The sense of malaise and wait-and-see is no longer prevalent," Wu said. "People are approaching post-ECFA with a sense of cautious optimism." Ma's ratings had fallen as the financial crisis ate into the local economy shortly after he was elected in 2008 and as a series of domestic flaps weighed on his image early this year.
July 13, 2010
Cathay faces bumpy ride as cash cow is blown off course - There may not have been a pot of gold at the end of the rainbow, but for Hong Kong flag carrier Cathay Pacific Airways the flight path to Taiwan was certainly paved in dollars.
July 6 - 12, 2010
China's foreign-exchange reserves, the world's largest, rose at the slowest pace in 11 years in the second quarter as expectations for a yuan appreciation diminished and the European sovereign debt crisis saw capital move out of emerging markets. The country's holdings rose US$7.2 billion to US$2.454 trillion at the end of June from the end of March, the People's Bank of China said yesterday, the smallest increase since the second quarter of 2001. Reserves dropped 2 per cent in May, according to data posted on the central bank's website, the first monthly decline since February 2009. July 4 - 5, 2010 - Happy July 4th
Crown Motors (CML) said on Friday some of its Lexus LS460 and LS600h models sold in Hong Kong would need to be recalled. Gaming revenues in the gambling haven of Macau fell 20 per cent in June from a record high in May as World Cup fever kept high-stakes gamblers away, an analyst said on Friday. Macau’s casinos raked in about 13.6 billion Macau Patacas in June, a 65 per cent year-on-year increase, but lower than the record-breaking 17.1 billion Patacas figure for May, according to data from Macau’s Gaming Inspection and Co-ordination Bureau. Macau has now outpaced gaming revenue in Las Vegas – largely thanks to huge sums spent in the city’s VIP gaming rooms. It is the only location in the mainland where casino gambling is legal and thus attracts huge numbers of players from other provinces of the country. “We believe July [will] see a similar temporary softness in VIP gaming as the World Cup approaches its final stages. That said, we expect market growth to resume sequentially in August, which is traditionally the summer travel season,” Deutsche Bank AG analyst Karen Tang wrote in a note to clients.
The central parity of the Renminbi (RMB), or China's currency yuan, strengthened to 6.7720 per U.S. dollar on Friday, a new record high, according to the data released by the China Foreign Exchange Trading System.
Google CEO Eric Schmidt downplayed fears over the internet giant's position in China on Thursday, amid a row over censorship and the blocking of a search feature there.
Agricultural Bank of China's Shanghai initial public offering drew 30 billion yuan in bids from potential strategic investors on its first day of book building, a source said.
July 3, 2010
Xinhua news agency launched a 24-hour global English-language television news service yesterday aimed in part at counterbalancing foreign views of the country. The CNC World news channel is the latest effort by Beijing to expand the reach of its propaganda outlets worldwide. CNC, which stands for China Xinhua News Network Corporation, would broadcast the channel to "the Asia-Pacific region, Europe, North America and Africa by satellite, cable, cellphone and the internet", Xinhua said. "CNC will present an international vision with a China perspective. It will broadcast news reports in a timely way and objectively and be a new source of information for global audiences," Xinhua president Li Congjun was quoted as saying. The news channel will draw on Xinhua's presence "in more than 130 nations and regions" and makes it the first international news agency to run a television news network, it said. The government has earmarked 45 billion yuan (HK$51.7 billion) to fund the expansion of groups including Xinhua, state television station CCTV and China Radio International, according to previous reports. Xinhua alone is "striving to build a modern, comprehensive news media group, comprising wire services, newspapers, websites, economic information services, databases and search engines, cellphone and mobile network services, and television", the news agency said. Beijing tightly controls media outlets, either directly or through self-censorship by organisations fearing shutdowns.
July 2, 2010
Two medium-sized residential sites in Kowloon were triggered for auction yesterday, a move that showed developers were eager to replenish their land banks in urban areas. The Lands Department said a residential site in Hung Hom would be sold for a minimum guaranteed bid of HK$1.77 billion and another residential site at Argyle Street, Ma Tau Wai, for HK$2.85 billion. Surveyors estimated the two sites together would contribute more than HK$6 billion to government coffers. Their optimism about the upcoming land sale rose after Sun Hung Kai Properties (SEHK: 0016) paid HK$10.9 billion for a luxury residential site in Ho Man Tin early last month. It was the second-highest price ever for a development site sold by auction. Pang Shiu-kee, the managing director of SK Pang Surveyors, estimated the Hung Hom site would sell for an accommodation value of HK$7,000 per square foot or HK$2.5 billion. He predicts a price of more than HK$10,000 per square foot or HK$4 billion for the Ma Tau Wai site. "Considering the two sites' locations, developers big and small will join the auction," he said. If a luxury residential site at Mount Nicholson, to be sold by auction on July 28, fetched a high price, the two Kowloon sites could attract higher bids, Pang said. The auction of the two sites will be held on August 17. Alvin Lam, a director at Midland Surveyors, said the unexpectedly strong outcome for the Ho Man Tin site showed that developers were willing to pay a higher price for development sites in good locations. Lam expects keen bidding for the Hung Hom site as flats on the high floors would enjoy sea views. The site, located in front of the residential project Harbour Place, will provide a total gross floor area of 365,750 square feet. The height limit of 100 metres allows for residential blocks of 33 storeys. The reserve price of HK$1.77 billion represents an accommodation value of HK$4,839 per square foot. Paul Louie, the regional head of property research at Nomura International, said the government had lowered its asking prices for sites under the application list in order to make it easier to trigger a sale. "We can see more sites released for auction," he said. The second site, which will provide a gross floor area of 394,285 sqft, is at 204 Argyle Street, close to Kowloon Hospital.
July 1, 2010
An epidemiology centre opened in Shanghai on Tuesday to train experts in detecting ways to prevent chronic and epidemic diseases. Three more senior aviation officials have been detained in a widening investigation of corruption in the country's air-transport sector following the suicide of a top official last week. Google said on Tuesday it will stop automatically rerouting users of its mainland search site to Hong Kong after Beijing said the company would lose its mainland licence.
Foxconn is to build a new plant in Zhengzhou City, capital of central China's Henan Province, municipal authorities said Tuesday. Foxconn and senior officials of Zhenzhou and Henan are working on the details of an agreement to build the plant, said a spokesman for the municipal government. Zhengzhou has allocated land for the plant. The first phase construction will cover 133 hectares, he added. Henan has launched a massive recruitment drive for the new plant. Recruitment advertisements have been posted in many residential communities in Zhengzhou as well as on the official websites of other Henan cities. The new plant is to employ 300,000 people in the long run. About 100,000 people are to be recruited in the near future, an official with the provincial employment promotion department said while declining to give his name. "Workers can expect a monthly income from 2,500 yuan to 3,000 yuan with wages of no less than 2,000 yuan per month." The pay is about the same as that of Foxconn's plants in Shenzhen City in south China's Guangdong Province. June 30, 2010
Democratic Party chairman Albert Ho Chun-yan said on Monday party members would join the July 1 protest – along with other pro-democracy protesters and groups. Graftbusters yesterday lost a six-year legal battle against two lawyers dubbed "The ICAC Killers" for their record of winning acquittals in cases brought by the anti-corruption agency. Friends and relatives of solicitor Andrew Lam Ping-cheung and barrister Kevin Egan were quick to celebrate after the Court of Final Appeal quashed convictions for perverting the course of justice. The Independent Commission Against Corruption had contested a Court of Appeal decision to quash a conviction against Egan. He had been convicted of revealing the identity of a female witness under protection by the ICAC. The witness, Becky Wong Pui-sze - the secretary of Semtech International Holdings chairman Derek Wong Chong- kwong - joined the protection program voluntarily after being arrested in 2004 along with her boss and seven others in a corruption case involving HK$570,000. Derek Wong has since absconded. The case related to a share- manipulation probe involving Semtech. Investigations included ICAC officers searching seven newsrooms - including those at Sing Tao, Apple Daily and Oriental Daily - in July 2004 and seizing computers. Egan gained access to Becky Wong and made a report of false imprisonment against the ICAC to seek her release. The Court of Final Appeal ruled that Egan's acquittal should stand, saying "the evidence presented by Egan was not addressed by the majority in the Court of Appeal." At the same time, Lam and Mandy Chui Man-si, a girlfriend of Derek Wong, appealed against convictions for perverting the course of justice. They were alleged to have made a fraudulent claim that Becky Wong was unlawfully detained by the ICAC against her will during the investigation. Lam was jailed for six years and Chui for two-and-a-half years. Both sentences were quashed. "The evidence favors a finding that Lam did not know or believe that Becky Wong was not unlawfully detained," Justice Patrick Chan Siu-oi said. The judge added that the presumption by the Court of Appeal that Lam was party to a conspiracy was inappropriate. Lam said later as he headed for a celebration at the Foreign Correspondents' Club in Central that having spent the "golden age of life fighting for justice in court" he was delighted with the judgment. "I believe in the rule of law practiced in Hong Kong," he said, adding: "Financial support from friends and my endurance helped pull me through the years." He told The Standard he is considering a claim against the ICAC for loss of earnings in the past four years, though he is not confident of success. Lam also said he would apply for the restoration of his license to practice as soon as possible. But he will not take up criminal cases - not to mention ICAC cases. "I've been restless enough going through the trial of this criminal case," he said. The Law Society of Hong Kong will today discuss whether to restore Lam's license. Egan, a former ICAC inspector, said he has no intention of changing what he has been doing for two decades and will continue to handle criminal cases involving the commission.
The League of Social Democrats has promised not to intimidate or heckle the Democratic Party during Thursday's pro- democracy march. But it expects the march to be "very chaotic" given disharmony in the pan-democratic camp due to Democrat support for the government's political reform package.
Trade officials from China and Taiwan were finalizing details on Monday on a landmark trade pact that will bind the economies of the political rivals closer than ever.
China's Communist Party grew even bigger last year as more people sought membership seen as a ticket to the ruling class elite and a means for getting ahead. Agricultural Bank of China has set the price range for the Shanghai portion of its IPO at 2.52 to 2.68 yuan (HK$2.88-HK$3.06) per share, two sources said on Monday. Taiwan’s Hon Hai Precision Industry Co group will build new factories for its LCD panel maker Chi Mei Innolux in the cities of Chengdu and Wuhan to mitigate rising labour costs in the mainland’s factory belt. A source with direct knowledge of the company’s plans said on Monday that the company would also expand production at existing plants in Ningbo, Nanjing and Foshan. The moves come amid a string of labour unrest in the coastal industrial hub of the Pearl River Delta, where increasingly assertive migrant workers are demanding better conditions and higher wages.
*News information are obtained via various sources deemed reliable, but not guaranteed
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Jade Dynasty staffer Leung Hoi-ming holds
a Nan Gong Wen Tian figurine at the 12th Ani-com & Games Hong Kong 2010. Limited
edition figures, pseudo-models, comics and bargains - all are in place as the
Ani-com comics fair kicks off today. More than a hundred people queued overnight
outside the Hong Kong Convention and Exhibition Centre last night, with the
majority saying that they were keen to buy figurines of online game or
comic-book characters. Among the most expensive is one of Nan Gong Wen Tian - a
character from Tony Wong Yuk-long's comic series, The Legend of Nan Gong Wen
Tian. The HK$1,200 special edition figurine comes with a transparent arm, and
only three are for sale at the fair, which runs until Tuesday. Others are
cheaper but also in short supply. A replica of the sword used by Nip Fung, a
character in Ma Wing Shing's comic Fung Wan, costs HK$350 but only 20 are
available. Brenda Leung, marketing manager for Jade Dynasty, publisher of Wong's
comics, said it was expected that business would increase by about 10 per cent
from last year's HK$1 million. Lego fans will be able to see 12 local
attractions made by Lego enthusiasts, such as models of Ap Liu Street, Wong Tai
Sin Temple and the Hong Kong Coliseum, and can vote on their favourite one.
Eddie Chow, in his 30s, made a Lego model featuring Tai Po's Lam Tsuen. The set,
on which Chow spent more than HK$10,000 and which took a month to make, includes
the famed wishing tree which has collapsed. Online gaming companies promise
pseudo-models will be there. Online game developer Gamania has invited
pseudo-model Da Da and four Taiwanese models. "Da Da will strip 10 items of
apparel off herself and give them to the first 10 fans in the queue," public
relations representative Kiko Li said. She did not say what the items would be
but stressed the event would be suitable for people of all ages. Microsoft, the
maker of X Box, has replaced Chrissie Chau Sau-na and Jessica C with another two
pseudo-models - Debby Tsang and Kinki Lam. The organiser has ruled out
promotional activities by Chan and Jessica C, because they are celebrities
"well-known enough to cause a stir", the exhibitor was told. But the company's
director of entertainment and devices, Chester Wong Kui-tim, said the
replacement models would not adversely affect sales, which he predicted would
increase by 40 per cent. X Box 360, a gaming device released two weeks ago, will
be offered as part of a promotional package at Ani-com. For HK$2,969, the first
100 buyers will get a HK$2,300 X Box 360, a game, a console and a bicycle.
Sino-Australian relations look to be on the mend with iron ore (above) from Down
Under unloaded in Tianjin in March, and now a project between Chalco and
British-Australian miner Rio Tinto in southeastern Guinea. Aluminum Corp of
China (SEHK: 2600), the nation's biggest producer of the metal, agreed to pay
US$1.35 billion for a stake in Rio Tinto Group's Simandou iron ore project in
Guinea, making its first investment in the commodity. Chalco will acquire a
44.65 per cent stake by funding development over the next two to three years.
The agreement follows an initial accord on the project with Chinalco, Chalco's
state-owned parent, in March. Rio is working to repair ties with China, its
biggest client, after scrapping a US$19.5 billion investment from Chinalco last
year. Chalco, facing a 12 per cent drop in aluminium prices, will benefit from
tapping what London-based Rio says is the world's top undeveloped iron ore
deposit. "Chalco delayed a share sale this year and the stock performed badly,"
Owen Liang, a Shenzhen-based analyst at Guotai Junan Securities, said. "The
company needs to convince investors of profit growth. The Simandou project will
contribute substantially to profit after it starts." This will be Chalco's
biggest overseas investment after it pulled a A$3 billion (HK$20.82 billion)
bauxite project in Australia last month as market conditions deteriorated.
Bauxite is the main raw material for aluminium. In February, the company agreed
to jointly develop and operate a US$1 billion smelter in Malaysia with GIIG
Holdings. "This project can also efficiently balance China's need for security
of supply on the global iron ore market," said Xiong Weiping, chairman of Chalco
and Chinalco. The Simandou project would be the foundation for future
co-operation between the two companies, he said. Imports of iron ore by China,
the biggest buyer, jumped 42 per cent last year to a record 628 million tonnes.
The biggest suppliers, Vale, Rio and BHP Billiton, abandoned a 40-year custom of
setting annual prices this year and raised rates twice as demand gained. "The
project will contribute roughly 4.5 billion yuan (HK$5.15 billion) of profit a
year, based on current iron ore prices," Guotai's Liang said. "It will also
reduce the pricing power of the three biggest miners." Rio will retain a 50.35
per cent stake after Chalco's investment, and International Finance Corp holds 5
per cent. The Guinean government had an option to buy up to 20 per cent of the
project and had "recently expressed a willingness to exercise that option", the
two companies said.
The house at 20 Peak Road, surrounded
by foliage, is a two-storey detached building completed in 1948. Sellers of a
luxury house on The Peak are confident of achieving a record price following the
positive result at this week's land auction. The Shang family, owners of the
China Can Company, appointed property agency Jones Lang LaSalle to conduct a
tender for the 62-year-old house at 20 Peak Road. The tender will close on
September 15. In an auction on Wednesday, a site at Mount Nicholson Road on The
Peak sold for the third-highest price on record in Hong Kong - HK$10.4 billion.
"The accommodation value [land price per square foot] has a great opportunity to
break the record for a residential site in town," Joseph Tsang Hon-ping,
international director at the property agency, said of the Peak Road site. The
most expensive site sold was 35 Barker Road on The Peak, for which Henderson
Land (SEHK: 0012) chairman Lee Shau-kee paid HK$68,228 per sq ft last month. As
the development potential of the project is small, Tsang expects the tender will
only attract tycoons keen to build their dream home, rather than commercial
developers. Lanbase Surveyors director Chan Cheong-kit estimates the 20 Peak
Road site to be worth between HK$800 million and HK$900 million as it is in a
prime location with panoramic views of Victoria Harbor and Central. "The land
price per sq ft may reach HK$68,229, similar to the site acquired by Lee
Shau-kee," he said.
China*:
Industrial and Commercial Bank of China (SEHK: 1398), the world's largest lender
by assets, said it would raise up to 45 billion yuan (HK$51.48 billion) via a
rights issue in Shanghai and Hong Kong, following fund-raising efforts by its
Chinese peers. ICBC's board has passed a proposal to sell up to 0.6 shares for
each 10 shares held by existing shareholders to replenish capital, according to
a bourse filing on Wednesday. The plan is subject to approvals from shareholders
and regulators. The rights offer would bring total fund-raisings announced by
the largest lenders - ICBC, China Construction Bank (SEHK: 0939), Bank of China
and Bank of Communications (SEHK: 3328) - to as much as 287 billion yuan. The
fund-raising flood comes on the heels of last year's lending binge. After banks
lent an unprecedented 9.6 trillion yuan, they now have to strengthen their
capital bases to meet regulatory requirements. At the end of March, ICBC's
capital adequacy ratio stood at 11.98 per cent, higher than the 11.5 per cent
minimum required by the China Banking Regulatory Commission. The ICBC board of
directors on Wednesday also passed a plan to privatise Industrial and Commercial
Bank of China (Asia), which is a 72.4 per cent-owned subsidiary. Analysts with
Citi Investment Research estimate that the deal, which is intended to streamline
ICBC's Hong Kong businesses, would cost ICBC US$1.6 billion if the stake is
priced at 2.5 times 2009 book value. ICBC sold a 75 per cent stake in brokerage
ICEA Finance Holdings to Bank of East Asia (SEHK: 0023) at the beginning of this
year and bought a 70 per cent stake in BEA (Canada). In Hong Kong, ICBC has a
wholly owned investment bank, ICBC International. Analysts with Guotai Junan
Securities estimate that the rights issue will be priced at HK$2.57, 56 per cent
lower than the Tuesday closing price of HK$5.87. The analysts do not expect the
fund-raising to have a major impact on the market, predicting that Central
Huijin Investment, a major shareholder of ICBC and a subsidiary of the nation's
sovereign wealth fund China Investment Corp, would probably subscribe to the
shares. Separately, Agricultural Bank of China may topple ICBC as the company
with the world's biggest IPO if it chooses to exercise a greenshoe option. ICBC
completed the world's top initial share sale in 2006 when it raised US$21.9
billion. ABC raised US$19.2 billion in an IPO earlier this month, and boosted
the size to about US$20.8 billion after selling a further 3.81 billion shares at
HK$3.20 a share, it said yesterday.
China Show of force in South China Sea
drill - War games a response to US-South Korean exercises, say analysts - Crack
warships from the PLA's three naval fleets jointly exercised in the disputed
South China Sea in a move that was hailed by the state media as unprecedented.
The drills by the People's Liberation Army Navy in strategic waters on Monday
come at a sensitive time; the United States and South Korea are conducting their
own joint military drills off the Korean Peninsula. The US further angered
Beijing last week by declaring that the resolution of disputes in the South
China Sea is in the US' "national interest". The Ministry of Defence and state
media did not mention the purpose of Monday's exercises. While it is normal for
the PLA to conduct exercises before anniversaries - such as that of its founding
on Sunday - experts on the mainland and overseas agreed that the sheer scale of
the drills was exceptional. Gary Li, a PLA analyst at the London-based
International Institute for Strategic Studies, said the televised display of so
many missile tests was highly unusual. "It looks like [China] was clearly
sending a message," he said. "I have never seen a senior Central Military
Commission member actually participating in naval exercises, along with so many
high-level officers. The deck of the observer ship was strewn with gold braid,"
he said. The news was only reported yesterday by China Central Television and
the Ministry of Defence on its website. PLA Chief of General Staff Chen Bingde
and naval commander Wu Shengli - both members of the Central Military Commission
- supervised the exercises. Flagships of all three naval fleets took part in the
war games, indicating the scale of the operation. Xu Guangyu, a senior
researcher of the China Arms Control and Disarmament Association, said the three
fleets regularly carry out [separate] exercises to mark the PLA's founding
anniversary. "But of course, this time there is a strategic necessity to bring
all three together for such a big joint mission," he said. State media did not
say exactly where the drills took place or how many ships or sailors
participated. "We must pay close attention to changes in [regional] situations
and the development of our mission; prepare ourselves for military struggle,"
Chen was quoted by the state media as saying. The military channel of China
Central Television showed selected footage of the drills. Luyang-class
destroyers, Sovremenny-class destroyers and guided-missile frigates carried out
synchronised warfare manoeuvres and test-fired several types of ship-to-air and
anti-ship missiles, the footage showed. The CCTV report said the navy focused on
how to conduct a precise strike in a complex environment amid sophisticated
enemy electronic jamming. "It is a comprehensive and complex exercise in our
history. The number of missiles fired and the intensity of the electronic
warfare conducted are both remarkable." Military exercises are an important
feature of Chinese military doctrine and often offer an important strategic
insight into the PLA's intentions and capabilities. Analysts are divided on the
exact motive for the latest exercise but agreed that it was a show of defiance
against US dominance in Asia. Li said the exercises were probably a further
reaction to the ongoing US-South Korean manoeuvres in the East Sea, given their
apparently high degree of organisation. Significantly, the PLA was showing off a
comprehensive array of long-range attack capabilities, including missiles
launched from submarines and fast-attack craft. "It is a very strong message ...
showing they can project force across a wide range of platforms in a very
comprehensive and adaptable way," he said. Antony Wong Dong, president of the
Macau-based International Military Association, said the gathering of main
forces of the three fleets in the South China Sea was to show China's concern
over America's involvement in territorial disputes in the troubled region.
Conducting such co-ordinated manoeuvres of ships from all three fleets is rare
for the PLA and would take time to prepare. But recently, the PLA demonstrated
it had mastered the required capabilities to bring a separated force together to
carry out co-ordinated missions. In April, the PLA navy carried out elaborate
long-distance exercises to the southeast of Japan's offshore islands. "It's not
that difficult for today's PLA navy to organise joint-fleet exercises at short
notice," Xu said. China's rapid growing military clout has raised concerns in
the region, particularly among nations that have unsolved territorial disputes
with Beijing. A senior Vietnamese military official warned on Wednesday against
an arms race in the South China Sea, noting a growing naval presence from a
range of nations, including China. Lieutenant General Nguyen Chi Vinh, deputy
defence minister, said China's military exercises were its own affair but they
must not interfere with the territorial integrity of Vietnam's holdings in the
sea's Spratly islands. "We never want to see an arms race in this area," he
said. Countries like Vietnam "should be worried" if "concerned parties do not
find a common understanding and direction ... and all want to impose their
opinion on each other".
Bottles of water are stacked up for sale
at a petrol station in Jilin city amid fears that tap water may have been
contaminated.
Patients who join a proposed voluntary
health insurance scheme should be asked to pay a higher proportion of the costs
of their treatment in public hospitals, then claim the money on their insurance,
Hospital Authority chairman Anthony Wu Ting-yuk says. Instead of paying only a
heavily subsidised charge of HK$100 a day, public patients covered by the
proposed government-regulated scheme would pay part of the full cost of HK$3,300
a day.
Hang Lung chairman Ronnie Chan emphasises a point during a press conference to
announce the company's results. Hang Lung Properties (SEHK: 0101) chairman
Ronnie Chan Chichung spent more time yesterday discussing recent management
upheavals than talking about his company's 400 per cent leap in net profit. He
said as far as he was aware, no more executives were planning to leave. Terry Ng
Sze-yuen, executive director of Hang Lung Properties and Hang Lung Group (SEHK:
0010), resigned for personal reasons a week ahead of yesterday's annual results
announcement. Two months before he left Ng, who had been with the company for 10
years, realised a gain of more than HK$100 million after exercising his share
options. His departure came a week after Nelson Yuen Wai-leung, the 58-year-old
managing director of both companies, retired on July 14. Philip Chen Nan-lok,
who quit Swire Group (SEHK: 0019) to join Hang Lung, succeeded Yuen in both
managing director posts the next day. "In our 50 years of corporate history,
very few people have left us," said Chan. "We are known as one of the most
stable senior management teams. Philip Chen is only our fourth managing director
so far." Chan emphasised that Yuen had said he would retire this year when he
was hired as a finance director. "As far as I know today, no more [executives]
will leave," he said. Asked about the job of investor relations, which was
previously handled by Ng, Chan said it was the least complicated work in the
company. Hang Lung Properties recorded underlying profit of HK$6.67 billion for
the year to June 30. The developer's operating profit from property sales rose
to HK$5.25 billion from HK$3 million a year earlier. The company sold 425
garden-view units at the HarbourSide residential project at Kowloon Station at
an average price of more than HK$14,000 per square foot. Operating profit from
property leasing climbed 8.13 per cent to HK$3.72 billion. Taking into account a
revaluation gain from its investment properties, net profit jumped 438.88 per
cent to HK$22.25 billion while turnover rose 188.96 per cent to HK$12.05
billion. A final dividend of 54 HK cents was declared, up from 51 HK cents a
year earlier. Meanwhile, Hang Lung Group reported that underlying full-year
profit rose 154.48 per cent to HK$3.69 billion, from HK$1.45 billion a year ago.
It declared a final dividend of 57 HK cents, up from 54 HK cents a year ago.
Shares in Hang Lung Properties fell 3.12 per cent to HK$32.60 yesterday while
Hang Lung Group was down 0.98 per cent to HK$45.45.
Hong Kong $10.4 billion (US$1.34)
Peak sale shows strength of luxury market - Nan Fung Development and Wharf buy
Mount Nicholson site - A site on The Peak fetched the third-highest land price
in the city's history yesterday, underscoring the continued strength of the
luxury residential market. Nan Fung Development and The Wharf (Holdings) (SEHK:
0004) paid HK$10.4 billion in an auction for the site at 103 Mount Nicholson
Road - HK$32,014 per square foot. They outbid New World Development, Sino Land
and another, unidentified, developer. Analysts had expected it to sell for
between HK$8.7 billion and HK$11.4 billion. The 2.33-hectare site contains
government staff quarters that have been empty for years. Nan Fung and New World
Development were the only two developers to submit aggressive bids. Sun Hung Kai
Properties (SEHK: 0016) and Sino Land appeared to take a back seat, even though
they have released new luxury projects that have sold well in recent months. New
World made the first bid when government auctioneer Graham Ross announced an
opening price of HK$8 billion. An unidentified developer and Nan Fung submitted
higher offers after Ross warned the site might be withdrawn if the offers failed
to meet the government's reserve price. He cut the incremental bid from HK$100
million to HK$50 million when the reserve price of HK$8.2 billion was reached.
The unidentified developer withdrew from bidding at HK$8.35 billion. Sino Land
chairman Robert Ng Chee Siong, Chinese Estates Holdings (SEHK: 0127) director
Lau Ming-wai and Manhattan Realty general manager Patrick Chow sat together,
implying they had formed a consortium. Sino Land made an offer of HK$8.5 billion
but withdrew when the price reached HK$8.95 billion. That left Nan Fung and New
World in the running. The site went to Nan Fung with the 47th bid. Though the
site is on The Peak, according to the zoning plan it is closer to Evergreen
Villa in Stubbs Road, Mid-Levels. Nicholas Brooke, chairman of Professional
Property Services, said: "It is a very good site but it isn't The Peak in many
people's minds. There is a challenge with development. Half of the site is
slope, and the developer will have to pay extra foundation costs." He believed
some developers were cautious about bidding because they expected the government
to put more luxury sites on the market in the next 12 to 18 months. Brooke
expected luxury residential prices to rise a further 10 to 15 per cent by the
end of the year. About 30 per cent of the floor area of the project will
accommodate houses, while the rest will be used for flats. The managing director
of Savills Valuation and Professional Services, Charles Chan, said the average
price of the houses would have to reach HK$55,000 to HK$60,000 per sq ft for the
developer to make a reasonable profit, and the flats would have to go for
HK$35,000 per sq ft. Including yesterday's sale, the government has generated
HK$26.05 billion from land sales since the start of the financial year in April.
Its target is HK$34.1 billion. The government will sell four commercial and
residential sites worth more than HK$7 billion next month. The Mount Nicholson
Road site could provide a gross floor area of 324,861 sq ft. Under government
restrictions, the maximum building height for the northern portion is 12 storeys
above one basement. For the southern portion it is 13 stories.
In the past 10 years, many deals
were done by overseas funds, such as the acquisition of Grand Millennium Plaza
in Sheung Wan, but local investors are now back in play.
Officials are trying to track the
source of an oil slick that left sludge on Repulse Bay beach yesterday. The
Marine Department says preliminary investigations show the oil did not originate
from land, but so far officers have drawn a blank. However, they say it is not
connected to an oil spill off Tuen Mun on Sunday. The beach on Hong Kong Island,
which is popular with both locals and tourists, was closed for a clean-up by the
Leisure and Cultural Services Department. It was not known last night if it
would be reopened today. The department was alerted at about 9am yesterday to a
large patch of oil that was floating off Round Island, which is about two
kilometres south of the beach. The oil - which marine officials described as a
"rainbow-coloured oil sheen" - then gradually began drifting towards Repulse
Bay. It started to hit the shoreline at about 12.40pm. A thick layer of oil was
also spotted in a corner of the sea just off the Kwun Yam shrine on the beach. A
spokesman for the Marine Department said the size of the oil patch had shrunk to
100 metres by 50 metres by the time it reached the beach. "We deployed a
contractor to use a water jet to disperse the oil," he said, adding that no
chemicals were used to dissolve the oil. He said it was uncertain what type of
oil it was but it was likely to be fuel oil. Samples were collected to determine
the properties of the oil. He said even with a good analysis of the oil, the
chance of locating the source was slim. The spokesman said the latest incident
did not have anything to do with the oil spill in Tuen Mun, which also forced
the closure of Cafeteria New Beach and Golden Beach on Sunday. The Environmental
Protection Department said their officers had established that the spill at
Repulse Bay did not originate from land.
Hong Kong carriers to launch iPhone 4 for free with HK$398 (US$51.35) monthly
plan - At the stroke of midnight, thousands of consumers will be the first in
Hong Kong to obtain Apple's iPhone 4 for free or just HK$580. Those attractive
options are being offered by mobile network operators 3 Hong Kong and SmarTone-Vodafone,
which announced yesterday their respective tariff plans for the sleek,
video-conferencing-ready smartphone. The two firms and new Apple carrier-partner
CSL will each host iPhone 4 launch parties tonight where attendees will be able
to buy the device on site instead of heading to the shops tomorrow. To get a
free 16-gigabyte iPhone 4, subscribers must choose the HK$398 monthly plan that
comes with unlimited data usage and intra-network text messaging. With its plan,
3 Hong Kong bundles 2,500 voice minutes per month - a bit more than the 2,400
that come with the comparable SmarTone-Vodafone package. A 32GB iPhone 4 is
available with an upfront payment of HK$580 with that unlimited data plan. For
iPad users, 3 Hong Kong is offering unlimited local data and Wi-fi links for an
extra HK$50 a month to those on its HK$398 iPhone plan. The cheapest plan for
both carriers costs HK$138 a month, with 100 megabytes of data and unlimited
intra-network text messaging. With this plan, a 16GB iPhone 4 is offered at
HK$3,480 by SmarTone-Vodafone and HK$3,380 by 3 Hong Kong. The handset's 32GB
version under the same monthly plan will cost HK$4,280 with SmarTone-Vodafone
and HK$4,180 with 3 Hong Kong. Calls made to CSL, the city's largest wireless
network operator, about its iPhone 4 tariff plan were not returned yesterday.
CSL chief executive Joseph O'Konek had earlier said selected 1010 and one2free
shops would remain open at midnight to accommodate preregistered customers not
invited to the carrier's launch party. Stephen Chau Kam-kun, SmarTone-Vodafone's
chief technology officer, said the operator had stock reserved to cover all
2,000 invited guests at its event at the IFC Mall in Central. "Despite the
publicity about the iPhone 4's antenna issues, the demand is huge," Chau said.
However, he declined to say how many customers had preregistered to buy the
device. PCCW (SEHK: 0008) Mobile, which is not an Apple carrier-partner,
introduced yesterday rebate offers of up to HK$4,988 for customers who use its
concierge service to order an iPhone 4 from authorised dealers and shops.
A black rainstorm warning issued for
the second time in a week saw more than 150 millimeters of rain fall across the
territory and left 10 construction workers stranded and a security guard almost
swept away by floodwaters in Sai Kung. Similar to last Thursday's black
rainstorm, yesterday afternoon's alert was raised from amber to red and then
black within about an hour. All warnings were canceled around 6pm. Ten
construction workers were stranded in a construction site on Pik Sha Road, near
Clear Water Bay Road. Firemen were called to lead them to safety. Also in the
same area, a security guard at a residential building escaped before his guard
post was swept away by 1.5-meter-high floodwaters. The Hong Kong Observatory
said a trough of low pressure brought heavy rain and thunderstorms. Some 174
flights were delayed and suspension of all outdoor works at the airport caused
serious interruption in luggage delivery. More than 1,000 people waited to
reclaim their baggage in the evening. Some said they waited for almost two
hours. The observatory said the storm brought more than 100mm of rainfall to the
urban areas in the afternoon. Sai Kung and Lantau Island were the hardest hit,
with more than 150 millimeters recorded. There were eight cases of flooding and
four landslides reported. Low-lying Tai Tung Village near Ma On Shan suffered
serious knee-high flooding. No injuries were reported. The government went to
great lengths to prevent a second Sha Po Tsai incident, when more than a dozen
villagers were trapped for hours last Thursday before being rescued. One
villager drowned there. Lawmaker Gary Chan Hak-kan along with government
officials inspected the village and the drainage work upstream. They visited
every household to warn villagers to evacuate. Transport services were arranged,
and dozens were led to safety at Tai Po Community Centre. Some, however, chose
to stay put. A villager surnamed Li refused to go and said the rain was less
serious this time. "I dare not sleep tonight in order to protect my home," he
said. Today, there will be sunny intervals with a few showers with temperatures
between 26 and 31 degrees Celsius. The forecast for tomorrow is sunny with a few
showers and mainly fine over the weekend.
Macau boom and strong Singapore
debut cut Las Vegas Sands losses - Booming gambling volumes in Macau and a
successful debut in Singapore helped casino developer Las Vegas Sands narrow
losses and boost sales to a record level in the second quarter. The US parent of
locally listed Sands China saw revenue at its three Macau properties - the
Venetian, Sands and Four Seasons - rise 41.5 per cent from a year ago to US$1.03
billion. Macau quarterly revenues broke the billion-dollar mark for the first
time as gambling volumes from high-rollers soared. Profit rose even faster on
cost-cutting measures, as the three Macau properties saw earnings before
interest, tax, depreciation and amortisation climb 73.9 per cent to a record
US$307.04 million in the three months to the end of June. The company controlled
by billionaire Sheldon Adelson said it continued to negotiate for approvals from
the Macau government to import the construction workers it needed to resume
full-scale work on its Cotai resort complex. The project will feature a
6,000-room Sheraton, Shangri-La and Traders casino-hotel complex with a total
projected cost of US$4.42 billion. Its opening date has been delayed from the
second quarter to the third quarter of next year and Adelson said yesterday it
was "too early to tell" if further delays due to the labour issue would be
necessary. Sands China acting chief executive Michael Leven said the company
would appoint a recruiting firm to help hire a replacement for former chief
executive Steve Jacobs, who was fired last week. "The candidate pool is a global
search," Leven said. In Singapore, where Las Vegas Sands partly opened its US$6
billion Marina Bay Sands on April 27, the city-state's second casino booked
US$94.5 million in ebitda on US$216.4 million in revenue during its first 65
days of business. The resulting ebitda margin of 43.7 per cent looks sky high
compared with Macau's 23 to 33 per cent margins. The difference is due to the
lower gaming tax rates in Singapore, and executives said margins would improve
further as the new property adds more hotel rooms, shopping outlets and
entertainment offerings. Company wide, net losses narrowed to US$4.7 million
during the quarter, down from a loss of US$178.3 million a year earlier. Hefty
depreciation charges and dividend payments on preferred shares continue to weigh
on the bottom line at the US firm, which has not reported a profitable quarter
since 2007.
Haier has made huge gains at home
and overseas through innovation. Haier's ability to innovate and adapt has
brought huge rewards in the countryside, where it sought to capitalise on the
government's rural subsidies scheme for electrical appliances, which began in
2007. The scheme was given a further boost by the Ministry of Commerce in March
when it raised the upper price limit for subsidies to offer higher-end goods to
wealthier farmers. Between January and April of this year, Haier's revenue in
rural areas grew by more than 40 per cent, giving the company a 29 per cent
market share compared to the 11 per cent held by its closest rival, Midea.
Ministry statistics show Haier is the best-selling brand of fridges, washing
machines and water heaters on the mainland, and has the largest slice of its
rural appliance subsidy programme at 32 per cent. Since August last year,
General Electric has been using Haier's mainland sales network, which reaches
more than 70,000 villages, to distribute its appliances. Hewlett-Packard also
has an agreement with Haier to sell to rural customers through the company's
Haier Ri Ri Shun Home Appliance Shops network. But Haier's success has not been
restricted to China. In terms of volume in the global market and geographical
penetration, it has already made huge strides and the current fiscal
retrenchment in the developed world could be a further boon to the company's
prospects. According to statistics from market researcher Euromonitor, in 2001
Haier was the fifth-largest white goods maker in the world with a global market
share of 3.72 per cent. Last year, the company moved into first place with its
global market share rising to 5.1 per cent. It is also the largest by market
share in the home laundry and refrigeration appliances markets. In contrast,
Whirlpool's market share fell to 4.5 per cent in 2009 to second place. Some of
Haier's rapid growth can be attributed simply to Western consumers buying less
and Chinese consumers buying more in a market that is already dominated by Haier
and a handful of other names. However, Tan Heng Hong, a consumer market analyst
at consultancy Access Asia, says Haier is able to grab a bigger share of the
market when consumers in developed markets are tightening their belts. "Haier
stands to gain from consumers in the developed world opting for lower-priced
products," Tan says. Peter Williamson, a professor at the Cambridge Judge
Business School at Cambridge University, highlights two examples where Haier has
been successful in innovating for foreign markets. In the first, it turned a
niche product - basic refrigerators which also stored wine - into a mass-market
product. "The original was a high-end product that was sold at a high price to
connoisseurs," Williamson said. "Haier re-engineered the product and brought the
retail price down from US$1,700 to US$750 and distributed it through Sam's Club
in the US, increasing the size of the market for that particular product by a
few thousand per cent in just a few years." In the second example, just as Haier
sends employees to the countryside to conduct research, they also sent people to
small offices and universities overseas to do market research on small fridges.
As a result, they were first to come up with fridges that have a fold-out wooden
top that can be used as a desk. "Chinese manufacturers have lower break-even
costs when launching new products to test the market," Williamson said. "Their
fixed costs are much lower and product lines are much more flexible than of
those of a company like Whirlpool." Some companies and sectors are waking up to
the benefits of embracing what is termed "frugal innovation" - the ability to
produce innovation at lower cost, shifting creativity away from the traditional
domains of the developed world. Haier could be facing stiff competition in the
innovation stakes, however. One member of staff in the Haier showroom said: "The
mice in the countryside are getting smaller and smaller and squeezing through
the tiniest of holes."
China's Peace Hotel reopens after
US$64m renovation - Visitors in the lobby of the Peace Hotel in Shanghai
yesterday view the refurbishment of what was once the Far East's most luxurious
hotel, now restored to its 1930s glory. Shanghai's Peace Hotel reopened
yesterday after a three-year, US$64 million renovation to restore what was once
the Far East's most luxurious hotel to its 1930s glory. The hotel on Shanghai's
neoclassical waterfront will be managed by a joint venture between Fairmont
Hotels and Resorts and China's state-owned Jin Jiang Hotels, executives from the
two companies said. "This hotel will be one of the most admired properties in
China. The history and reputation of the Peace Hotel is legendary. The efforts
to restore it to its original grandeur have been remarkable," Fairmont president
Chris Cahill said. Gesturing towards a massive octagonal skylight above the
hotel's shopping arcade, Jin Jiang chief executive Yang Weimin said that before
the renovation began, the stained glass was covered up and the space was a
store. "When you came into the shop, you couldn't see the ceiling that you now
see. The best thing in the building was hidden from view," Yang said. "Now as I
greet guests, the moment they step into the lobby they are in awe." Over time,
many of the original features of the 81-year-old hotel were destroyed or covered
up as war, revolution and ill-conceived renovations battered the building, an
institution in the famed Bund area. A team from Hirsch Bedner Associates worked
with local historians to restore and reconstruct the hotel's art deco features,
scraping away layers of paint and using old photographs and architectural plans
for reference. A new wing was added to the back of the hotel to expand it to 270
rooms, add a sky-lit swimming pool and provide additional lifts and other
amenities, executives said. Despite the modern touches, the hotel's restored art
deco interior and the kitschy Dragon Phoenix restaurant create a sensation of
stepping back in time. 
Guangdong province has officially
launched a bid to organise the 2020 World Exposition but a host city has yet to
be named, mainland newspapers reported yesterday. Speaking at the World Expo on
Tuesday in Shanghai, Chen Wenjie, head of the China Council for the Promotion of
International Trade, Guangdong sub-council, told reporters they had tendered an
official application to the provincial government to host the World Exposition,
the Guangzhou Daily reported. Chen said Guangdong had been preparing to apply
for the 2020 Expo for two years and had submitted reports to the provincial
government for its endorsement. He said it had also expressed interest to
Jean-Pierre Lafon, president of the Bureau of International Expositions (BIE).
"Guangdong is a vibrant and fast-developing province, and I believe Guangdong is
fully capable of organising the World Expo," the newspaper quoted Lafon as
saying. The New Express reported that Guangdong had been waiting for an official
endorsement from the provincial government so that it could proceed. Subject to
the evaluation of the BIE, the entire process from applying to hosting an expo
could take up to 10 years. The paper also reported that Guangdong might have to
wait until 2025, as a host country needed to wait 15 years for its next turn to
host. Local scholars are fully backing Guangdong's bid. Dr Peng Peng, a
researcher at the Guangzhou Academy of Social Sciences, said the province was
more than qualified to host the event. "My guess is that the expo might be
centrally based in Guangzhou and co-organised by a few neighboring cities. Being
the richest province in China, Guangdong should be able to attract keen
international participation," Peng said.
Mall manager bets on mainland's
fast-growing consumer market - Lippo Plaza on Huaihai Road before renovation
(left) and after TCBL brought in global brands. When Thomas Tam left property
heavyweight Cheung Kong (Holdings) (SEHK: 0001) to establish his own shopping
centre consulting company in 2005, he bet his career on the mainland's vast and
fast-growing consumer market. His bet proved right as TCBL Consulting is now
providing consulting services to about 50 completed or uncompleted shopping
centres on the mainland, and employs 300 staff members from just 20 five years
ago. Before setting up his own business, Tam was in charge of running Cheung
Kong's Oriental Plaza in Beijing, experience that he put to work on his account
when he set up TCBL. Now, with a steady increase in the number of new shopping
malls being opened and old malls being renovated, demand for his consultancy
services - which include mall management and a network of connections to bring
in international brands - is on the rise, says Tam. One example is upgrading the
three shopping centres - Lippo Plaza, Hong Kong Plaza and Infiniti Plaza on
Huaihai Road in Shanghai - by bringing in international brands such as Louis
Vuitton, Ermenegildo Zegna, Coach and Tiffany. "Chinese consumers have become
the target customers for international companies," Tam said. Top-priced luxury
brands such as Louis Vuitton and Gucci were in the first wave of retailers to
open outlets on the mainland more than 10 years ago, and mid-priced brands
followed in a second wave that got under way over the past three to four years,
he said. Luxury brands and fast fashion brands such as H&M and Zara are now
expanding into several second-tier mainland cities. "Retailers do not have their
eyes solely on first-tier cities, where the pace of consumption growth has begun
slowing. They are now looking to second- or third-tier cities such as Dalian,
Chengdu and Changchun, where they see the emergence of a growing consumption
power," Tam said. The mainland last year became the fifth-largest market for
consumer spending in the world, behind the United States, Japan, Britain and
Germany. The Ministry of Commerce has predicted the nation is likely to become
the biggest consumer market by 2015. "When H&M opened its first Qingdao outlet
in April this year, its first-day sales went over 500,000 yuan (HK$571,930).
That was very impressive," Tam said. That turnover compared with first-day sales
of 2 million yuan when H&M opened its first mainland flagship store in Shanghai,
added Lawrence Wu, who left Sun Hung Kai Properties (SEHK: 0016) and joined
Tam's consulting operation as joint managing director in 2006. H&M is now
planning to expand into western China, while Zara has opened stores in Dalian
and Changchun, and Japanese fashion brand Uniqlo recently opened a store in
Qingdao. It is not only fashion retailers that are beating a path to the
mainland's consumer market. Restaurant operators such as Hong Kong's Lee Gardens
have joined the stampede. Their expansion across the border has been fuelled by
several factors, says Wu, including the nation's rapid economic growth and the
policy support shown by Beijing for consumer spending as a pillar of that
growth. Mainland retail brands were also expanding at a fast pace, and would
play an increasing role in the country's retail market in future, Wu said. To
support this growth, TCBL is planning to open offices in more inland cities
including Hefei in Anhui province, Kunming in Yunnan province, and Changsha in
Hunan, according to Tam.
A customer leaves an Ikea store in
Shenyang, Liaoning province. China ranks No 1 among 27 emerging economies due to
its huge consumer market and rapid economic growth, according to Grant Thornton.
An Air China Ltd plane takes off while
another is parked at Beijing Capital International Airport earlier this year.
Air China, the nation's largest international carrier, will boost capital
expenditure by more than 50 percent in 2010 from a year earlier as it takes
delivery of aircraft to meet a surge in travel demand. China National Aviation
Holding Company is to take over China Aviation Supplies Holding Company (CASC),
a major aircraft and material provider for domestic airlines, which is part of
the government's plan to consolidate the aviation industry, a source
knowledgeable with the deal told China Daily on Tuesday. The proposal is subject
to approval by the State-owned Assets Supervision and Administration Commission
(SASAC) and the State Council, the source said, adding that no timetable has
been established for the deal. "China Aviation Supplies' business will be
maintained while some changes are expected regarding its business with other
domestic airlines or the competitors of Air China," said the source. The buyer -
China National Aviation - is the parent company of Air China. According to the
source, CASC's current business portfolio is very complementary to that of China
National Aviation, which is the country's air transportation provider. CASC's
President Li Hai will be appointed as the vice-president of China National
Aviation following the acquisition, the source said. "The acquisition is the
result of a structural readjustment of China's aviation industry, and is in line
with the country's strategy to make its State-owned enterprises bigger and
stronger, with the eventual goal of becoming the world's best," said Li Xuerong,
a researcher with China Investment Consulting. The number of China's State-owned
aviation companies will be scaled back to five after the acquisition. SASAC said
earlier it plans to initiate large-scale industry consolidation this year among
State-owned enterprises and will cut the number to 100 from the current 125. The
deal, however, also raised some concerns. "China National Aviation will further
consolidate its dominant position in the aviation industry after the takeover
and is likely to favor its subsidiaries, such as Air China, which will
definitely affect other airlines," said Li Xiaojing, director of the Aviation
Transportation and Economy Department at the Civil Aviation University of China.
With the burgeoning aviation market and limited imported aviation supplies, it
is possible that the aircraft supplier will favor Air China over those competing
with local subsidiaries of China Airlines, such as Sichuan Airlines. To avoid
the unfairness, we need to work on the details of the acquisition, said Li. CASC
has a long-term partnership with major airframe and engine manufactures such as
Boeing, Airbus GE, Rolls-Royce and Pratt & Whitney. CASC imports aviation
supplies and wholesales them to small- and medium-sized airlines without import
permits. 
The Vocational Training Council may
increase its 10,000 places for next week's admission for school leavers. This
comes after the council received 3,200 applications from its own graduates for
2,000 higher diploma places at its Institute of Vocational Education yesterday.
A VTC spokeswoman said the admission process went smoothly, but several students
who had queued up since Sunday disputed this, saying the council misled them.
The next round, to be held on Wednesday - when results of the Hong Kong
Certificate of Education Examinations are released - will be for 10,000 places
open to Secondary Five leavers and the council's own graduates who failed to get
admitted yesterday. Depending on the overall demand, the spokeswoman said the
council might increase the 10,000 places by 5 to 8 percent. "We have around
3,000 VTC graduates and we received a total of 3,200 applications for the coming
academic year," she said. "The internal admission scheme of the coming academic
year has finished." At the Cheung Sha Wan branch, some students were
disappointed over not getting their preferred courses, saying more places should
be offered. Frankie Cheng could only get into his third choice. "I'm considering
giving up the place. Maybe I'll first get a job and save some money for
enrolment next year," he said. A student called Wu, who failed to enter her
first choice, was upset, saying the admission office was misleading. "We called
the admission office a week before, and were told that there was no need to
queue up in advance, but just show up on the admission day," Wu's sister said.
Margaret Mak, a Project Yi Jin graduate, said she and her friends may queue up
outside the campus from today to increase their chances of admission on
Wednesday. "We are competing against Secondary Five leavers who usually have
much higher scores," she said. The Democratic Party's youth committee chairman
Mok Siu-lun criticized the VTC way of handling the internal admission. Lawmaker
Wong Sing- chi suggested it give out tickets for registration, and allow online
and postal applications. "Since this is the last year of HKCEE and under the new
education policy, the government should increase funding and consider opening
more career paths, such as diploma programs," Wong said.
Lawmakers of all political colours
rounded on the embattled chief executive of Octopus Holdings, Prudence Chan
Bik-wah, yesterday - accusing her of lying to and cheating the public over the
sale of cardholders' details and calling on her to resign. Chan denied having
lied two weeks ago when she said Octopus had not sold the data to third parties
including an insurance company, saying she might have used a "wrong definition"
of selling at the time. She caused an outcry on Monday when she told a privacy
commission investigation that Octopus had made HK$44 million in the past
four-and-a-half years from selling information about 1.97 million holders of the
stored-value travel and shopping card to its business partners. The furore
mounted at a special meeting of the Legislative Council's finance affairs panel
called to discuss the affair. Chan (pictured) did not respond during the meeting
to the calls for her resignation but told the media later she was responsible to
the public for the affair. She said the most important thing now was to assist
investigations by the privacy commissioner, the Hong Kong Monetary Authority and
Octopus itself. Privacy commissioner Roderick Woo Bun said a preliminary report
on the commission's Octopus investigation would be issued on Saturday.
Li Hau-chun, with tourism sector lawmaker
Paul Tse, apologises for the outburst that brought her notoriety and HK bad
publicity. Pilloried on websites and in media across the mainland and Hong Kong,
accused of wrecking the city's reputation as a tourism destination and afraid to
show her face in public for two weeks, the guide caught on video berating
tourists for not spending enough finally stood up yesterday and said "sorry". Li
Hau-chun, who was seen telling the group that if they didn't pay in this life
they would do so in the next, said her outburst had been provoked by a customer
who used "strong language" to complain about being steered into shops as part of
the tour. "At that time I was very angry and I couldn't control my emotions,"
said the thirty-something divorced mother-of-one who came to Hong Kong from
Hubei a decade ago. The woman whose outburst recalled that of "Bus Uncle" four
years ago - when a phone video of a middle-aged man haranguing a bus passenger
became an internet hit - looked startled as she apologised. Surrounded by dozens
of journalists and cameras in a crowded room, Li, dressed in a black blouse,
blue jeans with a Louis Vuitton belt and high-heeled sandals, said: "First of
all, I want to say I'm very sorry. I hope our Hong Kong citizens and mainland
comrades will forgive my mistake and the misunderstanding." She said she had
been hiding for two weeks because she did not have the courage to face the
public.
The Hong Kong Daily News, owned by
entertainment mogul Albert Yeung Sau-shing, is believed to be on the verge of
being bought by property tycoon Henry Cheng Kar-shun. Founded in 1959, the
Chinese newspaper has been owned by Yeung's Emperor Group since the 1990s.
Casino tycoon Stanley Ho Hung-sun is also a shareholder of the newspaper, having
bought an undisclosed stake in July last year. A person familiar with the
possible deal said yesterday "A discussion is going to take place." During a
public appearance yesterday, Yeung said: "In business, everything is possible,"
Yet officially both Emperor Group and New World Development said they would not
comment. Shirley Woo Suet-lai, publisher of the newspaper, said there had been
no instruction from the board of directors and added that the operation of the
newspaper would continue as usual. To Yiu-ming, assistant professor in
communications at Hong Kong Baptist University, said the takeover was not
unexpected. "It is an extension of business of a rich property firm. Like many
wealthy companies, it wants to exert more influence in society and the media."
However, he said that the acquisition might not be able to achieve the aim of
influencing public opinion. "Our recent study found that the influence of this
newspaper is really minimal. It will take quite an effort to re-establish the
paper, increase its readership and enhance its position in society and the eyes
of the Hong Kong people," he said. The 51-year-old newspaper has focused its
resources on covering racing and business news, but has faced increasing
pressure since the launch of Apple Daily in 1995, and free newspapers such as
Headline Daily. New World Development has been involved in controversies in
recent years. As a co-developer of The Masterpiece project, in Tsim Sha Tsui,
the company sold at least seven of the first 30 flats released there last August
to relatives of Cheng. Last November, Cheng had to testify before a Legco
inquiry into his company's hiring of former housing director Leung Chin-man. The
appointment did not go ahead, but caused uproar, with Leung allegedly involved
in the sale of the Hunghom Peninsula housing estate for barely half its original
asking price to a consortium that included a New World Development subsidiary.
China's hotel star ranking system
under increased scrutiny - BEIJING, July 27 - China is planning to accelerate a
mechanism with which to strip poorly run hotels of their star rankings in order
to protect the image of all the 15,000 star-rated hotels across the country, a
top tourism official said on Monday. Anonymous customers' opinions will be
considered for the first time along with those of industry experts when
evaluating a star-rated hotel's qualification, said Du Jiang, deputy head of the
National Tourism Administration of China. Hotels already endowed with a star
status will be subject to quality checkups every three years, instead of the
current five year period aimed at identifying problems and fixing them, he said.
The news came days after the announcement that the Hilton Chongqing was to be
stripped of its five-star status for reportedly permitting a venue for
prostitution to operate on its premises. The announcement, posted on the
administration's website last Friday, said the hotel's actions have "seriously
damaged the image of China's star-rated hotels and generated a bad influence".
Dai Bin, deputy head of the China Tourism Academy, told China Daily the incident
has partly pushed the administration to strengthen its management of star-rated
hotels. Even more importantly, he added, a means of expelling poorly run hotels
from the internationally recognized star classification system has become
critical at a time when the number of China's 15,000 star-rated hotels is
growing faster than ever before. In 2009 alone, for instance, the administration
gave a five-star status to 63 hotels across the country, pushing the total
number of top-level stars up to 432, according to China's tourism development
analysis and forecast 2010, a report compiled by the Tourism Research Center at
the Chinese Academy of Social Sciences. "Many new star-rated hotels are
competing in terms of advanced hardware and the level of luxury", he said
"Through this mechanism, the administration hopes to make them realize the
importance of good service and how to better serve customers." Zhao Huanyan, of
the Hotel Solution Consulting Ltd in Shanghai, echoed these thoughts, saying
that the pursuit of quality lodging based on the standards of China's hotel
star-rating system has led to disappointment among some foreigner visitors.
"They found that China's high-ranking hotels look almost identical - from the
lobby to the standard room," he said. The latest move by the tourism authority,
he added, should offer fresh ideas for hotel owners, pushing them to improve
service while using innovative techniques. The hospitality industry is one of
China's first few industries that opened up to foreign investment and management
concepts. Since 1982, when the Jianguo Hotel Beijing became the first hotel to
introduce international hotel management on the mainland, the world's top 10
hotel groups have entered the Chinese market. The groups now manage 480 hotels
nationwide, Xinhua News Agency reported on Monday.
China Offer Opportunites for American
Fruits - The shifting market dynamics of the food industry in China offer
immense opportunities for American companies to boost exports of agricultural
products, a top US official said on Tuesday. Eric Trachtenberg, director of the
agricultural trade office at the US embassy in Beijing, told China Daily that
there have been significant changes in the consumption pattern in China with
demand for imported products still strong. "We often tell exporters that China
is the place to be. Many US agricultural companies are keen on exploring
opportunities here," said Trachtenberg. The US exports many agricultural
products to China with soybeans the top commodity in terms of value, he said.
Economic development has bought about significant changes in the Chinese food
industry. With urbanization and income levels growing, people are becoming more
and more conscious of food safety and handling, he said. With land resources
fast getting depleted, there is also an increasing awareness of the quality of
food and how it is packaged and transported. US companies can cash in on these
factors and boost exports to China over the next five to 10 years, Trachtenberg
said on the sidelines of the Second US-China Cold Chain Standards and
Regulations Conference in Beijing. Cold chain is essentially a
temperature-controlled supply chain and involves a series of storage and
distribution solutions that ensures the shelf life of agricultural products such
as meat and vegetables. "The cold chain industry will boom in China as food
safety is gaining more ground," said Trachtenberg. At present only around 15
percent of food, meat and vegetables are transported by cold chain in China,
compared with 90 percent in developed countries, he said. Developing a strong
cold chain system in China will help agricultural exporters and logistics
companies from the US, said Trachtenberg. "In terms of food exports, the main
problem confronting US companies is that they are unable to ship their products
to inland regions in China due to the absence of cold chain linkages. That
certainly is a big trade barrier for US companies," he said. At the same time,
it is also an opportunity for logistics companies to sell their cold chain
solutions, he said. Over 15 percent of China's perishable agricultural products
are lost due to supply chain problems, said Dai Dingyi, vice-chairman of the
China Federation of Logistics and Purchasing. Dai and other experts said
industry standards are vital for the development of the cold chain industry in
China. The standards for the cold chain industry are still in their infancy and
there is no clear timetable on when they will be rolled out, Dai said. "China
has its unique weather conditions and eating habits, so it should set up a
standards system that is different from the US and EU," said Joe Yang, a
consultant for the Guangdong Cold Chain Committee.
Guan Jianzhong, chairman of Dagong
Global Credit Rating, explains why the mainland should have a greater say in the
global credit-rating market. The head of the mainland's largest credit-rating
agency believes the failure of the world's top credit-rating agencies to provide
warnings of the global financial crisis could give the country a golden
opportunity to increase its say in the industry. Guan Jianzhong, chairman of
Dagong Global Credit Rating, blamed Moody's Investors Service, Standard & Poor's
and Fitch for the global financial crisis and said the mainland, as the world's
leading creditor, and other emerging economies should have a say in how
sovereign debt is rated. "More credit-rating agencies from emerging economies
should be set up and join hands to break the monopoly over the global
credit-ratings business by the world's top three companies, all of which are
American," Guan said. Beijing-based and privately owned Dagong gave the
mainland's government a higher debt rating than the United States, Britain or
Japan in a report published this month covering 50 nations, sparking speculation
about close links with Beijing officials. Guan said that Hong Kong was an ideal
place to headquarter developing non-Western credit-rating agencies. That could
make the city a global hub for the credit-rating business to rival the American
hold of global markets. "The three leading Western rating companies dominate the
rating market, but failed to provide accurate evaluations," he said.
Former British prime minister Tony Blair says Western politicians feel more
"curiosity" than fear about the rise of China, but they will need time to get
accustomed to the power shift to the East. Speaking in Shanghai yesterday, Blair
said there was a mutual lack of understanding that was exacerbated by China's
"sudden" dominance of international relations. "A few years ago, we'd all make
speeches about [how] China is a very important country," he said. "It seemed
like a theory, like an intellectual idea. "What has happened in the last few
years, increased enormously by the financial crisis, is that suddenly it is no
longer a theory. Suddenly people are aware that China has arrived." However, he
denied that Western leaders were trying to limit the mainland's growth. "Is
China seen as a threat in the West? I believe not, actually," he said. "But I
believe there is an enormous interest and a huge number of questions people
have, which is natural. "I think one of the big problems sometimes is that we
don't see things from China's perspective and sometimes, likewise, you don't see
[them] from the West's perspective." Chinese people needed to understand that
the West needed time to adjust to the "huge shift of power to the East", Blair
added. Blair has been criticised for "cashing in" on his fame on the
international speeches circuit since stepping down in 2007, reportedly charging
one of the world's highest appearance fees. In November 2007, he was given short
shrift in mainland media for accepting a US$500,000 fee for making a brief
appearance at a luxury residential complex in Dongguan, Guangdong province. He
declined to comment on the US-South Korean military drills and on Washington's
recent statements on the strategic importance of the South China Sea. "The thing
you learn in my business is that there are some questions you answer and some
you don't," Blair said. "I'm not going to get into the issues to do with the US
and South Korea."
Shares of ICBC (Asia) (0349) were suspended from trading yesterday - setting off
speculation that its parent plans to privatize the lender. Such a deal by
Industrial and Commercial Bank of China (1398) would be worth at least HK$8.6
billion. A bank spokesman said there would be an announcement today. Analysts
said ICBC could make the most of the new yuan settlement deal for local banks if
a privatization went ahead. Morgan Stanley last week raised its target price for
the bank by 26 percent to HK$25. ICBC held a 72.4 percent stake in ICBC (Asia)
at the end of last year. A general offer to purchase the remaining shares would
cost the mainland's largest bank at least HK$8.6 billion, based on the record
closing price of HK$23.05 for ICBC (Asia) on Monday. ICBC eased 0.3 percent to
HK$5.87 yesterday. Analyst Paul Lee of Taifook Securities (0665) said there have
always been expectations ICBC would buy out its local arm. Taking into account
the limited capital base for ICBC (Asia), he said, the parent "needs to make
substantial acquisitions locally or elsewhere it will need to do so on its own."
Lee also said economic integration between the SAR and the mainland has raised
the subsidiary's growth potential, so even an expensive privatization would be
worthwhile. Owing to the modest size of ICBC (Asia) - it is valued in the region
of HK$31 billion - it was not necessary for the parent to suspend trading in its
shares, Lee said. But an analyst at a mainland brokerage thinks a buyout is
unlikely and expects ICBC (Asia) to issue new shares or convertible bonds to a
third party. "Shares have reached a 52-week high," he said, and other
shareholders cannot expect a "juicy" deal. ICBC (Asia) has always had a low
capital adequacy ratio, he added, so it had to catch peers and raise money for
expansion while its share price is high. Another Taifook analyst, Matthew Kwok,
said fundraising details would have emerged if ICBC was raising money.
The price of garlic continued to soar
nationwide this month, rising nearly 25 percent over its previous peak price in
May, while most other food products also increased in cost, Xinhua News Agency
reported on Monday. As of Sunday, the average price of garlic reached 14.38 yuan
($2.12) per kg, according to statistics from Xinhua News Agency's national
monitoring system of agricultural products. The price of garlic in North China's
Shanxi province has risen by more than 51 percent compared to May, the largest
increase in the country, Xinhua reported. "I only sell several kilograms of
garlic a day. Business is not good with the price hike, as restaurant owners buy
less to control costs," said Zhao Yali, a 42-year-old garlic dealer, who
operates from the Hexi agricultural products wholesale market in Taiyuan, the
capital of Shanxi. The wholesale price of garlic in the market, the largest in
the city, has hit 14 yuan per kg, seven times more than in January, she said.
The retail price of garlic is 20 yuan per kg in the Meetall supermarket in
Changfeng street, which is 10 yuan higher than the same period last year, a
saleswoman said. There is a similar situation in the provinces of Hebei,
Liaoning, Shandong, Jiangsu and Hainan, where prices have risen 30 to 42 percent
since May. The price of garlic also exceeded 20 yuan per kg at some markets in
Nanjing, capital of Jiangsu, where it is more expensive than pork and chicken,
the local Yangtze Evening News reported on Monday. Some customers have
reportedly even taken to packaging up the leftover garlic in restaurants, which
rarely occurred in the past. China is the world's largest garlic exporter,
followed by Argentina and Spain, and meets three-fourths of the world's demand
for garlic. The latest price hike is the continuation of a process that began in
the second half of 2009. The rocketing price is largely due to a shortage in
supply, some analysts said. There has recently been a sharp increase in garlic
exports, which has resulted in less garlic for the domestic market, Che Shitang,
vice-president of the Qixian County Garlic Company in Henan province, was quoted
by the Beijing-based China Industrial Economy News as saying on Monday. The
output in the production of garlic has also dropped 10 percent this year in
Qixian, he said. Like Henan, Jinxiang county in Shandong province is another
major garlic producer, which has seen a 13 percent dip in the output of garlic
this year due to inclement weather, the China Industrial Economy News reported.
However, Che said malpractices like speculation and hoarding "cannot be ruled
out". In May, officials from the National Development and Reform Commission
announced that the government will be taking steps to check speculation and
rampant price hikes on garlic and other agricultural commodities. Meanwhile, the
price of food continues to climb across the country, according to Xinhua.
Models pose with a car made by Chinese automaker BYD during a press conference
in Hangzhou, capital of east China's Zhejiang Province, July 27, 2010. The BYD
automaker issued its "M6" car to the market of east China on Tuesday. 
A Bikini party is held at the 2010
Qingdao International Ocean Festival, which kicks off in Qingdao, east China’s
Shandong Province, on July 25, 2010. 
A private residential project under
construction is being put up for sale without an unmodified show flat - which is
fine, the government says, because its flat-sale rules do not require the
provision of a show flat. A lawmaker and a green group say the scenario again
begs the question of how effective the new administrative measures on flat sales
are. They call for a requirement to make an unmodified flat mandatory. Industry
figures say such a showroom would help rather than hurt business. The Oakhill, a
new project in Wan Chai by Lai Sun Development that went on sale last Friday, is
the first private residential development that goes without a mock-up property
since a raft of measures to raise transparency in flat sales took effect last
month. In the sales office in Causeway Bay, buyers can find a three-dimensional
map of Wan Chai and models of the 42-storey apartment block, which will house
130 flats and a clubhouse on the top floor. Without a mock-up property, buyers
must visualise the layout of the flats from floor plans and artists'
impressions. Samples of tiles and finishes are available if they want to get the
feel of the kitchen and bathroom. Estate agents have a harder job trying to sell
the flats to buyers. One showed a South China Morning Post (SEHK: 0583) reporter
photographs of the building under construction and views from another block near
the site. "The government has never required a mock-up flat for sale of flats
that are under construction. Nor do the new rules," Julian Poon Yui-man,
vice-president of Lai Sun Development, said. The company did not set up a show
flat as it was unable to find a suitable place, but other measures would be
complied with, he added. In the package of measures implemented last month,
developers are asked, among other things, to set up at least one unmodified show
flat; release a price list and sale brochures three days and seven days before
the sale, respectively; and make public within five days transaction
information. A spokesman for the Transport and Housing Bureau said a mock-up
property was never compulsory. "It is up to a developer to decide whether to set
up a show flat, and if it does, it has to follow the guidelines and make one
that does not mislead." Before the new measures were launched, there had also
been cases where uncompleted flats were sold without a show room. Emerald 28 in
Prince Edward, the previous project of Lai Sun, was also sold without a mock-up
flat when it was launched. The completed building was later opened to visitors.
Swire Property's 5 Star Street in Admiralty and Soundwill Holdings' Warranwoods
in Tai Hang also did not feature a show flat during the launch of sales earlier
this year, before the new rules. It is easy for developers to set up a mock-up
property because their architects usually create one for working purposes,
according to a surveyor who declined to be named. But they are usually in
inaccessible places like factory buildings. Those who did not set one up for
buyers were normally small developers who did not own a large mall in a central
location, or those who were selling a development with small flats, the surveyor
said. Shermon Lai Ming-kai, CEO of Centaline Property, said estate agents lost a
vital sales tool without a showroom. "There have been fewer disputes when a
buyer can see an unmodified mock-up flat." Roy Tam Hoi-pong, of concern group
Green Sense, said the Oakhill case was "weird" and showed that the new flat-sale
rules were useless. "Buyers are not good at visualizing a real flat with floor
plans. We need a law that makes things clearer and makes an unmodified show flat
mandatory," Tam said. The Democratic Party's spokesman on housing affairs, Lee
Wing-tat, said the case was disillusioning. "A developer should not be allowed
to publicize artist impressions in the sales office, as they could be
misleading," he said, adding that legislation to regulate the property market
was required after all. Lawrence Poon Wing-cheung, a spokesman for the Institute
of Surveyors, said it was up to the community to debate whether an unmodified
showroom should be mandatory, but that without one a project would be less
attractive to buyers.
Tai Hang Residents' Welfare
Association office bearer Chan Tak-fai enjoys a drink in Ormsby Street as it is
today, its low-rise tenements standing in place of the ceramic-tiled houses of
the same street at the turn of the 20th century.
The residents'
association building, where villagers planned countless fire dragon dances, a
tradition to ward off plague. It was once a district of tenement buildings and
wooden huts clinging to a hillside without flushing toilets or tap water. Car
repair shops crammed the streets, which were overwhelmed with the smell of
petrol and paint. Development came to Tai Hang as it did to similar
neighbourhoods across Hong Kong, but Tai Hang was seldom in the public eye -
apart from a notorious occasion in February 1984, when it was the battlefield
for a shoot-out between police and a gang of bank robbers, and during its annual
tradition of fire dragon dancing. Now it is in the throes of a facelift that
looks set to turn it into a dining and nightlife area to rival Lan Kwai Fong and
SoHo in Central and Star Street in Wan Chai. The number of drinking and eating
places has doubled in the past three years from no more than 10 to about 20 pubs
and mid-range and high-end restaurants. More are expected to open after the
luxury residential development Warren Woods is completed in 2012, according to
Tai Hang district councillor David Wong Chor-fung. In recent years, developers
have also been buying up dilapidated buildings to pave the way for
redevelopment, further changing the face of the area. The body shops and
family-run food stalls are being gradually but noticeably edged out as they can
no longer afford the rents, which have more than doubled from about HK$20 per
square foot three to five years ago to about HK$50. "You can easily spot the
streets in the area that have become a lot tidier and cleaner after the auto
repair shops were replaced by the eateries which are so nicely decorated," Wong
said. "Besides the eateries, more special outlets have opened like
furniture-design shops, wine shops, an animal hospital and a pet shop." Wong
Leung-sing, an associate director of research at Centaline Property Agency, said
Tai Hang still had the streetscape and romantic atmosphere of the 1960s with
some low-rise tenement flats sitting on very narrow lanes, similar to Lan Kwai
Fong and SoHo. But he said Tai Hang was an even better place for restaurants,
with plenty of roadside car parking and drop-off places that were not easily
found elsewhere. Midland Realty shops department director Tony Lo Chin-ho does
not envisage anywhere becoming as bustling and successful as Lan Kwai Fong,
which has the edge of being close to Central, the city's main commercial area.
But he said there was still very strong business potential in Tai Hang. While
some residents, investors and shop owners are cheered by the bright commercial
prospects for the area, 64-year-old Chan Tak-fai, who has been living in the
district since he was born in nearby Tung Wah East Hospital, lamented the loss
of the local characteristics of Tai Hang. One of the city's oldest districts
with its famed Lin Fa Kung temple, built in 1846, Tai Hang is one of the very
few neighbourhoods in the urban area that still has indigenous Hakka residents.
"During my childhood, Tai Hang used to be a small community mostly occupied by
Hakka families like me. Even the food sold here was very local, like Hakka-style
tea dumplings and rice vermicelli with dried shrimp," Chan said. "Some stalls
sold coffee and milk tea. A pot of English tea enough for two cost only 25
cents. The cafe would set a few tables and used wooden boxes for seats. "The
district used to be full of two-storey houses with ceramic-tile roofs. There
were no flush toilets or tap water and residents had to get the water from a
well and wash their clothes at the nullah, which used to be on Wun Sha Street.
But the two-storey houses were later torn down and replaced by the low-rise
tenement buildings in the '50s and '60s." Despite the fact that a 500 sq ft flat
could be packed with as many as three families, "it was a quiet, lovely
community back in the 1950s and '60s with about 5,000 residents who all knew
each other well". Families would eat their meals at the front door to enjoy the
breeze during summer. "The place was so safe that we could move our beds to
sleep in the doorway. Bamboo grew on both sides of the street, which made a
perfect walking trail," Chan recalled. But as families moved out of the old
buildings, which were later torn down to make way for redevelopment, outsiders
moved in. "For instance, the two-storey building at the corner has been bought
by an expatriate," Chan said. Two years ago, the low-end area of the old days
was suddenly spruced up by a new 32-storey luxury residential block, 118 Tung Lo
Wan Road, where flats of 1,283 sq ft are renting for as much as HK$50,000. More
than half the tenants are expatriates, according to its rental office. And just
a few steps from the luxury building, another is under construction. The
family-run local food stalls selling cheap meals are gradually being replaced by
international cuisines, with Vietnamese, Singaporean, Chinese and Western
restaurants, as well as bars and cafes. Among the proprietors is Alex Liu Ka-po,
who opened a Southeast Asian restaurant called Bakkutking in October last year.
Liu said that even though rents had risen drastically, they remained attractive
at about a third or a quarter of those in such prime sites as Lan Kwai Fong,
SoHo and Causeway Bay. Rents in Lan Kwai Fong can reach HK$180 to HK$240 per
square foot, while SoHo and Star Street in Wan Chai fetch about HK$80. Besides
the "much lower rental", Liu liked the location, which he described as "an urban
oasis", a quiet corner in the heart of the city. "Our clientele is from both
local Tai Hang residents, Chinese and expatriates. Some live in the high-end
districts on Braemar Hill and Jardine's Lookout and others just come after
reading the food magazines. But these groups of customers want to try out
something different and like a wide variety of restaurants. They would not come
for Hong Kong-style tea houses that they can easily find anywhere else in Hong
Kong," Liu said. But not everyone shares his views. Like Chan, Wong Leung-sing
misses his favourite food stalls that sold cow offal and congee. Despite all
these changes, Chan intends to stay in the district. "Tai Hang is my home that I
have never moved out of since my birth. It brings me a lot of memories about my
childhood and all the good times and bad times here. I choose to stay here and
wait for my kids and the families who have moved out to return for the Fire
Dragon Dance every year."
Big rise in inquiries on
schooling outside HK - International study agencies have received a flood of
inquiries about overseas schooling from Form Five pupils ahead of the last round
of the Hong Kong Certificate of Education Examination results next month. The
number of Form Five pupils and their parents seeking advice on study abroad is
up by 20 per cent on last year, with interest high in all major destination
countries and types of programme, agents say. The 127,000 pupils waiting for
their HKCEE results to be released on August 4 are the last year group to take
the exams, which are being replaced by the new Hong Kong Diploma of Secondary
Education. Parents' groups say anxiety about the diploma and the transitional
arrangements is fuelling demand for overseas study among families who can afford
the annual fees of HK$200,000 and upwards. Lee Chung-kuen, adviser to the
Federation of Yuen Long Parent Teacher Associations, said: "Some parents who
plan to send their children abroad after the A-levels or the diploma are making
the calculation that perhaps it is better to go and study abroad earlier
instead. Parents are saying they don't want their children to be among the first
students to take the diploma because it is too risky. And they don't have
confidence in the recognition of the diploma." Form Five pupils who do not get
their desired grades will not be able to retake the final year of the HKCEE
programme at school next year, although re-sits will be offered for private
candidates. Instead, some places will be available for Form Five repeaters in
the second year of the three-year diploma program. Those pupils admitted to Form
Six will go on to sit the last Hong Kong A-level exams at the end of Form Seven
in 2012, alongside the first pupils taking the new school-leaving diploma at the
end of Form Six. Because the vast majority of pupils are expected to stay on for
the diploma, schools will have to squeeze in 150 per cent more Form Six pupils
and the final A-level group - with no extra space - for the academic year
2011-12. Ada Tam Tsz-wai, marketing officer of the International Studies Service
Centre, said: "We have seen an increase of about 20 per cent this year in the
number of inquiries and applications from Form Five students to study abroad.
"The most popular country is the UK, then Australia, followed by the United
States and then Canada. Many of these students are applying because they are not
confident that they are going to get good results in the HKCEE. And many
families are applying at the last minute." Joanna D'Ettorre Leung, director of
Academic and Continuing Education, said her firm had seen a 10 per cent increase
in inquiries about overseas secondary school places this year compared to last
year. The average annual cost of a place including tuition and board ranged from
HK$200,000 in New Zealand to HK$340,000 in Britain. "It seems to be increasing
across the board but the greatest increases I have seen are for Australia, the
UK and Canada," she said. "It includes both boarding schools and government
schools with home-stay arrangements. The extra students include a small number
who started the new senior secondary curriculum last September and have decided
not to continue with it." Ann White, director of the Hong Kong-China
International Institute of Education, which runs a placement service for study
in the US, said attendance at its seminars for school-leavers was up by 30 per
cent this year. "We have had a lot of inquiries from Form Five students and
their families already this year and I expect that the numbers applying to the
United States will continue to climb." Sister Margaret Wong Kam-lin, principal
of St Paul's Convent School in Causeway Bay, said parents were particularly
concerned about the new core subjects of maths and liberal studies that students
had to pass to get into higher education. "Now we have got four core subjects
and they have got to score pretty well in all four, plus the electives," she
said. "There are some kids who are not particularly strong in maths and, with
liberal studies, nobody really knows how to score well. I think if parents can
afford it, they will send their children away to study abroad." Terence Chang
Cheuk-cheung, principal of Diocesan Boys School, said the government was
providing schools with extra funding for teaching the larger number of pupils
but no help with meeting the need for extra classroom space. A spokeswoman for
the Education Bureau said the teacher to class ratio for Form Six and Seven had
been increased to 2.3 teachers during the period of transition to the new senior
secondary curriculum, which stretched from 2009 to 2012.
Donald Tsang Yam-Kuen (L), Chief
Executive of China's Hong Kong Special Administrative Region, and his wife (R)
visit Bifeng Gorge Base of China Conservation and Research Center for the Giant
Panda, Southwest China's Sichuan Province, on July 25, 2010.
Chinese Foreign Minister Yang
Jiechi called for restraint from all parties on Sunday, as the US and South
Korea launched a major naval exercise despite threats of nuclear retaliation by
North Korea. “All involved parties should commit to providing peace and security
on the Korean peninsula,” Yang told a joint press conference in Vienna, after
meeting with his Austrian counterpart Michael Spindelegger. Washington and Seoul
said the war games, which began Sunday in the Sea of Japan, were meant as a
message to Pyongyang to cease its aggressive behaviour, following allegations it
torpedoed a South Korean warship in March. But North Korea threatened to respond
with nuclear weapons. Yang told journalists that Pyongyang should return to
so-called six-party talks, aimed at dismantling its nuclear programme but
stalled since December 2008, the Austrian Press Agency reported. He also
insisted that world powers should intensify diplomatic talks on Iran’s nuclear
programme, APA said. The UN Security Council imposed a new set of sanctions on
Tehran in early June, and EU ministers were due to approve further sanctions on
Monday in a bid to lure Iran back to the negotiating table over its disputed
nuclear program. Yang and Spindelegger met briefly on Sunday afternoon to
discuss bilateral relations and their co-operation at the UN Security Council,
where Austria currently holds a non-permanent seat. The foreign minister was due
to attend the opening of the Salzburg Festival on Sunday evening before meeting
with Austrian President Heinz Fischer on Monday.
NBA star center Yao Ming leads
children from quake-hit regions to visit the roof garden of the Saudi Arabia
Pavilion at the Expo Site in Shanghai, July 25, 2010. Yao Ming, Jin Jing and
other Chinese stars visited several pavilions at the Expo Site with a group of
children from quake-hit Sichuan and Qinghai provinces on Saturday, as part of
"Touring the Expo with Stars" initiated by some Chinese celebrities.
China key for trade growth - has more
than fulfilled its commitment to the WTO - WTO chief says nation's robust import
demand vital for global economic revival - The World Trade Organization (WTO) on
Friday lauded China for the significant role it has played in reviving global
trade growth and said the nation has more than fulfilled its commitment to the
organization. The WTO said in its annual report released on Friday that it
expects global trade to grow by 10 percent this year. WTO chief Pascal Lamy told
reporters in Shanghai that "trade growth is coming back fast after a terrible
2009, thanks in no small measure to the continuing dynamism of China and the
other nations." "China's strong economic growth and its demand for imports are
important factors in the stabilization of the global economy," said Lamy. The
nation has also quickly integrated into the world economy after it entered the
WTO in November 2001. It has been an active member and has strictly adhered to
the WTO rules, he said. Lamy's comments are in sharp contrast to the tirade
launched by the US against the nation and its trade policies. US Deputy Trade
Representative Demetrios Marantis had recently said in Washington that China
must honor its past commitments and provide new market access. "Failure to do so
imperils not just our bilateral ties, but also the success of multilateral trade
talks," said Marantis. Firing a salvo, he said the US may even file new WTO
plaints against China to defend its (US) rights. Marantis' comments came after
China submitted a revised proposal on government procurement agreement (GPA) to
the WTO. Under the new proposal, China plans to open up some sectors of
government procurement to foreign companies. "China's latest GPA offer is better
than its earlier proposal," Lamy said. "The nation has fully fulfilled its
commitments and set up a trade mechanism in line with the WTO rules. The Chinese
market is now one of the most open markets worldwide," the Ministry of Commerce
said in a statement on Wednesday. Tariffs on commodities were slashed to 9.8
percent in 2009 from 15.3 percent before 2001. The tariffs on agricultural goods
have fallen to 15.2 percent and 8.9 percent for industrial goods. "China has
also removed all non-tariff measures to abide by the commitments it has made,"
said the ministry. In terms of service trade, China has opened up 100 service
sectors, including banking, insurance, telecommunications, education,
distribution and accounting, it said. China has also made significant
contribution and commitment during the recent Doha Round talks, said the
ministry. The Doha Round of negotiations began in 2001 and aims to reduce
tariffs and eliminate trade barriers. The talks were suspended several times in
the past nine years due to differences between the developed and developing
nations on key issues like agricultural tariffs. During his visit to Beijing on
Wednesday, Lamy expressed serious concern on the delay in negotiations and said
failure to clinch an early will seriously hurt the image of WTO.
Turning to magnetite iron ore could
cut China's reliance on gaints BHP Billiton and Rio Tinto. Chinese steel
producers are increasingly turning to Australia's magnetite iron ore sector,
pouring in funds to explore and develop mines once considered uneconomic, as
they nurture new supply sources. If the trend snowballs it could cut China's
reliance on giants Rio Tinto and BHP Billiton, a critical move as the duo pursue
a controversial iron ore merger that steelmakers fear will create a
near-monopoly in Australian material if left unchecked. China has been mining
and processing magnetite iron ore for decades, building up a wealth of knowledge
and expertise in the area. This helps explain why investment in the Australian
sector of around US$10 billion so far is set to increase. A free fall in
hematite iron ore prices, which lost 40 per cent over the past three months as
steel production fell in China, has done little to sate appetite, with investors
taking a longer-term bullish view. "If you're a Chinese steelmaker and you want
a direct say in how much iron ore you get, the magnetites are the best option
because they offer ground-floor exposure at relatively low cost and include
off-take agreements," Eagle Mining Research analyst Keith Goode said. "It's not
something the big boys can offer." Firms such as Baosteel, Anshan Iron & Steel,
Sinosteel, Citic Pacific (SEHK: 0267) Mining, Shagang, China Metallurgical Corp
and others are backing projects that promise to deliver 25 million tonnes over
the next two years from only 3.3 million now. Chinese steel mills have long fed
on magnetite ores from once-abundant domestic deposits now facing depletion,
while the focus in Australia has always been on plentiful supplies of hematite
ores. Magnetite, which accounts for just 1 per cent of Australia's total iron
ore production, has lower iron content - about 36 per cent versus 61 per cent
for hematite - and must be upgraded, typically into pellet form, at an added
cost of about US$15 per tonne, to make it suitable for steelmaking. By contrast,
hematite is known as "direct shipping ore" or "DSO" because it is mined and
beneficiated via a simple crushing and screening process before export. But in
the past few years iron ore of any type has turned to gold for anyone able to
mine it and transport it to a port for a relatively short journey to Asian
shores. This quarter alone, the fifth-biggest iron ore miner in Australia,
Grange Resources, was able to raise magnetite iron ore pellet prices by 107 per
cent and forecasts are for pellet prices to continue to rise. For now, all but a
fraction of Australia's iron ore is still mined in the established Pilbara
hematite iron belt, where Rio, BHP, Fortescue and Atlas Iron are forecast to
produce a combined 440 million tonnes this year. Traditionally, there has been
minimal seaborne trade and steel mills were often built beside magnetite mines,
but Chinese firms are displaying a willingness to fund new Australian ports
purpose-built to service new magnetite mines. Recent start-up Gindalbie Metals
has a contract to deliver nearly 900 million tonnes of iron ore from its Karara
magnetite deposits to China's No2 steelmaker, Anshan Iron and Steel, over three
decades. Its first shipment of ten million tonnes is due in 2011 via the Indian
Ocean port in Geraldton. Last month, the China Development Bank provided US$1.2
billion in loans for studies of a project for a second larger port to maximise
production. "The development of new ports is opening up vast opportunities that
did not exist before," Garret Dixon, managing director of Gindalbie, said. "For
Ansteel, Karara becomes a strategic long-term cost effective source of iron ore
for their expanding steel making facilities." There are more than 20 magnetite
deposits and prospects in Australia.
To prevent the HK$43 billion Hong Kong-Zhuhai-Macau
bridge from being underused and to shorten the project's payback period from 48
years to 19 years, Walter Kwok Ping-sheung, the ousted chairman of Sun Hung Kai
Properties (SEHK: 0016) (SHKP), said a railway system should be added into the
construction of the bridge. After the debate on the construction of a new
high-speed rail link from Hong Kong to Guangzhou and Shenzhen was settled
earlier this year, Kwok (pictured) said it was time to look westward.
Szeto Wah talks at a Cancer Fund event to fellow patients and those who have
overcome the disease about his battle with cancer. Beijing offered medical
experts' help after Szeto cancer diagnosis - Beijing suggested sending medical
experts to Hong Kong to help treat Szeto Wah's lung cancer, the veteran
democrat's doctor said yesterday. Appearing with his patient at a Cancer Fund
function, Dr Mok Shu-kam said both the central and local government had been
"nervous" when they were first told of Szeto's stage-four cancer late last year.
Nine experts from the mainland came to the city in December to have discussions
with him, soon after the diagnosis of the chairman of the Hong Kong Alliance in
Support of Patriotic Democratic Movements was confirmed. Szeto said the one-off
meeting occurred after he was told by Chief Executive Donald Tsang Yam-kuen that
the doctors' services were available. Dr Mok, an oncology expert at Chinese
University, said no particular suggestion raised by the mainland experts was
adopted. "Doctors take all therapy options into account before coming up with a
treatment plan for patients," he said. While Szeto has undergone all the
chemotherapy sessions required and started medication, Dr Mok said he was doing
well at the moment. "He is tough and positive," he said. "He continues with his
work, and has gained some weight, too. These are all good signs for a cancer
patient." Szeto said his life has not changed much. "I still attend all
functions of the alliance and the Professional Teachers' Union, only skipping
walking on marches," he said. "And I keep adding three spoons of sugar to my
local-style milk tea and have three to four chocolates after dinner every day."
Szeto said he had received much love and care. "A lot of people, who I know and
I do not know, came to me to send blessings," he said. "It is a gift to know
these people at your late stage of life." Szeto said the worst thing of his
cancer experience were the words of his first doctor. "Before I went to Dr Mok,
the first doctor informed me of the cancer and said I only had 10 months of life
left. But now seven months have passed and I still feel very good with my body."
Szeto said he has been trying to "coexist with the illness and live long". "I
will strive to cure the cancer in the remaining days," he said. But when asked
to choose between a recovery and universal suffrage, he picked the latter.
Luxury property prices are heading
for a sharp increase if a development site on The Peak is sold for HK$11.4
billion - the top of the forecast range - on Wednesday, analysts say. This would
fly in the face of government attempts to cool the market and further bring into
question the policy of releasing more sites for auction, they say. Given the
tight supply of luxury residential plots on The Peak, the former government
staff quarters at 103 Mount Nicholson Road which has panoramic views of Victoria
Harbour, is tipped to go under the hammer at the top of the HK$8.7 billion to
HK$11.4 billion range. To maximise returns on the investment, surveyors expect
the winning bidder to build houses and apartment blocks on the site. Alnwick
Chan Chi-hing, executive director at property consultancy Knight Frank,
estimates that the site could support 18 to 25 houses and four to six
residential blocks of 12 and 13 storeys with a total of up to 100 flats. "If the
site fetches HK$11.4 billion it would mean the land price of the houses will
reach HK$55,000 per square foot, while the accommodation value of the
residential buildings would be HK$25,000," he said.
Former postmaster general Allan Chiang
Yam-wang was named the next privacy commissioner yesterday - and immediately
sought to explain away a run-in he had with the office he has been chosen to
lead. Chiang was head of Hongkong Post when it was investigated by the Office of
the Privacy Commissioner in 2005 after six pinhole cameras concealed in
socket-like boxes were installed at the Cheung Sha Wan post office - some near
washrooms and changing rooms. Staff were not told about them. At the time,
Chiang explained that they were installed to catch a thief. The cameras were
later dismantled and the recordings made were destroyed after the privacy
commissioner issued an enforcement notice describing the use of secret cameras
as highly intrusive. Recalling the incident yesterday, Chiang said his brush
with the privacy watchdog had stoked his "passion" for privacy protection and
inspired him to apply for the job. He admitted he had not known enough about
protecting personal data at the time. "A fall in the pit is a gain in my wit,"
Chiang said. "This incident gave rise to my interest in privacy protection, and
is one of the reasons I applied for the position." Stephen Lam Sui-lung, the
secretary for constitutional and mainland affairs, said Chiang had been
proactive in handling the incident, and he believed that the experience had
given the former postmaster general a greater sense of responsibility about the
handling of personal data. Chiang, 59, was picked by an independent committee
from a list of 121 applicants. He worked for the government for 33 years and was
postmaster general from 2003 to 2006. Lam said he expected Chiang's rich
experience in public administration could help make the work of the privacy
office more balanced.
It's not so exotic for the honorary
consuls - While diplomatic position does have some perks, it's more about
building bridges - They're often depicted as suave, sophisticated and never far
from the next cocktail party. But while the job of honorary consul might sound
exotic, the reality of life as "Our Man in Hong Kong" is not quite the stuff of
a Graham Greene novel. Unlike career diplomats, they are not paid for
representing the interests of the states who appoint them, nor do they get any
direct reward for coming to the aid of its citizens who come into their orbit.
Nor are they afforded the same privileges and immunities granted to full-time
diplomats under the Vienna Convention. While the position of honorary consul
undoubtedly has its perks, not least the ability to carry on your day job and
boost its and your profile, career diplomats can look down their noses at their
honorary colleagues; the position is often seen as being one of style and little
substance. But all that may be changing, at least for the 59 honorary consuls
who now ply their diplomatic trade in Hong Kong.
Teams
compete at the Hong Kong International Dragon Boat Races at the Victoria Harbour
in Hong Kong June 24, 2010.
Four pregnant pandas bred in captivity
have been released into a special area of Sichuan so their cubs can have a life
in the wild. The pandas, aged four to five, were taken to a two-hectare tract
that will serve as a training base. It was created in the southwest province to
help the endangered animals survive in a natural setting. The pregnant pandas
will give birth there and then are expected to remain with their cubs for three
or four years, Xinhua News Agency reported. "All of the carefully chosen pandas
have experience of living in the wild, and three of them have already given
birth to cubs," said Tang Chunxiang, an expert at the Wolong panda reserve,
which is behind the initiative. "We hope the mothers can teach their cubs life
skills to help them survive in the wild." By recent count, there are only 1,590
pandas left in the wild in China, though wildlife experts have been running
programs in attempts to increase the number. But the only effort that involved
releasing a captive-bred panda ended tragically. Xiang Xiang, a male cub trained
to adapt to the wild and released in 2006, was found dead 10 months later -
apparently killed by wild pandas native to the area. This new attempt aims to
see the four pandas give birth and protect and raise their cubs on their own,
though wildlife workers - who must reduce the animals' reliance on humans - will
keep watch through surveillance cameras. "If they need help, the workers will
show up dressed in costumes that make them look like giant pandas," Tang said.
The workers will also simulate the sounds and smells of the panda's natural
enemies so they improve their vigilance in the natural world - a key requirement
if they are to survive.
A Super Hornet jet takes off from the
aircraft carrier USS George Washington in seas east of South Korea yesterday, as
US and South Korean forces begin large-scale exercises. Sino-US relations are
under yet another severe test as a massive joint military drill began yesterday
off the Korean Peninsula, and the Chinese Foreign Ministry lashed out at the US
for "attacking" Beijing on the sensitive issue of the South China Sea. The
military drills, code-named "Invincible Spirit" and a response to the sinking of
the South Korean naval vessel Cheonan, are to run until Wednesday with about
8,000 US and South Korean troops, 20 ships and submarines and 200 aircraft. Led
by the Nimitz-class USS George Washington, they were also going to take place in
the Yellow Sea off the east coast of China. But that arrangement was dropped
after vehement protests from Beijing. While the United States said the drill
meant to "get North Korea's attention", most mainland media yesterday reported
it as a move to contain China.
Hong Kong rises to No 4 for
foreign direct investment as global crisis eases - Amid the recent financial
meltdown, global flows of foreign direct investment plunged 37 per cent last
year to just over US$1.11 trillion, similar to the level in 2005 and almost half
the 2007 peak, according to a United Nations survey. Investment in Asia
accounted for about US$233 billion, with US$95 billion headed for the mainland,
the UN Conference on Trade and Development's latest World Investment Report
found. Since much of the capital investment destined for the mainland is
channelled through Hong Kong, the city surged five spots up the global ranks to
number four with reported direct investment of US$48.4 billion, down US$11.2
billion from 2008. Virtually every economy experienced a drop in FDI inflows,
but Hong Kong still achieved its highest global ranking ever, partly because
most major FDI recipients, such as the United States and Britain, suffered far
deeper declines than their Asian peers last year. The US continued to get the
most foreign direct investment in the world, with US$129.9 billion, less than
half of what it got in 2008. The mainland rose one spot to number two, followed
by France, Hong Kong and the Britain. In 2007, the mainland was the only Asian
entry in the top 10. Hong Kong remained the second biggest recipient in the
region last year. The report said a drop in cross-border merger and acquisition
activity was mainly responsible for declining investment inflows to the region.
The value of cross-border mergers and acquisitions in Hong Kong, South Korea,
Singapore and Taiwan plunged 44 per cent last year. Preliminary FDI data so far
this year indicate a healthy rebound, with Hong Kong receiving US$20 billion in
the first quarter, up 72 per cent year on year. "Based on the figures for the
last quarter of 2009 and certainly the first quarter of 2010, we're seeing a
very strong rebound this year," InvestHK director general Simon Galpin said.
Annual FDI flows into Hong Kong averaged about US$10 billion to US$13 billion up
to 2003 but rose steadily, from more than US$30 billion in 2004 and 2005 to a
record of almost US$60 billion in 2008. The dean of business administration at
Chinese University, Wong Tak-jun, said that given the relatively slow pace of
recovery in major developed economies and across Europe, Hong Kong would
probably continue to have a high global ranking this year. Hong Kong compiles
its FDI data from its Survey of External Claims, Liabilities and Income, which
covers all companies in Hong Kong with direct investment flows during the year.
Property market expected to stay hot -
Rise in new flats not seen reining in prices - New housing supply, including
units at the Larvotto project in Ap Lei Chau, increased 11 per cent to 61,000
flats by the end of June from 55,000 flats in the first quarter. A substantial
rise in new housing supply in the first half of this year will do nothing to
cool the red-hot property market, analysts say. Transport and Housing Bureau
statistics show that about 7,000 flats were completed in the first six months of
the year, equivalent to 97 per cent of the flats completed for the whole of
2009. However, the figure is still lower than normal: there were 17,300 flats
completed in 2005 and 16,600 in 2006. From 1999 to 2004, the number of completed
flats ranged between 22,900 and 31,100 a year. Construction of new flats also
rebounded this year, with 6,600 started in the past six months, compared with
8,200 flats in 2009. Including unsold flats in completed projects and under
construction, 48,000 flats were available for sale at the end of last month.
Supply is 4.3 per cent higher than three months ago. Centaline Property Agency's
research department said 13,000 flats were ready for construction in the first
half, 160 per cent higher than the 5,000 flats ready six months ago. Wong
Leung-sing, an associate director of research at Centaline, said the increase
was due to the government's move to increase land supply in recent months. New
housing supply, including completed flats, flats under construction and flats in
the pipeline, rose 11 per cent to 61,000 flats by the end of June, up from
55,000 in the first quarter, Centaline figures showed. "The new supply of
private housing will continue to increase as the government releases more sites
for sale this year," Wong said. He expected 15,687 new flats to be completed
this year, 119 per cent more than the 7,157 in 2009. The figure is also the
highest level in four years, rebounding from the record low of 8,801 flats,
which has been the average total for the past three years. "In the next four
years, the number of completed flats will be about 12,000 to 15,000 a year. But
I don't think the new housing supply will go back to the peak level of 30,000
flats a year that we saw in the 1980s," he said. "We face the problem of an
ageing population. We don't have enough new demand to support a significant
increase in new housing supply." Trevor Cheung, an analyst at BNP Paribas, said
the improvement in housing supply would not affect property prices. "We aren't
suffering from a shortage of flats. The sharp increase in property prices in
recent years is not due to tight supply, but to low interest rates and a booming
economy. We see strong demand from people who want to upgrade their living
environment. Many people want to live in a bigger and better flat," he said. He
expected property prices to rise another 10 to 15 per cent by the end of this
year. "Property prices will continue to go up unless there is an economic
downturn," he said.
Guangdong scrambles to regain place in
sun with culture push - After decades of following the motto "to get rich is
glorious", people in Guangdong are starting to focus on culture. The provincial
government will host a public forum tomorrow on how to turn Guangdong from the
factory of the world into the centre of a Chinese renaissance. Last weekend, top
leaders met to approve a guideline for promoting Cantonese culture and
developing related industry. While details have not been released, official
media said the government had earmarked 25 billion yuan (HK$28.6 billion) for
new cultural projects in the next five years. By 2020, the guideline says,
Guangdong's culture industry should become one of the pillars of its economy.
And it should also actively seek cultural co-operation with Hong Kong, Macau and
Taiwan. Ironically, the push comes at a time when Cantonese culture and language
are at a low ebb. A move to switch programming on the main channels of a
television station in Guangzhou, the provincial capital, from Cantonese to
Putonghua has sparked heated debate and spontaneous protests in recent weeks.
People line up to buy Apple iPads at an
Apple reseller retail shopin Hong Kong on Friday. Eager iPad fans in Singapore,
Hong Kong and New Zealand braved long queues and discomfort to get their hands
on the coveted Apple device. Eager iPad fans in Singapore, Hong Kong and New
Zealand braved long queues and discomfort to get their hands on the coveted
Apple device as its second wave of Asia-Pacific launches began on Friday. A
20-year-old New Zealander set up camp outside an Apple seller in Auckland two
days before the launch, while other buyers in the region started their vigil in
the wee hours of Friday. Japan and Australia were the first Asia-Pacific markets
to receive the iPad, getting it in late May along with several European
countries. Consumers in other Asian markets who could not wait for the release
ordered iPads from abroad or bought them through unofficial local resellers. But
this did nothing to dent enthusiasm at Friday. In Hong Kong’s busy Causeway Bay
shopping district, a line of more than 100 eager shoppers trailed from a ninth
floor Apple store down a humid stairwell, with latecomers fanning themselves as
they waited.
Robin McLaren, the man who
led the British side of the momentous negotiations for Hong Kong's handover to
China, has died in London aged 75. McLaren, who passed away earlier this week,
was mourned by the British government and former officials in Hong Kong who were
involved in the turbulent rounds of talks between London and Beijing on handover
arrangements that ultimately broke down because of the political reforms
introduced by former governor Chris Patten. Confirming what he described as the
"very sad news", British Consul General Andrew Seaton expressed his condolences
to McLaren's widow and family, and praised him for the role he played in the
handover process. "Sir Robin's career centred on Hong Kong. He made a huge
contribution to the process which led to the successful handover of Hong Kong in
1997 and laid the foundations for the prosperous and stable Hong Kong we know
today," Seaton said. "He will be much missed." Born in August 1934, McLaren
joined the diplomatic service in 1958 after a stint in the navy. His long
connection with China started as a language student in Hong Kong in 1959,
followed by postings in Beijing, two postings as political adviser in the Hong
Kong government, and head of the Far Eastern department in the Foreign Office.
He became fixed in the memory of Hong Kong people when he became senior British
representative on the Sino-British Joint Liaison Group between 1987 and 1989,
when London and Beijing negotiated for the implementation of the Sino-British
Joint Declaration setting out post-1997 arrangements.
The tour industry has a solution to tourist
rip-offs: a sticker. Carrying information on visitors' rights, it will be given
out to tourists from the mainland when they arrive in the city. The industry has
also set up a special task force to consider steps to mend Hong Kong's battered
reputation as a tourist destination. The latest blow to its image came last
week, when a video clip of a tour guide berating mainland visitors for not
spending enough on a forced-shopping tour was broadcast across the mainland. The
government has given the task force until September to come up with concrete
steps, and has warned it may propose legislation to curb abuses such as forced
shopping and ill-treatment of tourists. But the head of a tour guides' union
yesterday dismissed the warning as "just a show", and said if there was a
crackdown it should be on the travel agencies that run cheap tours for
mainlanders. Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan
said yesterday the government had not ruled out legislation to regulate tour
guides. Lau was speaking after meeting board members of the Travel Industry
Council, which set up the task force.
`Smeared' Foxconn chief Terry Gou Tai-ming sends warning to Taiwan - The head of
Taiwan technology giant Foxconn has hit out at critics who claim the firm
mistreats workers and threatened to review his company's investment plans on the
island. Terry Gou Tai-ming, chairman of the group which is a leading
sub-contractor for Apple and other electronics giants, was responding to
criticism in Taiwan following a series of suicides at the company's plants in
the mainland. "I don't know why our image has been smeared to this extent," he
was quoted by Huang Chiu-lien, chief financial officer of the group, as saying
during a briefing. "He said he was even wondering if there was still room for us
in Taiwan. We'll review our local investment plans, but the plans as a whole
have not yet been finalized," said Huang, referring to plans that could be worth
hundreds of millions of US dollars. The comments come after protests by island
academics who have claimed that Foxconn ill- treats its workers in cities such
as Shenzhen and have labeled the company a "shame on Taiwan." Taiwan Premier Wu
Den-yih threw his weight behind Gou, saying he hopes Gou will not be upset by
the criticism and scale back his investment plans for Taiwan. A total of 11
mainland employees have committed suicide this year at Foxconn plants by jumping
from buildings, including 10 in Shenzhen. Another worker at a Foxconn affiliate
died this week after falling from a dormitory.
Qinghai province in Northwest China
plans to increase lithium output by nearly five times as demand for electric
vehicles powered by lithium cells surges, a top local official said on Thursday.
The province has the largest reserves of lithium in China and accounts for
nearly 90 percent of the output. It plans to increase lithium carbonate output
to 30,000 tons over the next five years from 6,000 tons last year, said Liu
Shanqing, director of Qinghai's Land and Resources Department. Lithium carbonate
is used for soldering flux, in lubricants, focal lenses, ceramics, and
high-performance batteries. Citic National Security Lithium Technology
Corporation and Qinghai Lithium Co will account for most of the 30,000 tons
capacity, with Citic National alone expected to produce 25,000 tons, Liu said.
"The original plan was to have a capacity of 60,000 tons by 2015. But since the
extraction technologies are not that mature enough, we scaled it down to 30,000
tons," he said. In China, lithium is found in the rock formations of Sichuan and
Jiangxi provinces, and also below the surface of natural salt flats where the
weather and geography make it the most economical to extract. Lithium is
extracted from salt lakes in Qinghai province, which has estimated reserves of
over 17.65 million tons. "If the extraction technologies mature in the future,
we will try to attract more investors to develop the lithium resources," said
Liu. The total annual global output of lithium carbonate is around 100,000 to
150,000 tons, at contract prices ranging from $5,000 to $6,500 per ton. Prices
of lithium carbonate are likely to increase by 16 percent year-on-year globally
by 2013, due to the increased demand for lithium batteries, said a recent from
China International Capital Corporation. "Lithium demand will go up as electric
vehicles roll out in massive numbers," said Zhou Haiou, an analyst who tracks
the new energy sector at Shanghai-based Guoyuan Securities. China recently
surpassed Japan as the world's largest lithium battery provider. It also has
about one-tenth of the estimated global lithium reserves and is the world's
third-largest producer of the metal. The nation has outlined plans to boost the
number of electric vehicles on its roads to 500,000 by 2015 from the present
9,800 units. Other countries like the US plan to have at least 1 million
electric cars on the road by 2015. The global market for lithium-ion batteries
used in automobiles is forecast to grow 90-fold to 2.25 trillion yen ($24.8
billion) in 2014 from 25 billion yen last year, according to market research
company Fuji-Keizai. But there have also been doubts recently that the demand
surge would crimp metal supplies in the future. Electric-vehicle maker BYD,
backed by billionaire investor Warren Buffett, is reportedly eyeing rich lithium
content mineral resources in Sichuan. Similarly a key supplier for Toyota Motor
Corp is believed to have secured long-term sources of lithium in Argentina
earlier this year.
Fishing boats are docked in the
port of Tiger Beach in Dalian city, Northeast China's Liaoning province, on July
22, 2010. More than 30 fishing boats were dispatched off the Dalian coast to
help clean up the oil spill after a pipeline explosion on July 16. About 1,000
fishing boats in Dalian have been dispatched for the clean-up effort.
London-based luxury
department store Harrods is holding talks with the Shanghai municipal government
on the opening of its first store outside the United Kingdom in the historic
Bund area. The British emporium is keen on opening a department store in one of
the imposing buildings where British banks and merchant houses once traded, a
real estate agent familiar with Harrods' plan said. But the choices for the
British retailer are limited to only a few locations that are large enough for
Harrods, which operates one of London's largest department stores. Its proposed
venture in China was initiated by Managing Director Michael Ward. "China is the
most probable, but we would have to do a lot of work first," Ward was quoted as
saying by The Guardian. Hannah Hodges, Harrods' corporate affairs manager said:
"However, no plans have been confirmed to open a store in Shanghai." Harrods is
already a well-know purveyor of luxury goods among well-to-do Chinese consumers
who make frequent overseas shopping trips every year. The Guardian reported that
the number of Chinese travelers who shopped at Harrods in the first six months
of this year rose 125 percent year-on-year. Eugene Tang, head of retail at Jones
Lang LaSalle in China, said he was aware of talks about Harrods' Shanghai
outlet, but he estimated that it would take a long time before any lease
agreement can be concluded. "We don't expect to see the opening of Harrods in
Shanghai in the next couple of years," said Tang. "It will take much longer for
them to get things right before the opening," he added. Negotiations between
Harrods and potential Chinese partners will take one year, and another
year-and-a-half will be spent on design, decoration and stocking," said Tang.
Harrods' move to China is seen as a break with tradition for such a high-end
retailer. "Renowned for their conservative business philosophy, most premier
British retail brands don't go overseas for expansion," said Regina Yang, an
analyst with Knight Frank, a leading property consultancy. But other British
retailers have already made a dash for the yuan. Marks & Spencer opened its
second store in Shanghai's Yuyuan Garden last month, and it is already scouting
for premises for its third branch, according to Yang. Although luxury goods are
relatively cheaper in Hong Kong, Europe and the United States, many mainland
consumers who are not outfitting their entire wardrobes with designer clothing
prefer the convenience of making occasional purchases at local stores, Yang
said. High-end brands such as Louis Vuitton, Zegna, Gucci, Dior, Tiffany, Hermes
and Prada all opened stores in Shanghai between April and June to meet luxury
buyers' ballooning demand. China has overtaken the US to become the world's
second-largest luxury goods market, with Japan holding the top spot. Sales of
luxury goods in China grew 12 percent in 2009 to $9.6 billion, accounting for
27.5 percent of the global market, according to Bain & Co. In the next five
years, China's luxury spending will increase to $14.6 billion, making it the
world's largest luxury market. The landmark London department store Harrods was
acquired by Qatar Holdings on May 8 for 1.5 billion pounds from Egyptian
billionaire Mohammed al-Fayed. Harrods, in London's Knightsbridge district, has
over 90,000 square meters of retail space across more than 330 departments.
Flood water is released from the Three
Gorges Dam's floodgates in Yichang, Hubei province, on July 20. China, already
reeling from deadly floods, braced Friday for a potential new deluge on the
Yangtze downstream from the huge Three Gorges Dam as its reservoir’s level hit a
high for the year. The warnings came as officials sought to dampen expectations
that the dam could completely tame the swelling river amid the worst flooding in
a decade, which has left more than 1,100 people dead or missing. The Three
Gorges reservoir’s water level reached its highest point this year’s floods, the
water resources ministry said, adding it hit the dam’s 158.8-metre mark Friday.
State press reports put its maximum at 175 metres. Huge amounts of water
continued to thunder out of its massive spill-gates and the government of
Jiangxi said the hard-hit eastern province downstream was at a “critical
juncture” in flood control. It ordered authorities to redouble flood prevention
work along dozens of lakes and rivers already swollen by weeks of heavy rains.
“Over the next 20 to 30 days, the high water level of the Yangtze River’s
Jiujiang section and Poyang Lake will continue. The flood situation is very
grim,” the provincial government said in a statement. Poyang Lake, China’s
largest freshwater lake and linked to the Yangtze, is one of hundreds of major
Chinese lakes and rivers whose water levels have exceeded their danger marks.
Jiujiang is a city of about five million people. Authorities elsewhere in the
region issued similar warnings.
Princeton University professor molecular biologist Shi Yigong cast vote on
future by returning to China - Professor Shi Yigong, dean of life sciences at
Beijing's Tsinghua University, poses with bottles of bacterial culture, part of
studies that may produce drugs to fight cancer... "In 20 years [China] could be
doing pretty well." Dean cast vote on future by returning to China after 2
decades - Two years ago, molecular biologist Shi Yigong was a prize-winning
Princeton University professor with annual research funding of more than US$2
million and a seemingly limitless US academic career. But Shi did exactly what
China's leadership hopes to see more of - he turned his back on all that to
return home after two decades abroad. The recent return of people like Shi, who
now heads the life sciences department at Tsinghua University in Beijing, has
provided a ray of hope for China in its uphill battle to reverse a long-term
"brain drain" of experts. "China has contributed disproportionately to the
advancement of science and technology in the United States, for example," Shi
said of the steady stream of China's best and brightest who left for greener
pastures in decades past. "Behind China's shiny glass skyscrapers, it has an
extreme shortage of top talent and that is really regrettable." With aspirations
of becoming a science and technology power, China has tried for years to halt an
exodus of top minds, a lingering legacy of the 1966-76 Cultural Revolution when
campus upheavals closed universities for years. The chaos severely set back
Chinese science and academia. Afterwards, many of the nation's best and
brightest - with official encouragement - opted for study abroad, where most
have stayed. Many took foreign citizenship. But Shi, 43, said China's growing
clout and rapidly modernising research institutions made it an increasing draw
for returning scholars, known here as "sea turtles" swimming back to their home
beaches. "For talented people to apply their talents, the sky is the limit now
in China in terms of innovation," Shi said after a tour of a laboratory where he
studies cell proteins, with possible implications for new cancer drugs. From
1978 to last year, 1.62 million Chinese went abroad for graduate studies,
according to the government. Only 460,000 have returned. Last year 229,000 left,
up 27.5 per cent from 2008. But returnees leapt 56 per cent to 108,000 last
year, many drawn by increasingly lucrative enticements and growing research
funding. One current programme offers recruits a basic one million yuan (HK$1.14
million) in government funds - plus additional money from their employers and
other sources. The government this year promised even more attractive policies
in the future in its bid to close the technology gap with the West. The issue
resonates in China. Nationalist pioneer Sun Yat-sen and later revolutionaries
like Deng Xiaoping and Zhou Enlai , among other notables, were educated or
radicalised abroad before returning to shake the halls of power. Yet experts say
continued academic problems repel potential returnees. They include rampant
research plagiarism, a lack of political autonomy at universities, and a
sclerotic academic system marked by infighting and overemphasis on connections,
which stifles innovation. "You have a large number of incompetent scientists
that get lots of funding because they work the system," said Rao Yi, who
returned in 2007 from a top research position at Northwestern University to head
life sciences at Peking University. "Sea turtles" also encountered resistance
from their Chinese peers, who viewed them as overpaid interlopers, Shi said. Shi
and Rao have spoken out for change. They wrote a commentary in the People's
Daily in February urging reforms such as more independence for universities. But
accusations and insults have followed such suggestions, said Shi, who admitted
it has been a "tough adjustment". "Suffice to say that my last 2-1/2 years, in
terms of dealing with the media and the blogosphere, were not enjoyable," he
said. Cong Cao, a professor of international relations at the State University
of New York and an expert on the Chinese academic elite, said China had the
"hardware", in terms of research facilities, to succeed. "But in terms of the
software - whether the system is really ready to produce first-class work - I'm
still not sure," he said. Rao, who is renouncing his US citizenship to retake a
Chinese passport, said patriotism was only a small factor in his return. "It's
more a question of what side of history you want to be on," he said, noting
China's rise. But it would be decades until China rivalled the West in
innovation. "In 20 years we could be doing pretty well. But if we don't solve
some of the structural problems, maybe we won't go very high, but rather get
stuck somewhere in the middle."
China and Singapore forge currency swap
deal - The central banks of Singapore and the mainland have signed a bilateral
currency swap agreement likely to boost the internationalisation of the yuan, a
press statement said on Friday. “The People’s Bank of China (PBOC) and the
Monetary Authority of Singapore (MAS) today announced the establishment of a
bilateral currency swap arrangement,” said a MAS statement issued after a
meeting in Beijing. Financial institutions in Singapore and their customers will
be provided with the yuan financing for trade and direct investment through the
swap, MAS stated. “The arrangement is a key pillar of co-operation between the
PBOC and the MAS and serves to promote bilateral trade and direct investment for
economic development of the two countries.” Lasting for three years and
extendable by mutual agreement, the swap will provide the yuan liquidity of up
to 150 billion yuan (HK$172 billion) and Singapore dollar liquidity of up to
S$30 billion (HK$170 billion). The deal would also “facilitate the
internationalisation of the Chinese yuan”, the statement said. The agreement
“would not only strengthen Singapore’s economic and investment linkages with
China but also help to maintain our role as an international financial centre”,
it stated. Song Seng Wun, a regional economist at CIMB-GK Research in Singapore,
said the agreement reflected the strong financial relations between the two
economies, which will be among the world’s fastest growing this year. “If there
is a crisis of confidence in each other’s currency, the other can come in to
help,” Song added, but stated the chances of that happening were low.
AIA Hong Kong underwriters revealed -
American International Group is speeding up the process to publicly list its
pan- Asian arm on the Hong Kong bourse by appointing three banks as
underwriters. The world's largest insurer has chosen Deutsche Bank, Morgan
Stanley and Goldman Sachs as global coordinators for the initial public offering
of American International Assurance, Bloomberg reported yesterday. AIA is also
said to be working on securing strategic investors. The government-backed
Shanghai Financial Industry Investment Fund may purchase shares of AIA worth 2
billion yuan (HK$2.28 billion) to 4.1 billion yuan in the offering with an
expected return of 27.5 to 31.6 percent, Caijing magazine quoted a source as
saying. The Asian insurer is also reportedly having discussions with Standard
Chartered and Temasek Holdings, Singapore's state-run investment firm, about
investment in the IPO. "No stone will be left unturned in the search for
prospective pre-IPO buyers, but there are likely to be plenty of interested
parties," said one banker involved in the process, according to The Wall Street
Journal. The deal, which could be the biggest IPO ever on the Hong Kong market,
may raise about US$15 billion (HK$117 billion), reported Reuters. And fees could
top US$500 million. AIG appointed Mark Tucker as the new chief executive officer
of AIA on Monday, and said it will proceed with the initial public offering "as
soon as practicable." AIA has 23 million customers across Asia and at least
US$60 billion in assets. The Shanghai Financial Industry Investment Fund, the
largest yuan-denominated private equity fund, is managed by Gimpo Industry
Investment Fund Management. This is a joint venture of Shanghai International
Group, a subsidiary of the Shanghai government, and China International Capital.
Citic Group, a top Chinese financial
conglomerate, may raise as much as 80 billion yuan (US$11.8 billion) in a
planned initial public offering (IPO) in Hong Kong, sources familiar with the
situation said. The Beijing-based company, which has listed units including
Citic Pacific Ltd, China Citic Bank Corp, and Citic Securities, plans to
complete its IPO before the end of next year. If successful, it could be the
biggest float in Hong Kong next year, a source from a major mainland brokerage
said. "IPO preparation is now still in the planning stages," one person who has
direct knowledge of the matter told China Daily. Citic Group, the country's
largest investment conglomerate owned by the government, aims to raise as much
as 80 billion yuan from the share sale, the person said, without specifying how
many shares the company planned to sell. The State-owned investment company
plans to list its entire business as a group, the person said. Citic Group is
currently ranked 254th in terms of revenue among the top 500 global companies
listed by Fortune magazine this month. The company posted a gross profit of 35
billion yuan in 2009, a 35.4 percent year-on-year rise thanks to the sound
performance of its financial services, real estate and industrial investment
businesses. The group's total assets and net assets stood at 2,139.9 billion
yuan and 134.8 billion yuan respectively in 2009, up 31.2 percent and 23.1
percent respectively from the previous year. Citic group owns 44 subsidiaries
that operate in the Chinese mainland, Hong Kong, Macao, North America,
Australia, southeast Asia, Central Asia, the Middle East, Africa and South
America. Its core businesses range from the financial sector to the service
industry and include industrial investment. Analysts said the planned Hong Kong
IPO signaled Citic's intention to extend its business and step up overseas
expansion through investments in the Hong Kong market. Although financial and
domestic businesses are still the main components of the Citic Group, the
company plans to strengthen its non-financial and overseas businesses,
particularly in real estate, energy resources and overseas engineering
contracting, analysts said. "The fundraising is expected to further cement the
company's position in the investment market as it will give it the financial
muscle to expand its business," said Li Dahao, an analyst with China Jianyin
Investment Securities. "We hope the IPO will provide the opportunity for us to
boost transformation of our business practice by enhancing cooperation, risk
evaluation, strategy management and allocation of resources," said Kong Dan,
chairman of Citic group, in an exclusive interview with Century Weekly magazine.
In a rare show of displeasure
yesterday, Chief Executive Donald Tsang Yam-kuen lambasted Hong Kong people for
their "not in my backyard" mentality, saying they should be more ready to accept
unpopular facilities such as columbariums and public housing estates in their
neighborhoods. Everyone had to die some time, the chief executive observed,
adding that if the housing needs of poor people were not met, "society will
never have a peaceful day". Tsang was addressing district council leaders amid
continuing controversy over a shortage of public burial urn niches, and efforts
by private owners to build unauthorised facilities where niches can sell for
hundreds of thousands of dollars. "Recently, a phenomenon has emerged in our
society," Tsang said at the annual Summit on District Administration. "People do
not welcome some unpopular facilities. Despite growing public needs for these
facilities, there is a `not in my backyard' attitude." He said columbariums
should be built in each of Hong Kong's 18 districts and the responsibility to
meet public needs did not lie only with officials but also with district
residents.
A court has allowed winding-up as an
option for the future of a holding company which indirectly owns the Yung Kee
Restaurant - but says this does not necessarily mean the famed roast-goose venue
will shut down. In the latest move in the legal battle between members of the
Kam family who own the restaurant, Court of First Instance judge Mr Justice
Andrew Chung On-tak rejected an application by one brother and a nephew to
strike out a winding-up petition lodged by another brother. In his decision,
Chung said he agreed with the petitioner, elder brother Kam Kwan-sing, better
known as Kinsen Kam, that whatever happened to Yung Kee Holdings, it did not
mean the restaurant would close. In the hearing that began on July 13, younger
brother Kam Kwan-lai and nephew Carrel Kam Lin-wang asked the court to strike
out Kinsen Kam's winding-up petition. The ruling means winding-up remains an
option, along with the possible sale of Kinsen Kam's 45 per cent share in the
company to his younger brother, or a possible third option. Barrister Jat
Sew-tong SC, who acted for Kinsen Kam, said after the ruling that he strongly
believed customers would continue to enjoy the restaurant's roast goose no
matter what the court eventually ruled. "I don't see the legal battle or the
final ruling having any impact on the daily operation of the restaurant," he
said. Jat said the next step was to prepare for the hearing, possibly next year,
to determine the future of the holding company, unless the matter was resolved
through mediation. The law firm for the younger brother said it had not received
any instructions for an appeal. Jat argued against a move by Kam Kwan-lai and
Carrel Kam, who asked the court to strike out Kinsen Kam's winding-up petition.
In a nine-page written judgment, Chung said he agreed with Jat's argument that
Yung Kee Holdings, which holds 80 per cent of restaurant operator Yung Kee
Restaurant Group, did not directly own or operate the restaurant business. "Even
if Yung Kee Holdings is wound up, the liquidator will not be able to sell the
entire restaurant business," the judge said. "I also agree with the petitioner
that any such difficulty ... is ultimately a matter of details for the
liquidator and or the potential purchaser of the Yung Kee Restaurant Group
shares to consider, and cannot advance the respondents' case in this
application." The judge cited Jat's argument that a sale upon winding-up could
be a better option for Kinsen Kam than selling to his brother because, given the
restaurant's reputation, "more than a few famous, sizeable food and hotel
operators could be interested in paying an even higher price than what the
respondents may be willing to pay". He noted that Kinsen Kam had accepted that
winding-up was sought only as an "alternative relief". The court also accepted
that the restaurant business had not been adversely affected despite the legal
battle and any concerns of the patrons or staff were far from widespread, and
likely to be temporary. "For the reasons given by the petitioner, I agree with
the petition and disagree with the respondents," the judge concluded. He ordered
the losing party to pay costs. During the hearing, the court heard that
companies under the Kam family had no less than HK$880 million in cash, a whole
commercial block in Central worth at least HK$1 billion, and HK$127 million in
other net assets. In 2008 and last year, the restaurant made more than HK$50
million a year.
Number of Asia
millionaires rose 26 per cent last year - Fight for Asian talent costing Swiss
banks - Top bankers needed to lure clients in booming Asia. Swiss banks face the
highest wage demands in three years from bankers skilled at winning wealthy
clients in Asia, where the number of millionaires rose 26 per cent last year.
UBS, Credit Suisse Group and Julius Baer Group, three of Switzerland's biggest
fund companies, are competing for so-called relationship managers as heightened
scrutiny of Europeans' tax affairs drives them to seek rich customers living in
the world's fastest-growing economies. Retaining or hiring senior advisers in
Asia could cost two to three years of bonuses, said John Koh, managing director
of WMRC, a recruitment firm in Singapore. Base pay increases of about 30 per
cent are available for switching firms and bankers with eight to 10 years of
experience who have brought in assets of US$300 million to US$500 million can
earn S$500,000 (HK$2.83 million). Entry-level advisers were paid about
S$120,000, he said. "We're back to levels seen in maybe 2006 or 2007, with lots
of people in the market at reasonably expensive prices," said Boris Collardi,
CEO of Zurich-based Julius Baer. The trick was to find people who "pay for
themselves" by attracting assets. Higher salaries would depress profits from
Asia, where UBS reported 3.77 billion Swiss francs (HK$27.88 billion) of revenue
last year and Credit Suisse had 3.44 billion francs, said Roman Scott, managing
director at Calamander Capital in Singapore. Every 1 per cent increase in wages,
which accounted for two-thirds of the banks' total costs, would reduce pre-tax
profit by 0.7 per cent, he said. "Costs may be higher in Asia, but it's a gamble
the banks have to take," Scott said, adding that profitability in Asia was now
similar to more mature markets, such as the United States and Europe. "You may
get lower margins and profits, but at least the volume of the market is
growing." UBS, Switzerland's biggest bank, plans to increase its headcount in
Asia-Pacific to 9,500 in three years from 7,300. Credit Suisse employed 6,400
people in Asia at the end of last year, 13 per cent of its workforce. Credit
Suisse, ranked by Scorpio Partnership as the world's fifth-largest manager for
millionaires, expects to add about 60 so-called private bankers in the region
this year. "I would not necessarily want to be a newcomer and set up now because
entry costs are going up," said Marcel Kreis, head of Credit Suisse's
private-banking unit in Asia-Pacific, which attracted a record 11.5 billion
francs in net funds last year. Julius Baer, which managed 175 billion francs at
the end of April, expects Asia to account for as much as a quarter of the bank's
assets within five years, up from less than 16 per cent last year. The company
plans to increase its 400-person staff in the region this year. "Everyone is
fighting for the same shallow reservoir of talent," said Hanspeter Brunner, head
of Switzerland-based BSI's Asian unit, which by March had increased its
headcount to 180 in Singapore from 30 last year. "The region is leading global
growth and that has cost consequences." Pay increases helped push up cost-income
ratios at Asian fund managers to 86 per cent last year from 61.8 per cent two
years earlier, according to data compiled by industry consultants at Boston
Consulting Group. The ratio at Swiss banks rose 12.9 percentage points to 66.7
per cent in the same period. The gain occurred as the number of millionaires in
Asia-Pacific reached 3 million last year, matching those in Europe for the first
time, according to a report published last month by Capgemini and Bank of
America's Merrill Lynch brokerage unit. The assets of the millionaires rose 31
per cent to US$9.7 trillion, the study showed. Reyl & Cie, a Geneva-based money
manager with about 4 billion francs of client assets, aimed to attract S$1
billion within a year, said Charles Bok, head of the firm's Singapore office,
which opened last month. "Competitors are busy chasing talent and we have to
differentiate ourselves with a more entrepreneurial approach from the classic
big banks," Bok said. Singapore "allows us to take advantage of Asia's
unprecedented growth and is a fiscally and legally stable door to China", he
said. The cross-border market for millionaires in Hong Kong and Singapore will
grow at an annual rate of 6 per cent to about 800 billion francs in 2012,
Zurich-based UBS estimated in November. The bank boosted the maximum bonus for
managers winning assets in those two centres to 200,000 francs, and said in May
that it was reviving efforts to recruit and train people in Asia. Deutsche Bank,
Germany's biggest bank, had been hiring more graduates in Asia instead of paying
up to recruit veterans, The Wall Street Journal reported this week. CEO Josef
Ackermann was quoted as saying that competition for talent could cause a bubble
in bankers' pay. "The Swiss are going to Hong Kong and Singapore to access these
growth markets, but the difficulties they have are high set-up costs and the
problems of acquiring talent and establishing a brand name," said Stephen Wall,
a director at London-based Scorpio. "There's inevitably pressure on banks'
global profitability, but in the long run the big players will expect to see a
turnaround in cost-income ratios relatively swiftly." Swiss banks are expanding
in Asia as attacks on bank secrecy by the US, Germany and France threaten their
domestic position as managers of 27 per cent of the world's privately held
offshore wealth. The Swiss Parliament approved a settlement last month with the
US to hand over account details on UBS clients. That followed a decision last
year to offer greater assistance in catching tax evaders, to avoid being
blacklisted as a tax haven. While sacrificing cost-income ratios to win business
in Asia was not a "sustainable model", banks could not overlook the region's
potential, said Lok Yim, Deutsche Bank's head of private-wealth management for
China, Hong Kong, Taiwan and the Philippines.
94 units in Larvotto Hong Kong, each
worth more than HK$30 (US$3.8) million, were sold in just two days.
Sexy models were mobbed at the opening of the Book Fair yesterday, causing chaos
that organizers had tried to head off. Girlie displays and scrambles around them
were akin to scenes at last year's fair, and they spelled failure for a
concerted push against them by the Trade Development Council, backed by
education groups and serious book lovers. The council declared that there was no
space in the fair for langmo (literally, teen models, though many are in their
twenties) trying to promote risque "photo album" books. At least 12 applications
from models and their managers for promo slots were rejected. But the models
were as large as life, beating the ban by turning up at the Hong Kong Convention
and Exhibition Centre in Wan Chai not as "authors" but as ordinary visitors.
Except they were far from ordinary. In skimpy outfits, some paraded in the
exhibition hall to promote their albums. Young fans of the models - and of teen
singing idols who also got in on the act - expected a show, queuing long before
the doors opened at 9am. Some had been in line since Tuesday night. And when the
doors did open, they rushed inside for albums of their favorite models and free
gifts from singers. A 16-year-old fan of pop singer Theresa Fu said she had been
outside since 10pm the night before and was spending HK$500 on Fu's book and
limited-edition items. Chanting for Theresa, the fans had to wait another hour
for Fu. But when she did finally walk in, she set off pandemonium by handing out
free keepsakes. Elsewhere, three models from Taiwan attracted dozens of male
oglers, who took photos while reaching for gifts from the girls. The best-known
langmo, Chrissie Chau Sau-na, was not at the center of the action. But the
subject of a sensational pictorial book that featured in the fair last year was
nearby in Golden Bauhinia Square for an autograph session. A representative of
her publisher said later that the first day of the fair was a triumph, with
7,000 copies of Chau's new album sold in the morning alone. Although it was
stymied, the council's attempt to have the focus squarely on the other types of
books was welcomed by most visitors, who said the fair is for writers, not
scantily clad girls. A 75-year-old visitor named Chan said the models "have
utterly nothing to do with books." Mother of two Josephine Mak was put off by
models "practically wearing nothing" and said they should be kept out of the
fair altogether. Mak was at the fair with a plan to spend up to HK$3,000 on
classics, saying schools fail to teach children to appreciate literature. Model
books aside, exhibitors expect a rise in sales this year. "We anticipate a 10
percent increase since it has been nearly two years since the economic
meltdown," said Keith Wong Yiu-wing, a marketing executive at Page One. For
those looking beyond langmo, the week-long fair features public forums with
British novelist Frederick Forsyth, author and actor Stephen Fry and historian
Andrew Roberts. A record 510 exhibitors are taking part and about 900,000
visitors are expected.
Rail workers use cranes and
construction vehicles to build the Xining-Golmud Second Line of the Qing-Tibet
Railway on the Bayante Bridge, Huangyuan country, Xining city, Northwest China's
Qinghai province on July 21, 2010. The line is expected to be completed by the
end of 2010, ahead of the plan deadline by 21 months. It will be an electric
railway with a cargo transportation capability of over 50 million tons a year
and its passenger trains will attain speeds of up to 160 km/h.
Investors eye real estate market
- China's property market has seen soaring investment from foreign institutional
investors, driven by strong expectations of renminbi appreciation this year.
According to international real estate advisor CB Richard Ellis, the value of en
bloc property transactions in 15 Chinese cities has hit 49.9 billion yuan ($7.36
billion) in the first-half of this year, among which 19.4 billion yuan came from
foreign institutional investors, 10.2 billion yuan from Hong Kong, Taiwan and
Macao, and the remaining 20.3 billion yuan from mainland investors. Total
investments in the first six months of this year were almost five-fold of those
from the same period of last year. "Affected by the financial crisis, foreign
investors were inactive last year and domestic investors dominated the market.
But due to better liquidity and expectations of renminbi appreciation, the
situation is just the opposite this year," said Danny Ma, senior director of CB
Richard Ellis Research China. Industry experts say the renminbi will probably
appreciated 3 percent this year. LaSalle Investment Management, a US-based real
estate fund, for instance, has been actively seeking opportunities in China,
particularly in second-tier cities. Though the fund raised $2 billion last year,
it made no investments at all in 2009. But top management said that they will
definitely reach a deal in China this year. "We are now in talks with several
projects in the commercial and industrial sectors," Eric Au, China director of
LaSalle told China Daily on Thursday. For Matt Brailsford, Deputy Managing
Director of Savills Beijing, their foreign clients have shown much stronger
interest in investing in China's properties, mainly in the office and retail
sector. "But there is no big increase of new faces in market, most of them
remain those from Hong Kong and the United States," said Brailsford. Eric Pang,
head of Beijing Investment at Jones Lang LaSalle, said investments will be much
more active in the second half. "At the beginning of May, 12 commercial plots
located in the core Central Business District area opened to public bidding, and
a large number of reputable institutions and developers are expected to
participate in the tendering process," said Pang. "To us, this therefore
indicates a strong rebound in sentiment in the Beijing commercial investment
market."
Aluminum Corp of China Ltd,
China's biggest aluminium maker, and Europe's Sapa AB said on Wednesday they
have agreed to form a joint venture to serve China's rolling stock market. The
two companies had signed a memorandum of understanding, and aimed to finalise
plans for construction of a facility in southern China by the fourth quarter,
Sapa, the world's largest aluminium extrusion company, said in a statement. They
said the venture would be a 50-50 endeavour, but did not disclose financial
details. The joint venture's aluminium extrusion and fabrication facility would
include the latest technology for press and fabrication capabilities, according
to the two sides. Products could be launched by as early as the first quarter of
2011 using existing subsidiaries, Sapa added. "The Chinese rolling stock
industry has seen a very strong development both in terms of volume and
technology," said the companies. "The joint venture will be able to meet current
needs as well as serving the rapidly increasing technical demands of the rolling
stock industry."
Shanghai drops offshore China's yuan
trading hub dreams - Mainland city to complement HK in global currency drive -
Shanghai has backed off from plans to establish itself as an offshore centre for
yuan trading, leaving the field clear for Hong Kong to remain the dominant
market for offshore trading of the Chinese currency. Vice-Mayor Tu Guangshao
told a finance forum yesterday that the mainland's richest city would hone its
image as an onshore rather than an offshore centre, playing a complementary role
to Hong Kong as the two cities jointly reinforce the yuan's internationalisation
drive. "Hong Kong's efforts to build an offshore yuan centre give the currency a
huge boost as it goes global," Tu said. "I believe Hong Kong has reasons to do
so and it has its own advantages." He added that Shanghai should focus on the
domestic market and co-operate with Hong Kong to chase a win-win scenario. Tu's
remarks represented a dramatic and rare about-face by Shanghai that is
attempting transform itself into an international financial centre. In March, Su
Ning, a deputy governor of the People's Bank of China, said the central
government was considering setting up a yuan offshore centre in both Shanghai
and Hong Kong. That statement triggered concerns about intensified rivalry
between the two cities. An offshore yuan trading centre allows non-Chinese
companies, institutions and residents to actively trade the currency and settle
trade deals. Domestic firms and individuals conduct transactions in an onshore
centre. Shanghai unveiled ambitions early last year to transform itself into a
global financial centre, posing a big threat to Hong Kong amid the mainland's
increasing economic might. The central government and Shanghai officials have
been actively playing down the bitter rivalry. Shanghai Communist Party boss Yu
Zhengsheng said the mainland city still had a lot to learn from Hong Kong in
terms of financial services, insisting Shanghai would not catch up with Hong
Kong until 2020. Hong Kong Financial Secretary John Tsang Chun-wah said at the
forum that the offshore centre in Hong Kong and the onshore centre in Shanghai
would serve as the two engines to largely drive the internationalisation of the
yuan. The clearer roles to be played by the two cities in that drive followed a
landmark deal signed by the mainland and Hong Kong monetary authorities on
Monday, that allows financial institutions to open yuan accounts in Hong Kong
banks while individuals can transfer yuan to and from these accounts. The
relaxation is a further step towards allowing Hong Kong-based fund houses to set
up yuan investments and for brokers to trade yuan bonds and shares for clients.
Since China started to allow the yuan to be used for trade settlement in July
last year, 70.6 billion yuan (HK$80.9 billion) worth of trade deals were
transacted in the mainland currency with 75 per cent being conducted in Hong
Kong, according to Hu Xiaolian, a deputy governor of the People's Bank of China.
Louis Tse Ming-kwong, director of VC Brokerage, said Hong Kong now has about 70
billion yuan worth of deposits. "A wide range of yuan products in Hong Kong
particularly the products that could attract yuan back to the mainland market
are desirable," said Tse Yung-hoi, deputy chief executive of BOC (SEHK: 3988)
International Holdings. "Yuan trade could be invigorated with more production
innovations." Charles Li Xiaojia, chief executive of Hong Kong Exchanges and
Clearing (SEHK: 0388, announcements, news) , expected that small-size initial
public offerings denominated in yuan would likely be floated in Hong Kong this
year. Hong Kong stock brokers believed investors would like to invest in yuan
shares but doubted such offerings would happen in the short term. Kenny Lee Yiu-sun,
chief executive of brokerage firm First China Financial Group, said there were a
lot of technical issues that needed to be solved before yuan-denominated shares
could be offered in Hong Kong. Beijing has not yet relaxed the cap for
individual investors, who can only exchange up to 20,000 in yuan everyday, a
rule that restrict investors from making big bet on yuan-denominated initial
public offerings, Lee said. He believed yuan retail bonds would be launched
before yuan shares. "Many retail investors would buy the yuan bonds and hold
them until they are mature. This would make retail yuan bond easier to be
launched,'' Lee said. Joseph Tong Tang, executive director of Sun Hung Kai
Financial, said yuan IPOs were unlikely to be issued this year. "There are some
mainland firms that would be interested in raising funds in yuan. However, they
would need to wait until mainland authorities worked out the details of how the
funds raised in Hong Kong could be transferred back to the mainland for their
projects or other expenses," Tong said. "This will take time to study.''
Mainland regulators are also considering allowing Hong Kong subsidiaries of
mainland brokerages and asset managers to raise yuan-denominated mutual funds in
the city that could be invested in mainland-listed shares. The so-called mini-QFII
(qualified foreign institutional investor) scheme also aims at helping the
mainland's sluggish A-share market.
Canto-pop singer Theresa Fu attends the opening of the Hong Kong Book Fair at
the Convention and Exhibition Centre in Wan Chai on Wednesday. Hundreds of
people - many of them teenagers - flocked to the first day of the Hong Kong Book
Fair on Wednesday morning. The book fair opened at 9am at the Hong Kong
Convention and Exhibition Centre in Wan Chai. It will run until next Tuesday.
Large numbers of people waited outside the HKCEC before the fair opened, local
media reported. The organiser, Hong Kong Trade Development Council (HKTDC), said
it expected the fair would attract more than 900,000 visitors this year. A
record 510 exhibitors and nearly 2,000 counters from 22 countries and regions
are participating this year. The fair will feature more than 250 cultural
events. The HKTDC has banned the presence of teenage "pseudo-models" promoting
their photo books this year. But many teenagers anxious to buy these books and
books by local celebrities flocked to the fair. Local media reported that many
teenagers were also waiting for celebrities to sign their books. Others headed
to the counters selling comic books and related souvenirs. Some serious book
lovers complained that autograph-signing and promotional activities by teen
models were a distraction. “Some people were shouting out their idols' names.
Book fairs should allow people to read and buy their favourite books, silently,”
a visitor, surnamed Chung, told local media. Another reader, surnamed Shek, also
said the atmosphere was too noisy. Highlights of the fair will include public
forums featuring well-known authors including Frederick Forsyth and Stephen Fry.
These forums will take on Friday at 6-8pm, at HKCEC theatres 1&2, and on
Saturday at 10am-1pm at the University of Hong Kong’s Loke Yew Hall. The fair
also has new pavilions focusing on e-books, digital publishing and children’s
books.
After the weather deteriorated on
Wednesday afternoon and heavy rain lashed parts of the territory, the Hong Kong
Observatory issued the strong wind signal No 3.
Flash cash - Hong Kong - Flashier versions
of the HK$1,000 and HK$500 banknotes packed with security features that adjust
before your very eyes will be circulating by the end of the year. Color-changing
patterns and metallic threads, fluorescent flourishes, more iridescent images
and heightened embossing are among easily apparent features. Less obvious
devices to confound would-be counterfeiters include enhanced watermarks and
concealed denominations. All the devices will be laid on and built into thicker
and tougher paper than used for today's notes. New HK$20, HK$50 and HK$100 notes
will be in circulation around the middle of next year. The security designs are
based on two basic principles: easy to recognize yet difficult to duplicate, say
Hong Kong Monetary Authority officials. So all of these features will be in the
same places on the five denominations of notes from the three issuing banks -
Hongkong and Shanghai Banking Corp, Bank of China (Hong Kong) and Standard
Chartered Bank. Monetary Authority chief executive Norman Chan Tak-lam said that
while there is less counterfeiting of currency, upgrading notes remains vital.
"In the past six years, Hong Kong has seen a tremendous decrease in the
counterfeit rate," he said. "There is less than one fake note in every million
notes in circulation." "However, we have to stay ahead of the criminals to
ensure the stability of our monetary system." Continuing the system that started
in 2003, the three banks will issue their notes simultaneously - the second time
a full range of new notes has been introduced. The HKMA plans to gradually
introduce 100 million of the HK$500 notes and 70 million of the HK$1,000 notes.
About 120 million HK$500 notes and 110 million HK$1,000 bills now in circulation
will be withdrawn as they become worn, authority executive director Edmond Lau
Ying-bun said. While there are concerns about possible confusion between
different versions of notes, the authority believes seven to 10 years between
the versions is a reasonable timeline and is adopted by most countries. It
usually takes four years for old notes to largely disappear. There are 33
different notes in circulation now, but 97 percent of them are from 2003, Lau
said. The authority is now moving on a campaign to raise awareness of the new
notes. It starts on July 24 with exhibitions in various districts that will run
to October 3. Seminars will also be conducted for banks, retailers and money
changers, as well as special sessions for the elderly and people with visual
impairments. The cost of each new note is around 60 HK cents, or 15 percent more
than the previous version.
Octopus Holdings yesterday admitted it
shared personal data of 2.4 million customers with Cigna and Card Protection
Plan, two merchant partners involved in a rewards program. Octopus said it is
setting up a special committee to review its protection policy. The committee
will be led by Octopus Holdings independent non-executive directors and experts.
They will carry out a full review of the company's data privacy and usage
policies and practices. The committee will complete its review within three
months and submit a report, including international experience on data
protection, to the board of directors. It will also submit findings and
recommendations on the issue of data sharing with merchant partners. Chief
executive Prudence Chan Pik- wah said the company was taking additional steps to
protect customer data. "Management will be working very closely with the special
committee and will make all information available to facilitate a comprehensive
review," Chan said. Starting today, Octopus will begin to communicate with the
2.4 million rewards members to inform them of the latest measures and how they
can opt out of the scheme in which their personal information is shared for
marketing promotion. Chan said members can go to the Octopus website to check
the "opt-out" box in the "Contact Update" section. "They can also do so by
calling our hotline or sending a letter," she said. Chan said pending the
outcome of the review, OHL will not sign any new contracts involving information
sharing. "Octopus Rewards will reinforce with both CIGNA and CPP the importance
it places on the protection of customer data and privacy as well as the
requirement to strictly adhere to the confidentiality clauses in the contracts,"
Chan said. Committee chairman Roger Luk Koon-hoo said company profits will not
be a part of his panel's considerations. "The trust of our customers is of the
highest importance and we appreciate the public's concern over the protection of
any personal information they share with us. Our review will be objective and
independent," he said. But legislator Wong Kwok-hing disagreed. "The committee
is chaired by Octopus management staff and lacks credibility," he said. "Octopus
is just dragging its feet. They broke their promise to submit to Legco
information on Octopus partners by July 19. We have received nothing so far."
Wong said OHL should immediately stop disclosing information on its 2.4 million
rewards members to any of its merchant partners before the Office of the Privacy
Commissioner for Personal Data finishes its review, which it expects to do
within two months. The office said it received 23 complaints from rewards
members over the past two weeks.
If you are going up to the Shanghai Expo
before the end of October, you might want to visit Hong Kong Creative Ecologies
- a showcase of Hong Kong's leading design work. The event, which is funded by
Create Hong Kong, covers a wide range of our city's creative achievements,
including some that few know about. Well-known creative work is represented.
Alice Mak's McDull animated pig is there, as are architect Rocco Yim, and
fashion designers Vivienne Tam and Barney Cheng. But perhaps the most
interesting exhibits are from relatively unknown designers whose work is all
around us. Examples include: Milk Design's Lee Chi-wing, who has designed such
items as Cathay Pacific's Chinese-themed economy-class tableware; Tommy Li, who
designed such visual brands as Maxim's cake shops and MTR shops; Arnold Chan of
Isometrix, a lighting designer; and Chelsia Lau, who is Ford's chief designer -
next time you see a Ford SUV, that's her styling. This is talent that we don't
often hear about, even though we see much of their work every day. Hong Kong
designers are creating furniture, computer animation, sporting headwear,
interior decor, toys and even robots that help people stick to weight-loss diets
- things that are sold around the world and often under major international
brands. As well as its exhibits, the Creative Ecologies showcase includes
conferences, shows and workshops. It is, of course, basically aimed at mainland
and international visitors as a way to spread the word about our city's talent,
but Hong Kong people should see it if they get the chance, if only to see just
how wide-ranging that talent is. Bernard Charnwut Chan, chairman of the
Antiquities Advisory Board, sees culture from all perspectives.
Insurers and banks alike were splashing out on yuan-denominated financial
products yesterday - one day after the SAR and Beijing inked the historic deal
allowing Hong Kong to become the first yuan clearing center outside the
mainland.
China's largest reported oil
spill more than doubled in size to 430 square kilometres by Wednesday, forcing
nearby beaches to close and prompting one official to warn of a "severe threat"
to sea life and water quality. The oil slick started spreading five days ago
when a pipeline at a busy northeastern port exploded, sparking a massive fire
that took more than 15 hours to contain. Hundreds of boats have been deployed to
help with the cleanup. At least one person has been killed in those efforts, a
25-year-old firefighter, Zhang Liang, who drowned pm Tuesday after a wave threw
him from a vessel and pushed him out to sea, Xinhua news agency reported.
Another man who also fell in was rescued. Beaches near Dalian, once named
China’s most livable city, were closing as oil started reaching their shores,
Xinhua reported. “The oil spill will pose a severe threat to marine animals, and
water quality, and the sea birds,” Huang Yong, deputy bureau chief for Dalian,
China Maritime Safety Administration, told Dragon TV. The environmental group
Greenpeace China released several photographs this week showing oil-slicked
rocky beaches, a man covered in thick black sludge up to his cheekbones. One
worker, covered in oil, was being carried away by a colleague, but he was not
identified. The amount of oil spilled in the explosion was still not clear
Wednesday, though China Central Television earlier reported an estimate of 1,500
tons. That would amount roughly to 400,000 gallons (1,500,000 litres) – as
compared with 94 million to 184 million gallons in the BP oil spill off the US
coast. State Oceanic Administration released the latest size of the contaminated
area in a statement Tuesday. Though the slick has continued to expand — it
covered a 180-square-kilometre stretch earlier this week — officials maintain no
more oil was leaking into the Yellow Sea. The cause of the blast was still not
clear. The pipeline is owned by China National Petroleum Corporation, Asia’s
biggest oil and gas producer by volume. Images of 30-metre-high flames shooting
up near part of China’s strategic oil reserves late Friday drew the immediate
attention of President Hu Jintao and other top leaders. Now the challenge is
cleaning up the greasy brown plume. “Our priority is to collect the spilled oil
within five days to reduce the possibility of contaminating international
waters,” Dalian’s vice mayor, Dai Yulin, told Xinhua on Tuesday. But an official
with the State Oceanic Administration has warned the spill will be difficult to
clean up even in twice that amount of time. The Dalian port is the mainland’s
second largest for crude oil imports, and last week’s spill appears to be the
country’s largest in recent memory.
Flood waters are released from the Three
Gorges Dam's floodgates in Yichang, Hubei province, Tuesday. Flooding in China
that has killed more than 700 people this year and inundated countless
communities looks set to worsen as the country gets deeper into typhoon season,
the government warned on Wednesday. But officials, in the first high-level press
briefing on weeks of deadly flooding plaguing much of the country’s southern
half, said a disaster on the scale of historic 1998 flooding on the Yangtze
River would likely be averted.
The Hong Kong Monetary Authority (HKMA)
on Tuesday announced that new banknotes would be released later this year to
further reduce the risk of counterfeit notes being used. HKMA chief executive
Norman Chan Tak-lam said that for the past six years Hong Kong had seen a
continuous decline in the use of counterfeit money. “Currently, there is less
than one fake note in every one million notes in circulation,” Chan said. “We
should not be complacent and must ensure that we are staying ahead of the
counterfeiters,” he said. “There is a need to revamp the design of our banknotes
and introduce the latest security features to minimise the risk posed by
counterfeiting,” Chan said in a statement. The new series will consist of five
denominations using the same colour scheme. A new HK$1,000 note will be
circulated later this year, while a HK$500 note will be released in early 2011.
New HK$100, HK$50 and HK$20 notes will be circulated by mid-2011. The new
banknotes will include security features such as colour-changing patterns,
watermarks and fluorescent serial numbers. They will also have Braille. The HKMA
said the new notes would be issued by Standard Chartered Bank, the Hong Kong and
Shanghai Banking Corporation and Bank of China. The new designs from the three
banks will include depictions of Chinese inventions and calligraphy, local
festivals, images of the Bank of China tower and local nature scenes. They have
been approved by Financial Secretary John Tsang Chun-wah and will be printed in
Hong Kong. Existing banknotes will continue to be legal tender. They would
continue to circulate together with the new banknotes before being gradually
withdrawn, the HKMA said.
Landmark China yuan deal brings
new products for Hong Kong Standard Chartered & HSBC - People's Bank of China
deputy governor Hu Xiaolian and Hong Kong Monetary Authority chief executive
Norman Chan shake hands after signing the agreement. Standard Chartered and HSBC
(SEHK: 0005) were the first banks off the starting blocks to offer yuan
investment products after a landmark agreement between the Hong Kong Monetary
Authority and the People's Bank of China was signed yesterday. The deal signed
by HKMA chief executive Norman Chan Tak-lam and PBOC deputy governor Hu Xiaolian
allows financial institutions to open mainland currency bank accounts and allows
individuals to transfer yuan to and from them. This further relaxation of yuan
trade is a key step towards allowing Hong Kong-based fund houses to set up yuan
investments, brokers to trade yuan bonds and shares for clients, insurance
companies to launch yuan policies and companies to raise funds in yuan shares or
bonds. "I expect many more types of financial intermediary activities to be
introduced to help Hong Kong's yuan business platform leap to new heights," Chan
said. Hu said cross-border yuan settlement in the first half of this year
reached 70.6 billion yuan (HK$80.9 billion) - nearly 20 times the 3.6 billion
yuan recorded in the second half of last year - and 75 per cent of it was
conducted in Hong Kong. Although Chan noted that the agreement did not relax the
current exchange cap for individuals of 20,000 yuan per day, he said it was good
enough to promote more yuan investment products in Hong Kong. This proved to be
the case when, within hours of the signing, Standard Chartered Bank said it
would offer retail and wholesale clients investments that link yuan deposits
with interest rates, foreign currencies, commodities and equity indices.
Interest on these products will be paid in yuan. "This is a great step forward
for yuan liberalisation," Sundeep Bhandari, Standard Chartered's regional head
of global markets, said. "We believe this will create considerable market
opportunities especially as investors are keen to hold yuan as a long-term
investment given the Chinese economy and positive implications for the
currency." Meanwhile, HSBC said it would offer a product to provide enhanced
yields on customers' yuan deposits in which the interest payment will be tied
with the foreign exchange performance of the yuan. There would also be a 1.41
per cent rate paid on yuan time deposits placed for three months to one year.
"We want to be quick off the mark to roll out new yuan-denominated offerings to
ensure that we are well positioned to offer customers a one-stop solution in
yuan products and services," Mark McCombe, HSBC's Hong Kong office chief
executive, said. "It is recognition that China's currency has a mounting role in
international trade and investment."
Poon Woon-kam, 96, is transported
back to Hong Kong yesterday with the help of lawmaker Wong Kwok-kin (right).
Government to challenge court ruling over welfare payments - The government has
lodged an appeal against a High Court ruling last month that declared the
residency requirement placed on those seeking welfare was unconstitutional. It
comes as an ailing 96-year-old woman who had been living in Panyu, Guangdong,
returned to Hong Kong yesterday to apply for welfare and the old age allowance
commonly known as "fruit money". The Social Welfare Department said it had
lodged the appeal after seeking legal advice, which concluded that "the court
ruling involves issues of general importance". "The authorities therefore see a
need to seek clarification from the Court of Appeal," a spokesman said. He
declined to comment further owing to appeal proceedings having begun. He was
speaking after a bed-ridden Poon Woon-kam was transported by mainland ambulance
yesterday to the Huanggang border crossing, where she was transferred to a Hong
Kong ambulance and admitted to North District Hospital. The Court of First
Instance ruled on June 21 that the requirement that a permanent resident had to
have lived in the city almost continuously for a year before being eligible to
apply for welfare was unconstitutional. It said the rule, which allowed a grace
period of 56 days during which an applicant might be away, violated the Basic
Law, the Bill of Rights and a person's right to travel, and that it was
unconstitutional and unlawful. The government introduced the requirement in 2004
to discourage people who had lived abroad for a long time from relying on
Comprehensive Social Security Assistance (CSSA) immediately after returning. The
rule came into effect at the same time as one requiring that a person be in Hong
Kong for seven years before becoming eligible for CSSA. The court made the
ruling in the case of George Yao Man-fai, 65, a Hongkonger who had been working
on the mainland for a textile manufacturer. When he returned to Hong Kong after
being fired, Yao was denied CSSA because he did not satisfy the requirement. The
Society for Community Organisation, which supported Yao's case, said it was
disappointed that the government had decided to lodge an appeal. "The residence
requirement affects 30,000 unemployed people returning from the mainland and
Macau, harming their right to receive social assistance," the society said in a
statement. The society said it would seek to present its viewpoint in the appeal
hearing as an "interested party". Hong Kong citizen Poon spent all her savings
during her 13 years in Panyu, and a niece who had been caring for her said she
was unable to any longer, so sent her to Hong Kong to seek financial aid, said
Federation of Trade Unions lawmaker Wong Kwok-kin, who arranged the transfer.
Ex-Prudential
chief to helm AIA ahead of HK offering - AIG reshuffles leadership at Asian unit
after aborted sale. Bailed-out insurance giant AIG is parting company with Mark
Wilson, the well-liked boss of its pan-Asian life insurance unit AIA. Mark
Tucker, the former chief executive of Prudential, which failed to buy AIA last
month, has taken the helm to prepare the Asian insurer for a jumbo Hong Kong
initial public offering that bankers expect will raise up to US$20 billion.
Wilson reportedly clashed in May with Robert Benmosche, American International
Group's headstrong chief executive, threatening to leave if the US$35.5 billion
sale of AIA to Prudential went through. Some analysts have guessed that Tucker,
who was the architect of Prudential's successful Asian business before he left
last September, will use the funds from AIA's IPO to bid for his troubled former
employer. Prudential is licking its wounds after its audacious plan to buy its
Asian rival flopped spectacularly last month, when its shareholders baulked at
AIA's high price tag. Some investors have demanded chief executive Tidjane
Thiam's resignation. AIA has been on the block since autumn 2008. AIG originally
intended to sell a 49 per cent stake. In June last year, it appointed bankers to
launch it on the Hong Kong stock market instead - an idea scratched in favour of
selling to Prudential. In the latest twist, AIG said in a statement yesterday:
"After reviewing various options to monetise AIA's substantial value, we have
concluded that an IPO is our best option." It said Wilson would stay at AIA
until the end of this year and work closely with Tucker to "ensure a smooth
transition". The nine banks that won lucrative roles on the earlier IPO plan
would now have to re-apply for their jobs, because Tucker would want to choose
the advisers himself, a person close to AIA said. Last year, AIG tapped Morgan
Stanley and Deutsche Bank to lead AIA's IPO. In February, it added Bank of
America, Citigroup, Credit Suisse, Goldman Sachs, UBS, China Construction Bank (SEHK:
0939) and Industrial and Commercial Bank of China (SEHK: 1398) as bookrunners.
Similar-sized transactions in Hong Kong have earned the banks involved about 2
per cent of deal value, so AIA could shell out up to US$400 million for
financial advice. Yet Benmosche said last October that the company, which owes
US taxpayers about US$130 million, would slash its payments to outside
consultants. Wilson is the latest top boss to leave AIG over the bungled
Prudential deal. Last week, AIG chairman Harvey Golub quit after clashing with
Benmosche. Golub reportedly had argued that selling to Prudential, which
proposed to pay more than its own market capitalisation for AIA, would be too
risky. Benmosche, meanwhile, was determined to proceed with the deal. Wilson was
credited with keeping AIA buoyant while AIG teetered on bankruptcy. Between
AIG's first government bailout in September 2008 and March last year, AIA's loss
of customers was less than 1 per cent above normal levels, Wilson told the Wall
Street Journal last July. Rumours have swirled for months that Tucker would soon
take a top job at either his previous employer or AIA. British newspapers said
last month he was being lined up to replace Prudential chairman Harvey McGrath.
Tucker, a former trainee professional footballer, ran Prudential's Asian
business until 2003 and became group chief executive in 2005. He built the
British firm into Southeast Asia's second-biggest life insurer.
Overseas tourist arrivals in Hainan
nearly tripled to 316,000 - BEIJING, July 20 2010 - southern China's Hainan
province had received 1,096 visa-free tour groups, with a total 22,359 tourists,
according to official figures released by the local government. In the first
half of the year, the number of overseas tourist arrivals nearly tripled to
316,000. Earlier this year China's State Council announced a series of plans to
turn Hainan Island into a top international tourism destination by 2020. With
the recent addition of Finland, Denmark, Norway, Kazakstan, and Ukraine, the
tropical island now offers visa-free access to tour groups from 26 countries.
The new visa policies also cut the group size requirement from five to two, for
visitors from Russia, South Korea, and Germany, and the maximum length of stay
has been increased to 21 days from the previous 15.
Port authorities in Dalian have
recruited 500 local fishing boats to tackle an oil slick which covers 183 square
kilometres off the coast of Liaoning province. A pipeline explosion and fire hit
the Xingang port, home to a 19 million barrel strategic petroleum reserve,
during a tanker offloading last Friday, spilling 1,500 tonnes of crude into the
sea to leave a slick covering 183 square kilometres. State news agency Xinhua
said on Tuesday about 24 specialist clean-up vessels, together with a total of
800 fishing boats, were using dispersants and absorbents to clear up the slick.
With nearly a third of the oil now collected, it would take at least another
four to five days to complete operations, the agency quoted Luan Yuxuan, deputy
director of Dalian’s Oceanic and Fishery Administration, as saying. Six Very
Large Crude Carriers (VLCCs), with about 12 million barrels of oil, are set to
be diverted, possibly to South Korea or any one of another half-dozen VLCC
terminals in China, and corn deliveries have also been forced to dock elsewhere.
But while large sections of Dalian’s port facilities – spread out along the tip
of the Liaodong peninsula – have been shut, deliveries of imported soybeans
remain unaffected, a government-backed think tank said on Tuesday. “The only
impact we have felt so far is one of our ships had to pay a clean-up fee,” said
a Dalian-based soya crusher, adding that its operations and imports had remained
normal. But ships delivering corn cargoes to Dalian are being diverted to the
nearby ports of Jinzhou and Bayuquan, where warehouse space is expected to be
sufficient, the China National Grain and Oils Information Centre said. The
Dalian customs authority has handled about 10 per cent of China’s soya imports
so far this year, with US$175 million worth arriving in May alone – the last
month for which figures are available. Besides the strategic reserve, one of
four state storage bases already in operation, Dalian’s Xinjang port is home to
commercial storage run by CNPC (SEHK: 0135) and Petrochina (SEHK: 0857,
announcements, news) that may be even bigger. It is also a transfer spot for two
major refineries, Dalian Petrochemical Corporation and WEPEC, both operated by
PetroChina, with a combined processing capacity of 600,000 barrels per day
(bpd). PetroChina has set up a contingency plan to cope with one week’s closure
of the main oil port that receives crude shipments regularly and is also an
export hub for petrol and diesel. The aftermath of the weekend fire could stoke
pressure for stricter environmental standards in China, already reeling from a
toxic copper mine leak in its south that burst into the headlines last week amid
accusations of a cover up.
Taiwan opened to all China mainland
tourists amid warming ties -Beijing is now allowing tourists from all parts of
the mainland to visit Taiwan, in a move tipped to further boost the island's
tourism industry amid warming cross-strait ties. Beginning yesterday, mainland
tourists from four autonomous regions, including politically sensitive Tibet and
Xinjiang, as well as Inner Mongolia and Ningxia, can join mainlanders from other
provinces on group tours to Taiwan. The new arrangement also applies to people
from Gansu and Qinghai provinces, the mainland's first tourism envoy to Taiwan,
Fan Guishan, said. "With the opening of these areas, there are no more
restrictions on mainland tourists who want to visit Taiwan," said Fan, who heads
the mainland's first semi-official Cross-Strait Tourism Exchange Association in
Taipei. Travel to Taiwan was opened to 25 mainland provinces, municipalities and
the Guangxi autonomous region after the two former rivals signed a travel
co-operation agreement in July 2008. That deal was made possible after Taiwan's
mainland-friendly President Ma Ying-jeou took office that year and adopted a
policy of engaging Beijing. The two sides also agreed to swap tourism offices in
May this year to deal with rapid increases in the number of travellers, and
other tourism matters. In the past two years, more than 13.3 million mainland
tourists have visited the island, injecting US$2.6 billion into the Taiwanese
economy, according to the association. However, statistics released by Taiwan's
tourism bureau show that between July 2008 and the end of June this year, total
tourism revenue brought by all mainland tourists, including those coming from a
third territory, topped US$3.45 billion. Before the July 2008 agreement, Taiwan
permitted only mainland tourists coming from a third country to visit. Since
then, mainlanders have been able to visit directly, but only if they travel in
groups. The two sides are still working on the timing of allowing mainland
tourists to visit Taiwan individually. In the first six months of this year,
some 673,000 mainland tourists visited the island, up 105 per cent from the same
period last year, prompting Taiwanese authorities to predict that between 1.2
and 1.5 million mainland tourists will visit this year. To cope with the influx
of mainland tourists, the mainland side has agreed to increase the number of
travel agencies dealing with cross-strait travel from 146 to 164. The mainland
authorities would further expand the number of agencies to speed up application
procedures for travel to Taiwan, Fan said. Aside from opening the island to
mainland tourists, the two sides have also signed direct flight agreements to
carry travellers, a lucrative business that has sharply increased the profits of
airlines. The two sides have each expanded their weekly flights to 135, but that
has failed to meet the growing demand for cross-strait flights, leading to an
agreement in May to each increase the number by 50.
Young migrant workers in Shenzhen
are sorely underpaid but in no position to ask for more money, state media cited
a survey as showing. Factories in Guangdong province have been hit by a string
of stoppages over the past few months by workers demanding higher pay. In
Shenzhen, the average monthly wage for young migrant workers is less than half
that of those who hold full-time, long-term jobs in the same city, at 1,838.6
yuan (HK$2,110.32), according to the survey. "Many companies pay in line with
the city's lowest minimum standard, and migrant workers can only raise their
income by doing excessive amounts of overtime," the All-China Federation of
Trade Unions said. Such a salary "can only maintain the very lowest standards of
living in Shenzhen," it added. The survey, excerpts of which were carried in
Communist Party mouthpiece the People's Daily yesterday, made no reference to
the bout of strikes, the latest of which has affected a plant supplying parts to
Honda Motor's operations. But the publication of the study in an official
newspaper shows that the rising demands of a new generation of workers migrating
from villages, or born to migrants in the cities, are weighing on policymakers.
A similar report last month warned migrant demands are a test for stability. The
survey pointed out that young migrant workers are in a weak position when it
comes to pushing for higher pay. "They don't know much about protecting their
rights and lack communication channels within companies," it said. "When their
rights are infringed upon in most cases they choose to change jobs, so there is
a lot of movement of labor." Young migrants thought they should be getting at
least 2,679 yuan a month, but would need 4,200 yuan a month to be able to afford
to have a family, the survey found. Though they are better educated than the
generation of migrants before them, they are still doing the same manual jobs
and few have risen to the ranks of management, it added. But only 1 percent
would go back to the countryside. "Everything will get better and better, as
long as we work hard and keep forging ahead," more than three- quarters of
respondents said. The newspaper did not say how many people took part in the
survey. Official trade unions come under the control of the ruling Communist
Party, and rarely support strikes or confrontations with employers. Many private
companies do not have unions, or if they do they are controlled by management.
Water influx into Three Gorges
Reservoir sets record.
China National Petroleum Corp (CNPC)
plans to develop Xinjiang as a major oil and gas production and processing base
over the next 10 years, in line with the nation's plan to further boost the
region's economy. Xinjiang Uygur autonomous region is expected to become the
country's most significant base in oil and gas production, refining and
chemicals manufacturing, oil storage, and engineering and technology services in
the next 10 years, according to CNPC, the nation's largest oil company. Xinjiang
will also become a strategic route for oil and gas imports from Central Asia and
Russia, it said. Oil and gas production in Xinjiang is expected to reach 50
million tons of oil equivalent in 2015, and the figure will further rise to 60
million tons in 2020 and is expected to be sustained for 20 years, according to
CNPC. The region's oil refining capacity is expected to reach 26 million tons
per year in 2015, and 30 million tons every year by 2020, it said. CNPC will
also accelerate the construction of strategic oil reserves and commercial oil
stockpiles in Xinjiang. Its oil storage capacity in the region is expected to
reach 15 million cu m in 2015. Development of oil and gas business in Xinjiang
is "irreplaceably important" in the company's strategy, said CNPC President
Jiang Jiemin. The company's sustainable development in Xinjiang is "very
meaningful" in its endeavor to become an integrated international energy
company, he said. By now CNPC has invested over 300 billion yuan ($44.25
billion) in Xinjiang. It has 11 subsidiaries in the region, covering both
upstream, middle stream and downstream business. The company on Monday started
work on a petrochemical project in Urumqi in Xinjiang to produce aromatic
hydrocarbon. Total investment on the project is estimated at around 3.7 billion
yuan. Aromatic hydrocarbon products are widely used in industries like
automobiles, electronics, and machinery. CNPC also started work on two energy
projects in Xinjiang last week, with total investment of around 9 billion yuan.
The projects, one fertilizer plant and one natural gas pipeline network, will
better use the rich natural gas resources in Xinjiang. Rich in oil and natural
gas resources, Xinjiang in northwestern China will play an increasingly
important role in domestic energy companies' future strategies, said analysts.
Many domestic companies, such as China Huaneng Group, and China Guodian Group,
have unveiled ambitious plans to further develop their business in Xinjiang. In
May, the central government unveiled an ambitious plan to boost development in
Xinjiang. The government in June levied a resources tax in the region, in a move
to increase revenue for the local government.
Overseas casino operators in
Singapore & Macao eye Chinese tourists - Casino operators just love Queenie Liu,
the queen of the tables. The 30-year-old Shanghainese is no stranger to high
stakes and spends $15,000 on average when she rolls the dice - at the expense of
her high net worth husband who doesn't share her passion for gambling. "It's the
excitement that I crave for. It's exhilarating. For me, it's not the money," she
told China Daily in a telephone interview from her holiday home in Vancouver.
Queenie is one of the VIP gamblers at the casinos in Macao, Malaysia and Las
Vegas. She now plans to visit the two new casinos in Singapore - Marina Bay
Sands (MBS) and Resorts World (RWS). "Fortunately or unfortunately, most of the
big gamblers are of ethnic Chinese origin," she said. Casino operators from
Singapore, Malaysia and Cambodia are getting ready to make hay from the surge in
outbound tourists from China. So much so, that most of the operators are now
wooing tourists through indirect sales and promotional activities routed through
operators of group tours or junkets. The companies have to use the indirect
method to increase footfalls as marketing of casinos and gambling are illegal in
China, said Ben Lee, Chief Operating Officer - Gaming at Intercity Group.
Intercity Group is planning to set up a $400 million integrated resort and
gaming property in Siem Reap, Cambodia. "The biggest players in the region tend
to be from China," he said. "Junkets get higher commissions in Singapore as
gaming taxes are much lower at 12 to 22 percent versus Macao at 39 percent,"
said Aaron Fischer, Head of Consumer and Gaming Research at CLSA Asia Pacific
Markets. Junkets are also a big incentive in luring gamblers to Singapore. "With
its growing middle class population, China is an attractive market for us. We
consciously cater to the needs of Chinese guests, from the way they like to be
greeted to the way they like their food served," a spokesperson from Marina Bay
Sands told China Daily. Genting, Asia's largest listed casino operator and owner
of Resorts World Singapore (RWS) and Genting Casino, said it is on track to
achieving its target of 13 million visitors in its first year of full operations
by February 14, 2011. It has given out $100,000 in jackpot prize money alone.
Businesses are betting that the economic growth in China and the region would
boost demand for shopping, entertainment, gambling and tourism. Singapore
expects the MBS and RWS casinos to generate spin-off businesses such as demand
for luxury services and more deals for bankers in what is fast becoming Asia's
premier wealth management center. Casinos in Singapore and Malaysia are
successful without taking the market share from Macao, said Fischer. "Casinos in
Southeast Asia offer variety. Also, visa restrictions do not apply to individual
mainland Chinese travelers visiting Malaysia and Singapore when compared to
Macao," he said. Chinese are allowed to travel to Macao once in two months. In
addition, Chinese government officials are not allowed to gamble in Macao but
they can visit Singapore, Malaysia or Cambodia. While Macao is seen as a pure
gaming destination, casinos in Southeast Asia have the additional attraction of
combining business with gambling.
If you build it, will the cars come?
Imagine: it's a Friday night in 2016 and the long-awaited 37.73 billion yuan
(HK$43.23 billion) Hong Kong-Zhuhai-Macau bridge has been completed. A banker
plans to pick up his clubs after work and drive to Zhuhai for a round of golf,
stopping in Macau on the way for a quick meal. It should only take 30 minutes to
motor from his office in Central to the mainland city - a trip that used to take
three to four hours by ferry. But first he needs the right kind of car. And
there aren't a lot of those around. Right now, only 20,500 private cars, 950
coaches and 15,900 goods vehicles in Hong Kong could make the trip; vehicles
that don't have cross-border licences issued by Guangdong are not allowed over
the border. Even fewer mainland drivers - a few thousand at most - are qualified
to drive directly from Zhuhai to Hong Kong. The goal of the bridge was to
integrate the three economies and allow people to travel easily between Hong
Kong and the mainland. An initial 13,000 to 20,000 vehicles were expected to use
the link every day - to eventually reach 60,000 cars daily by 2035. But it's
likely the bridge will see just a fraction of that traffic. If the cross-border
licence system continues as it is, and the tight restrictions for
left-hand-drive cars entering Hong Kong also remain, it could end up being
severely underused. Hong Kong inherited from its former British masters a system
based on right-hand-drive vehicles, while those on the mainland are left-hand
drive. The bridge is designed for left-hand-drive cars but Hong Kong currently
does not allow left-hand-drive vehicles unless the Transport Department provides
a waiver - only ambulances and diplomatic cars usually enjoy such privileges.
The Hong Kong government mooted a possible relaxation of the regulations early
last year by issuing some short-term or one-off cross-border licences. Now it's
planning a trial scheme for ad hoc licences under a quota system for private
cars at the Shenzhen Bay Port. A Transport and Housing Bureau spokeswoman said
about 22,000 private cars hold cross-boundary permits, and it plans to allow
more in the future. The trial scheme will be introduced for private cars in Hong
Kong first, followed by private cars in Guangdong, she said, adding that details
were still being discussed. "The trial scheme, if successful at the Shenzhen Bay
Port, will pave the way for full-scale implementation at the Hong Kong-Zhuhai-Macau
bridge in the future," she said. But David Tung, a broker, said it was
"extremely difficult" to obtain a licence. "The application procedures are
complicated and the criteria are so tough that I would say it is almost
impossible for an ordinary person to succeed," he said. Tung runs his own
brokerage and is a director of Hong Kong and mainland firms. Even with his
background, he is not qualified for a cross-boundary licence. The minimum
requirement is to be either a big investor, a big charity donor, or to have
political connections. The investment amount depends on whether it is in the
country or city. For rural areas, a firm must invest HK$3.2 million and have
paid tax of 150,000 yuan a year to apply for a cross-border licence for its
first car. It needs to invest at least HK$40 million for a second car and HK$80
million for a third. The threshold is higher if the company is investing in a
city area, where a licence for a first car requires an investment of HK$8
million, rising to HK$64 million for a second car and HK$160 million for a
third. For individual applicants, only those who hold a political position in
the Guangdong provincial government or who have donated 10 million yuan or above
are considered. Tung said he had been advised to get a cross-border licence
second-hand or from the black market, but he dismissed the idea as too expensive
and possibly illegal. A licence on the black market could cost HK$400,000 or
more. "The government should make it easier for everyone to apply for a
cross-border licence. It is important for closer economic ties between Hong Kong
and the mainland," Tung said. Bank of East Asia (SEHK: 0023) senior adviser,
Chan Tze-ching, also believes the cross-border licence system needs to be
relaxed. "However, we should also recognise there are a lot of difficulties such
as the fact that the mainland is left-hand drive while Hong Kong is right-hand
drive. All the road signs and road designs are different," Chan said. "If there
is any relaxation, the government must do it carefully." Paul Chan Mo-po, the
legislator for the accountancy sector and a keen motorist, said Hong Kong should
follow Europe's lead, where it is easy to drive across the continent - switching
between right-hand-drive Britain and mostly left-hand-drive Europe. "When I
travel to Europe, I can hire a car in Paris and then freely drive around to
other European countries and even go to Britain," he said. "If it can be easily
done in Europe, why not in Hong Kong?" A Hong Kong government official who is
familiar with the issues said the difficulties in obtaining cross-border and
short-term licences were being studied. Challenges included the fact that a
large number of mainland cars could clog Hong Kong's already congested roads,
and vice versa. This would lead to traffic jams and pollution problems, said the
official, who declined to be named. There are also security and smuggling
concerns. As such, the official said even if the licence regime was relaxed, it
would be subject to a quota. Construction of the bridge, funded by the
governments of the three jurisdictions, will start next year and is expected to
be completed in 2016. According to the Highways Department, the project's
economic rate of return for Hong Kong is 8.8 per cent over a 20-year period, or
12 per cent over 40 years. In April, the Hong Kong government signed a framework
agreement with the mainland on Hong Kong and Guangdong co-operation. It is
expected to be a key plank of Beijing's plan to establish the delta as one of
the world's most competitive regions by 2020. The agreement points to the bridge
allowing drivers to travel from Hong Kong to key mainland cities within an hour,
and mentions a relaxation of licensing for cross-border vehicles, including
private cars. But, three months on, there has been no progress on the licensing
issue. Driving to Zhuhai in 30 minutes after work may be a bridge too far.
Tai Sze-chung, veteran vocal coach to
Cantopop's biggest stars, has died from heart disease. He was 69. Tai’s daughter
Wancy told reporters her father passed away early on Sunday from complications
from an acute coronary heart problem. The Apple Daily reported on Monday that
Tai was hospitalised after fainting at his home early on Saturday. News reports
said he is survived by a wife and two daughters. Tai was nicknamed “godfather of
the music industry” for his star-studded list of students. Among those he
tutored were late Hong Kong pop diva Anita Mui, singers Faye Wong and
actor-singers Andy Lau and Leon Lai.
Supporters of local festivals
set to win recognition as national intangible cultural heritage hope the status
will give the traditions more respect and help offset threats from urban renewal
and dwindling interest among younger generations. The Yu Lan Ghost Festival is
just one event fighting for its future. The festival is celebrated at 60 venues,
often on soccer pitches or parks, by the Chiu Chow community, estimated to be
1.2 million-strong. But some sites, such as Yan Oi Court in the heart of Kwun
Tong, are being lost after hosting celebrations for decades. The courtyard - a
small triangular open space occupied by hawkers - has been the stage for the
festival for the past 30 years, thanks to donations from believers. The place is
too small for live Chiu Chow operas for ghosts, a key component of the festival,
but the corner is as boisterous as any other celebration sites in Kwun Tong, an
area with a concentration of Chiu Chow people. During the festival in the
seventh lunar month, paper offerings are burned, free rice is distributed and
masters are invited to perform rituals to console ancestors and wandering
ghosts.
Hong Kong General Chamber of Commerce aims
to take leading role - Anthony Wu is intent on raising the chamber's profile. A
month after the Hong Kong General Chamber of Commerce made a submission on
constitutional reform to the government in August 2004, it posted the document
on its website without notifying the media. The chamber's newly elected
chairman, Anthony Wu Ting-yuk, said it spoke volumes about how low profile the
city's biggest business organisation had been. Its submission urged the
government to release a timetable for full democracy before 2007. "As our
political system moves forward, the business community can no longer remain
silent," he said. Wu took the lead in saying earlier that the formula of "one
person, two votes" for the five new Legco district council functional
constituency seats could be applied representing business interests. He said
most negative public perception of the business community stemmed from property
prices and the sales practices of some developers. "We must let the public know
that we businesspeople have a social conscience," he said. "We will also try our
best to educate our members to be more socially responsible." The chamber, which
has about 4,000 members, proposed in January 2002 that Hong Kong and the
mainland sign a regional trade agreement granting a zero tariff for "made in
Hong Kong" goods. The idea came more than 18 months before the signing of the
Closer Economic Partnership Arrangement. "But not many people know we were the
first business organisation to promote the concept of Cepa. It underlines that
we are not so good in publicising our ideas," Wu said.
Doubts raised over need
for new container terminal - Growth forecasts don't justify HK$10b project, says
official - The nine Kwai Chung container terminals handled 15.16 million teu
last year, down from 17.7 million teu in 2008, and experts say the port has room
for at least 23 million teu. The head of Hong Kong's container terminal
operators' association says a tenth container terminal, estimated to cost about
HK$10 billion, is not needed "in the foreseeable future", calling into question
the future of the project. Alan Lee said: "I do not see any need for it in my
lifetime. My lifetime might be about 10 or 15 years." He said the five-member
group, which includes Li Ka-shing's Hongkong International Terminals, DP World
and Cosco-HIT, would support construction of a new terminal provided the project
was justified. "Our position is that we do not disagree with the building of
container terminal 10 provided we see a need for it," Lee said. But he gave
three reasons that questioned whether there would be sufficient growth in
container throughput to support the massive investment needed. Lee said the
global slowdown in trade caused by the financial crisis weighed on container
volumes, resulting in a 20 per cent collapse in throughput in Hong Kong in the
first half of last year. Additionally, he said, the shift by China's factories
to smaller, higher-value products meant there would be fewer shipping containers
needed compared with bulkier, lower-value goods. Thirdly, he said the move of
manufacturing to the western side of the Pearl River would mean there would be
less reliance on Hong Kong's port. Meanwhile, the government is pressing ahead
with a preliminary feasibility study into plans to build container terminal 10
on the southern side of Tsing Yi island. Work on the two-year study is due to be
completed in March next year. Latest estimates of the total cost of developing
the container terminal, which is believed to involve some reclamation and the
relocation of oil terminals at Tsing Yi, have not been released but observers
believe the cost would top HK$10 billion. A study into port cargo forecasts
released in 2008 projected that Hong Kong "would continue to have modest and
steady growth" and "Hong Kong will need the first new container berth by 2015 at
the earliest". Observers have their doubts. The nine Kwai Chung container
terminals handled about 15.16 million teu (20-foot equivalent units) last year,
down from 17.7 million teu in 2008. But outlining the capacity that was
available at Kwai Chung, Lee said: "We still have room for 23 million teu." He
said this handling capacity could be expanded by up to about five million teu,
if there was more land available for container storage. Over the past 10 years,
throughput growth at Kwai Chung has been mixed, while in two years, 2001 and
2009, there was a year-on-year drop in volumes. And although there was a strong
rebound in container volumes at the Kwai Chung terminals in the first six months
of the year, Lee doubted if this rate of increase would continue in the second
half. "My forecast is about 7 per cent for the whole year at Kwai Chung, with 3
per cent to 4 per cent growth in the latter part of this year," Lee said. Hong
Kong is also facing competition from ports in the Pearl River Delta. GHK (Hong
Kong) managing director Jonathan Beard said current plans envisaged that more
than 20 million teu of capacity would come on stream early next decade in
Shenzhen, Nansha and Gaolan.
Smaller aircraft
makers shaping up to compete with Boeing and Airbus - A Boeing 787 Dreamliner,
now more than two years behind schedule, sits on the tarmac at Boeing Field in
Seattle, Washington. The Dreamliner will take centre stage at the Farnborough
show this week. Asian orders take off at airshow - The aviation sector descends
on the Farnborough International Airshow near London this week amid fresh
setbacks and an increase in competition for top aircraft makers Boeing and
Airbus. Any new orders for aircraft placed at one of aerospace's biggest events
are likely to be dominated by airlines from emerging economies across Asia and
the Middle East where air traffic is growing rapidly, according to analysts. "In
Asia and China in particular, there are massive orders coming through. Similarly
in the Middle East. There is enormous growth coming through that part of the
world as well," said independent aviation analyst John Strickland. "The economic
climate has certainly slowed orders for established traditional markets such as
Europe and the US." The Farnborough show is also traditionally the occasion for
the announcement of orders for military jets, but with governments set to slash
their defence budgets to help reduce huge public deficits, major deals may be
scarce. US company Boeing and its European rival Airbus, meanwhile, are heading
to the show aware of facing increased competition for their mid-sized civilian
jets from smaller manufacturers, such as Brazil's Embraer and Bombardier of
Canada. "Commercially, we've still got the big players Boeing and Airbus
slugging it out," Strickland said. "We've also got emerging producers of small
aircraft such as Bombardier, Embraer, and indeed new players coming up in Russia
and China which are producing aircraft which in future decades can become bigger
challengers to the established order of Boeing and Airbus." Before today's start
to the biennial show, Boeing said it may be forced to delay to 2011 the delivery
of its first 787 Dreamliner aircraft scheduled at the end of this year. The
fuel-efficient mid-sized aircraft designed to fly long distances, and which has
been beset by delays, will be on display at Farnborough alongside Airbus'
long-delayed A400M military transport plane. Airbus recently suffered a blow of
its own when the World Trade Organisation ruled that multibillion-dollar
subsidies it received from the EU were illegal. Whether Airbus will have to
repay any money is not yet clear. Meanwhile, the WTO is soon expected to deliver
a ruling on the legality of US subsidies to Boeing. Howard Wheeldon, senior
strategist at BGC Brokers, said he did not expect "many, if any really
significant orders" for either Boeing or Airbus at the airshow. "Financing
remains a big issue for airlines and my guess is that this is a situation that
will get worse," Wheeldon said. But in June, Emirates boosted its reputation as
the world's most bullish airline with an order for 32 "superjumbos", the biggest
contract in civil aviation history according to a delighted Airbus. The US$11.5
billion deal, unveiled just as the global airline sector emerges bruised and
battered from the worst global slowdown in decades, will take the number of
A380s ordered by debt-ridden Dubai's flag carrier to 90. "We'll probably expect
to hear the announcement of one or two more aircraft orders from Emirates" in
Farnborough, Strickland said.
Workers scoop up oil from a spill at
the northeastern port of Dalian, Liaoning province, on Sunday. Port sealed as
Dalian battles oil slick - Dalian has closed the Xingang oil port in its
northeast, home to the country's largest oil reserve bases, after crude pipeline
explosions spilled oil into the sea, but the main facilities there are
undamaged. State oil major PetroChina (SEHK: 0857), which operates two major
refineries in Dalian, has set up a contingency plan to cope with one week’s
closure of the main oil port that receives foreign crude vessels regularly and
also a main export point for petrol and diesel. PetroChina has started trimming
refinery operations at one of the plants, the 200,000 barrel-per-day (bpd) West
Pacific PetroChemical Corporation (WEPEC), by about “several thousand tonnes”
per day. “The port was sealed right after the explosion. We have a one-week
contingency plan, but are hoping that the oil spill can be cleaned up as soon as
possibly,” the oil executive told reporters on Monday. The accident had not
caused any direct damage to the oil terminal’s main facilities, the impact being
limited to ancillary facilities such as control systems.
Three Gorges Dam faces stiffest test yet
- Water levels in the dam reached 147 metres on Saturday. The massive Three
Gorges Dam faces its biggest flood-control test after days of torrential rain
created the sharpest surges on the upper Yangtze River for more than a decade. A
flood crest hitting a maximum volume of 70,000 cubic metres per second is
expected to pass through the dam on Thursday, said a report released yesterday
by the Yangtze River Water Resources Commission. The peak is shaping up to
become the biggest surge to hit the Yangtze since 1998, when flooding on the
undammed river left 3,000 dead and 14 million homeless downstream. Floodwaters
poured into the Three Gorges Reservoir at up to 47,000 cubic metres a second
yesterday and are expected to rise above 65,000 cubic metres a second between
today and tomorrow. High water levels have already forced the closure of locks
at the dam. "The water level in the reservoir will continue to rise ... This is
going to be the biggest challenge for the dam since its completion," said the
China Three Gorges Corporation. Four sluice gates were opened yesterday to
release water at 48,000 cubic metres a second. As a result, the dam's water
level dropped to 146 metres, from 147 metres on Saturday, with more than 500
million cubic metres of floodwaters being discharged. The maximum water level of
the dam, the largest hydroelectric project in the world, is 175 metres. It
reached 171 metres during a test run last year, but officials held off from
raising the level to 175 metres in order to relieve areas downstream that were
then suffering from a severe drought. Lower reaches of the Yangtze were facing
an "extremely severe" flood situation, Liu Ning, deputy head of the Office of
State Flood Control and Drought Relief Headquarters, told Xinhua. The report
said mid-stream areas were holding up fine for the time being due to the dam's
flood control. Water levels at several big lakes downstream surged past their
danger marks on Saturday as the meteorological centre said fresh downpours could
further swell rivers flowing into the lakes. Poyang Lake in Jiangxi saw water
levels 70 centimetres above its alert mark. At Dongting Lake, in Hunan, the
water was seven centimetres above danger level. The Three Gorges Dam, costing
180 billion yuan (HK$206 billion), was finished in May 2006 and went into full
operation last September. It is 2,335 metres long and 185 metres high. The
project, aimed at generating electricity to power the economy and prevent
flooding downstream, drew fierce criticism for uprooting more than one million
people.
Beijing home prices rise to 22
times of income levels: report - Salesmen are seen waiting for customers at a
real estate expo in Beijing in this file photo. A typical Beijing flat costs
about 22 times average incomes in the city, state media said on Monday. A
typical Beijing flat costs about 22 times of the average incomes in the city,
state media said on Monday, highlighting the challenge the country faces
providing affordable housing amid a property boom. A 90 square metre (968 square
foot) apartment in Beijing cost 1.6 million yuan (HK$1.8 million) last year, the
China Daily said, citing an independent report. That compared to an average
household disposable income of around 71,000 yuan last year, according to city
figures. The report was completed by the Beijing University of Technology and
the Social Science Academic Press. It said the building of low-cost, government-subsidised
housing had failed to meet demand and called on policy-makers to increase the
supply of land for such projects. Authorities in the mainland have issued a slew
of measures in recent months aimed at preventing the property market overheating
and causing a bubble that could derail the world’s third-largest economy.
Chinese property prices in June fell 0.1 per cent from the previous month, their
first monthly fall since the first quarter of last year, according to official
data. In remarks published on Monday, the Minister of Housing and Urban-Rural
Development said the government will maintain its tightening campaign to cool
real estate prices, while urging local governments to build more affordable
housing. As mainland economic growth slowed in the second quarter, some analysts
and investors expected Beijing might loosen its efforts to temper the real
estate sector, which accounts for more than 10 percent of gross domestic
product. But Jiang Weixin, the housing minister, told a meeting of more than 70
mayors that the risks of doing so were too high. “Once the policy is relaxed,
property prices will rebound strongly. Our macro control efforts will then fail
overnight, and the government will also lose the trust of its people,” he was
quoted as saying by the China Business News. Jiang urged the officials to speed
up efforts to meet the country’s target of building 5.8 million units of
affordable housing this year. His ministry will make a two-week check on the
progress of construction beginning on August 10, he told the mayors.
Expo 2010 Shanghai is proving to be a
boon for successful Chinese entrepreneurs eager to tap into the global market.
The 184-day event, which is predicted to attract an estimated 4 million foreign
visitors along with global media coverage, is considered to be a golden
opportunity for Chinese companies to raise their brands to an international
level and explore business opportunities. According to survey released last year
by the information office of Shanghai Municipal Government, more than a quarter
of the respondents were hoping to visit Shanghai during the Expo to seek future
business. The online survey polled 503 foreigners in 44 countries and regions
across the world, 30 percent of whom were senior corporate executives. Of the
Expo's 58 partners and official sponsors, 47 are Chinese companies, 25 are from
Shanghai, 15 are from Beijing and seven from other parts of the country. They
contributed a total of more than 7 billion yuan ($1 billion) in sponsorship fees
to the event, averaging more than 100 million each. While the sums are large,
the contributors represent only a small portion of the number Chinese firms that
want a slice of the Expo pie. Those who are not qualified to partner an official
sponsor have sought other means of gaining brand exposure. "The Expo is a
once-in-a-century opportunity for us to promote our brand on an international
scale," said Zhang Yingguang, a public relations manager for Tsingdao Beer, the
Chinese industry leader based in Qingdao, Shandong province. The company
launched a flurry of billboard advertisements on the city's busiest streets, as
well as in metro stations and commercial areas. The ads targeted foreigners by
trying to teach them Chinese phrases about drinking. It also made a presence in
the Zero Carbon Pavilion at the Expo, where it contributed lamps made out of
beer bottles and launched a gourmet TV show with a local TV station.
China's Bright Dairy invests $58 in
NZ's Synlait - July 19 2010 - WELLINGTON - China's Bright Dairy & Food Co is
investing $58 million in New Zealand milk producer Synlait, which will use the
money to lift exports of milk powder and infant formula to China. Bright Dairy,
majority owned by Bright Food Group, will take a 51 percent stake in the milk
processing arm of the privately-owned Synlait, which is a small player in the
dairy export market dominated by giant co-operative Fonterra. "In China, the
market for premium products from New Zealand and Australia is growing rapidly.
Synlait Milk will help Bright Dairy establish a market leading position in the
infant formula and milk powder category with a planned co-branded range," said
Bright Dairy President Benheng Guo. The NZ$82 million from the deal, which is
subject to regulator approval, will be used to build a new milk processing
plant, doubling Synlait's production capacity. Bright Dairy, one of China's main
dairy companies, is 65 percent controlled by the partially State-owned bright
Food Group, which earlier this month was trumped in a $1.5 billion battle for
the sugar arm of Australian conglomerate CSR Ltd. [Bright Food fails in bid for
Sydney-based CSR] More than 90 percent of New Zealand's dairy products are
produced by farmer-owned Fonterra, New Zealand's largest company which generates
more than 7 percent of the country's GDP with annual sales of about NZ$17
billion. Synlait is split into two arms, milk production and farming, with the
farming arm remaining in full private ownership. In November last year Synlait
scrapped a planned NZ$150 million float of the milk production business due to a
lack of investor support.
Hong Kong finally has a minimum wage
law after a 41-hour debate by legislators. The third reading of the minimum wage
bill was passed at 6.30am yesterday, in an overnight session of the Legislative
Council, with 45 votes for and only one against. The tourism sector's Paul Tse
Wai-chun was the sole opposer. "It marks a very important milestone in the
protection of our labour, particularly for ordinary workers in Hong Kong. I
would say it actually opens a new page in our socioeconomic history," Secretary
for Labour and Welfare Matthew Cheung Kin-chung said after the vote. He said the
government would monitor developments in the jobs market closely because foreign
experience had shown that the real impact of a minimum wage would emerge about
two years after its implementation. "We will devise guidelines for particular
sectors, and also start an education and publicity campaign, as well as work out
the details for the disabled, in particular, because they are a vulnerable
group," Cheung said. Unionists said the bill's passage was not the end of the
battle, but the beginning of another fight as the Provisional Minimum Wage
Commission had yet to recommend the minimum hourly rate to Chief Executive
Donald Tsang Yam-kuen. Unions have demanded a rate of no less than HK$33, while
employers' groups have suggested rates between HK$24 and HK$25. "All amendments
moved by legislators have failed to be passed. In fighting for the basic demand
for a HK$33 hourly rate and for workers to be able to live decently, we have no
choice but to hit the streets every year from now on," Lee Cheuk-yan, secretary
general of the Confederation of Trade Unions, said. The Chinese Manufacturers'
Association said the minimum wage should "start with a level which is easily
accepted by the market, followed by a review every two years", in a statement
welcoming the new law. The commission is due to recommend the wage rate by the
end of next month. Legislators will vote to accept of reject the rate decided by
the chief executive. The law is scheduled to take effect in the first half of
next year.
US-Korean military drill
revives painful memories - Whatever their stated purpose or the strength of the
forces deployed, upcoming US-South Korean military exercises in the Yellow Sea
will be greeted indignantly in Beijing because the presence of foreign warships
so close to China's shores will revive painful memories of the country's
invasion, political and military analysts say. The war games would be
precedent-setting, military analyst Andrei Chang said, since the last time
foreign warships staged a show of force in the Yellow Sea was during the
Sino-Japanese war in 1894. Even though South Korea insists the drills are aimed
at North Korea - which Seoul accuses of sinking one of its warships in March
with the loss of 46 lives - Chang, editor-in-chief of the Canada-based Kanwa
Defence Review, noted that US ships taking part would be armed with Tomahawk
cruise missiles within whose range would lie Chinese cities including Beijing
and Tianjin. China has voiced strong opposition to the exercises, mindful
perhaps of demands from its own public to speak out. While South Korea and the
US have insisted all along that the exercises would go ahead, on Thursday
Seoul's deputy defence minister, Chang Soo-man, said the exercises would be in
two stages, with the first in the East Sea, or Sea of Japan, on the other side
of the Korean Peninsula. He also confirmed US aircraft carrier the USS George
Washington, would only take part in the East Sea component of the exercise. A
date for the Yellow Sea exercises, which had been expected this month, has not
been set. The minister appeared to suggest the decision not to include the
aircraft carrier in the Yellow Sea drills would mollify China. Shi Yinhong , a
professor of international security at Renmin University who follows Korean
affairs, agreed the decision on the carrier was designed to avoid upsetting
Beijing. The PLA this month staged live-fire naval exercises in the East China
Sea, close to the Yellow Sea, in an apparent protest against the possible
presence of a US aircraft carrier on its doorstep. Chang noted that, in the
event of a foreign military attack on North Korea, it would be "impossible for
Beijing to be left alone" because most of North Korea's key infrastructure lies
near its border with China. Gao Haikuan , a Beijing-based regional security
specialist, said the US participation in the Yellow Sea drills would inevitably
damage Sino-US relations. "The US should realise that such a military
demonstration on our doorstep would not only stoke Chinese nationalist sentiment
against America, but also set back the peaceful development of the Korean
Peninsula," he said. The drill was reminiscent of the military confrontations
between the US and the Soviet Union during the cold war and would only erode
Beijing's trust in US President Barack Obama, Gao said. Chang, the defence
analyst, said: "Besides its proximity to China, the Yellow Sea also symbolises
the Chinese humiliations in the second opium war and the first Sino-Japanese
war." Chinese historians say foreign warships invaded China from the Yellow Sea
88 times in the past 200 years. Among the most painful episodes were the second
opium war from 1856 to 1860, and the first Sino-Japanese war from 1894 to 1895.
In 1856, an eight-nation force led by Britain and France sailed to China via the
Yellow Sea, marched on Beijing and burned down the Qing dynasty Old Summer
Palace. In 1895, Japan occupied Taiwan after defeating the Qing dynasty's elite
Beiyang Fleet in the Yellow Sea. The planned Yellow Sea drill is intended by the
US and South Korea as a show of unity against a belligerent North Korea. It has
already been delayed since June after Beijing's repeated objections. "Beijing
has publicly condemned the joint operations five times over the past month. The
domestic public outcry is stronger than it expected," Shi said. Chang believes
Seoul has no intention of upsetting Beijing, but is acting out of a practical
need to revise its battle plan for a possible invasion of North Korea, which was
formulated in the 1980s and focused mainly on an attack by land. It paid little
attention to North Korea's development of nuclear technology, Chang said. The
North is believed to have enough plutonium for a handful of nuclear weapons, and
the rockets to fire them. Chang thinks Seoul is eager to use the Yellow Sea
drill to formulate new naval operating strategies. Shi said the tension caused
by the Yellow Sea exercise could prompt Beijing to reconsider its current
approach to foreign policy, which relied on forming strategic partnerships with
other countries instead of, like the US, forging allies. "Beijing is very
isolated when dealing with such a challenge because we are alone," he said. "But
I think in the long term, it's possible for China to focus on cultivating allies
to further enhance our diplomatic relations, which might balance the threat from
the US."
Checklist fails to identify dangerous trees - Central has the most sick trees in
the city, with clusters along busy roads and in parks, according to a list of
inspected trees released by the government yesterday. Tree expert Jim Chi-yung
inspects a Chinese Banyan in Supreme Court Road, Admiralty. Critics questioned
the usefulness of the list, as it fails to say which trees are in danger of
collapsing or to disclose details of 800 trees. The government said these 800
had already undergone improvement measures. The list details 1,154 trees
inspected over the past few months, including 500 old and valuable trees, about
400 growing on stone walls and 252 in areas with high traffic and pedestrian
flow. It includes their location, species, condition, the government department
responsible for each, mitigation measures carried out, and photos of every one.
The list was drawn up by the Tree Management Office, established after a
government review of tree management following the death of student Kitty Chong
Chung-yin, who was crushed in Stanley in 2008 by a falling coral tree that was
listed on the registry of old and valuable trees. At least 28 old and valuable
trees in Central were identified to have three or more problems, including
decay, abnormal leaf colour, cavities, cracks, fungus, and signs of pest and
disease. They are mostly located around the Central Government Offices, in Hong
Kong Park and the Zoological and Botanical Gardens, and along Garden Road. The
worst case is a pink and white shower tree in the Zoological and Botanical
Gardens, which has severe decay and is under close observation.
Selling their labour for next to nothing ... Jack Tsang (left) says it's hard
work keeping KFC clean, while Alan Tsang (above) gives out flyers and complains
about cheap labour, and project leader Hank Cheng (below) is all for the
proposed law. While politicians debated the legislation for a minimum wage, most
low-paid workers were too busy at their jobs to think much about it. Restaurant
cleaner Mrs Lau, 62, rinsing dishes at fast-food chain Cafe de Coral (SEHK:
0341) for the HK$22 an hour she has earned for the past 17 years, did not know
she might be getting a pay increase. "Who would say no to more money? I'm sure
all my fellow workers like money," she said on learning of it. Despite that, she
remained wary about the authorities' determination to help low-income workers.
"Really, who cares how much we earn? I've been getting HK$22 for so many years,
I've become OK with it." If the rate is set at HK$25, her pay will rise by about
HK$700 to HK$5,900 a month if she continues to work nine hours a day, six days a
week. At a minimum rate of HK$33 an hour, she will make about HK$7,700 - or
HK$2,500 more per month. "It will not make me rich, but it's definitely better
to have a minimum wage," she said. "I can buy more fresh seafood for my family's
dinner then." Despite fears expressed by the catering industry, she wasn't
afraid she would lose her job as a result of the new law. "No," she said. "All
employees will be happier and we will work even harder. Why would we lose our
jobs?" At KFC's Causeway Bay branch, 18-year-old trainee Jack Tsang said he had
been too busy sweeping floors for HK$21 an hour to follow the Legco discussion.
But he strongly supported the passing of the law, regardless of what level the
minimum is set at. "Of course it's better. Many people are making really too
little money for their hard work," said Tsang, a Form Five student doing his
first summer job. "This work is really tough," he said while clearing food trays
and then sweeping the floor. "I hadn't imagined this work would pay only HK$21.
I hope the law takes effect soon." In the same district, 17-year-old Alan Tsang
was giving out flyers on the street for Japanese fast-food restaurant Yoshinoya
for HK$21 an hour. The part-timer will earn at least HK$1,000 more a month if
the rate is set at HK$25. "There should not be any doubt whether this law is
good for the general public. Too many people are selling their labour for next
to nothing," he said. Hank Cheng, 21, a project leader for a company that
conducts surveys, said he supported the law because it would provide better
protection for his team members. "They'll get a lot more than the HK$4,000 they
get now. And that'll not be a problem." Before the end of the summer break, the
Provisional Minimum Wage Commission will recommend the minimum hourly rate to
Chief Executive Donald Tsang Yam-kuen, taking into account the standards of
living, conditions in the labour market, and the need to foster employment and
social harmony.
Hong Kong invention speeds up phone
downloads - A model demonstrates how the new device speeds up mobile internet
access at the Chinese University campus in Sha Tin. Smartphone users tired of
watching YouTube videos with an intermittent freeze can expect faster download
times thanks to a piece of technology developed by Chinese University. The
technology, likened to a "turbo motor" by its inventor, Professor Jack Lee Yiu-bun,
associate director of CUHK's Centre for Innovation and Technology, is slated to
catapult the world into faster mobile internet access. And while it won't change
the way smartphones work or the way Web content providers run their sites, it
will keep impatient users happy. "Instead of building a turbo motor for every
car on the road, we built a turbo motor for the road," Lee said, explaining that
his innovation speeds up the operations of mobile internet access networks,
allowing for quicker download speeds. Mike Wang Jianya, Nokia Siemens Networks'
general manager for Taiwan, Hong Kong and Macau, playfully refers to the device
as a "magic box" that, placed in a network, accelerates the speeds of internet
applications by a factor of three, according to recent tests. Nokia Siemens
Networks collaborated with the university on the project. The device can operate
across several different technology systems and also allows internet
applications to make full use of bandwidth, which may not only save time for
mobile phone users but cut production costs for Web content providers. Lee, who
started his project to speed up mobile network internet access three years ago,
says his invention is still undergoing tests and improvements. He would like to
introduce a version for field trial in a year or two. The number of people
accessing the internet through mobile phones is growing at around 500 per cent
each year globally, Lee says. The market for mobile internet access in Asia and
specifically Hong Kong is strong and growing, according to Wang. He noted that
many of Nokia Siemens Networks' research and development departments, once
centred in western Europe, had now started moving branches to mainland cities
like Beijing, Shanghai and Chengdu. As part of the collaboration between the
mobile phone giant and Chinese University, the company has provided equipment to
give CUHK students a week-long live demonstration of commercially available
technology that allows internet access at very high speeds. 
Agricultural Bank
of China rises 2.2pc, improves on stock's Shanghai debut - Chief Executive
Donald Tsang Yam-kuen shakes hands with ABC chairman Xiang Junbo (left) and HKEx
chairman Ronald Arculli (right) at the listing ceremony yesterday. Agricultural
Bank of China executives breathed a sigh of relief yesterday as the stock
performed better on its Hong Kong debut than its A shares in Shanghai the
previous day. But investors' hopes for a big first-day advance fizzled. The
shares closed 2.2 per cent higher at HK$3.27 against an offer price of HK$3.20,
meaning that for every 1,000 shares, investors earned HK$70. The stock hit a
high of HK$3.31 during the day. The gain compares to the A shares' 0.75 per cent
rise on Thursday. The stock lost 0.4 per cent on its second day of trading in
Shanghai yesterday, closing at 2.69 yuan (HK$3.08). ABC was the most heavily
traded stock on the Hong Kong exchange yesterday, accounting for 17 per cent of
the market's total volume of HK$61.32 billion. Chairman Xiang Junbo said he was
pleased with the stock's debut given the weakness in global markets. Analysts
have been quick to point out that ABC's first-day performance is the poorest out
of the four major mainland lenders. But Ben Collett, head of equities at Louis
Capital Markets in Hong Kong, said the comparison was not entirely justified.
"ABC shares were priced too high for the sort of fantastic IPO performance that
it would have hoped for," he said. "A price of 1.5 times book value would have
been more appropriate for double-digit gains on the first day." ABC shares were
priced at roughly 1.65 times book value, while Bank of China is trading at
around 1.7 times. The upward movement of the shares on their first day of
trading would support the likelihood that the 15 per cent "greenshoe"
over-allotment option will be exercised, so long as the trend continues over the
next few weeks. This would give ABC the accolade of having the world's largest
initial public offering at HK$172.3 billion, overtaking that of Industrial and
Commercial Bank of China (SEHK: 1398) at US$21.9 billion in 2006. ABC this week
reported a 40 per cent year-on-year increase in net profit for the first half of
the year to 46 billion yuan, helped by robust loan growth. The bank will use the
funds raised in its IPO to replenish its capital base. Other big mainland
lenders have said they would also raise funds in the coming months following
last year's state-directed lending spree in order to meet the required capital
levels. Questions have been raised over the quality of ABC's loan book,
particularly the 325 billion yuan "special mention" loans, which could end up
being classed as non-performing, but those concerns have been ameliorated
somewhat by the promise of a massive retail base of 320 million customers. At
the end of 2007, the bank's non-performing loan ratio was 23.5 per cent, but a
government bailout brought that down to 2.9 at the end of last year. "Concerns
about the bank's fundamentals will continue to weigh on the stock, but these
will be priced in and the stock will and should trade at a discount to its
peers," Collett said. Xiang told reporters at the listing ceremony yesterday
that he anticipated the bank's provision coverage ratio to increase to 150 per
cent this year, without providing further details. Separately, investment banks
advising on the deal could see their fees hit, as Bloomberg reports that ABC is
negotiating a 36 per cent reduction in underwriter fees, or U$75 million, citing
unidentified people. ABC reportedly claimed that the fee cut is justified on the
basis that it negotiated directly with corporate investors, who accounted for
more than half of the buyers of the Hong Kong offering.
Hong Kong's travel industry is reeling after a wild rant by a shopping-mad tour
guide went viral on the internet and hit television screens across the mainland.
More than a dozen television stations picked up a video posted online and have
played it constantly during the past two days. Among them are Guangdong
Television, Guizhou Television and Liaoning Television, which serve mass-market
areas that Hong Kong looks to as sources of visitors. The seven-minute clip of
the female guide, nicknamed Ah Zhen, berating a group of mainland visitors as
cheapskates and threatening to lock them out of their hotel rooms because they
did not spend much at a jewelry store, provides a shocking view of what Hong
Kong can offer visitors. It follows a series of complaints about visitors being
strong-armed by tour guides to go shopping. Travel Industry Council chairman
Michael Wu Siu-ieng said last night that investigators have an idea of the
guide's identity and there will be a meeting today to look further into the
incident. The video clip went on a mainland website at the end of March but was
largely unnoticed until it went on YouTube this week. Ah Zhen is heard scolding
the tourists in fluent mandarin after they board their bus. "Don't tell me you
don't need to shop," she says. "So later are you going to say you don't need to
eat? "I will lock you out of your hotel rooms as you don't have enough to stay
there. "It's okay for you to stay poor at home, but when you travel outside
don't be like this. In this world there is no such thing as a free lunch?" She
goes on to talk about how the visitors found money for their airfares and then
chides them: "We don't do this for charity. Let me be responsible for charity. I
donated 10,500 yuan [HK$12,027] for Sichuan earthquke victims." She then points
to shops offering top- quality goods, before adding: "Why did you bother to come
to Hong Kong?" She laments that the group does not look good against another
group of tourists, who spent HK$137,000. "For a group of 24 people you only just
spent HK$13,000. How can you just walk out of the shop like that?" The man who
shot the video said on a mainland online forum that he joined the Hong Kong tour
on March 25 and the incident left him feeling bad. Recent incidents of tourists
facing harassment include a case last month when an elderly mainland man died
after a quarrel with a bogus tour guide during a shopping stop. Earlier this
month, four people from Henan complained they were abandoned in Guangzhou after
refusing to pay an extra HK$2,000 for not shopping in Hong Kong during a tour.
Tourism-sector legislator Paul Tse Wai-chun said the guide's behavior was
unacceptable and asked the Travel Industry Council to think about tough
penalties. "It's not enough if only the travel agent is penalized. Sometimes
they just give guidelines to tour guides and leave it to guides whether to
follow them or not."
Provincial officials in defence of Cantonese - Guangdong to boost local cultural
heritage. Debate over the future of Cantonese in Guangdong and the perceived
threat from Putonghua has intensified, with officials and influential figures
saying that the local culture and dialect should be respected. Guangzhou
residents are taking the initiative to protect their mother tongue, with a call
for people to gather next Sunday and recite Cantonese - a subtle form of protest
- winning widespread support. Against this background, top provincial leaders
started a two-day meeting yesterday to discuss "cultural development in
Guangdong", a propaganda department official said. It's a development that
underlines the significance of regional tensions on the mainland and anger at
edicts from Beijing seen to undermine local culture. The official said the
government would release a policy outline and new regulations afterwards to
boost "Cantonese cultural heritage". The authorities also plan to hold a public
forum, the official said, describing it as "one of the hottest topics that have
grabbed our leaders' attention". The forum, also scheduled to take place next
Sunday, will be organised jointly by the general office of the Guangdong
government, the provincial Development and Reform Commission and the propaganda
department. Scholars, teachers, students and businesspeople will all be invited
to attend. "Of course we will discuss how to protect Cantonese at the forum.
This is such a hot topic recently," the official said, and noted that even
provincial party secretary Wang Yang had spoken out on the issue earlier this
month. Wang was said to have pledged that "we won't let Cantonese culture die in
our generation". The spark that set off the debate was a controversial proposal
by Guangzhou's political advisory body this month that the provincial capital's
main television channel switch programming from Cantonese to Putonghua to make
the city a friendlier place for visitors from other provinces during the Asian
Games in November. The idea touched a raw nerve with many residents, who already
felt their culture and language was under threat from the central government's
promotion of Putonghua and an influx of migrants from other provinces. Many
people complain that Beijing's policy of mandating the use of Putonghua for all
formal occasions as well as in schools has marginalised Cantonese - a major
Chinese dialect with a long history. The advisory body proposed the switch even
though more than 80 per cent of the 30,000 people who responded to its own
survey said they were against the idea. It has sparked off heated debate
throughout the province, with many Guangdong people calling for action to
protect their mother tongue. They regard the proposal, together with other,
similar policies, as an attempt to suppress local tradition and character.
Guangdong people, although part of the Han Chinese family, are proud of their
unique heritage and their long history of defiance of central authority. Many
argue Cantonese is a more orthodox and traditional language than Putonghua -
previously known as Mandarin - which is a mixture of the northern Chinese
dialect, Manchurian and Mongolian. Prominent public figures have joined in the
debate. Flu expert Dr Zhong Nanshan - the mainland's severe acute respiratory
syndrome hero and a widely respected Guangdong native - said he strongly opposed
the use of Putonghua to replace Cantonese. "Cantonese is not just a kind of
dialect. It also carries the [essence] of southern Chinese culture and our
identity as Cantonese people," he was quoted as saying by GZTV Evening News -
the station's most popular programme - on Thursday. The move to "protect
Cantonese" has quickly turned into a unifying force for Guangdong people amid
the identity crisis they face. A call by some internet users for Guangzhou
residents to gather to defend their mother tongue spread fast and has been
echoed widely in internet forums. Those behind the call asked people to take
part in several "cultural events" next Sunday. The first would be held near a
subway station exit, with participants engaging in a mini-game to teach people
Cantonese colloquial phrases and sayings. There would be a rally later to call
for the preservation of Cantonese culture. As many as 20,000 people are said to
have told the organisers they will attend. The organisers said they would seek
approval for the rally from Guangzhou's Public Security Bureau. A bureau
spokesman said it had not received any application yet.
Rich Chinese homebuyers head
abroad - The mouthpiece of the mainland's Ministry of Commerce has resorted to
giving tips to cashed-up mainland there. Its advice: invest in the downtrodden
United States property market. The strong yuan and Beijing's tough measures to
cool property prices has sent a growing number of affluent mainlanders to look
for bargains overseas. The International Business Daily, which is owned by the
Ministry of Commerce, published a two-page report on whether it is the right
time to buy US property, and offered tips on which cities to explore. "Five
years ago, Chinese Americans came to China to buy homes; but now the situation
has been reversed," the newspaper said. The US National Association of Realtors
said China was the fourth-biggest source of foreign homebuyers in the United
States, followed by Canada, Mexico and Britain, in the year ending March 31.
Property agents expect more rich mainlanders will join the buying wave as a way
to diversify their investments and take advantage of falling property prices in
the US and other countries such as Britain. Kent Fong Chi-kit, co-head of
investment at property agency Cushman & Wakefield, said most bought properties
for immigration purposes and for long-term investment. "Our office in the US has
brought along developers and investors from the mainland to woo buyers amid
slackening demand at home. There are tens of thousands of foreclosed properties
for sale," he said. Most of those properties were surrendered to banks because
owners failed to pay monthly mortgage instalments after the US economy became
mired in the global financial crisis in late 2008, he said. California - where
median prices have plunged 44 per cent from the peak in early 2007 - is one of
the most popular states among mainland buyers, said Fong. "Mainlanders certainly
will make use of this opportunity to secure some great deals," he said. Andy
Tan, associate director for residential sales at Savills' Shanghai office, said
the US property market was well established on mainland investors' radar. "They
are going abroad largely owing to the [mainland government's] tightening policy
that is curbing price growth at home, and the strength of the yuan," he said. As
the US requires buyers to pay a capital gains tax of 23 per cent when they
resell, he said more mainland buyers were also opting for properties in London
where no capital gain tax is charged. Buyers found prices in London attractive
because the value of the British pound had dropped 20 per cent this year, he
said. A buyer from Beijing recently bought a property through his firm
comprising a 5,000 square foot country house and a cottage in Surrey for £4.5
million.(HK$53 million).
The 16-metre-long Nine Dragon Wall
has been a Wan Chai landmark since 1983. Government arts and heritage officials
have been asked to help find a new home for a 16-metre-long, glazed-tile wall in
Wan Chai - modelled on the Nine Dragons Wall near to Beijing's Forbidden City -
which is being relocated because of redevelopment. China Resources (SEHK: 0291)
Property offered the wall - built for HK$2 million in 1983 - to the government
as a gift, but officials said it could not be stored. The wall, which stands on
the ground floor of the China Resources Building, on Harbour Road, will have to
be removed from the site in September to make way for rebuilding and
refurbishment of the public park that stands in front of it. It was created in a
Beijing workshop, then shipped to Hong Kong when the company set up its base
here 27 years ago, Daniel Kwan Pok-man, the company's deputy general manager,
said. "The company wanted a strong presence in Hong Kong as a reminder of its
roots. The wall has become well known among Hong Kong people. Many people have
come to have their photographs taken alongside it," Kwan said. The wall, which
is four metres high, features glazed tiles depicting nine different colored
dragons flying in heaven. One end of the wall shows a scene at sunrise and the
other end shows night time with moonlight shining over the sea. The wall was
modelled on the design and proportions of the original Nine Dragons Wall in
Beihai Park, to the northwest of the Forbidden City, and created during the Qing
Dynasty. It was assembled with 4,700 glazed tiles made in a burning process
under 1,300 degrees Celsius.
Organic watermelon growing trials
bear fruit - The AFCD will hold a fair at Tuen Mun Farmers' Market tomorrow to
introduce the two organic watermelons. Two organic watermelons have gone on sale
after being grown successfully in trials. The "Super Sweet Black Angel 168" from
Australia and the "Red Lady" from Taiwan were introduced to farmers along with
other organic crops after being tested by the Agriculture, Fisheries and
Conservation Department. The Black Angel - characterised by its crimson flesh -
and the sweet, seedless Red Lady do not come cheap. They sell for about HK$100
each, a 50 per cent premium on other types. Farmers said demand had been strong
with one reporting that supermarkets asked him for more. The Red Lady has a brix
rating - a measure of the amount of sugar in fruits and vegetables - of 13 while
the Australian variety has 11.3. One brix is equivalent to one gram of sucrose
in 100 grams of solution. "The success of the large-scale watermelon growing
trial by some 40 farmers encourages other local farmers to upgrade their
facilities to be organically certified," department agricultural officer Chan
Siu-lun said. The department has been observing overseas experience and
collecting seeds from overseas agents to grow organic crops at its Tai Lung
experimental station. It then promotes suitable species to farmers and provides
them technical support. Ng Ping-leung, 46, a pig farmer turned organic farmer,
said the government had provided sufficient resources and technical support for
him to grow organic products. Ng has grown more than 300 watermelons this year
and is optimistic about sales as the watermelons he supplied to supermarkets and
restaurants sell out quickly. "They came back to me and asked for more," he
said.
Former Liberal Party chairman James Tien
Pei-chun has expressed interest in running for a Legco seat representing the
district councils if it is opened to non-district councillors. Tien, who lost
his Legco seat in New Territories East in the 2008 election, said he would not
rule out seeking such a comeback under the newly passed constitutional reform
package, which will create five new district council seats in Legco. "This is
very attractive, especially for business sector people who have the resources to
run a territory-wide campaign," Tien said. "If the election expenses ceiling is
HK$10 million, it means the candidate can run newspaper adverts many times."
Independent Regina Ip Lau Suk-yee is also considering running for a district
council seat on The Peak.
They make up three-quarters of
Shenzhen's workforce - and unlike their parents, many would like to settle down
there. Yet like their forebears, they are forced to work long hours to earn the
means to support families back home in their villages. And they are not the
delicate flowers, unable to work under pressure, that some employers and
sociologists have painted them as; rather, they are suffering the effects of
excessive overtime, poor factory conditions and a lack of companionship outside
the workplace. So say many of the twenty-somethings among 5,000-plus workers
questioned for a myth-busting survey about the lives and labours of Shenzhen's
migrant workforce. The survey was prompted after 13 suicide attempts by young
Foxconn workers in the first five months of the year, which raised questions
about working conditions at its factories. The younger generation of migrant
workers, contrary to popular belief, were found to be just as hard-working and
no more selfish than their elders in the survey. Ninety per cent of the twenty-somethings
polled said they worked long hours. And more than half said they were forced to
work far longer than the legal limits allowed because they were on very low
basic salaries. The average salary for a young migrant worker in Shenzhen is
1,800 yuan (HK$2,050) a month - including overtime. That's about 47 per cent of
the average income in the city last year. About four-fifths of that income is
spent on basic daily expenses such as food, accommodation and transport, the
workers said. And, like previous generations, they are working hard to subsidise
their families in rural areas: 90 per cent of those polled said they sent money
home every year - an average of 4,200 yuan each, or a fifth of their average
annual income. The study documented the impact on the lives of young migrant
workers of their extra hours, poor working conditions, low incomes and limited
social contact and their lack of access to social welfare. "Overtime has become
an extensive phenomenon among the younger generation of workers ... That's
because many manufacturers only pay them the statutory minimum wage and workers
are forced to work overtime to have more income," the survey said. "Even with
overtime pay, most young workers can only manage to live a life of struggle."
More than 40 per cent of young workers did not have regular social contact
outside the workplace and were unable to express their frustrations, the survey
found. And more than half of them lived in cramped, basic dormitories provided
by their employers, with more than six people sharing a tiny room. Of those with
children, 70 per cent were forced to live apart from their offspring. Young
workers' low salaries also hindered their efforts to settle down in cities and
many could only manage to visit their rural families once a year. Seventy per
cent of the young workers interviewed said they spent 2,500 yuan on the annual
journey. Like their parents, young migrant workers are unable to enjoy social
welfare because of the mainland's hukou residential permit system. More than
three-quarters of those polled want the same treatment as city dwellers, and
they want the hukou system scrapped altogether. Last month, Peking University
sociologist Lu Huilin urged the authorities to change the country's current
development model, saying it sacrificed the dignity of millions of workers.
"[The mainland] used a lot of cheap labour to pursue economic growth while
ignoring workers' basic human rights and social equity," he said. "Young migrant
workers resist the [sweatshop] system by instinct ... If you don't change it,
problems will emerge in an endless stream." Unlike their parents' generation,
the survey also found young migrant workers desired more personal growth and
development and were more willing to settle down. It said young workers valued
career prospects and on-the-job training much more than their parents'
generation, and many expected to start their own businesses using the skills
gained from their jobs in Shenzhen. The poll was conducted by Shenzhen's labour
union federation and Shenzhen University.
Police raided the offices of Henderson Land (SEHK: 0012) and a related law firm
yesterday in a sharp escalation of the government's investigation into flat
sales at the developer's 39 Conduit Road tower. Officers from the force's
commercial crime bureau seized documents concerning 20 uncompleted sales at the
luxury block in Mid-Levels that led to suspicions of market manipulation, and
invited representatives of the developer to assist with the investigation. But
police said no one was arrested. Police Commissioner Tang King-shing said
companies and people related to the aborted sales could also be targets of the
investigation. "This is a very complicated case and many people are involved.
The investigation does not only cover the companies involved but also those
possibly related. We will conduct the investigation with a multi-dimensional
approach," he said. Henderson said it welcomed the investigation. "We will do
our best to offer assistance so that the truth will be revealed," a spokeswoman
said. The raids came a day after Chief Executive Donald Tsang Yam-kuen promised
legislators he would make use of the opportunity arising from the controversy to
address the problem of unfairness and lack of transparency in property
transactions. Legislators, lawyers, public commentators and the Lands Department
have questioned the collapse of the 20 sales - including a duplex which went on
sale for a record-breaking HK$88,000 per square foot - that were among 24 deals
publicised by the developer and which were credited with boosting the luxury
property market. They have also asked why the buyers forfeited only 5 per cent
of the purchase price and were not asked to compensate Henderson for any losses
on resale. The Lands Department, under public pressure, has requested
information from Henderson about the sales since March, including why it
refunded deposits of more than HK$175 million to buyers in the aborted deals.
The fact that the buyers were all shell companies registered in the British
Virgin Islands and represented by a single law firm, Lo & Lo Solicitors, has
also intensified speculation the transactions may have been "created" to boost
prices of flats in the block and of the company's shares. Henderson has released
repeated public statements maintaining that the practice of using shell
companies is common within the industry, but it could not stop investigations by
the police and the Securities and Futures Commission.
Champion jockey Douglas Whyte claimed
the title for a 10th straight season in the most unlikely of places at Happy
Valley last night - sitting out the action as Brett Prebble's last chance to
dethrone him ticked past. In racing terms, the 2009-10 title was a race in which
Whyte missed the jump, worked his way through the field, then took a severe
check or two at the top of the straight, but finally arrived as the winner on an
anti-climactic winless night. With three races to run, the equation was still
doable for Prebble, if he could take the last three events in which he had
strong chances - he finished with two seconds and a win, but Jumbo Gold's second
to Soaring River was the end of the chase and Whyte didn't even ride in the
race. "It's an unusual feeling - I don't think I've ever won a championship from
the room like that as a spectator and I don't think it will ever happen again -
you know me, I would always prefer to be out there in the action," Whyte said.
Democrats are weakening HK, tycoon says -
Outspoken property magnate Ronnie Chan says protesters espousing Western-style
democracy are driving local politics to a dead end. It's a Thursday afternoon at
a five-star hotel in Nanjing and Hong Kong tycoon Ronnie Chan Chichung, in his
capacity as executive committee chairman of the Better Hong Kong Foundation, is
chairing a discussion with mainland vice-mayors on their cities'
competitiveness. Vice-mayors - who evidently climb the career ladder by relying
on various skills other than public speechmaking - take turns to speak,
displaying a range of flat tones, accented Putonghua and emotionless facial
expressions. Chan, who is chairman of Hung Lung Properties, nevertheless listens
patiently, smiles encouragingly, and takes occasional notes. When he speaks, his
Putonghua carries little evidence of his Hong Kong origins. He makes various
supportive comments: "Guangzhou has improved significantly over the past years.
Its public hygiene has improved a lot"... and ... "I am impressed by the
progress Nantong has made in recent years." The agreeable Ronnie Chan on show in
Nanjing is very different to the tycoon so well known here for his critical
observations on Hong Kong, the property market, and democracy; and for
occasionally crossing swords with Western journalists. Hours after the
vice-mayors' forum, the tycoon is back to form in an interview with the South
China Morning Post (SEHK: 0583). Chan says Hong Kong politics are heading for a
dead end, propelled by protesters who espouse Western-style democracy and the
judiciary. The democrats, he says, have switched from opposing Beijing to
opposing the Hong Kong government because they "bully the weak and are afraid of
the strong". He says the judiciary "wrongly think they are so almighty that they
can rule on everything", and he welcomes the early retirement of Chief Justice
Andrew Li. He is unapologetic for holding and expressing strong views. "I
haven't been buying land for 10 years in Hong Kong. I have no conflict of
interest on the subjects I comment on. Still, I'm a Hong Kong person. I want
Hong Kong to be good," he says. Hung Lung has recently been active developing
commercial properties on the mainland, its latest development a shopping mall in
Shenyang. Hang Lung's flagship commercial building in Shanghai, the high-end
Plaza 66 shopping mall, is a household name on the mainland. Setting aside the
recent warming relationships developing between the Democratic Party and
Beijing, Chan said the democrats by and large were "self-interested, quick to
use people's complaints to attack the government, making the government weak".
"They used to oppose the central government for the sake of opposing. Now they
are opposing the Hong Kong government, because they bully the weak and are
afraid of the powerful," he said. He said the democrats were turning Hong Kong
into an irrational society. "Popularism will lead to socialism," he said. "Hong
Kong will be over if we go for socialism. The democrats only promote the upside
of universal suffrage, they don't discuss the downside. All the countries with
the highest debts are Western countries whose governments are elected by the
people. Western democracy is a dead end." He agreed Hong Kong did not offer
young people the same opportunities that it did decades ago but thinks the right
way forward is to seek opportunities on the mainland. "China's development is a
rare opportunity which only happens once every few hundred years," he said. The
last time the world had such a chance was in the United States between 1890 and
1914, he says. "In 1890, the US had only 36 million people, in the 1960s, it had
63 million. The significant rise of population was because many people moved
from Europe. There were people who refused to move to the US. They stayed in the
UK and France. Of course there were risks in moving to the US but history proves
that those people made the right decision." Referring to a common complaint of
twenty-somethings in Hong Kong, he says: "The so-called `Post 80s'. Who are
they? They complain that Hong Kong has no opportunities and they are poor. This
way of talking is wrong. All they have to do is go to the mainland and learn
Putonghua. I don't know what they are doing in Hong Kong protesting against the
high speed railway in the name of protecting a village. My son works in
Shanghai. We are the best-positioned people to cash in on the mainland's
development." Chan is particularly scathing of the judiciary, saying he hopes
that High Court chief judge Geoffrey Ma Tao-li, who will succeed Andrew Li Kwok-nang
as Chief Justice of the Court of Final Appeal when he retires at the end of
August, will lead the court to back to the "right track". "In Hong Kong our
legal system wrongly thinks it is so almighty that it can rule on everything,"
he said. "It rules on social issues and moral issues, such as gay marriage. It
is wrong to do so. Unlike Supreme Court judges in the US, our judges are
non-partisan. We are using the British legal system, the new chief justice
should follow the practice of his counterparts in the UK, only ruling on legal
issues." Chan says the 1999 right of abode case - in which a Court of Final
Appeal decision granted residency to mainland children with at least one Hong
Kong parent, only for the ruling to be overturned when the National People's
Congress reinterpreted the Basic Law - was a "classic example". "Andrew Li
should be retiring early. Courts in other countries would not rule this way.
[Ma] should not repeat what had happened in Hong Kong over the past 10 years.
Cases similar to the right of abode one should not be repeated." Chan has
disagreements with Hong Kong's land policy, which he says has propped up
property prices by suspending land auctions until recently. He adds that Hong
Kong does not need subsidised housing. "The government can do a lot through
administrative measures," he says. "One way of ensuring developers build for the
lower income group is to order them to construct small units and ban car parks
and club houses from those projects." But he defends the government against
accusations that it has colluded with big business and widened the wealth gap.
"It is ridiculous to say the government favours the business sector. It
doesn't," he said. "And what is wrong with creating a favorable business
environment? People doing business create employment and pay tax." He says
instead that a major cause of the wealth gap is a lowering in the quality of
Hong Kong people themselves. "Some people have no chance of getting married in
Hong Kong so they go to the mainland. As a result, we have many people [in Hong
Kong] whose education level is low. Because they have received little education,
they can't find a job in Hong Kong."
About 60 Hainan businesses
ranging from agricultural, pharmaceutical and hi-tech firms to those in tourism,
water treatment and property development are seeking listings on the mainland or
in Hong Kong, a provincial official said. Wang Niansheng, an officer with the
provincial government's finance department, said it was trying to help the
companies comply with listing standards at the mainland and Hong Kong exchanges.
Funds raised in the proposed listings will be used to finance projects in Hainan,
he said. There are now 22 Hainan-based listed companies. Of those, two are
listed on the Hong Kong stock exchange while the rest trade on the mainland
bourses, he said. The two companies listed in Hong Kong are Melian Airport and
China BlueChemical, which is the country's second-biggest maker of nitrogenous
fertilisers. In the past six months, Hainan Strait Shipping and Hainan Honz
Pharmaceutical both listed on the Shenzhen stock exchange, he said. Over the
next five years, Wang said he expected Hainan to need total investments of more
than one trillion yuan (HK$1.15 trillion) to develop the island into an
international tourism destination by 2020. Projects in the pipeline include the
proposed Rail Express, which would shorten the travelling time from Haikou in
the north to Sanya on the island's southern tip to 90 minutes from present three
hours. Other developments include the Dongfang power plant phase one, a theme
park and a convention and exhibition centre. Lawrence Fok, chief marketing
officer of Hong Kong Exchanges and Clearing (SEHK: 0388), said companies from
Russia, Mongolia and France had listed in Hong Kong. Last year, companies raised
a total of HK$240 billion through initial public offerings in Hong Kong, and a
total of HK$390 billion was raised by already listed firms, he said. Since 1993,
Fok said mainland companies had raised about HK$250 billion through initial
public offerings. "Hainan companies can also make use of this platform to
strengthen their size and expansion," he said. But he said companies face the
challenge of getting the right investment bankers to facilitate their listing
plans. "I once heard from a mainland firm that complained it could not secure
any investment bankers as its listing sponsor. But I told the firm it could be
because its new shares were not likely to get good prices at that moment," Fok
said.
Agricultural Bank of China's A shares
could rise more than 5 per cent on their trading debut in Shanghai today. Its
performance would probably set the tone for ABC's H shares in Hong Kong - which
start trading tomorrow - and the overall mainland market, analysts said. If the
over-allotment options were exercised, the only unlisted bank among the
mainland's Big Four lenders would set an initial public offering record by
netting US$22.1 billion in the Hong Kong-Shanghai dual listing. In Shanghai, its
offering price of 2.68 yuan (HK$3.01) translates into 1.7 times its forecast
book value for 2010, according to Haitong Securities analyst She Minhua. A
shares of Industrial and Commercial Bank of China (SEHK: 1398), the country's
biggest lender, currently trade at two times book value while China Construction
Bank (SEHK: 0939) has a book value multiple of 1.8. "Investors take it for
granted that ABC should be as expensive as its rivals," She said. "It is likely
that the shares will rise on the first trading day." The bank's IPO price was
set lower than expected as Beijing tried to ensure a successful listing of the
once debt-ridden lender. During its price consultation process in late June, the
bank was reportedly looking to offer its 22.2 billion A shares at no less than
2.7 yuan a piece. It later set a price range at 2.52-2.68 yuan to attract
buying. ABC offered its H shares at HK$3.20 each and it will make a Hong Kong
debut tomorrow. The offering of ABC, which netted 68.3 billion yuan from the
Shanghai exchange, would further soak up funds on the weak market, analysts
said. There is speculation that institutions will be encouraged by the regulator
to bolster ABC's shares since it is seen as a political imperative to launch a
successful IPO of the giant lender. "If ABC's shares rise, other banks could
also jump," Bohai Securities analyst Zhou Xi said. "The heavyweight banks'
performance would therefore decide the movement of the overall market." ABC said
it would use the IPO proceeds to replenish capital. The money could also be used
to cover its potential bad loans, supporting loan growth and network expansion,
analysts said. The bank had 325 billion yuan of "special mention" loans at the
end of last year, almost equal to its 343 billion yuan of shareholder equity.
China leads global IPOs - A woman outside Agricultural Bank of China Ltd's
Shanghai branch. Agricultural Bank of China Ltd has raised $19.2 billion in the
world's biggest IPO in four years. China will continue to lead the global
initial public offering (IPO) market in terms of the funds raised and the number
of deals, international accounting firm Ernst & Young said in a report on
Tuesday. Mainland companies dominated the global IPO market by raising $188
billion in 495 deals on the top four bourses - New York Stock Exchange, Nasdaq
Stock Market, London Stock Exchange and Hong Kong Stock Exchange - in the past
decade, the report said. "China will maintain its lead in the IPO market as more
mainland companies tap overseas capital pools even as they expand their business
locally," said Terence Ho, strategic growth markets and China IPO leader at
Ernst & Young. Hong Kong remains the main choice for mainland companies as a
listing destination, while American bourses are the choice for small and
high-growth information technology companies, Ho said. The domestic capital
markets are also becoming more attractive with more Chinese companies looking to
raise funds at home than abroad. Many red-chip companies, which have businesses
in the mainland but are listed overseas, are also expected to return to the home
market after Shanghai launches the international board. During the first half of
this year, 175 mainland companies raised $32.1 billion from domestic and
overseas floats, exceeding the $28 billion raised during the same period last
year, the report said. The Shanghai Stock Exchange is growing fast with its
market capitalization rising tenfold in the past decade to $2,196 billion as of
May 2010. The latest report from Ernst & Young also found that BRIC (Brazil,
Russia, India and China) countries accounted for nearly 68 percent of the total
$248 billion of funds raised in the past decade from the top four bourses.
Russia was ranked the second in the global IPO market with funds of $39.1
billion raised from 39 overseas IPOs in the past decade. "While a majority of
the Russian companies chose to list on the London Stock Exchange, many are also
considering floats in Hong Kong and also expressed interest in Shanghai's
international board," Ho said. Global IPO activity in the second quarter has
shown signs of a strong rebound driven primarily by the emerging markets, who
will continue to lead the global capital market recovery, said Gregory Ericksen,
Ernst & Young's global vice-chairman for strategic growth markets.
Minmetals on a rare earth trail - Rare
earth being loaded onto a ship for export at Lianyungang port in Shandong
province. Metals trader to invest 1b yuan in Jiangxi over next two years -
BEIJING - China Minmetals Corp is planning to invest 1 billion yuan ($148
million) for rare earth processing projects in Ganzhou city of Jiangxi province
over the next two years to gain mining rights for the valuable resources. "The
nation's largest metals trader has been eyeing rare earth mines for some time
now. The move is also in line with the local government's requirements for rare
earth miners," said official sources. According to a document issued by the
Ganzhou municipal government in 2008, a company that invests more than 1 billion
yuan in the city over three to five years is eligibal for local mining rights.
However, Minmetals' proposal still needs to be cleared formally by the local
government, the sources said. He Jinglin, Minmetal's media manager, said he
could not comment on the matter, as he was not aware of the same. "Minmetals
does not own any rare earth mines and that has hampered it in its quest to boost
resources in the south. At the same time the company also has ambitious plans to
be present across the complete industry chain," said Liu Minda, an analyst with
Huatai Securities. Ganzhou owns 88 of the country's 104 mining licenses for rare
earth. It has verified reserves of 2.89 million tons of ion-absorbed type rare
earth elements, accounting for 40 percent of the nation as a whole, said Lin
Xiaobing, a spokesperson for the Ganzhou Committee of Industry and Information
Technology of Jiangxi. China stopped issuing new mining licenses for rare earth
elements, used in military weapons, electronics, and automobiles, until June 30,
2011. State-owned Minmetals made its first strides in the resource-rich region
in October 2008 by teaming up with two Ganzhou companies to establish a joint
venture - China Minmetals Rare Earth Co mainly for rare earth separation.
However, Minmetals has not yet directly participated in the mining sector - the
most critical part from a strategic perspective. Instead, it has only joined
with Ganzhou Rare Earth Mineral Industry Co, a local government-backed entity
that owns the sole mining rights in the city for rare earth exploration. "Minmetals'
quest to own sole mining rights in Ganzhou has not been accomplished yet," the
officials said. The company had earlier said it intends to spend at least 4.5
billion yuan over the next five years to explore minor metals including rare
earth in Hunan province. Minmetal's moves are also in tune with the government's
plan to keep rare earth mining within the ambit of SOEs. Last month, it had
identified several large State-owned miners for rare earth exploration in a bid
to consolidate reserves. China, which produces 95 percent of the world's rare
earth metals, has reduced production levels for 2010 and cut export quotas by 72
percent for the second half to 7,976 metric tons to protect the minerals from
being over-exploited.
The owner of the Taco Bell, Pizza Hut and KFC fast-food restaurant brands said
Tuesday that its second-quarter profit fell slightly because a one-time gain a
year ago outpaced its revenue growth. Yum Brands Inc gave an upbeat forecast,
citing ballooning growth in China, and raised its full-year outlook. But its
shares fell in aftermarket trading when investors saw revenue was flat at Yum
restaurants in the US that have been open at least a year. There were "some
whisper expectations" of higher sales at established restaurants in China, said
Larry Miller, a restaurant analyst with RBC Capital Markets. The market's tepid
reaction also might reflect disappointment in the company upgrading its
full-year earnings projection by just 4 cents per share, from $2.39 to $2.43, he
said. Still, Miller said it was basically an "all-around good quarter" for the
company. Analysts were expecting $2.42 per share for the current fiscal year.
Louisville-based Yum said it earned $286 million, or 59 cents per share, for the
three months that ended June 12. That compares with $303 million, or 63 cents
per share, a year earlier -- when it recorded a $68 million one-time gain for
increasing and consolidating its stake in its KFC business in Shanghai in China.
Excluding such one-time items from both quarters, the company earned 58 cents
per share for this year's second quarter, compared with 50 cents per share a
year earlier. Analysts expected the company to earn 54 cents per share in the
most recent quarter on revenue of $2.54 billion. Yum said its revenue rose 4
percent to $2.57 billion. The company, whose brands also include Long John
Silver's and A&W All-American Food, operates more than 37,000 restaurants around
the world. The company's operating profit soared 33 percent in China, where it
opened 59 new restaurants during the quarter, for a total of 155 so far this
year. Sales there grew 15 percent while sales at restaurants open at least a
year -- a key barometer for restaurant performance -- rose 4 percent. "The China
business is firing on all cylinders," said Yum spokesman Jonathan Blum. Across
Yum's US business, its operating profit rose 10 percent as commodity costs fell
and revenue rose at Pizza Hut and Taco Bell, offset by a decline at KFC. Pizza
Hut -- where revenue at restaurants open at least a year rose 8 percent --
benefited from a $10 pizza promotion. "It's certainly not as profitable as
selling high-priced pizzas, but they're selling a lot of them," Miller said.
Taco Bell posted a 1 percent boost in the key revenue figure, while it fell 7
percent at KFC. Net income in the international division, which doesn't include
China, rose 7 percent, adjusted for currency fluctuations. And revenue at
restaurants open at least a year edged up 1 percent. Yum Chairman and CEO David
C. Novak predicted that Yum will open about 1,400 international units this year,
consistent with the pace of restaurant openings in the past five years. Yum
expects to open some 475 restaurants in China this year, plus about 1,000 more
in its separate international division, Blum said. The shares fell $1.31, or 3.1
percent, to $40.40 in after-hours trading.
Yung Kee restaurant founder Kam
Shui-fai with sons Kinsen Kam (right) and Kam Kwan-lai (left). Court hears
roasting of geese lays golden eggs - According to the Kam family, which runs the
celebrated Yung Kee restaurant, no less than HK$880 million in cash, a whole
commercial block in Central worth at least HK$1 billion, and HK$127 million in
other net assets. Profits are pretty good too, despite a continuing legal battle
among the Kam siblings: in 2008 and last year, the restaurant made more than
HK$50 million a year. And as barrister Jat Sew-tong SC, acting for one of the
brothers, reminded the Court of First Instance, that doesn't include goodwill
and the cash value of the Michelin-starred Chinese restaurant's trademark. Jat
was acting yesterday for eldest brother Kam Kwan-sing, widely known as Kinsen
Kam, who is seeking to wind up holding company Yung Kee Holdings Ltd. The
company wholly owns another company, Long Yau, which has four subsidiaries, one
of which runs the restaurant. Jat was arguing against a move by younger brother
Kam Kwan-lai and nephew Carrel Kam, who asked the court to strike out Kinsen
Kam's winding-up petition. Clifford Smith SC, for the younger pair, said there
was no reason to subject the successful and profitable business to a winding-up
order. "It is a highly profitable business making a lot of money this year and a
lot of profit accumulated due to the profitability of the companies," Smith
said. He warned that the business success of the restaurant might not continue
if it was taken over by a new third party after the company was wound up. Smith
also said the recent row over the family business had shaken customers'
confidence and sparked fears that their favourite eatery could close. He said
the restaurant had recently received inquiries from customers worried about the
validity of rice dumpling coupons it had sold. A customer who planned to book
for 110 people for the Mid-Autumn Festival at a value of more than HK$80,000 had
become worried and asked the restaurant about the situation. But Jat said
winding up the holding company "does not per se affect the business or goodwill
of the restaurant". "The application by another side to strike out is
misconceived and must be dismissed because the company is a holding company," he
told the judge. "Apart from holding a 100 per cent shareholding in Long Yau, it
has no other substantial asset or operative business. "The petitioner [Kinsen
Kam] does not seek to wind up Yung Kee Restaurant Group Limited, which is
operating the Yung Kee Restaurant business." Jat also said Kinsen Kam had
proposed selling his shares but his brother failed to respond to the offer.
"Although [the younger brother] asserts that he is willing and able to purchase
my client's 45 per cent shares in the company - `subject to finalisation of
arrangements as to the basis of valuation and the mechanism through which the
buy-out is to be effected' - there is no evidence to show that he in fact has
and will continue to have the necessary financial means to purchase my client's
shares at the value assessed by the court at trial," Jat said. Jat believed the
goodwill of the restaurant could attract many hotels and business groups willing
to offer far more than the younger brother was willing or prepared to pay. "It
must be remembered that my client's shares are worth hundreds of millions, if
not billions," Jat said. The recent family row had not affected the restaurant's
business, he said, as sales in the first five months of the year were even
better than for the same period in the past few years, and sales of rice
dumpling coupons had also gone up. And there had been no adverse impact on staff
morale, with no staff at the supervising level having left, he said. Judge
Andrew Chung On-tak reserved his judgment.
The Hong Kong unit of the Bank of China
has been authorised to provide yuan cash settlement services for Taiwanese
lenders operating in the city. Bankers said the announcement by the People's
Bank of China showed Hong Kong had a role to play in the closer ties between the
mainland and Taiwan after the two sides signed a landmark trade pact - the
Economic Co-operation Framework Agreement - last month. It would also benefit
Hong Kong's development as an offshore trading centre for the yuan, as Beijing
continues the internationalisation of the currency, they said. Taiwanese
government officials said the advantage of the scheme is that local banks will
be able to procure yuan notes more cheaply for their retail customers and reduce
the number of fake notes in circulation. At present, the island's banks buy yuan
through Bank of America and HSBC which results in only a limited supply of
banknotes being available in Taiwan. "In the future, Bank of China (Hong Kong)
will be able to supply us with new notes at a lower cost and the supply will be
steady," George Chou, deputy governor at the Taiwan's central bank, told
Bloomberg. There is no cap on the amount of exchange between banks, but
Taiwanese individuals will be allowed to exchange only up to 20,000 yuan
(HK$22,900) at a time. "The arrangement will facilitate travel across the Taiwan
Strait and lay the foundations for a cross-strait currency settlement mechanism
and enhanced cross-strait cooperation on currency administration," the People's
Bank of China said. The issue of when banks in Taiwan will be allowed to start
taking yuan deposits and provide remittance and trade settlement services in
yuan remains to be negotiated, the central bank said. He Guangbei, vice-chairman
and chief executive of BOCHK (SEHK: 2388), said his bank would comply with all
regulatory requirements of the mainland and Hong Kong in preparing the new
services, but had no clear timetable for the launch, only saying it would be
ready as soon as possible. "We trust that the service of supplying and
repatriation of yuan cash notes for the Taiwan region will further facilitate
exchanges ... across the strait, and strengthen economic and commercial ties
between the two places," He said. Financial Secretary John Tsang Chun-wah said
the arrangement showed Hong Kong's established yuan clearing platform was able
to facilitate cross-strait co-operation. "This also underscores that Hong Kong,
as a leading international financial centre in the region, can play an important
role in cross-strait financial co-operation and development," Tsang said.
Monetary Authority chief executive Norman Chan Tak-lam said the mainland this
month will further lift the restrictions on yuan transfer between Hong Kong bank
(SEHK: 0005) accounts, allowing brokers to trade yuan shares and bonds for
clients, and fund houses to issue yuan funds.
Repulse Bay parcel could fetch HK$1b -
Owners at the top end of market opting to cash in on surging prices for luxury
homes. The five-storey house (centre) and five-storey residential block at 20
and 22 South Bay Road that have been put up for tender.
Workers drain away polluted
water near the Zijin copper mine in Shanghang yesterday. Zijin Mining (SEHK:
2899)'s share price plunged 12 per cent yesterday on concerns the nation's
largest gold producer faces hefty compensation claims and production delays
after a toxic chemical spill into a major waterway. The Xiamen, Fujian
province-based company said on Monday night that a leakage of pollutants from a
pond on July 3 in its Zijinshan copper mine due to continuous heavy rain
resulted in acidic copper-containing waste water entering the Ting river. Zijin
said 9,100 cubic metres of waste water was estimated to have entered the river
before the leak was brought under control on July 4. After emergency measures,
water quality in the river returned to the government's category III standard -
which meant it was suitable to be used as a tap water source - on July 8, and
that water supply of Shanghang county and downstream regions was not affected,
it added. Despite saying dead fish were found downstream causing "a certain
economic loss", and that the incident would have a "substantial effect" on the
mine's copper production, Zijin did not provide further details. Spokesman Zheng
Yuqiang said he had no knowledge of any proposal for compensation to the fishing
industry, adding that the cause of the incident was still under investigation.
"If we are found to be responsible for the incident, we will bear
responsibility," he said. When asked why Zijin only reported the incident nine
days after it happened while its shares kept trading with the price-sensitive
information kept from investors, Zheng said: "We did not want to cause chaos in
society while the impact of the leakage was not clear." According to a speech by
Shanghang deputy mayor Lan Fuyan on Monday and posted on the county government's
website, the county government has offered to purchase all of the area's farmed
fish at 12 yuan (HK$13.75) per kilogram. The compensation will be paid by the
government and claimed back from responsible parties later. Assuming the amount
of affected fish was equivalent to the preliminary estimate of 1.89 million
kilograms as reported by Xinhua on Monday, the compensation could amount to
22.68 million yuan. Lan said the mine had been ordered to cease production to
fix the leak caused by the damage to the waterproofing in the pond. A Credit
Suisse research report estimated that for each month of production disruption at
the mine, Zijin's copper output would be cut by 1.7 per cent and the company's
net profit by 0.9 per cent. Zijinshan is estimated to account for 32 per cent of
Zijin's copper output this year, and 53 per cent of gold output, according to a
Merrill Lynch report. Zijin is forecast to post a net profit of 5.4 billion yuan
this year, up 52 per cent from 3.55 billion yuan last year, based on the average
estimate of 16 analysts polled by Thomson Reuters. Zijin's shares yesterday
ended 12.2 per cent lower at HK$4.90.
Employees work inside a Foxconn
factory in the township of Longhua in the southern Guangdong province. Foxconn
International Holdings Ltd urged a Hong Kong judge to throw out a lawsuit filed
by BYD Co, mainland's largest maker of rechargeable batteries, that accuses
Foxconn of unlawful interference with its business, defamation and conspiracy to
injure. BYD's claim should be struck because the company failed to provide any
"material" facts or allegations to back its case, Winston Poon, Foxconn's
lawyer, said at a hearing today in the Court of First Instance in Hong Kong.
"Not only are the matters immaterial, they are also vexatious," Poon said. "They
will waste the court's time and money." BYD, backed by billionaire Warren
Buffett, countersued after a 2007 lawsuit filed by two Foxconn units that
claimed BYD recruited Foxconn employees and stole Foxconn's trade secrets. BYD
doubled its revenue from the sale of mobile phones in each of 2005, 2006 and
2007 as a result, according to court documents. BYD had failed to persuade a
Hong Kong judge to throw out the Foxconn lawsuit and let the case be tried in
Shenzhen, where BYD is based. Judge Thomas Au in Hong Kong ruled June 27, 2008,
he wasn't convinced Shenzhen was a preferable venue. Liu Xiang Jun, former chief
operating officer of one of the Foxconn units, joined BYD in 2005. He was
convicted in Shenzhen of infringing Foxconn's business secrets, according to
court documents. Si Shao Qing and Zhang Jian, who had worked for the same unit,
were also convicted of infringing Foxconn's business secrets. Foxconn, the
world's largest contract-manufacturer of mobile phones, faces competition from
BYD for orders of mobile phone components from customers including Nokia Oyj.
The mainland, which has seen a string of
food safety scares in recent years, is likely to experience similar problems in
the future due to its vast size, a top official was quoted as saying. The
comments by senior health ministry official Su Zhi came after authorities seized
tonnes of milk powder tainted with melamine, the chemical responsible for the
deaths of six babies in 2008, in at least three provinces. "With such a huge
territory and population in China, it's hard to avoid all food safety threats
and to put all unscrupulous businessmen under scrutiny," Su was quoted by the
China Daily as saying at a food safety forum. Su pledged that the government
would investigate every possible breach of food safety regulations and punish
those responsible for wrongdoing that could endanger people's health. He refused
to say whether the tainted products seized recently were left over from the 2008
scandal, which caused 300,000 babies to fall ill and rocked the country's dairy
industry. Melamine is used to make plastics but has been widely added to dairy
products to give the appearance of higher protein content. In 2008, the toxic
chemical was found in the products of 22 dairy companies. The discovery led to
worldwide recalls of dairy products. Melamine ingestion can cause kidney stones
and urinary tract infections. A total of 21 people were convicted for their
roles in the 2008 scandal and two were executed. The government has repeatedly
said that all tainted products were seized and destroyed after the scandal and
that there was no further public health threat, but reports of tainted items
have continued to trickle out. Authorities recently seized 76 tonnes of
contaminated milk powder, state media reported last week. Two officials from the
dairy company at the center of the latest find were detained.
COSCO China acquires rights to Athens port
- Despite financial turmoil surrounding Greece, COSCO Pacific, a port operator
subsidiary of China's State-owned shipping giant China Ocean Shipping (Group) Co
(COSCO), has signed a $4.2 billion deal to take over management of an Athens
container port. COSCO signed a 35-year lease in June and will spend $707 million
to upgrade port facilities, build a new pier and almost triple the volume of
cargo the port can handle. The move is part of an effort to create a network of
ports, logistics centers and railways to distribute Chinese products across
Europe - in essence a modern Silk Road - hastening the speed of East West trade
and creating a valuable economic foothold on the continent. The Piraeus port in
Athens can currently load and unload 1.8 million containers a year. With a
strategic position near the Straits of Bosphorus, the port also provides a way
into the Black Sea region, central Asia and Russia. COSCO aims to make the
container port a hub to rival Rotterdam - Europe's largest port. Many see the
latest COSCO investment as just the beginning of a far broader scheme to access
European markets. By the end of the year China is expected to make a joint bid
with a Greek company to create a 200 million euro ($252.2 million) logistics hub
at Attica, near the port, to distribute goods from China into the Balkans and
the rest of the continent. The Chinese are also in talks to buy a share in the
struggling State-owned railway in Greece. Agreements in June - This June, Zhang
Dejiang, China's vice-premier, lead a delegation of 30 leading businessmen to
Athens, signed 11 investment agreements worth hundreds of millions of euros in
Greek shipbuilding, logistics, infrastructure construction and telecom projects.
Greek officials said the deals were the biggest single investment China has ever
made in Europe. Five Greek ship owners signed deals to build as many as 15 bulk
carriers at COSCO shipyards, the construction arm of the Chinese shipping
heavyweight. Separately, George Economou, owner of DryShips, a Greek company
listed on the New York stock exchange, signed a letter of intent to set up a
joint venture with COSCO's bulk carrier division. The shipping agreements
highlight a growing trend by Greek maritime companies that trade with China to
build new vessels at Chinese yards, analysts said. Some industry analysts say
that the Chinese investment is something the cash-strapped Greek government
welcomes with open arms. Many in Greece believe the arrival of COSCO is exactly
what its ailing economy needs. "This is the locomotive for our development,"
said Nikolaos Arvanitis, president of the International Maritime Union - the
organization that represents the world's largest shipping companies, including
COSCO. "Greece needs investment. The Chinese came with good will and we are open
to other people who want to come and invest here," told a European newspaper.
"Our old ways of working were very primitive. Now we can really drive forward
and improve Greece's economy. There is nothing to be afraid of - the Chinese are
here to develop our infrastructure, and we will benefit. It is a win-win
project," a worker with the port said to the local media. Yet COSCO's physical
presence in Greece remains limited. Staff in the offices of COSCO's shipping
company, in a office block overlooking cruise ships at the passenger terminal,
said that of their 45 members of staff, only the director and financial director
were Chinese. In the port terminal offices, of 250 members of staff only 10
administrative and managerial staff were Chinese. "We have a saying in China -
construct the eagle's nest, and the eagle will come," Wei Jiafu, COSCO's chief
executive, said in a recent television interview with Greece's Skai Television.
"We have constructed a nest in your country to attract such Chinese eagles." "COSCO
wishes to see more Chinese companies invest in Greece and bring their goods and
services to central Europe through the port of Piraeus creating more
opportunities for the local economy," Wei said.
Chinese director Feng Xiaogang
(C) and cast members attend the premiere press conference of movie "Aftershock"
in Beijing, capital of China, July 13, 2010. The film directed by Feng reflects
the devastating earthquake in Tangshan of north China's Hebei Province in 1976.
The epic, costing more than 100 million RMB yuan (about 15 million U.S.
dollars), is due out on July 22 in both IMAX and common format.
Elle Style Awards honor Chinese
fashionistas - A glamour-filled ceremony was held Sunday in Shanghai to honor
Chinese winners of the Elle Style Awards, also known as the Oscars of the
fashion world, Sohu.com reports. Actress Fan Bingbing was named Elle Female
Style Icon of the Year. Accepting her award, the prolific actress told the
audience, "I'm on my summer vacation right now. I wish myself a good vacation."
"Crouching Tiger, Hidden Dragon" actor Chang Chen won the title of Male Style
Icon of the Year. Pop singer Li Yuchun, who was named Singer of the Year,
entertained the audience with a live performance. Other honorees included TV
Actor of the Year Wen Zhang; TV Actress of the Year Hai Qing; Silver Screen Star
of the Year Zhang Jingchu; Designer of the Year Anna Sui. The annual Elle Style
Awards are sponsored by the stylish magazine Elle China. Actress Fan Bingbing
(center) accepts the Female Style Icon of the Year award at the Elle Style
Awards 2010 in Shanghai on Sunday, July 11, 2010.
At least four consortiums consisting of
Chinese private investors have approached American International Group to
acquire its Asia insurance division AIA Group, according to mainland banking
insiders familiar with the situation. The investors approached AIG and the US
Treasury Department soon after Prudential aborted an acquisition plan in June
when shareholders of the British insurer baulked at the US$35.5 billion cost.
The sale of AIA, with 320,000 agents and 23 million customers from China to
Australia, was to be AIG's biggest step in repaying US taxpayers for its 2008
bailout. While it should not come as a surprise that Chinese investors are
eyeing the AIA assets, some analysts were baffled by why so many had emerged.
All of them have indicated they have strong support either from mainland
insurers or banks. Of the four consortiums, one is led by Shan Weijian, chairman
of the Pacific Alliance Group. Shan worked at Newbridge, the Asia unit of
US-based TPG Capital, before he joined PAG in June. He is best known for
Newbridge's purchase of a 17.89 per cent stake in the Shenzhen Development Bank
in 2004 for US$155 million. In May this year, Newbridge exchanged the stake for
299.1 million shares in Ping An Insurance (SEHK: 2318), the mainland's
second-largest insurer. It sold 160 million shares, or a 5.6 per cent stake in
the insurer, later that month, netting about HK$9.7 billion.
Convenience store chain 7-Eleven is paying its workers as little as HK$20 an
hour, according to a survey of seven of the city's biggest retail chains. The
finding comes as legislators prepare for tomorrow's debate on a bill creating a
framework for a minimum wage. The People's Alliance for Minimum Wage, which
conducted the survey, called the pay shameful and demanded the minimum wage be
set no lower than HK$33 an hour. The alliance sent members posing as job seekers
to the seven chains, asking about vacancies and pay levels for posts such as
cashiers, sales assistants and warehouse workers. Of 110 outlets checked in May
and last month, 7-Eleven was found to be the worst payer, offering staff on
average HK$23.40 an hour. The second worst were Circle K convenience store and
Wellcome supermarket chains, which both offered HK$23.90 an hour. At one
7-Eleven outlet in Yuen Long, the pay offered was only HK$20 an hour and the
rate at a Circle K outlet in Kowloon City was HK$21. 7-Eleven and Wellcome are
part of the Dairy Farm Group. Caroline Mak Sui-king, a regional director of
Dairy Farm, is also a member of the Provisional Minimum Wage Commission - the
body that will recommend to the government the city's first statutory minimum
wage. Circle K is under Convenience Retail Asia, a member of the Li & Fung
Group. Alliance spokesman Poon Man-hon said: "It is regretful the government
appointed Ms Mak to the commission. How could we trust her to set a reasonable
minimum wage for workers?" Mak could not be reached for comment yesterday. Also
sitting on the commission is Dr Michael Chan Yue-kwong, chairman of fast food
chain Cafe de Coral (SEHK: 0341). He previously said his firm would have to
issue a profit warning if the minimum wage was HK$33 an hour. A Dairy Farm
spokeswoman yesterday declined to comment on the alliance's study. "Our
companies offer competitive salaries according to the market situation. We also
offer such benefits as medical insurance, training, and guaranteed fixed bonus,
as well as other incentives." A spokesman for Circle K or the Li & Fung Group
could not be reached for comment. Poon led about 10 activists in a protest
outside a Wellcome outlet in Causeway Bay yesterday. The protesters staged a
drama, mocking the business sector for treating workers like slaves. Meanwhile,
a study by the General Union of Security and Property Management Industry
Employees shows that some caretakers and security guards are being paid as
little as HK$19 an hour. Half of the 354 respondents surveyed made from HK$6,000
to HK$7,000 a month, some working 12 hours a day. And concern groups of disabled
workers oppose a measure under the bill that would allow employers to pay
disabled workers less than the minimum wage. In a petition, 12 groups said the
measure would easily be abused by employers.
The developers of Larvotto in Ap Lei
Chau are releasing the first batch of 50 flats at prices higher than the values
in the secondary market of units in Bel-air Residence in Pok Fu Lam. Sun Hung
Kai Properties (SEHK: 0016) is to set a benchmark for a major luxury housing
estate in Island South by releasing a project in Ap Lei Chau at an average price
of HK$17,288 per square foot. The first batch of 50 flats at Larvotto - a
joint-venture development by SHKP, Kerry Properties (SEHK: 0683) and Paliburg
Holdings - would go on sale on Saturday. Prices of the flats, sized from 1,968
to 1,998 square feet, range from HK$31.11 million to HK$37.94 million, or
between HK$15,811 and HK$18,992 per square foot. "The launch price is a bit
aggressive," Paul Louie, the regional head of property research at Nomura
International, said. The asking prices are higher than the HK$9,500 to HK$16,000
per sq ft in the secondary market at the 2,746-unit Bel-air Residence in Pok Fu
Lam, which is the most expensive large housing estate in Island South. Louie
believes the 715-unit Larvotto project would appeal to mainland buyers, who
account for sales of more than 20 per cent of apartments worth more than HK$20
million. It would be the first major development put on sale since the Hong Kong
Monetary Authority told banks last October to reduce the amount they lend to
buyers of luxury homes priced above HK$20 million from 70 per cent to 60 per
cent of a property's value. The move followed a surge of about 40 per cent in
prices in the luxury sector last year, driven by low interest rates, limited
supply and money flowing in from the mainland. Eric Yuen Chi-fung, head of
research at Guoco Capital, believes buyers of properties worth above HK$20
million would not rely heavily on mortgage financing. "The good sales response
to new projects has indicated a strong comeback in confidence," he said.
"Developers will surely take advantage of the buoyant sentiment in both the
primary and secondary market to launch their projects." On Sunday, SHKP and the
Urban Renewal Authority said they had sold 90 per cent of the 377-unit Lime
Stardom in Tai Kok Tsui at an average price of HK$8,045 per sq ft. Yuen expects
the Larvotto developers could bring in total revenue of HK$18 billion to HK$20
billion if the whole project achieved an average selling price of HK$18,000 to
HK$20,000 per sq ft. In 1999, debt-ridden Paliburg was forced to sell a 70 per
cent stake in the site, then designated for industrial use, to SHKP and Kerry
Properties. SHKP and Kerry, which each hold a 35 per cent stake in the project,
agreed to pay a land premium of HK$3.9 billion or HK$4,300 per sq ft for the
conversion of the site from industrial into residential land use in 2005. Kerry
is controlled by the Kuok Group, the controlling shareholder of the SCMP Group,
which publishes the South China Morning Post (SEHK: 0583, announcements, news) .
With construction costs and interest expenses, Yuen said he believed the total
development cost of the project, with a total gross floor area of one million sq
ft, would be around HK$8,000 per sq ft. Separately, Sino Land will release
another batch of 50 standard units at The Hermitage in Tai Kok Tsui at an
average price of HK$11,871 per sq ft. It will also release a special unit - of
1,476 sq ft with a 860 sq ft roof top and a private pool - at HK$36.98 million
or HK$25,060 per sq ft.
Just months after government
measures dampened enthusiasm for flat-buying, the market is roaring back - so
much so that some properties are back to 1997 levels. Taking advantage of the
upturn in sentiment, developers will release nearly HK$4 billion worth of flats
this weekend. Sales and prices have improved since Sun Hung Kai Properties (SEHK:
0016) paid a higher than expected HK$10.9 billion for a site in Ho Man Tin early
last month. New rules requiring greater transparency in developers' price lists
have also helped sentiment. The number of weekly property transactions has
rebounded to 300 from 180 in April and home prices have started to edge up. More
than half of the 964 flats at The Hermitage in Tai Kok Tsui - the first project
launched under new guidelines issued by the government - were sold within a
week. Under the rules, developers must release price lists three days before
flats go on sale to allow homebuyers time to study prices. Previously,
developers released some prices 24 hours before the launch of a sale, leading to
accusations they were manipulating prices. Last week, a 393 sq ft flat at City
One, Sha Tin, changed hands for HK$1.85 million or HK$4,673 per sq ft - 8 per
cent higher than the vendor bought it for in 1997. "It probably shows the market
correction has come to an end," Eric Yuen Chi-fung, head of research at Guoco
Capital, said. Yuen said the developers' less aggressive pricing strategies had
also encouraged buyer interest. "The market is still dominated by local buyers
and they will return when projects are offered at a reasonable level," he said,
adding that mainlanders accounted for about 10 to 20 per cent of total sales.
Prices of the first batch of flats at The Hermitage were released at an average
of HK$11,000 per square foot. "The good sales response has removed earlier
concerns that the new guidelines could dampen buying interest," Midland Realty
chief analyst Buggle Lau Ka-fai said. "The strong sales response reflects that
buyers remain bullish." Sun Hung Kai Properties plans to release all 377 flats
at Lime Stardom, a joint venture housing project with the Urban Renewal
Authority, in Tai Kok Tsui at an average of HK$8,045 per sq ft on Saturday. The
flats, ranging from 345 sq ft to 1,058 sq ft, are worth more than HK$1.7
billion. "It is unusual for a developer to release all units in one go," one
agent said. "Potential buyers will have more time to study the price list."
Separately, Sino Land will release an additional 120 properties, worth about
HK$1.7 billion, at The Hermitage, at an average of HK$11,637 per sq ft on
Saturday. Henderson Land Development (SEHK: 0012) will also release 16 villas at
Legende Royale, the phase three development at The Beverly Hills in Tai Po at
HK$7,935 per sq ft as early as tomorrow. The total value of the 16 villas, from
HK$23 million to HK$47 million, will be about HK$500 million. Lau said low
interest rates and an attractive rental return had also lured investors.
PCCW turns to free-TV market to generate
new sources of revenue - Richard Li Tzar-kai's ascent to business tycoon status
was arguably sealed in August 2000, when his start-up internet holdings company,
Pacific Century CyberWorks (SEHK: 0008), acquired Hong Kong telecommunications
giant Cable & Wireless HKT for US$38 billion. After wrapping up that deal, Li
described the "new PCCW" as "a first-of-its-kind company", which would be "an
internet/communications powerhouse that will enrich our shareholders, customers,
staff, and the entire Hong Kong community". Ten years since Li made that bold
declaration, PCCW has indeed been transformed. The carrier harnessed a broad
network coverage and steady infrastructure expansion to develop, offer and
package services in four market segments: fixed-line telecommunications,
broadband internet access, mobile telephony and internet-based pay television.
Its terrestrial broadband network already covers more than 90 per cent of Hong
Kong's 2.3 million households. What PCCW calls its "quadruple-play" offering was
developed during the decade's sweeping economic upheavals, rapid advances in
information technology, regulatory changes, increased competition, and the
controversy surrounding the recent failed bid by Li and other controlling
shareholders to privatise the carrier. But there is plenty more to do for PCCW.
With the government's move to open up the free-TV market, the carrier has
applied for a licence - through subsidiary HK Television Entertainment Co - with
an eye to extend its services platform. To enable the largest number of viewers
to enjoy its proposed free-TV service, HKTVE has applied to broadcast on a
spare, territory-wide ultra-high frequency channel.
General Electric has secured a massive
supply deal with China's jumbo jet maker as the mainland took a big step towards
assembling large passenger planes that could challenge Boeing and Airbus. The
agreement, under which GE will provide avionics systems for China's future C919
passenger jet, was signed just two weeks after GE chief executive Jeffrey Immelt
complained about the difficulties that multinationals had doing business on the
mainland. "China is the world's fastest-growing aviation market and we need to
ensure GE and the United States are part of this growth," John Rice,
vice-chairman of GE said at the signing ceremony in Shanghai yesterday. "Our
participation helps GE to grow high-tech jobs and capabilities, while serving
the aviation market with the latest commercial technology. The C919 programme
will support hundreds of jobs in the US, China and the UK." GE will set up a
joint venture with Chinese partners to produce the central information system,
also known as the backbone of an aeroplane's networks and electronics. The US
conglomerate will own 50 per cent of the venture, while a clutch of China's
state-owned companies, including Aviation Industry Corp of China, will hold the
remaining 50 per cent. It was another multibillion-dollar coup for GE after it
and French industries group Safran won a contract to equip C919 jets with
engines last year. "The deal is yet another example that the fast-growing China
market is important for foreign businesses such as GE," Professor Zhou Dunren of
Fudan University and an economist on American studies, said. China needed GE
technologies to assemble the jumbo jetliner, he said. The mainland set up
Commercial Aircraft Corp of China (Comac) in May 2008, aiming to produce the
nation's first 200-seat jetliner and plans a maiden flight in 2014. It was
reported that Premier Wen Jiabao hoped to create a huge industry chain by
producing the airliners. Wu Guanghui, vice-president of Comac and chief designer
of the plane, said yesterday that major supply deals had all been sealed after
concluding the agreement with GE. "The bidding process for major parts came to
an end," he said. "We have ensured that all the major technologies and systems
to be used in the plane are the most advanced in the world." Jin Zhuanglong,
chief executive of Comac, said the company intended to ensure that the C919's
maiden flight would be in 2014 before delivery to buyers in 2016.
Research In Motion, maker of
BlackBerry e-mail devices, said it was preparing to launch an applications store
and consumer internet services on the mainland, as part of a big push into the
world's top mobile market. The App World applications store would follow RIM's
May launch of BlackBerry service on the mainland through China Telecom (SEHK:
0728), one of the country's three key carriers, and as RIM develops service for
the homegrown 3G standard used by the leading mainland carrier, China Mobile (SEHK:
0941). The applications store and consumer internet service were just two of the
initiatives RIM was undertaking to tap into the mainland's 700 million-plus
subscriber mobile market, said Greg Shea, head of RIM in China. In other
initiatives, RIM is also working with the mainland's internet content providers
and site operators, including search leader Baidu, online game leader Tencent
Holdings (SEHK: 0700) and online commerce leader Alibaba (SEHK: 1688) Group, to
create versions of their sites to work on BlackBerries. "We will soon be
launching the internet service" for consumers, Shea said. "We will also launch
an App World China - that will be soon as well. We think sometime after we put
in internet service and these other initiatives, we'll see that magic moment
when we see that acceleration" in sign-up of new customers. Before its recent
China Telecom tie-up, RIM offered BlackBerry services mostly to corporate
customers in the country through China Mobile.
China buyers head for Paris market -
Prices increase as Chinese investors target homes in prime districts for family
use - China homebuyers have started to arrive in Paris, joining Hong Kong and
Singaporean investors buying in the French capital's city centre, estate agency
Knight Frank says. "It is the first year we have begun detecting mainland
Chinese demand, albeit in its infancy," said Mark Harvey, an international
residential consultant at Knight Frank's Paris office. "They are primarily
looking at secondary market properties in prime areas like the 7th, 8th and 16th
arrondissements." Mainlanders bought property for family use, targeting
apartments in the €3 million (HK$29.3 million) to €6 million price bracket, he
said. "They (the Chinese) are buying for personal reasons where an offspring is
studying or working in Paris," he said. "They are always cash buyers, but very
low-key." Estate Agency HomeHunts said most of its clients wanted holiday homes,
although two families wished to relocate permanently. "We currently have a
number of Chinese clients looking for properties in both the French Riviera and
Paris," HomeHunts' director Tim Swannie said. "We sold a property last year to a
young Chinese couple. It was on the [Antibes] and it was a three-bedroom villa,
which required modernising. The price was €2.4 million." HomeHunts' Hong
Kong-born Riviera office manager Amy Bault said most people from the mainland
bought apartments off-plan. She also said buyers found ways around the
mainland's strict capital controls. "The [capital controls] do affect them
tremendously, but those with money already have offshore accounts, so this
should not be a problem any more," she said. Corruption in China enabled other
mainlanders to circumnavigate rules, she added. Bault said mainland buyers were
also attracted to French culture and lifestyle. "They look up to French culture.
They see it as romantic and innovative." The arrival of mainland homebuyers
follows the purchase of French vineyards by Chinese businessmen in 2008.
Incoming Chinese buyers are helping to drive up Paris property prices. "The
Paris market is performing well with demand for prime residential property far
exceeding supply," Harvey said. "Prices are back to pre-crisis levels, driven by
renewed international demand and sluggish inventory levels. "Lower-end
properties, valued at below €400,000, in key areas offering solid rental returns
are also performing well. It is driven by domestic and international investors
seeking a refuge and investment diversification." According to MeilleursAgents.
com, prices in Paris rose 1.5 per cent in May, which followed a 2.1 per cent
increase the April. In the most expensive area, the centrally located 6th
arrondissement, favoured by mainland buyers, homes are €10,819 per square metre
following a 4.4 per cent rise in values over the three months to May.
Hu Jintao(R), General Secretary
of the Communist Party of China (CPC) Central Committee, meets with Kuomintang (KMT)
Party honorary chairman Wu Poh-hsiung in Beijing, capital of China, July 12,
2010. Hu Jintao, General Secretary of the Communist Party of China (CPC) Central
Committee, said on Monday he hopes that the newly signed cross-Straits trade
pact will take effect as soon as possible to bring out practical benefits for
people of both sides. Taiwan may finish legal procedures for ECFA soon.
CNPC, BP to increase output at
Rumaila oil - China National Petroleum Corp, BP Plc and a local partner may
increase production at Rumaila, Iraq's biggest oilfield, by 14 percent by the
year-end after assuming full management of the block this month. Daily crude
production may rise to 1.17 million barrels from more than 1.03 million barrels
currently, CNPC said in a statement on its website today. BP and CNPC signed a
20-year service contract with Iraq in November to increase Rumaila's output to
2.85 million barrels a day, making it the world's second-largest producing
oilfield, the London-based producer said on Nov 3. Iraq is seeking to raise oil
production to 6 million barrels a day by 2015 to boost its war-ravaged economy.
A venture formed by CNPC, BP and Iraq's state-owned South Oil Co formally took
over operations and management of Rumaila on July 1, the Beijing-based company
said. The contract was the only oilfield deal awarded by Iraq in June in the
first bidding round since the US-led invasion in 2003.
The Song Dynasty ink-on-silk painting
"Life Along the Bian River at the Pure Brightness Festival". A detailed,
interactive and multi-layered digital rendition of the priceless work of art,
created by a Chinese scientist with Microsoft Research Asia in Beijing, can now
be seen and studied at the Palace Museum in Beijing. A software engineer in
Beijing has revealed a breakthrough in technology that could have a profound
effect on museums globally and which puts Beijing firmly on the map of cutting
edge development. Xu Yingqing, 50, a lead researcher with Microsoft Research
Asia in Beijing, has created a detailed, interactive and multi-layered digital
rendition of the Song Dynasty ink-on-silk painting "Life Along the Bian River at
the Pure Brightness Festival". The image of the priceless work of art created by
Zeduan Zhang and rarely shown in public can now be seen and studied in unique
detail in the Hall of Martial Valor at Beijing Palace Museum, also known as the
Forbidden City. "It provides a virtual three-dimensional walkthrough of the
painting with sound," he said. "The level of detail for a work of art like this
has never been created before. The technique can also be applied to other
paintings and even vases and the Terracotta Warriors. It will enable artists and
art historians to study works at a level never before accomplished."
Molly Gong
Chung-sum (left) and sister Kung Yan-sum at the launch of The Lily, Chinachem's
first residential project after the legal battle was won over Nina Wang's
estate. Chinachem Group, once counted among Hong Kong's leading property
developers, is bidding to recapture its former glory days, now that the legal
tussle over the estate of its late chairman, Nina Wang Kung Yu-sum, has been
settled in its favour. With the long-running legal battle finally out of the
way, the group's executive director, Dr Kung Yan-sum, and his sisters are
embarking on fresh managerial directions for the group, although analysts
question their lack of experience in property development. In a departure from
group practice, its managerial team appointed a public relations agency to
organise a press conference for the recent launch of its project, The Lily, and
invited dozens of reporters from Hong Kong, Beijing, Shanghai and Guangzhou to
attend. Such a step is unremarkable in the industry, but for Chinachem it was a
first. "They used to think they could attract buyers simply by selling the flats
cheaper," an agent said. "They would not spend a lot on advertising previously."
In another departure, Chinachem will now turn to professional advertising
specialists to design advertisements and plan its advertising campaigns.
"Previously, estate agencies were required to help them plan a marketing
strategy with advice about what kind of gifts to offer like travel tickets or
furniture and how to manage press conferences. The in-house art department of
the agency was also required to design an advertisement for the project," a
property agent said. The changed strategy of Chinachem's management has become
the talk of the property sector, particularly since none of the Kung family
members have experience in the property market. Kung Yan-sum and his sister
Molly Gong Chung-sum are doctors, while the youngest sister Kung Yan-sum is a
housewife.
Speed rail shaves time off
Shanghai-Nanjing - The Shanghai-Nanjing high-speed rail service, aimed at
boosting development in one of the country's major economic zones, opened to
passengers on Thursday. High-speed trains prepare to take of from Shanghai to
Nanjing on Thursday. The new express rail service between the two cities, with
speeds of up to 350 km per hour, has become the fastest inter-city line in the
country. The new service, with trains running at up to 350 km per hour, has
halved the travel time between Shanghai and Nanjing, capital of the neighboring
Jiangsu province. The service, which covers the 301-km route in just 73 minutes,
carving 80 minutes off the previous time, has become the fastest inter-city
train in the country. In the initial operation phase, high-speed trains will run
92 round trips on the route. The Ministry of Railways plans to raise the number
to 120, but no timetable has been set. Ministry spokesman Wang Yongping said the
new line will "help boost regional modernization" and the number of rail
travelers in the region. Among the 21 stops on the route are the eight most
prosperous cities in the Yangtze River Delta region, including Suzhou and Wuxi,
which contribute 61 percent to Jiangsu province's GDP. Wang cited a railway
expert as saying that building the Shanghai-Nanjing inter-city railway was no
easier than building the Qinghai-Tibet railway. The Qinghai-Tibet rail line
crosses 550 km of permafrost. Temperature changes could potentially alter the
shape of the permafrost, threatening the stability of the rail bed and
increasing the possibility of accidents. Its operation, which began in 2006, was
hailed a technical milestone. In the case of the Yangtze River Delta region, the
alluvial plain is prone to subsidence, which is not an ideal geological
condition for building high-speed railways.
GM’s China sales overtake US for first time -
General Motors says its first-half sales of vehicles in the mainland overtook
the US for the first time amid a fitful recovery in American demand. The 1.21
million GM-brand vehicles sold in the mainland in January to June – a near 50
per cent gain over a year earlier – compared with 1.07 million sold in the US
market, according to figures released separately by GM’s US and international
headquarters. The shift reflects GM’s growing reliance on stronger growth in
emerging markets, especially the mainland, to offset sluggish sales back home.
The recovery in US auto sales this year has been fitful, with month-to-month
sales falling as many times as they rose. Sales of GM’s four core brands rose 36
percent in the first half of the year over a year earlier in the US, but were
down 12 per cent in June from the month before, at 195,000, the company said. In
the mainland, where first half auto sales figures for the entire industry are
not due until next week, demand has begun to moderate but remains strong.
Passenger car sales rose 55 per cent in January-May to 5.7 million vehicles,
while total vehicle sales rose 53 per cent to 7.6 million. Last year, the
mainland sped past the US to become the world’s largest auto market, with 13.6
million vehicles sold, as consumers with rising incomes responded to government
tax cuts and subsidies aimed at encouraging purchases of small, energy efficient
vehicles. By contrast, US sales of cars and light trucks plunged 21 per cent
last year to 10.4 million as a shaky economy kept buyers away from showrooms.
Last year, GM’s global sales overtook the home market as US demand languished.
Sales in the mainland by GM and its partners surged 67 per cent over a year
earlier to a record 1.8 million vehicles. But while GM’s US sales fell 30 per
cent from a year earlier, they still exceeded its mainland sales at 2.08 million
units.
Ma defends cross-strait trade agreement
- Taiwan's President Ma Ying-jeou speaks to media on the recently-signed
Economic Co-operation Framework Agreement between Taiwan and the mainland in
Taipei on Thursday. Taiwan President Ma Ying-jeou on Thursday defended his
landmark trade deal with the mainland against claims that it would lead to a
Beijing takeover, as the opposition girded for elections that could determine
the fate of the ambitious opening. The Economic Framework and Co-operation
Agreement, signed on Tuesday in Chongqing, is the most significant step to date
in Ma’s signature programme of improving relations with Beijing. It promises
greater economic convergence between the once-bitter foes and raises prospects
for closer political bonds across the 160-kilometre wide Taiwan Strait, long a
regional flash point. While lauded by both Beijing and Washington – like Ma,
they see the agreement as dampening the chances for conflict across the narrow
waterway – Taiwan’s pro-independence opposition has blasted it as part of a
effort by Beijing to bring the island back under mainland control 60 years after
they split amid civil war. Ma appeared eager to calm those fears on Thursday
when he addressed a packed news conference in Taipei. “We understood that the
mainland must have political considerations, political motives” in signing the
trade agreement, he said. “But the mainland side has indicated there is no rush
to move into the political issues. We hope to gain enough time so people across
the Taiwan Strait can have enough economic, cultural or other exchanges to
better understand each other.” Ma is risking the future of his presidency – and
the fate of his China opening – on the deal. He maintains that democratic Taiwan
needs the agreement to prevent its economic marginalisation amid the emergence
of regional trading blocs, including a Free Trade Agreement between China and
Southeast Asian countries that went into effect earlier this year.
US trade panel rejects plea to fine China
steel products - A US trade panel overnight on Thursday turned down an industry
request to slap duties on hundreds of millions of dollars of a steel product
from the mainland. The rare “no” vote by the US International Trade Commission
bars the Commerce Department from imposing final duties of up to 437 per cent on
mainland-made “wire decking” used in storage rack systems and other
applications. The ITC voted 4-2 that US producers were “neither materially
injured nor threatened with material injury” because of the imports from the
mainland. The decision is a big disappointment for US companies that filed a
petition 13 months ago accusing mainland producers of selling in the United
States at unfairly low prices and benefiting from government subsidies. Those
companies were AWP Industries of Kentucky, ITC Manufacturing of Arizona, J&L
Wire Cloth of Minnesota, Nashville Wire Products Co of Tennessee and Wireway
Husky Corporation of North Carolina. Last month the Commerce Department
announced final anti-dumping duties in the case ranging from 14.24 per cent to
143 per cent and final countervailing duties ranging from 1.52 per cent to
437.11 per cent. The ITC can block duties if it determines US producers have not
been materially injured or threatened with material injury by the imports. The
Commerce Department broadly estimated wire decking imports from China at
US$235.9 million last year, down from US$316.9 million in 2008. But it noted
those figures included some metal furniture parts not covered by the wire
decking case.
More than 21,000 firemen battling
forest fires in N China.
Chief Executive Donald Tsang (right)
toasts Major-General Liu Liangkai (centre), political commissar of Hong Kong's
PLA garrison and Executive Council convenor Leung Chun-ying to celebrate the
SAR's 13th birthday.
Democratic Party under fire at rally -
Disenchanted protesters attack march's co-organiser, accusing party of selling
out After years of attacking government policies and demanding universal
suffrage, the Democratic Party has come under attack itself for the first time
from protesters in the annual July 1 march, which it helped to organise. The
party and its ailing co-founder Szeto Wah - who turned out in a wheelchair under
blazing sun despite fighting late-stage lung cancer - were subjected to verbal
abuse and got into a minor scuffle with protesters lashing out at the party for
backing the government's political reforms.
The Police Band marches in Golden
Bauhinia Square. Amid uncertainty about the pace of democratisation - and fierce
heat - the number of participants in yesterday's annual July 1 march fell by at
least a quarter from last year. But if the number that took to the streets a few
days after passage of the hotly disputed political reform package was smaller,
the noise they created was just as great. Demands included calls for universal
suffrage and better labour rights, while some marchers accused others of
betrayal.
Sorry,
no yuan! That's the message from several Hong Kong money changers as speculators
scramble to stock up in anticipation of the currency rising further. A local
bank manager is not surprised that yuan stocks have ran out as supply is tight.
"People are banking on reports that the United States is pressing for a 10
percent yuan appreciation, despite Beijing saying any appreciation will be
gradual," he told The Standard on condition of anonymity. "People want to make a
fast buck since interest in the Hong Kong dollar is low. So the yuan is a sure
bet for anybody." A source at the Hong Kong Monetary Authority said the shortage
at money changing counters could be due to another factor - hoarding. "Money
changers are expecting the yuan to appreciate faster and sooner, and so they are
holding on to their stocks," the source said. "The fact that there is no cap on
conversions to yuan has put them a difficult position in both quoting and
selling of the currency. "They obviously do not want to sell large amounts of
yuan." Local banks have confirmed they have an unlimited supply of yuan, which
they get directly from the mainland central bank, the People's Bank of China.
Yesterday's exchange rate was 864 yuan for HK$1,000 - two dollars lower than on
Tuesday, when speculation on possible appreciation was at its highest. But
people are continuing to snap up the yuan, a supervisor at the Hui's Brothers
foreign exchange company in Wan Chai said. "The stronger the yuan, the bigger
the demand," he said, adding that the situation will remain the same for another
week. The supply from the mainland, Shenzhen in particular, has been low since
the opening of the G20 summit last week, he added. A money-changing agent in
Shenzhen confirmed supply to Hong Kong is running low as most people hold on to
the yuan thinking it will appreciate further. On Lockhart Road, money changers
at Hang Fung Foreign Remittance asked a reporter from The Standard to return
today when asked to sell 10,000 yuan. Another money changer near the Wan Chai
MTR station said it had run out of yuan for the day. "The stronger the currency,
the keener the demand," he added. On June 19, just ahead of the G20 summit in
Toronto, Canada, the People's Bank of China announced it will further reform the
yuan exchange rate regime to make it more flexible. The decision has been
welcomed by many nations and organizations, including the International Monetary
Fund. Zhang Tao, international department director with the People's Bank, said
the reform of the yuan exchange rate regime will help restructure the nation's
economy and promote all- around sustainable and balanced growth. "In doing so,
we can guide resources to the services sector and boost our internal demand, to
promote industrial upgrading and the transformation of the economic growth
pattern," Zhang said. The stability of the yuan exchange rate played a
significant role in mitigating the impact of the 2008 financial crisis on the
mainland as other currencies, including the US dollar, depreciated. A senior
official of the People's Bank said further yuan exchange rate reform can help
Beijing work closely with its partners in the long term for mutual benefit and
further development.
Visitors look at the winning "Eating
in Hong Kong" entries (top) at the Hong Kong Museum of History yesterday, which
included studies on dried goods (above left) and dai pai dong. Three Form Six
students have won a prize for a study of a form of Hong Kong dining that had
largely disappeared before they were born. Few of the open-air food stalls known
as dai pai dong - found almost everywhere 60 years ago - remain, many having
been moved indoors while others just vanished as their licences expired or
hygiene rules were enforced. Apple Chan Sau-wan, Karen Ng Ka-wai and Susan Yung
Wai-hung wanted to know whether the remaining few would stay and whether those
moved to indoor food centres still merited the traditional name. So the three
Hong Kong Chinese Women's Club College classmates got together for the study
that has just won them first prize from more than 100 entries in the student
division of the fourth historical photos study competition on the theme of local
dining. "Written material on dai pai dong is scarce, so first-hand interviews
with those in the business had to be done," said Chan. "I found their
descriptions of the old times quite poignant, perhaps because all but those in
Central and Sham Shui Po were forced to move indoors, for the sake of hygiene."
Chan said it was dubious whether moving the stalls to indoor cooked-food centres
changed them to ordinary restaurants. "Yet it's pleasing to see the government
saw sense a few years back and seems more lenient with giving out licences," she
said. Jointly organised by the Hong Kong Museum of History and the We Love Hong
Kong Association, the contest required participants to pick one photo among 30 -
all of the old local dining scene - and write a story behind the photo, doing
their own research and interviews. In the open division, Jasmine Yiu Ka-man, a
social science undergraduate, and Rita Chan Sau-wa, a Chinese major, spent four
months on a study on dried seafood with which they beat 11 other entries. The
study recounts how the salted fish market in Sheung Wan was transformed into a
dried seafood area. The studies dug out and gave meaning to so much precious
information that "it would be such a great waste if we didn't publish them and
preserve them for posterity", said judge Joseph Ting Sun-pao, Chinese
University's honorary senior researcher, at the awards ceremony yesterday. A
merit went to a study into the history of egg tarts, which found a possible link
between the Chinese word for bread - bao - and Portuguese pau. Ting said the
link was interesting but needed more study.
Confusion reigns as food label law
comes into effect - Retailers unaware of change, unsure if products need tag.
Traditional Chinese biscuits on sale with inadequate labelling at the Lin Heung
Tea House in Sheung Wan were typical of many products still on display.
Potential buyers are offered snacks
while waiting during the sales of flats at the Hermitage - Hundreds queue
overnight for 130 flats on sale. Hundreds of potential buyers queued overnight
to invest in the first residential development launched since tighter measures
on marketing tactics were introduced - a sign people are more confident of a
fairer sale. The Hermitage, a new residential project in Tai Kok Tsui, was
offered for sale at 11am yesterday on a first-come, first-served basis in the
shopping centre of the MTR Olympic station. Eva Yeung was among the many buyers
and agents who started to queue on Wednesday at the sales office, 19 hours
before the official sale kicked off. "It is tiring but I bought the unit I
wanted within my budget," she said. Yeung bought a 1,400 square foot flat for
HK$15 million or HK$10,714 per square foot through a company. "It will be either
for my own use or for investment," she said. Under one of the new rules
introduced by the government, developers are required to release a price list
three days before a sale.
Yuan investment channels beckon - The
government is holding talks with Beijing to open channels for investment
opportunities in the mainland for yuan held in Hong Kong. Foreign direct
investment, the Qualified Foreign Institutional Investor scheme and re-insurance
are potential channels being studied, Julia Leung Fung-yee, Under Secretary for
Financial Services and the Treasury, told The Standard. But she declined to
comment whether the so-called "mini QFII" - a program that allows locals to
invest in A shares - is being discussed. Leung said the volume of trade
settlement in yuan surged to 7.2 billion yuan (HK$8.27 billion) in May, from 400
million yuan in February. Transactions are expected to grow even faster after
the People's Bank of China expanded the pilot scheme last week to cover 20
provinces and cities in the mainland, as well as worldwide for overseas
counterparts, Leung said. This allows more flexibility in both current and
capital accounts to pay for services imported to China, the under secretary
said. "For example, tour agents and investment banks will be able to accept yuan
as tour fees or underwriting fees, instead of just Hong Kong dollars or foreign
currencies," Leung said. "Even H-share holders can receive yuan in dividend
payment as the current regulation allows. Of course, that all depends on a
company's policy and arrangement," she added. Leung said the lack of yuan
products for investment is the reason for the slow yuan deposit accumulation
rate. Yuan deposits in Hong Kong in May were about 84.7 billion yuan, up only
4.7 percent from the previous month, Hong Kong Monetary Authority data showed.
Building up an asset base for yuan investment is crucial to boost yuan
liquidity, said Leung. Besides opening investment channels in the mainland, the
under secretary said financial institutions are ready to offer new yuan
products. As for yuan-denominated insurance policies and equities in Hong Kong,
the under secretary said insurance products should be more readily available as
less liquidity is required and risks are easily hedged. "It's only the beginning
of the yuan- product era," Leung said.
A senior military official said
yesterday that China would welcome a visit from US Defence Secretary Robert
Gates at an "appropriate" time, which may be an indication that Beijing is ready
to resume bilateral military exchanges. "Our stance remains that when both sides
consider it's appropriate, [China welcomes] his visit," said General Ma Xiaotian
, deputy chief of the People's Liberation Army general staff, in Beijing. Ma's
remarks came one month after Beijing turned down a US proposal that Gates visit
China, a move that Washington considered a snub to its fence-mending efforts.
The PLA at that time reportedly told the Pentagon that it was not a convenient
time for Gates to visit, without elaborating. Beijing has halted high-level
military exchanges since January to protest against Washington's decision to
proceed with US$6.4 billion worth of arms sales to Taiwan, which China considers
a renegade province. The 1979 Taiwan Relations Act commits the US to the defence
of Taiwan and authorises arms sales to aid its defence. After his visit request
was turned down, Gates warned at a security conference in Singapore that the
lack of contact between China and the US would damage security in Asia. With
nuclear-related problems in North Korea and Iran showing signs of escalation,
Washington has been pressing Beijing for its assistance to resolve the issues.
Beijing voted for a watered-down version of a United Nations Security Council
resolution against Tehran but has remained committed to its North Korean ally.
Ma has said that arms sales to Taiwan are one of the three major obstacles in
bilateral military ties. Professor Gao Haikuan , a security specialist with the
mainland-based Chinese Association for International Friendly Contacts, said Ma
was sending out a positive signal without giving a definite answer. "His remarks
make things look flexible now," Gao said. " ... But it all depends on how the
Pentagon handles bilateral relations from now on. If they do something to make
China unhappy, China may change its mind again." A case in point is a joint
military drill between the US and South Korea later this month, which could
further complicate bilateral military ties as the Pentagon is considering
sending an aircraft carrier to participate in an exercise in the Yellow Sea. The
drill is intended as a warning to Pyongyang, which Seoul has accused of sinking
its corvette, the Cheonan, in March, killing 46 sailors. The hermit state denies
it torpedoed the vessel. Beijing has warned that it is "extremely concerned"
about the war games. In an apparent move to protest against the possible
presence of a US aircraft carrier on its doorstep, the PLA is staging live-fire
naval exercises in the East China Sea, close to the Yellow Sea. They began on
Wednesday and will end on Monday. Military ties between the two powers have not
developed as well as relationships in other areas. At the G20 summit in Canada
last week, President Hu Jintao accepted US President Barack Obama's invitation
of a state visit. In a bilateral meeting on the sidelines of the summit, Obama
told Hu that Washington was looking forward to an invitation for a visit to
Beijing by Gates in the coming months. Hu's acceptance of the state visit
invitation came just a week after Beijing's decision to allow the yuan to float
freely against the dollar. Obama sidestepped the currency issue during his
meeting with Hu.
The Yangtze River Delta entered
the "bullet train" era with the launch of Shanghai-Nanjing high-speed rail
services yesterday, but the much-lauded multibillion-yuan project failed to wow
many passengers. There were widespread complaints about the price of tickets -
up 50 per cent - and that the massive investment had resulted in only negligible
improvement in most journey times. "This is a con. This isn't really high speed
- it is just an excuse to charge more money," said one unimpressed traveller.
"They have just added the `high-speed' label to the ordinary express trains and
then bumped up the price of the tickets." Others questioned why the supposedly
new trains - capable of travelling at up to 350km/h - were virtually
indistinguishable from the ones already in service. "I thought they would be new
trains, but I'm sure these are just the ones we normally take," said Hong
Jianhua , a regular traveller between the two cities. "Even the furniture is all
quite worn already." Newspapers in both cities ran stories yesterday
rhapsodising about how direct trains could now make the 301-kilometre trip in
just 72 minutes. However, only two trains a day are scheduled to run at full
speed. Trains stopping at intermediate stations can take up to two hours and
seven minutes - just one minute quicker than the cheaper D-class express trains
already manage. Standard-class tickets on D-class routes cost 93 yuan
(HK$106.60) for the full trip, considerably less than the 146 yuan it costs to
ride the new high-speed service. Staff on two trains taken by a South China
Morning Post (SEHK: 0583, announcements, news) reporter yesterday explained that
the longer-than-expected journey times were due to waiting times at intermediate
stations. For the most of the journey, the trains maintained speeds of between
160km/h and just above 200km/h - comparable to the D-class service and well
below the advertised 350km/h. The 300km/h mark was passed only a few times on
each trip, and both times only for a few minutes. When the train did travel at
top speeds, there was a significant increase in carriage noise and vibration -
to the noticeable annoyance of some passengers. Xu Yumin , a high-speed rail
safety officer for the Shanghai Railways Bureau, told Nanjing's Modern Express
that the trains were only able to run at around 200km/h for most of the journey.
"There are 66 points on the track which require changes of speed," Xu said. The
paper also quoted Wang Feng , deputy director of the bureau, as saying that the
trains had reached a top speed of 353km/h during test runs but this was not
going to be repeated for the whole journey during regular service. "Everybody
believes that the Shanghai-Nanjing high-speed line is a new route which can
bring Shanghai and Nanjing closer together," Wang said. "In reality, it is not
like this. Cities along the line such as Zhenjiang and Changzhou have decided to
take the line into the town, through their old stations. The route is not
perfect, which is the main reason." Shanghai's cavernous new Hongqiao Railway
Station also had its first day of operations yesterday. The new station is
linked to the second terminal at Hongqiao International Airport. A majority of
the amenities were not ready in time for the main opening. Not a single shop had
opened in the huge arcade beneath the station, and drinks vending machines did
not appear to have been switched on.
China's Li Ning aims for top-end market with new logo and higher prices - Li
Ning, the chairman of Li Ning, displays the new logo of the sportswear company.
The change is an attempt to distinguish the firm from Nike. Li Ning (SEHK:
2331), intent on transforming itself into a high-end global brand, has unveiled
a new logo in an attempt to distinguish itself from Nike. "We hope to become
China's No1 in eight years," chief executive Zhang Zhiyong said. "Our plan is to
become one of the top five [sports] brands in the world by 2018." For years, Li
Ning's logo has been accused of bearing a resemblance to Nike's famous "swoosh".
Zhang said the main reason for changing the logo was to distinguish itself.
"Consumers only come into contact with your logo and slogan," he said. "In terms
of our logo, we took into consideration our future global expansion." Herald van
der Linde, HSBC (SEHK: 0005) Asia-Pacific deputy head of equity research,
agreed, saying it would be difficult for Li Ning to emerge as a global brand if
it failed to distinguish itself from other products. "A lot of Chinese brands
look like Nike, no matter if they tick right or tick left," he said. Li Ning's
new logo is an adaptation of the company's former one but features a cleaner cut
and resembles the Chinese character for "ren", which means people. The
sportswear brand upgraded 500 retail shops in first-tier cities by the end of
last month, and will refurbish 1,000 stores by the end of the year. Li Ning is
the second-largest sports brand in the country, after Nike, according to
Deutsche Bank research. But Zhang said Li Ning falls behind international sports
brands in first-tier cities and is also less popular among those below the age
of 25. Li Ning is planning to tackle this challenge by moving to the upper end
of the market and raising prices, he said. According to Deutsche Bank, Li Ning's
average retail selling price is 300 yuan (HK$345) for footwear and 200 yuan for
apparel. The company plans over the next three years to increase the average
price of footwear to between 400 and 650 yuan and apparel to an average of 300
yuan. Ma Mengran, 15, a student shopping at the sportswear firm's newly
refurbished store in Wangfujing, Beijing, said she had no preference between
foreign brands and Chinese brands as long as they were of good quality. Asked if
Li Ning was worried about Nike's purported plans to lower prices and expand in
second and third-tier cities, Zhang said the company had concerns. But that
strategy would hurt Nike's high-end brand image, he added.
An application to restructure Asia
Television's shareholding in moves worth about HK$280 million has been received,
the Hong Kong Broadcasting Authority confirmed yesterday. The authority was
responding to inquiries on whether it received a bid by mainland property tycoon
Wang Zheng to buy a stake in the free-to-air local broadcaster. The station
declined to comment. But ATV director Rebecca Wang, who represents Taiwanese
snack tycoon Tsai Eng-meng on the board, confirmed the deals. She said the board
on Monday passed a resolution in favor of Wang Zheng's move - despite opposition
from the two main shareholders - after ATV was notified by the authority that it
had been contacted by the mainland tycoon earlier. According to a report by Sing
Tao Daily, sister publication of The Standard, Wang has joined forces with Wong
Ben- koon, chairman of Prosperity International (0803), to acquire a 41.66
percent stake in ATV for HK$200 million. Sources said Wang's move was aimed at
helping the station pass the mid- term license review. Wang and Wong will
acquire the stakes currently owned by CITIC Group, Phoenix Television (2008)
chairman Liu Changle, and Chan Wing-kee, sources said. Wang's representative at
ATV said the Prosperity International chairman is interested in the station
because he is optimistic about its prospects. Wang informed the authority on
June 18 about the acquisition move and named Wong as one of the buyers. Wang
also told the authority that he had signed a letter of intent with majority
shareholder Payson Cha Mou-sing and his family to buy their 17.5 percent stake
for HK$83 million. However, at ATV's board meeting, Cha reportedly had no
inkling about Wong's participation. Cha and Want Want China Holdings (0151)
chairman Tsai - the second largest shareholder - were both said to be
dissatisfied with Wong's sudden appearance as a potential buyer. The two main
shareholders reportedly asked for more information about Wong, and Tsai said he
would probably take legal action against the move, one source said.
The university's swine flu drug uses antibodies taken from the plasma of
recovered patients to treat those in critical condition. Local researchers have
proven antibodies from the plasma of recovered swine flu patients are an
effective treatment for those with severe complications from the virus that
sparked a global pandemic last year. This emerged yesterday as Mexico lifted its
alert for swine flu, officially ending the health emergency in the country where
it began 14 months ago. A joint study by the University of Hong Kong (HKU), the
Hong Kong Red Cross and the Hospital Authority - details of which have yet to be
published - has concluded antibodies from the plasma of recovered patients can
kill the H1N1 virus in severely ill patients. Researchers say a similar
treatment may also be effective against other viruses, including new ones. About
30 swine flu patients in critical condition underwent the treatment after they
did not respond to the antiviral drugs Tamiflu and Relenza and most were cured.
Some were treated with the plasma, known as convalescent plasma, while others
received a more concentrated hyperimmunoglobulin made from it. HKU clinical
assistant professor of medicine Dr Ivan Hung Fan-ngai, who led the study, said
antibody therapy could be the "last defence" against swine flu. "We used the
antibodies on severe swine flu patients who did not respond to antiviral
treatment, neither oral nor intravenous," he said. "Some of them died
subsequently, but we have enough evidence to conclude that the antibodies are an
effective cure, as most patients have since recovered."
Former Legislative Council
president Rita Fan Hsu Lai-tai, subject of speculation that she might run for
chief executive, has urged aspirants for the top job to respect incumbent Donald
Tsang Yam-kuen. Fan, the only Hong Kong member of the National People's Congress
Standing Committee, made her call as she openly queried remarks by another
likely contender, Executive Council convenor Leung Chun-ying, on government
policies. Fan also said she remained doubtful of Leung's suitability for the top
job - a view she first aired six years ago. But when Fan was asked recently
about renewed speculation that she would run for chief executive, she said she
would not respond to such rumours. Speaking at a gathering with journalists, Fan
was asked about possible discord among members of Tsang's cabinet in the final
half of his five-year term. "Succession takes place everywhere," she said.
"Other governments can transit without any mess ... Why? It needs tolerance and
you have to leave some room for people. "But at the same time, those who aspire
to move up should also respect our chief executive. After all, he is Hong Kong's
chief executive and the leader of the special administrative region government."
In April, Leung wrote in a newspaper article that those who said the government
had no duty to help people buy a home "had probably lived on Mars in the past 40
years" - a comment seen as aimed at government officials. Responding to this,
Fan said yesterday: "These comments seem to be well received in the media.
People taking a political career have to consider citizens' reactions when they
speak." In her 2004 Legco election campaign, Fan said at a public forum that she
did not find Leung a suitable candidate for the top job. Asked whether that
opinion still holds, she said: "Have I ever told you that he is a suitable
candidate for the chief executive?" She also said that a chief executive
candidate had to be trusted by both the Hong Kong public and the central
government. "Hong Kong citizens have discerning eyes ... They hold political
ethics in high regard. If one's motives are doubted, then he will lose more than
he gains." An aide to Leung said the executive councillor did not have any
comment on Fan's remarks. Leung and Chief Secretary Henry Tang Ying-yen are both
widely seen as prospective contenders for chief executive in 2012. Over the past
several years, there has been speculation that Fan might run for the post, which
she has repeatedly denied. But discussion was renewed last week when Democratic
Party lawmaker James To Kun-sun said he had heard that Fan was gathering a team.
Fan said a government official had sought her view more than a year ago on
whether Tsang might quit prematurely. Fan told that person, who was not a
principal official, that she thought Tsang should not follow his predecessor
Tung Chee-hwa's footsteps to resign because it would be unfavorable for Hong
Kong's governance. No local or Beijing official had asked her whether she
intended to run for chief executive, Fan added.
United States fashion chain Forever 21
will pay a monthly rent of HK$11 million to lease a six-storey retail arcade in
Causeway Bay, the largest retail leasing transaction in two years. The store's
turnover has to reach at least HK$60 million a month in order to cover the
monthly rent and generate reasonable profit, said Helen Mak Hoi-lun, the
director of retail services at property consultant Colliers International. That
means the retailer has to sell four to five clothing items every minute over a
24-hour period at an average price of HK$300. It will have to sell at least
6,667 clothing items a day. Forever 21's aggressive push into the city's tough
retail sector reveals it is confident in the market outlook. CB Richard Ellis,
which represents the landlord, said Forever 21 has leased the 51,188-square-foot
space in the Capitol Centre, adjacent to Jardine's Bazaar. Current tenants
include fashion retailer Giordano (SEHK: 0709) and drugstore Watson's. The
monthly rent is double the HK$5.5 million currently paid by Giordano. Giordano
sub-lets some of the space to Watson's and restaurants but will vacate the
premises next year. Forever 21 will move into the premises in August next year.
The US retailer was founded in Los Angeles in 1984 by a Korean-American. With
its trend-setting styles and budget-conscious price tags, it has expanded
rapidly over the past two decades and now has stores in Asia and the Middle
East. In 2005, it had more than 355 retail stores. It has opened 90 new stores a
year on average since 2008. Foreign fast-fashion retailers such as Zara and H&M
are aggressively expanding in Hong Kong and are willing to pay top rents. H&M is
paying a monthly rent of HK$6 million for its 60,000 sq ft store in Silvercord
on Canton Road in Tsim Sha Tsui. But not all foreign brands have been successful
in Hong Kong's pricey and competitive retail market. Britain's B&Q and
Australia's Spotlight, both home-improvement retailers, closed their stores in
the city two years ago after opening in 2007. "We are currently working with a
number of international fashion brands which want a presence in Hong Kong. The
main challenge is their space requirement as they prefer 10,000 square feet or
more," said Joe Lin, a senior director of retail services at CB Richard Ellis.
"But retail space in prime shopping malls is very limited in Hong Kong." The
shortage of retail floor space in Causeway Bay and the highly visible location
of the Capitol Centre have drawn leasing interest from companies from around the
world. Causeway Bay is a key shopping destination for both locals and mainland
tourists. Growth in retail rents for the district, as well as in Tsim Sha Tsui,
was the sharpest in the city for the first half, Lin said. He estimated retail
rents in Causeway Bay had surged 8 per cent so far this year. According to a
report by Colliers International, Hong Kong is the world's third-most expensive
city in which to rent street-level shops. The average retail rent on Russell
Street in Causeway Bay is US$1,205.46 per square foot a year. The survey of
rents in 127 premier retail streets around the world showed only Paris and New
York were more expensive than Hong Kong.
Hang Seng School of Commerce's reputation
for turning out straight-A students was further strengthened yesterday - the
city's only student to score six straight As came from Hang Seng, as did 16 of
the 21 students who bagged five As. And the Sha Tin school's winning streak was
evident not just among students scoring five As, of which there were 10 more
than last year. Some 575 A grades were earned by students at the school this
year, an 89 per cent rise on the 305 As it scored in 2006, the first time it had
pupils scoring six As. School president Chui Hong-sheung said Hang Seng was
known for transforming average-scoring students into high achievers, and he was
inspired by the results. "Our teachers are willing to teach all those who are
willing to come. We have one student who scored 23 [out of 30] in the Form Five
public exam and got five As in his A-levels here," Chui said. The only other
school to get some of the media spotlight was the Diocesan Girls' School, which
produced two five-A students this year. The other three five-A scorers came from
Ying Wa Girls' School, St Joseph's College and Po Leung Kuk Tang Yuk Tien
College in Tuen Mun.
Promoters at the opening
ceremony of online retail shop hongkongdg.taobao.com, which aims to promote Hong
Kong brands and designer collections on the mainland. The Hong Kong Trade
Development Council (HKTDC) Design Gallery and leading mainland online shopping
website Taobao.com have jointly launched a retail channel, hongkongdg.taobao.com,
to promote Hong Kong brands and designer collections on the mainland. The online
shop will sell 100 per cent Hong Kong designs, ranging from fashion and
accessories, jewellery and watches, to homeware and lifestyle goods, gifts and
stationery. More than 50 brands are now available on the shop, including Chow
Sang Sang Jewellery and Chow Tai Fook Jewellery, which enjoy high popularity
among mainlanders. Hong Kong movie star and singer Andy Lau Tak-wah has designed
exclusive gifts for online shoppers under his brand Andox and Box. HKTDC deputy
executive director Margaret Fong said at the online shop's opening ceremony that
online shopping on the mainland was estimated to grow more than 80 per cent a
year, reaching 250 billion yuan (HK$287 billion) last year. "This presents
immense business opportunities for Hong Kong companies," she said. HKTDC has
outlets in Wan Chai and at the airport, and a third one at Beijing's Wangfujing
commercial district. Fong said the shop was set up mainly to promote Hong Kong
designs not to make profits, and there was no sales target in the near term.
Daniel Zhang, chief financial officer of Taobao and general manager of Taobao
Mall, said Taobao's sales reached 208 billion yuan last year, accounting for 80
per cent of the online shopping market on the mainland. "I believe the new HKTDC
channel will help Hong Kong brands and small businesses expand into the mainland
and allow more mainland consumers to buy Hong Kong products with greater ease,"
he said. Zhang said the website had been in experimental operation for a while
and had received a warm response from shoppers. Based in Hangzhou, Taobao was
set up by internet conglomerate Alibaba (SEHK: 1688, announcements, news) Group
in 2003 as a platform to provide customer-to-customer service. It was serving
more than 190 million registered users as of April this year. Taobao Mall
Emperor plans to increase exposure in the
first-hand property market, says Vanessa Fan. Emperor International Holdings, a
property-to-hotel developer, posted a net profit of HK$2.80 billion in the
fiscal year ending March 31, compared with a HK$1.54 billion loss a year
earlier, a turnaround helped by proceeds from a residential project in Xiamen
and a greater share of the profits from its hotel division. Sales increased more
than three times to HK$1.45 billion from HK$348.17 million. The board of
directors recommended 4 HK cents per share as final dividends on HK$1.44
earnings per share. Shares in the company dropped 4.0 per cent to HK$1.67
yesterday after the results announced. The company, which used to rely heavily
on rental income, plans to further increase its exposure in the first-hand
property market, said Vanessa Fan, managing director for Emperor International
Holdings. The company will increase its market share in the first-hand property
market by offering more residential units to the market this year. It will kick
off the sale of at least two residential projects in Hong Kong this year, at a
time when the recovery in the first-hand property market in the city is
gathering pace. Harbour One, which fetched HK$960 million in the first batch of
sales in May, will offer the remaining 54 units as early as this year. The Java,
a 75-unit property project in North Point, will start its sale next month. In
additional, the company also plans to launch the pre-sale of a multi-storey
commercial/residential block on Prince Edward Road West in the fourth quarter of
this year. The project will be completed in 2012. Regarding the "nine measures"
by the Hong Kong government to improve the accuracy and transparency of
first-hand residential property transactions, the company believes that those
measures could boost the confidence of potential buyers of uncompleted flats.
The company predicts retail will contribute a more substantial portion to the
company's total rental income. It has a growing shop portfolio along Tsim Sha
Tsui's Canton Road, which is becoming more popular with mainland tourist. And it
has a strong presence on Russell Street, Causeway Bay, which according to a
recent market survey ranks third-highest in the world in retail rents. Sales
from its hotel division increased to HK$ 687.1 million from HK$52.7 million a
year earlier due to the contribution from the 291-room Grand Emperor Hotel in
Macau since August 2009. Emperor Entertainment Hotel Limited, a 55 per cent
owned subsidiary of the company, has recorded HK$ 834.7 million revenue from its
gaming facilities, including a 60-table gaming hall and 330 slot machines.
China state media yesterday slammed
US President Barack Obama for suggesting Beijing turned a blind eye to North
Korea's actions, calling his remarks "irresponsible and flippant." At the Group
of 20 summit in Canada at the weekend, Obama said Beijing must not show "willful
blindness" over Pyongyang's "belligerent behavior." He also noted having spoken
bluntly to President Hu Jintao on the matter. The Global Times hit back at the
US leader, saying he should have taken Beijing's concerns into consideration
before "making irresponsible and flippant remarks about China's role in the
region." Noting Beijing's role as host of the on-off six-nation talks on North
Korea's nuclear disarmament, the English- language daily said: "It is thus not
China that is turning a blind eye to what North Korea has done and has not done
... Instead, it is the leaders of countries such as the United States that are
turning a blind eye on purpose to China's efforts." The United States and Seoul
have led a push for a UN censure of Pyongyang for the sinking of a South Korean
warship in March that killed 46 sailors, but the Security Council has yet to
issue a formal condemnation. Beijing, a close ally of the impoverished North,
has been reluctant to endorse a United Nations condemnation over the sinking
until it has assessed the evidence in the incident for itself. The Global Times
acknowledged that Beijing's efforts to convince North Korea to give up its
nuclear program have not all been effective, but said maintaining contact with
Pyongyang is vital. "The US cannot ignore the fact that China remains the most
important channel of effective communication in this situation," said the paper,
run by Communist Party mouthpiece People's Daily. "Closing the channel would
leave the situation deadlocked. That is by no means what the world wants."
Grand Canal extension stops short of
the sea - In 605AD, a Sui dynasty emperor named Yang Guang decided that China
should have a 2,000-kilometre canal between Beijing and Hangzhou that should be
deep enough for large cargo ships, and more than 40 metres wide. The decision
immediately drew criticism from some senior officials, who estimated it would
take decades, if not centuries, to build the canal. By one account, the emperor
had their tongues cut off, and the project - now called the Grand Canal - was
completed in five years. For more than 1,000 years, nearly half of China
depended on the canal to transport food, commodities and even armies. But the
rise of railways and major roads and a severe drought in the north in recent
years rendered it largely defunct. Then in 1995, as the canal was approaching
total disuse, the government decided unexpectedly to lengthen it. The extension,
largely using a river connecting Hangzhou and Ningbo, was to be only 230
kilometres long.
ZTE Corp (SEHK: 0763)
led domestic sales of CDMA-standard wireless network equipment in the first half
of this year with a 43.54 per cent market share, driven by the aggressive
infrastructure expansion of China Telecom Corp (SEHK: 0728). That demand has
pushed Shenzhen-based ZTE, the country's largest publicly listed
telecommunications systems manufacturer, "to make large-scale investments in
CDMA technology", Li Jian, the firm's general manager for third-generation CDMA
and fourth-generation LTE-standard wireless products, said yesterday. The firm's
main domestic customer for CDMA equipment is fixed-line network giant China
Telecom, which has signed up an average of about three million new mobile
subscribers a month since the launch of its wireless network last year. "This
year, ZTE has undertaken the migration of legacy CDMA systems from other
manufacturers in 12 of the 14 prefecture-level cities for China Telecom," Li
said. Wang Xiaochu, the chairman of China Telecom, said in March the carrier
would continue to ramp development of its wireless infrastructure, as "demand
for mobile internet services continue to increase". China Telecom had 71.5
million mobile telephone service users as of May, when the country's total 2G
and 3G subscribers reached 776 million. Market leader China Mobile (SEHK: 0941),
which runs a nationwide 3G network based on the mainland-developed TD-SCDMA
standard, had 548.982 million wireless subscribers as of May. Rival China Unicom
(SEHK: 0762), operator of the more mature WCDMA-standard 3G network, recorded
155.287 million mobile users. ZTE, which posted a 39.68 per cent year on year
increase in net profit to 109.86 million yuan in the first quarter, also claimed
leadership in worldwide CDMA network sales. Li said the company seized a 43.2
per cent global market share due to a steady increase in shipments to more than
120 mobile network operators in 70 countries. Matt Walker, principal analyst at
market research firm Ovum, said ZTE, like domestic rival Huawei Technologies,
had received Beijing's support to grow significantly in overseas markets. Last
year, for example, ZTE received two separate lines of credit from government
financial institutions to help it pursue projects abroad - US$15 billion from
China Development Bank and US$10 billion from the Export-Import Bank of China.
The company last month landed a C$350 million (HK$2.6 billion) contract to
design, build and operate a CDMA wireless network for Canadian operator Public
Mobile.
The government has appointed a new
commission to manage harborfront development on Tuesday, with property
consultant Charles Nicholas Brooke named as chairperson. The Harborfront
Commission will replace the Harborfront Enhancement Committee. The commission
consists of 28 members with 12 organizations such as the Real Estate Developers
Association and the Society for Protection of the Harbor represented. It would
make recommendations on the development of Victoria Harbour to the government
and the chairman said it would also aim to encourage government partnerships
with the private sector. “Not only will we will play an overseeing role, but we
will be responsible for monitoring planning, design and development [of
harborfront projects] for the management,” Brooke told local radio. The previous
committee was set up in 2004 and helped in reducing the extent of reclamation
plans proposed by the government in Kowloon Bay and Central.
China Resources Enterprise has bought
an 80 per cent stake in Hong Kong coffee chain Pacific Coffee for HK$326.6
(US$42.1) million, in a move by the retail firm to enter the coffee store
business in the mainland. Consumer-sector focused China Resources Enterprise (SEHK:
0291) said on Tuesday that it had acquired an 80 per cent stake in Hong Kong
coffee chain Pacific Coffee from Chevalier Pacific Holdings for HK$326.6
million. The remaining 20 per cent of Pacific Coffee, which has 95 stores mostly
in Hong Kong, would be held by investment holding firm Chevalier. “Coffee
consumption is experiencing rapid growth in China, fuelled by a growing
coffeehouse culture among Chinese consumers,” Chen Lang, managing director of
China Resources Enterprise, said in a statement. “Our goal is to build Pacific
Coffee into the No 1 coffeehouse brand in China.” Pacific Coffee would compete
with US speciality coffee chain Starbucks, which said recently that it could in
the future have “thousands of stores” in Greater China, up from around 700 now.
Seasoned barristers and friends yesterday broke into applause in a scene rare
for the sombre halls of the Court of Final Appeal as two lawyers in a case
involving alleged witness tampering had their names cleared six years after they
were first arrested. The Court of Final Appeal unanimously dismissed
prosecutors' attempts to overturn barrister Kevin Egan's acquittal by a lower
court and quashed solicitor Andrew Lam Ping-cheung's conviction. Mandy Chui Man-si,
a co-defendant, was also acquitted. The ruling brings to a close six turbulent
years of legal battles and appeals, first at the District Court, then the Court
of Appeal, and finally, the city's top adjudicator. The Court of Final Appeal's
judgment came after seven days of appeal hearings last month and this month.
Immediately after Mr Justice Kemal Bokhary announced the decision and the panel
of judges rose, the three appellants and others in court erupted in applause.
Lam appeared moved to tears as he embraced those around him. "Of course I'm very
delighted that in Hong Kong we have a judicial system which is fair and
reasonable," the lawyer, who had not slept for six days before the judgment,
said outside court. However, he added that within the system there might be room
for improvement. Lam said the case had affected him tremendously. "My licence to
practise law was revoked, my family is affected, my social life is totally a
mess. And of course, my financial position has been damaged and ruined," he
said. Lam went to St John's Cathedral 50 metres from the court to pray after the
ruling. "It was thanks to my faith that I got through those six years." He
headed to a doctor afterwards to consult him about a heart condition he
attributed to the long battle. 
At the same time, Lam and Mandy Chui Man-si,
a girlfriend of Derek Wong, appealed against convictions for perverting the
course of justice. They were alleged to have made a fraudulent claim that Becky
Wong was unlawfully detained by the ICAC against her will during the
investigation. Lam was jailed for six years and Chui for two-and-a-half years.
Both sentences were quashed. "The evidence favors a finding that Lam did not
know or believe that Becky Wong was not unlawfully detained," Justice Patrick
Chan Siu-oi said. Lam said he would apply to get his licence back but was now
less keen on criminal law. Egan and Chui declined to comment. Law Society
president Huen Wong said the society would meet today to study the judgment and
decide whether it should discontinue disciplinary proceedings against Lam and
reinstate his licence. Lam's licence was suspended pending the final outcome of
his case, Wong said. It was not suspended as a result of disciplinary
proceedings against him, which up till now have not been heard. One man in court
yesterday said he predicted the outcome. Sammy Au Chung-tak, Chui's fung shui
master, said he knew Chui would win. "Mandy's ba zi," he said, referring to a
fung shui system, "is averse to fire. Today's ba zi has the element of earth and
metal, which helps reduce the fire element, which represents the legal
proceedings". Au said Chui had performed many charitable acts, including opening
a charitable organisation to help the elderly six months ago. Mr Justice Patrick
Chan Siu-oi, Mr Justice Roberto Ribeiro, and non-permanent judges Mr Justice
Henry Litton and Mr Justice Murray Gleeson also sat on the panel hearing the
case.
Hong Kong Law Society president Huen Wong at a press conference on Tuesday in
Central where he announced the reinstatement of suspended lawyer Andrew Lam
Ping-cheung. The Law Society of Hong Kong has reinstated solicitor Andrew Lam
Ping-cheung’s legal licence and stopped disciplinary proceedings against him,
Law Society president Huen Wong said on Tuesday. Lam's licence had been
suspended in 2006 after his conviction for conspiring to pervert the course of
justice. On Monday, that conviction was quashed by the Court of Final Appeal.
Wong made the announcement after members of the society met on Monday to study
the court's judgment. “The society suspended Mr Lam’s licence in 2006 on the
grounds that he was convicted," Wong said. "Now that the court has quashed his
conviction, it was reasonable for us to resume his licence.” Lam was very happy
with the decision of the society, he said. The case stemmed from an alleged
conspiracy to put pressure on a potential prosecution witness to not help the
ICAC with a market manipulation investigation. Lam's conviction was quashed by
the Court of Final Appeal after it found there was insufficient evidence to link
him with the conspiracy.
Amid intensifying criticism being levelled at the Democratic Party for its
support of the government's reform proposal, the League of Social Democrats said
it could not control any radical action by its supporters during the annual July
1 march. The warning by league lawmaker Wong Yuk-man came as Democratic Party
chairman Albert Ho Chun-yan said he was prepared for a bad reception at the
march, which his party will attend. At a press conference, the league announced
that it was reviewing whether to treat the Democratic Party as an ally in light
of the latest developments. League chairman Andrew To Kwan-hang said the
democratic party should consider whether to take part in the march. "We are
fighting for the introduction of universal suffrage in 2012 and abolishing
functional constituencies. The government has already surrendered - why is it
still going to march?" To said. He accused the party of "trying to play victim"
in recent days, citing vice-chairwoman Emily Lau Wai-hing's condemnation of
people who swore at moderate democrats during RTHK's City Forum programme on
Sunday. "Perhaps the party thought it could score some political points if its
members tripped over during the march," Wong said. "The league has not ordered
our supporters to rush them, but when the people are angry, we can't guarantee
anything." Wong said he personally "does not oppose" league supporters mobbing
Democrats taking part in the demonstration to express their anger. "I expect the
July 1 march will be very chaotic. The Communist Party will be very happy," he
said. Flanked by his party colleagues, lawmakers from the Civic Party and other
independent pan-democrats in a separate press conference, Ho said he was
prepared for the worst but trusted the public to hold an orderly demonstration.
"People will be angry and criticise us, and I am prepared for this. We will call
for our supporters to be relaxed about the criticism," Ho said. There was
tension in the air when, one by one, those present at the press conference
called for restraint. Unionist Lee Cheuk-yan, a march organiser, said any
violence would mean people had fallen into Beijing's trap of splitting the camp.
Chen Yunlin, chairman of
China's Association for Relations Across the Taiwan Strait (ARATS), front right,
shakes hands with his counterpart, Chairman of Taiwan's Straits Exchange
Foundation (SEF), Chiang Pin-kung after a signing ceremony in Chongqing on
Tuesday. China and Taiwan signed a tariff-slashing trade pact that boosts
economic ties and further eases political tensions.
U.S. slaps punitive penalties on
Chinese woven electric blankets - The U.S. Commerce Department Monday set final
antidumping duties on imports of some 55.92 million dollar woven electric
blankets from China, a move might escalate trade disputes between the two
countries.
Graftbusters need to stay on the
straight and narrow, legislators said after yesterday's ruling in the Court of
Final Appeal. James To Kun-sun, a solicitor and deputy chairman of the
legislature's panel on security, said: "The image of the Independent Commission
Against Corruption has been affected by the case ... not because it spent lots
of manpower and resources on it but because it did something unjust." He
described as "malpractice" an ICAC decision to destroy a recording that
solicitor Andrew Lam wanted kept as it might have proved his innocence. The
recording was said to be of a conversation between Mandy Chui and Semtech
chairman Derek Wong's secretary. To also said that as Lam and Kevin Egan were
known for representing people in trouble with the ICAC, the agency's handling of
the case might leave people with an impression that it was snapping at their
heels. The case could also have lawyers worrying that they would face trouble if
they represented people charged by the ICAC, he added. Lau Kong-wah, chairman of
the panel on security, said yesterday's decisions were "a blow" to the ICAC,
"but I believe our society will respect the ruling." But another solicitor and
panel member, Paul Tse Wai-chun, said he did not see indications that the ICAC
failed to meet its responsibilities in the case. The ICAC has lately come under
criticism over its approach to some cases. Among them, TVB general manager
Stephen Chan Chi-wan and four other people were arrested in March for alleged
corruption over service contracts on entertainment shows, but the case does not
appear to have moved forward.
US President Barack Obama launched a
stern challenge to the mainland overnight on Sunday, using the big stage of the
G20 summit of world powers to demand Beijing’s help in rebalancing the world
economy. The G20 leaders, representing both the world’s established economic
giants and its dynamic emerging powers, agreed a package of measures to cut
deficits, stimulate growth and return stability to financial markets. But Obama
went further than the carefully worded joint statement, using his post-summit
press conference to remind the mainland that the United States expects it to
allow its currency to rise and to reduce its huge trade surplus. “My expectation
is that they’re going to be serious about the policy that they themselves have
announced,” Obama said, welcoming Beijing’s announcement last week that it will
allow more flexibility in the yuan exchange rate. As the world limps out of the
worst recession since the 1930s, American policymakers fear the recovery will
revive the one-sided trade across the Pacific in mainland goods kept cheap by
the low level of the yuan.
