China.Hawaii Chamber of Commerce ®
Hong Kong.Hawaii Chamber of Commerce ®
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Hong Kong, China & Hawaii News Archive for Year 2002  Archive Jan 1, 2003.........:>
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China Projects Bidding Information - update daily    Scholarship & Grants  News Archives in PDF Format 

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(approximate $ exchange rates: US$1 = HK$7.8, US$1 = RMB$6.3)

China President Hu Jintao USA State Visit January 19 - 21 2011 http://www.b2bchinadirect.com/hujintaousavisit.htm

Wine-Biz - Hong Kong Brand Hong Kong Video

Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) http://www.tid.gov.hk/english/cepa/index.html

成功之道 武进制造 Wujin - Changzhou - Jiangsu Province - China http://www.hkchcc.org/wujin.htm 

Happy Chinese New Year - Year of the Horse - Jan 31 2014 - Dance w/ Firework http://www.youtube.com/watch?v=-VoFfOglJuI 

  President Obama's Lunar New Year Message - Year of the Dragon http://www.youtube.com/watch?v=C6gfkYAo5gE

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

The Hong Kong Advantages under One Country Two Systems - when most of the world want to do business with China, there is only one place that China gives 100% backing - that is Hong Kong. Quoting the former Chief Executive of Hong Kong SAR Honorable Tung Chee-hwa "背靠祖國 - 面向世界" "backed by China and engaged globally". Whether you are an international business wanting to do business with China, or just wanting to get connected with Asia and the rest of the world - Asia's World City: Hong Kong is the right and smart choice.

TED: Martin Jacques Understanding The Rise of China 马丁·雅克:了解中国的崛起 http://www.youtube.com/watch?v=DJiOXUHIOeA 

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

Hong Kong Chief Executive Policy Address, please visit www.policyaddress.gov.hk The website contains all the documents and official video clips (including the recording of CE's presentation at the Legislative Council, press conference and TV forum, etc.).

Be sure to visit Hong Kong on your way TO/BACK from China http://www.chinadaily.com.cn/travel/visafree/ 

Hong Kong*:  Apr 4 2014

Hong Kong-born Olivia Chow urges voters in SAR to help her defeat Toronto mayor Rob Ford (By Ian Young in Vancouver ian.young@scmp.com) Mayoral candidate Olivia Chow says Canadians in SAR 'share shame' at crack-smoker's antics - Toronto mayoral candidate Olivia Chow has urged tens of thousands of Torontonians living in Hong Kong to help end the "embarrassment" of having Rob Ford as leader of Canada's biggest city. Chow, whose family migrated from Hong Kong to Canada when she was 13, told the South China Morning Post on Tuesday that Toronto residents living in Hong Kong shared the "sense of shame" that came from having a crack-smoking mayor. The former MP for the left-leaning New Democratic Party (NDP) said Canadian citizens in Hong Kong who were eligible to vote in October's municipal elections had the chance to restore pride to Toronto. She was visiting Hong Kong with fellow MPs in November when Toronto police confirmed the existence of a video that showed Ford smoking from a crack pipe. Ford's drunken escapades and his association with known gang members have also provided rich fodder for late-night comedians. "That was the exact time when Rob Ford made international news. So I saw Rob Ford on the front page of the South China Morning Post. I thought 'oh my God. We can't escape the embarrassment'," said Chow, 57, who is one of Canada's most prominent ethnic Chinese politicians. It is unclear how many Canadians in Hong Kong are eligible to vote in Toronto's elections. However, a 2010 survey conducted by the Asia Pacific Foundation suggested there were about 295,000 Canadian citizens in the SAR, most of them returnee immigrants. Since a large majority of Hong Kong emigrants settle in either Toronto or Vancouver, a conservative estimate of the number of Torontonians in Hong Kong would reach more than 100,000. Chow, the widow of former NDP and opposition leader Jack Layton, stepped down as a federal MP last month in order to challenge Ford. She said she believed Hong Kong's Torontonians felt "a fascination and a deep-seated embarrassment and sense of shame" about Ford's behaviour. "There we are on CNN, being recognised not as this most diverse and successful city, but as a laughing stock on Hollywood late-night shows," she said. Chow is considered the leading contender to oust Ford, who remains popular in working-class Toronto suburbs known as "Ford Nation". More than 40 candidates have registered for the October 27 race, with former provincial Progressive Conservative party leader John Tory the other main challenger. Chow has campaigned on the promise of creating a world-class public transport system in Toronto. She has also pledged to create jobs by cutting taxes on small businesses. The mayor's brother, Councillor Doug Ford, told the Toronto Sun last month that voters "may despise Rob Ford but I know deep in your heart if you had Olivia Chow taking care of your bank account or Rob Ford, you wouldn't care if Rob had 10 beers because he'd watch every single penny". A poll conducted by Forum Research on March 13, the day Chow launched her campaign, saw her leading the field of candidates, with 36 per cent of respondents supporting her. Ford had 28 per cent support and Tory 22 per cent. In the first televised mayoral debate, held on March 26, Ford's rivals mainly steered clear of the controversy surrounding his behaviour, and most observers thought Ford held his own. But Chow delivered the best line of the night, after the cost-cutting mayor boasted that he had been elected to "stop the gravy train". "Your gravy train has turned into a train wreck," Chow said. Chow said her primary message to potential voters in Hong Kong was that they should participate. "Toronto is your city too. You may want to come back to retire or invest … You want to be proud of your city," she said. Would-be overseas voters must register, with applications available via the Elections Canada website or at the Canadian Consulate General. Ballots are sent to registered voters, who must return them by mail to Elections Canada a week before the election date.

 China*:  Apr 4 2014

Trip builds bridge to Europe (By By Wu Jiao in Bruges, Belgium) President says China and EU can become twin engines of growth - President Xi Jinping, his wife Peng Liyuan (right), Belgian King Philippe (third from right) and Queen Mathilde (second from right) attend a ceremony to present the 300,000th Volvo car produced for the Chinese market at a Volvo plant in Ghent, northern Belgium, on Tuesday. Ending his European tour with a speech in the Belgian city of Bruges - derived from the old Flemish for "bridges" - President Xi Jinping said on Tuesday that he had come to Europe to build bridges of friendship and cooperation across the Eurasian continent. "We need to build four bridges for peace, growth, reform and the progress of civilization, so that the China-EU comprehensive strategic partnership will take on even greater global significance," he said. "We must uphold the open market, speed up negotiations on the investment agreement, actively explore the possibility of a free trade area, and strive to achieve the ambitious goal of bringing two-way trade to $1 trillion by 2020," Xi told dignitaries, including Belgian King Philippe, Queen Mathilde and Prime Minister Elio Di Rupo, at the College of Europe. In addition, they should study how to dovetail China-EU cooperation with the initiative of developing a Silk Road economic belt to integrate the markets of Asia and Europe, and make China and the EU the "twin engines" for global economic growth. Xi said China cannot copy the political system or development model of other countries. "The Chinese people, more than 2,000 years ago, had come to understand this from a simple fact that the tasty orange, grown in southern China, would turn sour once it is grown in the north," he said. "The fruit may look the same, but the taste is quite different, because the north is a different location and different climate." "The Chinese people are fond of tea and the Belgians love beer," he said. "To me, the moderate tea drinker and the passionate beer lover represent two ways of understanding life and knowing the world, and I find them equally rewarding." Xi said that one can hardly understand China without a proper understanding of its history and culture, and the profound changes taking place. That explained why he devoted nearly half of his speech to describing what kind of country China is. Xi said the memory of invasion and bullying has never been erased from the minds of the Chinese people, and is why people cherish the lives they lead today. "The Chinese people want peace, we do not want war. This is why China follows an independent foreign policy of peace," he said. China is committed to non-interference in other countries' internal affairs, and China will not allow others to interfere in its own affairs, he said. More than 200 million Chinese are still living under the poverty line set by the World Bank, roughly the population of France, Germany and the United Kingdom combined, Xi said. China is the second-largest economy in the world, he said, but is ranked 80th in per capita GDP. That explains why economic development remains the top priority, he said.

Hong Kong*:  Apr 3 2014

Hong Kong the 'best city in the world for commuters' (By Ada Lee ada.lee@scmp.com) Public transportation gets top marks in survey but cycling and air quality still a problem - A study praises Hong Kong's MTR saying it has turned the city's high population density "into an opportunity rather than a threat". Hong Kong is the best place in the world for people to travel around, but falls behind in cycling paths and air quality, a study has found. The study, involving 84 major cities across the globe, found the city had developed “the most advanced urban mobility system in the world”, with public transport being the main mode of commuting and the number of registered vehicles per head of population is one of the lowest. Hong Kong, which also topped the list in the last survey in 2011, scored 58.2 out of 100 this year, followed by Stockholm with 54.7, Amsterdam third and Copenhagen fourth. Singapore is in sixth place, after Vienna. London ranked ninth in the study, with Tokyo 19th and Beijing 28th, followed by Guangzhou. The Urban Mobility Index report, compiled by international consultancy company Arthur D Little, found Hong Kong’s railway system “impressive”, and the high use of Octopus cards also played an important part in securing the top spot. “MTR has turned Hong Kong’s high population density into an opportunity rather than a threat,” it said. It described the city as “a striking example of a city entering into a virtuous system”, but it noted that its mobility had been shaped by “one dominant operator” – the railway. “Further improvement of the mobility system will require more co-operation with other stakeholders in the ecosystem and the introduction of innovative mobility services”. Although the city fares well in most indicators of the study, its score in cycle path density was the lowest in the top 11 cities. Hong Kong only has 187 kilometres of cycling paths for every 1000 square kilometres of land, compared to 4,041 in Stockholm, 3,502 in Amsterdam and 280 in Singapore. The city also did not do well in the air quality indicators. The annual average transport-related emission of nitrogen dioxide stood at 50mcg per cubic metre, and there was 50mcg per cubic metre of particulate PM10. Government figures show the roadside nitrogen dioxide level has increased by a quarter since 2006. Hong Kong Cycling Alliance chairman Martin Turner said Hong Kong had great potential to become a bicycle-friendly city because of the compact urban area, and the government should stop treating cycling only as a leisure activity. He welcomed the government’s initiatives to improve and build cycling tracks in the New Territories but said more effort would be needed to extend the network to other areas. “We shouldn’t use [the high ranking of Hong Kong] as a reason for the absence of cycling.” Friends of the Earth’s Melonie Chau Yuet-cheung said poor air quality score could be attributed to the bad planning in Hong Kong, with buildings creating a wall effect. The many traffic lights also made cars stop and go frequently, generating exhaust fumes.She said the government should considering road charging in the busiest parts of the city or banning cars from entering certain districts. The study said 38 per cent of Hongkongers used zero emission modes of transport – cycling and walking. The organisation noted that it was much higher than the general public perceived. The Transport Department said it strived to promote bicycle-friendly environment in rural areas, new towns and new development areas and was carrying out a comprehensive review of the city’s cycling policy. The Environmental Protection Department said it was pleased with the survey. It had taken measures to reduce roadside pollution by phasing out some 82,000 pre-Euro IV diesel commercial vehicles, subsidising franchised bus companies to test hybrid and electric buses, and other schemes to control emissions. It would also work with Guangdong authorities to reduce emission in the region, it said.

 China*:  Apr 3 2014

EU-China research centre opens in Belgium (By SCMP) Facility at College of Europe to study ‘rapidly developing relations between the European Union and China’ - Jorg Monar, rector of the College of Europe, right, speaks at the opening of the EU-China Research Centre. The College of Europe, a postgraduate institute that trains European leaders and diplomats, opened its EU-China Research Centre in Bruges, Belgium, on Tuesday The opening came a day after Xi Jinping made the first visit by a Chinese president to the European Union’s headquarters in the historic city. Xi, accompanied by his wife, Peng Liyuan, was on the final leg of a 10-day, four-nation tour of Europe, his first as president. The European Union has 28 member states and is China’s largest trading partner. “The Centre aims to study the rapidly developing relations between the European Union and China by critical analysis and academic research,” the centre’s director, Jing Men said. The centre will undertake research, produce publications, organise conferences and promote co-operation between scholars who specialise in EU-China studies, she added. Following the inauguration ceremony, the centre and other institutions at the college began a two-day seminar on “China’s reform and its impact on the EU and the world”. On Friday, the college inaugurated its China Library, providing about 10,000 books and audio-visual publications in six languages that were donated by China’s State Council Information Office. The College of Europe was founded in 1949 to promote “a spirit of solidarity and mutual understanding between all the nations of Western Europe”. It has about 400 postgraduate students from more 55 countries. Its famous alumni include Danish Prime Minister Thorning Schmidt Helle, the British Deputy Prime Minister Nicholas Clegg, and ambassadors from countries across Europe. Sino-EU trade between has doubled since 2003 to 1 billion euros (HK$10.5 billion) a day, and a number of important trade deals were announced during Xi’s visit that included the Netherlands, France, Germany and Belgium. 

Hong Kong*:  Apr 2 2014

Pro-Beijing camp woo pan-democrats with ‘exclusive’ talks for Shanghai visit (By Jeffie Lam and Stuart Lau) Pro-Beijing figures 'will find a way' for rivals to have private meeting with officials in Shanghai - Lawmakers (left-to-right) Ronny Tong Ka-wah, Dennis Kwok Wing-hang, Emily Lau Wai-hing, Frederick Fung Kin-kee and Cyd Ho meet the press after discussing the details of a purposed meeting with Beijing officials in Shanghai with Legislative Council president Jasper Tsang Yok-sing. Pressure is growing on pan-democrat lawmakers to join a trip to Shanghai after pro-government figures said they would find a way for them to have an exclusive meeting with Beijing officials. This emerged yesterday when one of the hold-outs, Frederick Fung Kin-kee, of the Association for Democracy and People's Livelihood, said he was willing to go after hearing of the gesture. But other pan-democrats want a guarantee. "We still want the central government to give us a reply first on whether the officials are willing to have an exclusive meeting with us," Labour Party lawmaker Cyd Ho Sau-lan said. Only 44 of the 70 lawmakers - and just one pan-democrat, radical "Long-Hair " Leung Kwok-hung - had signed up by the deadline yesterday to join the visit on April 12 and 13 for talks with Beijing officials on Hong Kong's political reform. Pan-democrats have demanded an exclusive meeting with the director of the State Council's Hong Kong and Macau Affairs Office Wang Guangya , Basic Law Committee chairman Li Fei and central government liaison office director Zhang Xiaoming . Pro-Beijing figures including Legislative Council president Jasper Tsang Yok-sing believe such an arrangement is possible. Yesterday Fung quoted Tsang as saying he had heard of the possibility that establishment lawmakers would excuse themselves from a meeting with the Beijing officials to give pan-democrats an exclusive audience. "While the pro-establishment camp hopes an exclusive meeting can be arranged for pan-democrats, [Tsang] heard that some pro-Beijing lawmakers are willing to stay away and let pan-democrats have an [exclusive] dialogue with the officials," Fung said. Lawmaker Wong Kwok-kin said he believed most of his pro-Beijing allies would agree to such an arrangement. "We really hope - and would be very glad - to see pan-democrats finally start a rational discussion with Beijing officials on reform," he said. But Ip Kwok-him, of the Democratic Alliance for the Betterment and Progress of Hong Kong, said he would respect the arrangements made by mainland officials. Ho said the pan-democratic camp, which meets today, could make a decision by Thursday, when all parties would have consulted their members.

 China*:  Apr 2 2014

We should join hands, Xi tells EU (By WU JIAO and FU JING in Brussels and PU ZHENDONG in Beijing) Chinese President Xi Jinping (L) meets with Jose Manuel Barroso, president of the European Commission, in Brussels, Belgium, March 31, 2014. The two sides must start study on free trade agreement 'as soon as possible' China and the European Union should be partners for growth, offering each other opportunities and speeding up completion of an investment treaty, President Xi Jinping told European Council President Herman Van Rompuy on Monday. In the first visit to EU headquarters by a Chinese president, Xi told the bloc's top official that China expects Europe to expand high-tech exports, and that the two sides should start a feasibility study for a free trade pact as soon as possible. Xi, on the last leg of his first official tour of Europe, met with Van Rompuy, European Parliament chief Martin Schulz and European Commission President Jose Manuel Barroso. Xi said China firmly supports European integration and has committed itself to expanding and deepening a comprehensive strategic partnership with the EU. He proposed that the two sides take the lead in following a course of peaceful development by intensifying consultations and coordination on international and regional affairs to push for the political settlement of "hot" issues. As reform in China and the EU has entered "deep-water" zones, the two sides should share experience and step up cooperation on such reform priorities as the macroeconomy, social governance, public policies, rural development, employment and environmental protection. Van Rompuy said the Chinese president's presence at the EU headquarters is testimony that the EU-China comprehensive strategic partnership is on a firm footing. Echoing Xi, Van Rompuy said the EU is willing to speed up negotiations for a Europe-China investment agreement and for a free trade pact, and to cooperate with China in areas including urbanization, sustainable development and coping with climate change. The EU places emphasis on the new opportunities unleashed in China's reform and opening-up and hopes to broaden cooperation with the nation, he said. In an earlier interview with Xinhua News Agency, Van Rompuy said, "There are many common features in Europe's growth and job strategy and China's 12th Five-Year Plan — how to provide first class educational opportunities for our young people, how to encourage research and innovation, how to sustain a clean environment, reduce poverty, ensure effective public service and cut red tape for business. "In all these areas, we can learn from each other and exchange views on how to achieve our priorities," he said. Chi Fulin, president of the China Institute for Reform and Development, said, "Xi's visit to EU headquarters is of historic meaning, and the consensus achieved between Xi and Van Rompuy is also of great significance," — a reference to the fact that China and the EU have agreed to deepen partnerships in peace, growth, reform and civilization. Chi is among a group of Chinese experts attending a high-level seminar on China's reform and its implications to Europe and the world, hosted by the College of Europe on Tuesday and Wednesday, where Xi is scheduled to give a speech on Tuesday to wrap up his European tour. In a meeting with Barroso, Xi said he hopes Europe will keep markets open, exercise caution over the use of trade remedy measures and bring trade friction under control. Xi said he hopes the two sides will conduct equal dialogue and friendly consultations to "put out the sparks of trade frictions and let the flames of prosperous development rage". Barroso said the EU, in line with the China-EU 2020 Strategic Agenda for Cooperation, hopes the two sides will upgrade trade and investment levels as they negotiate the investment agreement and free trade pact. Both sides will properly handle trade friction in wireless communications equipment and other areas, he said. In view of last year's solar panel dispute between the two sides, Feng Zhongping, vice-president of the China Institutes of Contemporary International Relations, said the "lose-lose" game of trade friction will lead to China and the EU consulting each other on setting up an early warning mechanism to avoid serious damage. "In terms of reducing future trade disputes, the negotiation and signing of the China-EU Investment Agreement offers another perspective," Feng said. The EU is China's largest trade partner, while China is the EU's second largest. In 2013, bilateral trade reached $559 billion. Zhou Hong, director of the Institute of European Studies at the Chinese Academy of Social Sciences, said: "European integration offers a new perspective for China. The two sides can find common language on innovations in governance mechanisms and institutions. "On one hand, the integration process has effectively prevented vicious competition and brought peace among member states," she said. "On the other hand, the integration has led to prosperity because of the merger of many small state-level markets into one vast and well-functioning community."

 

Hong Kong*:  Apr 1 2014

Marine Department promises review amid shortage of mooring space (By Ada Lee ada.lee@scmp.com) With lack of berths driving up rents and illegal moorings, Marine Department promises review - Government will look into shortage of mooring space. Community pressure over Hong Kong's chronic shortage of mooring spaces, which has put the cost of boat ownership beyond the means of all but the most wealthy, has prompted a government review. Industry representatives warn that the shortage - estimated at about 10,000 spaces - is forcing skippers to berth illegally, while competition for available legal spaces has caused rents to double. The Marine Department has promised to launch a review of the berth situation within two months. The department is to appoint consultants in May, with the review to be completed by the middle of next year. According to tender specifications, the review will survey existing supply and demand for the spaces and make projections up to 2030, taking into account development plans. It will also look at whether more sheltered berths are needed, analyse occupancy levels at popular moorings and collect views from industry figures and the public. There are more than 15,000 fishing and leisure boats in the city, but the number of moorings is estimated to be less than 5,000. Baggy Sartape, of Asia Boating in Aberdeen, said the rent for a mooring space had doubled in the past five years. A berthing space at a private marina cost between HK$50,000 and HK$80,000 per month, he said. Sartape said some owners had taken to berthing two vessels on one mooring, while others sublet berths, despite both practices being illegal. He estimated that the number of boats increased 10 per cent each year, but said the last private moorings created were the 33 established 11 years ago in Cheung Sha Lan, Lantau. "Now, even if you are rich, you may not be able to find a sublet space, simply because there are no more," he said. He called on the government to create more mooring spaces, which would bring the rents down and enable more people to enjoy boating. Southern District councillor Paul Zimmerman suggested the Aberdeen Typhoon Shelter could be expanded to provide more mooring spaces. This would alleviate pressure on berths, while creating job and business opportunities, Zimmerman said. The district council is to discuss the issue tomorrow.

 China*:  Apr 1 2014

'Nubia', not iPhone, is Chinese first lady Peng Liyuan’s latest choice of smart phone (By Chris Luo chris.luo@scmp.com) [Peng Liyuan is a popular Chinese folk music and opera singer and the wife of Chinese president, Xi Jinping. A native of Yuncheng County, Shandong, Peng was a finalist at the First National TV Chinese Vocal Contest and is best known for works including People from Our Village and On the Plains of Hope] Peng Liyuan, wife of the president of the People's Republic of China, Xi Jinping, takes pictures next to Volkswagen CEO, Martin Winterkorn in Berlin, Germany on Saturday. Ever since Peng Liyuan dazzled the public on her first official appearance as China’s first lady a year ago, the former military singer's every movement, speech and choice of apparel has been closely watched by fans as well as analysts. And the latest social media craze about Peng among China’s online community is, “what cellphone is she using?” On Saturday, a picture of Peng snapping photos with a white mobile phone emerged on the internet, prompting curious internet users to speculate over exactly what brand the first lady favoured. A smiling Peng was seen sitting between her husband Xi Jiping and Volkswagen CEO Martin Winterkorn, raising a white smart phone to take pictures of a friendly match between German and Chinese youth soccer teams in Berlin, during the couple's state visit to Germany. Although only the back of the smartphone and no logo was visible in the photo, gadget-savvy web users soon discovered that Peng's phone was a Nubia Z5 mini, a one-year-old model made by Chinese firm ZTE, the world’s seventh-biggest smartphone maker. The budget smartphone retails between 1,499 yuan and 1,888 yuan (US$241-304), but is no longer available on Nubia’s official website as it has been replaced by newer versions. Peng’s new handset choice, a far cry from the iPhone 5 she was pictured using on her US trip last June, drew applause from many Chinese netizens who saw it as a demonstration of the first lady's support for domestically manufactured products. Many Nubia fans wrote on social media that they were delighted to discover the first lady shared the same taste with them. In addition, the companies concerned have been quick to bank on the revelation as a marketing windfall. The official Weibo social media account of the brand Nubia on Saturday night reposted the photo of Peng holding the phone, and added the comment: “the Chinese dream starts from Chinese-made,” a reference to Peng’s husband President Xi Jinping’s iconic political slogan. It also added a tag referring to the handset as the “cellphone [used by] the mother of the nation,” playing on a popular nickname for the first lady. And the microblog of JD.com, China’s second largest e-commerce website and Nubia’s exclusive distributor, commented: “Recording the Chinese dream, using a JD phone … the flagship cellphone is Only Available on JD.com.” But a number of online users did not find the 'patriotic' narrative quite so plausible. “Isn’t the [cellphone’s] operating system still Google’s Android?” one blogger observed in a comment echoed by a number of others. Some others questioned the appropriateness of the brand name, which sounds very much like “niubi” – a somewhat vulgar slang term meaning “badass” or “kickass”. Peng earlier won praise from mainland internet users and fashion experts when she sported outfits designed by the Chinese fashion icon Wuyong, as many fashion critics called the brand choice “elegant,” “dignified,” and “falling in line with her identity”. The latest online frenzy surrounding Peng has also prompted a number of businessmen to try to promote copies of everything Peng wore from coats to handbags on Taobao, a major online shopping website in the mainland. The 51-year-old Peng is among China’s most famous folksong singers working for the People's Liberation Armyand, and used to hold a non-combat rank equivalent to that of a major general. Her successful singing career made her a household name in the 1980s, years before her husband emerged as a rising political star. 

Hong Kong*:  Mar 31 2014

Hong Kong's dominates Dubai sprint features in successful international raid (By Alan Aitken in Dubai alan.aitken@scmp.com) Joao Moreira puts on a demonstration to the world, winning the Al Quoz Sprint aboard Amber Sky and the Golden Shaheen on Sterling City, but the Hong Kong team could not match their rivals in the bigger races - Sprinters carried the day for Hong Kong's assault on the Dubai World Cup, answering the call for multiple wins by bringing home the two short course Group Ones but the longer races proved a back-to-earth experience as the Japanese and then the Godolphin team waltzed off with the biggest money races. Joao Moreira was one of the stars of the show, donning a gift of a Brazilian flag from an excited fan as he returned with Ricky Yiu Poon-fai-trained Amber Sky after the Al Quoz Sprint but Team Moore found him a bauhinia flag to sport as he came back with Sterling City, who beat Rich Tapestry in the Golden Shaheen 40 minutes later in a triumphant Hong Kong quinella. An incredible three wins beckoned but Hong Kong's fortunes tapered off as the Group One races got longer, with Blazing Speed well beaten a long way from home in the Duty Free, Dominant brave in the Sheema Classic after early interference, and the World Cup a popular home town result for Godolphin's African Story while Akeed Mofeed (fifth) and Military Attack (10th) were never threats. "I have to be pretty happy with my night - to win two races was fantastic," Moreira said and he was showing all the skills - in front throughout on Amber Sky for Ricky Yiu Poon-fai and the horse's owner, martial arts legend, Sammo Hung Kam-po, then waving his wand across John Moore-trained Sterling City just when compatriot Rich Tapestry looked to have him beaten. Joao Moreira after winning the Golden Shaheen with Sterling City. "We have 1,200 horses in Hong Kong and look what we're doing at the biggest meeting in the world," said Moore, after the Golden Shaheen quinella, echoing the predictions he had made on Friday that Hong Kong would win multiple events at the meeting. Amber Sky was simply too quick over the straight 1,000m in the Al Quoz, holding a neck margin to the line. "I don't know what to say - I don't even believe it yet," said Hung after a win that was months in planning for Yiu. "In the mornings in Hong Kong, we have been taking him for long walks, before and after trackwork, doing everything to get him to settle down and keep calm," Yiu said. "I still remember seeing Amber Sky as a yearling and my first impression was that he would make a two-year-old. But he has just kept improving." Asked to compare the speedster with other greats he had handled, like Sacred Kingdom and Fairy King Prawn, Yiu said it was not a fair question. "So far, Amber Sky is a 1,000m straight horse. Those other horses won around the turns, at different distances, so you cannot compare them," he said. "But I'm hoping Amber Sky will continue to improve, learn to handle the turns and run 1,200m in time." If Moreira's Al Quoz win was anticipated and looked straight forward during the race, Sterling City's win was anything but assured as the sprinter was being cajoled by the Brazilian approaching the home straight. "This was his first time on the Tapeta, he has never experienced it and the kickback was affecting him," Moreira said. But Moore was a relieved man when Moreira hooked right on the gelding, moved into clear space and Sterling City launched his finishing sprint. "Sterling City has beaten Rich Tapestry every time they have met in Hong Kong, but he had won easily here on this surface and I was thinking about that in the run," Moore said. "But we're lucky to have the Magic Man on." "This is my first win in Dubai and also the first for Team Moore - my son George rode Sterling City in his work here and my daughter, Caroline, told me she would love to strap a horse here and I said Sterling City is a very quiet horse and he'd be perfect." "I want to mention Henry Plumptre too - this isn't one of the horses I've bought for my owners at the sales. We got him through Henry, and the Lings and I are very grateful." Yiu indicated that further overseas action may be ahead for Amber Sky - with consideration given to the King's Stand Stakes or possibly Melbourne - while Moore indicated Singapore as the next target for Sterling City, but Royal Ascot may be on the agenda thereafter. Michael Chang Chun-wai had to settle for second with Rich Tapestry, but was taking nothing away from the winner. "We had to do a little more this time from the 12 barrier, but he was there to win, the winner was just too good. I am very proud of my horse," Chang said.In the Al Quoz, veteran Joy And Fun, the 2010 winner of the race, bowed out of racing unplaced but with a typical fighting effort - beaten just over a length for fourth placing - while trainer Richard Gibson said he was not disappointed with Akeed Mofeed's fifth. "I can't be disappointed with Akeed Mofeed - Douglas Whyte gave him a great ride, I thought he was going to hold on for third but they got to him the last bit," said Gibson. Moreira said he had not persevered strongly with Blazing Speed when he was dropping out 600m from the post, but had a troubled run on Military Attack and said Dominant (fifth) was caught up in an incident when Mars, reportedly suffering a fractured pelvis, ran off the course and through the outside rail at the first turn in the Sheema Classic. "Dominant was actually quite good, considering that and the wide gate and he finished very strongly in the straight," Moreira said. "And Military Attack was not happy in the gates, then he got a bump on the first turn and I don't think he enjoyed the kickback on the Tapeta. If he had clear room in the straight, he might have run three or four places closer."

 China*:  Mar 31 2014

Wartime atrocities still fresh in memory, President Xi Jinping says in Berlin (By South China Morning Post Staff Reporter and Associated Press in Berlin) Xi says in Berlin that China must build up defences, while stressing desire for peace - Volkswagen chief Martin Winterkorn presents a soccer shirt to Xi and wife Peng Liyuan at a match involving Chinese youngsters. President Xi Jinping said during his visit to Germany that Japanese atrocities during the second world war were still "fresh in the memory" in China and that the nation needed to build its defences to safeguard against aggression. In a speech in Berlin, Xi also reiterated that China's rise posed no threat to the world and that it was committed to creating friendly partnerships with its neighbours. His comments came after an earlier speech in France during the president's European tour in which Xi compared China to an "awakened lion" which he said was "peaceful, pleasant and civilised". In his speech in the German capital, Xi also said China was no Mephisto, a fictional demon character in German literature. "Some view China through coloured glasses and believe it will inevitably become a threat and even portray China as being the terrifying Mephisto who will someday suck the soul of the world," he said. These opinions, he said, highlighted deep prejudices against China. Xi mentioned Japanese aggression twice in his speech and said China understood the importance of peace. "The war of aggression committed by Japan militarism alone inflicted over 35 million Chinese military and civilian casualties. "These atrocities are still fresh in our memory … China needs peace as much as human beings need air and plants need sunshine," he told a forum attended by politicians and business representatives. In a question-and-answer session at the forum, Xi appeared willing to take on some sensitive questions, including China's territorial disputes in the South China Sea with neighbours and the nation's defence budget. "It is purely normal and consistent with China's need to defend itself as a large country in the world," he said of China's defence spending. "On the issue of the South China Sea, we will not provoke trouble ourselves. But when it comes to our sovereignty and territorial integrity we will firmly safeguard our interests." Business ties took centre stage at Xi's meeting with German Chancellor Angela Merkel. The two leaders oversaw the signing of deals including agreements by carmakers Daimler and BMW to deepen ties with their Chinese partners. A deal was also signed between the countries' central banks that will allow yuan-denominated payments to be cleared and settled in Germany's financial centre, Frankfurt. Xi also called for a "quantum leap" to boost economic ties with Germany. Germany is China's largest European trading partner, while China is Germany's biggest export market outside Europe after the United States.

China mulls global satellite surveillance after flight 370 riddle (By Stephen Chen binglin.chen@scmp.com) Beijing mulls launching network of dozens of satellites, giving it the ability to monitor the whole world, in wake of lost flight 370 - China is considering massively increasing its network of surveillance and observation satellites so it can monitor the entire planet, scientists working on the project said. The government is mulling building more than 50 orbiting probes, which Chinese researchers said would make the nation's satellite surveillance network on par with, or even larger than, that of the United States. Frustration with the search for the missing Malaysia Airlines aircraft over the past three weeks had led the project to win strong backing from decision makers in Beijing, the researchers said. "If we had a global monitoring network today, we wouldn't be searching in the dark. We would have a much greater chance to find the plane and trace it to its final position," said Professor Chi Tianhe, a researcher at the Chinese Academy of Sciences' Institute of Remote Sensing and Digital Earth. "The plan is being drafted to expand our regional monitoring capability to global coverage." The number of surveillance and observation satellites now operated by China, which largely focus on the nation and surrounding region, is a state secret, but Chi estimated the US operated about 50 similar satellites. It was not known when the project might start, but if approved by the government the satellites could be launched in as few as two years, according to Chi. A satellite costs about 400 million yuan (HK$503 million) to build, according to estimates from experts in the mainland's space industry, meaning the total budget for the project would be at least 20 billion yuan. After the Malaysia Airlines flight went missing, the Chinese Academy of Engineering submitted a letter from senior scientists to state leaders urging them to start construction of a global satellite-surveillance network as soon as possible, according to sources close to the academy. Professor Liu Yu, a remote-sensing expert at Peking University's school of earth and space sciences, said the project had "almost incredible ambition" and if approved would be a game changer for China's ability to carry out observation from space. More than 1,000 satellites now orbit the earth, but most are for communications. About 150 are earth-observation, remote-sensing and military-surveillance satellites, according to statistics from the US-based Union of Concerned Scientists. "International earth-observation services today are dominated by the US and European countries, but if China launches more than 50 satellites for this purpose, the whole landscape will be changed," Liu said. "The more Chinese satellites there are in space, the easier our work becomes. By analysing data from numerous satellites positioned at different locations and equipped with different sensors, we can understand much better an area of interest." The project faces technological challenges even if it does get approval from the government. China launches about 15 conventional satellites a year and would need to nearly double that if it was to meet its target of swiftly deploying a global network. That would stretch the limit of existing space centres such as Jiuquan , Taiyuan and Xichang , which are also involved in other missions, including lunar exploration and manned space flights. But the upgrade of China's largest launch centre at Wenchang in Hainan province is complete, with the first launch scheduled this year. This would significantly boost China's rocket-launch capacity and make the project possible, space-industry experts said. Scientists also need to improve the technical quality of the imaging equipment used in satellites, according to Liu, although progress has been made. Professor Guo Ziqi, who also works at the Institute of Remote Sensing and Digital Earth, said the 50 or so new satellites would be run by numerous ministries, making co-ordination difficult. China did not have a central agency to co-ordinate the positioning or tasks of satellites, he said. Professor Zhao Chaofang , an oceanographer at the Ocean University of China in Qingdao , said China would also need to build many more ground stations at home and overseas to maximise the speed of sending back data. "Many Chinese satellites can only offload their data when they are flying over China, so the data we receive is sometimes only a fraction of the amount collected by the satellites," he said. "To build up a global monitoring network as efficient as that of the US, our ground stations overseas must be expanded as well."

Hong Kong*:  Mar 30 2014

Fares to increase 18pc on two North Point ferry routes (By Ada Lee ada.lee@scmp.com) Trips to Hung Hom and Kowloon City suffering from few passengers and rising costs - Fares on two ferry routes from North Point to Hung Hom and Kowloon City will increase by 18 per cent, or another HK$1, from Tuesday. New World First Ferry, which operates the two routes, said passenger traffic on inner harbour routes was persistently low, while operational costs kept rising. It also said it is difficult to attract seafarers entering the trade. From April 1, passengers will have to pay HK$6.5 each trip on the route, up from HK$5.5. The new price for a monthly ticket will increase to HK$266.8 from HK$225.7. “First Ferry is required to adjust the fare to cater for the sharp increase of operating cost and stabilise the operating environment,” it said in a statement, adding that it would look into ways of improving the non-fare revenue and reducing expenditure. The fare increase is part of the company’s licence renewal conditions. Sailing schedules remain unchanged. In 2011, services linking Hung Hom to Central and Wan Chai were axed because no other operators expressed interest in running the routes after the Star Ferry Company’s licences expired. Of the 12 years the company had operated the routes, it recorded loss in 10 of those years.

 China*:  Mar 30 2014

Xi Jinping ally Cai Qi to have senior role at National Security Commission (By Keith Zhai and Zhang Hong) A close ally of President Xi Jinping is poised to take up a senior role at the newly created National Security Commission, several sources say. Cai Qi has stepped down as deputy governor of Zhejiang province and will likely become deputy head of the office administering the security body, according to the sources. The Communist Party said last year it would set up the commission to co-ordinate and oversee national security issues. The commission is run by Xi, who is also the party's general secretary. Cai may assume the post of deputy general office director of the new internet security leading group, also headed by Xi. Cai is viewed as an open-minded official who makes his views known to the public, according to sources who have worked with him. His social media account on the Tencent microblogging platform has more than 10 million followers. The 58-year-old has already moved to Beijing and will report to the head of the security commission's general office, Li Zhanshu . Another source, citing an official in Zhejiang, said Cai was a close ally of the president. "Cai stayed in his position as deputy provincial governor for just four months. That job served as a springboard, helping him get promoted to a higher level." Cai was promoted to executive deputy governor of Zhejiang last November. He had previously worked as head of the province's organisation department. He worked in Zhejiang for nearly 15 years, climbing the career ladder after becoming mayor of Quzhou in 1999. Before that he worked in Fujian , the province of his birth. Cai's political career has overlapped Xi's. The president worked in Fujian and Zhejiang from 1985 to 2007. "Cai was appreciated by Xi when he was a deputy director of Fujian province's political reform office in the early 1990s," one source said.

Hong Kong*:  Mar 29 2014

Hong Kong child prodigy, age 5, passes 11 international dance exams in one day (By Shirley Zhao shirley.zhao@scmp.com) Children are thrown into break-neck competition almost as soon as they can walk. In the first of a series, the Post talks to the mother of a prodigy - Dance prodigy Pearl Chan Pui-yee with her trophies. She will soon take an exam to become an assistant dance teacher. At the age of three, she started to learn Latin and ballroom dancing. At four, she became the youngest person in Hong Kong to pass 11 international dance exams in one day. Now, at the age of five, she has become the youngest person in the city to earn a gold, a silver and a bronze medal from the same body, the Britain-based International Dance Teachers Association. Soon, when she turns six, she will take another exam, for a pre-associate licence qualifying her to be an assistant dance teacher. Pearl Chan Pui-yee's is the story of a typical child prodigy. Her mother, who has spent tens of thousands of dollars on Pearl's activities, is one of the many caring and constantly worrying mothers in Hong Kong. "I want her to go to a boarding school in America or Canada, but the competition these days is so huge," says Selina Lam Sai-yan, Pearl's mother. "Being able to play piano is like being able to type. You're abnormal if you don't learn." Lam says she once called a prestigious US boarding school and asked if her child could get admitted to the school if she earned a Grade 8 in piano. "She said, 'So what? Everyone has a Grade 8 nowadays'," says Lam, who is in her 30s. "She asked me where I lived. I said Hong Kong and she said everyone in Hong Kong knows some instrument." So does Pearl. Not only outstanding in dancing, she has won awards in singing, piano, harp and even golf. She is learning violin as well, but Lam says she has not done well enough to win anything. Five-year-old dance prodigy Pearl Chan Pui-yee poses with her trophies. Photo: Sam Tsang Lam lays out all her daughter's trophies and medals on the floor of their home - 45 of them, not counting awards in the form of certificates. "No one can force her to do this. She wouldn't have won so many awards if she was forced to learn," Lam says. "If you don't allow her to dance, she'll lose the interest of her life." Lam says her daughter likes watching Disney cartoons and always imagines herself being a princess, wearing ballroom dresses and dancing. "She wants to own those beautiful dresses herself," says Lam, adding that she had bought five dresses for her daughter the previous week. She keeps buying new clothes for Pearl, sometimes with matching handbags, because she says the child gets bored with one outfit very quickly. Pearl has the love of music in her genes, says Lam, as her husband likes to dance tango and salsa, mix music and play violin and piano. She says her daughter dances naturally when she hears music and writes notes to herself in music theory books. And she begged her parents for a violin for two years. "We have to deal with huge economic pressure for her to learn so many things," says Lam. "She likes playing instruments more than playing with toys. We can't ban her from learning if she has talent, can we?" Previously a merchandiser, Lam quit her job to focus on her daughter's education as her homework load increased. Pearl studies at one of the city's most expensive international schools, Yew Chung, which charges about HK$16,000 a month. On top of the tuition fee, Lam and her husband spend more than HK$20,000 a month on their daughter's after-school activities and tutoring. "Would you be happy if you didn't win awards?" asks Lam. "No," Pearl smiles, shaking her head. "Would you be happy if you didn't dance?" asks Lam. Another negative. Although Pearl is accompanied by their domestic helper when her parents are not at home, they installed a CCTV camera in their house in Tai Po. "She jumps around all the time. You don't know what she'd do when we're not here," says her father, Peter Chan Tsz-man, who works in information technology. To get the pre-associate licence, Pearl has to memorise page after page of postures and techniques. She also has a tutor in music theory. Knowing this would be a challenge for a five-year-old, Lam says she can take two years to pass the exam. Believing that China will dominate the world's economy, Lam recently hired a Putonghua tutor for her daughter. "Real teachers are not in the school, but after school," she says. "You can only be sure when you have a tutor."

 China*:  Mar 29 2014

Chinese tourists boycott Malaysia in wake of MH370 disappearance (By Zhang Hong and Laura Zhou) Chinese tourists are shunning Malaysia, with some even calling for a boycott, in the aftermath of the disappearance of flight MH370 [A Malaysia Airlines Boeing 777-200ER from Kuala Lumpur to Beijing lost contact with air control and went missing more than a hour after it took off in the early hours of Saturday, March 8, 2014. The incident triggered an unprecedented international search and rescue operation that spanned from the southern Indian Ocean to Central Asia and involved more than two dozen countries] Mainland travel agencies have reported a sharp drop in the number of Chinese visitors to Malaysia. Some mainlanders, led by celebrities, were also calling for a tourism boycott to the popular holiday destination following the disappearance of Flight 370 on March 8. “In the two weeks after the incident, we have seen the number of clients from northern China going to Malaysia declining 50 per cent compared with the same period last year, including group and independent travellers,” said Dun Jidong, a senior marketing manager at Ctrip.com, China’s largest travel booking website. Three top travel agencies, China International Travel Service, China Youth Travel Service and BTG International Travel and Tours, have reported similar declines. “The impact has spread to most destinations in Southeast Asia,” said a travel agent with the China International who declined to be named. “Many of our travel packages include Malaysia and Thailand and people are reluctant to go there not only because of the missing plane, but also Thailand’s political turmoil.” But at a resort in Kota Kinabalu, the seaside capital of Sabah state in northeast Malaysia, business was unaffected, at least for now, an employee said. “Most of our clients have booked their rooms one or two months in advance,” said Aaron Chang, a project manager at KK-Suites Residence. “We might see the real impact in one or two months.” According to Tourism Malaysia, 1.79 million Chinese visited the country last year, a nearly 15 per cent annual increase. China is the third largest source of visitors for Malaysia, in which tourism is the sixth contributor of its gross domestic product. Luo Juan, a senior analyst with market research company Forward Information, predicted Chinese arrivals would this year drop by 20-40 per cent, representing 400,000 to 800,000 tourists. If each tourist spent an average of 10,000 yuan during the stay, the total loss could rise to 4-8 billion yuan, Luo said. “A recovery might only be seen after about one year,” she said. It remains to be seen what effect the boycott calls will have on the industry. Chen Kun, a popular film star in China, urged people to avoid Malaysia in a weibo posting. “I … will start a boycott from my inner heart on any commercials and travel relating to Malaysia. This will last … until the Malaysian government takes down their clown-like mask and tells the truth,” he said. Chen has more than 70 million followers on weibo and his post has been republished over 70,000 times, drawing nearly 30,000 comments, many of them supportive. Some travellers were cancelling their bookings. Wang Dezhang, a businessman in Shanghai, said his wife and daughter, together with 14 other parents and children, changed their plans to visit Malaysia in July. “We have booked everything, but still decided to cancel the trip as everybody is concerned about the safety issue,” he said. China Youth Travel Service has stopped collaborating with Malaysia Airlines on package tours in Kota Kinabalu and promised to a full refund to any customers who wanted to cancel. “After the MH370 incident happened, the number of travel inquiries to Malaysia has almost dropped to zero, although it is the off-season to go to Malaysia,” said Ge Lei, a marketing director with China Youth Travel Service. The airline has suspended Flight 318/319, which replaced MH 370/371, and service between Kuala Lumpur and Beijing would be put on hold beginning May 2. Some industry insiders say it was due to a lack of passengers. 

Hong Kong*:  Mar 28 2014

Hong Kong agrees to give financial data of Americans working in city to US tax authorities (By Phila Siu phila.siu@scmp.com) Under Foreign Account Tax Compliance Act, US can ask for data if certain conditions are met - Secretary for Financial Services and the Treasury Professor Chan Ka-keung. Hong Kong tax officials will soon be able to pass information about the finances of Americans working in Hong Kong to their US counterparts under an agreement signed yesterday as part of Washington's global crackdown on tax evasion. The Financial Services and Treasury Bureau said the tax-information exchange agreement allowed the US to file a request to the Inland Revenue Department "under specified conditions". The bureau said that provided the basis for a further agreement that would enable US tax authorities to seek information directly from local banks. Tax experts said the agreement was crucial for America's controversial anti-tax evasion law, which takes effect later this year. The Foreign Account Tax Compliance Act was passed in 2010. It takes effect in July. It requires foreign financial institutions such as banks to declare to the US tax authorities the foreign holdings of anyone liable under US tax rules. If the institutions did not comply, the US tax authorities would withhold 30 per cent of their US-sourced income, according to Ivan Strunin, managing director of Deloitte's Asia Pacific International Core of Excellence (US Tax Service). Without an intergovernmental agreement, financial institutions that provided the information might breach privacy laws. Signed into law by President Barack Obama in 2010, the law was originally supposed to take effect on January 1 last year. That was postponed to January 1 this year and then to July 1. Secretary for Financial Services and the Treasury Professor Chan Ka-keung said after signing the first agreement with US Consul General Clifford Hart that it demonstrated Hong Kong's continued commitment to fulfilling its international obligations. "The [agreement] with the US has adopted highly prudent safeguard measures to protect taxpayers' privacy and the confidentiality of information exchanged," he said. For the agreement to take effect, the Chief Executive in Council will have to make an order under the Inland Revenue Ordinance. The order will take effect unless the Legislative Council objects to it. The Post reported earlier that Cathay Pacific planned to comply with the US law. Cathay pilots said they were concerned about privacy and were puzzled why companies in Hong Kong needed to comply with the regulations of a foreign country. "How can Cathay give a foreign government our details without our permission? There is a good case [that this is] against Hong Kong [privacy] law," one American pilot said.

 China*:  Mar 28 2014

World leaders in drive to bolster nuclear security at Hague summit (By Agence France-Presse in The Hague) US President Obama shakes hands with China's President Xi Jinping as UN Secretary-General Ki-moon looks on at the Nuclear Security Summit in The Hague. Thirty-five countries committed to bolstering nuclear security yesterday, backing a global drive spearheaded by US President Barack Obama to prevent dangerous materials falling into the hands of terrorists. In a joint statement issued on the sidelines of the third biennial Nuclear Security Summit, the countries pledged to work closer together and submit to "peer reviews periodically" of their sensitive nuclear security regimes. The nations - including Israel, Kazakhstan, Morocco and Turkey but not Russia - vowed to "realise or exceed" the standards set out in a series of guidelines laid down by the International Atomic Energy Agency to safeguard nuclear materials. These are the "closest things we have to international standards for nuclear security", US Energy Secretary Ernest Moniz told reporters as he presented the pledge. Obama has made improving nuclear safety one of the foreign policies of his presidency. He said in 2009 that nuclear terrorism was "the most immediate and extreme threat to global security". Frans Timmermans, foreign minister of the Netherlands, which is hosting the summit of more than 50 countries, acknowledged that nuclear security had to remain a "national responsibility" but said closer international co-operation could be "a direct contribution in preventing nuclear material becoming a security risk". Dutch Prime Minister Mark Rutte, opening the two-day talks on Monday, said there was "almost 2,000 tonnes of weapons-usable material in circulation worldwide" and stressed that "security has to be our constant concern". Analysts hailed the joint pledge but voiced concern that not all countries had signed up, notably Russia, with its outstanding stockpile of Soviet-era weapons. Shin Chang-hoon, analyst at the Asan Institute for Policy Studies in South Korea, highlighted the peer review commitment in the pledge as "an important part of nuclear security". "This will probably be the legacy of the [Nuclear Security Summit], more than the final communiqué," he added.

Hong Kong*:  Mar 27 2014

Shuanghui could soon salve Hong Kong bourse's wounds with its IPO (By George Chen and Ray Chan) Mainland's meat-processing giant aims to raise US$6b on main board, boosting the city's hope to maintain its global ranking for flotations - Still licking its wounds from the loss of Alibaba's planned US$15 billion initial public offering, the Hong Kong stock exchange may find some consolation in the imminent listing of Shuanghui International, likely to be the city's biggest this year. The mainland's largest meat processor, best known for its branded ham and sausage products, was scheduled to apply on Thursday for a listing in the city, three people familiar with its plans said. If successful, Shuanghui, which will be listed under the new name of WH Group, aims to raise about US$6 billion on the Hong Kong exchange, the world's No2 destination for flotations after New York by capital raised last year. WH Group is a holding company for all of Shuanghui's assets, including Smithfield Foods, acquired last year, and Shenzhen-listed Henan Shuanghui Investment & Development. "It's of course a very big deal for the Hong Kong market, especially now that Alibaba is going to New York. If Shuanghui can do well, it will also give market sentiment in Hong Kong a strong boost," said a banker, who declined to be named. After its listing hearing on Thursday, the company planned to launch its roadshow early next month and get listed on the main board by the end of April or in early May, the people familiar with the plan said. Shuanghui's existing shareholders included CDH Investments, Goldman Sachs, New Horizon Capital and Temasek, the sources said. CDH, one of the mainland's biggest private equity firms, still held 30 per cent of the company and planned to sell part of its existing "old shares", as distinct from the "new shares" Shuanghui planned to issue through the Hong Kong listing, they said. Goldman Sachs has been cashing out of Shuanghui gradually in the past few years but still holds a minority stake. New Horizon Capital, a private equity fund co-founded by Winston Wen Yunsong, the son of former premier Wen Jiabao, and Singapore state investment firm Temasek are also minority shareholders. Shuanghui's listing plan comes about six months after its landmark US$4.7 billion acquisition of Smithfield Foods, the biggest pork producer in the United States, which vaults the Henan-based firm into the top ranks of firms involved in the processing of meat and meat products. The firm was initially scheduled to submit an A1 form, the official application for a Hong Kong listing, to the stock exchange in mid-January but decided to delay the application, partly because of the weak market sentiment at the time. After Alibaba, the mainland's No1 e-commerce firm, decided to list in New York instead, Shuanghui has become Hong Kong's best hope to maintain its global ranking for flotations.

 China*:  Mar 27 2014

China's People's Liberation Army told to learn from Japan's 1894 victory (By Minnie Chan minnie.chan@scmp.com) Military daily highlights factors involved in Qing dynasty defeat to Japan in 1894 in commentary seen as alluding to corruption in today's military - PLA commanders should study the Qing dynasty's humiliating defeat to imperial Japan, a push seen by analysts as a warning against corruption in today's military, the leading military newspaper says. In a series of commentaries to mark the 120th anniversary of the first Sino-Japanese war, the PLA Daily offered an unusually objective assessment of Japan's dramatic military transformation in the late 19th century, which precipitated decades of bloody conflict between the two neighbours. The commentaries argue that the superior discipline and commitment of Japanese forces during the period of expansion and modernisation known as the Meiji Restoration allowed them to decimate the Qing dynasty's Beiyang, or northern, fleet. "The Chinese navy was equipped with the same advanced warships and weapons that were used by the Meiji maritime forces," one article said. "But Chinese sailors and officers were keen on mocking foreign instructors who were highly paid, causing a striking contrast with the Japanese navy's serious and humble learning attitude." Analysts said the articles were intended to highlight the fact that the Qing-era military faced many of the same challenges that the People's Liberation Army is struggling with now. These include nepotism, factionalism and corruption. "It's an open secret that the corruption problems inside the PLA today are even worse than those of the Qing dynasty's Beiyang fleet," said Ni Lexiong , director of a defence policy research centre at the Shanghai University of Political Science and Law. Ni said that the buying and selling of military ranks had left unqualified officers in senior positions, creating an imbalance in the command structure. "If such a phenomenon continues, the PLA will definitely be defeated by the Japanese army again if there is military conflict between the two countries," Ni said. In the last 18 months, tensions between China and Japan have deteriorated to a low not seen since the end of the cold war, with both sides scrambling fighter jets and launching coastguard patrols near the disputed Diaoyu Islands in the East China Sea. Beijing counts the islands, which Japan knows as the Senkakus, among the territory China ceded to Tokyo at the end of the first Sino-Japanese war. It therefore argues they should have been returned after Japan's defeat in the second world war. In a nod to the ongoing dispute, one PLA Daily commentary noted: "The first Sino-Japanese war is not over." "Our army is facing the same problems that the Qing government failed to tackle," said one retired senior colonel in Beijing. "That's why President Xi Jinping has urged the PLA's senior officers to free themselves from old mindsets and be more devoted." The three commentaries so far published, including a full-page piece on Friday, have not criticised Japan for wartime aggression, as would usually be expected. Instead, they focus on Japan's achievements and the Qing dynasty's failure to carry out necessary reforms. The product of the Qing dynasty's "self-strengthening movement", the Beiyang fleet matched Japan's navy in number of ships on the eve of war in 1894. However, it was still defeated. "Japan is a nation with a strong sense of shame," one commentary said. "They still retain fresh memories of defeat and humiliation, even though they have forgotten their history of militarist aggression. "However, amnesia, satisfaction with temporary peace and a lack of humility are the national characters of our people," it said. Macau-based military observer Antony Wong Dong said it was "pointless to criticise China's national character and praise Japan's innate superiority". "The PLA has been ordered to learn advanced military skills from Western countries, like the Beiyang fleet," Wong said. "But the party has also warned it not to 'blindly pursue' a Western military system that advocates fairness, political independence and professionalism." "The core problem of today's PLA is the lack of checks and balances, because it isn't loyal to the country, but to the party," he said.

Hong Kong*:  Mar 26 2014

Does HK$1.38m per sq ft make sense for a shop in Causeway Bay? (By Yvonne Liu yvonne.liu@scmp.com) This tiny shop in Matheson Street was sold for HK$180 million. The sale of a 130 square foot shop in Causeway Bay for a record HK$1.38 million per sq ft surprised the market two weeks ago. I received many enquiries regarding the deal after the Post reported on it. The most frequently asked question was why the acquisition was made when retail rents are peaking. The shop in Matheson Street is leased to a seller of audiovisual products at a monthly rent of HK$180,000, which translates into a yield of just 1.5 per cent. Even if the monthly rent could be raised to HK$300,000 when the lease expires this year, the yield would rise to a mere 2.3 per cent. While such a return is not attractive, the buyer, Mico Chung, chairman of CSI Properties, said the yield is similar to that offered by prime properties in first-tier locations. I believe the buyer is focused on capital growth in the the long term, as the shop is close to Times Square – a “must go” destination for mainland tourists. Nearby Russell Street has been the most expensive shopping street in the world since 2012. It costs at least HK$300 million to buy a shop in Russell Street, but the main problem is none of the owners wants to sell. The Matheson Street shop cost over HK$180 million, which is not a big amount to Chung. And there is a lack of retail properties in first-tier locations available for purchase. That explains why an investor would be willing to pay a premium for the property, although there is not a great deal of shopper traffic and the pedestrian walkway is narrow. In the short term, the potential investment return would be limited, as growth in retail sales has slowed and mainland shoppers have changed their buying habits - A monthly survey of retail sales by the Census and Statistics Department shows the value of total retail sales in Hong Kong grew 14.5 per cent year on year in January, although the Lunar New Year, traditionally a peak season for retail sales, began at the end of that month. That was slightly higher than the 10.5 per cent growth recorded in January 2013 without the impact of the Lunar New Year. The breakdown of sales by type of retail outlet suggests a change in the buying habits of customers. Jewellery, cosmetics and electrical goods have long been the most popular purchases among mainland tourists. But in January, the value of sales of electrical goods and photographic equipment slumped 18.2 per cent year on year, compared with a 27.4 per cent gain in January 2013. Sales of jewellery, watches and valuable gifts, grew 10.8 per cent, similar to the 10 per cent growth a year earlier. Electrical goods and photographic equipment, motor vehicles and furniture – all high-priced goods – were the three categories of products in which sales fell in January. Mid-priced to low-end products such as clothes, supermarket commodities, medicines and cosmetics recorded growth in sales. By contrast, in January 2013, only mid-priced to low-end products recorded a fall in sales. Figures from the Tourism Board show the spending of overnight visitors’ per head grew just 4.7 per cent for the 12 months to March last year, compared with growth of 11 per cent in the previous year. Without the support of retail sales, retail rents will not able to rise as fast this year as we saw over the last few years.

 China*:  Mar 26 2014

Michelle Obama comes face-to-face with Terracotta Warriors (Agence France-Presse in Beijing) US first lady Michelle Obama visits the Museum of Qin Terracotta Warriors and Horses, in Xian, Shaanxi province. Visiting US first lady Michelle Obama, along with her daughters and mother, came face-to-face with China’s Terracotta Warriors on Monday on a week-long tour which has taken in several major sites while skirting politics. The family stepped into one of the vast pits at the site outside Xian, in the northern province of Shaanxi, to view the ancient statues while a guide showed them around. The site houses 8,000 lifesize warriors left by China’s first emperor Qin Shi Huang who reigned in the 3rd century BC, a hugely popular tourist attraction that saw five million visitors last year. Since arriving in Beijing on Thursday night for a visit focusing on “soft” issues, Obama has toured the Forbidden City, a former imperial palace, with her counterpart Peng Liyuan, and promoted education and study abroad. She touched briefly on politics during a speech on Saturday at Peking University’s Stanford Centre that was otherwise devoted to encouraging American students to study in China. “When it comes to expressing yourself freely, and worshipping as you choose, and having open access to information -- we believe those are universal rights that are the birthright of every person on this planet,” she said. “We believe that all people deserve the opportunity to fulfil their highest potential, as I was able to do in the United States.” As her motorcade arrived at the US embassy in Beijing on Sunday for a roundtable with Chinese educators and families, two people outside the premises began shouting. Police and men in grey sweatshirts hurried to subdue them, and it was unclear why they were yelling. Later that day she strolled along the Great Wall north of the capital. Vendors at the tourist site appeared to have removed T-shirts that are typically on sale showing President Obama in a Mao hat, with one merchant revealing a boxful of the souvenirs stored in the back of her tent. 

Hong Kong*:  Mar 25 2014

Move to delay listing AS Watson surprises market (By Toh Han Shih hanshih.toh@scmp.com) Initial public offering of Li Ka-shing's retailing arm had been expected to be launched this year - Li Ka-shing's decision to delay the listing of AS Watson surprised the market, but his sale of 24.95 per cent of the retail company to Singapore sovereign wealth firm Temasek will benefit shareholders, analysts said. Hutchison Whampoa, the conglomerate controlled by Asia's richest man, announced it would sell the Watson stake to Temasek for HK$44 billion. Watson operates more than 10,500 health and beauty product stores in 25 markets worldwide. "The fact that it delayed the initial public offering was a surprise because the market was expecting it this year," said Kenny Tang Sing-hing, the general manager of AMTD Financial Planning. Hutchison's sale reaped an exceptional gain for Hutchison and benefited its shareholders in the form of a generous dividend, Tang said. Part of the proceeds from the sale would be used to pay a special dividend of HK$7 per share to Hutchison shareholders, the company announced yesterday. On February 28, Li said Hutchison hoped to list Watson in Hong Kong and another stock exchange later this year. But at a press conference yesterday, he said the listing was unlikely to happen this year but might take place in two to three years. A possible reason for the delay was the weak market environment, Tang said. Li's sale of assets has prompted speculation that he may be withdrawing his investments from Hong Kong, which he has denied. On March 14, it was reported that his port business, Hutchison Port Holdings Trust, would sell a 60 per cent stake in Terminal 8 West container port for HK$2.47 billion to mainland shipping and port companies Cosco Pacific and China Shipping Terminal Development. "It may not be true that Li Ka-shing is pulling out of Hong Kong. Hutchison's strategy is to realise its asset value. Many of its assets are now mature," Tang said. Now is a good time for Li to sell his assets because interest rates would rise next year following the decision of the United States to end a stimuls programme, Guotai Junan analyst Jason Song said. "Li Ka-shing's companies have lots of debt." Part of the proceeds of the Watson sale would be used to discharge debts of Hutchison's retail division, Hutchison said. Separately, China Huiyuan Juice also announced yesterday Temasek had bought US$150 million of convertible bonds of the mainland juice producer. The bonds can be converted into a 7.68 per cent stake in Huiyuan. The announcement of two Hong Kong investments by Temasek on the same day was pure coincidence, said a source close to Temasek.

 China*:  Mar 25 2014

‘So much data that we don’t know what to do with it’: NSA spied on Chinese telecom giant Huawei (By Agence France-Presse) New NSA claims are based on documents provided by former NSA contractor Edward Snowden - The US National Security Agency has secretly tapped into the networks of Chinese telecom and internet giant Huawei, according to new claims. The New York Times and Der Spiegel both reported on their websites on Saturday that the NSA accessed Huawei’s email archive, communication between top company officials’ internal documents, and even the secret source code of individual Huawei products. The claims are based on documents provided by fugitive NSA contractor Edward Snowden. “We currently have good access and so much data that we don’t know what to do with it,” states one internal document cited by Der Spiegel. Huawei - founded in 1987 by former People’s Liberation Army engineer Ren Zhengfei - has long been seen by Washington as a potential security Trojan Horse due to perceived close links to the Chinese government, which it denies. The United States and Australia have barred Huawei from involvement in broadband projects over espionage fears. Shenzhen-based Huawei is one of the world’s leading network equipment providers and is the world’s third-largest smartphone vendor. The original goal of Operation “Shotgiant” was to find links between Huawei and the Chinese military, according to a 2010 document cited by The Times. But it then expanded with the goal of learning how to penetrate Huawei computer and telephone networks sold to third countries. “Many of our targets communicate over Huawei-produced products,” the NSA document read, according to The Times. “We want to make sure that we know how to exploit these products,” it added, to “gain access to networks of interest” around the world. Huawei is a major competitor to US-based Cisco Systems Inc. - but US officials insist that the spy agencies are not waging an industrial espionage campaign on behalf of US companies, as Snowden has alleged. “The fact that we target foreign companies for intelligence is not part of any economic espionage,” a senior intelligence official told reporters on Thursday. The goal of economic intelligence efforts is “to support national security interests,” and “not to try to help Boeing,” the official said.

South China Morning Post: The other Obama (US President 1/2 brother): Shenzhen (China)-based half-brother of US president sets record straight - Close your eyes, and it could be the president of the United States talking. Sipping tea with Mark Okoth Obama Ndesandjo in a Ming-dynasty temple is a surreal experience. Fleetingly, it conjures up images of what it'd be like to meet his half-brother - Barack Obama - for this African-American émigré to China bears a striking resemblance to his Nobel Peace Prize-winning sibling. And despite having grown up on opposite sides of the world - Barack with his mother in Hawaii and Mark with their Kenyan father in Nairobi - the half-brothers share mannerisms, including a politician's gift for putting people at ease. We had arranged to meet in Shenzhen's Baoan district. Ndesandjo's assistant, George, escorted me through a leafy park on a golf buggy to a secluded building. The imposing, tall wooden doors opened from the inside and we were guided through a series of private, tranquil courtyards until we reached the Yuan Baoyuan teahouse, where Ndesandjo emerged from the main hall. In the flesh, he is a force. Dressed head to toe in black, with an Indonesian bandana around his forehead, Ndesandjo is tall and personable, and speaks with a warm American accent. He's much more likeable than his self-deprecating new autobiography, Cultures: My Odyssey of Self-discovery, suggests. THE LIVES OF MARK and Barack couldn't have unfolded more differently. While Barack's childhood was a happy Honolulu existence, Mark spent his formative years in a newly independent Kenya, living under the reign of terror of an alcoholic and abusive father, until his white, American mother finally found the courage to flee. Despite his Kenyan upbringing, Ndesandjo never felt accepted by black Africa; but as the son of a Luo tribesman, he also felt incongruous in the expatriate community to which his mother belonged. With his first autobiography, which was released last month, Mark has emerged from relative anonymity to tell his story and set the record straight about the president's "mysterious Kenyan roots". "I wanted to tell my story myself without other people telling it for me," he says. Ndesandjo, 48, lives in Futian, Shenzhen, with his wife, Liu Xuehua, a Hunan province native and his partner of a decade. The pair met in a tea shop when Ndesandjo was an impoverished English teacher. He had emigrated to China in 2003 from Orlando, Florida. Having lost a well-paid job in the telecommunications industry in the post-9/11 economic slump, he wrote to the director of a mainland teaching project he'd read about in a magazine, asking for a job. "He said, 'You're obviously too qualified.' But I really wanted to explore China." Ndesandjo expected to stay for three months. Twelve years later, he is fluent in Putonghua, proficient in calligraphy and has no plans to leave the country. Long-standing rumours tell of him running a barbecue restaurant in Shenzhen, but he laughs them off. "I'm a vegetarian," he says. What he does run is a foundation that helps children in need, while also teaching piano to orphans, raising awareness of domestic violence and heading up two consulting companies that assist American investors entering the Chinese and Kenyan markets, and those looking to go in the other direction, one registered on the mainland, the other in Hong Kong. THE FIRST TIME NDESANDJO met Obama was in 1988. It was a sunny weekend in Nairobi, and Ndesandjo was on his bed reading Fawn M. Brodie's The Devil Drives, about the explorer Richard Burton. "My mother came to the doorway and was trembling. She said, 'Your brother from America is here. In the living room. He wants to meet you.'" In Obama's 1995 autobiography, Dreams from My Father, he claims Ndesandjo's mother, Ruth Baker, sent a car to pick him up and that the family had arranged lunch. "It was never like that," Ndesandjo says, shaking his head. "He and my half-sister, Auma, walked in that afternoon out of the blue. It was a year after my younger brother, Bobby [David Opiyo], had died in a motorcycle accident. I thought, 'What are they doing here?'" Obama, Ndesandjo remembers, sat on the couch in very simple clothes, appearing as a regular Kenyan, with gangly legs and arms, and huge hands. "My stepfather [Simon Ndesandjo] was very impressed by him," he says. The family leafed through photo albums but the meeting was stilted, and the two half-brothers agreed to meet again a few days later. "He looked so similar to me, we both loved America and were going to Ivy League schools," he says. Having left Kenya aged 17, armed with a scholarship, Ndesandjo had just completed a degree in maths and physics at Brown University, in Rhode Island. He was on a break in Nairobi before returning to the US, to enrol at Stanford University. "Until then, I'd assumed I was the cleverest in the family," he says. But the long-lost siblings failed to connect. "Barack felt I was too Western, and I thought he was trying too hard to be African," Ndesandjo remembers. "He wanted to know a lot about my father [who had passed away in 1982], and he was very direct with his questions. I felt like he was opening up old wounds. A lot like a lawyer, he was trying to research our emotional history. "He kept asking, 'Well, what do you think of him?' I had shut all these things out, but he was relentless. It was a shock to him when I said, 'Our father was a drunk and he beat women.' Barack flinched. He wasn't aware of that. "I think that has coloured our relationship to this day. In fact, I know it has." Barack Obama Snr had skin as dark as ebony, teeth that shone like pearls and, in his younger years - like his Hawaiian son - had the hallmarks of brilliance. Born in 1936 in the sun-basked Nyanza province of western Kenya, Obama Snr attended the prestigious Maseno School, where his teachers described him as an "exceptionally bright student". However, Obama Snr didn't graduate from high school, the record shows, because of a "behaviour infraction". Consequently, in 1959, his request for a grant to study abroad was rejected. Had it not been for Elizabeth Mooney Kirk - a forty-something American who Obama Snr allegedly seduced - agreeing to bankroll him, neither Barack Obama nor Ndesandjo would be here today. It was the Swinging Sixties in Boston when Obama Snr met Baker at a party. She was a Jewish girl from Massachusetts, born to first-generation Russian and Lithuanian immigrants, he was a Harvard graduate who was "a touchy, sarcastic but incredibly charming intellectual", according to Ndesandjo. In August 1964, after two months of dating, Obama Snr proposed. Smitten and seeking adventure, Baker relocated to Nairobi, where her new partner should have been on a fast-track government career - prospects that were squandered in bars. "At this point," Ndesandjo says, "my mother didn't know about Barack and his mother, Ann Dunham," who had married the African student in 1961 and divorced him three years later. Obama Snr saved that surprise for when he and Baker were in Kenya, where a picture of Barack II eventually sat on the mantelpiece of the couple's first home. Life in the Obama household was hell. Baker says in her memoir that, from the start, Obama Snr "was drinking heavily, staying out to all hours and hitting me". Within a year, she had fled back to the US. One night, after Obama Snr had persuaded her to return, he came home drunk and held a knife to his wife's throat. Shortly after, Baker had her seven-year marriage annulled. Ndesandjo was seven years old. Even today, thousands of miles away in Shenzhen, when Ndesandjo remembers his father's violence, tears slide down his cheeks. Ndesandjo can't remember being told about his father's death. "Perhaps I blocked it out," he says. "When Barack came to Kenya, I felt he admired our father because Obama Snr had been proud to be a black African; a person who wouldn't let anyone get in the way of Kenyan independence and the flow of free ideas. But I wanted to be as far away from him as possible." After that first meeting between the half-brothers, Ndesandjo returned to the US, where he studied for a master's degree in physics at Stanford University, before preparing to take a PhD. Then, in a moment of weakness, he cheated. In his autobiography he describes the giddy moment he slipped into his professor's office to read the exam paper: "I had the keys to the kingdom." He was caught and then kicked out by the department chair, Steven Chu, who, in a twist of fate, would later work for the Barack Obama administration as secretary of energy. Ndesandjo describes feeling suicidal as he left Stanford mired in disgrace. Two decades in the corporate world followed. During this period, Ndesandjo dropped the Obama name and never returned to Africa; didn't speak to his half-siblings - Malik and Auma - by his father's first wife, Kezia; and didn't return to see his mother. He did, however, dip in and out of contact with Barack. Once, the pair went for lunch in San Francisco at Tommy's Joynt, a haunt for hippies and left-wing progressives. Obama again had questions about Kenya. "I felt he was clarifying facts from years before." A few months later, aged 33, Obama published Dreams from My Father - an autobiography he'd never prepared his family for. Ndesandjo uses Cultures to right the many wrongs he sees in his half-brother's opus. "I think he took artistic licence with the book. He created composites of characters, and he didn't like my mother. There was also a playing up of our wealth in Kenya. We could never have afforded to send a car for him." In 2004, the year after Ndesandjo had moved to Shenzhen, a friend drove him to the American Chamber of Commerce in Guangzhou, to watch the new Illinois state senator, Barack Obama, give the keynote address at the Democratic National Convention in Boston, which would make the politician an overnight star. As Ndesandjo and a gaggle of other Americans watched the senator speak live, before a rapturous audience waving Obama placards, Barack told the world, "We are our brother's keeper." "At that point, no one knew of my relation to him, except the friend who had driven me over," Ndesandjo recalls. "But word gets around, and someone asked, 'Are you his brother?' I said, 'Yes'. Suddenly, I felt very proud of him." A few days later, a friend called up. "It's great that he got that speech," the friend said. "But he'll never have a chance at being president." Ndesandjo doesn't remember where he was when Obama made history by announcing his candidacy for president, in 2007. But he quickly renewed contact, sending his half-brother e-mails with quotes from Sun Tzu's The Art of War as the campaign thundered forward. "Feint to the east and attack the west," he e-mailed when his challenger for the Democratic Party presidential nomination, Hillary Clinton, focused on capturing big states, "Revive in a new guise," when Obama decided to directly attack Clinton in Ohio and Texas. Barack's campaign started to heal the Obama clan, which Ndesandjo likens to "herding cats, all moving in their own direction". Ndesandjo flew to the US to meet a half-brother, Joseph, from his mother's second marriage, to support Barack at his 2008 Democratic Party presidential debate against Clinton in Austin, Texas. When Barack was elected, the entire Obama family was flown out to the White House for the inauguration; not an eyelid was batted when Malik came attired in a Muslim fez. As they toured the Oval Office, Barack promised he would one day meet Ndesandjo's wife in China. "But he declined an invitation to our Shenzhen home for dinner," Ndesandjo remembers, "Barack said, 'They won't let me.'" They, of course, would have been the White House security department. How much influence did Washington have on his own movements at that point? "I've never gotten the impression they've tried to control what I do," says Ndesandjo. But his paranoia had compelled him to flag certain "failures" that he felt the Republicans might have been able to use as weapons in the fight for the presidency. First, his expulsion from Stanford, and second, a trail of bad debt he had left in the US. Obama replied with a brief e-mail: "Mark, do not worry - your life is your own and will not affect my election." In 2008, Ndesandjo and Liu married in a low-key ceremony. Their union is one of harmonious compromise; they speak Putonghua during the week, English on the weekends and eat separate meals - Ndesandjo is not partial to "squidgy" Chinese cuisine. He says their "otherness" is what fascinates both parties, and cites her as his rock. It was Liu who, in 2009, encouraged Ndesandjo to pursue a lifelong ambition he knew would have long-standing familial repercussions. That year, he published Nairobi to Shenzhen, a fictionalised account of his past, but one accurate enough for the world's press to realise Ndesandjo had outed Obama Snr - the man Barack had lauded as an example of the American dream in that famous 2004 keynote speech - as a wife beater and a drunk. The opening scene of Cultures is of Ndesandjo's long-promised meeting with Obama in Beijing, shortly after the novel was published. The half-brothers talk for five minutes and Ndesandjo describes the president as smelling vaguely of cigarette smoke and being emotionally closed. Later that day, Obama told a CNN journalist: "I don't know [Ndesandjo] very well. I met him for the first time only two years ago." Those words stung. "I sometimes feel we - the Obama family - have been used. Since being elected, Barack has been trying to distance himself from his relations in Kenya, and he's overly sensitive to the African dimension of his past. That's not right." The two haven't seen each other since, but remain in e-mail contact. "A few months ago, I said, 'Barack, you have to try and reach out more. One word to the family in Kenya - a happy birthday to Granny Sarah, who is 93 - would mean the world.' He got quite upset about that." Still, Ndesandjo recognises the tremendous opportunities his half-brother's fame has afforded him, and is convinced Obama has been a "great president who is fundamentally trying to make good in the world". The Obama family, Ndesandjo says, spanning Islam, Judaism, Kenya, the US, China, Indonesia - on Barack's side - and Mexico - through Joseph's wife, Dora - is a tale of what it is to be a modern, multicultural American. As his maternal Grandma Ida says in Cultures: "One day, Mark, we will all be brown." Ndesandjo says he has made peace with Obama Snr, Barack's achievements finally having made him proud of the family name. In 2011, after 20 years away, he returned to Kogela, the family village in Kenya. "It's funny," he says. "In Dreams, Barack says sons often spend their lives trying to achieve their father's dreams or correct their errors. That polarity defines my relationship with Barack. I've been trying to correct the issues I experienced with my father my whole life. Barack, on the other hand, has been achieving my father's goals and dreams."

Hong Kong*:  Mar 24 2014

A long musical journey to Carnegie Hall (By By Amy He in New York) Hong Kong-raised cellist Clara Tsang in front of Carnegie Hall, where she performed pieces by Sergei Rachmaninov and Csar Franck on Tuesday. Tsang founded the Hong Kong Cellist Society in 2004. For cellist Clara Tsang, the road to Carnegie Hall was paved with good intentions and many, many disappointments. Hong Kong-raised Tsang played to an enthusiastic crowd at Weill Recital Hall at Carnegie Hall in New York on Tuesday, and the performance was an accumulation of decades of loneliness in her pursuit of music. Tsang's cello performance of Sergei Rachmaninov's Vocalise, Op. 34, No. 14, Cello Sonata in G Minor, Op. 19, and Csar Franck's Cello Sonata marked her debut in the US, a country she hopes she can perform in again in the future, but she isn't going to think much about the future yet. "I have no specific plans. I don't plan," she told China Daily. "Everyone thinks that I have all these plans, but that's not the case." Having no plan is the best plan, she said, because plans go awry all the time. Born in Hubei province, Tsang moved to Hong Kong with her parents when she was young because of the opportunity for work. But growing up in Hong Kong was difficult because her parents didn't have any family or friends and lacked resources, she said. Tsang didn't grow up with music; she fell into it accidentally. The first time she heard her elementary school teacher play the piano, she was entranced. When she asked for lessons, her teacher told her it would require money, money that Tsang's parents didn't have. She was told about instrument courses that the government funded, so she applied and tested, only to be told then that learning the piano was not an option. After choosing the violin as an alternative, Tsang was told that the center where she was going to learn to play would close, and that if she wanted to learn an instrument at a different location, she would have to choose between the cello and the double bass. Tsang admitted that she chose the cello on whim - because it looked more elegant than the double bass - and thus her music journey began. But resources were scarce and it took years before Tsang could finally learn how to play the cello. "I really wanted to learn music but there was nobody to take care of me," she said. "There was nobody to give me guidance." When she finally was given the opportunity to properly learn, she had to play catch-up, practicing for hours every day, "using time to compensate," she said. Even then, she didn't have a method to her playing, having no foundation. But Tsang was serious about the craft and persisted, even in times of extreme hardship. A half year before she was admitted into a music college after high school, her mother was diagnosed with cancer, and her parents' relationship unraveled. "At that age, I was so afraid. I felt apologetic to my mom because during that time I was preparing for music school and I had no time to take care of her," she said. Music school itself was a struggle too. Growing up in a financially-strapped environment with parents who had no social circle and no spare time left Tsang unprepared to deal with all the social expectations of students her age, she said. She didn't have the money to eat out or go shopping with friends, so she funneled all her energy into studying and practicing the cello. After she graduated from the Hong Kong Academy for Performing Arts with a degree in music, Tsang said she worked "feverishly. I worked so much I became numb." She taught classes, private lessons, freelanced with orchestras. She decided she still wanted to pursue playing and was given the opportunity to meet with an acclaimed professor in Switzerland. But upon arriving, she was told that he may have taken her on as a student, but not at 27. "He said that I couldn't have a career at that age," Tsang recalled. "I traveled all that way just to hear that. Music is so merciless." Tsang had established the Hong Kong Cellist Society as a way of bringing people interested in classical music together. After the deeply disappointing meeting, she put her energy into organizing music events with the Society, which currently has more than 1,600 members, and encouraging people to perform, on top of her other jobs. For years she juggled this part of her music life, but Tsang said she still wanted more - to just perform. So one day she went ahead and did it; she organized four concerts in 2013, which ultimately led her to Carnegie Hall. An audience member at one of her Hong Kong concerts suggested that she try to play in the US. She was granted a fellowship by the Asian Cultural Council in New York and was invited to play at Carnegie. "Everyone thought that maybe playing at Carnegie would be a huge pressure, but a week before that, I performed in Hong Kong in preparation for the New York concert," she said. "I played with the same mindset I did in Hong Kong as I did at Carnegie Hall, so it really doesn't matter where I play, I play just as hard everywhere." https://www.youtube.com/watch?v=hraITfGonIA 

 China*:  Mar 24 2014

President Xi Jinping greets Michelle Obama at Beijing state guesthouse (By Associated Press in Beijing) Michelle Obama, her mother Marian Robinson share a light moment with Chinese President Xi and his wife Peng Liyuan after a photograph session at the Diaoyutai State guest house in Beijing. US first lady Michelle Obama met with Chinese President Xi Jinping on Friday, the first day of her week-long visit to China, in a sign that the leaders of the world’s two largest economies are seeking to build stronger bonds. The formal meeting between Obama and Xi, in the company of Xi’s wife, Peng Liyuan, and Obama’s two daughters and mother, took place in a state guesthouse after the first lady toured a Beijing high school and the former Imperial Palace. “I cherish my sound working relationship and personal friendship I already established with your husband,” Xi said. “We stay in close touch between phone conversations and correspondence.” The meeting was not on the first lady’s official itinerary but was expected. “It is only logical for President Xi to meet her, because it is a matter of etiquette for the head of the household to meet the guest of his wife,” said Teng Jianqun, director of the American studies department at China Institute of International Studies. He added that Obama likely served as a messenger on behalf of President Barack Obama. Obama also made history as the first US first lady to visit China independently, Teng said. The first lady told Xi she was focusing on education and student exchanges during her seven-day, three-city visit to China. Her aides have said the first lady plans to stay away from contentious issues. Earlier on Friday, Obama visited with excited students who were building robots and tried her hand at Chinese calligraphy at the Second High School Attached to Beijing Normal University in central Beijing. The elite school has 33 American exchange students, and some of its Chinese students aspire to study in the United States. In a calligraphy class set up for Obama’s visit, the first lady practiced writing the Chinese character for “eternal” under the guidance of 16-year-old student Lu Yuhong. “I’m nervous,” Obama said. “Don’t be nervous,” Peng replied in English. Lu said he too was nervous, as well as “very excited.” “But the first lady was so amicable. She was very approachable,” Lu said. Peng also picked up a brush and wrote a four-character Chinese aphorism on virtues before presenting it to Obama as a gift. In another class, students showed the first lady small robots they had built, moving the devices with remote controls. One knee-high robot climbed over a pile of yellow plastic bricks. “All the students that she met with, the Chinese students, spoke English and were able to explain to her in very fluent English what they were doing,” said Tina Tchen, Obama’s chief of staff. “And I think she found that very impressive, because we know it’s something that we struggle with in the United States, about having our kids be able to be fluent in a second language by the time they get to high school.” Lu, the student, said he had bonded with American friends over a shared love of US television, including his favourite series, “Agents of S.H.I.E.L.D.” Among the six American exchange students attending the calligraphy class was Audrey Fritz, 17, at the exclusive Sidwell Friends School in Washington. “It’s been an amazing experience,” Fritz said of her time in China. “I have learned to be much more independent.” Later in the morning, Peng went with Obama to the former Imperial Palace in central Beijing. That was to be followed by a private dinner and a performance. On Saturday, the first lady was due to speak at Peking University and on Sunday visit the Great Wall. At Peking University, Obama plans to speak on the importance of free exchange of ideas, her aides said. “I do think tomorrow she will talk about the value of the free exchange of ideas and the internet, and how that, in her view, has made our country stronger; how even when you can be the object of criticism, as she and her husband have been, that that’s not a system that she would change,” Tchen said. White House aides have said they hope Obama traveling with her daughters and mother can resonate with Chinese families who value multigenerational activities. “China views Mrs. Obama’s trip most positively,” said Shen Dingli, professor of international relations at Fudan University in Shanghai. “If she is humble and respectful, she will win the support from the Chinese public for building good relationships with the United States under the leadership of her husband.” The Obama delegation is due to fly on Monday to Xian, home to the famed Terra Cotta Warriors Museum, then visit a panda breeding facility outside Chengdu in the southwest.

Michelle Obama meets with students in Beijing (By Zhao Shengnan and Li Xiaokun in Beijing and Chen Weihua in Washington zhaoshengnan@chinadaily.com.cn and lixiaokun@chinadaily.com.cn) US first lady Michelle Obama visited students at the Second High School attached to Beijing Normal University Friday morning with her daughters, where they had a demonstration and hands-on lesson in Chinese calligraphy. The Obamas' landmark trip will focus on the importance of education and strengthening US-China ties through person-to-person contact. On Friday morning, US first lady Michelle Obama, a Harvard-educated lawyer, visited a high school in Beijing with the accompany of Peng Liyuan, President Xi Jinping's wife. After that, the two is to stroll inside the Forbidden City, eat Peking duck and watch a performance together. Mrs Obama landed in Beijing on Thursday evening, starting her long-awaited trip to China with a big smile and a wave. When Mrs Obama, in an elegant color-blocked dress by Chinese-American designer Derek Lam, stepped out of the plane with her two teenage daughters Malia and Sasha and her mother Marian Robinson, dozens of reporters that had waited in the airport for hours incessantly clicked their camera shutters. Though nobody from the delegation spoke to the media, the first lady's brief debut spread quickly on Chinese media and micro blogs, where users discussed what she would wear and eat, and how she will interact with Chinese first lady Peng Liyuan. "It is another innovation in the history of Chinese diplomacy" and helps both sides' leaders strengthen their personal relations, said Ruan Zongze, vice-president of the China Institute of International Studies. Ruan was referring to the latest "creative" laid-back meeting between President Xi Jinping and his US counterpart, Barack Obama, at the Sunnylands resort in California last June, soon after Xi assumed office. Peng, Xi's wife, accompanied her husband on the Sunnylands visit but did not meet Mrs. Obama, who was in Washington. Her absence left some Chinese disappointed and more excited about the "make-up" meeting. The Twitter account Flotus, maintained by the White House first lady's office which stands for First Lady of The United States, quickly posted the arrival photo. "She looks stunning, as always! Nice to also see the First Grandmother!" responded the account Colorsizzle. "You look wonderful and so do your beautiful girls!" said Dianeloves2. "You will love it. It's a very beautiful place. Oh, don't forget to go to the Great Wall," said Efemenaa. "Make sure you try different foods in Chengdu," said Jingles66. "The meeting of the two first ladies shows that China is more open and is getting more involved with the international community," Ruan said. The US side also kept a high-profile tone about the first lady's third solo trip abroad. The White House website dedicated a special page for the visit and released a detailed schedule of the weeklong, three-city tour before her arrival. Mrs Obama will post a daily travel blog, including videos and photos, to share her experience in China. She will also record video responses and engage directly with young people on social media. Earlier this month, Mrs. Obama visited the Washington Yu Ying Public Charter School - a Chinese immersion school - to get tips on her China visit from schoolchildren. She also encouraged students to follow her trip. Robert Kapp, a former president of the US-China Business Council who now advises US firms about China, wrote on the ChinaFile blog run by New York-based Asia Society that he is certain that Mrs Obama "will convey directly to Madame Peng and to the Chinese people a sincere message of mutual respect, shared humanity, sober awareness of unfinished societal tasks and global responsibilities, and genuine celebration of their loved ones, starting with Presidents Xi and Obama". The meeting of the two first ladies will come just days before their husbands meet bilaterally on the sidelines of the Third Nuclear Security Summit in The Hague of the Netherlands next week, tackling some of the most urgent global crisis, such as the one unfolding in Ukraine. "I am certain, without bombast or a barrage of cliches, the first lady in particular will contribute to a more full-bodied Chinese understanding of our nation and our people," said Kapp, who was also a historian of 20th century China. Chen Mingming, former Chinese ambassador to New Zealand and Switzerland, said although Mrs. Obama said she would focus on education and youth empowerment, her Chinese trip should not be interpreted as a personal visit. "It reflects the importance Barack Obama attaches to Washington's relations with Beijing," said Chen, referring to her previous solo visit to African countries on behalf of the US president. Chen also noted that Mrs. Obama's bringing her mother and two daughters reflects a smart characteristic of US diplomacy. "It is like saying that 'Not only do my husband and I cherish relations with China, our whole family all support the relations,'" Chen said, adding that the move can easily trigger resonance in family-oriented China and bring the leaders closer to the ordinary people of both countries. The Obamas will also tour the Great Wall, see the Terracotta Warriors of Xi'an, capital of Shaanxi province, and visit a panda reserve in Chengdu, Sichuan province. The two first ladies both delivered a video speech last December at the naming ceremony for the 100-day-old panda cub at the Smithsonian National Zoo in Washington. "The colorful episode in China-US diplomacy will serve as a strong complement to exchanges of the two presidents and raise friendly emotions toward each other among peoples of the two nations," said Ruan. Personal visits to foreign countries by US first ladies, which date back to the presidency of Franklin D. Roosevelt during World War II, have become an important duty and responsibility for contemporary first ladies. US first ladies Hillary Clinton, Laura Bush and Michelle Obama have made 37 foreign trips without their husbands at their sides over the past 20 years. Chinese experts hailed the visit as "a new dimension in the architecture of Sino-US relations" and said Michelle Obama's every step and syllable along the tour will send shockwaves through the media outlets of both countries.

Hong Kong*:  Mar 23 2014

Li & Fung profit soars as brand spin-off eyed (By Tiffany Ap tiffany.ap@scmp.com) Trader to create new company to house its licensee brands, which departing group chief executive Bruce Rockowitz will take charge of - From left, Li & Fung managing director William Fung Kwok-lun and CEO Bruce Rockowitz, who is to step down from his post. Global trading group Li & Fung said operating profit for 2013 soared 70 per cent to US$871 million as it announced an acquisition to change its business mix and said it is seeking to spin off its licensee brands business into a separate public company sometime this year. The core operating profit for the year ended December beat a consensus of 15 analysts compiled by Bloomberg which forecast operating profit of US$813 million. Profit attributable to shareholders was US$725 million, a gain of 17 per cent from a year ago. Turnover increased 3 per cent to US$20.75 billion. The group said it would acquire China Container Line, a sea-freight forwarding firm, the first major logistics acquisition since it acquired IDS in 2010. Li & Fung supplies some of the world's largest firms including Wal-Mart, Target and Inditex. "Our focus has been in-country logistics, moving goods within Asian markets and working for major brands and retailers in this part of the world," chief executive Bruce Rockowitz said. "With the new acquisition, we will now be firmly in the freight forwarding business. If you look historically, our core business is trading. "There's a huge synergy with freight forwarding and our trading business. Our business was 10 per cent freight forwarding and 90 per cent in-country logistics. After the acquisition we'll be 50-50." The logistics business will add more than 500,000 20-foot equivalent unit (teu) containers to the current 50,000. If the spin-off is approved, the new company called Global Brands Group will be listed in Hong Kong. Global carries more than 300 brands such as Cole Haan, Tommy Hilfiger, and Disney. Shares will be distributed in specie, meaning no capital will be raised. "We developed a branding business because we wanted to develop the top 10 retailers in the US. Li & Fung will go back to its core. It's less volatile. The branded business has gone through a difficult time," Rockowitz said. If the listing goes through, Rockowitz will step down from his position at Li & Fung to head up the new company. Spencer Theodore Fung, currently the chief operating officer and son of honorary chairman Victor Fung Kwok-king, will take Rockowitz's place. The company said that by 2016 it wants its trading core operating profit to be larger than the entire group's operating profit today, double that produced by the logistics business and more than double that of its Global Brands Group which stands at just under US$134 million. In its previous three-year plan, the firm had set a goal of US$1.5 billion operating profit by last year but was hit hard in 2012 by weak consumer demand in Europe and the US. In January, Forbes ranked the Fung brothers jointly as the tenth richest Hongkongers with a net worth of US$4.7 billion. Li & Fung was founded by their grandfather Fung Pak-liu as a porcelain and silk export business in 1906. Shares of Li & Fung moved up 0.98 per cent yesterday to end at HK$10.30, beating the Hang Seng Index which fell 1.79 per cent. In the aftermath of the fire at a textile factory in Bangladesh, Rockowitz said "factories need help to bring them up on the compliance side".

 China*:  Mar 23 2014

Virginia on the road to China (By By Chen Weihua in Richmond chenweihua@chinadailyusa.com) Virginia Governor Terry McAuliffe (left) announces a historic visit to China by the Richmond Ballet in May 2015 at a ceremony in the Virginia State Capitol in Richmond on Wednesday, while Lu Kang (center), minister and deputy chief of mission from the Chinese Embassy in Washington DC, and Stoner Winslett, artistic director of the Virginia Ballet, look on. The State of Virginia is seeking strong ties with China with Governor Terry McAuliffe announcing on Wednesday a historic visit to China by the Richmond Ballet and a series of cultural and economic exchanges. McAuliffe, who took office two months ago, said the Richmond Ballet had accepted an invitation to perform at the 15th Annual "Meet in Beijing" Arts Festival in Beijing in May 2015. The trip will mark the ballet's first trip to Asia and its second international tour, following its successful run at the Royal Opera House in London in June 2012. "The invitation for Richmond Ballet to perform in China marks a significant and important step not only for the ballet, but in continuing an open and productive cultural dialogue between Virginia and our most valuable trading partner, China," McAuliffe said at a ceremony held in the Virginia State Capitol.The Richmond Ballet, a leading mid-size ballet company in the US, has planned a year-long Road to China program, which will celebrate Chinese culture in the US throughout its 2014-2015, a season that marks the company's 30th anniversary. Besides the trip to Beijing, the program will also include the arrival next February of two guest dancers from the National Ballet of China to share the stage with Richmond Ballet dancers for the company's performance of Don Quixote. China will also be featured in the ballet's community outreach program, known as Minds in Motion, in both Richmond and Charlottesville. The Richmond Ballet also plans to schedule a series of events designed to encourage diverse communities across Virginia to become more engaged in movement and dance and the Richmond Ballet plans a gala for Feb 28, 2015 to celebrate the Chinese New Year. "What an overwhelming addition to our 30th anniversary season!" exclaimed Stoner Winslett, artistic director of the Richmond Ballet, known as the State Ballet of Virginia. "Who would have thought - an invitation from China, a fascinating place with such rich cultural heritage? We are humbled and we are honored by this invitation." Lu Kang, minister and deputy chief of mission of the Chinese Embassy in Washington DC, said he is very proud to officially welcome the Richmond Ballet as one of the celebrated performers expected to take the stage for one of the most significant arts festivals in China. "Cultural exchanges such as the Road to China program advance mutual understanding and help substantiate the new model of major country relationship envisioned by President Xi Jinping and President Obama at their Sunnylands meeting last year," Lu said. Winslett talked about dance being the expression of the human spirit and the Richmond Ballet's mission to awaken and uplift the human spirit, both for audiences and artists. She said she is also looking forward to learning about their friends in China and furthering cultural exchanges. "This represents an exciting new horizon for us here at the ballet," said Winslett. "The chance to explore a fascinating interesting culture, so historic and majestic, and of course so different from our own, is an opportunity I know our dancers cherish. I am so proud to take first steps along this Road to China, as we seek to share the power of dance and its special ability to communicate and connect our souls when words fail us," she said. McAuliffe described the relationship between China and the US as one of the most important political and economic relationships in the world today. "Cultural exchange programs such as this historic tour for our state ballet company and ballet series Road to China program are a very important and significant part of that relationship," he said. He said Virginia has a long-standing, productive, and mutually beneficial relationship with China, one built solidly on the economic pillars of trade and investment. China is already the largest customer of Virginia's agricultural and forestry products and one of the state's largest trade partners. China also is a top 15 global investor in Virginia. McAuliffe revealed that he will lead a trade mission to Asia in October that will include several stops in China. "I hope this trade mission will offer an opportunity to increase Chinese investment but also more cultural ties, open up more trade and more personal visits between China and Virginia," he said. "This is a win-win situation for the Commonwealth of Virginia and China."

Hong Kong*:  Mar 22 2014

Hong Kong man arrested after attack on two newspaper executives (By Clifford Lo clifford.lo@scmp.com Ng Kang-chung kc.ng@scmp.com) Second assault on media figures in a month raises concerns over freedom of the press - Lam Kin-ming, news controller of the new newspaper, was taken to hospital after the attack. Police arrested a 30-year-old man today in connection with yesterday’s attack on two executives of a new Hong Kong newspaper. It was the second attack on media figures in a month in the city. On February 26, former Ming Pao chief editor Kevin Lau Chun-to was critically injured in a chopping attack in San Wan Ho. Two men were remanded in custody when they appeared in court today charged with wounding Lau. In today’s arrest, crime-squad officers picked up the man in Tuen Mun shortly after a silver Toyota, believed to have been used to flee after the attack, was found abandoned in Wong Tai Sin at about 8am, according to police. A police source said the suspect, a Hong Kong resident, was the owner of the sedan. It is understood the car had not been reported stolen. The man was still being detained and questioned at the headquarters of Kowloon West regional crime unit in Kowloon city at late afternoon. No charge has been laid. Yesterday, Hong Kong Morning News Media Group director and vice president Lei Iun-han, 46, and news controller Lam Kin-ming, 54, were attacked by three masked men with metal bars in broad daylight while they were walking along Science Museum Road in Tsim Sha Tsui. Lei’s nose and knees were injured, as was Lam’s right elbow. The assailants – wearing caps, surgical masks and gloves – fled in a sedan driven by a fourth man. Earlier today, about 50 police officers, including the tactical unit and a tracker dog, searched the area for three hours after the abandoned car was found the Lion Rock Park off Lung Cheung Road. Pairs of labour gloves and surgical masks seized at the site were taken for examination, but no weapon was discovered. A police source said the victims of the attack did not receive any warning and threats prior to the attack that “lasted for a few seconds”. “It appeared the assailants targeted the female victim”, the source said. “But she told police she did not know why she was attacked.” The new media group is planning to launch a new publication this summer. Meanwhile, US State Department spokesman Jen Psaki said today that Washington was concerned about the recent spate of attacks. “While the details of the most recent attack are not completely clear, we are troubled by a series of incidents over the past year that seem to target Hong Kong media figures, ” she said. She said freedom of the press was crucial to Hong Kong’s success and reputation as a leading centre of global commerce. “We expect Hong Kong’s law enforcement authorities will fully and transparently investigate these incidents,” said Psaki. Hong Kong lawmaker James To Kun-sun described the assault as another attack on press freedom, while the security minister Lai Tung-kwok also condemned the attack and ordered police to conduct a thorough investigation.

 China*:  Mar 22 2014

Michelle Obama arrives in China to kick off hotly anticipated week-long trip (By Reuters in Beijing) US first lady Michelle Obama waves as she walks out the plane with her daughters Sasha and Malia upon their arrival at Beijing. US first lady Michelle Obama arrived in Beijing on Thursday evening, the official Xinhua news agency said, beginning a hotly anticipated week-long trip during which she will promote education and cultural ties. Obama, a Harvard-educated lawyer, is expected to spend Friday with China’s charismatic first lady, Peng Liyuan, who is admired at home as both a glamorous songstress and fashion icon. Besides Beijing, Obama will visit the western historic city of Xian and the southern city of Chengdu, where she will visit a panda preserve. Obama’s two daughters are accompanying her, as well as her mother. She also plans to visit American and Chinese students to promote education and cultural exchanges, and visit historical landmarks like the Great Wall of China. A Xinhua commentary said the trip was “especially meaningful” given tensions in the US-China relationship, including President Barack Obama’s recent meeting with the Dalai Lama, whom China sees as a violent separatist. Foreign Ministry spokesman Hong Lei said the visit would help deepen ties between the world’s two largest economies. “We believe that this visit will play an important role in increasing mutual understanding between the two countries and expanding friendship,” Hong told reporters ahead of Obama’s arrival. Obama is expected to focus on education during her trip, foregoing mention of thornier issues such as trade and human rights – an approach the Xinhua commentary said it agreed with. “The uniqueness of the role of first ladies is its soft touch and freedom from the knottiness, and even ugliness, of hard politics,” the commentary said. Still, many internet users have already begun criticising Obama for planning to lunch at a Tibetan restaurant in Chengdu – a tacit sign, some said, of US support for the Dalai Lama. Former US first lady Hillary Clinton criticised China’s human rights record during her husband’s presidency. News of Obama’s arrival spread fast on Sina Weibo, China’s Twitter-like microblog, where users speculated on what the trip would bring – as well as what Obama would wear and eat. “Two intellectual women playing the game of great power politics – how beautiful,” wrote one user. 

Hong Kong*:  Mar 21 2014

Why the world's youngest billionaire plays little part in running her own Hong Kong-listed empire (By Toh Han Shih and Tiffany Ap hanshih.to@scmp.com tiffany.ap@scmp.com) Perenna Kei (inset, left) holds 85 per cent of Logan Property with an estimated net worth of US$1.3 billion. Her father, Ji Haipeng (inset, right), is the chairman and chief executive of the company. The secretive 24-year-old Hong Kong woman named by Forbes magazine as the world’s youngest billionaire plays little part in the running of the company she owns and her residency in the city ensures her mainland father’s business empire is legitimately sheltered from the Chinese government and the taxman, the South China Morning Post can reveal. Perenna Kei Hoi-ting became a US dollar billionaire after the company in her name, Logan Property Holdings, was listed in Hong Kong on December 20 last year. Her wealth increased following the listing as Logan’s share price rose from HK$2.10 to HK$2.36 on March 19. Forbes put her net worth at an estimated US$1.3 billion. According to WealthX, an international firm that collates information on the world’s ultra-wealthy, Kei, whose name in Putonghua is Ji Peili, holds liquid assets of at least US$6.5 million and lives in Tsim Sha Tsui. But despite the reported fortune that suggests a savvy businesswoman who built a mainland real estate empire, Logan’s IPO prospectus paints a different picture. And analysts believe the real power lies behind her throne, with the company using her name and Hong Kong status to minimise taxes and avoid having to reveal the secretive offshore companies owned by her family. This practice is not illegal. The IPO prospectus, compiled by a company ahead of a listing to give detailed information to prospective investors, firmly states that the company reins are held by Kei’s father, Ji Haipeng, despite Kei jointly owning 85 per cent of the company with her father through various holdings. The prospectus reads: “Given that Ms Kei has limited experience in the real estate business, a declaration was made by Ms Kei which declared the ultimate control over all major affairs of the group are vested in Mr Ji, the father of Ms Kei, and Ms Kei had and will continue to act under the instruction of Mr Ji from time to time.” When the Post called Logan Property and asked to speak to Kei, our reporter was told she was not involved in the day-to-day operations of the firm and did not work at the company’s Shenzhen headquarters. A Hong Kong analyst who did not wish to be identified said bluntly: “I don’t think she built this business. She’s a de facto nominee for her father.” As far back as 2010, Kei, at the tender age of 20, was listed as playing a major part in the creation and organisation of the company, involving multimillion dollar offshore deals. When Logan was incorporated in the Cayman Islands on May 14 of that year the company was wholly owned by Kei, according to the IPO prospectus. However, it was clear that the decision-makers were in fact her father and other directors. In 2010, Yuen Ming Investments, a British Virgin Islands (BVI) company controlled by Kei, acquired 75 per cent of Shenzhen Youkaisi Investment, a mainland property firm, for 375 million yuan (HK$474 million). Because Kei was unable to attend a meeting on the deal, Cheung Hok Ming, a friend of her father’s from his home city of Shantou, Guangdong province, arranged the acquisition, the prospectus said. According to the prospectus Kei is a Chinese national and is also a citizen of the Caribbean offshore haven of Nevis and St Kitts. In addition she, in November 2012, acquired a Hong Kong ID card. Ji Haipeng, meanwhile is a Chinese national, with his address registered in Shantou. Kei’s status as a Hong Kong resident allows her to own offshore companies without informing the Chinese government of their existence, whereas her father, as a Chinese national, would be obliged to. She is the current and former owner of a number of companies registered in offshore havens including the British Virgin Islands and the Cayman Islands. In addition a Hong Kong permanent resident is not subject to tax on dividend income from companies, according to William Chan, a tax partner of international tax and advisory firm Grant Thornton. A Chinese national, however is subject to tax on worldwide income. By transferring the shares in his companies to his daughter, Ji Haipeng would legitimately minimise his tax bill while still being able to control the companies in question, Chan said. David Webb, a Hong Kong corporate governance activist, described Hong Kong as “the Monaco of China”, adding that it is “attractive for mainland tycoons to be tax residents and remove themselves from the mainland tax system”. Raymond So Wai-man, dean of the business school of Hang Seng Management College, said Kei’s position within Logan was unusual and raised questions about the control of corporations. “Having such a young person as Perenna Kei own the majority of a Hong Kong-listed company is not common,” he said. “Although Kei’s position in her company is legal and meets the requirements of the Hong Kong Stock Exchange, there is room for improvement in corporate governance.” While little is known about her current personal life, Kei is understood to be involved in philanthropy, mainly through Logan Property. Last December she donated HK$120,000 to the Community Chest of Hong Kong and has previously donated to the Xiqu Central Primary School, Red Cross Society of China and Guangxi Charity Foundation. An interview with Singapore’s Today newspaper in 2009 gave an insight into her earlier aspirations and education. The piece painted a picture of a 19-year-old with ambitions to study in London. “I’m confident of excelling in mathematics and economics, but GP (General Paper) was a tough paper for me,” she told the newspaper. “I didn’t want to spend two years in a place that could not guarantee me a path to a university in the UK,” she continued, explaining her reason to withdraw from junior college after four months, before taking up a place at the Singapore Institute of Management. She graduated from the University of London in 2011 with a bachelor’s degree in finance and economics. Kei’s dependence on her father is in stark contrast to that of another young Chinese woman tycoon, Yang Huiyan. In 2007, at the age of 25, Yang became the mainland’s richest person and Asia’s richest woman when her property firm, Country Garden Holdings, went public in Hong Kong. Yang’s 58.2 per cent stake in Country Garden was worth HK$34.91 billion on March 18. Like Kei, Yang is a daughter of the company’s chairman, Yeung Kwok Keung. But unlike Kei she plays a more active role, as executive director of the company. Country Garden’s IPO prospectus said: “In 2005, Yeung Kwok Keung transferred his interests in our mainland companies to his daughter due to his intention to train Yang Huiyan as the successor of his family’s interest in the group. Yang Huiyan joined the group in spring 2005 as the personal assistant to Yeung Kwok Keung and assisted Mr Yeung in the formulation of development strategies, investment planning and overall project planning.” It remains to be seen whether Kei will become more involved in the business, or whether her father will choose to retain control.

 China*:  Mar 21 2014

China bans the locking up of petitioners seeking government redress (By Agence France-Presse in Beijing) Petitioners kneel before a car, blocking its way, as they beg to display their petition letters near a local government office supposed to receive grievances in Beijing. China has banned the widespread practice of detaining petitioners seeking government redress, state media said Thursday, following the abolition four months ago of “re-education through labour”. Similar pledges have been made before, but detentions have continued nonetheless. Chinese citizens unable to find redress from local officials often appeal to higher-level authorities, sometimes travelling cross-country to Beijing. But they are routinely ignored by government offices, or thwarted by embarrassed by hometown officials and forced into informal “black jails” before being bundled home. Government bodies must now “resolutely (avoid) blocking the people from normal petitioning by any means”, said a circular issued by the ruling Communist Party’s Central Committee and the State Council, China’s cabinet, the official news agency Xinhua reported. “The circular stresses that illegal or indirect confinement of petitioners is strictly prohibited,” Xinhua said. The document instructed officials instead to meet with petitioners and either funnel their complaints to the court system or explain why they were rejected. Xinhua admitted that when petitioners presented grievances ranging from land acquisition to healthcare to environmental protection, “officials often prevent them from raising such cases with their superiors”. The move follows a decision by Beijing last November to end a decades-old system of “re-education through labour” camps, where petitioners and minor offenders could be sentenced for up to four years by a police panel, without appearing before a judge. But detention of petitioners seem to have continued -- in February, the central province of Henan admitted shutting petitioners in “discipline centres”. Meanwhile, rights groups have warned that despite the closure of labour camps, arbitrary detention persists through “black jails”, enforced disappearances and other methods. Many labour camps were converted into drug rehabilitation centres that operated “virtually identically”, the advocacy group Amnesty International said in December.

Hong Kong*:  Mar 20 2014

2017 might be Hong Kong's only shot at universal suffrage, Carrie Lam says (By Tanna Chong and Jeffie Lam) Carrie Lam says Beijing's decisions leave room for doubt on whether universal suffrage is possible if no deal is reached for 2017 poll - If Hong Kong fails to agree on a reform package for the 2017 chief executive election, there is no guarantee Beijing will allow universal suffrage in future, Chief Secretary Carrie Lam Cheng Yuet-ngor insisted yesterday. Lam was speaking after a breakfast meeting between lawmakers and representatives of Beijing's liaison office yesterday, at which she and central government officials cast doubt on future attempts to implement a one-person, one-vote system if the current reform effort failed. "The objective fact is that we can elect the chief executive by universal suffrage in 2017. If we fail to achieve the goal for 2017, it is difficult to say when we would obtain another timetable for universal suffrage," said Lam, leader of the government consultation on reform. She dismissed a claim by Civic Party lawmaker Dr Kwok Ka-ki, one of the 13 legislators at the meeting, that she and liaison office legal chief Dr Liu Xinkui were "scaremongering" when they suggested that the idea of universal suffrage could be scrapped. She cited a decision by the Standing Committee of the National People's Congress, which in 2007 named 2017 as the year when the city could elect its leader by one person, one vote. The Standing Committee said universal suffrage for the chief executive election "may be implemented" in 2017, Lam argued, but had not "elaborated on the electoral methods for the chief executive elections after 2017". Kwok said Lam and Li had used scare tactics at the meeting in an attempt "to force Hong Kong people to pass an unacceptable electoral plan". Lam called Kwok's comments "untrue and unexpected". The government is expected to put forward a reform plan later this year, and must win a two-thirds majority in the Legislative Council, meaning some pan-democrats must support it. Disagreements remain, however, especially over how candidates will be nominated. An official who attended the breakfast meeting quoted Lam as saying that were an attempt at reform to fail: "The future government would possibly face greater ruling issues and a more fragmented legislature, which makes reaching a consensus more difficult. If we fail for 2017, is it possible to succeed in the future?" The official said Lam was interpreting the Standing Committee's decision "from legal and political perspectives". However, an expert on the Basic Law said the ruling could be interpreted in a different way. "The decision says 2017 is the earliest time when Hong Kong can implement universal suffrage. It naturally follows that universal suffrage can happen after 2017," said Alan Hoo SC, chairman of think tank the Basic Law Institute. Executive Council member Cheng Yiu-tong also rejected suggestions the city would be given no more chances to implement universal suffrage. "The central government officials would not - and would not dare - say something like this," Cheng said. But he agreed further reform efforts would be pointless if Beijing loyalists failed to secure two-thirds of Legco seats in 2016. "It would only repeat the discussion and waste time and resources," he said. The NPC delegate said Beijing had always wanted the chief executive poll in 2017 to be "100 per cent safe". "They want the election to bring stability to the society - not to lead to internal fighting between two groups," he said.

 China*:  Mar 20 2014

Yuan tumbles to 11-month low, with fears it could fall further still (By Jeanny Yu jeanny.yu@scmp.com) The yuan fell to its weakest level against the US dollar since April yesterday, breaching the psychological level of 6.20 against the greenback, but market players fear the correction is not over yet. In three days of trading since the central bank doubled the trading band for onshore yuan, the currency has fallen 0.8 per cent against the US dollar - more than a quarter of last year's gain - as investors sold yuan amid soft macroeconomic data and mounting mainland credit risks.The onshore yuan fell as much as 0.25 per cent, or 153basis points, to 6.2081 against the US dollar in the spot market yesterday. By the close, onshore yuan stood at 6.1957 against the dollar, an 11-month low, and offshore yuan stood at 6.1870. The market, including both foreign exchange and equity investors, reacted strongly to the yuan's fall yesterday, fearing the People's Bank of China is being more hawkish in its monetary policy, regardless of short-term pain to the economy or investors. "The PBOC set the mid-point rate for renminbi at weaker-than-expected levels in the past two trading days - they were not defending the renminbi as the market thought they would be," said Ju Wang, senior Asian FX strategist at HSBC. "We see more near-term weakness, for the currency, with the yuan to potentially test a new upper trading band of 6.25 against the dollar." The overnight Shanghai Interbank Offered Rate, measuring short-term liquidity in the mainland's money market, rose to a one-month high yesterday after the mainland had its second onshore bond default this year. The benchmark Shanghai Shenzhen CSI 300 Index, tracking the 300 top firms listed on the two cities' main boards, lost 0.81 per cent yesterday to end at 2,120.87. The Hang Seng Index lost 0.07 per cent to finish at 21,568.69. The PBOC said on Saturday it would let the onshore yuan spot rate float 2 per cent either side of its daily reference fixing - double its earlier 1 per cent trading band. The yuan's fall has nearly wiped out last year's gain when onshore yuan rose 2.9 per cent and offshore yuan 2.2 per cent.

Hong Kong*:  Mar 19 2014

Asian appetite for geoduck clams brings big profits for Canadian fishermen (By Agence France-Presse in Tofino) Fishermen in British Columbia make a small fortune wresting huge geoducks from the ocean bottom for restaurant tables in China and Japan - From a basket hoisted on the back of his trawler, fisherman Freddy Gutmann proudly picks up a giant geoduck clam fresh from the frigid waters off the northwestern Canadian coast. "This one is a great specimen," Gutmann says as sea water gushes from the massive fleshy mollusc that measures an impressive 20cm. Gutmann has good reason to be in high spirits, since within 24 hours, the super-sized shellfish - shunned by Western chefs - will be served at top restaurants in Hong Kong, Beijing or Tokyo for a steep price. Without missing a beat, the 35-year veteran of the Pacific waters swiftly fills three orange cases with his sorted and cleaned catch so they can be rushed to the airport in Vancouver - and on to Asia. A kilogram of geoduck fetches C$30 (HK$210) for the fishermen and six times that for a fine restaurant. But that was not always the case, recalled Gutmann. "Fifteen years ago, its price was around 30 cents per pound, maximum," he said. What is more, licences to harvest such clams were once available for a pittance. "Licence owners got them for a couple bucks. Sometimes they were given [away] by the government," said the native of Tofino, a small seaside town in the province of British Columbia. Today, however, "they're worth C$4 to C$5 million", he added. In the port of Tofino, mariners talk of astronomically high fees of C$50 million per permit and annual salaries of C$200,000 - all difficult to believe and verify. But just 55 fishing permits have been issued by Canadian authorities, who are not planning to increase that quota - even though environmentalists say the geoduck population is overabundant. The distinctive clams - sometimes evocatively referred to as "horse penis clams" - can be found all the way from Mexico's Baja California Peninsula to Alaska. But they are particularly prevalent off the shores of the US state of Washington and in neighbouring British Columbia. Harvesting the shellfish is no easy task. It takes two divers, weighed down by 30kg belts and taking turns, over 12 hours to plunge 15 to 20 metres into the dark waters to wrest the geoducks from the sandy Pacific floor. Dressed in thick wetsuits and attached to a boat by a 300 metre air hose, the divers scour the sea floor for tiny holes that suggest the presence of a clam, often buried under a metre of sand. They plunge their arms in and try to wrestle the muscular shellfish out. "You've got your ears against the sand - you hold it, but it's fighting to leave," said David Thomas, who has spent 27 of his 48 years searching for geoducks. Thomas - who works with Gutmann - swears this season will be his last. Sometimes, the underwater current was so strong that it plastered you to the sea floor, he said. Perhaps surprisingly, Thomas, Gutmann and the boat's third crew member haven't become culinary fans of the clams.

 China*:  Mar 19 2014

US first lady's visit expected to boost goodwill (By By Chen Weihua in Washington and Pu Zhendong in Beijing) Chinese first lady Peng Liyuan is expected to stroll inside the Forbidden City on Friday with her US counterpart, Michelle Obama, whose upcoming trip will spark new interest in Chinese culture among Americans and further advance people-to-people exchanges between the two countries, observers said. On Thursday, the US first lady will kick off her visit to Beijing, Xi'an and Chengdu with her daughters, Malia and Sasha, and her mother Marian Robinson. US first lady's visit expected to boost goodwill - Peng will also accompany the Obamas on a visit to a high school and attend a private dinner and performance in Beijing. Peng visited the US last June with her husband, President Xi Jinping, and attended meetings with US President Barack Obama in Sunnylands, California. However, the two first ladies did not meet. "Both first ladies are sending their goodwill as Peng is ready to display Chinese culture and hospitality to Michelle Obama, while Mrs Obama and her daughters have shown interest in Chinese language and Chinese food," said Ni Feng, a researcher at the Chinese Academy of Social Sciences. "Their interactions diversify the forms of leadership contacts between Beijing and Washington, which is pivotal to stable bilateral ties and the resolution of disagreements," Ni said. Michelle Obama will speak at Peking University and meet with Chinese and US students who have studied in each other's countries. China is the largest source of foreign students to US universities with more than 200,000 students studying in the US. In 2009, Obama announced the 100,000 Strong Initiative to encourage more US students to pursue studies in China. Describing the activities as sending a strong message on the importance of education, Tina Tchen, chief of staff to the US first lady, said Mrs Obama is very much looking forward to interacting with Peng. Ni said communication between the first ladies on topics such as youth, education and culture helps improve understanding of the two societies. Along the way, the US entourage will visit the Great Wall in Beijing, the Terracotta Warriors and the Walled City in Xi'an, an ancient capital in northwestern China. The family will also visit a panda reserve in Chengdu, Sichuan province. The White House is encouraging students at US schools to follow Michelle Obama's trip to China online via the White House blog, Twitter or through PBS LearningMedia and Discovery Education. "Her visit and her agenda send a message that the relationship between the United States and China is not just between leaders; it's a relationship between peoples," said Ben Rhodes, the White House deputy national security adviser for strategic communications, on Monday. "Her focus on people-to-people relations, her focus on education and youth empowerment is one that we believe will resonate in China," Rhodes said, adding that the trip will improve relationships. Analysts said the visit will emphasize issues that Washington and Beijing have in common, like education and family. "Hopefully, it will help to slow or reverse the current trend, which is toward more negative opinions about each other, seen evidently in recent polls," said Bonnie Glaser, senior adviser for Asia at the Center for Strategic and International Studies. Orville Schell, director of the Center on US-China Relations at the New York-based Asia Society, said Michelle Obama's trip offers a symbolic expression of a genuine US commitment to do everything it can to achieve new breakthroughs in relations with China. Contact the writers at chenweihua@chinadailyusa.com and puzhendong@chinadaily.com.cn

Hong Kong*:  Mar 18 2014

Hong Kong businessman Steven Lo faces expulsion from HKFA, Jockey Club if appeal against conviction fails (By Chan Kin-wa, Alan Aitken and Phila Siu) Businessman declares his innocence in Macau corruption case; both he and Joseph Lau file appeals against their conviction and jail sentence - Businessman Steven Lo declares his innocence and pledges to appeal. He read out a statement but did not take questions from reporters. Former Chinese Estates head Joseph Lau will also appeal. High-profile businessman Steven Lo Kit-sing faces expulsion from the city's Football Association (HKFA) and Jockey Club if he fails to win an appeal against his jail term for corruption and money laundering in Macau. The chairman of entertainment company BMA Investment protested his innocence yesterday. "I want to reiterate that I have not done the illegal acts stated in the judgment," he read from a written statement without answering any questions. Lo and developer Joseph Lau Luen-hung, ex-chairman of Chinese Estates, filed appeals with the Macau courts after they were each given a jail term of five years and three months on Friday. They were found guilty of paying a HK$20 million bribe to Macau's disgraced public works minister Ao Man-long in 2005 to secure land near the airport for a luxury residential project, La Scala. Lo said yesterday: "Former public works chief Ao Man-long never used his power to influence the result of the land auction." Lo is one of two vice- chairmen on the HKFA board of directors. According to the association, any director guilty of criminal charges would be disqualified. A source close to the board said it was not taking any action for the time being as Lo had lodged an appeal. "He is still innocent at this stage," the source said. "But the board should discuss the matter sooner rather than later, because it is affecting the reputation of Hong Kong soccer." HKFA chief executive Mark Sutcliffe said he had just returned from holiday and preferred not to comment "until I have reviewed all of the news and spoken to the directors". Lo is also convenor of First Division side South China and the club's parent body, South China Athletic Association. The association's chairman, Duffy Wong Chun-nam, said: "We will discuss [Lo's position in the club] as soon as possible." The Jockey Club declined to comment until Lo's appeal options were exhausted or abandoned. However, a senior club official said the rules were "fairly straightforward" in that anyone with a criminal conviction could not be a member, and that only members were eligible to hold an owner's permit. Neither Lo nor Lau were in Macau when Judge Augusto Silvestre delivered the verdict and sentence. Since Hong Kong and Macau have not signed an extradition agreement, they will not be jailed as long as they do not enter the former Portuguese enclave within the 15-year period that their penalties will be in force. "The validity period is different for different cases, depending on the severity [of the crime]," University of Macau law professor Lok Wai-kin said. Lo and Lau had two channels of appeal, first to the Court of Second Instance and, if that failed, to the Court of Final Appeal, Lok said. On Friday, Judge Silvestre said Lau "has always had control of Moon Ocean", a company that won the bidding for the five plots of land near the airport. It appeared to contradict statements issued by Chinese Estates in 2005 and 2011, when a subsidiary of the company bought shares of Moon Ocean. The statements said the "ultimate beneficial owner" was an independent third party of Moon Ocean. The Securities and Futures Commission has the authority to check whether Chinese Estates has given false statements. It is understood the commission has not initiated an investigation.

 China*:  Mar 18 2014

Reforms seen as key to success of China’s long-delayed urbanisation blueprint (By Victoria Ruan in Beijing victoria.ruan@scmp.com) Moving 100m people into cities needs changes to land and welfare systems, analysts warn - Beijing's long-delayed urbanisation blueprint, which aims to move about 100 million people from rural areas to cities by 2020, will require complex reforms, analysts say. The full text of the plan released on Sunday night showed that Beijing wants to raise the proportion of urban residents to about 60 per cent of the total population by 2020, from the current 53.7 per cent. The proportion of people registered under urban households is targeted to rise to about 45 per cent from 36 per cent over the same period. China's goal remains far below the average urbanisation rate of about 80 per cent in developed nations, but boosting the rates requires an intense effort to overhaul the fiscal, land, and social welfare system, analysts say. The plan is designed to spawn a consumption-driven, greener growth model in a shift from the old pattern, which was typified by heavy capital spending and high environmental costs. Qiao Runling, a vice-director at the China Centre for Urban Development under the National Development and Reform Commission (NDRC), said: "The blueprint centres on moving migrant workers into cities, transforming [the] growth model to low-carbon and green development, and improving the structure of cities." He told the Post: "It's no longer an emphasis on enclosing land, adding investment, and constructing properties." Migrant workers moving into cities are expected to consume more food, buy houses and home appliances, and join transport networks. Local governments are expected to include them in the social and medical insurance coverage for urban areas. "There wouldn't be a second 'four-trillion-yuan' stimulus," Qiao said, referring to a stimulus package rolled out by Beijing during the global financial crisis to combat economic slowdown, a policy that fuelled high inflation, asset bubbles, and overcapacity. Economic growth cooled to 7.7 per cent last year after peaking at more than 14 per cent in 2007. But Qiao said implementation would be much more complicated and pilot trials would be conducted across the nation first. The government plans to guide some labour-intensive industries to move to central and western regions from the affluent eastern coast. It aims to develop a few city clusters in areas including the Chengdu -Chongqing region in the west, central China, and the middle reaches of the Yangtze River. The government also plans to expand railways, roads, highways, and airlines to facilitate labour flows. Cities will be encouraged to develop strategic industries such as information technology, biology and renewable energy. A more market-based investment and financing system with participants from private enterprises will be established to cut local authorities' reliance on land sales. The government also plans to reform the rural land ownership system, a major problem that has discouraged many farmers from moving to cities for fear of losing their land permanently. Beijing also aims to boost air quality, ensuring 60 per cent of cities meet national pollution standards by 2020. "The blueprint will help narrow the gap between urban and rural areas," said Wang Jun, a senior researcher with the China Centre for International Economic Exchange, a government think tank. But he cautioned that: "There is a long way to go, as China's fiscal strength and public services networks will take time to catch up." Beijing has repeatedly suspended the rolling out of the urbanisation plan in the past two years. President Xi Jinping , taking office in the autumn of 2012, rejected a proposal last year as it focused more on expanding investment than improving livelihoods, according to people familiar with the talks. The central government will oversee the design of the overall urbanisation strategy, while the NDRC will be responsible for making detailed plans.

Hong Kong*:  Mar 17 2014

HKEx chief Charles Li Xiaojia urges reform as Alibaba opts for New York (By Ray Chan ray.chan@scmp.com) Hong Kong stock exchange chief not prepared to bend rules for HK$100 billion listing of tech giant but says structural reform is under way - Stock exchange chief Charles Li Xiaojia says the city must be ready to reform its share-listing rules if it wants to stay a globally competitive financial centre, but it was right to stick to principles that saw it lose out yesterday to New York for the potential HK$100 billion listing of Alibaba. Li spoke to the South China Morning Post hours after mainland e-commerce giant Alibaba said it had picked New York after months of wrangling with Hong Kong regulators over its management structure that the Securities and Futures Commission said breached its "one shareholder, one vote" governance rules. "Everything has a cost. Our persistence has a cost too," Li told the Post, but added that Hong Kong Exchanges and Clearing would continue with the review of its existing listing rules - which began after a stalemate with Alibaba last autumn - even though the deal was now dead. "The reform review in the HKEx will not stop because Alibaba has decided to list elsewhere," Li said. "We would not bend our existing rules just for one applicant, but Alibaba's proposal has propelled the management to review our operating model. The eventual loss may be even larger if we don't undergo reforms [of the] listing regime." However, the stock exchange chief was careful to back regulation that many international investors - and the SFC - say define Hong Kong as a respected market in which to trade and invest. "We feel proud of Hong Kong as we ensure that our rule of law and investor protection remain intact," Li said. Hangzhou -based Alibaba, led by former English teacher Jack Ma Yun, said yesterday that it would begin the process for an initial public offering in New York. Hong Kong's regulators had rejected Alibaba's wish for an amendment to the city's listing rules to accommodate a partnership structure that gives Ma and other senior managers the right to nominate a majority of board members, despite owning only around 10 per cent of the firm's stock. Exchanges in the US allow such dual-class structures. The other major stock holders in Alibaba are Yahoo and Softbank. Alibaba is expected to raise US$15 billion in New York in the highest-profile listing since Facebook's US$16 billion IPO in 2012. The estimate is based on the firm's current expected market value of between US$100 billion and US$120 billion. Alibaba said on its corporate blog yesterday that the steps towards a US IPO would make the firm "more global and enhance the company's transparency, as well as allow the company to continue to pursue our long-term vision and ideals". Investment banks, including Credit Suisse and Morgan Stanley, are said by market participants to be the lead managers for the Alibaba listing. The US listing will provide a swift means for Alibaba to lower the cost of capital since the deal-hungry internet firm has spent more than US$3 billion in a buying spree over the past year.

 China*:  Mar 17 2014

Corruption probe of PLA's Xu Caihou dropped because of terminal cancer (By Minnie Chan minnie.chan@scmp.com) Retired Xu Caihou has terminal bladder cancer, 'which is equal to the death penalty' - A corruption probe into a retired senior PLA general was dropped because he has terminal cancer - a fate "equal to the death penalty" - two sources have told the South China Morning Post. President Xi Jinping decided not to punish Xu Caihou, 70, who was vice-chairman of the powerful Central Military Commission, one of the sources, a senior colonel, said. Xu was being investigated as part of the Communist Party's inquiry into one of his subordinates, Gu Junshan, a former deputy logistics chief for the PLA, the source said. Gu has been under shuanggui - the secretive form of administrative detention imposed on party members suspected of corruption - since early 2012. "Xu was interrogated after the army's anti-graft investigators started their probe of Gu, but he escaped military discipline after he was diagnosed with terminal bladder cancer," the senior colonel said. Xu was made vice-chairman of the commission, the body that commands the armed forces and is currently headed by Xi, in 2004. He remained in the position until retiring last year. The senior colonel expressed disappointment that Xu was not punished. "When Xu was taken away for investigation, many mid-ranking cadres like me were very happy. We believed at the time that Xu would be 'the biggest tiger' that would be caught in the massive anti-graft campaign," he said. "We were very disappointed to learn that Xu was exempt [from prosecution] because of his illness." The sources said they were told the investigation of Xu was dropped after he handed over his ill-gotten gains and that his terminal cancer "equates with the death penalty". "But from our point of view, we don't know why Xi didn't use the chance to punish him to please the public and the army," the senior colonel said. The other source, from the PLA's Academy of Military Sciences, confirmed that Xu had been diagnosed with terminal bladder cancer, saying that "Xu won't have to worry about any more investigations". "If Xu were punished, it will help the army rebuild its public image," the senior colonel said. Gu, who was in charge of the military's extensive property portfolio, reportedly received bribes worth at least 8.6 billion yuan (HK$10.9 billion) in cash and gifts. Sun Sijing, head of the anti-graft watchdog overseeing the army's general logistics department, confirmed Gu was being investigated and that details about the investigation would be announced soon. 

Hong Kong*:  Mar 16 2014

New World taps market for HK$18.6b to buy out China unit (By Yvonne Liu yvonne.liu@scmp.com) Developer to use funds raised from rights issue for buying out investors in mainland subsidiary - New World Development, the city's fifth-largest developer by market value, yesterday announced it would make an HK$18.6 billion rights issue to take its mainland property arm New World China Land private. The developer launched an offer to buy back shares of New World China it does not own at HK$6.80 each, a 32.3 per cent premium to the stock's close of HK$5.14 on March 10. The company controls 69.1 per cent of New World China. Shares in New World China, which had been suspended from trading since Tuesday, jumped 29 per cent to close at HK$6.63 following resumption of trading yesterday. Trading was heavier than normal with 46 million shares worth HK$305 million changing hands. New World Development, however, dived 14.03 per cent to HK$8.27. The Hang Seng Index closed 1 per cent lower. Chairman Henry Cheng Kar-shun said: "It is a good time to take New World China Land private. The offers for privatisation and rights issues are reasonable. "Privatisation could facilitate New World China's fundraising in future. "If we are unable to take the company private, we'll use the funds [from the rights issue] to buy development sites in Hong Kong and on the mainland." New World said it planned to raise between HK$13.32 billion and HK$13.99 billion through a rights issue of one share for every three held by investors. The rights shares will be priced at HK$6.20, 36.3 per cent below the stock's close of HK$9.74 on Monday. New World said that while the subsidiary would require substantial funding for its future developments, the public equity capital market was not a viable funding option because of the low liquidity of its shares and the fact that the stock market priced them at a 23.1 per cent discount to their net asset value. After the privatisation, New World said the subsidiary would be able to fund larger property development projects by leveraging its parent firm's financial strength, including its access to more competitive financing terms for bank loans. An analyst, who declined to be named, said: "The offer is attractive and offers a fair deal to shareholders of the two companies." "New World Development's property sales have picked up over the past two years and boosted its cash. "It has given the developer incentives to take New World China Land private." He also said New World China's cost of funding could be lower after the privatisation. According to research reports by Bank of America Merrill Lynch, the buyout offer is not cheap as mainland property stocks are going at an average 0.7 times book values. New World China listed in 1997 at HK$9.70.

 China*:  Mar 16 2014

China doubles yuan trading range against the US dollar to 2 per cent (By Victoria Ruan in Beijing victoria.ruan@scmp.com) Currency will be allowed to move 2pc up or down in further liberalisation move - China's central bank has decided to double the daily trading band for the yuan against the US dollar from tomorrow, marking a step forward in giving the currency more flexibility. The People's Bank of China will allow the exchange rate to float by as much as 2 per cent up or down from a midpoint set by the central bank each day. The band has been kept at 1 per cent since 2012. The central bank, however, vowed to step in as needed to stem any large swings. Market players have widely expected the change after the central bank guided the yuan to weaken 1.6 per cent against the US dollar since the start of this year, reversing a 2.9 per cent climb in 2013. "It's another step made by Beijing towards a free-floating currency, which may eventually take place in one or two more years," said Shen Jianguang , Mizuho Securities' Greater China chief economist. "While the yuan can float in a wider range, it remains not convertible at the moment as the central bank has retained capital control," Shen told the Sunday Morning Post. He forecast the yuan might weaken further over the next three months before rebounding as domestic economic growth stabilises. The rate of exchange to the US dollar would likely fluctuate between 6 yuan and 6.25 yuan this year, he said. Beijing has pledged to further liberalise mainland financial markets by permitting more risk. Central bank governor Zhou Xiaochuan said this month the government would fully relax its control over interest rates within one to two years. The yuan's continued appreciation last year attracted rapid foreign capital inflows. But slowing economic growth has added downside pressure on the yuan, some analysts say. In the first two months of the year, growth in industrial output, investment, exports and retail sales showed further weakness. The central bank said the yuan was unlikely to rise or fall dramatically, and urged people to focus more on the mid- to long-term trend.

Hong Kong*:  Mar 15 2014

Hong Kong sell-off continues as Li Ka-shing unloads 60pc stake in Terminal 8 (By Charlotte So) A straddle carrier at Kwai Chung container terminal. Li Ka-shing's sell-off of Hong Kong assets continues. A straddle carrier at Kwai Chung container terminal. Li Ka-shing's sell-off of Hong Kong assets continues. Li Ka-shing unloaded yet another Hong Kong asset on Thursday, going against the billionaire’s repeated claims that he has confidence in the city and will not withdraw from Hong Kong. Hutchison Port Holdings Trust (HPHT), Li’s port arm, on Thursday agreed to sell a 60 per cent stake in Hong Kong Terminal 8 west for HK$2.47 billion to two mainland shipping conglomerates, Cosco Pacific and China Shipping Group. This comes just a year after HPHT acquired the operator of T8 west, Asia Container Terminals, from DP World in March last year. HPHT said it would book HK$125 million in disposal gains upon the sale of the 60 per cent stake. Talks between HPHT and Cosco Pacific began in June, after the strike of the dockers at Li’s Hong Kong International Terminals paralysed operations at the port for more than 40 days, before ending on May 6. During the demonstration dockers placed a demon-like effigy of Li Ka-shing outside the Cheung Kong Centre, the headquarters of Li’s flagship company. After selling the 60 per cent stake in Terminal 8 west, HPHT will continue to run Terminal 4, Terminal 6,Terminal 7 and Terminal 9 in Hong Kong as well as jointly run the Terminal 8 east with Cosco Pacific. “Li has long lost confidence in the Hong Kong port business when he decided to spin-off operations through HPHT onto the Singapore Exchange in 2011,” said one analyst who preferred to remain anonymous. Other analysts maintain, however, this latest disposal is consistent with the strategy that Li employed for the spin-off of Hong Kong Electric and as yet unrealised plans to sell ParknShop last year.

Customs nab Tsim Sha Tsui trader who misled shoppers over price of Chinese herbs (By Samuel Chan samuel.chan@scmp.com) Customers were pressured into paying more than ten times the price they expected after confusing use of different measurements - About 10 per cent of complaints received by customs between July and the end of last year were linked to shops selling dried seafood and Chinese herbs. Customs officers posing as ordinary customers on Monday arrested a saleswoman in Tsim Sha Tsui for misleading shoppers about the unit of measurement used for quoting prices of Chinese herbs, which turned out to be 10 times what was expected. The 37-year-old was arrested for contravening Section 13-E of the amended Trade Descriptions Ordinance which prohibits the misleading omission of information required by customers. More arrests are possible in the future, said Patrick Liu Ping-tong, acting head of the Customs’ Special Duties Team, but there was no evidence to suggest any wider network or organised group was involved. Some 4.5 catties (2.7kg) of herba dendrobii, a Chinese medicine known as shi hu which is said to help prevent high blood pressure, were seized with a total sales value of about HK$470,000. The operation followed a complaint received in early February from a tourist, whose place of origin was not revealed. The tourist said the salespeople at the Tsim Sha Tsui shop had quoted a price in tael, a unit of measurement equivalent to about 38g. When they went to pay, it was revealed that the price was actually based on the mace unit of measurement – one-tenth of a tael or about 3.8g. The tourist said they were then pressured into buying the goods at the newly inflated price. Liu said both locals and tourists fall victim to the misleading practice. But tourists, who may not be familiar with how goods such as herbal medicine are sold in Hong Kong, constitute a significant proportion of the complainants. In the time period since the amended Trade Descriptions Ordinance took effect on July 19 last year up until the end of the year, shops trading in Chinese herbs and dried seafood have been among the major focuses of complaints received by the Customs and Excise Department. About 10 per cent of all complaints have been in relation to such shops.

 China*:  Mar 15 2014

8.6pc growth in China industrial output in first two months weakest in 5 years (Reuters in Beijing) China’s industrial output rose 8.6 per cent in the first two months of this year from a year earlier, missing market expectations, the National Bureau of Statistics said on Thursday. Growth in retail sales was also weaker than expected. They rose 11.8 per cent in January and February from the year-ago period, the government said. Fixed-asset investment, an important driver of economic activity, rose 17.9 per cent in the first two months from the same period last year, the bureau said, falling short of forecasts for a 19.4 per cent increase. Economists polled by Reuters had forecast industrial output to rise 9.5 per cent and retail sales to rise 13.5 per cent. Annual growth in factory output in the first two months of the year was the weakest since 2009.

Hong Kong*:  Mar 14 2014

All 70 Hong Kong lawmakers invited for talks in Shanghai (By Emily Tsang and Jeffie Lam) All 70 legislators asked to make trip for possible talks with leading officials on 2017 election; some pan-democrats have doubts - A glimmer of hope for political reform emerged yesterday when all 70 lawmakers - including radicals - were invited on a two-day trip to Shanghai next month, during which they may meet central government officials. Chief Executive Leung Chun-ying, who announced the central government's green light for the visit for April 12 and 13, suggested there may be opportunities to discuss "matters of mutual concern". The invitation even extended to pan-democrats, a number of whom have been deprived of their home return permits because of their dissenting views. But at least one pan-democrat immediately turned down the offer, while others said they would boycott the trip unless it could facilitate discussion on political reform. It has been four years since pan-democrats were last invited to visit the mainland. Announcing the ice-breaking trip, Leung said: "I believe there will be opportunities for lawmakers and central government officials to exchange views on matters of mutual concern. "There is still one month to go. I believe there is time for the officials to hear what the lawmakers want from the trip [and make arrangements]." Details of the tour - including where they would visit, who they would meet and what would be discussed - would be worked out by the central government as soon as possible, Leung said. Democratic Party chairwoman Emily Lau Wai-hing said she would definitely boycott the trip, but her party colleagues would meet today to decide whether to accept the offer. "I will never step on the soil of mainland China until I am allowed to travel freely," said Lau, whose home return permit has been confiscated. Civic Party leader Alan Leong Kah-kit and "Long Hair" Leung Kwok-hung of the League of Social Democrats said whether they went depended on who they could meet and what they could discuss during the meetings. Leung, who also lost his home return permit, said: "I might consider going if some substantial and fruitful discussion could be made in the trip. But don't count me in if it is solely for sightseeing." Claudia Mo Man-ching of the Civic Party was surprised that the government had picked Shanghai as the destination instead of Beijing if reform was the topic. The trip offer comes four years after 42 of the 60 lawmakers - including some pan-democrats - attended Shanghai Expo 2010. And in September 2005, 59 of 60 lawmakers visited the Pearl River Delta in a trip organised by Donald Tsang Yam-kuen, who was chief executive at the time. Both visits took place at a critical time when Hong Kong was discussing political reform. A government source said Leung had played a key role in convincing the central government to arrange the trip. "The chief executive's visit to Beijing last week, during which he met Zhang Dejiang , chairman of the National People's Congress, was instrumental in finalising the tour," the source said. "Pan-democrats and central government officials are likely to discuss political reform during the trip to Shanghai." At the centre of the electoral reform debate is how to put forward chief executive candidates for the popular vote in 2017. Pan-democrats want the public to be allowed to make nominations. But there have been several signals from mainland officials that allowing voters to nominate candidates would violate the Basic Law, which states the city's leader should be nominated by a "broadly representative nominating committee in accordance with democratic procedures". Legislative Council president Jasper Tsang Yok-sing, who will lead the trip, said he was pleased about the invitation and hoped all members would take part. Executive Councillor Fanny Law Fan Chiu-fun said she hoped lawmakers would "behave and not protest during the Shanghai trip", as it would make Hong Kong look bad.

 China*:  Mar 14 2014

Whistle-blowers spearhead fight against corruption in China (By Toh Han Shih hanshih.toh@scmp.com) Common feature in graft prosecutions is use of social media to expose officials for misconduct - The internet has become an important channel for whistle-blowers in China to go public with their allegations. A new and increasingly important tool in China's fight against corruption is whistle-blowing, a cause for concern among multinationals, analysts say. "One theme that current anti-corruption efforts in China have in common is the prominent role played by whistle-blowers," a report by US law firm Jones Day said. "A substantial percentage of the corruption investigations against officials and foreign companies were initiated after Chinese whistle-blowers approached authorities with or publicly disclosed alleged misconduct." An increasingly common feature of Chinese corruption prosecutions is internet users using social media to expose officials for misconduct, such as keeping mistresses, flaunting luxury watches and hoarding real estate, the report said. John Donker, PwC's lead partner for forensic services in Hong Kong and China, said: "Many of our investigations, including those in Hong Kong and China, started because of a whistle-blowing activity, like an anonymous e-mail or a blog." Whistle-blowing against multinationals in China began to gain significance last year, said a lawyer who declined to be named. "It changes things, because companies have to worry about someone going to the public with allegations of corruption against them, and the Chinese and US authorities learning about it," he said. Last year, the Central Commission for Discipline Inspection (CCDI) announced that Chinese disciplinary bodies had launched 155,144 investigations based on tips from the public, resulting in the punishment of 160,718 officials in government and state enterprises. In September, the CCDI and the Ministry of Supervision jointly set up a website that allows members of the public to report misconduct by officials. Whistle-blowers can do this anonymously or with their real names. Not all official Chinese reactions to whistle-blowers have been positive, and the government has taken steps that critics fear will deter private citizens from blowing the whistle, Jones Day's report said. In 2012, the government introduced regulations that require social network operators to compel users to register their real identities. Last year, the National Internet Information Office closed more than 100 informal news websites in a government campaign against "extortionists", including a well-known corruption whistle-blower, according to the Jones Day report. In September, the Supreme People's Court and Supreme People's Procuratorate jointly issued an interpretation that expanded criminal laws so as to subject social media users to criminal defamation charges and up to three years in prison if a libellous post is viewed more than 5,000 times or forwarded more than 500 times. However, not all that passes for whistle-blowing in China is legitimate. "Black media" has increasingly reared its ugly head in recent times, a report by FTI Consulting, an international business advisory, said. This occurs when social media firms are hired to conduct malicious marketing campaigns against brands or personalities by spreading false and negative information. Nonetheless, there is enough wrongdoing in China to keep real whistle-blowers busy. Almost 80 per cent of mainland companies reported internal fraud in the past two years, according to PwC's latest survey of global economic crime. That is higher than the global average of 56 per cent and the Asia-Pacific average of 61 per cent. The survey found 39 per cent of respondents on the mainland experienced bribery and corruption in 2012 and 2013, more than the global average rate of 27 per cent and the Asia-Pacific average of 30 per cent. PwC polled 5,128 people from 95 countries and territories, including 85 respondents in mainland China and 116 respondents in Hong Kong and Macau. Mainland respondents were five times more likely to have been asked to pay a bribe than their counterparts in Hong Kong, the survey found.

[在短短20小時內就美國腐敗從白宮到地方政治的最好學習講課 The best real lecture on United States corruption from the White Hosue down in 20 short hours http://www.netflix.com/WiMovie/House_of_Cards/70178217?sod=search-autocomplete]  South China Morning Post: House of Cards embodies the corruption in American politics, says Chinese ambassador - According to Cui Tiankai, the drama showcases certain issues prevalent in Washington (Jeremy Blum jeremy.blum@scmp.com) China’s ambassador to the United States has chimed in on popular political drama House of Cards, arguing that the show exposes the disadvantages of American bipartisan politics. “I have seen both seasons of House of Cards, which I think embodies some of the characteristics and corruption that is present in American politics,” said Cui Tiankai, speaking as a participant on a televised People’s Daily panel coinciding with the Chinese People’s Political Consultive Conference. The Chinese diplomat, who previously studied in Washington, DC – the setting of House of Card’s intricate political machinations – added that the show’s story of bipartisan competition and corruption largely mirrored recent affairs. “Currently, Americans are arguing and debating on how their two political parties have become so extreme,” Cui said. “Many things can never be accomplished because the interests of each party are of the greatest importance.” But according to Liu Yu, a liberal columnist for Southern People Weekly, the show's depiction of corruption in the White House is exaggerated, and Washington politics are not nearly so simplistic. “In a sense, House of Cards is a work full of conspiracy theories,” Liu wrote. “Every word and every look from the male and female leads harbours a new conspiracy, and the biggest conspiracy of all is [the show's depiction of] democracy itself, where greedy and crafty statesmen try to outwit each other and deceive the populace for their own personal interests – all under the cover of ‘democracy.’” Liu also quoted US president Barack Obama, a fan of House of Cards. Obama previously called the political dealings on the show “ruthlessly efficient” but a far cry from real life. “Obama’s comments largely tell the truth about Washington politics – a variety of separation of powers, checks and balances,” Liu wrote. “It is an inefficient system… American democracy has evolved into a ‘vetocracy’ – where there are too many checks and balances and the opportunity to veto often renders reform intentions meaningless.” This is not the first time that House of Cards has provided food for thought in China. The award-winning show, which portrays the ruthless manipulations of Democratic party whip Frank Underwood, has many fans in China and is one of the most popular programmes on Sohu.com, an internet streaming service. Wang Qishan, top-ranking head of the Communist Party's anti-corruption body, is reportedly an avid fan of the series. A March 9 Financial Times editorial by Kurt Campbell, former US assistant secretary of state, asserts that many mainlanders are enamored of House of Cards because it portrays American politicians who may “echo something familiar in the modern Chinese experience [such as] the recent saga of Bo Xilai,” a famous politician now jailed for graft. “In my experience, even the most cosmopolitan Chinese interlocutor harbours a deep ambivalence and uncertainty about Washington’s strategic intentions,” Campbell wrote. “It is widely believed that, beneath the surface, America’s vaunted democracy is rife with injustice and corruption.” Members of China’s online microblogging community offered an alternate voice, and several criticised Cui for his comments. “Americans are such that they do not hide their drawbacks, and through debate, constantly compromise to improve their government,” one Sina Weibo commentator wrote. “They see the problems of their [government], and also recognise their own shortcomings.” “Of course there are issues with a two party system,” mused another blogger. “But a one party dictatorship can really harm people.”

China slams Malaysia over ‘chaotic’ response to hunt for missing flight MH370 (By SCMP) As hunt for missing plane enters its sixth day, Beijing hits out at lack of hard facts and accuses Malaysian military of hampering search efforts - Malaysian transport minister Hishammuddin bin Tun Hussein is bombarded with questions at yesterday's news conference. Beijing slammed Malaysia's "pretty chaotic" answers concerning the missing Malaysia Airlines plane, as Kuala Lumpur officials failed to pinpoint the plane's last known whereabouts. As the search enters its sixth day, two Chinese diplomatic officials accused Malaysian military of hampering China's efforts to locate its 153 nationals among the 239 passengers and crew aboard a Beijing-bound flight that vanished on Saturday. Malaysia's acting transport minister Hishammuddin bin Tun Hussein admitted in Kuala Lumpur: "We don't know where the aircraft is." Guo Shaochun, a deputy director of China's Ministry of Foreign Affairs, said Beijing "requests that Malaysia releases authoritative and substantial information" on the missing plane. "It's pretty chaotic, so up to this point we too have had difficulty confirming whether [information is] accurate or not," said China's foreign ministry spokesman Qin Gang, responding to conflicting information provided about the flight path of ill-fated flight MH370. Military personnel from 12 countries - including China, India, Japan and the US - are sweeping the seas and airspace around Southeast Asia for traces of the Boeing 777 jetliner. The search has expanded to 27,000 square nautical kilometres, involving 42 ships and 39 aircraft, although Vietnam said it would scale back its efforts. Malaysian officials from the airline, air force, transport ministry and aviation department in Kuala Lumpur yesterday were bombarded with questions from reporters about contradictory statements concerning the plane's last known location. Hishammuddin, quizzed about Beijing's frustration, said: "China obviously feels aggrieved because they have so many of their nationals involved." He added: "It's not a matter of chaos ... it only seems confused if you want it to be seen so." Confusion reigned after reports indicated the plane had moved significantly off course. Malaysia's air force chief, Rodzali Daud, denied reports quoting him saying the plane was last detected by military radar at 2.40am on Saturday, at the northern end of the Strait of Malacca. One Malaysian military official told the Post that while reviewing readings, he saw "weak signals" on the military radar showing an object moving west towards the Strait. Another Malaysian military investigator corroborated the sighting. At a meeting in Beijing with passengers' families, Datuk Iskandar Sarudin, Malaysia's ambassador to China, said his country's national airline lost contact with the jet after communications were handed to air controllers in Ho Chih Minh City. A spokesman for Vietnam's aviation authority confirmed the transfer took place. He said Vietnam could not communicate with the plane, told Malaysia, and passed responsibility back to Malaysia's aviation authority.

Hong Kong*:  Mar 13 2014

Ricky Wong plans court action as HKTV plans hit 'dead end' (By Vivienne Chow vivienne.chow@scmp.com) Ofca tells HKTV that it has to get a domestic free-to-view or pay-TV licence first before launching new mobile TV service - Hong Kong Television Network's chairman Ricky Wong Wai-kay. The entrepreneur who revolutionalised Hong Kong's telecom market says the government has pushed him to a dead end after it repeatedly blocked him from entering the television market. Hong Kong Television Network (HKTV) chairman Ricky Wong Wai-kay said yesterday he would take the battle to court after the government cited legal reasons to stop him from launching a mobile television service on July 1. "This is a laughable and violent move," Wong said. "The Hong Kong government has stopped us from realising our dreams again and again. We have reached a dead end. We just want to make good TV. Do 'you' have to go this far?" He was speaking after the Office of the Communications Authority (Ofca) told HKTV that unless it limited its audience to 5,000 households or fewer it would have to apply for a free or pay television licence under the Broadcasting Ordinance. "I'm left with no choice but to postpone the HKTV launch and suspend production of new programmes," Wong said. "It's ridiculous ... more fictional than fiction," Civic Party lawmaker Claudia Mo Man-ching said. HKTV's application for a free-to-air television licence was rejected without a convincing explanation last October after a three-year wait. It caused public outrage with tens of thousands mounting a week-long rally outside government headquarters. HKTV pressed ahead with plans for a mobile service in December after acquiring China Mobile Hong Kong Corporation for HK$142 million along with its mobile television licence. Wong said Ofca had not stopped the previous owner from operating a mobile service and he could not see the grounds for Ofca's latest stance. Wong has spent more than HK$1 billion on his television plan but said he had no plans for layoffs among his 300 HKTV staff. He denied he was negotiating a deal with ATV. Wong, who attended last Sunday's media-freedom protest after the attack on former Ming Pao chief editor Kevin Lau Chun-to, refused to say whether he had offended anyone that might have led to the government's determination to stop the launch of HKTV. "I'm just a businessman. I have no plans to offend anyone. Today's Hong Kong is no longer the Hong Kong I used to know. We are now in the state of terror."

 China*:  Mar 13 2014

China's satellites 'missed best chance' to find missing Malaysia Airlines flight (By Stephen Chen binglin.chen@scmp.com) Sky eyes were on other parts of globe during plane's ill-fated journey [A Malaysia Airlines Boeing 777-200ER from Kuala Lumpur to Beijing lost contact with air control and went missing more than a hour after it took off in the early hours of Saturday, March 8, 2014. It was feared the plane, with 239 passengers and flight crew on board, might have crashed into the Gulf of Thailand in waters between Malaysia and Vietnam. The incident triggered a large international search and rescue effort] Hampered by poor co-ordination and a meagre staff, China did not immediately exploit the capability of its satellites to search for the missing Malaysian airliner, according to a Chinese scientist. It was one of several potential problems raised by researchers, who are as frustrated as the public in the search for Malaysia Airlines flight 370. When the Boeing 777 was en route from Kuala Lumpur to Beijing last Saturday, no Chinese satellites were observing it, said Dr Chi Tianhe, a researcher in satellite imaging with the Chinese Academy of Sciences who took part in the search. Several hours after Malaysia Airlines announced that the plane had disappeared, China used its satellites to scour the waters between Vietnam and Malaysia, state media said. They were part of a multinational effort using military equipment. The search has failed to find survivors, wreckage or debris. "Chinese satellites' real-time surveillance capability will likely be strengthened after this incident," said Chi, a professor with the academy's Institute of Remote Sensing and Digital Earth in Beijing. Chi said his biggest regret was that while China had enough satellites to monitor a large area around the clock, including the search zone, the job had not been done. Monitoring every bit of land and sea would require a dedicated staff, he added. The failure of the search has raised questions over its field and strategy, and its multinational co-ordination. Professor Wu Dong, a satellite remote-sensing expert with the Ocean University of China in Qingdao , said the lack of satellite evidence of the plane suggested that the designated search zones could be wrong. Professor Xie Tao, an expert in ocean satellite remote-sensing at Nanjing University of Information Science and Technology, said it was possible that the resolution of the satellites doing the search was not high enough, an assertion that Chi disputed. "The waves would also distort microwave images and make analysis difficult," Xie said. And time was of the essence. "The longer the search takes, the farther the debris would be carried away by currents from the crash site." For three days, Chinese researchers have employed high-resolution satellite imaging equipment to search for the Boeing aircraft. This has included satellites with many different sensors, including high-resolution optical telescopes, infrared cameras, synthetic aperture radar and microwave detectors. The search project has also used military satellites with classified technological details. In addition, China has paid overseas commercial satellite companies to use their advanced satellites and to obtain their data. The satellite equipment allowed researchers to examine specific areas of the sea for wreckage and debris day and night, under all kinds of weather conditions, Chi said. Chi would not comment as to the size of objects that the satellites could detect but added that the resolution was "definitely high enough for the job". Some US and Canadian satellites can distinguish an object as small as half a metre in size, but the ocean waves could make precise detection difficult. "If the object is non-metalic, such as plastic, it would be very difficult to spot with radar," Xie said. While civilian satellites might have difficulty finding debris, military spy satellites should be able to do the job because they are designed to search for very small targets, Wu said. Chinese warships have prowled the sea using powerful surface radar to detect objects on the sea's surface, and sonar to find underwater wreckage. Wu said it was possible, judging from the lack of wreckage, that the plane made a successful water landing, but then sank to the ocean floor in one piece. "But if the crew achieved such a miracle, why didn't they radio for help?" Wu asked. "From a technical point of view, I cannot find a good explanation for the complete disappearance." The lack of evidence also frustrates Chi. "If such a large plane had fallen in the ocean, it would leave some signs on the surface," he said. "The plane seems to have disappeared completely. To us it is unreasonable."

Hong Kong*:  Mar 6 - 12 2014

Terror probe launched into missing Malaysia Airlines jet as passenger list is scrutinised (By Keith Zhai, Patrick Boehler, Danny Lee and agencies) [A Malaysian Airlines Boeing 737-200 from Kuala Lumpur to Beijing lost contact with air control and went missing more than a hour after it took off in the early hours of Saturday, March 8, 2014. It was feared the plane, with 239 passengers and and flight crew on board, might have crashed into the Gulf of Thailand in waters between Malaysia and Vietnam. The incident triggered a large international search and rescue effort. ] Family members of those onboard the missing Malaysia Airlines flight MH370 cry at a hotel in Putrajaya. The Malaysia Airlines Boeing 777-200ER that disappeared from air traffic control screens Saturday, taking off from Roissy-Charles de Gaulle Airport in France. A terror probe involving the FBI and counterterrorism units from around the world was launched on Sunday into the disappearance of a missing Malaysia Airlines jet, as officials said they were investigating four people on the Boeing 777 flight from Kuala Lumpur to Beijing. More than 36 hours after the last contact with flight MH370, the entire passenger list was being scrutinised as Malaysian officials worked to verify the identities of all those on board. Foreign ministries earlier revealed that at least two tickets on the flight had been booked with stolen passports. The passenger manifest issued by the airline included the names of two Europeans - Austrian Christian Kozel and Italian Luigi Maraldi - who, according to their foreign ministries, were not on the plane. Both had apparently had their passports stolen in Thailand during the past two years. The BBC reported that the men using their passports had purchased tickets together and were flying on to Europe from Beijing, meaning they did not have to apply for a Chinese visa and undergo further checks. An employee at a travel agency in Pattaya, in Thailand, said the two had purchased the tickets there. US and European security officials said there was no proof of foul play and there could be other explanations for the use of stolen passports. Interpol released a statement confirming that at least two passports – Austrian and Italian – recorded in its Stolen and Lost Travel Documents database were used by passengers on board the missing flight. The agency said the Austrian and Italian passports were added to its database after their theft in Thailand in 2012 and 2013 respectively, and that it was also conducting checks on all other passports used to board flight MH 370 which may have been reported stolen. "At this time, Interpol is unable to determine on how many other occasions these passports were used to board flights or cross borders," the statement said. Interpol added it was currently in contact with its National Central Bureaus in the involved countries to determine the true identities of the passengers who used these stolen passports to board the missing Malaysia Airways flight. Malaysia’s acting transport minister Hishammuddin Hussein said: "Counterterrorism units... from all the relevant countries have been informed." The probe into the disappearance of the jet and 239 people continued as Malaysian military officials said radar records indicated that the flight had turned back towards Kuala Lumpur before it vanished. Rodzali Daud, the Royal Malaysian Air Force chief, said: “What we have done is actually look into the recording on the radar that we have and we realised there is a possibility the aircraft did make a turnback." Malaysian rescue teams this morning expanded the search for the flight, which was carrying 227 passengers and 12 crew, to the country's west coast. It is thought to have crashed on Saturday, after losing contact with air traffic controllers. Five children aged from two to four years - two from the United States and three from China - were among the passengers, along with two French teenagers aged 14 and 17. The eldest flyer was a 79-year-old Chinese national. The airline said Sunday it was working with a disaster recovery management specialist from the US as it resumed the desperate search for the vanisher airliner. The company said that 'in fearing the worst', it had taken on the squad of experts to assist 'in this crucial time'.

Lai Sun returns to hotel business in Hong Kong (By Sandy Li sandy.li@scmp.com) Chew Fook Aun of Lai Sun Development explains why firm is re-entering the hotel business - Years after it demolished two five-star hotels it owned in Central to make way for office projects, midsize developer Lai Sun Development is looking to re-enter the hospitality industry in Hong Kong. The firm will enter the bidding to build a hotel on Lantau Island. The Airport Authority of Hong Kong invited expressions of interest from developers to build a 1,200-room hotel of at least a three-star grade on part of the SkyCity car park near the AsiaWorld-Expo. The tendering to build the hotel closes on March 31. "We see demand for hotel rooms far outstripping supply, as the city has only about 60,000 rooms," Lai Sun deputy chairman Chew Fook Aun said. The government recently predicted 70 million tourists would visit the city per year by 2017. In October, Lai Sun, chaired by Peter Lam Kin-ngok, who is also chairman of the Hong Kong Tourism Board, said it would invest HK$4.1 billion to build a 495-room resort hotel in Ocean Park. It beat six firms to win the tender. The Ocean Park hotel, with a total gross floor area of 366,000 square feet, will be managed by Marriott International and is slated to open by early 2017. It will be Lai Sun's first hotel in Hong Kong since it demolished the 28-year-old, 517-room Furama Hotel in 2001. The grade A offices of AIA Central now occupy that site. In 2008, Lai Sun tore down the 216-room Ritz-Carlton Hotel, adjacent to the Furama, to make way for the development of the CCB Tower. The firm has a 10 per cent stake in AIA Central and a 50 per cent share of CCB Tower. Lai Sun owns 95 per cent of the Starr Hotel in Shanghai and a 26 per cent stake in the Caravelle Hotel in Ho Chi Minh City, Vietnam. Chew said Lai Sun was expanding its holdings to increase its rental income. With the opening of its commercial-retail project in Observatory Road, Tsim Sha Tsui - a 50-50 joint venture with Henderson Land Development - and its Ocean Park hotel, the company's investment portfolio will expand 31 per cent to 1.84 million sq ft in 2017, according to Chew. On the mainland, Lai Sun's investment portfolio would increase to 5.61 million sq ft by 2019, up 128 per cent from 2.45 million sq ft at present, Chew said. Its mainland property development subsidiary, Lai Fung, and a unit of eSun will develop a 2.8 million sq ft "creative culture city" in Hengqin, the special economic zone off Zhuhai. At the end of 2012, Lai Sun joined ousted Sun Hung Kai Properties chairman Walter Kwok Ping-sheung in buying a residential site in Tseung Kwan O for HK$2.86 billion, or HK$4,929 per sq ft. "Taking into account construction costs, the total cost will be HK$8,000 per sq ft. Current transaction prices are more than HK$10,000 per sq ft in Tseung Kwan O. Our flats will enjoy a full sea view. The land price is okay," he said.

Money laundering big in Hong Kong and Macau, PwC crime survey finds (By Toh Han Shih hanshih.toh@scmp.com) Money laundering is more prevalent in Hong Kong and Macau than in most parts of the world, with rates far above the global average, according to an economic crime survey by PwC. A poll by the accounting firm found 37 per cent of companies in Hong Kong and Macau, mainly banks and casinos, had experienced money laundering in the past two years. That compared with a global average of 11 per cent, the Asia-Pacific average of 11 per cent, Singapore's 5 per cent and mainland China's 4 per cent. Hong Kong had the highest reported rate of money laundering in Asia and the ninth highest globally, behind Britain, South Africa, the Czech Republic, Russia, Zambia, Australia, Kenya and Ukraine. PwC polled 5,128 company executives from 95 countries and territories, including 116 respondents in Hong Kong and Macau, of whom 49 per cent worked for listed companies. It was the first time the survey, which began in 2001, took a substantive look at money laundering in Hong Kong and Macau. "The concentration of financial services in Hong Kong and gaming in Macau drives the significance of money laundering in the local marketplace," said John Donker, the lead PwC partner in forensic services for China and Hong Kong. "The No1 concern found among financial services companies globally is money laundering. In Hong Kong, it is one of the top concerns." PwC's poll found 27 per cent of financial services companies globally had experienced money laundering. On Monday, a Hong Kong court found Carson Yeung Ka-sing, owner of English soccer club Birmingham City, guilty of laundering HK$721 million through Hong Kong bank accounts. "It was refreshing to see a more substantive target prosecuted under the recent money laundering legislation," said Steve Vickers, chief executive of Steve Vickers Associates, a Hong Kong risk consultancy. "It is important that targets are carefully selected to make sure the big fish, not the minnows, are selected." The two previous major cases of money laundering in Hong Kong involved an elderly woman and a young man, and both of them received prison terms, Vickers noted. A new law against money laundering and terrorist financing took effect in Hong Kong in 2012. Courts convicted 140 people of money laundering last year, 166 in 2012 and 246 in 2011. The government recovered HK$639.74 million of laundered money last year, HK$23.6 million in 2012 and HK$1.6 billion in 2011.

 China*:  Mar 6 - 12 2014

Chinese satellites deployed in search for missing Malaysia Airlines flight MH370 (By Staff Reporters in Phu Quoc Island, Vietnam, Beijing, Hong Kong and Associated Press in Kuala Lumpur and Taipei) Defence ministry will redeploy 10 satellites; crew on Cathay Pacific flight to Kuala Lumpur spot debris floating off southeast Vietnam - Li Jiaxiang, head of the China's Civil Aviation Administration, briefs the media on the hunt for the Malaysia Airlines plane. China's defence ministry will redeploy 10 satellites to join the hunt for the Malaysia Airlines jet that disappeared on Saturday with 239 people on board after three days of fruitless searching. As the Malaysian authorities announced they were doubling the size of the search area, Hong Kong's Civil Aviation Department said it had received a report from the crew of a Cathay Pacific plane flying from Hong Kong to Kuala Lumpur at about 3pm that debris was spotted near Vung Tau, off southeast Vietnam. The department said it had notified its counterparts in Vietnam, Malaysia and Hainan . But the location of the debris does not match the path expected to have been taken by Malaysia Airlines flight MH370, which should have flown over Ho Chi Minh City. The location supplied to the Civil Aviation Department was more than 125 kilometres southeast of the original flight path. The satellite control centre in Xian will relieve the satellites of other tasks to step up weather monitoring, communication and search operations in the area where the plane disappeared, the ministry said. Beijing said it would expand the search and called for Malaysia to strengthen its efforts. This followed several false leads from the sighting of debris and oil slicks thought to have come from the plane, which vanished en route to Beijing. Azharuddin Abdul Rahman, head of Malaysia's Civil Aviation Authority, said the size of the search area would be doubled to 100 nautical miles around the spot where the jet disappeared. Three Chinese civilian ships and the frigate Mianyang arrived yesterday and three more ships are on the way to the area where the plane lost contact. Meanwhile, Thai police and Interpol questioned the proprietors of a travel agency in the resort town of Pattaya that sold one-way tickets to two men who travelled on flight MH370 using stolen passports. Malaysia's police chief was quoted by local media as saying that one of the men had been identified. Rahman said they were of "non-Asian" appearance. Asked by a reporter what they looked like "roughly", he said: "Do you know of a footballer by the name of [Mario] Balotelli? He is an Italian. Do you know how he looks like?" A reporter then asked, "Is he black?" and the aviation chief replied, "Yes." The Thai travel agent who arranged the tickets for the two passengers using the stolen passports said she had booked them on the flight via Beijing because they were the cheapest tickets, the Financial Times reported. The agent said an Iranian business contact she knew only as "Mr Ali" had asked her to book tickets for the men on March 1. She had initially booked them on other airlines but those reservations expired and on March 6, Ali had asked her to book them again. She told the newspaper she did not think Ali, who booked tickets with her regularly, was linked to terrorism. In Beijing, hundreds of distraught relatives waited anxiously for news. About 200 relatives of passengers criticised the lack of help from the Chinese and Malaysian governments. Malaysia Airlines said it was giving 31,000 yuan (HK$39,000) to relatives of each passenger, "not as compensation, but a special condolence payment". In Vietnam, Deputy Transport Minister Pham Quy Tieu said debris spotted by the Singaporean authorities earlier were not from the missing plane. Rescue helicopters and ships had rushed to investigate a yellow object, but it turned out to be moss-covered floating rubbish. Li Jiaxiang , China's minister of Civil Aviation Administration, would not comment whether they suspected an earlier terror warning to Beijing was related to the missing plane. Taiwan's spy chief confirmed yesterday that the island had received a warning of possible terrorist attacks on the mainland as the annual parliamentary session is held in Beijing. National Security Bureau head Tsai De-sheng told a legislative committee that the bureau passed on a warning of planned attacks against Beijing airport and the subway system to mainland authorities on March 4. He did not think the intelligence was relevant to the missing plane.

達賴喇嘛破壞美國的中國的關係 Dailai 'sabotaged United States China ties': Tibet authority (By WANG HUAZHONG) Commenting on the Dalai Lama’s ongoing visit to the US, where he met with US President Barack Obama and gave an opening prayer at the US Senate, Padma Choling said Tibetans, including himself and those from other ethnic groups, strongly denounce and object to the meetings. He said the reason for the Dalai Lama to meet US leaders is obvious — working to "build his 'Greater Tibet’ and the 'middle way’ for 'independence’." "Independence" means going back to a theocratic Tibet, he said, adding that any government or political organizations and individuals meeting with the Dalai Lama are interfering in China’s internal affairs.....Protest in Washington - On Friday, when the Dalai Lama spoke inside the National Cathedral in Washington, close to 700 people protested outside on behalf of the International Shugden Community of Buddhists, the national USA Today newspaper reported. The Dalai Lama banned Buddhists from worshipping Dorje Shugden, a deity regarded as a protector or "guardian angel", because the deity is harmful to him and the Tibetan people. Worldwide, over 4 million people are followers of Dorje Shugden. USA Today reported that the demonstrators called the Dalai Lama a "hypocrite" and asked him to "stop lying". "A mother goes out to buy food for her children and is turned away from the store because she practices Dorje Shugden. People are thrown out of hospitals," protester Rebecca Foley said. http://usa.chinadaily.com.cn/2014-03/10/content_17334176.htm 

South China Morning Post: No compromise on disputed islands, says foreign minister Wang Yi (Teddy Ng in Beijing teddy.ng@scmp.com) Foreign minister says China will engage in dialogue not bullying, but will not back down in its rows with Tokyo and Manila - Wang Yi at the legislative meeting in Beijing. The foreign minister criticised what he called Japan's renewed militarism. China will never bully its neighbours but will not compromise over unreasonable demands in territorial disputes, Foreign Minister Wang Yi said. Beijing would resolve such disputes through peaceful negotiations, but would "defend every inch of territory that belongs to us", Wang said at a press conference on the sidelines of the annual National People's Congress session yesterday. He appeared to be referring to the Philippines and other claimants to territory in the South China Sea. The remarks came as the Philippines said it had rejected a Chinese offer to withdraw its ships from the Scarborough Shoal if Manila delayed filing its arbitration case over the matter with the International Tribunal for the Law of the Sea. Beijing has denied making such an offer to Manila. Referring to a similar dispute with Japan over a cluster of islands in the East China Sea, Wang said "there is no room for compromise in territorial and historical issues". China and Japan have exchanged increasingly harsh rhetoric over their claims to the Diaoyu Islands, which Japan controls and calls the Senkakus. China claims ownership of the islands, and relations soured when Tokyo said it had purchased the Senkakus from private owners last year. China and South Korea were also incensed when Japanese Prime Minister Shinzo Abe visited the Yasukuni Shrine housing the remains of 14 leading second world war criminals. The acrimonious Sino-Japanese relationship has heightened fears of a military confrontation between the countries. Following Abe's visit, which Japan has defended as a domestic matter, Beijing accused Tokyo of returning to its militaristic past. Tokyo countered that their relationship now looked more like it did before the first world war a century ago. Wang rejected the comparison, saying Japan should learn from Germany's contrition over its wartime aggression. The moves by Japanese leaders had "betrayed the spirit of the normalisation of China-Japanese ties in 1972, and damaged the foundation of the Sino-Japanese relationship", Wang said. "Only by making a clean break with the past and not going back on their own words can the relationship between the two nations emerge from the current deadlock and have a future," he said. Wang also called on the US to respect China's core interests and territorial sovereignty as Washington continued to rebuild its military and diplomatic presence in its so-called pivot to Asia. "The Asia-Pacific region should be a testing ground for China and the US to build a new model of 'major power relationships' [a phrase coined by President Xi Jinping ], instead of becoming a ground for competition," he said. Wrapping up China's diplomacy last year, Wang said Beijing had been more proactive on major international issues, saying it had helped resolved the crisis in Syria and the Iranian nuclear issue. "We will take an active part in international and regional affairs, put forward more Chinese proposals and play a bigger role in helping resolve all kinds of global issues," he said. He added that the relationship between China and Russia had reached a "historic peak", with a high degree of mutual political trust. He called on the two nations to deepen co-operation and commemorate the 70th anniversary of the end of second world war next year. On Ukraine, Wang said the crisis there, which erupted after violent protests that led to the overthrow of its president, Viktor Yanukovych, should be resolved through political dialogue. "The priority now should be exercising calm and restraint, and preventing further escalation of the situation," he said. He also called on parties involved in the six-nation talks on North Korea's nuclear programme to enhance political trust before they resume.

China boosts defence budget by 12.2 pc after warning military will respond if provoked (By Agence France-Presse in Beijing) Delegates from the People's Liberation Army arrive for parliamentary talks in Beijing. China will raise its official defence budget by 12.2 per cent this year, the finance ministry announced Wednesday, a day after warning that its military would respond if 'provoked' by neighbours. The Asian giant has for years boosted spending on its People’s Liberation Army, reflecting its military ambitions as it asserts its global standing and claims in a series of territorial disputes with Japan and other countries in the region. “The appropriation for national defence is 808.23 billion yuan (HK$1.02 trillion), up 12.2 per cent,” it said in a budget report prepared for the annual session of the National People’s Congress (NPC). Ahead of the meeting NPC spokeswoman Fu Ying had said that peace in the region would only be "maintained by strength". She said the nation's growing military expenditure was only a defensive measure, and that its goal was to peacefully coexist with its neighbours. But if provoked, she said, China was prepared to respond. "If some countries want to challenge and ruin such a consensus and harm regional security and order China will make a response and an effective response at that," she said. Beijing set an increase in military spending of 10.7 per cent in 2013, following announced rises of 11.2 per cent in 2012 and 12.7 per cent in 2011. The double-digit rises have raised concerns in the United States and Asia, particularly long-time rival Japan, with the two embroiled in an escalating row over East China Sea islands called Diaoyus in Chinese and Senkaku in Japanese. Tokyo’s cabinet agreed in recent months to raise spending by 24.7 trillion yen (HK$1.9 trillion) from 2014 to 2019, representing a five per cent boost over five years - and eliciting criticism from Beijing. Japan’s actions “must cause great concern to neighbouring countries in Asia and the international community”, defence ministry spokesman Geng Yansheng said in December. Analysts believe China’s actual military spending is significantly higher than publicised, with the Pentagon estimating that in 2012 it reached between US$135 billion and US$215 billion. Li Qinggong, deputy secretary general of the China Council for National Security Policy Studies, said previously that Beijing would prioritise improving its hi-tech sea, air and nuclear arsenals, with the main focus likely to be on China’s navy, including adding aircraft carriers and strengthening fleets.

Lawsuit threat over Canada's scrapping of visa scheme (By Adrian Wan adrian.wan@scmp.com) Wealthy mainlanders who planned to move to Canada say they may sue over Ottawa's abrupt cancellation of Immigrant Investor Program - Du Jun, whose visa application has been halted, speaks to the media in Beijing. A group of wealthy mainlanders has criticised the Canadian government for scrapping its investor visa scheme and are threatening legal action if the decision is not overturned. More than 10 people who had applied for the visa met with reporters in Beijing yesterday to air their grievances. The group said they had wasted years of time, effort and money preparing to move to North America. Finance Minister Jim Flaherty announced last month that the Canadian government was scrapping the Immigrant Investor Program. The scheme has allowed nearly 100,000 wealthy Hongkongers and mainland Chinese to move across the Pacific since 1986. An estimated 45,500 Chinese millionaires who were still in the queue for visas will have their applications "eliminated" and their fees returned. Rong Bing, a 47-year-old businessman, said he first applied to move to Canada through the investor visa scheme in 2009. He quit his job with a state-owned enterprise the same year to prepare for his family's move to Canada. "We have set aside a lot of money to meet the investment requirements and over the years passed up on many opportunities," he said. "Moving to Canada has been a dream of mine since witnessing what happened in 1989 as a student over there on this main thoroughfare," he said, pointing to a road passing Tiananmen Square where the crackdown on pro-democracy demonstrators took place. "I thought Canada was a place that underpins justice, trust and democracy, but the abrupt, unilateral decision to scrap the scheme has left us very, very disappointed," he said. "A refund of our application fees will not make up for all the preparation put in." Larry Wang, the president of the immigration consultancy firm that organised the meeting with reporters, said he would help applicants take legal action if the decision was not overturned. "It's not in many Chinese people's nature to stand up for their rights, but many of our clients have shown willingness to speak out on this issue," Wang said. Du Jun, 54, applied for the scheme in 2010 hoping to take his family of three to Canada. In preparation, he transferred his child to a Canadian international school in Tianjin two years ago. "A sovereign country, of course, has the right to make such a move, but it's unfathomable how a democratic and human-rights-respecting country like Canada just cut off applications like that, without regard to those who've been preparing for the move for years," Du said.

Hong Kong*:  Mar 5 2014

HK$10,000 fine for lawmaker who browsed sexy pictures on his tablet during budget debate (By Emily Tsang emily.tsang@scmp.com) Albert Ho apologises to Democratic Party as panel finds he undermined its reputation - Ho admitted that browsing pictures of scantily-clad models, including Yu Xin Meng (inset) during the budget speech was "inappropriate" and "embarrassing" to his party. The Democratic Party has fined lawmaker Albert Ho Chun-yan HK$10,000 for looking at pictures of scantily-clad women on his tablet computer during last Wednesday’s budget speech. The politician was snapped looking at various pictures of women as John Tsang delived his hour-and-a-half long budget speech. After being caught out, Ho said: "It just so happened that at that time, I casually saw the photos." The veteran legislator will donate the money either to a women’s rights group or some other non-government organisation, the party said today. A panel set up by the party’s disciplinary board found Ho’s actions had violated its code of conduct and undermined its reputation. The party said Ho accepted the judgment and apologised to the public and his fellow party members. “In the hearing, Ho Chun-yan admitted that his actions were inappropriate and had embarrassed himself and his party. “He has promised to learn from this and remind himself to keep a high standard of conduct.” Ho must prove he has made the donation by providing the receipt to the party’s disciplinary board. Ho, a failed chief executive candidate, has previously admitted his actions were “inappropriate". He described them as a "silly mistake” and a "random" act with no particular purpose. It is not the first time Hong Kong lawmakers have been caught out while their minds should have been on politics. In 2003, Hong Kong’s then education minister Arthur Li was spotted playing a video game during a parliamentary session, while last year lawmaker Eddie Ng was seen checking stock market updates on his phone during a question-and-answer with the chief executive.

 China*:  Mar 5 2014

Japan’s ambassador to China Masata Kitera says his job is an uphill battle (By Teddy Ng in Beijing teddy.ng@scmp.com0 Masata Kitera reports little progress in his efforts to engage senior leaders in Beijing - Masato Kitera, Japan's ambassador to China, says he faces an uphill diplomatic battle after trying for more than a year to bridge the escalating differences between Asia's two major powers. Despite his best efforts to make friends since arriving in Beijing in December 2012, the veteran diplomat said he had enjoyed little luck in engaging senior Chinese leaders, other than officials from the Ministry of Foreign Affairs. "I have visited many places and have tried to meet as many Chinese people as possible. However, to me, meeting Chinese leaders is still very difficult," Kitera said. "I have put my effort over the last year into improving the relationship between Japan and China, but it is not easy." Kitera was faced on arrival with strained Sino-Japanese ties after Japan said in September 2012 that it would purchase three of the disputed Diaoyu Islands - known as the Senkakus in Japan - from their Japanese owner. The relationship between the countries continued to deteriorate after Japanese Prime Minister Shinzo Abe visited the Yasukuni Shrine that houses 14 Class A war criminals in December, prompting Foreign Minister Wang Yi to summon Kitera to lodge a formal protest. Beijing later named Abe an "unwelcome" person - a remark widely seen as an indication that it had ruled out high-level dialogue with Tokyo. The Japanese envoy said communication with the Chinese foreign ministry was smooth and that he had visited many provinces to engage with Japanese businessmen, Chinese students learning Japanese and others with an interest in Sino-Japanese ties. But forging contact with government leaders was a problem. "It is difficult for me to meet with leaders of local governments when I [travel around the country] because of the challenging situation with political ties between Japan and China," he said. Kitera said the situation facing the two nations was "difficult", but Japan had no intention of escalating the tensions. "Since the end of the second world war, Japan has continued to pursue the path of a peace-loving nation, and Prime Minister Abe's cabinet will never change this course," he said. "Japan has been consistent in handling the situation resolutely and calmly." He called for senior leaders of both nations to resolve their disputes peacefully. "There are difficulties between the two nations, and because of that it is important to engage in direct communications at a high level," he said. "The door for [high-level] dialogue with China remains open on the Japanese side." Kitera expected the challenges facing him in his role to continue this year, but said he was confident the two countries would pay regard to their "mutually beneficial relationship based on common strategic interests" and take measures to prevent disputes from jeopardising long-term ties. "The relations between Japan and China have become very wide and deep after 41 years of the normalisation of ties." He said economic co-operation between China and Japan continued despite the political tensions. Some 23,000 Japanese companies are operating in China, creating about 10 million job opportunities. He said China and Japan could also strengthen co-operation in tackling pollution, enhancing food safety and coping with an ageing society. Japan also aims to boost the number of foreign tourists to 20 million when it hosts the Olympics in 2020, and will look to expand exchanges with China through sports and tourism. Kitera had no extensive China experience before taking up his post. He was responsible for African affairs in Japan's foreign ministry and has served in Japanese missions in France, Switzerland and Thailand. His appointment to Beijing came after his predecessor, Uichiro Niwa, was recalled to Japan after he said Tokyo's plan to purchase the uninhabited islands in the East China Sea would damage bilateral ties. Tokyo first named Shinichi Nishimiya to replace Niwa, but the appointment finally went to Kitera because Nishimiya collapsed on a Tokyo street and later died. On a lighter note, speaking of the challenges he faced in China, Kitera said he needed to get used to writing Chinese calligraphy. "I am asked to write Chinese calligraphy when I visit various Chinese places," he said. "I am not good at writing, and I sweat every time when I see the writing brush and the paper." He also enjoys walking in tourists spots in Beijing, where he said he met friendly people. "I went to the Badaling Great Wall with my mother in a wheelchair. When we were going down some long stairways, some Chinese people held the wheelchair for us," he said.

Michelle Obama, kids will visit China (By Chen Weihua in Washington chenweihua@chinadailyusa.com) US first lady Michelle Obama will embark on another solo international trip, this time to China. During the week-long trip from March 19-26, she will be accompanied by her two daughters Malia and Sasha and her mother Marian Robinson. The trip was announced on Monday morning by the first lady on the White House blog and press release. US President Barack Obama won't join her on the trip. Instead, his scheduled trip to several European nations and Saudi Arabia will overlap part of the China trip. Mrs Obama will be visiting Beijing from March 20-23, Xi'an on March 24 and Chengdu from March 25-26. During her trip, she will meet Peng Liyuan, China's first lady and wife of Chinese President Xi Jinping. The two did not meet when Xi met Obama for an informal summit at the Sunnylands estate in Rancho Mirage, California, last June, when Mrs Obama had to stay in Washington. But the two first ladies both delivered video greetings last December at the Smithsonian National Zoo in Washington during a naming ceremony for a panda cub. The White House said that during the trip Mrs Obama will be focusing on the importance of education in her own life and in the lives of young people in both countries. Mrs Obama said she will meet young people to hear about their challenges, hopes and dreams, as she has done on other trips. "And that's what I'll be doing in China as well," she blogged. "During my trip, I'll be visiting a university and two high schools in Beijing and Chengdu. I will be talking with students about their lives in China and telling them about America and the values and traditions we hold dear," she wrote. The first lady encouraged US students to follow her activities during the trip on a daily travel blog she will be posting, complete with videos and photos, as well as answering questions from children across the US. "I'll also be visiting various historical and cultural sites in China, and I look forward to sharing with you the stories of the students I meet, as well as the interesting facts I learn about Chinese history and culture," she wrote. Mrs Obama has made similar trips abroad without her husband. In 2010, she went to Haiti after the devastating earthquake to assess the damage and then to Mexico to promote youth engagement. In 2011, she went to Botswana and South Africa to promote youth leadership and education. Describing China as another important stop on her international journey, the first lady wrote: "With more than 1.3 billion people, China is the most populous country on Earth, and it plays an important role on the world stage." "My husband and I take the time to visit countries like China because we know that today, more than ever, our lives here in America are connected to the lives of people around the world," she said. Obama visited China in November 2009 during his first year as president, and he is expected to pay a second trip there this fall when China hosts the APEC summit. To prepare for the China visit, Mrs. Obama was scheduled to visit the Yu Ying Public Charter School Tuesdsay. The school in northeast Washington is known for its Chinese-immersion program. Besides encouraging US students to follow her trip, she will deliver brief, informal remarks following a 6th grade presentation on their 2013 trip to China, and visit pre-kindergarten students in their classroom to experience their language learning firsthand, according to the White House. Sasha, the younger daughter who is 12, has been studying Chinese. In January 2011, she spoke in Chinese with then Chinese president Hu Jintao. Ben Rhodes, the deputy national security adviser, told reporters at the time that Sasha practiced some Mandarin phrases with Hu following the ceremonies to welcome him to the White House. "Not every child has the opportunity to try out their first phrases of Chinese with the president of China," Rhodes said. "I think that speaks to there is an interest in the United States and China, and a desire to get to know the country better," At the Sidwell Friends School which Sasha and Malia attend, a Monday evening reception and speech on US-China relations by former Secretary of State Madeleine Albright was postponed as the federal government and schools shut down due to a snow storm. The school's Zeidman Memorial Lecture invites prominent figures to speak on the bilateral relations every spring. It was started in 1983 with the first speaker being John Fairbank, the noted China scholar at Harvard University. Sidwell, where many children and grandchildren of notable US politicians now attend or have attended, including those of some presidents and vice presidents, has an extensive Chinese study program and maintains exchange programs with schools in China. On the school's website, several students now traveling and studying in China have been constantly updating the China Fieldwork Semester Blog, sharing their experience in Xizhou, a small town in southwest China's Yunnan province. Cheng Li, director of the John L. Thornton China Center of the Brookings Institution and last year's Zeidman Memorial Lecture speaker, said the first lady's visit is a goodwill gesture. "More than just a trip, it shows the respect, care and goodwill for China," Li said. "She is setting a personal example to showcase the importance of US-China relationship."

Hong Kong*:  Mar 4 2014

Government advisers warn of possible Greek-style financial crisis (By Olga Wong, Phila Siu and Fanny W.Y. Fung) Task force says government could face massive deficit in future years if spending continues to soar amid the impact of an ageing population - Hong Kong could be as heavily indebted as Greece - facing a structural deficit of HK$1.54 trillion by 2041 - if the city's spending grows at the current pace and nothing is done to mitigate the impact of an ageing population, the government's fiscal advisers warned yesterday. The deficit, accounting for almost 22 per cent of the nominal gross domestic product - not adjusted for inflation - would be even higher than the 10 per cent disclosed by Greek officials when they came clean about the true state of their country's public finances in 2010. By that time, the advisers said, Hong Kong would have had to borrow HK$10.96 trillion to cover the sustained deficits experienced from 2021 onwards - about 15 times the existing reserves of some HK$750 billion. The projections, released by the government-appointed working group on long-term fiscal planning, do not take into account the impact of the chief executive's target announced last year to build 200,000 public rental flats in the next decade and 5,000 subsidised flats a year. The aggressive public housing programme would speed up the emergence of a structural deficit and depletion of fiscal reserves by three years, the group warned. After the release of the report, Financial Secretary John Tsang Chun-wah said the city's finances were still sound but caution was needed. "I do not think that the working group is pessimistic on the future of Hong Kong," he said. "Our public finances are still in good shape in the short to medium term, but it does not mean our economy and fiscal position will remain healthy forever." Tsang appointed economic analysts, academics and officials from his treasury unit in March last year to study the impact of the ageing population on public finances, which are subject to land revenue fluctuations and rely increasingly on direct taxes on salary and profits. In 13 of 16 projected scenarios, based on various GDP growth rates and spending rates in education, health care and welfare that account for some 60 per cent of the government's recurrent expenditure, structural deficits will emerge in 10 years. But having rung the alarm, the working group avoided controversial ideas including higher rates and introduction of a goods and services tax. Instead, they suggested the government adopt a "multi-pronged" approach. This included containing public expenses at 20 per cent of GDP and screening policies costing more than HK$100 million a year to see if they could be sustained without threatening the government's solvency. The report also suggested raising fees for public services, banning the use of one-off land revenues to finance recurrent expenses and setting up a future fund - combining the existing land fund of some HK$220 billion with one-third of future budget surpluses - to save and invest for future emergencies. "We didn't rule out new taxes. The public will be more receptive to new taxes only when we better control our spending," said working group chairwoman Elizabeth Tse Man-yee. Terence Chong Tai-leung, professor of economics at the Chinese University, said the government needed indirect taxes such as a gambling tax to widen the scope of revenue.

 China*:  Mar 4 2014

Drop in HSBC PMI confirms weakness in Chinese manufacturing (By Associated Press in Beijing) China’s manufacturing weakened last month, and employers cut staff at the fastest rate in nearly five years, a private survey showed on Monday, adding to signs growth in the world’s second-largest economy is cooling. HSBC’s final factory purchasing managers index fell to 48.5 from January’s 49.5. Numbers below 50 show activity contracting. China’s economic growth has slowed steadily as its leaders try to reduce reliance on trade and investment and encourage growth based on domestic consumption. “This calls for policy fine-tuning measures to stabilise market expectations and steady the pace of growth,” HSBC economist Qu Hongbin said in a statement. Fewer new orders led manufacturers to cut staff for a fourth month in the fastest reduction since March 2009, the survey showed. “We think the slowdown is genuine,” Julian Evans-Pritchard of Capital Economics said in a report. “Tighter monetary conditions over the last few months are likely to have weighed on manufacturing activity.” The official manufacturing PMI for last month issued on Saturday by the China Federation of Logistics and Purchasing fell to 50.2, its weakest pace in eight months, from January’s 50.5. The HSBC has a larger number of private companies in its sample, while the official number is based on a bigger share of state companies.

Hong Kong*:  Mar 3 2014

Cathay to withhold US pilots' wages for taxes (By Phila Siu phila.siu@scmp.com) Airline says new laws are forcing it to hand over 30 per cent of salaries to American authorities [Hong Kong carrier, Cathay Pacific Airways, was founded in 1946 by American Roy C. Farrell and Australian Sydney H. de Kantzow, offering scheduled passenger and cargo services. Cathay also owns Dragonair and in 2010, Cathay Pacific and Dragonair carried nearly 27 million passengers and over 1.8 million tonnes of cargo and mail. Cathay Pacific was a founder member of the Oneworld alliance] Cathay Pacific Airways is to start withholding about 30 per cent of its American pilots' salary every month and pass the money to the US tax authorities together with the pilots' personal information this year. While the airline told the South China Morning Post the move was designed to comply with US tax regulations, its decision has been challenged by legal and tax experts in Hong Kong. They said companies in Hong Kong had no obligation to fulfil demands made by a foreign government because of the two different jurisdictions. Lawyer Albert Luk Wai-hung said that if the airline observed the US regulations, the affected pilots could sue the airline for underpaying them because part of their salaries would not find its way into their pockets. That could violate the spirit of their contracts. "The company also cannot pass their employees' personal information to any third parties without their consent," Luk said, pointing to the Personal Data (Privacy) Ordinance. At the centre of the controversy are two US tax regulations - an income tax withholding requirement in the Internal Revenue Code and the Foreign Account Tax Compliance Act. Patrick Yip, a national financial services tax leader at Deloitte Touche Tohmatsu, said the tax withholding law required overseas companies which hired US citizens to withhold an amount of tax and pass it to the US Internal Revenue Service. It applies to US citizens who make more than US$97,600 a year - about HK$63,000 a month. "But practically, Hong Kong and the US are two jurisdictions so I have never seen any companies here which comply with this law," Yip said, adding there would be no penalty even in the case of non-compliance. "Even the US companies in Hong Kong which have US employees don't do it … no wonder the pilots have such big reactions because no one has ever heard about it." Cathay will start withholding tax from the second quarter of the year, and pilots said it would affect 300 to 500 of them - up to 18 per cent of cockpit crew. The pilots said they already had to pay Hong Kong and US taxes, but before Cathay changed its policy they could file US taxes themselves once a year. CPA Australia's divisional president for Greater China, Ronald Yam, and the chair professor of accounting at the University of Hong Kong, Amy Lau Hing-ling, said they had not heard of a local company withholding US employees' taxes. As for Fatca, it was passed into law in 2010 but will only take effect in July this year. The anti-tax evasion law requires foreign financial institutions such as banks to declare to US tax authorities the foreign holdings of anyone liable under US tax. "The US Internal Revenue Service is actively seeking airlines flying into the US to ensure they are fully compliant with all US income tax requirements," Cathay said. "As an international airline flying into the US, we are working with the IRS on this compliance." Cathay added that no disclosure of information would be made to the IRS without "notifying" the pilots. Yip, an expert on Fatca, said that if Cathay did not comply, the US tax authorities would withhold 30 per cent of its US-source income. He said it was "strange" that the tax authorities had demanded airlines declare pilots' financial details because airlines were not financial institutions. Two American pilots employed by Cathay said the plans would create cash-flow problems for them. They also said that filing tax was a complex matter and they were concerned they might pay more than they should.

Hong Kong must accept basic realities to achieve universal suffrage in 2017 By Carrie Lam) Carrie Lam says without an acceptance of the political realities and a return to the legal framework of the Basic Law, universal suffrage for the chief executive election in 2017 may well remain an unfulfilled dream - We are now halfway through the five-month consultation on constitutional development. The three members of the task force have pressed on with gathering the views of different sectors. In the feedback received so far, a number of commonly held views are notable. First, it is the common aspiration of Hong Kong people to see the timely implementation of universal suffrage in the election of the chief executive through "one person, one vote" in 2017. Nobody wants a stalemate in constitutional development. Second, subscribing to the rule of law as a core value of Hong Kong, the public generally agrees that constitutional development must proceed in accordance with the Basic Law and the relevant interpretation and decisions of the National People's Congress Standing Committee. Third, many people agree that the chief executive must be someone who loves both our country and Hong Kong. The requirements of the Basic Law make this clear, to ensure that the person will faithfully exercise the constitutional powers and discharge the duties associated with this important position. Fourth, given the Basic Law's stipulation that the chief executive shall be selected by universal suffrage upon nomination by a nominating committee in accordance with democratic procedures, the community should conduct serious discussions about the composition of this committee, the nominating procedures, the number of candidates to be nominated, and so on. At present, the major difference in public opinion lies in the nominating procedures. Quite a number of people consider that candidates should be nominated solely by the nominating committee as required by the Basic Law. Some bodies, however, have suggested alternative proposals such as "civic nomination", "nomination by political parties" and "three-track nomination". There are also views suggesting there should be no "screening", but without clearly defining or explaining what "screening" means. The views of political parties and political organisations at this time are rather polarised. Many are reiterations of their stance or slogan-type statements, lacking substantive supporting arguments or giving little consideration to the principles and provisions relating to the political structure as stipulated in the Basic Law. I am genuinely concerned that if people retain their own stance, refusing to return to the legal framework of the Basic Law or accept the political reality, universal suffrage for the 2017 election will become nothing but a castle in the air. And once again, our democratic process will reach an impasse. The task force has been emphasising that, when we discuss the method for selecting the chief executive by universal suffrage, we should consider thoroughly the feasibility of the proposals from legal, political and operational perspectives simultaneously. On the legal side, the secretary for justice has already shared his legal viewpoint on whether the proposals of "civic nomination" and "nomination by political parties" are consistent with Article 45 of the Basic Law. I wish to share my views from a political perspective. Any proposal for implementing universal suffrage must be in strict compliance with the four major principles on constitutional development under the Basic Law, namely meeting the interests of different sectors of society, facilitating the development of the capitalist economy, providing gradual and orderly progress, and being appropriate to the actual situation in Hong Kong. For example, the Basic Law says that the composition of the nominating committee must be "broadly representative" so as to realise the principle of "meeting the interests of different sectors of society" with regard to the design of the political structure. From this, a nominating committee modelled on the framework of the broadly representative four-sector Election Committee currently in place will stand a better chance of being accepted in both the legal and political context. As for the nomination procedures, Article 45 clearly states that the power to nominate candidates is vested in the nominating committee. Any proposal bypassing the committee or undermining its substantive nomination power will not be acceptable in the realm of law. In fact, the Legislative Council, the chief executive, the Hong Kong government and the Standing Committee are all required to act according to law. On the political side, any proposal that is legally controversial is unlikely to be passed by a two-thirds majority in Legco and obtain the consent of the chief executive and the approval of the Standing Committee. At this juncture of the consultation, we should have practical discussions based on the provisions of the Basic Law, instead of wasting time and effort in making proposals over which a consensus is hard to achieve. This is the right way to implement universal suffrage for the chief executive election. In light of the prevailing situation, the outlook for the successful implementation of universal suffrage for the chief executive election is not very bright, though the prospect is not yet completely bleak. I firmly believe that the wider community supports achieving the goal of universal suffrage for 2017 according to law. I also believe most political parties do not want to see a failure to attain the goal. Implementing universal suffrage for the 2017 election is a big step forward along our road to democracy. This is not only a solemn commitment of the central authorities to Hong Kong, but also the aspiration shared by seven million Hong Kong people. With just over two months to go before the end of the consultation, the task force has a duty to give timely advice. I would like to urge all sectors of the community to initiate more constructive discussions, in particular, more comprehensive and thorough deliberations on specific issues such as the composition of the nominating committee, the nomination procedures and the electoral methods, so as to identify a proposal for universal suffrage that complies with the Basic Law and best meets the actual situation of Hong Kong. We must not let this opportunity slip away. It is my earnest hope that all parties across the political spectrum will bear Hong Kong's long-term interests in mind, apply their political wisdom and seek a consensus through open and rational communication with people of different views. Only through this would our five million eligible voters have a chance to elect the next chief executive in 2017 and celebrate the important milestone in the democratic development of Hong Kong. Carrie Lam Cheng Yuet-ngor is chief secretary

 China*:  Mar 3 2014

Yuan's sharp drop puts investors on alert for reversal of rising trend (By Jeanny Yu jeanny.yu@scmp.com) Investors are being forced to take a closer look at the prospects for the yuan's exchange rate. The yuan has recently been something of a safe haven among emerging market currencies, yet market players have learned from a bloody lesson over the past week that it is no longer an easy, one-way bet. A sharp fall against the US dollar both onshore and offshore made the yuan the worst performing currency within emerging Asia this month. The drop offshore - the most since October last year - caused a massive short squeeze. Many investors were forced to buy back contracts at prices higher than what they cost to close out their short positions. The onshore rate yesterday capped two weeks of losses by falling 0.46 per cent, the most since November 1, 2010. It closed at 6.1266 per dollar in Shanghai, according to China Foreign Exchange Trade System prices reported by Bloomberg. Meanwhile, the offshore rate shed as much as 1 per cent in the past fortnight. The correction has shocked the market as the yuan had been deemed the bright spot in the Asian currency market, given its ultra-low volatility and appreciation trend against the dollar. China recently reported the second-highest monthly trade surplus in 14 months. A bigger surplus normally provides impetus for the yuan to appreciate. The People's Bank of China, however, has been setting the benchmark fixed rate for the dollar in terms of yuan higher each day since February 18. That pushed spot rates higher and triggered the short squeeze. Traders and economists viewed such an unusual move as a signal from the authorities that they are ending the one-way movement of the yuan in the past decade and introducing two-way risk to the currency. "The era of steady yuan appreciation may be drawing to a close," UBS economist Wang Tao said. "We think the recent weakening of the yuan may signal a change in China's exchange rate policy." Some also attributed the sudden dislocation in the market to the broader political environment. At the National People's Congress meeting next month, the central bank will need to report on the progress of Beijing's agenda of further liberalising the capital account and possibly widen the trading band for the yuan."As we look for reasons, we need to remember that the yuan is basically still fully in the hands of policymakers," RBS economist Louis Kuijs said. The sudden change in direction prompted investors to question whether a bigger sell-off in the yuan could be coming. Most currency strategists maintain their long-term forecast for appreciation of the currency, yet many now expect more volatility and uncertainty in the outlook than they did before the correction. "We think that after this current bout of weakness, the yuan will likely stabilise in the run-up to the NPC. We also expect the PBOC to widen the band - and maybe this bout of weakness is part of the preparation for that," Standard Chartered economist Stephen Green said. Although this round of weakness seems close to an end, some foresee a similar episode in the second quarter. "[The onshore rate] could probably grind back to about 6.05 before the [second-quarter] risks kick in," said Geoff Kendrick, Morgan Stanley's head of Asian foreign exchange and rates strategy. The key risk Kendrick sees is the mounting default risk of China's trust products. More than 500 billion yuan (HK$635 billion) of such products is due to mature in the second quarter. "We do not expect defaults to pose systematic risk to the banking sector and the economy, but the headline risk is very likely to move the currency market, especially [the onshore rate]," he said. As the yuan steadily appreciated over the past few years, structured products became popular among Asian companies, especially those with operations in China. While originally designed to hedge the firms' exposure to a strengthening currency, these products have become a source of monthly income. Further weakness would leave many investors in the red. For example, the outstanding value of the most popular structured product, a target redemption forward, is estimated at US$350 billion yuan, according to Morgan Stanley. "If we start to breach 6.15 [onshore], Chinese investors involved in structured products will lose money," Kendrick said.

Hong Kong*:  Mar 2 2014

Hong Kong University falls victim to cyberattack (By SCMP) E-mail accounts and personal websites belonging to staff and students targeted in attack - The University of Hong Kong has fallen victim to hackers for the second time in just a few months, with 40 personal websites and 150 e-mail accounts belonging to students and teaching staff targeted, local media reported on Saturday. The attack is the latest in a string of hacks to make headlines, including one on the university in July which targeted thousands of online accounts, and an attack on Macau government e-mail accounts. The security breach in Macau was believed to have been carried out by hackers in both Hong Kong and the United States.. A total of 3,676 e-mail accounts belonging to students and teaching staff at HKU were compromised in the July attack, SCMP reported. HKU said they did not know who the hackers were, and they had reported the case to the police, according to reports. It was not yet clear if the attack was connected with previous security breaches.

 China*:  Mar 2 2014

China manufacturing growth slows to 8-month low (By Agence France Press in Beijing) The purchasing managers’ index (PMI) tumbled to 50.2, the National Bureau of Statistics reported on its website - Workers make stuffed animals to be exported to Europe and America at a toy factory in Zhejiang. China’s manufacturing growth fell to an eight-month low in February, government figures showed on Saturday, reflecting further weakening in the world’s second-largest economy but also the effect of a major holiday. The purchasing managers’ index (PMI) tumbled to 50.2, the National Bureau of Statistics reported on its website, in the third straight drop from 50.5 in January, 51.0 in December and 51.4 in November. A figure over 50 indicates expansion while one below shows contraction. This marked China’s 17th consecutive month of manufacturing growth but at a slowing rate - the lowest since a June reading of 50.1. China’s economic growth has weakened in recent years, hitting 7.7 per cent last year, the lowest level since 1999. Analysts expect a further drop to 7.5 per cent this year. The lowered forecast comes as Beijing has pledged to reform the country’s growth model so that consumers and other private actors play a more significant role, rather than massive and often wasteful state investment. Whereas in the past authorities have reacted quickly to inject cash to stimulate a slowing economy, recently they have remained tight-fisted instead. Two liquidity crunches occurred last year in part because officials sought to impose stricter discipline over banks amid burgeoning debt levels. But the recent Lunar New Year, China’s most important holiday, may also have dampened results, Bank of America Merrill Lynch economists Ting Lu and Xiaojia Zhi said in a research note. “We believe the drop was mainly impacted by the Lunar New Year holiday,” they wrote, adding that they expected a bounce back up to 50.5 in March. “Markets will likely respond negatively to the reading but the impact could be limited. Policies are unlikely to be impacted by these distorted PMI readings,” they said. In another closely watched indicator of Chinese manufacturing, British banking giant HSBC said last week its preliminary PMI reading for February dropped to a seven-month low, to 48.3, down from a final figure for January of 49.5. HSBC is set to release its final PMI reading for February on Monday.

Hong Kong*:  Mar 1 2014

Tycoon Li Ka-shing downbeat over Hong Kong’s future (Peggy Sito peggy.sito@scmp.com) [Often referred to as “Superman” in Hong Kong because of his business prowess, Li Ka-shing is the richest businessman in Asia, and chairs conglomerate Hutchison Whampoa and Cheung Kong Holdings, a property group. Li turned Cheung Kong Industries into a top property group, and Cheung Kong expanded to acquire Hutchison Whampoa in 1979 and Hongkong Electric in 1985. Li is a noted philanthropist and heads a charitable foundation that is a shareholder in Facebook] Li Ka-shing, Asia's richest man, gave a downbeat assessment of Hong Kong's situation yesterday, warning that the Occupy Central campaign, the harassment of mainland tourists and declining competitiveness with neighbouring markets would erode the city's prospects. Li also said he was upset about the news that Hong Kong has been replaced by Beijing as the venue for a meeting of Apec finance ministers and central bankers. "The move to occupy Central does not benefit Hong Kong," he said. "If this happens, it will give a bad impression to outsiders ... even if it just lasts for one hour, it will be harmful to the city." The campaign wants to stage a sit-in protest in the city's business district this year if electoral changes fail to meet its expectations. Li spoke at the post-earnings results press conference of his flagship companies - Cheung Kong (Holdings) and Hutchison Whampoa. Cheung Kong posted a 10 per cent rise in its net profit to HK$35.26 billion for the year ended December last year, and Hutchison Whampoa reported its net profit for the year ended December up 20 per cent to HK$31.11 billion, both are better than analysts' expectations. Li said Hong Kong people need to stop complaining about Chinese tourists because they help support the city's economy. "It will be very difficult for Hong Kong if there's no support from China." Li referred to the harassment of mainland tourists during a protest in Kowloon last month in which demonstrators targeted shoppers in Tsim Sha Tsui, "Stop scolding China tourists, this is totally wrong," he said. Visitor arrivals to Hong Kong from China jumped about 17 per cent to 40.8 million last year, according to the Hong Kong Tourism Board. In what seen as an unusual move, Li repeatedly expressed sadness about recent happenings in the city. "I was saddened that Hong Kong has been replaced by Beijing to host the Apec conference. I hope Hong Kong can be recognised by our own country and other countries as the ideal place to host such international meeting," he said. He was disheartened about the recent brutal attack of former Ming Pao chief editor, Kevin Lau, that sparked off concern over freedom of press in Hong Kong, and upset by the continuous reports criticising that he is pulling out of Hong Kong, despite his repeatedly denials. Commenting on Hong Kong's competitiveness and opportunities, he said that the city's competitiveness should be strengthened. The gross dometic product of Hong Kong and Singapore were at similar levels in 1997, he said. But now Hong Kong's per capita GDP is now about one-third less than that of Singapore. Li was ranked the richest man in Asia by Forbes magazine with a net worth of US$32 billion last year. But the ranking could be threaten by Galaxy Entertainment chairman Lui Che-woo, who has ridden Macau's casino boom to become Hong Kong's second-richest person, with a net worth of US$21 billion. Li said that in a period of at least 10 years in the past, foreign magazines, which he did not identify, had underestimated his wealth by more than 40 per cent because they did not regard Canada's Husky Energy as one of his assets. "Actually I am the biggest shareholder in Husky, slightly more than Hutchison. That's a personal investment. But I don't bother to point out," he said. Li also reiterated he had no plan to retire.

 China*:  Mar 1 2014

Yuan suffers its biggest fall on record amid speculation over widening of trading band (By Kwong Man-ki in Beijing phoenix.kwong@scmp.com) Speculation over widening of the trading band is blamed, but analysts say central bank guided devaluation to temper expectations of investors - The yuan plunged to a 10-month low in its biggest daily fall on record yesterday. It dropped 0.86 per cent to trade at 6.1808 against the US dollar, even after the People's Bank of China (PBOC) fixed the rate at 6.1214 yesterday morning. It was the largest intra-day fall since China Foreign Exchange Trade System records started in 2007 and the biggest since the official and market exchange rates were unified in 1994. The yuan ended the day at 6.1450, having lost 1.4 per cent in February - the biggest-ever monthly drop in the currency, according to Reuters. Analysts said the fall was a response to speculation that the central bank would widen the yuan's trading band in the next few months. This would have the effect of allowing greater volatility in the currency at a time when the world's second-largest economy was slowing. Raymond Yeung, a senior economist at ANZ Bank, said the devaluation of the yuan was guided by the central bank, which had been setting a lower reference rate over the past few weeks. He suggested the central bank "intended to tame expectations of a one-way rise in the yuan". The yuan can trade as much as 1 per cent on either side of the reference rate set by the PBOC. Mizuho Securities economist Shen Jianguang said the government-guided devaluation of the yuan would shake out investors drawn by the higher interest rates offered on the mainland. He said the prospect of higher interest rates had prompted inflows of hot money from players speculating on the yuan's unabated rise. Industry insiders said a rising number of retail investors were using money borrowed in Hong Kong to buy yuan-denominated financial products across the border. Greater volatility in the yuan would therefore increase their investment risk. DBS economist Nathan Chow agreed that the central bank's intervention reflected its desire to temper expectations of appreciation and counter hot money inflows as it prepares for the widening of the trading band. A stronger yuan would also dampen China's export business, he added. The wider trading band could be announced in the coming months after the National People's Congress and the Chinese People's Political Consultative Conference, which start in Beijing next week, Chow said. Despite the possibility of greater volatility in the yuan exchange rate, expectations of an appreciation of the yuan against the dollar would remain unchanged, said Chow, estimating the yuan was likely to rise to 5.97 by the end of this year.

Hong Kong*:  Feb 28 2014

'Get Kai Tak going or Hong Kong will be history' (By Alvin Sallay alvin.sallay@scmp.com) Top sports officials again urge the government to speed up action on the stadium or risk losing events as Singapore unveils acts for new venue - Leading Hong Kong sports officials have again urged the government to get cracking on the Kai Tak Sports Complex, fearing the city will be left behind as Singapore on Thursday unveiled the opening acts for its new venue. The Singapore Sports Hub has a soft launch in April and officially opens in June, while work has yet to start on Hong Kong's complex. The new Singapore Sports Hub, featuring a 55,000-seater National Stadium as its centrepiece, has claimed one event from Hong Kong - the rugby World Club 10s tournament. It has lined up major events from women's tennis and Asian soccer to a Lionel Ritchie concert in April and Taylor Swift in June. "We were asked to host the rugby World Club 10s in June, but we couldn't make a commitment due to the uncertainty over the Hong Kong Stadium pitch," said Trevor Gregory, Hong Kong Rugby Football Union chairman. "Now that is gone and there is the potential to lose more events. By the time our sports complex is ready in six years it will be difficult to catch up with Singapore." Hong Kong Football Association chief executive Mark Sutcliffe was also concerned major events would move to Singapore with the Kai Tak complex scheduled to finish in 2020. "It is worrying that major sports events may gravitate to Singapore. As 'Asia's world city', Hong Kong cannot be complacent because the world is moving on," Sutcliffe said. "Hong Kong still has plenty to offer, but we need a co-ordinated sports policy and strategy that places priority on investment if we are not to fall behind. "The opening of the Sports Hub in Singapore will inevitably attract major events and this should be the catalyst for speeding up the delivery of the Kai Tak project. I have worked in Singapore on consultancy projects and was impressed with the sporting culture and the infrastructure. "This is because the government there has identified sport as a priority in terms of community health and well-being, but also as one of the 'vehicles' to really put Singapore on the world stage as an attractive place to live, work, invest and visit," Sutcliffe added. The Singapore Rugby Union has confirmed its interest in hosting the 2019 Sevens World Cup and becoming part of the IRB Sevens World Series. The Women's Tennis Association championships will be held at Indoor Stadium in October and Asean Football Championship matches at National Stadium this year. "They are best dressed now, while we have an old stadium and are still having difficulties with our pitch. The sad thing is that we could sell the stadium twice over for the Hong Kong Sevens and in this sense it is disappointing to hear that Singapore is gathering such momentum," Gregory said.

 China*:  Feb 28 2014

Chinese sue Japanese firms Mitsubishi Materials and Mitsui Mining 中國起訴日本企業三菱材料和三井礦業 By Zhou Wa zhouwa@chinadaily.com.cn (China Daily USA) [Picture of relatives of deceased Chinese forced laborers, accompanied by lawyer Kang Jian (center, in blue coat), attend Beijing No 1 Intermediate People's Court on Wednesday to sue two Japanese companies over forced labor during World War II. The lawsuit seeks printed apologies to be carried in Chinese and Japanese newspapers as well as compensation from the Japanese companies} Plaintiffs seek apologies, compensation as they lodge class-action case for first time - Thirty-seven Chinese citizens filed a lawsuit in a Beijing court on Wednesday demanding Japanese apologies and compensation for forced labor during World War II. It is the first time that Chinese forced laborers and their relatives have lodged such a class-action case in a Chinese court. Observers said the case will increase pressure on Japan to correct its interpretation of its militarist history. The forced laborers and their relatives want apologies to be carried in mainstream media in China and Japan, as well as compensation from Mitsubishi Materials and Mitsui Mining and Smelting. Kang Jian, a lawyer for the plaintiffs, said the lawsuit is aimed at safeguarding the victims' dignity and human rights. Dozens of wartime compensation suits have been filed by Chinese and South Korean citizens in Japan, but almost all have been rejected by Japanese courts. In 1998, five Chinese survivors of World War II and relatives of other Chinese nationals filed seven lawsuits in Japan against Nishimatsu Construction, alleging that the company forcibly brought Chinese individuals to Hiroshima prefecture during the war and used them as forced labor to build the Yasuno power plant. The allegations were dismissed by Hiroshima District Court in 2002. Two years later, Hiroshima High Court reversed the district court's decision and ordered Nishimatsu to pay damages to the plaintiffs. However, in 2007 Nishimatsu filed an appeal with the Japanese Supreme Court. The top court, in the final verdict, recognized that construction of the power plant by the company subjected Chinese victims to work in conditions that caused them mental and physical pain, but still dismissed the plaintiffs' compensation claim. "The Japanese court's move hurt us. We can't accept such an attitude toward history," 58-year-old Liu Guolian, daughter of a laborer, told China Daily on Wednesday. Her father Liu Qian was abducted to Japan to work in a mine in Nagasaki in 1944. Liu Guolian's younger brother Liu Guoyou said: "We are angry and disappointed with Japan's incorrect attitude toward its brutal history. It should learn from Germany, seriously reflect on itself and sincerely apologize, so that victims like my father can rest in peace." Kang showed reporters an X-ray of Liu Qian's leg, which was chopped off by his Japanese supervisor after he stopped working momentarily. "Most of these Chinese forced laborers were treated inhumanly in Japan, which violated international humanitarian law as well as Chinese and Japanese domestic laws," Kang said. Zhang Shijie, 88, a laborer who survived, said he was excited about the lawsuit being filed. Zhang was abducted to Japan in 1944 to work at a coal mine in Nagasaki. "We didn't have enough to eat and we were treated like prisoners," he said, adding that he and other workers were often beaten at work by Japanese foremen. It will take some time before the lawsuit can be put on record officially and the court sessions begin, but lawyers for the plaintiffs, including Kang, are confident they can win. Mitsubishi Materials was unable to comment because it did not know the details of the latest case, a spokesman for the company told Reuters. Under Chinese law, Mitsubishi Materials should pay compensation to the plaintiffs if they win, said Zou Qiang-lun, another lawyer in the case. Japan's Chief Cabinet Secretary Yoshihide Suga said he was aware of reports about the case, adding that it concerns individuals and private companies. "However, we believe that according to a joint declaration between Japan and China the (right) to make these claims does not exist," he was quoted as saying by Reuters. The Japanese government insists that all wartime compensation issues concerning China were settled by a 1972 joint statement establishing diplomatic ties. But the Chinese Foreign Ministry said Japan's unilateral interpretation of the joint statement is "void". On Wednesday, ministry spokeswoman Hua Chun-ying urged Japan to show a responsible attitude toward its history and handle the case appropriately. The case comes amid strained relations between the two countries following Japan's illegal "purchase" of China's Diaoyu Islands in September 2012. Tensions increased after Japanese Prime Minister Shinzo Abe visited the Yasukuni Shrine in December. The Tokyo shrine honors Japanese war dead, including 14 Class-A World War II war criminals. Kang denied that the lawsuit is related to ties between the two nations. But Wang Ping, a researcher of Japanese studies at the Chinese Academy of Social Sciences, said, "The case, together with recent similar cases in South Korea, will increase moral pressure on Japan." Nearly 39,000 Chinese laborers were abducted and forced to work for 35 Japanese companies from 1943 to 1945 and nearly 7,000 of them died in Japan. Nearly 9,500 Chinese laborers worked for the two Japanese companies named in the latest lawsuit, and 1,745 of them died.

Hong Kong*:  Feb 27 2014

Key Apec meeting switched from Hong Kong to Beijing (By Stuart Lau, Tony Cheung and Zhang Hong) City replaced as venue by Beijing in 'rare' move, but speculation that the Occupy Central protest could have triggered the decision is dismissed - Hong Kong has been replaced by Beijing as the venue for a meeting of Apec finance ministers and central bankers later this year. The surprise move by the central government, described by one Apec official as "rare", led to wild speculation about the reasons for the switch. Some politicians linked it to a radical political rally planned to take place in the city's main financial district in the summer. But the organisers dismissed that theory yesterday. Officials of the Asia Pacific Economic Co-operation forum (Apec) said the decision was made because US President Barack Obama asked for the leaders' meeting to be pushed back from October to November. Obama needed to be at home for campaigning in the US mid-term elections, said an Apec official, who asked not to be named. The leaders' summit, including a meeting between Obama and President Xi Jinping , will be the highlight of the event. "Such a big change is indeed rare and we haven't seen it for years. This reflects that China and the US are working really hard to ensure the meeting [between Xi and Obama] will take place," said the Apec official. Because of the change, the meeting of finance chiefs originally scheduled for September - and which would have worked out the broad economic issues for the political leaders to ratify later - has been postponed by a couple of weeks as well. The organisers said this would cause logistical problems, such as hotel bookings, and it would be easier to manage the meetings if all the events were held in Beijing. About 800 people were expected to attend the Hong Kong meetings. David Dodwell, executive director of the Hong Kong-Apec Trade Policy Group, said the idea of a switch had been circulated for about three weeks. "Clearly this is upsetting because we were looking forward to hosting a meeting that is a natural fit for Hong Kong," Dodwell said. Discussions are still taking place on whether it will be possible to keep some of the planned business meetings here to discuss issues of international financial stability and market regulation being tackled by the Asia-Pacific Financial Forum. The explanation did not stop politicians in Hong Kong from linking it to the Occupy Central movement. The protest group is urging people to block traffic in Central unless "genuine universal suffrage" is guaranteed for the 2017 chief executive election. Executive councillor Cheng Yiu-tong believes the venue switch "could be related" to the movement and said this would affect the city's reputation. "It is worrying, because you won't know how serious Occupy Central will get … so it could be safer [to hold the Apec meetings in Beijing]," he said. Democratic Party lawmaker Albert Ho Chun-yan said he was worried the decision could indicate that Beijing was bracing for the worst and may adopt a hardline stance that would be likely to trigger angry protests in the city. But Secretary for Financial Services and the Treasury Professor Chan Ka-keung said the switch was "purely due to co-ordination and time concerns". He said "only a small amount" had been spent in preparation, with the HK$63 million fund granted for the event still intact. Macau's chief executive, Dr Fernando Chui Sai-on, said the city's Apec tourism ministers' meeting had received "no notice of changes" and the preparatory work would go ahead.

Former Ming Pao editor Kevin Lau 'fights for life' after chop attack in Sai Wan Ho (By Clifford Lo clifford.lo@scmp) Ex-chief editor Kevin Lau Chun-to hospitalised after an attack by two assailants early on Wednesday morning - Former Ming Pao chief editor Kevin Lau Chun-to who was chopped in the back and leg in a mysterious attack in Sai Wan Ho this morning is being transferred to the operation theatre at Pamela Youde Nethersole Eastern Hospital in Chai Wan. Former Ming Pao chief editor Kevin Lau Chun-to suffered life-threatening injuries when he was chopped in the back and leg in a mysterious attack in Sai Wan Ho on Wednesday morning. He is now receiving treatment for three chop wounds at a public hospital in Chai Wan. His wife Vivien Chan Pik-kwan confirmed the attack over the phone. “Police told me that he suffered three knife wounds in the back and leg,” she said. Police are looking for two men in connection with the attack. At the time of writing, police had failed to give any description of the two attackers. Officers are understood to have set up roadblocks in an effort to track down the two. Lau was in Tai Hong Street near the Sai Wan Ho Harbour Park when he was attacked shortly before 10.30am. It is understood Lau usually had breakfast in one of the restaurants in the area before going to work. “The victim called police [saying] that he was chopped and his attacker [had] fled on a motorcycle,” a police spokeswoman said. She said he was conscious when taken to Pamela Youde Nethersole Eastern Hospital in Chai Wan for treatment. At 11.30am, police had cordoned a section of Tai Hong Street as officers were searching for evidence. Another team of crime-squad officers attended the hospital to wait to take a statement from Lau. The HKJA official statement expressed shock and outrage: "Journalists consider the incident a serious provocation to the Hong Kong press and freedom of expression...." Journalists reiterated that press freedom is a core value of Hong Kong’s success as a free and open society, said they will not tolerate any form of threat of violence against journalists morale. "We will now offer our condolences to Mr Lau, and strongly urge the police to severely deal with this case, arresting the culprits to justice as soon as possible, in order to demonstrate to the public action to protect the safety of journalists the ability and determination." 

 China*:  Feb 27 2014

Mainlanders use ‘free money’ from Hong Kong banks to earn higher returns at home (By Keira Huang and George Chen) Mainland Chinese working in Hong Kong have found a way to use “free money” from local banks to invest in profitable financial products across the border. They take advantage of cheap personal loans aggressively hawked by banks in an attempt to expand their business. The borrowers quietly turn around and invest the cash on the mainland for higher returns. Given the big gap in interest rates between Hong Kong, which has a market-based banking system, and the mainland, where the central bank tightly controls loan and deposit rates, it’s no surprise that some are able to exploit the opportunity for arbitrage. One practical difficulty remains, however, for these individual investors – how to transfer the money to the mainland? Sometimes they have to resort to underground banks that operate in a legal grey area. The annual tax season in Hong Kong provides an opportunity for investors to obtain the cheap cash from local banks in the form of loans ostensibly to help them pay off their taxes. Robin Wang, a managing director in the Hong Kong office of a major Chinese state-owned enterprise who earns more than HK$2 million a year, faces an eyebrow-knitting tax statement every year. This year, he learned something new from his friends about how to make profitable use of his tax filing – submit the statement to a local bank and apply for a tax loan at a very low rate, in some cases less than 2 per cent per year. Wang, who spoke to the South China Morning Post on condition that his real name not be used, said he could borrow up to 10 times his salary from one of the major local banks, although he does not, in fact, need the loan to pay his taxes. “For me, this means ‘free money’, so why not?” he said. Wang said instead of using the loan to pay his tax bill, he transferred the cash – after converting it into yuan – to the mainland through underground banks in the city. Once the cash reached his mainland bank account, he could sit back in Hong Kong and place orders online for short-term investments. These are typically wealth management products, mostly offered by trust companies. They mature in three to six months and offer an annualised return of at least 6 per cent. They are part of the country’s shadow banking business, the regulation of which has been a growing headache for Beijing. Wang said that with part of the returns he earns on these investments, he was able to quickly repay the tax loans, which to him represented “free money”. Once the cash gets into the mainland banking system, some investors may also pour the money into the red-hot property market, where they can put a down payment on a flat financed at the cheaper offshore borrowing rates. In an interview with the Post, a Hong Kong-based mainland business executive who only wanted to be identified as Mr Su said he recently made the down payment for his new flat in Zhongshan, Guangdong province, with part of his tax loan from a local bank. Su said he had the financial strength to repay the loan, since his job paid well. “I don’t see anything wrong with [borrowing in Hong Kong and investing in the mainland]. This is what we are entitled to, because this is how the two different systems work,” Wang said. “The only risk may happen in the money transfer process, given the dodgy nature of those underground banks, but if you think about the low-rate loans you can get in Hong Kong, it is too compelling [an opportunity to ignore].” Customer service staff at major Hong Kong banks from HSBC to Bank of East Asia said they were aware of the loophole and that some of those taking out tax loans might not really use the money to pay their taxes. But they said the banks have no control over how the borrowers spend their money. For the 2013/2014 tax year, many banks started promoting tax loans in October, with a monthly flat rate ranging from 0.12 per cent to 0.17 per cent. After taking into account all fees and promotional discounts, a borrower usually pays an annualised interest rate of 1.7-2.6 per cent. The larger the loan a borrower applies for, the lower the interest rate. For example, HSBC charges 1.7 per cent interest for smaller tax loans, but if the amount exceeds HK$100,000, the rate drops to 1.4 per cent. On the mainland, the benchmark interest rate set by the People’s Bank of China, the central bank, is 6 per cent for one-year loans. It rises to 6.55 per cent for loans of more than five years. The interest rate on the mainland’s personal housing accumulation fund loans, which are designed to provide lower mortgage rates to homebuyers, is 4.7 per cent for long durations.

Hong Kong*:  Feb 26 2014

Offshore yuan centres not the biggest threat to Hong Kong’s financial sector (By Enoch Yiu enoch.yiu@scmp.com) As local banks uncork the champagne on Tuesday to mark 10 years since they were first allowed to engage in personal banking in yuan, they have a lot to do to prepare for the challenges ahead. Hong Kong Monetary Authority chief executive Norman Chan Tak-lam warned the city last week that it can no longer rest on its laurels, having lost its monopoly of the offshore yuan business, a privilege it enjoyed from 2004 until 2012. Over the past year, Beijing has given the green light for other financial centres, such as London, Singapore, Sydney and Tokyo, to do business in yuan, so as to further encourage international use of the currency. It will not be easy for banks in Hong Kong to fend off such competition. In the case of global banks with their international networks, their operations in London or Sydney could work together with their Hong Kong branches in the offshore yuan business. Domestic Hong Kong banks, which do not have a wide international network, will find it hard to compete in the yuan business. But in fact, the real competition is not from centres overseas, since Hong Kong, which is directly adjacent to the mainland, has an advantage over them. The real threat to Hong Kong’s yuan business is the possibility of the mainland fully opening up its capital markets. Once Beijing lifts its capital controls and foreign companies are able to raise funds directly on the mainland and easily trade stocks and bonds there, there will be no longer be much of a role for Hong Kong markets to play. When that happens, the question is whether there will still be a demand for an offshore market in yuan. In order to keep their clients from going directly to financial institutions on the mainland, banks in Hong Kong will need to show they can offer better yuan products and services. The city’s banks, brokers and other professionals have for the past two decades enjoyed the benefits of the mainland’s capital controls. It was because of these controls that mainland firms have to issue two classes of shares – H shares in Hong Kong, to tap funds from international investors, and A shares in Shanghai or Shenzhen, for domestic investors. Once capital controls are lifted, there will be no need for these two classes of shares. Hong Kong Exchanges and Clearing will then have to compete with the bourses in Shanghai and Shenzhen on a level playing field for listings of mainland firms. At present, 60 per cent of foreign direct investment in the mainland flows from Hong Kong, and 30 per cent of the mainland’s exports are handled by the city. It is also because of the capital controls that companies must use Hong Kong as a gateway. Once they are abolished, firms will be able to deal directly with the mainland, making Hong Kong no different from other Chinese cities. Ten years ago, few would have expected Beijing to relax its capital controls any time in the near future. But with the progressive internationalisation of the yuan, the day is coming closer when that happens. It is not all negative news for Hong Kong, because when the capital controls are lifted, it will be easier for mainlanders to trade in Hong Kong’s stocks and other investment products. The key question is whether the local bourse and financial firms are well prepared for that day.

 China*:  Feb 26 2014

Modern Chinese art to get exposure at a major New York art fair (By Vivienne Chow vivienne.chow@scmp.com) Contemporary art fair in New York offers American collectors rare chance to get measure of what artists in China are producing today - Chinese contemporary art will come under the spotlight of the American art market for the first time in a long while at a major art fair in New York. Organisers of The Armory Show said the US had a limited understanding of the Chinese contemporary art scene, and that political events and negative media coverage of China had made it even worse. Seventeen galleries from the mainland and Hong Kong will show works by more than 20 artists and collectives at the New York modern and contemporary art fair's Armory Focus: China. Most of those featured are not the "blue chip" artists whose work appears regularly at auctions. Noah Horowitz, executive director of The Armory Show, said the art fair began featuring a regional focus section five years ago and had covered Berlin, Latin America, Scandinavia and America. He said there was a growing interest in China and its art market, particularly after leading Swiss fair Art Basel launched its Hong Kong edition last year. But the focus had been mostly on headline-grabbing auction results, he said, and stories such as The New York Times' reports in 2012 on the finances of former premier Wen Jiabao's family had created a negative view of China. "There isn't tremendous awareness, in a sophisticated way, of the art world [in China]," Horowitz told the Post. "We are trying to show a younger generation of Chinese art and what's happening in China." "There won't be Zeng Fanzhi, Zhang Xiaogang or Ai Weiwei . It's not just about a few Chinese artists and auction records. There's a whole art world in China. It's still developing, and there's a system in place," said Philip Tinari, the section's curator and the director of the Ullens Centre for Contemporary Art in Beijing. A two-day symposium at the fair will present a big picture of China, covering politics, economics as well as art history and the state of contemporary art in China. Many artists featured in the Armory show, including Zhao Zhao, He Xiangyu and the Hong Kong-born Nadim Abbas were born after 1980 and use a more conceptual aesthetic language that has grown out of the Cultural Revolution political symbols widely used by established modern Chinese artists, according to Aenon Loo of Hong Kong's Gallery Exit, which is showing Abbas at the fair. Loo believes works by the new generation of Chinese contemporary artists will appeal to the tastes of American collectors, who appreciate conceptual and visually strong works. American museums gave little recognition to Chinese art until recently, according to Meg Maggio, director of Pékin Fine Arts, which will present three artists at The Armory Show. She said that because of the cold war and the Cultural Revolution, America refused to engage with communist China, resulting in a huge gap in cultural understanding. Twentieth century masters from Wu Guanzhong to Zou Wou-ki are unheard of in America, said Maggio. She said museums in the US only began presenting these Chinese artists in recent years, with, for example, a 2012 exhibition of ink master Fu Baoshi's work at the Metropolitan Museum of Art in New York. Chinese contemporary art was introduced to the US in 1998 at a show called "Inside Out: New Chinese Art" presented by the Asia Society Galleries and the San Francisco Museum of Modern Art. But it took another decade for the Guggenheim Museum to stage Cai Guoqiang's solo exhibition "I Want To Believe" in 2008, sponsored by the Hong Kong-based Robert H.N.Ho Foundation. Four years later, the gunpowder art master was presented in a solo show called "Sky Ladder" at the Museum of Contemporary Art in Los Angeles. The current Metropolitan Museum show is called "Ink Art: Past as Present in Contemporary China", and runs until April 6. In April, the Brooklyn Museum will stage "Ai Weiwei: According to What?", the artist-activist's first solo show in New York exploring the issues of freedom of expression and human rights. Featured works include S.A.C.R.E.D., the monumental installation detailing Ai's 81-day detention in 2011, which debuted at the Venice Biennale last year. The market, however, responded more swiftly. Sotheby's held its first New York sale of contemporary Asian art in 2006. Last March, Christie's and Sotheby's sold contemporary and Chinese art, rare bronzes, furniture and antiquities worth US$130 million at their semi-annual Asia week sales, according to Reuters. The Armory Show, which will take place from March 6-9, will feature more than 200 galleries from 29 countries.

Hong Kong*:  Feb 25 2014

Appetite for Huisheng IPO bodes well for fellow pork producer WH's listing (By Reuters) Hong Kong's retail investors are clamouring for rare shares in a Chinese pork supplier this week, heralding a potential stampede when industry giant WH Group comes to market in April with what could be a US$6 billion listing. With few fresh Chinese meat sector listings, the chance to buy into a vast, steadily growing industry has made little-known Huisheng International popular. Its initial public offering, due to be priced late yesterday, generated retail demand 20 times the US$37 million shares on offer in the first day of subscription. As shoppers on the mainland, the world's biggest pork consumer, grew more affluent, per capita spending on meat, poultry and processed products more than doubled to 1,184 yuan (HK$1,500) by 2012 from 2006, Huisheng said in its offering prospectus. The company cited Chinese government statistics and a report by research firm Ipsos. Strong demand for Huisheng, which is raising funds for freezer facilities and new farms, bodes well for WH. Its flotation is expected to be Hong Kong's biggest listing since 2010 in a banner year for the city's investment bankers. Previously known as Shuanghui International, WH is a powerhouse of China's meat trade. Last year, it acquired US pork producer Smithfield Foods, which had sales of US$13.2 billion in the fiscal year to April 2013. "The fundamentals, the company and the business factors are better [for WH]," said Alvin Cheung, associate director at Prudential Brokerage. "It's a quite different and much more diversified company." When the retail portion of Huisheng's offer closed on Thursday, demand for shares had soared to a value of US$1.34 billion, according to brokerage Phillip Securities. Pork sales on the mainland rose to 51.8 million tonnes in 2012, 18 per cent higher than in 2007, and are forecast to reach 58.5 million tonnes in 2017, according to research firm Euromonitor International.

Higher stamp duties approved by Legco 16 months after being imposed (By Tony Cheung tony.cheung@scmp.com) Measures to cool market now official, but not before pan-democrats storm out ahead of vote after failing to get way on vetting future rises [To rein in the city's runaway housing prices, Hong Kong's Financial Secretary John Tsang Chun-wah announced an additional 15 per cent stamp duty on non-permanent-resident and corporate buyers starting from October 27, 2012. The move prompted speculation over the effectiveness of taxation on the real estate market and criticisms that Hong Kong was turning away from its roots as a free market economy in favour of a more protectionist market environment] Higher stamp duties to cool Hong Kong's property market finally became law yesterday amid a flurry of grandstanding in the Legislative Council. The duties, which have been levied since October 2012, were approved after a marathon 35-hour debate over four days. The vote removes uncertainty in the property market by giving effect to a 15 per cent levy on non-permanent residents and corporate buyers and an expansion of duties paid on quick resales of property. A defeat could have meant the government paying back an estimated HK$4 billion it has collected in the past 16 months. The measures have wide public support, but their approval was held up as lawmakers sought a legally binding say in future stamp duty decisions. In the end, just after 4.30pm, 23 pan-democrats walked out of the Legco chamber in protest at not getting the law change they wanted. The bill authorising the duties then passed by a wide margin of 30 votes to six, with six abstentions. Controversy continued when it emerged that Jeffrey Lam Kin-fung of the Business and Professionals Alliance - who is also an executive councillor - was not present for the vote, sparking disquiet in the government camp. Lam refused say why he was absent when asked last night. The pan-democrat walkout was in protest against housing minister Professor Anthony Cheung Bing-leung's refusal to offer more than a verbal promise that future rises in stamp duty would require legislative scrutiny. Reductions will still be subject to "negative vetting" - meaning they will go through unless lawmakers object. The pan-democrats argued that this "verbal commitment" went against the spirit of the rule of law and accused Cheung of being disrespectful to legislators. Cheung, who said he was surprised by the furore his move caused, promised to "seriously consider" the pan-democrats' request for an official amendment. Among the 30 who voted for the bill were two pan-democrats, the League of Social Democrats' "Long Hair" Leung Kwok-hung and the NeoDemocrats' Gary Fan Kwok-wai. The pro-government Democratic Alliance for the Betterment and Progress of Hong Kong, the Federation of Trade Unions and the New People's Party backed the bill, while four Liberal Party lawmakers, real estate and construction sector representative Abraham Razack and independent Paul Tse Wai-chun voted against it. Six others - People Power duo Albert Chan Wai-yip and Raymond Chan Chi-chuen and four from the pro-government Business and Professionals Alliance - abstained. Cheung expressed relief' after the meeting. He said negative vetting was intended to eliminate market uncertainty. It was a misunderstanding to think that the government was trying to use it to bypass Legco, he said. But Civic Party leader Alan Leong Kah-kit was not convinced. "Replacing legislation with a verbal promise is [tantamount to] replacing the rule of law with the rule of man," Leong said. "The Civic Party could have sat there in the chamber and voted in disapproval of the administration, but since the bill itself is good for the people, we chose to walk out." Democratic Party lawmaker James To Kun-sun also told the government to make its position on the mechanism for scrutinising stamp duty changes clear soon. Analysts said the imposition of the stamp duties had popped the property market bubble. Brokerage house CLSA projects a 10 per cent drop in prices this year and a further 5 per cent drop next year. Developers began offering big discounts to sell flats in November. This has meant flats in new developments selling for 20 to 30 per cent less than equivalent homes in the secondary market. Targeting the stamp duty at non-local buyers has also been effective in squeezing out mainland investors. Property agency Centaline estimates 42 per cent of buyers of new homes were non-local before the 15 per cent additional levy on non-local buyers was introduced. Today, that figure was in the "low single digits", CLSA's Nichole Wong said. Midland Realty chief analyst Buggle Lau Ka-fai, speaking from a property industry perspective, hoped the government would be as aggressive in reversing its measures when the market drops as it was in implementing policies when prices were going up.

 China*:  Feb 25 2014

Modern Chinese art to get exposure at a major New York art fair (By Vivienne Chow vivienne.chow@scmp.com) Contemporary art fair in New York offers American collectors rare chance to get measure of what artists in China are producing today - Chinese contemporary art will come under the spotlight of the American art market for the first time in a long while at a major art fair in New York. Organisers of The Armory Show said the US had a limited understanding of the Chinese contemporary art scene, and that political events and negative media coverage of China had made it even worse. Seventeen galleries from the mainland and Hong Kong will show works by more than 20 artists and collectives at the New York modern and contemporary art fair's Armory Focus: China. Most of those featured are not the "blue chip" artists whose work appears regularly at auctions. Noah Horowitz, executive director of The Armory Show, said the art fair began featuring a regional focus section five years ago and had covered Berlin, Latin America, Scandinavia and America. He said there was a growing interest in China and its art market, particularly after leading Swiss fair Art Basel launched its Hong Kong edition last year. But the focus had been mostly on headline-grabbing auction results, he said, and stories such as The New York Times' reports in 2012 on the finances of former premier Wen Jiabao's family had created a negative view of China. "There isn't tremendous awareness, in a sophisticated way, of the art world [in China]," Horowitz told the Post. "We are trying to show a younger generation of Chinese art and what's happening in China." "There won't be Zeng Fanzhi, Zhang Xiaogang or Ai Weiwei . It's not just about a few Chinese artists and auction records. There's a whole art world in China. It's still developing, and there's a system in place," said Philip Tinari, the section's curator and the director of the Ullens Centre for Contemporary Art in Beijing. A two-day symposium at the fair will present a big picture of China, covering politics, economics as well as art history and the state of contemporary art in China. Many artists featured in the Armory show, including Zhao Zhao, He Xiangyu and the Hong Kong-born Nadim Abbas were born after 1980 and use a more conceptual aesthetic language that has grown out of the Cultural Revolution political symbols widely used by established modern Chinese artists, according to Aenon Loo of Hong Kong's Gallery Exit, which is showing Abbas at the fair. Loo believes works by the new generation of Chinese contemporary artists will appeal to the tastes of American collectors, who appreciate conceptual and visually strong works. American museums gave little recognition to Chinese art until recently, according to Meg Maggio, director of Pékin Fine Arts, which will present three artists at The Armory Show. She said that because of the cold war and the Cultural Revolution, America refused to engage with communist China, resulting in a huge gap in cultural understanding. Twentieth century masters from Wu Guanzhong to Zou Wou-ki are unheard of in America, said Maggio. She said museums in the US only began presenting these Chinese artists in recent years, with, for example, a 2012 exhibition of ink master Fu Baoshi's work at the Metropolitan Museum of Art in New York. Chinese contemporary art was introduced to the US in 1998 at a show called "Inside Out: New Chinese Art" presented by the Asia Society Galleries and the San Francisco Museum of Modern Art. But it took another decade for the Guggenheim Museum to stage Cai Guoqiang's solo exhibition "I Want To Believe" in 2008, sponsored by the Hong Kong-based Robert H.N.Ho Foundation. Four years later, the gunpowder art master was presented in a solo show called "Sky Ladder" at the Museum of Contemporary Art in Los Angeles. The current Metropolitan Museum show is called "Ink Art: Past as Present in Contemporary China", and runs until April 6. In April, the Brooklyn Museum will stage "Ai Weiwei: According to What?", the artist-activist's first solo show in New York exploring the issues of freedom of expression and human rights. Featured works include S.A.C.R.E.D., the monumental installation detailing Ai's 81-day detention in 2011, which debuted at the Venice Biennale last year. The market, however, responded more swiftly. Sotheby's held its first New York sale of contemporary Asian art in 2006. Last March, Christie's and Sotheby's sold contemporary and Chinese art, rare bronzes, furniture and antiquities worth US$130 million at their semi-annual Asia week sales, according to Reuters. The Armory Show, which will take place from March 6-9, will feature more than 200 galleries from 29 countries.

Hong Kong*:  Feb 24 2014

Kai Tak tender attracts strong bids (By Yvonne Liu yvonne.liu@scmp.com) The overwhelming response to the tendering of three Kai Tak residential sites reflects developers' keen interest in acquiring plots in urban areas. The Lands Department said yesterday it received a total of 28 bids for the three residential sites. The biggest site with a better view attracted the best response, with 12 bids. The other two sites received seven and nine bids each. The valuations of the sites range from HK$7.52 billion to HK$9.53 billion, or HK$4,500 and HK$5,700 per square foot. "The market response is good because the sites are located in the urban area and are without 'Hong Kong property for Hong Kong people' conditions," said Alvin Lam, a director at Midland Surveyors, referring to flats that can only be sold to Hong Kong permanent residents. He added that these factors could "lower the risk in property sales". However, he believes offers made by developers would still be conservative due to weakening market sentiment and increased land supply. Major developers such as Cheung Kong (Holdings), Henderson Land and K Wah International joined the bidding for all three sites, as well as mainland developer Poly Property. If a single developer succeeds in winning all three sites the combined parcel of land could amount to 303,977 square feet and yield a total gross floor area of more than 1.67 million sq ft. That would be enough to support a housing estate with at least 2,590 flats. China Overseas & Investment last year acquired two Kai Tak sites with the conditions attached for HK$4.54 billion, or HK$5,157 per square foot. The tender result for the three Kai Tak sites is seen as a barometer of the current land market. Separately, the Lands Department announced two residential sites in Shouson Hill and Tuen Mun will go up for tender on March 21. The tender will close on May 9. The residential site at the junction of Shouson Hill Road West and Wong Chuk Hang Path, is expected to attract market attention with its potential to develop a luxury project. The site covers an area of 116,897 sq ft and could yield a total gross floor area of 87,673 sq ft. The 23,702 sq ft Tuen Mun site at Tseng Choi Street, the former Kwong Choi Market, could be developed into a mass residential project with a total gross floor area of 71,107 sq ft.

 China*:  Feb 24 2014

South China Morning Post: 南部防空區對中國長期至關重要 Southern air defence zone 'crucial for China in long term', PLA expert says - US Army Chief of Staff Raymond Odierno and General Wang Ning salute while reviewing an honour guard in Beijing. Establishing a second air defence zone - this time over the South China Sea - was in China's long-term interest, a senior People's Liberation Army researcher said yesterday. Senior colonel Li Jie , of the PLA Navy's Military Academy, said a senior US intelligence officer's remarks last week about China's intention to declare another air defence identification zone (ADIZ) were meant to deter China from making such a move. Captain James Fanell, director of intelligence and information operations at the US Pacific Fleet, predicted China would set up such a zone over the South China Sea by the end of 2015. China declared its first air defence zone late last year over the East China Sea, where it is locked in a territorial dispute with Japan over the Diaoyu Islands, known as the Senkakus by the Japanese. China demands all aircraft entering its zone identify themselves or face countermeasures. A Pentagon spokesman said Fanell's comments were his own views. The statement came as US Army Chief of Staff General Ray Odierno visited Beijing, where he met PLA Chief of the General Staff General Fang Fenghui. Li said the Pentagon's distancing of itself from Fanell's remarks was tactical. "It's a typical US diplomatic strategy. Washington is very concerned about the tension developing in the South China Sea, which will relate to its strategic interests," he said. "The establishment of another ADIZ over the South China Sea is necessary for China's long-term national interest." Li said it was too early to predict when the zone would be announced. International relations experts have said China does not intend to further upset its neighbours with another zone. But tensions in the South China Sea are not letting up. The Philippines' military chief, General Emmanuel Bautista, on Tuesday pledged his forces would defend fishermen against any Chinese "terror or intimidation". Fanell said China was training its military to be able to carry out a "short, sharp" war with Japan to take the Diaoyu islands or even the Ryukyu islands - a chain stretching to Okinawa. "We witnessed the massive amphibious and cross-military region exercise, Mission Action 2013, and concluded that the PLA has been given a new task: to be able to conduct a short, sharp war to destroy Japanese forces in the East China Sea," Fanell said. Such a war could be expected to be followed by a seizure of the islands in dispute, he said. Shanghai-based military expert Ni Lexiong said the drill was not an indication China had any plan to seize islands by force. "Both the PLA and Japan's Self-Defence Forces have come up with different island capture plans, which are just common exercises," he said.

Hong Kong*:  Feb 23 2014

West Kowloon arts hub to name COO to steer commercial development (By Amy Nip amy.nip@scmp.com) Chief operating officer to focus on establishing shops and homes in the new cultural district - SCMP senior reporter Vivienne Chow, West Kowloon Cultural District Authority chief executive officer Michael Lynch, Hong Kong Arts Festival executive director Tisa Ho, Hong Kong Academy for Performing Arts director Adrian Walter, Hong Kong designer and artist Stanley Wong, and Foster + Partners partner Colin Ward, attend a seminar of "West Kowloon Cultural District - More hype than hub?", at the JW Marriott Hotel in Admiralty. The West Kowloon arts hub is appointing a chief operating officer to develop its commercial and residential space. "The idea is to assist on commercial deals and establish the retail and residential side of the project," Michael Lynch, chief executive officer of the West Kowloon Cultural District, said in a Redefining Hong Kong panel discussion hosted by the South China Morning Post. Cultural facilities will take up 35 to 40 per cent of the gross floor area of the development. Developers will build most of the flats, but the authority is planning a hotel for visiting artists, rehearsal facilities and creative space for young people and artists. The government gave the arts hub authority an initial endowment of HK$21.6 billion in 2008. With investment returns, the amount is now HK$24 billion. Lynch said HK$1.3 billion had been spent over the past six years. A "ballpark estimate" given to lawmakers for the design and construction of all facilities is HK$47 billion. Lynch said this was not a figure the authority was using, but he did not provide a new estimate. Although 15 performance venues were planned back in 2007, only five have been confirmed. Lynch denied the project had been scaled down, but the fate of the others would depend on private sponsors. Other speakers at the conference said the authority should put the emphasis on software - nurturing talent, educating the audiences, building a good museum collection and planning content. The executive director of the Hong Kong Arts Festival, Tisa Ho, said she was not so interested in how many seats there would be or how much the buildings would cost. What was important was "what it is going to do?" she said.

 China*:  Feb 23 2014

Beijing issues last-minute warning to Obama on Dalai Lama talks (By Cary Huang and Reuters) Scheduled meeting would be a 'gross interference' that would damage relations, US president told - The Dalai Lama greets audience members before speaking at an event at the American Enterprise Institute in Washington. China issued a last-minute warning to US President Barack Obama to call off a planned meeting with the Dalai Lama. The talks with the Tibetan spiritual leader were due to take place at the White House last night (Hong Kong time). Foreign Ministry spokeswoman Hua Chunying said in a statement: "For the United States leader to meet the Dalai Lama is a gross interference in China's internal affairs and a serious violation of the norms of international relations." Hua sidestepped a question during a daily news briefing about whether Beijing would try to have the meeting cancelled. But she said: "If any country deliberately insists on harming China's interests, in the end it will also damage its own interests and will harm the bilateral relations between China and the relevant country. "[If] the US president wishes to meet any person, it's his own affair, but he cannot meet the Dalai Lama." The meeting was due to take place in the White House Map Room, which is of less significance than the Oval Office. This was intended to highlight the Dalai Lama's capacity as a cultural and religious leader instead of a political one. The two previously met in February 2010 and July 2011, both times in the Map Room. National Security Council spokeswoman Caitlin Hayden said the US supported the Dalai Lama's approach, but recognised Tibet to be "a part of the People's Republic of China". Hayden said: "We do not support Tibetan independence." The planned meeting was scheduled to take place days after US State Secretary John Kerry's visit to Beijing. Obama and President Xi Jinping are due to meet at a nuclear security summit in the Netherlands next month. Analysts said both sides were carefully trying to contain the political damage of the meeting. Jin Canrong , of Renmin University's School of International Relations, said the meeting reflected US efforts "to maximise its political benefit domestically and minimise its negative impact on Sino-US relations". He said: "While using the encounter to show the Obama administration's concern over human rights in China, the White House is trying to avoid being trapped in controversy over the issue of China's sovereignty over Tibet." The Dalai Lama gave a speech to the American Enterprise Institute, a conservative think tank, in Washington on Thursday. He did not address the issue of Tibet, but stressed the general need for "compassion, tolerance and forgiveness" in the world.

Hong Kong*:  Feb 22 2014

[Mandarin was taught at my Catholic English Grammer School in Hong Kong in the 60s and 70s where Bernard Chan had also attended] Insight & Opinion at South China Morning Post: Cross-border integration is occurring naturally, all around us - Bernard Chan says better communication will benefit Hong Kong. Travellers crossing from Hong Kong to Shenzhen at the Lo Wu border checkpoint on January 24, 2014. Every so often, the Hong Kong press reports a language uproar. Maybe someone posts a clip of a class at a local university on YouTube, and a big fuss breaks out because the lecturer is speaking Putonghua. Or people protest because a restaurant produces a menu using simplified Chinese characters. The offenders are usually defensive. The university might point out that the class was in a postgraduate course in which up to 90 per cent of the students were from the mainland. The restaurant would apologise and hastily reprint the menu in traditional characters. No one points out that many of the textbooks for the university course are in English, or the menu has English and Japanese as well as Chinese. Even the government gets into trouble with these sensitivities. Critics recently attacked the Education Bureau after noticing that its website described Cantonese as "not an official language". The bureau quickly changed the page and apologised. What is government policy? Officials usually speak Cantonese, often with some English; they use Putonghua when speaking to mainland counterparts. Official documents in Chinese use traditional characters, and government websites appear in simplified as well as traditional versions. The official goal is for a "bi-literate and trilingual" population, reading Chinese and English, and speaking Cantonese, Putonghua and English. Public-sector schools mostly teach in Cantonese, using traditional characters. But - unlike in Singapore - there is no official policy to encourage Putonghua and simplified characters. Our officials do not dare try to influence how people speak. With so many other controversies, officials are happy to leave this issue alone. Most of our officials, like me, are Cantonese speakers who value our local culture. However, the community is adapting anyway. I hear young shop assistants speaking Putonghua far better than I can. International schools teach only that form of Chinese, and they do it using simplified characters. Many businesses and other institutions produce sales and other materials in simplified characters for mainland clients and audiences. These changes are taking place naturally and voluntarily. We are adapting to market and broader social forces. This is not about mainland shoppers. Many Hong Kong companies and other organisations are dealing with more and more mainland clients and partners - in sectors as varied as financial services, IT, leisure, education, personal care, the law, consulting, art, entertainment and many others. They range from small start-ups to multinationals. And, of course, we have growing numbers of Hong Kong people living and working on the mainland, and a rising number of cross-border marriages. These are natural and positive forms of integration. They are signs that people on both sides of the border are getting closer - as you would expect in a city on the coast of a large, fast-emerging economic power. I expect the sensitivity and complaints about the use of Putonghua and simplified characters in Hong Kong are related to the phenomenon of mainland shoppers. This huge influx is the result of market distortions - differences in tax levels and perceived product safety standards. It is on such a large scale that it is inconveniencing local people. It is understandable under these circumstances if some people feel that they and their culture are being swamped. However, being able to communicate better across the border will help Hong Kong, not threaten it. That applies not only to our economy, but to our local language and culture. Bernard Chan is a member of the Executive Council

 China*:  Feb 22 2014

South China Morning Post: Anti-Chinese backlash inspired axing of Canada's investor scheme, says critic (By Ian Young in Vancouver) Canada’s government has been accused of pandering to anti-mainlander sentiment by axing its millionaire migration scheme, which has brought tens of thousands of rich Chinese to the country. Members of the Chinese business community in Vancouver, where most wealthy mainlanders settle, lashed out at last week’s surprise announcement in Finance Minister Jim Flaherty’s budget which resulted in 65,000 would-be immigrants having their visa applications scrapped. The government justified terminating the 28-year-old Immigrant Investor Programme by saying arrivals under the scheme paid far less tax than other economic-based migrants, and that the programme was riddled with fraudulent applications. But Gabriel Yiu, a community activist co-ordinating opposition to the move, on Wednesday accused the Conservative government of “smearing” investor migrants as it tried to capitalise on a growing backlash against the influx of mainland millionaires. About 37,000 investor migrants have settled in Vancouver since 2005, 66 per cent of them mainland Chinese. “Before they cancelled the scheme, I have already talked to people and there is a backlash against mainland wealthy immigrants, not just in mainstream society but within the Chinese community,” he said. Yiu said that the innocent would-be immigrants dumped from the queue were paying to price for this pandering. “This is so unfair.” Under the scheme, applicants worth a minimum of C$1.6 million (HK$11.3 million) would loan the government C$800,000 for five years in return for residency visas for them and their family, with the option later of applying for Canadian citizenship. The axed scheme has brought about 185,000 migrants to Canada, including about 30,000 rich Hongkongers, mainly in the run-up to the 1997 handover. But the scheme has recently been dominated by mainland Chinese, who made up 86 per cent of all applicants in 2011. About 67,000 mainlanders have migrated to Canada under the IIP, with an estimated 45,000 to 50,000 others now dumped from queue. Resentment - Hong Kong-born Yiu said he understood why some resented the rich newcomers. “Sometimes I feel that way too. We don’t like to see people driving that huge expensive car, or buying big houses, but this is a free country,” said Yiu, who has previously stood as a candidate for the opposition New Democratic Party. “They are able to do what they do because the government allows them to do it. But the government should not punish those who follow the rules and our system.” If the government had wanted to raise the admission criteria “I would have had no problem with that”, he added. Yiu organised a press conference in Vancouver’s Chinatown on Tuesday in which immigrants who used the scheme said the city’s Chinese community had been insulted by the lack of consultation over the decision. Chinese migrant Charlie Zhang said at least one business deal he was planning had fallen through because of the government’s decision. He told the press conference at the Floata Chinese restaurant that his would-be business partner in China had last week decided not to come to Canada. “When we close our business, our factory, in China and come here we have already lost a lot,” Zhang was quoted as saying by The Globe and Mail newspaper. “This is bad for investment.” Disputing assessment - In a press release issued after Flaherty’s announcement last Tuesday, Citizenship and Immigration Canada said that over a 20-year career, “an immigrant investor pays about C$200,000 less in income taxes than a federal skilled worker and almost C$100,000 less in taxes than one live-in caregiver”. “The current IIP provides limited economic benefit to Canada. Research shows that immigrant investors pay less in taxes than other economic immigrants, are less likely to stay in Canada over the medium- to long-term and often lack the skills, including official language proficiency, to integrate as well as other immigrants from the same countries,” the CIC release said. But Yiu said the government’s assessment of investor immigrants’ tax contribution was “total nonsense” based on a “discredited” study by the conservative Fraser Institute. Yiu said that instead of axing the entire class of immigrants, the government should have focussed on catching tax cheats. “Instead the entire class is labelled ‘tax cheater’,” he said. Flaherty’s announcement that the scheme was being scrapped came in spite of a pledge by former immigration minister Jason Kenney in January last year that the government was “not contemplating legislative measures” to deal with the backlog. The decision to scrap the programme came less than a week after the South China Morning Post began publishing an investigation into the scheme which revealed how the Canadian consulate in Hong Kong had been overwhelmed by applications by tens of thousands of mainland millionaires, forcing applications to be halted worldwide in 2012. The Post‘s reports, based on internal immigration department documents, also showed more than 45,000 rich Chinese were in the backlog queue awaiting approval of their applications to move to British Columbia, as of January last year.

[Chinese and China Bashing by US Leadership and News Media with strong ties to Washington DC, Trade Unions and Defense Contractors influence American polls result] Most Americans view China unfavorably but respect its economic power, global poll finds (By Jeremy Blum jeremy.blum@scmp.com) According to a Gallup poll, 52 per cent of Americans see China's economy as a threat to US interests over the next ten years - A worker hoists an US flag in Tiananmen Square, ahead of a visit by US President Barack Obama in Beijing. A recent poll has indicated that the majority of Americans hold an unfavourable view towards China but recognise the country as the world’s leading economic power. These results come from a February 6-9 poll conducted by the World Affairs department of Gallup, a research-based consulting company. Gallup carried out the poll by interviewing over 1,000 adults living across the United States by phone. 43 per cent of those interviewed said that they perceive China favorably, while 53 per cent said they had an unfavorable opinion of the country. 52 per cent said that they respected and recognised China as the world’s leading economic power, while only 31 per cent said the same of the United States. Gallup’s poll also found that 52 per cent of Americans were more likely to see China’s economy as a threat to US interests over the next decade, versus 46 per cent who perceived its military as the greater danger. “[These results] suggest that, for now, US residents see China’s growing influence through more of an economic lens,” wrote Andrew Durgan, an analyst for Gallup. “[In 2011], just one in ten Americans named China as the superior economic power; now, a reliable majority do.” “This is likely attributable to China’s impressive economic performance over the last 13 years – its economy often growing by double digits over this time span – and the United States’ often underwhelming, crisis-ridden economy.” According to Durgan, while many Americans may feel threatened by China’s tremendous economic growth, just as many are likely to view the rise of China as “an opportunity”. “Opinions of China have softened from lows observed during Tiananmen Squre and other tense moments in Sino-American relations,” Durgan wrote. “And despite their generally unfavorable views of China, more Americans see China as a friend or an ally, rather than an enemy. “How American public opinion shifts with regard to this rising Asian power will continue to measure which possibility – opportunity or danger – Americans believe is more the reality.” Gallup has been polling Americans on their opinion of China since 1979 – a time when, notably, 64 per cent of US residents said that they had a favorable view of the country. These poll results generally saw no major change until June 1989, when news coverage of Tiananmen Square protests caused Americans’ positive opinion of China to fall to 34 per cent.

Neighbors keen to open trade corridor (By Li Xiaokun and Mo Jingxi) Leaders call for work to be sped up on multibillion dollar project with Pakistan - China and Pakistan signed agreements for energy and infrastructure projects on Wednesday as they vowed to soon give "practical shape" to a trade and transport corridor linking the neighbors. President Xi Jinping accompanies his Pakistani counterpart Mamnoon Hussain at a welcoming ceremony in Beijing on Wednesday. The documents were signed after a meeting between President Xi Jinping and visiting Pakistani President Mamnoon Hussain, who is on his first official overseas visit since assuming office in September. Among the papers signed are memorandums of understanding on construction on the new Gwadar international airport, upgrading part of the Karakorum highway linking the nations and establishing a joint research center for hydropower technology. The Wall Street Journal assessed the value of the agreements at $20 billion. Without confirming the figure, Luo Zhaohui, director of the Department of Asian Affairs at the Foreign Ministry, told China Daily the final amount depends on the implementation. China shares a 600-kilometer border with Pakistan. The multibillion dollar economic corridor project connecting Kashgar in China’s Xinjiang Uygur autonomous region to the port of Gwadar in Southwest Pakistan was proposed during Premier Li Keqiang’s visit to Islamabad in May. "The leaders of China and Pakistan urged relevant offices on both sides to speed up work on the economic corridor," said a joint statement issued after the presidents met. It says they should work to ensure the corridor "starts to take practical shape soon and yields tangible benefits". "Friendship with China is the most important pillar of our foreign policy and security policy," Hussain told Xi, adding that all political parties in his country support the unique friendship with China. "China will, as always, view its relations with Pakistan from a strategic height and a long-term angle, and make the relationship a priority of neighborhood diplomacy," Xi said. Luo Zhaohui said the nations also reached consensus on developing Pakistan’s energy industry, which he described as the country’s "bottleneck". In the joint statement, China assured Pakistan of "its full support" in helping the latter address its energy deficit. China will continue to support investments by its companies in Pakistan’s conventional and renewable energy sectors, the paper said.

Hong Kong*:  Feb 21 2014

Hong Kong jewellers keen on Qianhai site for precious metal warehouse (By Enoch Yiu enoch.yiu@scmp.com) Gold bourse plans to invest HK$1b to develop warehouse with capacity to store 1,500 tonnes - The Chinese Gold & Silver Exchange Society is prepared to spend at least HK$1 billion to set up its metal warehouse in Qianhai, president Haywood Cheung Tak-hay told the South China Morning Post yesterday. He said the funds would be in the form of bond offerings to its 171 members such as Chow Tai Fook, Chow Sang Sang and Luk Fook. "Society members, who include all gold jewellery makers and retailers in Hong Kong, support the planned project in Qianhai. We could easily raise HK$1 billion for the construction cost for the warehouse and related facilities," Cheung said. The 103-year old gold bourse submitted the plan to authorities in Qianhai in December and received a positive response. A working group that includes Qianhai authorities and some exchange members has been set up to discuss the details. Cheung wanted the warehouse to have a capacity of 1,500 tonnes. A key issue, Cheung said, is for the warehouse to be given special status by Beijing so members can freely transfer gold and silver between Hong Kong and Qianhai. China still has capital controls and only 11 mainland banks are allowed to import gold. "Hong Kong retail jewellery [stores] such as Chow Tai Fook, Chow Sang Sang and others have a combined 4,000 shops across the mainland. They have hundreds of jewellery factories in Shenzhen. If they can conduct the trading in Hong Kong and then transfer the gold in Qianhai to their factories in Shenzhen, that would save them transport and insurance costs," Cheung said. Qianhai, about an hour by car from Hong Kong, was named in July 2012 as a testing ground for the free flow of yuan and other policies to encourage overseas investment. "At present, many foreign gold investors dare not trade in China as there are too many restrictions. They prefer to trade in Hong Kong which is a free market. If we can have a Qianhai warehouse, it would further increase our attractiveness," said Cheung . World Gold Council data released on Tuesday showed mainlanders bought a record 1,066 tonnes of gold last year, up 32 per cent year on year.

 China*:  Feb 21 2014

China and Pakistan pave way for ‘economic corridor’ (By Associated Press in Beijing) Pakistan and China sign agreements to build a new airport and upgrade the fabled Karakorum Highway - Longtime allies Pakistan and China signed agreements on Wednesday to build a new airport and upgrade the fabled Karakorum Highway as part of efforts to build an “economic corridor” through rugged mountains and regions torn by insurgent violence. The signings followed a summit in Beijing between Pakistani President Mamnoon Hussain and Chinese leader Xi Jinping that underscored close ties between the neighbours. “Friendship with China is the most important pillar of our foreign policy and security policy,” Hussain said in brief comments at the start of their meeting, which followed a formal welcoming ceremony at Beijing’s Great Hall of the People. Xi said “the Chinese people cherish a profound friendship with the people of Pakistan.” While Islamabad and Beijing have long found common cause in opposing mutual rival India and co-operate closely in military and diplomatic affairs, economic ties have lagged. That’s largely a result of Pakistan’s poorly functioning government and lack of basic infrastructure such as power plants for generating electricity, something Pakistan is looking to China for help improving. Two-way trade exceeded US$12 billion for the first time in 2012, a tiny fraction of China’s overall commerce with the world. The planned economic corridor will incorporate a 2,000-kilometre transport link connecting Kashgar in northwestern China to the little-used Pakistani port of Gwadar on the Arabian Sea near the border with Iran. That could at some point include a railway and oil pipeline. The project received a major boost when control of Gwadar was transferred to China’s state-owned China Overseas Ports Holding in February last year. Built by Chinese workers and opened in 2007, Gwadar is undergoing a major expansion to turn it into a full-fledged, deep-water commercial port. One of the agreements signed on Wednesday was a preliminary accord for constructing an international airport at Gwadar. Another was for upgrading a section of the 1,300-kilometre Karakorum Highway connecting to Islamabad. The sides last year already agreed to build a fibre-optic cable to be laid from the Chinese border to the Pakistani city of Rawalpindi which will boost Pakistan’s access to international communications networks. China is to provide 85 per cent of the financing for the three-year project’s US$44 million budget, with Pakistan covering the rest. If the corridor project takes off, oil from the Middle East could be offloaded at Gwadar, which is located just outside the mouth of the Persian Gulf, and transported to China through the lawless Baluchistan province in Pakistan and over the towering Karakoram mountains. Such a link would vastly cut the 12,000-kilometre route that Mideast oil supplies must now take to reach Chinese ports.

Hong Kong*:  Feb 20 2014

Hong Kong government considers plan to cram in more people (By Peggy Sito peggy.sito@scmp.com) Proposal involves raising density levels by 20pc in some areas, which would be above the maximum allowed in many major world cities - The population density in Hong Kong, already the highest in the world in some districts, is set to go even higher. Under a proposal before the government, the plot ratio - the total built area of a development divided by the total site area - is to be increased by 20 per cent or more in some urban areas and new towns, which will raise living density above the maximum allowable in housing developments in the world's major cities. The plot ratio for Hong Kong's high-rise residential developments in urban districts ranges from five to 10 times, according to Thomas Lam, head of research and consultancy for Greater China at property consultancy Knight Frank. Plot ratios, also known elsewhere in the world as floor area ratios or floor space ratios, are tools employed by urban planners to control development intensity. "Hong Kong's ratio is similar to that of New York's downtown district, which has a floor area ratio of between six to 10 times," Lam said. But it is higher than London's ratio, which ranges from as low as one to as high as six times; and Shanghai's 1.6 to 2.5 times. Singapore, a long-time rival of Hong Kong for attracting businesses, has a low plot ratio of 2.2 to four times. While admitting that "exact" comparisons of plot ratios or floor area ratios was not possible, since the development intensity was calculated in different ways in different cities, Lam noted that the government of Singapore tended to favour lower development intensities to enhance the quality of living spaces, unlike the policy trend in Hong Kong. He voiced concerns that Hong Kong's overworked public transport network and power utilities might struggle to cope with an even higher population density. The proposal to increase development intensity was announced by Chief Executive Leung Chun-ying in his second policy address speech on January 15. Under the proposal, the government is considering increasing the plot ratio of sites at medium and low-density locations in urban areas and new towns by 20 per cent. In some cases ratios on existing buildings that were only three storeys high may be relaxed to allow six storeys, Secretary for Development, Paul Chan Mo-po noted in his blog last month. Chan said in the blog that the government was aware of the concerns created by the proposed increases in living density and would take into account the circumstances and considerations of individual sites to ensure the provision of adequate transport infrastructure, utilities, services, and community facilities. Kim Chan Kim-on, a fellow at the Hong Kong Institute of Planners, said the plan to raise the plot ratio was the most readily achievable way to increase housing supply in the short-term aside from land reclamation or development in country parks. He said the negative effects of density could be mitigated by the design and layout of developments, and the creation of open spaces and traffic and community facilities. For example, more sky gardens could be built in ways to create a sensation of less crowding, Chan said.

 China*:  Feb 20 2014

Looking familiar? Award-winning US designer gives CCTV nightly news show 'international' look (By SCMP) The studio of CCTV’s flagship news programme has been given an “international” facelift by a famous US set designer to propel it into the ranks of broadcasters such as the BBC. The studio of CCTV has been given an “international” facelift by a famous US set designer Jim Fenhagen. The studio of CCTV’s flagship news programme has been given an “international” facelift by a famous US set designer to propel it into the ranks of broadcasters such as the BBC. After a global search, multiple Emmy-winner Jim Fenhagen was brought in to redesign the set of Xinwen Lianbo, which broadcasts daily from the iconic CCTV building in Beijing and has more than 100 million viewers. He designed the sets of Good Morning America, The Colbert Report and The Daily Show which broadcast in the US and was tasked with bringing the state broadcaster up to their level. “They wanted to be on a par with the BBC, CNN, and Sky News – to be cutting-edge and to be an equal,” Fenhagen told Fast Company magazine. “Money wasn’t the defining issue. They wanted the most contemporary tools and an ‘international style’, not a Chinese look.” He added: “We offered them designs referencing Chinese culture, but they were rejected.” The set uses the most cutting edge LED technology – high-resolution screens with 2.5mm pixels LEDs. Before, the highest resolution screens had 4mm pixels. “Screens with 2.5 mm pixels are unbelievably crisp and very, very expensive,” Fenhagen said. A glass wall allows viewers to see straight into the newsroom where 70 journalists work. Fenhagen said modern design incorporated many right angles, but his Chinese client preferred circles, which he put down to their “symbolic meaning of prosperity, the ongoing cycle of life, yin and yang”. His company, Jack Morton Worldwide, which has an office in Beijing, was first commissioned to design a bureau in Nairobi, Kenya, as a test. Fenhagen said more complicated parts of the set were built in New Jersey and shipped to China as local expertise was not available. He also had to negotiate the building’s fire code, which shuts down electricity at night, as LEDs are never turned off. But some Weibo users were sceptical of the style revamp to the program. “The new design will beat US broadcasters, but the news content it broadcasts will only outrun North Korea’s,” Xu Xunlei wrote. Viewers can see the new set later this spring.

Hong Kong*:  Feb 19 2014

Hong Kong needs to develop global network to maintain its leading role in yuan business (By Enoch Yiu enoch.yiu@scmp.com) "It is unrealistic for one to expect a long-standing monopoly by Hong Kong on the world’s offshore yuan business," Norman Chan wrote. Hong Kong must play an active role in developing an international network for cross-border business in the yuan if it is to maintain its leadership in a global market for the currency that could grow by 300 per cent over the next decade, Hong Kong Monetary Authority chief executive Norman Chan Tak-lam said. The city’s central banker warned local lenders to gear up to cope with the challenges ahead, as the city is losing its long-standing monopoly in the offshore yuan business. Chan’s warning came in an article he wrote on Tuesday for the South China Morning Post, a week before Hong Kong’s banks mark 10 years since they were first allowed to conduct business in yuan for individuals. “While Hong Kong now accounts for 70 per cent of the offshore yuan deposits and payment transactions globally, I think that Hong Kong will not, and should not, hold such a big share forever,” Chan wrote. “If the scale of yuan activities of overseas enterprises and banks remains trivial, they would have little demand for financing and correspondent banking services offered by Hong Kong banks. “In other words, it is unrealistic for one to expect a long-standing monopoly by Hong Kong on the world’s offshore yuan business.” Hong Kong’s banks retain exclusive rights to conduct business in yuan that the State Council approved in November 2003 as a way to boost the city’s economy, which was hit hard by the outbreak of severe acute respiratory syndrome earlier that year. In July 2009, China began its campaign to internationalise its currency. First, firms were allowed to use the yuan to settle trades, then from 2010 to make investments denominated in the currency. But to realise the country’s ambition of having the yuan used globally and ultimately as a reserve currency, since 2012 Beijing has allowed other financial centres, such as London, Singapore and Sydney, to enter the offshore yuan business. However, Chan said, Hong Kong is so close to the mainland that “such intrinsic advantage will not erode simply because of the introduction of yuan business in other places”. At present, 60 per cent of foreign direct investment in the mainland flows in from Hong Kong, and 30 per cent of the mainland’s exports are handled by the city. “But there is no place for complacency. Nor can we lose faith in ourselves,” Chan wrote. “As everyone in Hong Kong keeps up with the efforts to strengthen Hong Kong’s yuan business links with the mainland and overseas, thereby entrenching our role as a global hub, I see very flourishing prospects for Hong Kong as an offshore renminbi business centre.” He predicted trade settlement in the yuan, also known as the renminbi, will increase by between 100 per cent and 300 per cent in the next five to 10 years and will match that in the yen and the euro. That will mean up to 60 per cent of all mainland trade will be settled in yuan, four times the 15 per cent at present. “As China continues its reform and further liberalisation of capital account and yuan convertibility, there does not seem to be any particular reason that yuan in the mainland’s bilateral trade cannot reach that of the yen or the euro in five to 10 years,” Chan said. Christopher Cheung Wah-fung, legislator for the financial services sector, said the yuan has been widely use in trade but has still a long way to be an investment or reserve currency. “China still has not opened its capital market widely, while Hong Kong people can still only exchange up to 20,000 yuan a day. This discourages investors from trading in yuan products, while companies are also reluctant to launch yuan funds or yuan shares,” Cheung said. “If China wants the yuan to become an investment currency like the US dollar, it has to open up its investment market further. First, it should remove the 20,000 yuan daily exchange cap as soon as possible.”

 China*:  Feb 19 2014

KMT's Lien Chan to meet Xi as Beijing softens tone on summit talk (By Andrea Chen andrea.chen@scmp.com) Kuomintang honorary chairman Lien Chan will have second dialogue with President Xi Jinping amid rising hopes for Xi-Ma summit talk - Taiwan's Lien Chan speaks to the media in Taipei before his departure to Beijing yesterday for a four-day visit. Communist Party general secretary Xi Jinping meets Lien Chan, honorary chairman of Taiwan's ruling Kuomintang, today - hot on the heels of the first government-to-government talks between Beijing and Taipei straits since the end of the Chinese civil war. Lien arrived in Beijing yesterday for a four-day visit at the head of an 80-strong delegation. The two leaders will meet today in their capacities as party leaders. Their talks will be the second the pair have held. Xi vowed to push for peaceful reunification in their first talks in Beijing last February after he took over as Communist Party leader. Lien said his visit had "no political mission" and that a meeting between Xi and his Taiwanese counterpart, Ma Ying-jeou, was not on his agenda. Beijing yesterday adopted a softer tone about the prospects of talks between Xi and Ma. Fan Liqing , spokeswoman for the mainland's Taiwan Affairs Office, said Beijing held a "positive attitude" towards Xi and Ma holding talks, despite its chairman Zhang Zhijun's statement last week ruling out the possibility of such a meeting at the upcoming Asia-Pacific Economic Co-operation (Apec) summit. Taiwan's mainland affairs minister, Wang Yu-chi, said on Friday that Zhang had called the proposal to hold such talks during the summit inappropriate. Yesterday Fan said all attendees should be subject to the 1991 Memorandum between China and Apec, which stipulates that Taiwan should be seen as a regional economic entity at the summit and attend under the name of "Chinese Taipei". But Professor Jean-Pierre Cabestan, head of the political science department at Hong Kong Baptist University, said Fan's words were merely a kind gesture to "give hope" to Ma, who wanted Beijing to approve his participation in the summit. Taiwan has long been represented by its business leaders at the Apec summit. Its political leaders are barred because of Beijing's objections that Taiwan is a breakaway Chinese province. "Beijing is not in a hurry," he said. "Even if they (Beijing) would like to hold the dialogue, it is not going to happen any sooner than next year, since Ma's second term will not end until 2016." Researcher Alex Chang Chuan-hsien, of the Taipei-based Academia Sinica, agreed, saying Beijing had "thrown the ball back to Ma". It was now up to Ma to decide what he was willing to compromise on to attend an international summit, he said.

Hong Kong*:  Feb 18 2014

South China Morning Post: Senior ministers condemn 'humiliation' of mainland visitors at protest 譴責抗議'羞辱'內地遊客 (By Phila Siu phila.siu@scmp.com) 100 protesters, who were calling for visitor numbers from mainland to be limited, hurled abuse at shoppers on Canton Road, forcing some stores to close [China's Vice-Premier Wang Yang in May 2013 acknowledged that "uncivilised behaviour" by its citizens abroad was harming the country's image. He cited "talking loudly in public places, jaywalking, spitting and wilfully carving characters on items in scenic zones". Destination countries have been easing visa restrictions to attract more tourists from China, but reports have emerged of complaints about etiquette.] A protester holds up a placard during Sunday's march, where demonstrators chanted 'go back to China'. Senior government officials have condemned Sunday’s “anti-locust” protest, saying that the “regrettable” event had "humiliated" mainland visitors and had tarnished the city’s international image. “The harassment of the tourists on Canton Road is very regrettable. We strongly condemn this sort of action,” Secretary for Commerce and Economic Development Greg So Kam-leung said on Monday morning. “Hong Kong has been very friendly not only to our tourists, but to other people conducting business here. This sort of harassment should not be repeated in Hong Kong,” the minister said. On Sunday some 100 protesters demanded that the government curb the number of mainland visitors coming to the city. The protesters said a massive influx of mainland visitors – dubbed “locusts” by opponents, who accuse them of overwhelming the city and hogging its resources – had made life more difficult for locals. The group marched from the Star Ferry pier to Canton Road, a street lined with luxury stores popular with mainland tourists. Scuffles broke out between the demonstrators and passers-by opposed to the march, forcing police to intervene. “The government understands that growth in the number of tourists has a certain level of impact on the lives of Hongkongers,” So said. “But tourism has contributed a lot in creating job opportunities. It makes up about 4.5 per cent of our economy.” In 2011 tourism made up 4.5 per cent of the city’s GDP. Secretary for Security Lai Tung-kwok condemned the “humiliation” of mainland visitors and the fact that some shops on Canton Road were forced to close. “The protesters have affected the business activities in the area, as well as the public’s activities there,” he said on Monday. Lai said the police will handle the incident according to the city’s laws, and will take “relevant action” if they find evidence of illegality. He refused to say if he believed arrests would be made. Secretary for Constitutional and Mainland Affairs Raymond Tam Chi-yuen said he was “shocked” when he saw images of the protest on television. Tourism from the mainland has boomed as the city’s economy has grown and rules forcing visitors to join tour groups have been eased. Some 40.8 million mainland visitors arrived to Hong Kong last year.

Former HKMA chief urges Beijing to adopt US-style policy rate to boost efficiency (By Kanis Li kanis.li@scmp.com) Joseph Yam urges PBOC to help improve the banking system by ditching the required reserve ratio - Beijing should phase out its use of the required reserve ratio and instead adopt an American-style policy rate to make capital allocation in the banking system more efficient, according to former Hong Kong Monetary Authority (HKMA) chief Joseph Yam. Yam, who was the head of the city’s de facto central bank from 1993 to 2011, suggested in a research paper he authored that Beijing should change the way it managed its money supply and reduce administrative impact on liquidity in the mainland’s banking system. “I think it is time that China’s central bank should formally change its way of dealing with the money supply target and how it conducts monetary policy,” Yam, now a professor at the Chinese University of Hong Kong, said in a media briefing on Monday. The required reserve ratio (RRR) – which determines how much cash banks should keep on hand, usually as a buffer against economic downswings, and which affects a country’s money supply – should be eventually replaced by a policy interest rate to allow the People’s Bank of China, the country’s central bank, to enhance liquidity efficiency in the banking system, Yam said. The use of a policy interest rate, as practiced in the United States and many European countries, can help reduce the volatility of the Shanghai Interbank Offered Rate (Shibor) as the policy rate itself can reflect the central bank’s attitude on monetary policy, said Yam. A policy rate would send a clearer message about the central bank’s intended course, he said. For instance, when the rate is lower, the government tends to have a loosening policy, and vice versa. Shibor, modelled after the more globally accepted London Interbank Offered Rate (Libor) scheme, was chosen as part of Beijing’s ambitions to make its rate system more market-oriented. All the other interest rates that the PBOC determines – including the set of lending rates applicable to its loans to banks, along with the interest rate on reserves and excess reserves – should gradually be abolished, Yam said in the research paper. He also said the measure could head off the impact of business lost to shadow banking, which some might prefer to formal banking channels amid a downturn. Setting a policy rate could help reduce the gap between interest rates of loans and deposits, attracting borrowers back to the formal banking sector, he said. Yam said his recommendation applied to the entire mainland banking system, and not just testing grounds such as the Shanghai free-trade zone. Yam, an executive vice-president of the China Society for Finance and Banking under the PBOC, last year penned a research report on a proposal to review the currency-peg system in Hong Kong. His report last year about the Hong Kong dollar peg quickly caused market speculation, eventually prompting the HKMA to clarify that there was no need for any measures to cool speculative money inflows, which banked on Hong Kong dollar appreciation in case the currency would be re-pegged to the yuan as some analysts had suggested. When asked for comment on whether there was a need for such a change, Yam declined to comment on Monday.

 China*:  Feb 18 2014

China concerned by reports of Japan holding weapons-grade plutonium (By Reuters in Beijing) Chinese Foreign Ministry spokeswoman Hua Chunying said Japan should 'rigorously respect its international commitments to nuclear safety and non-proliferation'. China said on Monday it was “extremely concerned” by a report that Japan has resisted returning to the United States more than 300 kg of mostly weapons-grade plutonium, the latest dispute between the two Asian neighbours. Japan’s Kyodo news agency said that Washington had pressed Japan to give back the nuclear material which could be used to make up to 50 nuclear bombs. Japan had resisted, but finally given in to US demands, it added. The material was bought for research purposes during the 1960s and the two governments will likely reach an official agreement on its return at the Nuclear Security Summit at The Hague in March, an official at Japan’s Education Ministry said. China is involved in a bitter territorial dispute with Japan and has warned Japan is trying to re-arm. “China believes that Japan, as a signatory to the Non-Proliferation Treaty, ought to rigorously respect its international commitments to nuclear safety and non-proliferation,” Chinese Foreign Ministry spokeswoman Hua Chunying told a daily news briefing. “For a long time, Japan has not returned the stored nuclear materials to the relevant country, which has caused concern in the international community. China is of course very concerned.” Japan, the world’s only victim of nuclear attacks in the final stages of the second world war, does not have nuclear weapons, unlike China, and it is the government’s stance that it will not obtain them. Deteriorating relations between Beijing and Tokyo have been fuelled by a row over a chain of uninhabited islands in the East China Sea. Ships from both countries frequently shadow each other around the islets, raising fears of a clash. Ties have worsened further since China’s creation of an air defence identification zone over the East China Sea and Japanese Prime Minister Shinzo Abe’s visit to the controversial Yasukuni Shrine honouring war criminals among Japan’s war dead.

China keen to set meeting with Taiwan president but in no rush (By Reuters in Beijing) China said it was keen on a meeting between Taiwan President Ma Ying-jeou and President Xi Jinping China said on Monday it was keen on a meeting between President Xi Jinping and Taiwan President Ma Ying-jeou, but signalled it was in no rush to set a venue or timeframe for what would be a historic get-together. Since taking office in 2008, Ma has signed a series of landmark trade and economic agreements with China, cementing China’s position as Taiwan’s largest trading partner. But Taiwan said last week that China had rebuffed as “inappropriate” a request for the two men to meet at an Asia-Pacific Economic Cooperation (Apec) summit in Beijing. Fan Liqing, spokeswoman of China’s Taiwan Affairs Office, told reporters the subject of a Xi-Ma summit was “not a topic for discussion” during last week’s landmark meeting between top Chinese and Taiwan government officials. That meeting was an important step in pushing overall cross-Strait relations, she said, adding that further steps would follow, promising to benefit people on both sides of the Taiwan Strait. “As for a meeting between the leaders on both sides of the Strait, we have said many times that this is something we have upheld for many years, and we have always had an open, positive attitude towards it,” Fan said. “Compatriots on both sides of the Strait all hope that the leaders can meet.” She declined to elaborate on the topic of an appropriate venue for the two presidents to meet, adding, “Apec has its own rules, which should be handled in accordance with the memorandums of understandings.” China and Taiwan have been ruled separately since Nationalist forces, defeated by the Communists, fled to the island at the end of the Chinese civil war in 1949. China considers Taiwan a renegade province and has never ruled out the use of force to bring it under its control. But in recent years the two sides have built up extensive economic ties, and last week they held their first direct government-to-government talks, a big step towards expanding cross-strait dialogue beyond trade. Yet booming trade has not brought progress on political reconciliation or reduced military readiness on either side. Many in democratic Taiwan fear autocratic China’s designs for their free-wheeling island. In October, Xi told Ma’s envoy to last year’s Apec summit, Vincent Siew, that a political solution to the standoff between China and Taiwan could not be postponed forever. But Ma later said he saw no urgency to hold political talks and he wanted to focus on trade.

Hong Kong*:  Feb 17 2014

渣打香港馬拉松2014直擊 Standard Chartered Hong Kong Marathon on Feb 16 2014  http://www.youtube.com/watch?v=5cUqcweSOrE 

Ethiopian Gemeda Feyera wins Hong Kong Marathon as 64,000 runners take to the streets (By Alvin Sallay and SCMP staff reporters) Gemeda Feyera of Ethiopia wins the men's marathon at the Standard Chartered Hong Kong Marathon on Sunday morning. Gemeda Feyera of Ethiopia raced clear to win the men’s marathon at the Standard Chartered Hong Kong Marathon on Sunday morning. Feyera finished in 2:15.05, beating compatriot Abdisa Bedada Sori (2:15.11) and Elisha Kiprop Barno of Kenya (2:15.12). Twenty-three runners were sent to hospital, with nine discharged by 11:30am. "I’m thrilled for I only started running marathons four years ago and this is the biggest win of my career,” said Feyera, who will take home a purse of US$65,000. “That is enough to change our lives,” said second-placed Bedada, a close friend of Feyera with both hailing from the city of Addis Ababa. “I tried to push forward and beat him but my legs were not willing. My hamstrings were hurting." Ethiopian runners filled the frame in the women’s marathon, with Rehima Kedir denying Misiker Demissie's bid to win the event for the third year in a row as she took the race in 2:34.53. Demissie, who only arrived in Hong Kong on Saturday after missing her scheduled flight from her training base in the United States, came home in 2:35:05, with Gemechu Debellu third in 2:35.18. Chinese student Wang Kun outduelled Kawarai Tsukasa of Japan in the run to the line to take the honours in the men’s half-marathon. After swapping the lead throughout the race, the 21-year-old shifted up a gear in the dying stages to win in 1:09.08. Tsukasa finished in 1:09.26, with Australian McIntyre Klarie third in 1:11.55. ln the women's half marathon, Hong Kong-based Australian Jane Richards took first in 1:26:05, followed by Karen Hung Shee-yeung (1:26:25) and Sarah Cheung Hoi-wah (1:26:59). The marathon was again bursting at the seams again with 73,201 runners from more than 40 countries registered to take part, but the number of no-shows – believed to be at least 8,000 – was expected to be even greater this year because of the cold and windy conditions. An estimated 64,000 took part, braving temperatures of around 12-14 degrees Celsius. Entries for the marathon were 14,379, the half marathon 22,798 and the 10km races 36,024. Clinton Mackevicius was the first major winner of the morning, returning to Hong Kong on the first anniversary of the death of his mother to win the men’s 10-kilometre race. “It was nice to come back and defend my title as it was also a special day for me,” said Mackevicius, who won in a time of 32 minutes and 22 seconds. It was more than two minutes slower than his winning time last year but the Australian was still pleased that at 35 he was able to hold off “the talented young bucks in Hong Kong”. “There is so much talent around here and I came up against a few this morning. It is nice to think that I can still hold my own,” laughed Mackevicius. “But my time was slower today due to the conditions which were very windy.” Hong Kong triathlete Ivan Lo Ching-hin pushed Mackevicius all the way after former national triathlete Daniel Lee Chi-wo had set the pace early, leading for the first three kilometres. Lo finished second overall in 32:59, while Lee faded to come in sixth in 33:21. The women’s overall category was won by Christy Yiu Kit-ching in 36:14, with Fan Ka-king behind her in 39:14. Priscilla Siu Wai-yue was third in 39:37. An 800-strong medical care team, including about 100 doctors and nurses, were on hand to treat runners. Representing the government at the start line was Secretary for Home Affairs Tsang Tak-sing after Chief Executive Leung Chun-ying turned down the invitation. He denied his unprecedented decision was down to a political beef with title sponsor Standard Chartered Bank. The city’s chief executive has officiated at every marathon since the handover, and Leung did the honours for the first time last year.

 China*:  Feb 17 2014

Asian cinema triumphs at Berlin film fest (By Agence France-Presse in Berlin) Actor Liao Fan director Diao Yinan and producer Qu pose with Silver Bear for Best Actor and Golden Bear for Best film after awards ceremony of 64th Berlinale International Film Festival in Berlin. Chinese film noir “Black Coal, Thin Ice” by Diao Yinan about a washed up ex-cop investigating a series of grisly murders won the Berlin film festival’s Golden Bear top prize Saturday. In a remarkably strong showing for Asian cinema, the stylish but gritty picture, whose Chinese title is Bai Ri Yan Huo, also captured the Silver Bear best actor award for its star Liao Fan. “It’s really hard to believe that this dream has come true which didn’t come true for such a long time,” Diao said as he accepted the trophy, fighting back tears. It was the first Chinese film to win in Berlin since the unconventional love story “Tuya De Hunshi” (Tuya’s Marriage) by Wang Quan’an brought home the gold. “Black Coal, Thin Ice” is set in the late 1990s in the frosty reaches of northern China and its murder mystery plot is told through enigmatic flashbacks. It is Diao’s third feature film. Liao said he put on 20 kilogrammes (44 pounds) to play the alcoholic suspended police officer who falls hard for a mysterious murder suspect (Gwei Lun Mei). He said he had celebrated his 40th birthday on Friday in Berlin. “I think this was the most wonderful present you could give me,” he said. The Berlinale, Europe’s first major film festival of the year, gave its best actress prize to Japan’s Haru Kuroki for her role as a discreet housemaid in wartime Tokyo in Yoji Yamada’s “The Little House” (Chiisai Ouchi). “I will take this happiness and joy for winning the prize back to Japan,” Kuroki said, wearing an elegant kimono. The second of three Chinese films in competition in Berlin, “Blind Massage” (Tui Na) featuring a cast made up in part of amateur blind actors, captured a Silver Bear prize for outstanding artistic contribution for cinematographer Zeng Jian. American films shared the glory, with Wes Anderson’s historical caper “The Grand Budapest Hotel” offering a nostalgic look back at a Europe lost to war claiming the runner-up Silver Bear grand jury prize. US actress Greta Gerwig, a member of the jury, read out a statement from Anderson who was not in Berlin for the awards. “This Silver Bear is the first both full-scale and genuinely metallic prize I have ever received from a film festival so I feel particularly honoured, moved and indeed thrilled to accept it,” he wrote. The picture starring Ralph Fiennes had opened the Berlinale on February 6. Texas filmmaker Richard Linklater, who shot his innovative coming-of-age drama “Boyhood” over more than a decade with the same actors and was widely tipped to take the Golden Bear, won best director. “This says best director but I want to think of it as best ensemble,” said Linklater, clutching the trophy. Best screenplay went to the German siblings Dietrich and Anna Brueggemann for their wrenching drama “Stations of the Cross” (Kreuzweg) about a teenager who makes the ultimate sacrifice for her fundamentalist Catholic family. Veteran French director Alain Resnais clinched the Alfred Bauer Prize for work of particular innovation for his play-within-a-film “Life of Riley” (Aimer, boire et chanter). A nine-member jury led by US producer James Schamus (“Brokeback Mountain”) handed out the prizes at a gala ceremony in the German capital. “Black Coal, Thin Ice” divided audiences in Berlin but won critical praise. Movie news website Indiewire noted buzz about the picture had been strong ahead of its screening “on the possibility of the film becoming that whitest of whales: a crossover Chinese-language international hit”. Industry magazine The Hollywood Reporter hailed it as “a salute to the classic Hollywood film noir, an exciting stylistic tour-de-force” but questioned its commercial prospects. Film business bible Variety called it a “bleak but powerful, carefully controlled detective thriller in which - as with all the best noirs - there are no real heroes or villains, only various states of compromise”. The 11-day festival wraps up Sunday with screenings of its most popular features from a lineup of more than 400 movies. Berlinale director Dieter Kosslick announced earlier that the event had had sold a record 330,000 tickets this year. On Thursday British director Ken Loach picked up an honourary Golden Bear for his life’s work.

Hong Kong*:  Feb 16 2014

Controversial plan to rezone Central harbourfront land for PLA dock gets green light (By Olga Wong and Stuart Lau) Town Planning Board unanimously approves proposal which means People's Liberation Army will decide when public can access prime 0.3 hectare site - A general view of the Central harbourfront site which will be handed over to the PLA for its military berth. The government is studying the need to amend a law to ensure the public can freely enjoy the military pier on the Central waterfront when it is not in use by the People's Liberation Army, sources close to the government said. Yesterday the government secured approval from the Town Planning Board to rezone the dock area of 0.3 hectares from open space to military use, ending a year-long process. Legal experts said the green light, given despite huge public opposition, would create management and enforcement problems. Amendments to the law were necessary to ensure a clear right of use, including protest, they said. The sources said the Security Bureau was studying the need to amend the Public Order Ordinance, under which a person entering any place occupied by the PLA must obtain a permit from the garrison's commander. The Security Bureau did not reply when asked if it was considering a legislative amendment. Eric Cheung Tat-ming, a principal law lecturer at the University of Hong Kong, said the ordinance did not deal with sometimes-military, sometimes- public land. It was also unclear if protests on the site would require the PLA's approval, he said. "It must be clarified under what circumstances the land will be classified as a closed area and when it is an open space," said Cheung, who is also a member of the Independent Police Complaints Council. Senior counsel Gladys Li said it was "procedurally flawed" that the government did not make necessary legislative changes prior to tabling the issue with the Town Planning Board. "It is very unclear who would be administering the site when it's for public access," she said. The unanimous decision by the board yesterday morning was criticised for ignoring a majority of public views. "It is a political decision ... it means the land would be ceded to the PLA," said lawmaker Kenneth Chan Ka-lok of the Civic Party. The board was flooded with more than 19,000 public comments after the government's rezoning application last February. Only 20 supported the rezoning., which will become officially effective when it secures approval from the Executive Council.

 China*:  Feb 16 2014

Mainland millionaires turning backs on Canada and looking to the US and Europe, say migration agencies (By Keith Zhai and Ernest Kao) Millionaires are looking elsewhere after axing of investor visa scheme, with the US and Europe the prime alternatives, migration agencies say - A rising number of wealthy Chinese are moving to the US and Europe because their once-favourite destination, Canada, has been scaling back entry, migration agents say. Hong Kong-based immigration consultants are also trying to provide would-be migrants with alternative programmes after the scrapping of Canada's investor visa scheme. Wang Pin, a Chinese-born Canadian, said he had to close his immigration consultancies in Toronto, Canada's largest city, and Shandong province last year when business shrank. "My firm has done badly over the past two years after applications to the Immigrant Investor Programme were frozen in 2012," said Wang. "For Canada, the advantage of attracting migrants is being lost as most Chinese want to move to other countries. They have to wait for an uncertain time if they choose Canada." The Canadian government on Tuesday officially terminated the controversial investor visa scheme, which has allowed Chinese millionaires to emigrate since 1986. About 45,000 mainland applications in the waiting list for visas will no longer be processed and applicants will have their fees refunded. "I think I made a good choice," said Hu Xiaofeng, a Zhejiang banker who obtained permanent residency in the US last year through an investment program. "I wanted to move to Canada, but my agent told me the process was more complicated and the chances of obtaining Canadian residency status were slim." Despite Canada being his first choice, Hu said there was little difference between Canada and the US. "The important thing is to move away. I don't speak English so the destination really doesn't matter," he said. The US has been promoting its investor scheme in China and allows foreigners to invest a minimum of US$500,000 in exchange for a green card. At the same time, European countries have become more popular destinations by providing incentives to attract investment from rich Chinese after the global financial crisis in 2008. But the US investor immigrant scheme, known as the EB-5 visa, may be the biggest immediate beneficiary of Chinese investors who had previously been flocking to Canada. But the US investor immigrant scheme, known as the EB-5 visa, may be the biggest immediate beneficiary of Chinese investors who had previously been flocking to Canada. "It will be a windfall for the US," said immigration lawyer Eugene Chow, principal of law firm Chow King & Associates. He said: "The programme, which had previously been met with a yawn because of onerous eligibility requirements, has suddenly taken off." More than 80 per cent of the 6,500 applications filed for the EB-5 visa in the current financial year were from mainland investors, he added. Civitas Capital Group CEO Daniel Healy said the EB-5 scheme was virtually "unknown" just three years ago. But he added: "Demand for permanent residency in the US through investment is exceeding supply now ... this fiscal year is likely to be the first where the programme will max its quota." Other beneficiaries of the Canadian scheme's closure include Portugal, where non-EU citizens can obtain "golden residence permits" for just €1 million (HK$10.6 million) in capital investment or €500,000 in any type of real estate. Greece offers five-year residency visas to anyone investing €250,000 in real estate, while Cyprus offers residency visas for €300,000. Australia is another popular alternative to Canada, especially after Canberra started a programme in 2012 that gives permanent residency to anyone investing A$5 million (HK$35 million). At least 65 per cent of Australian "significant investor" visas had been granted to mainlanders and 91 per cent of the 545 applicants for the permits since the scheme began just over a year ago were Chinese nationals, according to figures from the Australian Department of Immigration and Border Protection.

Hong Kong*:  Feb 15 2014

South China Morning Post: 陳志雲說 電台主持人李煒玲的指責“可笑” Sacked radio host Li Wei-ling’s accusations ‘ridiculous’, says Stephen Chan (By Stuart Lau stuart.lau@scmp.com) Commercial Radio chief adviser Stephen Chan Chi-wan on the morning show "On a Clear Day". Commercial Radio chief adviser Stephen Chan Chi-wan on Friday hit back at sacked host Li Wei-ling, saying her allegations relating to her dismissal were “ridiculous”. But Chan, who switched roles from chief executive this week, said he would advise the company to explain on the outspoken host’s dismissal. He had earlier refused to say how he would advise the station. Li, who was sacked on Wednesday, accuses of the radio station of bowing to suppression by the Leung Chun-ying’s government. She said on Thursday Chan told her he believed justice chiefs were motivated by politics when they appealed against his acquittal on bribery charges within hours of him being cleared in March. The popular host also said Chan had encountered difficulties when approaching the authorities over the renewal of the station’s licence, which expires in 2016. Speaking on his morning current affairs show on Friday, Chan said Li was trying to link her dismissal to his bribery case. "I don’t want to drag into details with Wei-ling ... I believe those with common sense would not believe [that]. “The picture she wanted to paint is that I’m doing things for my own well-being,” he said. “This allegation is very serious and, I think, very ridiculous without any factual justification." "This is unfair to me. This is a blow, if not an insult, to my personality." He asked Li to present evidence to support her claims of government suppression, which he said does not exist. But Chan did not deny having talked to Li about his bribery case when repeatedly asked by co-hosts. Chan was more straightforward on the Communications Authority claim. "I really didn’t knock [its] door ... The licence renewal has not yet restarted," Chan said. He said it was "impossible" for the licence to be revoked due to an outspoken host.

 China*:  Feb 15 2014

China inflation flat at 2.5 per cent (By Victoria Ruan in Beijing victoria.ruan@scmp.com) The mainland’s consumer price index climbed 2.5 per cent year on year last month, on par with the rise in December, the slowest increase since June last year, data released by the National Bureau of Statistics showed on Friday. Last month’s inflation was higher than the 2 per cent in January last year, likely because the Lunar New Year holiday began earlier this year, pushing up demand for vegetables and meat. “The moderate inflation is basically in line with expectations. Excess capacity and inadequate demand have continued to weigh on prices. Food prices got curbed a bit because of the relatively warmer winter this year,” Li Huiyong, chief economist at Shanghai-based SWS Research, told the Post. “Monetary policy is likely to stay prudent, instead of being loose, as authorities hope to push companies to boost efficiency in making use of their funds. However, companies that already face rising labour and environmental-handling costs wouldn’t be able afford too tight a policy.” The People’s Bank of China said in its fourth-quarter monetary policy report that prices had been basically stable but upward pressures on prices of agricultural products and services remained. The central bank also cautioned that the broad-based rises in property prices were likely to push costs in other areas to climb. The producer price index, an advance indicator for inflation, fell 1.6 per cent year on year last month, compared with a decline of 1.4 per cent in December and a 1.6 per cent drop in January last year, indicating overcapacity problems have continued to weigh on operations at industrial companies.

Hong Kong*:  Feb 14 2014

Luck in a bowl: Buddha Jumps Over the Wall (By bernice.chan@scmp.com) Shang Palace head chef Mok Kit-keung. Cuisine Royale's Frankie Tong prepares Buddha Jumps Over the Wall. The classic winter soup, Buddha Jumps Over the Wall, is packed with auspicious sounding ingredients, writes Bernice Chan - Buddha Jumps Over the Wall is a dish that dates back several centuries to the Qing Dynasty and is made in Cantonese and Min, or Fujian, cuisines. The curious name comes from the story of a monk who walks by a home where someone is cooking a fragrant soup. It smells so good that the monk, who according to the dictates of his faith, should have a vegetarian diet, jumps over the wall and eats some of the soup. When he is caught eating a dish with meat, he replies it was so good that even Buddha would jump over the wall to eat it. Kowloon Shangri-La Chinese executive chef Mok Kit-keung recalls that in his younger years of training in the kitchen, the soup was served from a giant tureen similar in shape to the Shaoxing rice wine jars that were traditionally used, where the opening was only large enough for the ladle to go in, which concentrated the aromas. But today, many restaurants prefer to serve the soup in individual portions. "While a large tureen has more flavour because it has so many ingredients, it's harder for the server to make sure each person has each ingredient in their bowl," he explains. The chef, who also oversees the hotel's Shang Palace, says the soup served in the restaurant features about 15 ingredients, including chicken, fish maw, abalone, sea cucumber, American ginseng, bamboo pith, deer tendon, wolfberries and mushrooms. "We layer the ingredients and the top layer has the choice items such as fish maw, abalone and sea cucumber. Under that are items like mushrooms and bamboo pith, followed by chicken and pork. That's so that when the lid is taken off, guests can see the most expensive ingredients at the top," Mok says. He also adds a splash of brandy as well as huadiao wine, for a more fragrant flavour. At Cuisine Royale in the Hopewell Centre in Wan Chai, the soup is presented in a tureen large enough to serve 12 people and it has a dozen ingredients in it including sea whelk, Chinese ham and fish maw. Chef Frankie Tong Yat-fai says there are various prices of Buddha Jumps Over the Wall, most ranging from HK$800 to HK$1,200. Diners can pay HK$4,000 for the premium version. At Yan Toh Heen in the InterContinental Hong Kong, executive chef Lau Yiu-fai cooks nine ingredients in the famous dish, as the number is auspicious. He uses quality items as conpoy (dried scallops), abalone, fish maw and sea cucumber. "We make the soup base first using black chicken, lean pork and ham and let it simmer for about four hours. We add the rest of the ingredients and simmer it some more before serving." Lau says this method of preparing the soup ensures there is less fat, making it healthier for diners. "We make sure the skin is removed from the chicken because it's the skin that has the fat. That way the broth is very clear." Lau explains that preparing the ingredients takes longer than the actual cooking of the dish, as each type of dried seafood has its own specifications in terms of how it needs to be rehydrated. Dried sea cucumber, for example, needs to be soaked for at least a week beforehand, while dried fish maw should be soaked in hot water. "We use canned abalone because it's more convenient, otherwise dried abalone can take an additional 20 hours to soak and prepare," he says. At Yan Toh Heen the soup's name has a more metallic ring to it in Chinese, as it translates literally to "house filled with gold and silver". Despite the wealth of ingredients in the soup, chef Mok says it is typically consumed after Mid-Autumn Festival until the end of March as it helps warm up the body. And during the month of March, Shang Palace will have mini bowls of Buddha Jumps Over the Wall on offer to help diners stave off the cold.

Stamp duty should extend to commercial properties, accounting firm suggests (By Tony Cheung tony.cheung@scmp.com) Ernst & Young says the special stamp duty is a powerful tool to curb property speculation. The special stamp duty imposed on sales of residential properties should extend to commercial office transactions as a way to curb speculation, accounting firm Ernst & Young proposed on Thursday. But companies setting up new offices in the city should be exempted from the double stamp duty – another levy now charged on buyers of both residential and commercial units, the firm said. The idea was part of Ernst & Young’s suggestions for the government’s budget, due to be announced on February 26. Under a new measure introduced in February last year, buyers of all properties – homes and offices – worth more than HK$2 million have to pay a double stamp duty — of up to 8.5 percent of the property price. A special stamp duty was also levied on the resale of residential properties within three years of purchase, up from the original two years. The accounting firm proposed exempting from the double stamp duty companies which set up new offices. At the same time, it suggested a special stamp duty be imposed on re-sale of commercial properties. “It was reported that a multinational insurance company paid HK$4.5 billion to buy an office in Kowloon recently, and the … stamp duty for that transaction was HK$400 million,” Tracy Ho Suk-fan, a tax partner at E&Y said. “It was also reported that Hong Kong’s competitiveness was lowered because these [stamp duty] measures caused a significant increase in business operation cost in Hong Kong.” “The special stamp duty is [powerful] enough to [discourage] property speculation,” Ho added. The firm also suggested reducing the salary tax for this financial year, which ends next month, by 75 percent, subject to a HK$10,000 ceiling; while expanding salary tax bands from HK$40,000 to HK$48,000. It estimated that the government would post a HK$40 billion surplus by the end of March, instead of a HK$4.9 billion deficit as finance chief John Tsang Chun-wah estimated a year ago. In November, Ernst & Young estimated that the surplus would amount to HK$12 billion. The firm said on Thursday that revenue from the government’s land sale had been higher than expected.

 China*:  Feb 14 2014

Dongguan vice crackdown just the start (By Sonny Lo) Sonny Lo says local governments should brace themselves for a protracted crackdown on vice and corruption directed by Beijing, in a big-picture effort to clean up the country's image - An alley in Dongguan, Guangdong on Feb. 11, 2014 after police raided the sex industry in the city. The high-profile anti-prostitution campaign and arrest of sex workers in Dongguan has highlighted the intertwined relationship between the central and local governments in crime control while illustrating how Beijing is tackling the proliferation of vice establishments. First and foremost, once CCTV aired a programme on Sunday that uncovered the seriousness of the prostitution problem in Dongguan, the provincial leadership in Guangdong came under tremendous pressure from the top to act. Some said Guangdong party secretary Hu Chunhua was pressured to immediately deal with the prostitution industry. Another explanation was that he had to show some consistency in dealing with crime, given the recent crackdown on drugs in Lufeng. Whatever one's interpretation of Hu's reaction, it is clear that Beijing used its official mouthpiece, CCTV, to highlight the vice industry in Dongguan and push provincial leaders to clean up the mess. We should also examine the media criticism that targeted the "protective umbrella" in Dongguan, implying that local police were responsible for the situation. Notably, the media also reported on the involvement of a member of the National People's Congress, as the owner of a five-star hotel accused of offering sex services. This anti-prostitution campaign clearly originated from the central government. Some internet users complained on mainland blogs that the campaign was unfair to the sex workers, whose faces were not covered in the CCTV coverage and reports. They contended that sex workers should also have rights - an interesting argument that is rarely talked about in the mainstream mainland media. The complaints also revealed netizens' cynicism about how the prostitutes were portrayed by official media. Of course, in Dongguan, the importance of the tourism industry has led to local tolerance of vice establishments, thus creating a vicious cycle that perpetuates the prostitution business. Fierce competition among Dongguan's hotels, including five-star establishments, has led many to set up saunas, massage parlours and nightclubs to attract customers. To some extent, local economic prosperity depended on these vice establishments; as its textile and manufacturing sectors have shrunk, the city has failed to diversify its economy in any meaningful way. Without a long-term economic plan, the effect of the anti-vice campaign is likely to be short-lived. The prostitution business will return once the heat has died down, albeit in a more subtle manner. The anti-prostitution campaign also reflects the governing mentality of Xi Jinping's leadership. He has said that, for too long, reforms have focused on the easier issues, and that the more difficult matters would have to be tackled. That being the case, it was only a matter of time before the traditional Chinese attitude of tolerating prostitution, gambling and drugs would become unacceptable. Increasingly, these vices are being targeted in clean-up campaigns. Last year, officials took a zero-tolerance approach to Macau-style open gambling in hotel casinos in Hainan province. While underground casinos may be allowed in some parts of the country, as long as they keep a low profile and are protected by corrupt local authorities, any high-profile gambling is destined to be eliminated. Provincial and local authorities must now understand what will and will not be tolerated under Xi's strong leadership. Policies to crack down on corruption, vice, illegal drugs, gambling and other crimes have to be enforced as China maintains its state-led economic modernisation. And the message is that any illegal and undesirable activities, such as prostitution, that have sprung up as a result of economic reforms have to be curbed. Beijing needs to show the world that China, a rising great world power, will not tolerate local-level criminal activities and corruption, and will do all in its power to control them. In short, the Dongguan campaign against prostitution is part of the bigger picture showing how Beijing is mapping out its economic modernisation strategy in the coming years. Although vice establishments might have contributed to local economic prosperity, they cannot be allowed to proliferate and operate openly in a way that could undermine the positive image of the central government. Under these circumstances, it is likely that such anti-prostitution, anti-drugs, anti-gambling and anti-corruption policy winds will persist in the coming years. Local officials who form "protective umbrellas" with triads and vice establishments are likely to be purged, offered up as examples to other local cadres of what to avoid if they wish to advance their careers. It is also worth highlighting the prominent use by the central authorities of official media to exert pressure on provincial governments as a way to tackle excessive local autonomy. Clearly, provincial-level officials in Guangdong, and elsewhere in China, will have to be far more sensitive to central-level sentiment than ever before. Sonny Lo is professor and head of the department of social sciences at the Hong Kong Institute of Education

Aviation biofuel project could kill two birds with one stone - if Sinopec brings cost down (By Chris Luo chris.luo@scmp.com) An Air China Boeing 747-400 passenger jet filled with mixture of biofuel and aviation kerosene takes off at Beijing Capital International Airport. China’s civil aviation regulator on Wednesday granted a license to the nation’s top refinery for its self-developed aviation biofuel, effectively giving a green light to the large-scale commercial use of the environmentally friendly energy. The permission, the first of its kind in China, means Sinopec Group has joined the ranks of just a few institutions in the world capable of developing aviation biofuel. The specific fuels approved by the Civil Aviation Administration of China (CAAC) to be used on commercial jets is called No. 1 Aviation Biofuel, made from palm oils and recycled cooking oils. The company initiated its research in 2009. Last April, a test flight using the fuel was successfully conducted in Shanghai. Biofuels, made from vegetable oils or animal fats, have significantly low carbon dioxide emissions compared to those of fossil fuels and have gained popularity in recent years in the aviation industry. They are viewed as a feasible alternative to conventional fuel, especially for an industry so heavily dependent on the price of oil and under close scrutiny to reduce its carbon dioxide emissions. A number of airlines in developed countries have turned to researching biofuels in recent years, in hopes the fuels can power their commercial jets on a large scale in the near future. For instance German carrier Lufthansa, the largest airline in Europe, made more than 1,000 biofuel trips in a six-month-long trial last year. But Sinopec has warned that a major obstacle still facing the large-scale commercialisation of this novel technology is its steep cost. “The cost of biofuels is approximately two to three times of the conventional fuel according to international standards,” Xu Hui, a deputy director in Sinopec, told Xinhua. “The cost of collecting the used cooking oil is very high.” Xu Chaoqun, a deputy director of CAAC also added, “the next step is to extend the variety of the raw materials of the aviation biofuels” in order to push for the further commercialisation of biofuels. Chinese people consume 28 million tonnes of cooking oil a year, as the country's airlines burn 20 million tonnes of aviation fuel during the same period. The adoption of recycled cooking oil for biofuels in China has been hailed as a potential approach to drive down the nation’s rife black market trade of recycled kitchen oil known as “gutter oil”, known to contain carcinogens and other contaminants. Numerous reports in recent years have shown how businessmen would illicitly collect and recycle wasted cooking oil in crude home-made workshops before selling it back to restaurants for high profits, to the shock and disgust of the public who demanded a harsh government crackdown. Experts previously estimated that Chinese customers unwittingly consume two to three million tonnes of the illegally recycled oil every year.

Hong Kong*:  Feb 13 2014

Regina Ip’s New People’s Party seals deal with Civil Force group (By Tony Cheung tony.cheung@scmp.com) Senior figures from both sides sign up for dual membership, bringing groups' total district council seats to 31 - New People's Party chairwoman Regina Ip (left) and vice-chairman Michael Tien. The number of district council members of the New People’s Party has almost tripled, from 12 to 31, after it confirmed its alliance with New Territories East group Civil Force on Wednesday. Instead of a clear-cut merger, senior NPP figures will also sign up to Civil Force and vice versa. Civil Force chairman Pun Kwok-shan, a Sha Tin district councillor, was named the New People’s Party’s new vice-chairman. The NPP has two legislative councillors – party chairwoman Regina Ip Lau Suk-yee, who also sits on the Executive Council, and vice-chairman Michael Tien Puk-sun. The NPP has 12 district councillors across Hong Kong Island and the New Territories, while its new partner has 18 district councillors in Sha Tin and Sai Kung, both in New Territories East. Scarlett Pong Oi-lan is the only one of the 18 Civil Force district councilors to have not joined the NPP as part of the alliance, while all 12 NPP district councillors have also joined Civil Force. Both NPP lawmakers have signed up for Civil Force. Industrial sector representative Lam Tai-fai, Civil Force’s only lawmaker, rejected the opportunity to join the NPP. Two other district councilors not originally affiliated with any political group have also joined the NPP and Civil Force as part of the deal. The partnership means that both groups will together have 31 seats on district councils. Pun said the two groups will “actively consider” working together to contest for a seat in New Territories East in the 2016 Legislative Council election. “In 2012, we only lost by a margin of about 4,000 votes,” Pun said. “We also hope that with the help of the New People’s Party platform, [the two] groups can have more exchanges on political issues, such as the impact of the government’s property-market cooling measures.” NPP chairwoman Regina Ip Lau Suk-yee also said that “as a responsible political party, we hope that we can win a seat in all of the Legco’s five geographical constituencies … but we don’t have any detailed plan for the 2016 poll yet.”

 China*:  Feb 13 2014

Prostitution clampdown on Dongguan may knock 50 billion yuan off its economy (By Zhang Hong hong.zhang@scmp.com) City's long-term economic growth could be weakened by vice clampdown - People are taken away from a hotel in Dongguan during a police crackdown on prostitution. The crackdown on the vice trade in Dongguan will cost the city at least 50 billion yuan (HK$64 million) in losses to related businesses, with the spillover effect sending a chilly wave to China’s macro economy, analysts said. The action also reflects a warning from central government to provincial authorities to place anti-corruption and social moral standards at a higher priority after decades of economic development, they added. Dongguan in Guangdong province has been in the media limelight after China Central Television aired a news report on its thriving sex industry on Saturday. Shortly afterwards the city mobilised more than 6,000 policemen to raid almost 2,000 entertainment venues, while crackdowns in other Guangdong cities were carried out simultaneously. In a note to investors on Tuesday, Minsheng Securities’ senior economist Guan Qingyou estimated that around 50 billion yuan, or at least ten per cent of the city’s GDP, could be wiped out due to the crackdown. “It’s very hard to make a concrete study on this underground sector. The sex industry relates directly or indirectly to many industries including hotels, condoms, restaurants, cosmetics, daily necessaries, travel and so on. Fifty billion yuan is a general estimate by many research institutes of the volume of Gongguan’s sex trade,” said Guan. Lin Jiang, dean of the Finance and Taxation Department with Lingnan University and also a consultant to Dongguan city government, agreed with Guan’s estimate. “It’s a reasonable estimate. But I am afraid the actual figure could be even higher,” said Lin. “It will have a serious impact on the local economy. Dongguan has been trying to upgrade its industries for a long time, but that didn’t work well. The crackdown will also hurt investors’ confidence and weaken the city’s long-term economic growth.” Guan also warned the crackdown on the sex industry might be echoed nationwide and have a negative impact on the nation’s economy. “Some people might underestimate the resolution of the leadership. But we should take seriously the impact of the Dongguan case on the macro economy. We may see the impact in national economic statistics as early as March,” he said. Analysts also believe the largest police crackdown seen in years on Dongguan’s sex business could have been a direct order from the central government. The South China Morning Post learned that some local officers got wind of the crackdown ahead of the Lunar New Year and secretly raised the alarm.

Dongguan police and officials face punishment if prostitution re-emerges (By Mandy Zhou) Officials urged to 'resolutely curb the spread of prostitution and efficiently purify the social atmosphere' - A woman walks past a sign that reads, 'Get rid of prostitution, gambling and drugs' in the town of Zhongtang, Dongguan, on Wednesday. A hotel in the town of Zhongtang, Dongguan, remains closed on Wednesday after police raided sex industry venues in the district. Dongguan city’s discipline committee has warned local officials and police that they will be sacked and severely punished if prostitution re-emerges in places under their jurisdiction. Officials involved in managing venues providing sex services or linked to such activities would meet the same fate, according to a statement published on the municipal government website on Wednesday. The discipline committee had issued an emergency notification urging officials to “resolutely curb the spread of prostitution and efficiently purify the social atmosphere”, according to the statement. All those who neglected their duty or worked inefficiently in the ongoing prostitution crackdown would be held responsible and punished, it said. The Dongguan crackdown on the sex trade has also spread to Guangzhou, Zhaoqing and Huizhou where more than 260 people were detained by police. Police in the three cities raided over 6,000 venues on Monday, the Guangzhou Daily reported. Venues raided included saunas, hotels, karaoke bars, hair salons and rented apartments, it said. Of the people detained, 44 were in Guangzhou, seven in Zhaoqing and 16 in Huizhou, according to police statements on Tuesday. The Dongguan city government also published a telephone number for the public to call on its Sina Weibo on Tuesday. A woman responsible for managing 20 prostitutes at a hotel in Zhongtang township was quoted by the Beijing Times as saying that many prostitutes had not returned after the Lunar New Year holiday and had not been affected. She said the crackdown was not bad enough for her to lose her job, but would merely lead to the postponement of work in the new year. A taxi driver in Dongguan echoed this sentiment saying, “The crackdown will have little impact because many people in the industry have not returned after the Lunar New Year holiday.” He added that it was difficult to name local hotels that were not involved in prostitution. 

Hong Kong*:  Feb 12 2014

Luxury hotels take collaborations with fashion designers to another level (By Divia Harilela divia.harilela@scmp.com) At Langham Place Mong Kok, big spenders have access to Thomas Pink's vintage Morgan, as part of the Elevated Experiences service. High fashion and luxury hotels have always been connected. But it was, of course, Versace who took this to the next level, opening his first branded hotel in 2000. He paved the way for others, such as Armani, Moschino, Ferragamo and Missoni. Last September, Versace's hotel chain announced plans for a new grand hotel in Macau, designed by Donatella Versace and billed to open in 2017. The designer hotel trend has evolved in recent years. Big names such as Diane Von Furstenberg, Karl Lagerfeld, Barney Cheng, BAPE and Vivienne Tam - who worked with Hong Kong's Hotel Icon - started to design exclusive suites, rooms or uniforms for high-profile hotels around the world. American designer Oscar de la Renta recently announced a collaboration of a different kind with The Peninsula Hotels. He will be creating a collection of bathroom amenities, including a bespoke fragrance. These collaborations, however, are becoming more sophisticated as hotels develop deeper and longer standing ties with the fashion community. The Dorchester in London was one of the first to break new ground in 2010 when it launched the Dorchester Collection Fashion Prize for emerging fashion talent. The winner receives £25,000 (HK$316,000) to help establish their business. Never one to be left behind, hotel chain W signed on as an official partner of the CFDA (Council of Fashion Designers of America) Fashion Incubator programme last year. It now offers emerging designers "inspirational" trips to various W hotels around the world. While such projects have begun in the West, Asia is catching on. The W Hong Kong has created an exclusive pop-up space at Hong Kong retailer I.T. It has been introducing and supporting emerging Asian designers, including SixLee and the award-winning Chinese designer Masha Ma. In addition to supporting the design community, other collaborations take guest experiences to a whole new (stylish) level. Boutique hotel The Upper House, which is known for its use of cutting edge technology (all rooms have iPads which control everything from check-in to room service) recently partnered with online fashion retailer Net-a-porter to give guests the ultimate shopping experience. For a limited period, a HK$1,000 gift card can be redeemed online, with delivery straight to their rooms. A style concierge also will provide a door-to-door service. Dean Winter, Swire Hotels' area director of operations for Hong Kong and China projects, says: "The hotel's collaboration with Net-a-porter perfectly combines both brands' philosophies. "The trend towards shopping for luxury goods online has been interesting to follow and when we considered how someone could send their purchase to a luxury hotel and have it waiting in their room when they arrive, the concept became irresistible." The Upper House is also launching an afternoon tea this month in collaboration with Net-a-porter, inspired by two organic skincare brands available exclusively on the site, Aurelia Probiotic Skincare and Dr Jackson's. Of course, branded afternoon teas were first made popular by The Landmark Mandarin Hotel, which kicked off its programme in 2009 with fragrance expert Jo Malone. Fashion houses soon followed and the hotel's pastry chefs have since created dishes inspired by fashion collections by Marc Jacobs, Chloe, Stella McCartney and Jimmy Choo. It isn't just about unique eats, either. This month, Langham Place Mong Kok has joined forces with British brand Thomas Pink as part of its Elevated Experiences campaign, which is offered to its Club floor guests. Privileges include in-house styling and shopping services and complimentary monogramming on purchases. Guests who spend a certain amount can also enjoy a drive around town in the brand's chauffeured vintage Pink Morgan. "We approached Thomas Pink because not only could we cater to guests with a real need - if they forgot something at home, lost their luggage or extended their stay, for example - but also because they have a playful spirit about them that works so well with our brand," says Alka Datwani, director of communications at Langham Place Mong Kok.

Hong Kong’s air quality to ‘drastically improve’ within five years, says Christine Loh (By Ernest Kao ernest.kao@scmp.com) Environment undersecretary promises ambitious targets will be met, including banning all vehicles that don't meet emissions standards by 2016, as roadside pollution gets worse - Hong Kong’s air quality will show “drastic improvements” over the next four or five years and start to see “measurable results” in the second half of this year, undersecretary for environment Christine Loh Kung-wai says. In the most confident pledge made by a senior government official about the fight against pollution, Loh told the South China Morning Post that the city is well on target to achieve landmark goals – such as a 20 per cent reduction in sulphur emissions – before 2020. “There’s no question – we will meet these objectives,” said Loh, striking a markedly more positive tone than when she last spoke to the Post in September. “Our whole vehicle fleet will be dramatically cleaner in about four or five years time.” Recent government data indicates that roadside air quality is worsening, but the undersecretary said the situation will improve. Objectives set out in last year’s seven-year air-quality roadmap have already been met without much political resistance, she said, in stark contrast to stalled action on other environmental issues such as waste, energy and conservation. Loh believes several more air-quality measures would be endorsed by the Legislative Council before summer. “We should be able to start measuring reductions by the second half of the year,” she said. The Air Quality Health Index went into effect at the end of December, replacing the much-criticised Air Pollution Index (API) after 18 years. “We now have a much better health-based air quality index, so people must also take on personal decisions on whether to go out at any one time,” she said. An HK$11.4 billion initiative to replace some 82,000 old commercial diesel vehicles was finally approved by the Legco financial committee last month and is to begin next month. A scheme to replace catalytic convertors – devices which covert harmful emissions into less harmful ones – on 20,000 taxis and public light buses powered by LPG is expected to be approved by the summer, while a plan to retrofit some 1,400 franchised buses with selective catalytic reduction devices – which reduce harmful emissions – is also scheduled for legislative approval this year. “By 2016, all pre-Euro vehicles will be banned from the street,” said Loh, in reference to the “Euro” emission standards introduced by the European Union since 1992. “Once we start running the scheme, we can see how we can incentivise vehicle owners to replace their vehicles earlier rather than later.” Loh said that the community would have to be “galvanised” for all the measures to have success. She said there was not enough public understanding of the dangers of roadside air pollution. But tackling roadside pollution is only half the battle, Loh admitted. Maritime pollution is one of the city’s biggest causes of sulphur dioxide emissions – a toxic byproduct of burning coal and petroleum. In 2012, a study by the Civic Exchange – the non-profit think tank set up by Loh – found 75 per cent of deaths linked to sulphur dioxide in the Pearl River Delta region each year were Hongkongers. Loh expects legislation for a mandatory fuel switch, which will force all ocean-going vessels berthing at Hong Kong to switch to a lower-sulphur fuel, to be passed by Legco before the summer recess and to go into effect by early next year. This will be coupled with a local initiative that would require smaller local ships operating in local waters to switch to a cleaner marine diesel, which Loh hopes will begin by April 1 this year. “We think after the implementation of both measures, we will see an estimated 20 per cent drop in local sulphur dioxide emissions. This is really quite substantial.” Roadside air quality continued to deteriorate last year, with levels of nitrogen dioxide hitting the second-worst level recorded in the city’s history, according to the Clean Air Network concern group. “We’re trying to reduce public exposure to air pollution. This is why we’re spending so much time on roadside [initiatives],” said Loh.

CY Leung dismisses Hong Kong arrival tax proposal as ‘unfeasible’ (By Emily Tsang emily.tsang@scmp.com) Hong Kong should not consider taking 'unilateral' action, says chief executive - A proposal to slap an arrival tax on non-Hong Kong residents who enter the city by land would not be feasible, Chief Executive Leung Chun-ying said on Tuesday. It would be difficult for the tax to target inbound non-local travellers only while excluding Hongkongers, Leung said. At the same time, he said the city should expect the mainland to impose a similar levy on Hongkongers who visit China in return. The idea of introducing an arrival tax of up to HK$100 on non-locals visiting the city by land was proposed by two democratic groups as a way to curb the influx of mainland visitors. Leung commented on the proposal during a media session on Tuesday: “I noticed a lawmaker had proposed an arrival tax. But this suggestion will not work.” He said the city should not consider taking “unilateral” action. “Taxing could limit the number of mainlanders coming to Hong Kong but many Hongkongers go back to mainland everyday too.” Leung said the mainland trips were part of Hong Kong people’s daily lives and they contributed to the Hong Kong economy. “Mainlanders and foreign visitors coming to Hong Kong have offered a bracing effect to Hong Kong’s tourism and economy. It has created massive job opportunities for the tourism industry or grass-root people,” Leung said. He said there are around 100,000 visitors entering Hong Kong every day – most of whom are Hong Kong residents returning to the city. There are also 180,000 Hong Kong residents travelling to mainland by land every day for work, study or living, he said. Leung pledged that his government would improve the city’s capacity to receive tourists, and would maintain certain measures to ensure locals can get ample supplies of daily necessities such as infant formula.

 China*:  Feb 12 2014

Luxembourg seeking RQFII quota as holder of Europe's biggest pool of yuan deposits (By Jeanny Yu jeanny.yu@scmp.com) Luxembourg is lobbying Beijing to be treated like London, which was granted an investment quota last year allowing investors based there to invest their offshore yuan directly in mainland China’s securities markets. In an effort to capture a larger share of Europe’s offshore yuan business, top officials from the grand duchy, including the minister of finance, plan to visit China in May or June for talks with the financial authorities. Luxembourg, which holds the largest pool of yuan deposits in Europe, is seeking to be accepted into the renminbi qualified foreign institutional investor scheme (RQFII). The scheme grants selected offshore yuan holders a quota to invest in China’s onshore stock and bond markets. “We are hoping, if not before, at least at that stage, to get some good news,” said Nicolas Mackel, chief executive of Luxembourg for Finance, a government-backed agency tasked with promoting and developing the country’s finance industry. “We are very confident the Chinese will look at the second batch of jurisdictions that they will offer RQFII status to and Luxembourg will be among them”. Competition among would-be offshore yuan centres has been intensifying, and acceptance into the RQFII scheme has been a key target for each of them, as the two-year-old programme is the only channel through with offshore yuan can be invested directly in the onshore securities markets. Foreign investors have also been able to invest in A shares, stock futures and warrants through the qualified foreign institutional investor (QFII) scheme since 2002, but the QFII quota is denominated in US dollars and usually takes a longer time to be approved. London was the first offshore yuan centre after Hong Kong to be accepted into the RQFII scheme. It was granted an 80 billion yuan quota when British finance minister George Osborne paid a visit to Beijing in mid-October. A week later, Singapore received a 50 billion yuan RQFII quota during a visit by Chinese vice-premier Zhang Gaoli to the city state. London has an unrivalled position in yuan trading given that it is the world’s largest centre for foreign exchange trading. But in terms of dim sum bond listings and the distribution of yuan-denominated investment funds, Luxembourg compares well with London, Mackel said. Bank of China, China Construction Bank and Industrial & Commercial Bank of China have set up their European headquarters in Luxembourg City, the capital of the tiny country nestled between France and Germany. “Every city has its own field. We are much stronger in deposits, loans, investment funds and bonds. London is stronger in foreign exchange and derivatives,” Mackel said. “Luxembourg plays a major role, even if London has a better communication strategy than Luxembourg. We are a better and more important place [in the yuan business]. London talks more about it.”

Landmark mainland China-Taiwan talks open with calls for bigger thinking, concrete action (By Lawrence Chung and Agence France-Presse) Although agenda focuses on confidence building, Beijing expected to raise reunification while Taipei expected to push for press freedom after two media were barred from coverage - Wang Yu-chi (left) and Zhang Zhijun greet at the Purple Palace Hotel. Senior officials from Taiwan and mainland China on Tuesday agreed in a historic government-to-government talks in Nanjing that the two sides need to leave more room for imagination in order to achieve a further breakthrough in cross-strait relations. Zhang Zijun, director of the State Council’s Taiwan Affairs Office, and his Taiwanese counterpart Wang Yu-chi of the Mainland Affairs Council in Taipei, also vowed not to allow any stepping back from the future development of cross-strait ties. “As long as we are on the right path, the destination will not be far,” Zhang said in the opening of the landmark talks that saw chief executives in charge of cross-strait affairs meeting face-to-face in their official capacities for the first time in more than six decades. Wang, who led a 20-member delegation to Nanjing for the four-day visit, which includes a stop in Shanghai, said in addition to allowing more room for imaginative solutions, it was necessary for the two sides to take concrete action in consolidating ties. He said it was no easy task for them to be able to sit together to talk, and this was something both sides must treasure. Before Tuesday’s historic meeting, talks between the two sides had been held by proxies – the Straits Exchange Foundation in Taipei and the Association for Relations Across the Taiwan Strait, set up in early 1990s to represent their respective governments in talks in the absence of formal ties. Taiwan and mainland China have been adversaries since the end of the civil war in 1949 but cross-strait relations improved after Ma Ying-jeou of the Kuomintang party was elected Taiwan’s president in 2008 and adopted a policy to engage Beijing. Since then, the two sides have signed 18 non-political agreements. The closely-watched meeting, held at the Purple Palace hotel in Nanjing, saw Zhang and his Taiwanese counterpart Wang being addressed by their official titles – a move seen by Taiwanese pundits and the media as highly significant as it represents a major breakthrough in cross-strait relations. Wang is scheduled to visit the Sun Yat-sen Mausoleum later on Tuesday, and give a speech at Nanjing University, before heading to Shanghai on Wednesday. With sensitivities crucial, the hotel room in Nanjing was neutrally decorated with no flags visible and nameplates on the table devoid of titles or affiliations. Before leaving, Wang told reporters: “The visit does not come easy, it is the result of interactions between the two sides for many years.” Nanjing, in eastern China, was the country’s capital when it was ruled by Wang’s Kuomintang, or Nationalist, party in the first half of the 20th century. When they lost China’s civil war – which cost millions of lives – to Mao Zedong’s Communists in 1949, two million supporters of the Nationalist leader Chiang Kai-shek fled to Taiwan, officially known as the Republic of China. The island and the mainland have been governed separately ever since, both claiming to be the true government of China and only re-establishing contact in the 1990s through quasi-official organisations. Tuesday’s meeting is the fruit of years of efforts to improve relations. But Beijing’s Communist authorities still aim to reunite all of China under their rule, and view Taiwan as a rebel region awaiting reunification with the mainland – by force if necessary. Over the decades Taipei has become increasingly isolated diplomatically, losing the Chinese seat at the UN in 1971 and seeing the number of countries recognising it steadily whittled away. But it is supplied militarily by the United States and has enjoyed a long economic boom. No official agenda has been released for the talks – widely seen as a symbolic, confidence-building exercise. Wang said he would not sign any agreements but added: “The main purpose of the visit is to help facilitate mutual understanding.” Taiwan is likely to focus on reaping practical outcomes from the discussions, such as securing economic benefits or security assurances, while China has one eye on long-term integration of the island, analysts say. The political thaw comes after the two sides made cautious steps towards economic reconciliation in recent years. As the heirs of a pan-Chinese government, Taiwan’s ruling Kuomintang party accepts the “One China” principle and is opposed to seeking independence for the island. Since it returned to power on the island in elections in 2008, President Ma Ying-jeou has overseen a marked softening in Taiwan’s tone towards its giant neighbour, restoring direct flights and other measures. In June 2010 Taiwan and China signed the landmark Economic Co-operation Framework Agreement, a pact widely characterised as the boldest step yet towards reconciliation. Yet despite the much-touted detente, Taipei and Beijing have still shunned all official contact and negotiations have been carried out through proxies. While these bodies – the quasi-official Straits Exchange Foundation representing Taiwan and the Association for Relations Across the Taiwan Straits for China – have achieved economic progress, they lack the power to broach deeper-held differences. Analysts say only government-level officials can address the lingering sovereignty dispute that sees each side claiming to be the sole legitimate government of China. Tuesday’s meeting will be watched closely to see whether it can pave the way for talks between Ma and his Chinese counterpart Xi Jinping – although chances of that happening any time soon are slim. “The current interaction across the Taiwan Strait is quite positive,” said Jia Qingguo, a professor of international studies at Peking University. Ties have “been developing very fast, but the potential of this relationship has not been fully tapped (by) both sides,” he said. “But people should not expect too much out of it. It will take time for the two sides to get really integrated.”

Hong Kong*:  Feb 11 2014

Shanghai sashays past Hong Kong as Asia's most fashionable city (By Stuart Lau stuart.lau@scmp.com) Hong Kong dropped eight places to 20th in the world, the sharpest fall among the top 20 cities. As China further emerges on the world stage, Shanghai is leading the fashion charge. That's the verdict of a global survey that named the city the most fashionable in Asia - knocking Hong Kong off its perch. After being given the top regional rank for the past five years, Hong Kong dropped eight places to 20th in the world, the sharpest fall among the top 20 cities. It was also overtaken by two other Asian rivals, Tokyo and Singapore, according to the survey by the US-based Global Language Monitor (GLM). Shanghai climbed 12 places to 10th and topped the table in Asia largely thanks to binge spending on luxury goods by its fashion-conscious locals. Tokyo came in at 11th and Singapore at 18th. New York has retaken the global top title from London. GLM measures fashion trends by tracking print, electronic and social media for top words and phrases. It has released the report every year since 2004. Without giving a detailed analysis of the individual cities, it said Hong Kong was "still a strong global presence" despite its fall in the rankings. Mainlanders' living standards have been on a rise, thanks to the country's economic development. The mainland is expected to account for 20 per cent - or 180 billion yuan (HK$229 billion) - of global luxury sales next year, according to 2011 research by McKinsey, a consultancy. Lawmaker Michael Tien Puk-sun, founder of clothing chain G2000, lamented the dwindling opportunities for young fashion designers to do business in the Hong Kong. "Given the soaring rents, the fashion industry has had a hard time in Hong Kong in the past few years," Tien said, adding that at the same time the mainland had opened many new malls, giving room for designers to flourish. He said fashion retailers in Hong Kong were losing out to shops selling watches and jewellery. Tien said the increase in mainland tourists had also seen high-end brands "snapping up more and more prime locations and malls". He urged the government to have better planning for commercial land use.

 China*:  Feb 11 2014

Police crackdown on Chinese ‘sex capital’ Dongguan prompts surprising outpouring of sympathy (By Chris Luo chris.luo@scmp.com) Dongguan, a Guangdong city dubbed the “sex capital of China” for its thriving underground sex industry, may be facing the largest police crackdown in years after a report by state television CCTV investigating the illicit trade. But the renewed police action has been met with an unexpected social media campaign rallying ‘moral support’ for the city. The campaign, appearing to be spontaneous and not formed from any one organisation, has seen a large number of online users of social networking websites posting and sharing encouraging phrases such as “Dongguan, hang in there!” or “Today we are all Dongguan people,” popular catchphrases often used in China to cheer people up after huge disasters. The former phrase was searched for almost 130,000 times on China’s most popular microblogging site, Sina Weibo, and became the second most searched term as of Monday afternoon. “CCTV, Dongguan” was the fourth most searched term. The crackdown followed CCTV’s lengthy investigative report which was aired on Sunday morning. Footage taken by undercover journalists using hidden cameras revealed in vivid detail various underground prostitution activities in a number of luxurious hotel-turned brothels. Just hours after the report, Dongguan police quickly dispatched more than 6,500 police officers in a citywide sweep to its entertainment venues, shutting down a dozen of them and suspending two police chiefs. The action also saw the arrests of 67 people allegedly involved in prostitution. Chinese media reported the order to “strictly handle” the situation that was directly given by Guangdong party secretary Hu Chunhua, who is also part of a group of the 25 most powerful Communist Party elites, after he watched the CCTV report. The swift response appeared to have failed to impress some online netizens who responded with scorn and cynicism. Some asked: “How come it took more than 6,000 police officers to only bust 67 people?”. It was speculated that tip-offs may have prompted many of those involved in prostitution across the city to flee. Interestingly, the speculation coincided with the publicised data of search engine giant Baidu, China’s Google, whose newly-launched interactive website showed a surge of people departing from Dongguan for Hong Kong on Sunday night. The website, which tracks the movement of hundreds of thousands of its mobile app users across the nation using their GPS coordinates, recorded a consistent outward-bound stream to Hong Kong throughout Sunday night until early Monday morning. Baidu said that of its customers it had tracked leaving Dongguan that night, the number leaving for Hong Kong accounted for over one quarter. This has prompted some online users to suspect they were potentially customers or sex workers fleeing to Hong Kong from Dongguan, although there is no concrete evidence to support this theory about the identity of the Hong Kong-bound travellers. The United Nations also chipped in during heated online discussions on the issue. On Sunday night it pointed out on its verified weibo account that those who conduct prostitution activities should be referred as “sex workers” instead of “discriminating” labels such as “prostitutes”, quoting a guideline it published earlier this month. Despite the posting not mentioning the CCTV report or Dongguan, many viewed it as a veiled criticism against the investigative report which frequently used the word “prostitutes” in the report. Many others viewed it as a laughing matter, poking fun at those who got caught despite the media revelations that went viral half a day ahead of the police crackdown. “Two groups of people have been caught out by the CCTV exposure and police clampdown: those who do not watch CCTV, and those who are not familiar with social media apps”, read one online comment. “The arrested only now truly realises what the phrase ‘mobile changes life’ means,” quipped another blogger, referring to a catchphrase of mobile network operator China Mobile. “Such widespread online backlash against CCTV reflects the divide and confrontational nature of society”, said media commentator Cao Lin. Writing on his weibo, Cao said CCTV’s video was widely viewed as an embodiment of the authoritarian regime, while sex workers have been perceived as the underclass victims of oppression. “Such conflict dictates the general public opinion on the issue,” he added. Shi Feike, a veteran journalist and media commentator, wrote: “The unexpected public backlash underlines ... the gaping disagreement between the public and the authorities, further aggravated by the expanding public discourse brought on by burgeoning social media tools.” A manufacturing boomtown located between Guangzhou and Shenzhen in the Pearl River Delta, Dongguan is an export hub city in Guangdong province and home to more than eight million people, most of them migrant workers from inland provinces. The city has long been notorious as a hotbed of underground sex services. The number of sex workers in the city could be as high as 300,000, according to some local media estimates. In an earlier major police crackdown on prostitution in 2010, 57 were detained while several hotels closed down in Dongguan. 

Hong Kong*:  Feb 10 2014

Ten of the best romantic movies in Asian cinema (By Mathew Scott) With Valentine's Day near, Mathew Scott selects 10 of Asian cinema's best romantic movies. In the Mood for Love. Farewell My Concubine. - Asian romance films always seem to get a bad rap. In a region where the film industry's output has long been dominated by beefed-up action heroes and horror-movie monsters, the common perception is that those looking for a little love have to wade through productions that seem to focus more on pain and perversity than the simple pleasures love can bring. That or the films come so sick with saccharine as to make them indigestible. Not that there's anything wrong with wandering over to the dark side once in a while, or to spend some time with that innocent inner child, but to think that Asian romance is only about the far reaches of the soul fails to give the genre the credit or the respect it deserves. With a double dose of Valentine's Day just around the corner - this year the Chinese and Western varieties fall on the same date - here's a look back at 10 classic films that'll help you ponder and celebrate the true nature of love.

WTA event organisers hope to bring Li Na to HK tournament (By Alvin Sallay alvin.sallay@scmp.com) Approach has been made to bring China's grand slam winner to HK's first professional tournament since 2002 in September - Australian Open champion Li Na is being wooed to headline Hong Kong's retur n to the world of professional tennis in September - in the WTA Championship at Victoria Park. "We have approached her and made her an offer," said tournament director Stephen Duckitt of China's world number three. "I spoke to her agent in the first week of the Australian Open in Melbourne and said Hong Kong was keen to have her at our tournament. We hope she will agree but if that doesn't happen, it is not the end of the world." The city will welcome back a professional tournament after over a decade without one. The new Women's Tennis Association International Series event was won with a HK$15.5 million government grant last year. Run by the Hong Kong Tennis Association, the 32-draw singles event (doubles will feature too) will be played for a purse of US$250,000 from September 8-14. However, Duckitt warned fans not to expect the moon in the first year, with the odds all stacked against mainland star Li - who could reach a career-high world number two ranking next week - making an appearance since the local event follows hot on the heels of the US Open. "As a top player, Li will be expected to advance to the final stages of the US Open, which ends on the Sunday our tournament [qualifiers] begin," Duckitt said. "It would be a stretch of the imagination to hope that if she reaches the latter stages [in the US] that she will turn up in Hong Kong in a couple of days. Yet, we have approached her as we know she will be a drawcard." After a foot inflammation caused current world number two Victoria Azarenka to withdrawal from the Qatar Open, starting today, Li needs a mere nine ranking points from the event to climb above the Belarussian in the rankings. The Hong Kong event can only field one player from the world's top 10 from the 2013 year-end rankings (Li was No 3 then, too) - unless it is willing to double the prize money to US$500,000, which would permit a second top player to be booked. Organisers are also looking at Czech Petra Kvitova (world No 6), Serbian Jelena Jankovic (No 8) and Caroline Wozniacki of Denmark (No 10). "I travelled to the WTA tournament in Auckland and to the Australian Open in January this year to talk with a number of players and agents to encourage them to play the tournament and also promote Hong Kong as a great global city," said Duckitt, a former ATP official. "These discussions included players from within the top 10 The discussions were positive and there is a sense of excitement among the players about being able to come to Hong Kong and play. "It is a tough week in the calendar as it is the week following the US Open and the top players are usually always competing towards the final week of a grand slam. The need for rest plays a big part in their decision making regardless of the financial incentive to play." It is understood that Li, who won her second grand slam title in January, now commands an appearance fee of around US$400,000 to turn up in events, which are not mandatory for her to participate in. She will turn up next month in the BNP Paribas Showdown, a one-day exhibition event, at Hong Kong's cycling velodrome. Part of World Tennis Day, the March 3 event will feature Li playing against Sam Stosur of Australia, while the men's match will be between Australian Lleyton Hewitt and Tomas Berdych of the Czech Republic. Meanwhile, organisers of the WTA event have launched a logo design competition with a HK$20,000 prize for the winner. Duckitt said: "We are excited about the return of a WTA tournament to Hong Kong - [it's] the first time since 1993 and the last time there was a Tour level event [the ATP Hong Kong Open] was in 2002. The exhibition events have always helped keep tennis in the public vision, but our hope now is that this tournament re-energises the popularity of the sport, and can begin creating an inspirational pathway for up and coming players."

 China*:  Feb 10 2014

Historic China-Taiwan talks start long road to closer ties (By Agence France-Presse in Taipei, Taiwan) Wang Yu-chi, minister of Taiwan's Mainland Affairs Council, speaks during a press conference in Taipei. China and Taiwan are gearing up for their first government-to-government meeting in more than six decades Tuesday -- but analysts say renewed political ties between the former bitter rivals may still be a long way off. The Taiwanese government’s Wang Yu-chi, who oversees the island’s China policy, is scheduled to fly to the mainland on February 11 to meet his counterpart Zhang Zhijun, China’s Taiwan Affairs Office chief, for talks set to last until February 14. The meeting in Nanjing, in China’s eastern Jiangsu province, is the fruit of years of efforts to normalise relations and marks the first official contact between sitting governments since the pair’s acrimonious split in 1949. That year, two million supporters of the nationalist leader Chiang Kai-shek fled to Taiwan--officially known as Republic of China--after losing a civil war to Mao Zedong’s Communists. Ever since, the island and the mainland have been governed separately, both claiming to be the true government of China, only re-establishing contact in the 1990s through quasi-official organisations. When the much-anticipated visit was announced at a January press conference, Taiwan’s Wang said it had “crucial implications for further institutionalisation of the ties between the two sides of the Straits”. “It has a symbolic meaning. It introduces more confidence and trust between the two sides,” Jia Qingguo, an international studies professor at Peking University said of the meeting, adding that it could bring about modest improvements in cooperation. While Taiwan is likely to focus on reaping practical outcomes from the visit, such as securing economic benefits or security assurances, Jia said, China has more of an eye toward long-term integration of the island. Beijing views Taiwan as a rebel region awaiting reunification with the mainland, and has repeatedly refused to renounce the possibility of using force to take back the island if necessary. “From the mainland perspective, (China) probably attaches more importance to accelerating the process of economic integration, and also with a view to political unification in the long run,” Jia said. Taiwan wants to use the visit to raise issues including proposed liaison offices, bilateral efforts on regional economic integration and better healthcare for Taiwanese students studying on the mainland. Decades of stalemate - The political thaw of a decades-long stalemate comes after the two sides have made cautious steps towards economic reconciliation in recent years. Taiwanese president Ma Ying-jeou of the Beijing-friendly Kuomintang party came to power in 2008, presiding over a marked softening in tone from Taipei towards its giant neighbour and reinstating direct flights between the two sides. In June 2010, Taiwan and China signed the landmark Economic Cooperation Framework Agreement, a pact widely characterised as the boldest step yet towards reconciliation. Yet despite the much-touted detente, Taipei and Beijing have still shunned all official contact, and negotiations since 2008 when Ma came to power have been carried out through proxies. While these proxies -- the quasi-official Straits Exchange Foundation (SEF) representing Taiwan, and the Association for Relations Across the Taiwan Straits (ARATS), for China -- have secured economic progress, they lacked the power to broach deeper-held differences. Analysts say that only government-level officials can settle the crux of a lingering sovereignty dispute that sees each side claiming to be the sole legitimate government of China. “The two government units will be authorised to handle policy-oriented affairs, while SEF and ARATS could be somewhat weakened in their functions,” George Tsai, a political science professor at Taipei’s Chinese Culture University told AFP. Analysts will be watching the meeting closely to see if it could pave the way for talks between Ma and his Chinese counterpart Xi Jinping -- although chances of that happening any time soon are slim. “Such [a] proposal could be dictated by the outcome of the coming meeting,” Tsai said. “Both sides are crossing the river by feeling for stones,” he said, quoting a Chinese proverb to describe the cautious path Taipei and Beijing are following in the hope of greater progress.

Rescue of blazing boat by frigate seen as PLA statement in East China Sea (Minnie Chan minnie.chan@scmp.com) Swift action by PLA Navy - after Japanese had offered to assist burning Zhejiang fishing boat - seen as sign of its readiness in East China Sea - A naval frigate came to the rescue of a Zhejiang fishing boat on fire near disputed waters in the East China Sea, shedding light on the People's Liberation Army's readiness to deploy in the region amid the simmering territorial spat with Japan. The missile frigate Zhoushan sailed at high speed for 3½ hours to reach the burning boat late on Friday, 280 kilometres west-northwest of Amami-Oshima in Kagoshima Prefecture. It arrived ahead of three Japanese coastguard patrol ships that responded to an earlier request by China for help, according to mainland media and Japan's Kyodo news agency. Xinhua reported six of the 24 people aboard died in the blaze. Beijing-based naval expert Li Jie said the presence of the Zhoushan had indicated the PLA's air and sea readiness after Beijing announced the creation of an air defence identification zone (ADIZ) in November. The zone includes the disputed Diaoyu Islands, known as the Senkakus in Japan, and has drawn protests from Tokyo. Xinhua said yesterday that the Zhoushan had received a distress signal at 4.30pm on Friday after a fire broke out on the Chinese fishing boat Zhelingyu 90058. It said the East Sea Fleet, which oversees the East China Sea, then sent the Zhoushan from a destroyer force patrolling nearby waters to take part in the rescue. The navy's website said the Zhoushan had met two Chinese vessels at 9.20pm and began a joint rescue operation. One sailor with severe burns was taken to the warship for treatment by doctors and medical staff on board. The Zhoushan later sailed for more than 10 hours to take the injured sailor to a military hospital, while the other 17 sailors were believed to be returning to port after their boat was repaired, mainland media reported. Kyodo said the Japanese coastguard had sent three patrol ships and one jet to rescue the Chinese fishing crew after it received an SOS signal on Friday. But later the Chinese authorities told the Japanese their ships would take care of the rescue, and the three Japanese vessels turned back halfway. "The result is predictable because our warship is obviously much faster than Japanese coastguard patrol ships," Li said. "The PLA has strengthened its maritime operations since the establishment of the ADIZ, including naval drills and other non-traditional military exercises." Professor Ni Lexiong , a Shanghai-based naval expert, said Japan would be wary after the PLA's fast reaction. "The Japanese coastguard should be aware that it appears the PLA navy treated this rescue as a live drill - and they performed pretty well," he said.

Hong Kong*:  Feb 9 2014

Happy Valley bomb 'part of big January 1945 US attack on Japanese' (By Ada Lee ada.lee@scmp.com) A police bomb disposal team finishes defusing a wartime bomb at a hotel construction site in Hau Tak Lane in Happy Valley. A police bomb disposal team finishes defusing a wartime bomb at a hotel construction site in Hau Tak Lane in Happy Valley. The 2,000-pound second world war bomb that brought chaos to Happy Valley was dropped during a huge one-day pounding of Japanese positions in the city in 1945, US military documents have revealed. As the hundreds evacuated on Thursday from hotels, offices and flats near the construction site where the bomb was unearthed returned yesterday, amateur military historian Craig Mitchell said it was likely that the ANM66 was one of just 11 bombs of such size and destructive power ever dropped on Hong Kong during the second world war. The raid took place on January 16, 1945. Police records show that the device was only the second of its kind found in the city since the end of the war. Mitchell, who has spent years researching the legacy of Hong Kong's wartime past, said the bombers in the January 16 raid came under fierce anti-aircraft fire and attack by fighter planes, which might explain why the bomb landed wide of its target - Taikoo Dockyard. He said there were 12 US aircraft carriers close to Hong Kong at that time, but only two carried that type of bomb. On that day, two TBM- Avenger bombers carried the payload of 11 2,000-pound bombs over the city. Four were dropped on Taikoo Dockyard, another on Aberdeen docks and one on Kowloon docks, according to US military documents provided by Mitchell. The other five targeted ships. One narrative on the Taikoo docks attack in the documents said: "Five planes dove [sic] from south to north, releasing their bombs between 3,000 and 3,500 feet, and all bombs were observed to hit in the dry dock area ... It is considered that serious damage was done to these ships, as well as to the dry docks themselves." Hundreds of other smaller bombs were dropped on Hong Kong on the same day. Mitchell said the bomb probably hit Happy Valley because the bomber had strayed off course. "The planes were releasing the bombs at 3,000 to 3,500 feet under very, very heavy anti- aircraft fire so there was lots of chaos," he said. "It appears roughly between the two targets of Taikoo docks and the navy boatyard in Tamar." The other ANM66 bomb found in the city was discovered by Mitchell in Tai Tam Country Park last year. He said it was unusual because the explosives inside were removed. Mitchell estimates that between 25 and 30 per cent of the bombs dropped on Hong Kong during the second world war failed to detonate. While more unexploded ordnance could be in Happy Valley, it was unlikely any other device of that size would be found in the area. Albert Lam Ping-wai, of the Ex-Servicemen's Association, said 35 to 40 per cent of the bombs dropped from a plane would miss their target. The bomb found in Happy Valley could have hit soft soil and its thick shell could have made it more difficult to go off. Lam said Happy Valley had its own significance during wartime, as a Japanese military camp was located on Morrison Hill.

 China*:  Feb 9 2014

New US ambassador Max Baucus pledges to build trust with China (By Agence France-Presse in Washington and Teddy Ng) Max Baucus speaks outside the Senate chamber in Washington on Thursday. A hard act to follow? Outgoing ambassador Gary Locke. Incoming US ambassador Max Baucus has pledged to build trust with China as fellow senators confirmed him to the post at a time of high tensions in East Asia. The Senate approved Baucus in a rare unanimous show of support for one of President Barack Obama's high-profile nominees, although four senators including Baucus did not vote. "The United States-China relationship, I believe, is one of the most important bilateral relationships in the world. It will shape global affairs for generations - we must get it right," Baucus, a member of Obama's Democratic Party who has represented the US state of Montana since 1978, said on the Senate floor after the vote. Foreign Ministry spokesman Hong Lei said China welcomed the appointment. "We hope and believe that Mr Baucus will work hard on improving mutual understanding between China and the US, strengthening co-operation and exchanges, and pushing for the construction of a new type of major power relations between China and the US," he said. On a lighter note, Baucus, a 72-year-old running buff, said he wanted to run the Beijing Marathon, although he admitted - without mentioning the capital's notorious air pollution - that he may not be able to do so. "I've actually got my eye on the Beijing Marathon. But to be more honest, maybe scale down to half-marathon - something a little shorter," he said to laughter from his colleagues. Speaking later to reporters, Baucus said that he expected to be busy handling the heated maritime disputes between Beijing and its neighbours in the East China and South China seas. He said a priority was to "sincerely work with China to try to help develop confidence and trust". Baucus said it was not decided when he would leave for Beijing, but indicated that incumbent Gary Locke, the first Chinese American in the post, would stay at least until the end of February.

Sanya sees Spring Festival tourism boom - The gross income of Sanya's tourism during the week-long Spring Festival holiday reached 5.464 billion yuan this year, up 25.31% from last year. 

Hong Kong*:  Feb 8 2014

Judge slams 'lazy' Medical Council response in drug-taking doctor case (By Austin Chiu austin.chiu@scmp.com) 'Woeful' delays in holding hearing into doctor who injected himself with anaesthetic, the only case the council's health committee has had to deal with in four years - The High Court has branded the Medical Council lazy over “woeful” delays in holding a court-ordered hearing into a doctor who injected himself with an anaesthetic – the only case the council’s health committee has had to deal with in the past four years. The health committee had been “indolent and inefficient” in complying with a court order to set a date for a hearing into the doctor’s fitness to practise, the judge said. The doctor, identified only as Dr Q in court, was found semi-conscious at the United Christian Hospital on November 4, 2008 after he injected himself with an anaesthetic drug. The case took a twist in October 2010 when the High Court ruled that the committee had unconstitutionally prohibited the doctor from having legal representation for the hearing. By late 2012 no hearing date had been fixed. In December that year the court ordered the committee to fix an “early hearing date”. In August last year, the doctor sued the committee for contempt of court for failing to set a date. In her written judgment, Madam Justice Queeny Au Yeung Kwai-yue said there had been an “indolent and inefficient” attempt by the committee to comply with the mandatory order. “The delay was particularly woeful and culpable given that over those four years, Dr Q’s case was the only case that [the health committee] had to deal with expeditiously under the compulsion of a [mandatory order]!” she wrote. The judge said the delay had affected the doctor’s career and public confidence in the committee. The doctor had been left to practise for four years while his fitness to do so remained unresolved. And if the doctor was fit to practise, the medical council had caused “material prejudice” to him, affecting his chances of practising or undertaking fellowship examinations overseas. But the judge dismissed the contempt of court application, ruling the December 2012 order to fix an early hearing date did not specify a time for compliance. The committee had earlier told the court the delay in fixing a hearing date was due to problems receiving legal advice from its former legal adviser, Charles Chan Chor-chak, who reportedly resigned in November last year. But the judge said the delay in obtaining legal advice had been unreasonable and could have been avoided.

 China*:  Feb 8 2014

Retail spending growth in China during Lunar New Year holiday slows (By Langi Chiang langi.chiang@scmp.com) Lunar New Year holiday spending on the mainland grew at its slowest pace in at least a decade as the Communist Party’s crackdown on corruption dampened luxury gifting, but economists are not overly concerned. Retail sales during the seven-day holiday (January 31-February 6) rose 13.3 per cent to 610.7 billion yuan (HK$776 billion), the Ministry of Commerce said on Thursday. Adjusted for retail price inflation, the decline in the growth rate from 14.7 per cent in the same period last year and 16.2 per cent the year before would be milder, said Chang Jian, an economist at Barclays Capital. “The anti-graft campaign has made consumption cheaper and more affordable for Chinese households,” Chang said. She expected full-year retail sales growth this year of 14 per cent in nominal terms, up from last year’s 13.1 per cent, despite a projected slowdown in economic growth to 7.2 per cent this year from 7.7 per cent. Chang also forecast consumer inflation of 3 per cent this year, up from last year’s 2.6 per cent. Prices remained stable during the holiday period from the previous week, with no change in rice and a mere 0.5 per cent increase in the price of pork, the staple meat, the commerce ministry said. It said sales in luxury items slumped, while electronic and jewellery products sold well. For example, sales of luxury gifts and alcohol fell by 70 per cent in some shopping centres in Fuzhou, capital of the southeastern province of Fujian. Sales of expensive cigarettes and alcohol at some retail outlets in Luoyang, in the central province of Henan, declined 40 per cent. A slump of 20 per cent in sales was reported by high-end restaurants in the northern province of Heilongjiang. Some establishments had to restructure and cater to the mass market instead, the ministry said. Meanwhile, sales of mobile phones and computers more than doubled in the northern province of Hebei, while sales of home appliances grew 61 per cent in the northwestern province of Gansu. Jewellery sales rose 35 per cent in the central province of Hubei, 31.6 per cent in the northeastern province of Liaoning and 30.2 per cent in Heilongjiang. “The number is relatively healthy, given the circumstances,” said Alaistair Chan, an economist at Moody’s Analytics. “The government’s actions in curbing official spending and also cooling the housing market are working to slow consumption, but I think that underlying demand is still strong, because wages are still growing at a robust pace,” Chan said. Nominal urban disposable income grew 9.7 per cent last year, while rural household income rose 12.4 per cent. ANZ chief economist Liu Ligang said: “If the official spending can be used more for the social and economic welfare of the people, China’s consumption will pick up more quickly, because of the reduced [need to set aside] precautionary savings.”

Hong Kong*:  Feb 7 2014

Hongkonger Birdy Cheng Yu-pang lands a place on Mars mission (By Emily Tsang emily.tsang@scmp.com) Birdy Cheng Yu-pang believes planet earth is polluted and hopeless - so much so that he is determined to start a new life on Mars. Despite average temperatures of minus 55 degrees Celsius and shortage of oxygen so great that settlers will need breathing equipment, the 25-year-old says he is overjoyed to be the only Hongkonger among 1,058 candidates for a one-way space migration to the desert-like planet. Dutch foundation Mars One plans to establish outposts on the planet's surface in four years. If it succeeds, several teams of astronauts will begin their high-risk journey to the red planet in 2024 to settle permanently. "I am ready to start a new life on a new planet," the physics graduate from Hong Kong University of Science & Technology told the South China Morning Post. "Since I have joined the programme, I picture my new life on Mars every now and then." Unlike most young men his age Cheng, a property manager, said he was not interested in looking for a girlfriend - at least not on earth - and believed Mars One would arrange a partner for him on the new planet when necessary. "I know it is a one-way trip, and there is risk that I may die. But someone has to make the move," he said. "There is really nothing I cannot leave behind on earth." An environmental activist since secondary school, Cheng shocked his university hall mate in their first meeting by telling him he would not use air-conditioning, even in summer. He spends his free time collecting newspapers and plastic bottles for recycling. Two years ago, he turned vegetarian. "Earth is too polluted, and there is always the likelihood that a war could end the whole world," he said, explaining his desire to join the perilous migration. "It is very dangerous that we have only one place we call home in the whole universe. It makes sense that we should start exploring human settlement on other planets." Mars One's hunt for "would-be Mars settlers" began in April and drew more that 200,000 applications from across the globe. Out of these 1,058 - most of them from the United States and Canada - were picked to enter two more rounds of selection. The mainland has 40 candidates and Taiwan five. Six to 10 teams of four individuals will be chosen to undergo seven years' full-time astronaut training. Cheng says he has the support of his brother, but reckons his mother will never understand his ambition to explore the solar system. "She is a very traditional Chinese woman. She would not understand about the anything about Mars or the space. Maybe I will simply tell her I am making a very long trip abroad," he said. His father died several years ago. A local scientist has cast doubt on the ambitious project , but Cheng says he believes in it. "Many friends have warned me about it," he said, having paid an application fee of about HK$200. "Even if it is a fraud, it is still worth believing in. It has given me a dream." Among those who doubt the project are Hong Kong University of Science and Technology mathematics professor and astrophysicist Chan Kwing-lam, a former researcher for the US space agency Nasa. Chan said the necessary technology would not be available in a decade. "How can humans settle on Mars when we cannot even sustain the technology to build a human observing station on the moon?" he asked. But Mars One's co-founder and chief executive Bas Lansdorp told the Post that existing technology was sufficient to allow humans to land safely on Mars and sustain life. He said the first mission would be risky, but the organisation would make it as safe as possible. "Scientists often forget how much less complex a mission of permanent settlement is compared to a return mission," he wrote in an e-mail. The not-for-profit foundation developed its Mars migration plan two years ago. Among its experts are Gerardus 't Hooft, joint Nobel Prize winner for physics in 1999, and Dr Gerard Blaauw, chairman of the Netherlands Space Society.

 China*:  Feb 7 2014

Boston runners to honour slain Chinese student (By Angela Meng angela.meng@scmp.com) Fifteen spots will be reserved for people to commemorate Lu Lingzi, one of three people killed in attack on marathon last year [On April 15, 2013, two bomb blasts rocked the annual Boston Marathon, injuring more than 170 people and killing three others: Martin Richard, 8; Krystle Campbell, 29; and Lu Lingzu, 23, a Chinese student at Boston University. The suspects later forced a standoff with authorities. They were identified as two ethnic Chechen brothers from southern Russia who had been in the US for about a decade, 19-year-old Dzhokhar Tsarnaev and his 26-year-old brother, Tamerlan, who died in the gun battle. Dzhokhar was arrested on April 19, 2013.] The organisers of the Boston Marathon have reserved 15 places for runners to compete in honour of Lu Lingzi, the mainland student who died in the bombing attack on the event last year, local media have reported. Lu, a 23-year-old graduate student at Boston University majoring in mathematics and statistics, was watching the race when two pressure cooker bombs exploded near the crowded finish line, killing her and two others. Hundreds more were injured, including Lu's friend, fellow student Zhou Denling. Organiser Boston Athletic Association said it had reserved 10 spots for Lu's family to fill with runners of their choosing, and another five would be decided by members of the Boston University community, according to school newspaper, BU Today. "Through my interactions with them, this family has shown me what grace is all about," dean of students Kenneth Elmore told the newspaper. "For them to think of us during their time of sadness and sorrow, and to give the people in this community the chance to show their support in such a spectacular way, we should be humbly honoured." Any money raised by the runners will be donated to the Lu Lingzi Scholarship Fund. With only 10 weeks left until the race, the positions have been exempted from the usual registration requirements, including qualifying time and fundraising minimum, according to the Boston Athletic Association. Traditionally, the organisation sets the qualifying time for each bracket of participant. This year, runners in the adult men category must have completed a marathon in no more than three hours and five minutes, while the minimum for the woman's field is three hours and 35 minutes. Students, faculty or alumni who are interested in one of the five spots are encouraged to apply through a written statement or video stating what taking part in the tribute means to them. The applications, which close this Friday, will be reviewed by the Dean of Students Office, Office of the Provost, the Lu family and other administrative offices of the university community. The suspects in the attack last year on April 15 were identified three days later as Chechen brothers Tamerlan and Dzhokhar Tsarnaev. Tamerlan, 26, was killed during a firefight with police, while his younger brother Dzhokhar, 20, was apprehended while hiding in a boat and remains in custody. He has pleaded not guilty to using a mass weapon of destruction. A few days after the blast, US President Obama attended a special service at Boston's Cathedral of the Holy Cross. "Our prayers are with the Lu family of China who sent their daughter Lingzi here so she could experience all the city had to offer. A 23-year-old student far from home," Obama said at the service. "And in the heartache of her family and friends on both sides of the great ocean, we're reminded of the humanity that we all share."

US official's criticism over China's ADIZ unfounded (By Xinhua) A senior US security official, in an interview with Kyodo News, has warned that the announcement of another air defense identification zone (ADIZ) by China would trigger an expansion of US military presence in the Asia-Pacific. However, the warning of Evan Medeiros, senior director for Asian affairs at the US National Security Council, is unfounded as he might have not realized that the real threat to the region comes from Japan, not China. Japanese Prime Minister Shinzo Abe and his right-leaning government are the source of surging tensions and hostility in the region. In his 2014 State of the Union address, US President Barack Obama said his country will continue to focus on the Asia-Pacific and support its allies in the region. But if the United States continues to spoil trouble-making Japan, more provocative actions are expected from Tokyo. As a result, the regional situation would turn messier to a point that regional security and economic interests of various countries would be jeopardized. China's establishment of ADIZ in the East China Sea, as a defensive measure to safeguard national air security, is in line with international law and practice, and does not affect the freedom of civil aviation. No one is in a position to point a finger. Nevertheless, the Japanese government is trying to fabricate "China threat" as an excuse to revise its pacifist constitution so that Japan can wage war. Thus, it is high time for the Obama administration to see through Abe's political tricks and to cage the trigger-happy elements in Japan. To pamper an ambitious ally that refuses to reflect on its own history of aggression and that is eager to challenge the post-war world order will wreck havoc in the region and the world as a whole.

 

 

Putin: Xi's visit a reunion with a good friend (By Xinhua) SOCHI - Visiting Chinese President Xi Jinping met his Russian counterpart, Vladimir Putin, here Thursday for talks on bilateral ties. While expressing his delight to be invited to the opening ceremony of the 22nd Winter Olympic Games, Xi referred to the pleasant concurrence of the Sochi Olympics and the Chinese Spring Festival. Sochi's hosting of the major international sports event serves as a symbol that Russia is on its way to prosperity under the leadership of Putin, added the Chinese president. Calling China and Russia good neighbors, good partners and good friends, Xi said he came to Russia to offer his congratulations in person as is customary for the Chinese people to do upon their neighbors' joyous occasions. He also voiced his confidence that, with Russia's careful preparations, the Sochi Winter Olympics will be a splendid and unforgettable sports event and make fresh contributions to the Olympic cause. Additionally, Xi extended his wishes that the Sochi Winter Olympic Games be a complete success and that Chinese and Russian athletes score good results. For his part, Putin conveyed his hearty welcome to Xi and thanked the Chinese president for travelling to Sochi to share the magnificent occasion with the Russian people. Noting that the Spring Festival is a time for the Chinese people to visit relatives and friends, Putin said Xi's trip to Russia is exactly a reunion with a good friend. The Russian president also wished Xi and the Chinese people a happy Lunar New Year and the Chinese athletes excellent results in the Sochi Olympic Games. During the meeting, their first this year, the two leaders will also exchange views on bilateral cooperation in large projects and people-to-people exchanges as well as on major global and regional issues. Xi arrived in this Russian resort city earlier Thursday to attend the opening ceremony of the 22nd Winter Olympic Games. The three-day visit is his first foreign trip this year. Talks between Xi and Putin are believed to mark a "good start" for the advancement of bilateral ties in 2014.

Hong Kong*:  Feb 6 2014

Weak office market in Central expected to pick up on IPO rebound (By Peggy Sito peggy.sito@scmp.com) Rents and leasing activity are likely to pick up by 2015 in tandem with IPOs, consultants say - Some companies in Central have had to consider cutting space by asking senior staff to share an office. The office market in Central district in Hong Kong will remain weak in the first half of this year, property consultants say, but rents and activity are expected to pick up by next year as more initial public offerings come to market. Several law firms had adopted a wait-and-see approach as listing activity rebounded, said James McLean, executive director of office services at CBRE Hong Kong. "They no longer look to drop spaces in Central," he said. According to PricewaterhouseCoopers forecasts, funds raised through listings in the city this year will exceed HK$250 billion, mostly in the second half, compared with HK$169 billion last year. McLean expects an increase in leasing activity and rentals next year and beyond. However, the office market will remain subdued in the first half. Overall occupier demand was likely to remain weak and landlords would continue to focus on tenant retention, CBRE said. Their more flexible attitude towards asking rents should provide occupiers with room to negotiate, the consultancy firm said. John Siu, managing director of Cushman & Wakefield Hong Kong, said demand continued to gradually improve but was mainly driven by firms seeking small to medium-sized offices. As a result of the continued lack of demand for grade A office space from large banks, rents were unlikely to increase this year, he said. Siu said occupation cost was still a concern for tenants. Some companies that stay in Central have had to consider cutting space by such measures as requesting senior staff to share an office. Cushman & Wakefield said net effective rents in core Central in the fourth quarter averaged HK$103.54 per square foot per month, compared with HK$64.81 in Wan Chai and Causeway Bay, while the average rent in Kowloon East was HK$31.81. Consultancy DTZ said rents in grade A offices in Central, Admiralty and Sheung Wan dropped 2.9 per cent quarter on quarter to HK$100 per square foot per month during the period. 

 China*:  Feb 6 2014

China's 'sense of destiny' a concern to Asia region, says James Clapper (By Associated Press in Washington) China's aggressive pursuit of territorial claims in the seas of East Asia is driven by a sense of historical destiny and is causing great concern among countries in the region, the chief of US intelligence says. James Clapper, Director of National Intelligence, said China had pursued a very impressive military modernisation that was designed to address what it saw as America's military strengths. Clapper was responding to a question on China's recent actions in the East and South China Seas posed at a House Intelligence Committee hearing on worldwide threats. Clapper said that China had been greatly concerned by the US "pivot to Asia"- the Obama administration's attempt to boost America's military, diplomatic and economic presence in the region - viewing it as an attempt at containment. "They've been quite aggressive about asserting what they believe is their manifest destiny, if you will, in that part of the world," Clapper told lawmakers. He added that disputes over islands and energy resources, particularly in the South China Sea, created potential flash points for conflict. Beijing denies any aggressive intent. It says its claims have a historical basis, including over most of the resource-rich South China Sea, where it has disputes with nations including Vietnam and the Philippines. The top-ranking Democrat on the committee, C. A. "Dutch" Ruppersberger, described China's November declaration of an air defence identification zone in the East China Sea - over uninhabited islands controlled by Japan but also claimed by China - as a "troubling power and land grab" and an affront to international law. Clapper said China's military modernisation effort extended to all of its armed forces, in space and in cyberspace and over time China would try to project its power globally. Ruppersberger asked whether China could threaten US satellite systems, which have widespread military and civilian applications. Clapper responded that there were countries pursuing very aggressive and impressive "counter-space" capabilities, and the US was taking "appropriate actions". The US Senate Foreign Relations Committee on Tuesday unanimously approved the nomination of Senator Max Baucus, a Montana Democrat, to be the next US ambassador to Beijing, clearing the way for a vote on his confirmation in the Senate, where approval is expected.

Hong Kong*:  Feb 5 2014

Donnie Yen talks about the challenges of his latest role in ‘The Monkey King’ (By Yvonne Teh) Action icon Donnie Yen suffered for his art under complex face make-up in big-budget epic ‘The Monkey King’ - Being both the lead actor and action director of a movie is par for the course for Donnie Yen Ji-dan. After all, the action superstar has appeared in some 60 films and has been the action director on about 20 – many of which he also starred in. But Yen says doing double duty on his latest film, HK$600 million fantasy epic The Monkey King, took things to a whole new level. “The Monkey King represents the most enormous challenge of my whole career. There were so many things going on on a daily basis,” says Yen, 50. Long before stepping onto the set of this highly anticipated Lunar New Year movie, Yen had already been preparing for his roles in front of, and behind, the camera. “This is a project I started working on a couple of years ago,” he says. “The reason it’s taken so long is because there’s an enormous amount of post-production involved. You can tell that this is an immense film. It’s a very ambitious movie not only for the Asian film industry but any industry, a very daring and challenging project.” The Monkey King tells the story of the origin of the legendary character from Ming Dynasty poet-novelist Wu Chengen’s Journey to the West. “In the past, there were many filmmakers – Chinese as well as Western – who wanted to make The Monkey King,” says Yen. “But I think those were more thoughts without real action behind them – because this film requires a lot of imagination and knowledge of historical literature. Plus, it has only become possible to achieve it with recent technological advances. Ten years ago, this type of film and setting would have been impossible.” It has finally come to fruition with Soi Cheang Pou-soi directing. Among the notable films where Yen has worn the hats of action director and star are Wilson Yip Waishun’s SPL (2005) and Flash Point (2007), and Peter Chan Ho-sun’s Wu Xia (2011). For The Monkey King Yen says he had to respect the conventional parameters of the legendary story when planning the action scenes. “The world involved in the story is so imaginative and yet it has to be within the frame of the original literature,” he says. “As a Chinese person, I don’t want to create something that is outside the expectations of what the audience wants from Journey to the West. Basically, the Monkey King cannot fight Godzilla, for example, [because] it’s not in the original story.” While the story of Sun Wukong the Monkey King dates back to the 16th century, the filming techniques used on this movie were cutting edge. For a lot of the people working on this production, “that was the first time working with 3-D – true 3-D – and in fact, the team that came to help us was the team that created 3-D”, says Yen. “I was working with a brand new set-up and camera equipment that was very heavy. So I had to make adjustments to the action scenes with such a big camera.” Yen estimates that he spent a total of four months working on set for the film. While he would have preferred to have spent the majority of that time in front of the camera or working out moves with the other cast members (including Aaron Kwok Fu-shing as the Buffalo Demon King, and Chow Yun-fat as the Jade Emperor), he ended up spending a lot of time being transformed into the very simianlooking Sun Wukong. “The make-up was so delicate and complicated. It wasn’t just one [latex piece] like those Halloween masks you can buy. It took specialists – often four people – five hours a day to glue it onto my face, piece by piece. Forehead, nose, chin, you name it. Sometimes I would have to wear coloured contact lenses, and then there’s the monkey’s teeth, which caused problems with eating and drinking. I had to drink through a straw,” Yen says. “Five hours to put it on, one hour to take it off – that’s every single day, a total of up to 1,000 hours sitting on a couch being made up. “I was given only six hours a day maximum for shooting. Because of the chemicals they put on my skin, anything more than six hours would be damaging to my skin. “The first few days, I wondered how I could last doing this. Of course, I was filled with joy when I finally finished having to do it. It’s a great challenge for any actor. “ Besides the physical burden, Yen had to learn how to express himself under all that make-up. “The first two, three weeks [of shooting], I was adjusting to having all this stuff on my face and trying to gain control of my expressions. At the beginning, I had problems with the accuracy of a smile, for example – I had to use more strength than I normally would. But if I used too much, the expression would be over-exaggerated. So it took me a few weeks just to get the facial expressions down correctly,” he says. After he had mastered that, Yen then had to figure out Sun Wukong’s body movements. “I spent months prepping – thinking about the character, doing lots of research and analysing how to play the Monkey King. It’s not just adjusting to the muscular control, I was trying to grasp the accuracy of how I act. I would review it every single day. It took me about two or three weeks to really get the role down and feel comfortable playing the character.” Ultimately though, Yen decided that it was all worth it, because the experience will contribute to his goal of becoming a great thespian. “I wanted to elevate my filmmaking, to become a better actor. And to become a better actor, you need to have more varied experiences,” he says. “I’ve been an action person for 21 years. I believe that I’ve proven myself as an action actor. So where do you go from there? How do I elevate myself as an actor and how do I elevate action movies? “As a personal ambition, I want to prove that even though I’m an action icon, it doesn’t stop me from becoming a great actor.” MONKEY BUSINESS - "In the worlds before Monkey, primal chaos reigned …" So began each episode of the Japanese-produced television series Saiyuki (Monkey), which introduced Journey to the West to the world through its initial run in the 1970s. But the surprise was that it took so long. With its wild characters and scenes, and even wilder dubbing, the show brought Wu Chengen's layered tales to an international audience, who were intrigued by its action, monsters and by the lessons in morality at the story's core. Asian audiences have, of course, long been in thrall to this masterpiece of ancient literature. The first cinematic retelling was the silent film The Cave of the Silken Web (1927). China's first animated feature film - 1941's Princess Iron Fan - also selected a portion of Wu's tome as its foundation and filmmakers have been dipping into its pages ever since. Monster hits such as the Ho Meng-hua-directed Monkey Goes West (1966) - which was followed by three sequels - as well as the Jet Li vehicle The Forbidden Kingdom (2008) and Stephen Chow Sing-chi's two-part A Chinese Odyssey (1995) have kept the story alive for subsequent generations. Chow, who has long professed his love for the story, returned for another crack with last year's Journey to the West: Conquering the Demons, which made just over 1.24 billion yuan (HK$1.57 billion) at the mainland box office, making the film China's all-time biggest hit. It would be no surprise to see the filmmaker revisit the Monkey King in the future and he said before his latest release that he had so far only scratched the surface of the story. "Every chapter of Journey to the West has enough going on to make more than one film, and there are so many chapters you could just keep making film after film," says Chow. Meanwhile, TVB's classic Journey to the West series first hit screens in 1996 - making a superstar out of Dicky Cheung Wai-kin - and it still attracts a massive local audience with every re-run. The story has also found an audience through different mediums in recent years. Blur and Gorillaz frontman Damon Albarn and Chinese stage director Chen Shi-zheng joined forces for the acclaimed opera Monkey: Journey to the West in 2007. Gamers have not been forgotten, with Nickelodeon launching the multiplayer game Monkey Quest in 2011 - which had more than 10 million users.

 China*:  Feb 5 2014

Ireland goes the extra mile for Chinese visitors (By Anna Healy Fenton Anna.fenton@scmp.com) Oh the irony. I learn that mainland Chinese tourists flock to Dublin’s poshest department store Brown Thomas, because they now have 12 in-store terminals that accept China UnionPay cards. “Very few businesses in Ireland hold these machines,” the department store’s general manager told Dublin’s evening Herald newspaper. Hong Kong people know this only too well, after HSBC switched to these UnionPay cards last year. How hilarious that those smart chaps at Brown Thomas have been cute enough to clean up with mainland shoppers - by installing the UnionPay machines for the Chinese customers. Well done lads. UnionPay card machines aren’t the only reason mainland Chinese tourist flock to Dublin. Firstly, Ireland eased its visa restrictions last year, after the UK tightened theirs, chuckle, chuckle. The RMB has appreciated 40 per cent in recent years over the euro, which means China’s new travelling middle class gets far more bang for their buck in euroland. Ireland’s high sales taxes and VAT can be claimed back at the airport, reducing real prices even further. You also get the latest lines of European branded products, so they can stock up on their favourite Hermes, Chanel, Louis Vuitton, Burberry and Ireland’s own Waterford Crystal, also popular with Chinese customers. “When you combine the price difference, the conversion with the euro and the tax back they save a lot of money shopping here,” Brown Thomas general manager Limby told the Herald. Business is booming, with Chinese customers spending three times more than their normal customer. Mainlanders often splash out €20,000 on a single item. Mandarin speaking staff - Chinese shoppers can even chat in Mandarin to Brown Thomas sales staff. Before Christmas, the store added ten more Chinese speaking staff to the 25 they already had, to cope with the holiday rush. Some of the mainland shoppers speak English, but for a more in-depth conversation Mandarin is required, explained Limby. Local staff have also received cultural training to deal with their Chinese customers from the UCD Confucius Institute, which promotes China-Ireland cooperation in business and education. Ireland is taking China relations seriously. Cultural bonding - Ireland is embracing cultural bonding with China so enthusiastically. Our image previously in Asia was so bad that when the first batch of Vietnamese boat people wee told their destination was the Emerald Isle, they were dismayed. They tried to refuse to go. A few hundred refugees were dispatched to Dublin nevertheless and settled on the city’s north side. Needless to say, they prospered and for years their offspring regularly topped the school results league table. Ireland circa 2014 is a different place. Thousands of mainland Chinese students choose to study in Ireland’s colleges and universities. As well as teaming up with the Chinese government (see previous blog) to develop the mainland’s bloodstock industry, Dublin’s Chinese New Year Festival is now in its seventh year. A raft of events including a carnival, started on New Year's Eve, January 30, running through to February 14. Dublin’s Lord Mayor Oisin Quinn said: "Our twinning relationship with Beijing continues to flourish and we aim to build and develop this in the coming year, especially in the area of cultural exchange," acknowledging the positive contribution made to the city over many years by the Chinese community. Amen to that.

China reports three new H7N9 bird flu deaths, toll hits 25 (By Agence France-Presse in Beijing) Three Chinese people have died of the H7N9 bird flu, the state news agency Xinhua said on Tuesday, adding to a spike in cases this year. Two men, aged 76 and 52, died in southern Guangdong province on Monday, while a third patient passed away in eastern Jiangsu province on Saturday, Xinhua said in separate reports, citing provincial health authorities. Two new cases were also reported – a four-year-old girl in Guangdong in stable condition, and a 59-year-old woman in Jiangsu in critical condition. So far this year China has confirmed 115 human H7N9 cases, including 25 deaths, according to a tally of reports by local authorities. By comparison last year there were 144 infections and 46 deaths, according to official figures. The World Health Organisation (WHO) said last week that the rise in cases this year was not surprising due to seasonal factors, rather than a virus mutation. The same week Hong Kong was forced to cull up to 20,000 chickens after finding H7N9 present in poultry imported from mainland China, days before the Lunar New Year celebrations. Mainland China’s H7N9 outbreak among humans began in February last year, triggering concerns that the virus could mutate to become easily transmissible among people, potentially triggering a pandemic. Both Chinese authorities and the WHO have said there has been no evidence so far of sustained human-to-human transmission. But limited spread – such as among relatives who have been in close contact – is possible. Last week a couple and their daughter contracted the H7N9 bird flu eastern Zhejiang, China’s worst-hit province, Xinhua reported at the time.

Hong Kong*:  Feb 4 2014

Construction firms fear that Hong Kong's new air quality targets will kill projects (By Cheung Chi-fai chifai.cheung@scmp.com) Contractors and consultants say new air quality objectives may mean projects cannot go ahead in Mong Kok, Central and Causeway Bay - Some big contractors and consultancies fear new air quality objectives could mean no new projects can be built in some areas of the city. "The industry is very concerned about the impact of the new air quality objectives. We need to think about solutions to avoid possible conflicts," Gammon Construction chief executive Thomas Ho On-sing said. Ho, also chairman of the Construction Association, called for more discussion about how to meet the new standards. The concerns are included in a report commissioned by the association. The association will submit recommendations to the Environment Bureau for it to consider in its review of the environmental impact assessment (EIA) system. New air quality objectives came into force on January 1. Under the EIA system in place since 1998, projects had to meet certain criteria or they would be refused a permit. The study involved interviews with six companies and five professional bodies about their opinions of the EIA system. Some said areas including Mong Kok, Central, Causeway Bay and Tung Chung might not be able to accommodate new projects under the stricter new standards. While the report called for a review of the feasibility of having new projects in these areas, Raymond Ho Chung-tai, chairman of the Association of Engineering Professionals in Society, which did the research, said they were not asking for exemptions. "We just want the government to come up with clear requirements of what should be done," he said. "If it believes it is worth introducing measures, we will go along with it." The report concludes there is no need to revamp the framework and operation of the system. But it calls for a central database of ecological data and a better exchange of information with the mainland on projects that could mutually affect each other. As to whether the Council on the Environment should be beefed up, the survey found there was no consensus in society. While some local activists opposing development in the northeastern New Territories want to have the EIA report in Chinese, and extend the one-month public consultation, Raymond Ho said it was unnecessary as it would be costly and impractical to have a Chinese report. A department spokesman said it had received a copy of the report. But he would not comment on fears some areas would not be able to accommodate new projects because of their poor air quality. The spokesman would only say the government was committed to combating air pollution and reach targets set for 2020. "Project proponents can help by incorporating measures to reduce air pollution, making their project viable," he said. He also said any proposal to change the EIA mechanism should be studied carefully, taking into account past experience, public views and court judgments. On setting up a central ecology database, he said project-based, individual ecological assessment could not be replaced by a database.

 China*:  Feb 4 2014

China says Japan's 'hype' over air defence zone spreads regional tension (By Agencies in Beijing - Reuters and Agence-France-Presse) [The Air Defense Identification Zone is airspace over land or water in which the ready identification, location, and control of civil aircraft over land or water is required in the interest of national security. China's Defence Ministry announced its ADIZ over a vast area in the East China Sea on November 23, 2013, which covers the area around the Diaoyu islands, controlled by Japan and known as the Senkaku Islands. The establishment of this zone drew strong opposition from Japan, the US and South Korea, becoming a flashpoint in East Asian politics and security.] China does not feel threatened by countries in Southeast Asia and is optimistic about the situation in the disputed South China Sea, the foreign ministry said, warning Japan not to spread rumours it plans a new Air Defence Identification Zone. China alarmed Japan, South Korea and the United States last year when it announced a zone for the East China Sea, covering a group of uninhabited islands at the centre of a bitter ownership spat between Beijing and Tokyo. The Japanese Asahi newspaper said last week China was considering setting up a similar zone, where foreign aircraft are supposed to report their movements, in the South China Sea, prompting the US State Department to warn against such a move. In a statement released late on Saturday, the foreign ministry in Beijing implied there was no need for such a zone in the South China Sea, where China, Vietnam, Malaysia, Brunei, the Philippines and Taipei all have competing territorial claims. "Generally speaking, China does not feel there is an air security threat from Asean countries," the ministry said, referring to the Association of Southeast Asian Nations. "China feels optimistic about relations with countries surrounding the South China Sea and the general situation in the South China Sea," the ministry said. While the foreign ministry said China had a right to set up Air Defence Identification Zones, it criticised Japan for allegedly attempting to distract attention from its own military plans. "Right-wing forces in Japan have again been hyping up so-called plans that China will shortly set up an Air Defence Identification Zone in the South China Sea, which is purely to try to distract international attention to cover up their conspiracy to expand their military," the ministry said. "We warn these forces not to delude people with rumours for their own selfish interests and to play up tensions, and hope the relevant party talks and acts cautiously," it said. Three Chinese ships sailed through disputed waters off Tokyo-controlled islands yesterday, according to Japan's coastguard. The Chinese coastguard vessels spent more than two hours in the 12-nautical-mile territorial waters off one of the Senkakus, which China claims and calls the Diaoyus, it said. China's State Oceanic Administration said three of its coastguard ships were patrolling territorial waters surrounding the Diaoyu islands, according to Xinhua. China has regularly dispatched patrols to the East China Sea since it established the Air Defence Identification Zone in November. Beijing has repeatedly denied Japanese accusations of being a threat to peace.

South China Morning Post: “你是來自中國?”大專生,20,在新德里種族主義暴徒打死 'Are you from China?' College student, 20, killed by racist thugs in New Delhi (By McClatchy-Tribune in New Delhi) Protesters shout slogans outside a police station in New Delhi on Saturday. Many people have criticised the response of the Delhi police to the young man’s beating and death.. Indians from a part of nation near Myanmar and China say they face discrimination in rest of the country for their 'Asian' features - The death of Nido Tania on Thursday sparked a swift outcry across social media in India. Tania’s supporters produced images, including the one above. He was a slight young man, who sported hipster eyeglasses and a wispy moustache. He had dyed his spiky hair blond, but that was not the only thing that made college student Nido Tania stand out in the Indian capital. Tania was from northeastern India, a narrow strip of territory wedged between China and Myanmar, whose people say they face discrimination in the rest of the country for having "Asian" facial features. When Tania, 20, stopped in a dairy to ask for directions on Tuesday afternoon, the shopkeeper taunted Tania for not knowing his way around, saying, "Are you from China?" and making fun of his hair. The incident escalated into a violent altercation in which several men thrashed him with sticks and steel rods, friends and officials said. He died in his bed the next day, succumbing to severe injuries to the chest and brain, according to preliminary medical results provided to his family. The incident has sparked outrage in New Delhi, which was already reeling from a spate of high-profile rape cases, and has added to a growing sense of insecurity in a capital that is aiming to be a showcase for India's growing economic might. Hundreds of protesters rallied on Saturday in Lajpat Nagar, the market where the beating took place, calling it a hate crime and demanding that the assailants be prosecuted. "This was a racist hate crime," said Albina Subba, an advertising writer originally from the northeast Himalayan town of Darjeeling. "Our community is often targeted like this … We look different, so it's easy for people to see we're not from Delhi." She added: "We have little faith in the Delhi police, but this time we want them to take action." "This happens every day in Delhi. Each and every one of us has experienced discrimination because of our physical features," said Sophy Chamroy, a 22-year-old student from the northeastern state of Manipur. India's 1.2 billion people have many languages and customs but, as with the rape cases, racially motivated assaults seem to occur in New Delhi and other major cities with regularity. Many victims from the northeast are young people who have migrated to the capital for school or job opportunities lacking in their poorer home areas. Last year in New Delhi, three students from Manipur were beaten by neighbours. In a separate case, a 21-year-old beautician from Manipur was found dead in her apartment with injuries to her face and toes. Police labelled it a suicide and dropped the case but many suspected she was slain. So widespread is the discrimination against people from northeastern India that the federal government in 2012 passed a law that punishes the use of a racial slur with up to five years in prison. Still, activists say, authorities rarely enforce such laws and police are as likely to participate in discrimination as intervene to stop it. "You don't know what is on the minds of people in Delhi, because these incidents keep on recurring," said Geetartha Barua, an official with the state government of Arunachal Pradesh, where Tania lived. Tania was in New Delhi on vacation and going to visit an ailing friend in the area near Lajpat Nagar when he walked into the dairy, friends said. Tania smashed a glass display case in anger after being taunted, prompting the shopkeeper and several other men from the market to set upon him and a friend. The shopkeepers called the police, who got Tania to pay about US$120 for the broken glass. The police did not take any action against the assailants, Barua said. Police officers let Tania go, but when he passed the shop a second time the attackers beat him again, said Jotam Toko Tagam, the former president of a New Delhi organisation for students from Arunachal Pradesh. When he reached his sister's flat, where he was staying, he complained of pain and was bleeding from his wrist. He fell asleep early on Thursday morning after applying balms across his body, Tagam said. Around 1pm the next day, friends tried to wake him but found his body cold and limp. Brought to a nearby hospital, he was pronounced dead on arrival, Barua said. The case sparked an outcry across Indian media and websites with many criticising the response by the Delhi police. Three men reportedly have been detained for questioning. Barua said police did not open a murder investigation until 24 hours after Tania had died, after the incident had begun to make news. "We are being forced to go exert pressure on different quarters to get the police to investigate this matter properly, at a time when the situation is very sad," Barua said.

China pulled towards action in South Sudan (By Teddy Ng in Beijing teddy.ng@scmp.com) Beijing's preference for hands-off approach to political affairs in Africa tested by civil war that threatens its energy interests, experts say - Salva Kiir, South Sudan president. China has taken a more proactive role in trying to end the fighting in South Sudan, one of its main oil suppliers, suggesting Beijing is strengthening political engagement with African nations, observers say. But any contacts would still be made in a low-key way in keeping with its policy of non-interference, despite pressure on China to step up its global political and security role as its economic power increases around the world, they said. China imported about 14 million barrels of crude oil from South Sudan in the first 10 months of last year, about 80 per cent of its total export, and has more than 100 registered enterprises in the African nation. Beijing sent special envoy Zhong Jianhua to carry out mediation efforts in South Sudan after violence broke out in December between its president, Salva Kiir, and rebels loyal to ousted vice-president Riek Machar. The two sides signed a ceasefire last month. Foreign Minister Wang Yi also called for an end to hostilities during his visit to Ethiopia last month, urging all sides to start talks. China was deeply concerned about the crisis and South Sudan should be concentrating on economic development, Wang said. Professor Daniel Large, an expert on developing nations at the Central European University based in Budapest, Hungary, said Beijing's energy ties meant it had to take a more direct role in South Sudan. "China can be committed to non-interference of course, but at the same time Beijing has to interfere," he said. Observers said China had decided to take prompt action to prevent the crisis from escalating because Beijing did not want a repeat of the events in Libya, which saw the toppling of the regime of Muammar Gaddafi. China had limited investments in Libya, but the turmoil led to concerns in Beijing that any future government would be less favourable to Chinese financial backing, analysts said. "China's direct interest in Libya is not that high, but still the chaos there created tremendous losses," said Zhang Hongming , an African studies researcher at the Chinese Academy of Social Sciences. "In South Sudan, China has a huge financial interest and the potential losses could also be huge if the situation gets out of control." Zhang said Beijing was reluctant to engage itself politically in Africa, but African nations have called for more Chinese involvement on the continent as China expands its presence there. "China realises that if it does not try hard to mediate, then it will only suffer more when crises keep unfolding," Zhang said, adding the principle of non-interference should be flexible. Wu Jianmin , a veteran diplomat, said China would still avoid directly getting involved in the internal politics of other nations. "I think people will support China if it calls for peaceful resolutions to conflicts," he said. "But it would be over for China if it supported taking action to overthrow the government of other nations.''

Hong Kong*:  Feb 3 2014

 

Mexican cartel smuggling cocaine into Hong Kong amid booming demand for drugs (Bryan Harris bryan.harris@scmp.com) Fears of 'unholy alliance' between notorious Sinaloa cartel and local triads to take advantage of booming demand for cocaine and 'Ice' - One of the world's largest and most notorious drug cartels is targeting Hong Kong as it seeks to expand its operations into lucrative new markets, the Sunday Morning Post has learned. Already a key supplier of illicit narcotics to many Western countries, Mexico's Sinaloa cartel is diversifying its business by taking advantage of the booming demand for cocaine and methamphetamines in the Asia-Pacific region. Details of the syndicate's push emerged after the Post revealed last month how Hong Kong triad gangs are supplying the cartel with precursor chemicals - such as ephedrine and pseudoephedrine - that are needed to produce methamphetamine, known here as "Ice". Following that report, the Customs and Excise Department last week announced it was setting up a dedicated team to crack down on the illegal trade of the controlled chemicals. Named after the state on Mexico's Pacific coast where it was formed, the Sinaloa is considered one of the world's most sophisticated and dangerous drug-trafficking groups and is a powerful player in Mexico's drug wars, which have claimed 60,000 lives since 2006. Describing the group as the "most notorious", a local law enforcement source confirmed that the cartel was smuggling cocaine into Hong Kong, but declined to give more details because it could compromise an investigation. The source's comments echo a 2012 study in the US Defence Department's Prism journal, which highlighted Sinaloa's push into Asia and its efforts to enter the Hong Kong market. Access to such markets would not only diversify the syndicate's consumer base, but would also secure its global narcotics supply chain. A number of recent arrests across the region have also heightened fears about the cartel's presence. On Christmas Day a special task force of the Philippine National Police detained three known Sinaloa affiliates during a raid on a meth lab south of Manila. The bust was followed three weeks later by the capture of four Canadian gangsters thought to have links to the Mexican cartel. Hong Kong's triads have long been key players in the Philippine drug trade and police there now fear an "unholy alliance" between the Mexican and Chinese drug syndicates. "We have to move fast to nip this partnership in the bud," said Senior Superintendent Bartolome Tobias, head of the Philippine National Police anti-illegal- drugs task force. In Hong Kong, five Mexicans were sentenced last year to up to 27 years in prison for smuggling 538kg of cocaine into the city in 2011. Police and customs officials have declined to say whether the five were Sinaloa traffickers and Mexican consul-general Alicia Buenrostro Massieu said "respect for due process" meant she could not say. However, the ringleader of the group came from Sinaloa territory and operated out of a Mexican port controlled by the cartel. In sentencing the group, Deputy Judge Mr Justice Gareth Lugar-Mawson said that the individuals - with the exception of the ringleader - were drug mules "driven to participate because of debt problems". Leveraging unpaid debts is a common method that such syndicates use to recruit otherwise innocent mules, experts say. With surging demand for methamphetamine and cocaine, an increasingly affluent Asia presents an enticing market for drug traffickers. Cocaine seizures by Hong Kong Customs soared from 30kg in 2011 to 600kg in 2012, a rise of nearly 2,000 per cent. The figure fell to 170kg last year, yet the drug has been classed a "growing threat" in Asia by the UN. According to customs, most of the seizures were destined for neighbouring countries. "There is much more cocaine on the market now than in the last 20 years," said Professor Karen Laidler, an expert in drugs trends at the University of Hong Kong. "Previously it was considered a rich person's drug, but since the market opened up the price has come down. It is now more accessible. People also learned how to make crack [cocaine] which is more addictive." A gram of cocaine in Hong Kong today costs about HK$1,200, down from HK$1,700 five years ago, according to Caritas social worker Debby Wong. "Ice" is also increasingly popular, with seizures soaring. Last year, Hong Kong authorities seized 165kg of the substance - a 125 per cent rise from the 73kg captured in 2012. Similarly, seizures of meth pills in mainland China have risen dramatically, increasing 1,500 per cent from six million in 2008 to 100 million in 2012, according to the UN Office on Drugs and Crime (UNODC). With an average purity of between 90 per cent and 99 per cent, the "Ice" seized in Hong Kong and mainland China is of significantly higher quality than that in the rest of Asia, a fact that experts attribute to the prevalence of skilled chemists in Chinese drug-trafficking groups. "It's really a perfect storm for meth use in Asia," said the UNODC's Jeremy Douglas. "Asia has the raw materials, the market demand and the organised crime."

 China*:  Feb 3 2014

 

China's factories slow down as credit squeeze and holiday disruption kick in (By Bloomberg) Indexes measuring manufacturing and new orders dip ahead of Lunar New Year holiday - A key measure of manufacturing activity fell to a six-month low last month as output and orders slowed amid government efforts to rein in excessive credit. The Purchasing Managers' Index was 50.5, the National Bureau of Statistics and the China Federation of Logistics and Purchasing said yesterday. "The economy has lost some momentum," said Wang Tao, chief China economist at UBS in Hong Kong, who previously worked at the International Monetary Fund. Credit growth slowed in the second half and "that impact is being felt", she said. Estimates for the official PMI from 31 economists ranged from 50 to 50.9. The benchmark Shanghai Composite Index fell 0.8 per cent on Thursday, capping the worst start to a year since 2010, on fears the economy is slowing as the US Federal Reserve cuts stimulus. China's markets are closed until Thursday for the Lunar New Year holiday. A gauge of output in January fell to a four-month low of 53 from 53.9, while the new-orders index declined to a six-month low of 50.9 from 52.0, according to government data. The survey suggested manufacturing jobs are shrinking at a faster pace, with a gauge of employment declining to 48.2, the lowest since last February. "Growth may continue to slow in the next couple of quarters due to generally tighter credit conditions, amid government efforts to contain local government debt and regulate shadow banking," said Ding Shuang, senior China economist at Citigroup in Hong Kong. The data suggests that a "gradual deceleration of economic activity continued at the beginning of the year", Ding said. The government-sponsored PMI has a stronger representation of large companies and state-owned enterprises that serve the domestic market than the one prepared by Markit and HSBC, according to Louis Kuijs, chief China economist at Royal Bank of Scotland Group in Hong Kong. The decline in January's PMI was mainly due to the approach of the Lunar New Year holiday, Zhao Qinghe, of the statistics bureau, said. He said the operating environment for production would improve this year. Bank of America analysts urged reading the January and February PMI figures "with a grain of salt" because of production slowdowns related to workers returning home for the week-long festival. "We do not think a notable growth slowdown is evident at present," Hong Kong-based economists Xiaojia Zhi, Ting Lu and Sylvia Sheng wrote in a January 29 report. Citigroup's Ding said the decline in January's official PMI was "partially seasonal" because of the holiday, whose timing shifts every year. Last year, the PMI fell to 50.4 in January and 50.1 in February, when the holiday fell.

Hong Kong*:  Feb 2 2014

Sinopec to co-operate in Hong Kong graft probe (Patrick Boehler patrick.boehler@scmp.com) China Petroleum and Chemical Corporation, also known as Sinopec, has said it is co-operating with Hong Kong authorities in an anti-graft probe, media reports said. The state-owned company would not tolerate any illegal or corrupt conduct, it said in a statement made through a public relations agency to Bloomberg News. It added that operations were not affected and it considered the inquiries to relate to the “individual conduct” of unspecified staff, according to the statement. Hong Kong’s Independent Commission Against Corruption had questioned two company executives of the conglomerate’s SAR-based subsidiary Sinopec (Hong Kong) Limited, Apple Daily reported on Thursday. The report did not say when the two were questioned. The inquiry relates to kick-backs over petrol stations in Kowloon, the report said. Sinopec runs 42 filling stations in the city, according to its website. The revelation comes at a sensitive time for the oil and gas conglomerate after China’s central leadership had briefed top-level officials on findings in the corruption case centred on former security tsar Zhou Yongkang, who was a leading figure in the industry in the 1990s. The share price of Sinopec’s Hong Kong-listed subsidiary has fallen 2.4 per cent since the beginning of the year and 11.8 per cent since an eight-month peak in November. Calls to Sinopec’s Hong Kong and Beijing offices and the ICAC went unanswered on Friday.

 China*:  Feb 2 2014

[Businesses-Universities-People-Government on State, City and County Levels in the San Francisco Bay Areas understood Asia with long term commitments with substance help San Francisco to achieve as major financial, business, education and investment center between US and China - it is one of the reasons why 100,000 of the best educated, young and smart from Hawaii now live in the San Francisco Bay area to capture the dynamic of trade and business not found in Hawaii] San Francisco Bay Area more connected to China (By Chen Jia in San Francisco chenjia@chinadailyusa.com) Expansive economic, demographic and social change in China is having significant impact on the San Francisco Bay Area, according to a report released by the Bay Area Council Economic Institute. "The Bay Area, including Silicon Valley, is more closely connected to China than any other place in the US, and the relationship – which dates back 160 years – is continuing to deepen," institute president and CEO Sean Randolph said at the Commonwealth Club of California in San Francisco as the report was released. "This presents important opportunities for the region and its businesses". Randolph wrote the 144-page report – Ties That Bind: The San Francisco Bay Area's Economic Links to Greater China – with Neils Erich. Their research covers the fields of economics, education, professional networks, trade and tourism, affiliates and invention. China ranks second among the top sites for Bay Area businesses abroad, with 795 Bay Area affiliates located there, according to the report. Chinese direct investment in the Bay Area keeps increasing, with a growing number of acquisitions in industries ranging from clean-tech to biotech, the report said. Investment in real estate is seeing particular growth, it said. "China's internal transformation is creating huge demand for many technologies, products and services, while the Bay Area's innovation and technology industries are playing a key role in supporting China's transformation," Randolph said. He said the Bay Area is not only a destination for Chinese investment and companies, but also for students and tourists. For example, the number of students in the Bay Area from China has increased to 7,000 who contribute $219 million annually to the state and regional economies. In 2005, the number of Chinese students was 5,500. Vying for overseas tourists, the region is also seeing a significant shift from low-end packaged tours to wealthier, individual Chinese travelers. Through extensive interviews and using a wide array of examples, the report also "highlights the Bay Area's leading role as a landing pad for China as it seeks to prioritize innovation and expand its economic presence globally," said Rufus Jeffris, the vice president of communications of the Bay Area Council. He said the report expands on a similar study the Bay Area Council Economic Institute released in 2006. "Much has changed in China and the Bay Area since then, particularly in the context of the US recession and the global economic slowdown," he said. "The economic relationship between China and the Bay Area has matured, but has also become more complex. Bay Area companies face challenges in a growing Chinese market," he said. Meanwhile, new sectors such as renewable energy are in play, as China's government has made innovation a priority. Chinese investment in Bay Area real estate, biotech and information technology is also increasing. And new incubators and connectors are building bridges for both established businesses and aspiring entrepreneurs. The study offers information about how Bay Area and California companies may respond to the changing demands of Chinese consumers, investors and businesses both here and across the Pacific. For companies seeking opportunities in China, the report finds that key growth sectors include architecture and urban planning, energy and environmental technologies, clean-tech, life sciences and health care, and mobile and Internet technologies.

[Harry Reid is SMART NOT to give Obama Fast Track approval to TPP with primary objective to contain China as it will ONLY benefit a handful of Major US Corporations and practically NOTHING for Small Business with 50 employees or less and NO benefit to 99.9% of the Companies for States like Hawaii. There are also serious environmental issues exempting major corporations from liability under US law through sweet heart deals within TPP] Obama's pivot to Asia faces setback from fellow Democrat over trans-Pacific trade deal (By Associated Press in Washington) Senate majority leader Harry Reid announces his opposition to fast tracking of legislation to confirm Obama's proposed Trans-Pacific Partnership - President Barack Obama’s foreign policy pivot to Asia took a hit this week, and it came from a stalwart of his own party. The top Democratic in the US senate, Harry Reid, has announced that he opposes legislation that’s key for a trans-Pacific trade pact that’s arguably the most important part of Obama’s effort to step-up American engagement in Asia. Since Obama rolled out the policy, most attention has been on the military aspect, largely because it was billed as a rebalance in US priorities after a decade of costly war in Afghanistan and Iraq. But officials have increasingly stressed the pivot is about more than military and cementing America’s stature as the pre-eminent power in the Asia-Pacific as China grows in strength. It’s about capitalising on the region’s rapid economic growth. Hence the importance of the Trans-Pacific Partnership, or TPP, an ambitious free trade agreement being negotiated by 12 nations including Japan that account for some 40 per cent of global gross domestic product. “The pivot is the TPP right now,” Victor Cha, director of Asian studies at the Georgetown University’s School of Foreign Service, told a conference at a Washington think tank this week on US policy and the outlook for Asia this year. The Obama administration’s Asia policy has been welcomed by countries concerned by China’s rise and its expansive territorial claims. During the president’s first term, the US has made progress in strengthening old alliances with nations like the Philippines, forging deeper ties with Indonesia and Vietnam, and befriending former pariah state, Myanmar. There were problems. Rancorous politics at home forced Obama to withdraw from the East Asia Summit last autumn, raising some questions about his commitment to the region. New military deployments in the Asia-Pacific – a few hundred Marines in Australia, new warships rotated through Singapore – have fuelled Chinese accusations of a US policy of containment while making little impact on regional security. Asia got little mention in Obama’s State of the Union address on Tuesday, adding to perceptions in some quarters that the pivot has dropped a peg or two in the administration’s policy agenda during the president’s second term. But he did urge both parties in Congress to approve so-called fast-track legislation needed to make the TPP and a separate trade deal under negotiation with Europe a reality, saying it would open new markets and create American jobs. The problem for Obama is that a lot of his fellow Democrats are set against a fast-track process that would require Congress to act on the trade deals negotiated by the administration in a yes-or-no vote, without the ability to make any changes. Reid said on Wednesday he opposed fast-tracking and that lawmakers should not push for it now – a comment that suggests that legislation introduced three weeks ago will go nowhere soon. While that legislation is co-sponsored by a senior Democrat – Obama’s nominee to become the next ambassador to China, Max Baucus – many in the party join with labour unions in opposing lowered trade barriers, which they worry will cost jobs due to increased competition. That includes the leading Democrat on trade policy in the House of Representatives, who wants any fast-track procedure to stipulate a more active role for Congress in trade policy and measures to address currency manipulation. So in a bitterly divided Washington, Obama is in the rare position of having more support for a key policy among his political rivals, the Republicans, than from his own party. On that front too he faces opposition. Top Republicans who want the fast-track accuse the administration of failing to pull its weight to mobilise support for it among Democrats in Congress – a task that will be complicated by November mid-term elections. Lawmakers will be careful to avoid measures that could hurt their prospects of re-election. In an e-mailed comment on Friday, US Trade Representative Michael Froman remained upbeat about the TPP, saying that momentum developed to advance the TPP talks in 2013 is carrying over to this year. He said the administration is working closely with Congress and is committed to bringing home a deal “worthy of broad support from the American people and their representatives in Congress.” Ambassadors of Japan and Vietnam both say they want TPP negotiations to be wrapped up before Obama makes a visit to Asia in April, but stressed that the fast track is very important for achieving that. Japan’s Kenichiro Sasae told the Centre for Strategic and International Studies this week that fast tracking is needed because there are worries the US would seek changes to the agreement. He also acknowledged difficult hurdles remain on auto and agricultural products between the biggest players in the TPP, Japan and the US. The good news for Washington was that the Japanese and Vietnamese envoys remained strongly supportive of the US role in Asia, viewing it as a stabilising influence in region beset by territorial disputes. Those tensions have heightened fears of a conflict, as an assertive China stakes its claims to contested islands in the East and South China Seas. State Department spokeswoman Jen Psaki told reporters that from the president on down, the United States “could not be more committed to our relationship with Asia.” Despite US Secretary of State John Kerry’s deep involvement in high-stakes Middle East diplomacy, this month he will make his fifth trip to Asia since taking office a year ago.

Hong Kong*:  Feb 1 2014

My daughter's lesbian partner is not welcome in this family, says Gigi Chao's father as he withdraws 'dowry' offer (By Olivia Rosenman
olivia.rosenman@scmp.com) - The deal is off. For the time being. Cecil Chao Sze-tsung has rescinded his HK$1 billion proposal to find his daughter a good husband, but insists Gigi’s lesbian partner will never be part of the family. The deal is off. For the time being. Cecil Chao Sze-tsung has rescinded his HK$1 billion proposal to find his daughter a good husband, but insists Gigi’s lesbian partner will never be part of the family. After announcing last week that he was doubling the original deal for HK$500 million, the property tycoon told CNN Television on Thursday that he was retracting the offer. “Her private life is hers,” Chao said, adding that it didn’t matter whether or not he accepted it. "If this is her choice, then it’s for her," said Chao. But it seems the 77 year-old Chao is holding on to a glimmer of hope, “If this is the way she wants to be, for the time being it’s all over.” Asked what he meant by ‘for the time being’, Chao replied, “Because she is only 33. Life changes. I mean I changed a lot when I was 33 to now.” While he said he respects his daughter’s choice, he will never accept her partner of nine years, Sean Eav. “I don’t have to accept her partner. It’s for she (sic) to accept her partner,” he said. The reporter followed up by asking if he welcomed her partner into the family. Chao replied: “No.”The conflicted father daughter duo have been once again thrown into the spotlight in recent days after Gigi’s well-broadcast response to her father’s outlandish declaration doubling his initial offer of a dowry, which he first made in 2012. "I don’t think my dad’s offering of any amount of money would be able to attract a man I would find attractive," Gigi told the South China Morning Post in an exclusive interview. Just days later, Gigi penned on open letter to her father. “In terms of relationships, your expectations of me and the reality of who I am, are not coherent,” Gigi wrote. Gigi expressed frustration at the way her father behaves towards her partner. “It would mean the world to me if you could just not be so terrified of her, and treat her like a normal, dignified human being,” Gigi wrote in the letter which was published in the Post on Tuesday. In yesterday’s interview, Cecil Chao appeared hurt by the way he had learnt that Gigi is a lesbian, saying: “She never tell (sic) me in person, I saw it on the paper.”


Two very different New Year messages: CY Leung and US Consul General Clifford Hart release videos (By SCMP) Chief Executive Leung Chun-ying and over a hundred residents from less privileged and single parent families join Cathay Pacific Spirit of Hong Kong Community Flight 2014 and spend 90 minutes on a journey over Hong Kong. US Consul General Clifford Hart. Two contrasting messages were delivered on video this Lunar New Year. On the one hand, Chief Executive Leung Chun-ying took the opportunity to mark himself out as a man of the people by getting his hands dirty mixing traditional turnip cakes with a group of chefs using ‘recycled’ ingredients before eating them with elderly residents in need. His oft repeated theme was ‘sharing’ – a message that could well be levelled at Hong Kong’s wealthy elite. With its soft focus and warm fuzzy colours Leung’s video is a fine example of how to project soft power, inspired perhaps by Xi Jinping’s undoubtedly spontaneous visit to Beijing restaurant serving squidgy savoury buns last month. On the other hand, US Consul General Clifford Hart, takes the Year of the Horse a bit too literally in his message. Featuring Hannah the Horse, a finger puppet of the US government who wants to join the consulate’s car sharing scheme as a “one-horse power; green alternative, the lengthy video message appears pitched towards Hong Kong’s under fives in both tone and delivery. The consul and members of his staff address the diminutive equine puppet as if it were an applying for a green card. It tries very hard to tick all right boxes as Hannah endures a series of stilted interviews from staff as she does her best to prove her value. She eventually faces Hart, who practices his Puthonghua and appears to offer her a job as his chauffeur. No expense spared in this Hollywood production. Chief Executive Leung Chun-ying's Lunar New Year speech:- This is my second Lunar New Year’s message to the people of Hong Kong since being appointed chief executive and, in common with previous years, my wife Ching-yi and I decided to mark the occasion by making a short film. When we were considering what style of movie to make, my colleagues suggested it should involve real people and welcome the Year of the Horse with a balance of optimism and caution. One of my most fond memories of celebrating Lunar New Year during childhood is enjoying the seasonal food. When I recalled hearing about voluntary organisations in Hong Kong that avoid waste by recycling food and donating it to people in need I decided to make the film on the theme of ‘sharing’. After contacting one of the organisations concerned, Ching-yi and I found ourselves working as volunteers in a kitchen preparing turnip cake, one of the most traditional new year’s delicacies. When our work was finished we joined elderly members of society at the community centres around the city to enjoy the cakes. It was very enjoyable to talk with them over lunch in the run up to Lunar New Year and we were almost unaware of the cameras rolling in the background. Shooting went smoothly – relaxed and without drama – and the film turned out a success. It was a pleasure to share the food we had helped prepare and I would like to take this opportunity to thank the voluntary organisation we worked with and all the others involved who offer help to those in need at this time. While we celebrate the Lunar New Year with our families, I hope everyone will share their happiness with people with need. May we all enjoy love and warmth in our home of seven million people during the Year of the Horse.


 China*:  Feb 1 2014

White House ‘very disappointed’ as US journalist is forced to leave China (By Associated Press in Washington) After Ramzy Austin (inset) was forced to leave China, White House Press Secretary Jay Carney urged Beijing to unblock US media websites and eliminate restrictions on journalists. 

French star Sophie Marceau sings in China TV New Year gala (By Agence France-Presse in Beijing) French actress Sophie Marceau performed “La Vie En Rose” on Chinese state broadcaster CCTV’s New Year gala on Thursday, a show watched by hundreds of millions of people. The hugely popular programme ushers in the week-long holiday for the Year of the Horse, which begins on Friday, and state broadcaster China Central Television (CCTV) said that last year’s edition had 750 million viewers in China alone. For 24 years it featured Peng Liyuan, the wife of China’s President Xi Jinping, who is a soprano singer with the rank of army general. She retired from the show shortly after her husband joined the Politburo in 2007. This year it featured Marceau, who performed Edith Piaf’s signature song in a duet with Chinese pop star Liu Huan. “I wish you all a Happy Year of the Horse,” Marceau said, wearing a long red dress. She told reporters in Beijing ahead of her appearance: “This is a way to thank my Chinese fans, who are super-loyal. “I am a Horse,” added the 47-year-old, who was born in 1966. “The Chinese are deeply attached to tradition, to family, to romance,” she said, and some of her films had a “slightly innocent romance” that touched them deeply. Marceau followed in the footsteps of singer Celine Dion, who appeared last year’s event. But Chinese rocker Cui Jian, who inspired the 1989 Tiananmen Square pro-democracy movement and was in talks to perform on the show, did not feature. The Beijing News daily quoted his manager You You as saying he had refused to “change the words” of his songs. Earlier this week France and the People’s Republic marked the 50th anniversary of the establishment of diplomatic relations, but China remains a Communist-ruled one-party state. Liu Xiaobo, the co-author of Charter 08, a manifesto calling for democracy is serving an 11-year jail term, and earlier this week legal activist Xu Zhiyong was given four years for his part in anti-corruption protests, despite the ruling party repeatedly proclaiming it is cracking down on graft. Asked about Xu and human rights, Marceau said: “There is a long way to go, that’s for sure. At the same time these are extremely delicate subjects here in China and one has to be very diplomatic. “We are dealing with a great nation with people who have a great history behind them and will not let themselves be intimidated or told what to do and how to be. “Even in France we don’t want to be ordered around by anyone. Everyone tells us we are mad with our taxes and stuff, but do you think we listen to anyone?”

Hong Kong*:  Jan 31 2014

Saddle up for a bumpy Year of the Horse, warn Hong Kong geomancers (By Vivienne Chow vivienne.chow@scmp.com) Diplomacy will be rocky; China will be particularly prone to disasters; while Obama, Bieber and even Leung Chun-ying will have a tough road ahead, according to fung shui masters - Hong Kong will face a difficult Year of Horse that is filled with chaos, disputes and a pessimistic economic outlook, according to Chinese fung shui and Western astrology. Fung shui masters say the Year of Horse is characterised by the elements wood and fire, with the latter being the dominant element – which is not a positive sign. “The fire is so strong that it will cause an ‘explosion’,” said fung shui master Ma Lai-wah, citing as an example how this could mean “the economic bubble might burst, and the impact will last for a while”. Ma also looked at how fire would impact the other elements in fung shui – metal, water and earth. As “fire melts metal”, Ma said sectors such as the financial industry will suffer this year, with a particularly bad impact on the Western world. He warned people to be cautious about any speculative opportunities that appear before May and June. But there is good news for those who are in need of properties: “The property market [prices] might decline for 20 to 30 per cent in the second half of this year,” Ma said. Another fung shui master, Luk Ngai, said that just as fire can burn wood, bad tempers might flare this year and that summer in particular would be a difficult time. Luk also said that based on I Ching, a divination method based on the concept of yin and yang, Hong Kong faces unfavourable conditions for development and will face tremendous strain that will keep it from further growth. Western Astrology also depicts a difficult year ahead, according to Lilian Chow Lai-ming, chairwoman of the Hong Kong Astrology Club. She said tension would be felt in April when Mars, Jupiter, Uranus and Pluto form a “cardinal grand cross”, which means they will squared with one another, with Mars opposite Uranus and Jupiter opposite Pluto. The impact of this will peak on April 22 and the same pattern will return in December, with less impact. “During this period, Hong Kong is likely to be troubled by disputes, chaos and confusion,” said Chow, adding that Occupy Central’s future would hinge on events in April. Chief Executive Leung Chun-ying, meanwhile, having been born in the Year of Horse in 1954, will be in conflict with tai sui (the deity in charge of the year) in the Year of the Horse. While misfortune is not necessarily a given for those born in the Year of the Hourse, Luk warns that they “must not be arrogant and be cautious with their action. They must also constantly review the mistakes they made”. Meanwhile, Chow of the astrology club said Leung, who will turn 60 in August, would be going through the “Saturn return” phase, which means the planet will return to the same position it was when he was born. This type of movement usually happens between the ages of 28 to 30 and 58 to 60. It can be a stressful time for many individuals, she said. World perspective - Conflicts, disasters, record high temperatures, an economic chill in Asia and more trouble for Justin Bieber: the upcoming Year of the Horse is set to be a dramatic one - With the Year of the Snake slithering into history, they say that the incoming Lunar New Year beginning on Friday is going to be the kind of horse that you shouldn’t stand behind – because it incorporates the volatile element of fire. With this being the Year of the Wood Horse, and with wood being very combustible, there will be a lot of scandals, conflicts, explosions and arguments,” celebrity fung shui master Alion Yeo said. Fung shui, litreally meaning “wind-water”, is influential in many parts of Asia, where people adjust their lives and even renovate offices and homes based on its edicts to maximise their luck and wealth. Yeo says that conflict in the new year could be defined by anything from diplomatic tension to armed engagement, particularly in the first, fourth and seventh lunar months: February, May and August. “The most likely thing that could lead to a physical war would be the Diaoyu Islands,” Yeo said, referring to acute tensions between Japan and China over the islets, which are called the Senkakus by Japan. The previous Year of the Wood Horse in 1954 was marked by nuclear bomb tests by the US and the former Soviet Union and the battle of Dien Bien Phu, which led to the defeat of French forces in Vietnam. West gallops ahead - Chinese fortune-telling such as fung shui is based on ancient philosophy and the belief that events are dictated by the varying balances in the five elements that make up the universe: metal, wood, water, fire and earth. The lunar calendar is based on the cycles of the moon and through Chinese folklore ascribes 12 animals, one for each year in the rotating cycle. The horse is in the seventh position. Fung shui master Chow Hon-ming believes that while the United States and Europe will enjoy economic recovery, nations such as Singapore, Indonesia, Thailand, India and Pakistan will feel a negative impact. “The Western economy will see obvious improvement but Eastern nations will face difficulties and their economies may even take backward steps.” Chow believes it will be a tricky year for US President Barack Obama, who was born in the Year of the Ox in 1961. “He may make gaffes, he may face obstacles when it comes to cutting through political red tape,” Chow said. Record-high temperatures and natural disasters will be prominent due to the influence of the fire element, according to soothsayers. “There will be a higher chance of volcanic eruption and earthquakes because the earth element will be irritated by the abundance of fire,” fortune-teller Cheng Chi-hang adding that Japan, Indonesia and China would be particularly prone. Bad year for Bieber? A person’s fortune is calculated by using the exact time and date of his birth, with the relationship of each of the elements. Troubled Canadian pop star Justin Bieber will be on a streak of negativity this year, Yeo said. “There will be times where he will not be able to control himself.” Bieber, 19, was charged with driving under the influence after police caught him drag-racing in Miami Beach last week -- allegedly after drinking alcohol and smoking marijuana. “His fire element, if he goes all the way, could lead to health risks,” Yeo said. Celebrities born in the Year of the Horse include Philippine boxer Manny Pacquiao, Hollywood actress Halle Berry, German Chancellor Angela Merkel and the late former South African president Nelson Mandela -- whose 1990 release from prison also occurred in a “horse” year. Tens of thousands of worshippers will be offering sticks of incense on the eve of the first day of the Lunar New Year to pray for good luck and fortune at Hong Kong’s Wong Tai Sin Temple. The former British colony is also a popular horse-racing destination, hosting the Chinese New Year Raceday on February 2, with total payouts of up to HK$68 million. The city will celebrate the new year with a 23-minute long fireworks display on Saturday, which organisers say will display the word “win” in capital letters twice. In mainland China, tourism operators are also seeking to capitalise, particularly in Dan Xia Shan, a mountainous tourist attraction in the southern province of Guangdong which includes five hills known as “five horses return to the manger”.

 China*:  Jan 31 2014

China, Japan spar at UN over Abe’s Yasukuni Shrine visit (By Agence France-Presse at the United Nations) [Yasukuni Shrine, located in Tokyo, Japan, is dedicated to over 2,466,000 Japanese soldiers and servicemen who died fighting on behalf of the Emperor of Japan in the last 150 years. It also houses one of the few Japanese war museums dedicated to World War II.The shrine is at the center of an international controversy by honoring war criminals convicted by a post World War II court including 14 'Class A' war criminals. Japanese politicians, including prime ministers and cabinet members have paid visits to Yasukuni Shrine in recent years which caused criticism and protests from China, Korea, and Taiwan.] Liu Jieyi, China's permanent representative to the United Nations, speaks during a Security Council open debate at the UN headquarters in New York. China and Japan accused each other of threatening stability on Wednesday as a diplomatic battle over Japanese Prime Minister Shinzo Abe’s visit to a contested war shrine reached the UN Security Council. China’s UN ambassador, Liu Jieyi, seized upon a debate on the lessons of conflict to slam Abe for going to the Yasukuni Shrine, which honours war criminals among the country’s war dead. Attempts to change history “destabilise regional peace and pose a serious challenge to the peaceful course of mankind,” Liu said. South Korea also condemned Abe’s December 26 visit to the shrine that honours 2.5 million war dead, including 14 war criminals from the second world war. But Japan rebuffed the attacks. “Japan does not believe that such actions are helpful in lowering tensions and enhancing the stability in the region,” said the country’s deputy UN ambassador, Kazuyoshi Umemoto. Other countries see Yasukuni as a symbol of Japan’s refusal to come to terms with its wartime past. But Japan is also involved in a tense territorial dispute with China over islands in the East China Sea. China has repeatedly condemned Abe for the shrine visit while tensions over the islands have mounted. Abe “paid hommage to those who launched a war of aggression and were up to their elbows in the blood of the people in the countries they invaded,” said the Chinese envoy. “Abe’s hommage to those fascist war criminals is nothing less than a challenge to the victorious outcome of the war against fascism.” “Abe is trying to reverse the verdict on the war and defend war criminals,” he added. South Korea’s UN ambassador, Ah Joon, highlighted the plight of Korean “comfort women” forced to act as sex slaves for Japanese troops in the war. “Tensions are escalating more than ever before due to the distrust among states in Northeast Asia,” Ah told the council debate. “And this mainly stems from the fact that the Japanese leadership has a distorted view of what happened during the time of imperialism.” He said Japanese leaders had “shown an attitude of historical revisionism” by going to Yasukuni and making “irresponsible” remarks over the militarist past. “If Japan seriously wishes to contribute to regional and global peace, it should refrain from provoking its neighbours with its denial of history,” the South Korean envoy said. Japan’s prime minister has denied paying any tribute to the war criminals and has in turn criticised what he calls China’s increasing military assertiveness. Japanese envoy Umemoto rejected the diplomatic assault, insisting his country “squarely facing these historical facts, has expressed its feelings of remorse and heartfelt apology” for its wartime actions. “Japan’s position is that this issue should not be politicised or be turned into a diplomatic issue,” he said. Japan, he added, wants “a future-oriented and co-operative relationship” with China and South Korea. Japan has seen repeated calls for a summit with its neighbours rejected by Beijing and Seoul.

Hong Kong*:  Jan 30 2014

South China Morning Post: Hong Kong imposes sanctions against Philippines over bus hostage crisis 香港對在巴士人質危機施加制裁菲律賓 (Ada Lee ada.lee@scmp.com) Chief Executive Leung Chun-ying announces the imposition of visa restrictions placed on diplomatic officials visiting Hong Kong from the Philippines. Hong Kong will cancel a visa-free arrangement for official and diplomatic passport holders of the Philippines in the first phase of sanctions against the country in light of the Manila bus hostage crisis, the city announced on Wednesday. Chief Executive Leung Chun-ying said at a press conference the Philippines had failed to respond to the victims’ and families’ requests for a formal apology. He said the government received a “negative message” from the Philippine government on Monday and the discussion between the two governments on Tuesday bore no fruit. The sanction will come into effect next Wednesday. Holders of official and diplomatic passport holders of the Philippines will no longer enjoy the 14-day visa free status when visiting Hong Kong. In November, the Philippines gave an undisclosed amount to Yik Siu-ling, who had a surgery costing HK$1 million in Taiwan last month. On August 23, 2010, sacked policeman Rolando Mendoza took 22 Hong Kong tourists and three Filipinos captive on their coach in Manila. He shot dead seven tourists and their guide before being killed in a bungled rescue.

HKMA urges Hong Kong banks to keep higher-than-Basel capital reserves (By Kanis Li kanis.li@scmp.com) HKMA is leaning towards requiring lenders to hold up to 3.5pc of capital as a countercyclical reserve, exceeding Basel standards, sources say - Hong Kong banks have maintained relatively high capital adequacy ratios, but the prospect of a steeper mandatory requirement for a countercyclical buffer is causing concern within the industry. An HKMA suggestion that banks keep more capital on hand than required by global standards is being opposed by local lenders, which argue it will restrict the type of business they can engage in and put them at a disadvantage with global rivals, sources say. However, Hong Kong banks have historically maintained capital adequacy ratios well in excess of those required by the Basel committee on banking supervision, according to Hong Kong Monetary Authority figures. It wants banks to set aside as much as 3.5 per cent of their capital as a countercyclical buffer, compared with a maximum of 2.5 per cent required by Basel, two sources said. Countercyclical buffers are meant to be built up during times of earnings growth so that they can be drawn down when things are not going so well. "It is such a waste of bullets when Hong Kong banks have to hold more capital just to meet the local requirement instead of doing business," a senior executive at a leading bank said. "Some disadvantage may be brought to Hong Kong banks if their peers in other regions just follow the [more lenient] global standard." Local regulators are allowed to modify or adapt Basel requirements to address local circumstances. The range the HKMA had proposed for the countercyclical buffer, 0 to 3.5 per cent of capital, would be applied to all banks in Hong Kong regardless of size, the executive said. Basel requires such buffers to be in the range of 0 to 2.5 per cent of a bank's capital, with the buffer allowed to shrink when times are bad. "The banks are negotiating with the regulator on the final standard on the buffer for Hong Kong," said another banker familiar with the talks. "But it is likely that we will have a higher requirement." Bankers warned that some banks might once again have to cut dividends to meet Basel capital reserve requirements, which are gradually being phased in. Dah Sing Bank declared no dividend for 2009, while Wing Hang Bank declared a lower dividend that year and Bank of East Asia reduced its dividend payout ratio for 2010. HKMA executive director Karen Kemp told a press conference last week it was deciding the reference indicators, such as credit growth and gross domestic product growth, that would be used to determine the size of the countercyclical buffer to be imposed in Hong Kong as economic conditions changed. She did not disclose the range it was proposing. The HKMA said in a paper submitted to the Legislative Council in 2012 that it might make "some modifications" to the Basel capital requirements "for prudential reasons having regard to local circumstances". The Basel committee on banking supervision will require all banks to have a minimum capital adequacy ratio of 10.5 per cent by 2019, with the mandatory capital conservation buffer coming under this. With a countercyclical buffer as high as 3.5 per cent on top of the capital adequacy requirement, as suggested by the HKMA, Hong Kong banks would have to hold on to as much as 14 per cent of their capital. Hong Kong banks have historically adopted a prudent approach to capital reserves, but bankers worry that higher mandatory requirements could limit the scope of new business. The capital adequacy ratio of Hong Kong banks averaged 16.1 per cent at the end of September, up from 15.7 per cent at the beginning of last year. At the end of 2007, as the storm clouds of the global financial crisis gathered, it averaged 13.4 per cent. Maybank Kim Eng Securities analyst Steven Chan said: "The extra requirement by the HKMA will create a more difficult operating environment for the sector." When more restrictions were imposed on the use of capital, banks would earn less as they could only engage in businesses involving lower risks and lower returns, he said. "More acquisitions may happen because the owners of smaller lenders struggle to run the banks with enhanced regulations, along with the keen competition in the market," he said. But Alexander Li, an analyst at DBS Vickers, said he expected banks' net interest margins, a measure of lending profitability, would improve as ultra-low interest rates began to vanish. Higher interest rates would help banks increase the profitability of lending and generate more capital, he said.

Company offers bitcoin instead of cash in lai see packets (Danny Lee danny.lee@scmp.com) City's biggest bitcoin exchange offers HK$500,000 worth of virtual currency in massive Lunar New Year giveaway - Lai see packets with a difference are being handed out to Hongkongers this Lunar New Year holiday – with vouchers for virtual currency bitcoin replacing the traditional, crisp notes. Vouchers worth HK$500,000 in bitcoin are being gifted to members of the public by the city’s biggest bitcoin exchange, ANX, to mark the dawn of the Year of the Horse. Some 50,000 red packets worth HK$10, or one 617th of a bitcoin, will be distributed around the International Financial Centre, Lan Kwai Fong, Times Square, Sogo, The One mall on Nathan Road and MTR stations at Wan Chai and Mong Kok. ANX hopes the stunt will encourage Hongkongers to embrace the controversial digital currency, which has shot to prominence in recent months amid mixed messages from central banks around the world over its use. “We are trying to help the eco-system,” said Lo Ken-bon, the company’s founder and managing director. “One of the biggest issues is the adoption of it because it’s too complicated for most mainstream users – we are trying to get them started as easily as possible.” Users who wish to turn their vouchers into bitcoin will have to register an e-mail address, but Lo said the giveaway would be done with no strings attached. “We’ve got a lot of people talking about bitcoin already, and more are very excited and curious.” The current price of bitcoin stands at HK$6,170 on the ANX exchange. And the lucky recipients were not sure what to make of their gift. “I’ve heard of it on the news,” Maria Pang said of bitcoin. “You can use it to purchase something, use it like money… they said it was something like an online coupon.” Australian tourist Marley Hawke said he had read about bitcoin on the internet. Asked if bitcoin interested him, he said: “Not until I found out more about it…I’ve only heard [of] the name, and that’s the first step isn’t it, getting the name out there.” Bitcoin has caused a split among governments, with China’s central bank cracking down on its use, along with India and Indonesia. However, Singapore and Switzerland have embraced its adoption – and started taxing holders of the currency. On Sunday, US authorities arrested prominent crypto-currency champion Charlie Shrem, accusing the vice-chairman of the Bitcoin Foundation of plotting to launder money.

Replace dollar with super currency: economist (By MICHAEL BARRIS in New York, FU JING in Brussels and CHEN JIA in Beijing) The World Bank's former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system. "The dominance of the greenback is the root cause of global financial and economic crises," Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. "The solution to this is to replace the national currency with a global currency." Lin, now a professor at Peking University and a leading adviser to the Chinese government, said expanding the basket of major reserve currencies — the dollar, the euro, the Japanese yen and pound sterling — will not address the consequences of a financial crisis. Internationalizing the Chinese currency is not the answer, either, he said. Lin urged the international community, especially the US and European Union, to play a leading role in currency and infrastructure initiatives. To boost the global economy, he proposed the launch of a "global infrastructure initiative" to remove development bottlenecks in poor and developing countries, a measure he said would also offer opportunities for advanced economies. "China can only play a supporting role in realizing the plans," Lin said. "The urgent thing is for the US and Europe to endorse these plans. And I think the G20 is an ideal platform to discuss the ideas," he said, referring to the group of finance ministers and central bank governors from 20 major economies. The concept of a global "super currency" tied to a basket of currencies has been periodically discussed by world leaders as well as endorsed by 2001 Nobel Memorial Prize-winner Joseph Stiglitz. A super currency could also be tied to a single currency, but the interconnectedness of world financial markets and concerns about the volatility that can occur as a result of the system being tied to one currency have made this idea less popular. Eswar Prasad, a trade-policy professor at Cornell University who also is a senior fellow at the Brookings Institution, said he disagrees that a super currency would protect the global financial system against breakdowns such as the 2008 downturn which plunged the world economy into its most dangerous crisis since the Great Depression of the 1930s. "Flexible exchange rates provide a useful shock absorption mechanism, especially for emerging market economies," Prasaid, a former chief of financial studies in the International Monetary Fund's research department, told China Daily on Tuesday. "More effective financial regulation and improved global governance, along with better fiscal and structural policies, would go much further than a single currency in enhancing global financial stability," he said. Arguments in favor of a global currency resurfaced during October's US budget impasse, which forced the government to shut down. "It is perhaps a good time for the befuddled world to start considering building a de-Americanized world," a Xinhua News Agency commentary said on Oct 14. The piece argued that creating a new international reserve currency to replace reliance on the greenback, would prevent government gridlock in Washington from affecting the rest of the world. In March 2009, China's central bank governor, Zhou Xiaochuan, called for the creation of a new "super-sovereign reserve currency" to replace the dollar. In a paper published on the People's Bank of China's website, Zhou said an international reserve currency "disconnected from individual nations" and "able to remain stable in the long run" would benefit the global financial system more than current reliance on the dollar. On that note, David Bloom, global head of FX research at HSBC, said US monetary policy change "will bring fluctuations for emerging countries' currencies and lead to financial instability". Chen Wenling, chief economist at the China Center for International Economic Exchanges, a government think-tank, said, "A supranational currency may be a new direction for development of the global financial system. It also requires different countries to cooperate in coordinating macroeconomic policies." Bloom and Chen both said China needs to play a more important role in global financial governance. But Bloom said it is difficult for international financial organizations to reach a consistent conclusion on how to improve the foreign exchange system. He said the renminbi is predicted to be stronger this year, even against an appreciating US dollar, and internationalization of China's currency will accelerate when the government decides to further open the capital market. Michal Krol, a researcher at the Brussels-based European Center for International Political Economy, said he disagrees that US dollar hegemony caused the global economic crisis. The emergence of other currencies, such as the euro, the yuan and the yen, created a situation where an adjustment mechanism needs to be in place, he said. "I don't think that the largest economies and their currencies are at this moment ready for the introduction of a supranational currency," Krol said. "Neither the EU nor China have financial markets and monetary systems yet that are sound, solid, predictable and well functioning to be the cornerstone for a global system. But, indeed, it is time to formulate the fundamentals for global monetary governance." Pierre Defraigne, executive director of the Madariaga College of Europe Foundation in Brussels, said of Lin's infrastructure proposal, "It is excellent, but the problem is how to implement these plans to link those countries that need such infrastructural construction and those with enough foreign reserves, by using an effective global mechanism." 

 China*:  Jan 30 2014

[Do you agree with Obama that China no longer world’s No 1 place to invest? 你是否贊同奧巴馬認為中國不再是世界第一大投資的地方] China no longer world’s No 1 place to invest, Obama says in sweeping speech (By South China Morning Post) US President Barack Obama extolled his country’s economic gains in recent years, boldly declaring that America had usurped China as the world’s top investment destination and that this year would be a “breakthrough year” for America. He kicked off his State of the Union address on Tuesday with a list of his administration’s economic achievements, which he said bolstered the superpower’s footing. “Here are the results of your efforts: The lowest unemployment rate in over five years. A rebounding housing market. A manufacturing sector that’s adding jobs for the first time since the 1990s. More oil produced at home than we buy from the rest of the world – the first time that’s happened in nearly twenty years. Our deficits – cut by more than half,” he said. “And for the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is," he said. “That’s why I believe this can be a breakthrough year for America. After five years of grit and determined effort, the United States is better-positioned for the 21st century than any other nation on earth,” Obama said. It was only one of two instances that the president mentioned China – the world’s No 2 economy and seen as an emerging rival to US supremacy – in his hour-long speech, which focused more on domestic matters than those abroad. He mentioned China for a second time in the latter part of his address in which he spoke about creating jobs through export partnerships. He said that when 98 per cent of American exporters are small businesses, European and Asia-Pacific trade pacts would help create more jobs. “We need to work together on tools like bipartisan trade promotion authority to protect our workers, protect our environment, and open new markets to new goods stamped 'Made in the USA'. China and Europe aren’t standing on the sidelines. Neither should we,” he said. Obama looked to revive his second term in his sweeping speech, outlining an agenda that calls for creating jobs and addressing the widening gap between rich and poor. He offered a mix of new and old ideas, and said he wanted to work with Congress but would act on his own when he can, if necessary. The plans come at a time when the country has recovered from massive unemployment – but not by much, with the rate currently at 6.7 per cent. According to a 2013 report by the Organisation for International Investment, foreign direct investment in the US reached US$2.7 trillion at the end of 2012, and Britain remained the single largest investor at US$487 billion. It was followed by Japan at US$308 billion that year and the Netherlands at US$275 billion. Among the Brics countries, China was the biggest investor, pouring in US$1.4 billion in 2012, according to the figures. US selling points - RBS economist, Louis Kuijs, said the United States was emerging from the recession in the wake of the 2008 global financial crisis, and was on track to an economic upturn this year. “The US has made progress in economic recovery, which makes itself a more attractive place for investments,” he said. “Many federal governments are quite keen on attracting investments and manufacturing as well as energy prices are lower,” he said, adding that the United States’ abundant supply of shale gas alone made it a “compelling” investment spot. “However, lower energy costs are not the sole factor, there are others like wages and availability of supply chain services,” he said. “If cheap and abundant supply of oil is the factor in determining the success of manufacturing activities, Saudi Arabia would have been the manufacturing power base in the world.” Kuijs added that the US was more suitable for developing some petrochemical-related industries. Obama also noted on Tuesday that American had begun producing more oil than it imported for the first time in 20 years. However, China, which has continuously built the logistics and supply chain network in the past three decades, remains a core manufacturing destination -- but on higher-end products, the economist said. “The supply networks were lost with the demise of many manufacturing activities in the US many years ago,” he said. “It is not easy to bring more jobs back to the US.” Tempered with scepticism - Obama opens his sixth year in the White House after a tumultuous year that prompted some of the worst job approval ratings since he took office. A divided Congress is already turning much of its focus to the November election, and he has got just three years left in office to make his mark. The president had a fine line to walk on Tuesday: projecting the optimism and energy that dispirited members of his party, and the public at large, are hungry for, without overpromising in an election year when congressional Republicans are even less likely to co-operate than they were last year. Where last year’s State of the Union to-do list was an ambitious call to arms on issues such as gun control and immigration, this year’s promised to be more modest, in keeping with the narrowing scope of what’s doable for a president in a stand-off with House Republicans and whose party stands to lose ground in the Senate in the midterm elections. Congresswoman Cathy McMorris Rodgers of Washington, the highest-ranking woman in the House Republican leadership, offered her party’s response, blaming Obama’s policies for stagnant wages and long term unemployment – and not 30 years of economic trends. “Last month, more Americans stopped looking for a job than found one,” she said. “Too many people are falling further and further behind because, right now, the president’s policies are making people’s lives harder. Republicans have plans to close the gap.” Obama had, by all accounts, an awful last year: His top legislative priorities went nowhere, Edward Snowden’s revelations about government spying caused an uproar, the launch of his health-care plan was plagued with problems and a budget dispute led to the first government shutdown in nearly two decades. But Obama insists that with three more years in the Oval Office, he is still passionate about the issues that matter.In his speech, which was peppered with anecdotes, a few jokes and dominated by his plans for new executive orders, Obama worked to tie economic woes to a long tide of history rather than his own record. He said that although the US has largely pulled out of the economic recession, the middle class has lost jobs and income from three decades of blows, including shifts in technology and global competition. The White House promised a message brimming with optimism, opportunity and action. Where Congress will not co-operate, Obama aims to find creative ways to act on his own, through executive orders, regulatory action and presidential cajoling.

Japan should learn from Germany: US expert (By Chen Weihua in Washington) Amitai Etzioni, an Israeli-American sociologist who was a child in Germany when the Nazis rose to power in 1933, has a bit of advice for Japan. The 85-year-old said the best thing Japan could do is sending 200 public intellectuals and political leaders to Germany to see what it is like for a country to face its past, come to terms with it, make it part of their schools and army, and never let it happen again. "I was born as a Jewish child in Nazi Germany and I have some feelings about countries dealing with their past," Etzioni told a group on Monday at the National Press Club in Washington. A renowned professor of international affairs at George Washington University, Etzioni said Germany has recognized its past, apologized for the atrocities, made amends, and educates its children and army every year about what went wrong in the nation's history. "Unlike Japan, they faced their past, came to terms with it and learned from it. Japan should do the same," said Etzioni, a senior adviser to the White House from 1979 to 1980 and who, in 2001, was named among the top 100 US intellectuals. Etzioni's words echoed the feelings of many in China and South Korea who have questioned why Japan has not been able to deal with its brutal behavior in World War II, as Germany has. The question was raised again after Japanese Prime Minister Shinzo Abe's visit to the controversial Yasukuni Shrine on Dec 26, the first anniversary of his second term. The shrine honors Japanese war dead, including 14 notorious Class-A and more than 1,000 Class-B World War II war criminals. The shrine has long been regarded by Chinese and Koreans as a symbol of Japanese militarism, which inflicted enormous suffering on people in the region. Unlike Japanese leaders, German leaders are unambiguous in renouncing the nation's Nazi past. People remember well the sight of then-German chancellor Willy Brandt kneeling on the wet ground in December 1970 at the monument to the Jewish Ghetto massacre victims in Warsaw, Poland. Not long after Abe's visit to Yasukuni, Steffen Seibert, spokesman for German Chancellor Angela Merkel, asked Japan to "honestly live up" to its role in the horrible events of the 20th century. He said that only on the basis of an honest accounting will it be possible to build a future with former foes — a conviction Germany has taken to heart. Abe's controversy has not been limited to the visit to the shrine. The right-wing Japanese politician has publicly questioned whether Japan's actions in World War II should properly be defined as "aggression". He has also denied that the Japanese government forced tens of thousands of "comfort women" into serving as sex slaves for the Japanese military. Abe and his right-wing cohorts have also endorsed a whitewash of the war in Japanese school textbooks and pushed for the revision of Japan's postwar pacifist Constitution. Some of Abe's actions have also irritated its closest ally, the United States. The US has repeatedly voiced its disappointment at Abe's visit to Yasukuni and described it as exacerbating regional tensions. Jonathan Pollack, director of the John L. Thornton China Center of the Brookings Institute, said he is not going to speculate on Abe's psychology. "He probably calculates that ‘the US needs me so much that I can do what I want to do.' But I think what he did not sufficiently anticipate and maybe he did not really care about is the damage quickly done to such a vital bilateral relationship," Pollack said. "(It's) not so much in terms of the American commitment to Japan, but the trust and comfort that the American leadership has in dealing with the Japanese leadership. I think, Abe, if anything, really did not calculate his interests carefully enough, and we're dealing with the consequences today." Douglas Paal, vice-president for studies at the Carnegie Endowment for International Peace, said the US needs to send seasoned diplomats to Beijing, Tokyo and Seoul to listen to respective complaints and claims and rephrase them to the counterparts with a view of eliciting ideas about reducing tensions. "Abe is trending toward taking a view of history significantly at odds with the American view, and that should be voiced," he said. Paal, who came back from a visit to South Korea last week, said Koreans expect Abe to apologize for his visit to the shrine. "But if he continues repeatedly to visit the Yasukuni Shrine, high-level substantive meetings will not be possible." In Paal's view, Seoul started to relax gradually its stance toward official meetings, but the Dec 26 visit to Yasukuni killed that initiative, much as it did China's reported attempt to thaw relations after China's ambassador called on Japanese Foreign Minister Fumio Kishida on Dec 20. P.J. Crowley, former US assistant secretary of state for public affairs and now a professor at George Washington University, believes that Abe will listen carefully to what the US will tell him. "But he is a political animal. He is going to do the things he is going to do, first and foremost as part of his own governing philosophy and his governing convictions," Crowley said.

Hong Kong*:  Jan 29 2014

Meet fireworks engineer Wilson Mao (By Charley Lanyon charley.lanyon@scmp.com) Pyrotechnics engineer Wilson Mao has designed and staged every major fireworks display in the city since 1997. He tells Charley Lanyon how technology is changing the game - On three days of every year - January 1, Lunar New Year and National Day on October 1 - spectacular fireworks light up the Hong Kong skyline, drawing "ooohs" and "aaahs" from the thousands of onlookers. Watching New Year celebrations on television, from San Francisco to Toronto, it is not uncommon to see footage from Victoria Harbour alongside local celebrations. Hong Kong's New Year fireworks are world famous, over the top and presented in eye-searing Technicolor, so it was surprising to find mastermind Wilson Mao seated at an empty conference table in an industrial building in Cheung Sha Wan, casually dressed in jeans and jumper. This place, he assures me, is where the magic happens. A wall along one side of the table is dominated by some of the coolest drawings ever committed to a whiteboard: firework schematics. The far wall accommodates a large-screen television, and all-around there are first-place trophies from fireworks competitions all over the world. The television, Mao says, is to keep an eye on the competition: "We look at Sydney. We look at London, all the major players, basically … like Dubai's last New Year countdown. That was big." Mao, a slight, shy man, has good reason to count himself among the big names in fireworks. Pyromagic Multi-media Productions, the company he formed in 1994, is Asia's largest fireworks production company and Mao has handled every major fireworks display in Hong Kong since 1997. The company that would give birth to Pyromagic was started by Mao's grandfather in 1953 as a general mercantile company, trading Chinese goods across Southeast Asia. Fireworks were just one of many commodities he traded. It was Mao's father who began to shift the focus to fireworks, selling them in Hong Kong and Macau before the riots in 1966 resulted in a sweeping ban. Forced to look elsewhere, he took advantage of cooling tensions between the US and China, and began exporting fireworks to America - the US remains one of Pyromagic's most important customers. He also dabbled in pyrotechnic displays in Southeast Asia. In the 1980s, Mao's father partnered with a US fireworks company to put on his first Lunar New Year display in Victoria Harbour. The rest is history. When he was a small child, helping his father set up displays across Southeast Asia, Mao got his first taste of the life of a fireworks designer. It might seem like a young boy's dream, growing up in the fireworks business and helping your dad blow things up. But Mao laughs at the idea: "I wasn't that destructive. I really like to play with fireworks with some kind of design, you know. "I don't like something to shock your nerves. That's not an art at all; it's destruction to me. It hurts." He gestures towards pictures of fireworks covering the walls. "I like colour. I like music. I like lines, tails, all of that." His love of design stayed with him through university in California, where he majored in engineering and design. "Everything about design is something I like. Fireworks are a synchronisation of music, timing, colour, layering, and angles. It's pretty much architecture. "It's like an engineering drawing in colour and light," he says. Mao is also a great lover of music, and thinks that is the foundation of all the best fireworks displays: "The music comes first." After selecting the perfect score - "music that is slow, then is fast, music that suddenly jumps up" - Mao and his four designers gather in the conference room listening to the music turned up loud on overhead speakers and brainstorm ideas, shouting out fireworks effects and transitions. There are many to choose from - the effects file at Pyromagic contains more than 50,000. Once an aesthetic for the display has been determined, the team creates a spreadsheet which acts as a schedule of the different fireworks to be used. "The last Western New Year alone was only eight minutes and was already 6,000 lines," he says. Then, computer-shy Mao passes the spreadsheet on to his technology team, a group of "kids from the 1990s", who use modelling software to turn the spreadsheets into computer animations. These animations are the closest thing fireworks technicians get to a rehearsal. For obvious reasons - among them safety, expense, and spatial limitations - actual rehearsals are out of the question. The fireworks displays that Pyromagic deals with are massive. The January 1 show this year was the biggest in the company's history. "We had five barges, 20 pontoons, seven rooftops. We also had an LED display, a big one, 50 metres high by 50 metres wide. It was crazy and scary when you look at the size of the structure." A display of that scale can take 10 days to set up and dismantle. For Lunar New Year, Mao is planning something a bit smaller. It's only a four-barge display, but what it lacks in size will be made up for in the cutting-edge effects. A gimmick in which the word "WIN" will be spelled out in lights has been publicised, but there are surprises in store, including fireworks in the shape of horseshoes, horse tails, and a pair of lips which pay homage to sponsors, Sasa. The display will cost nearly HK$8 million. Mao says he loves his job, but as the displays grow larger and larger, the stresses and risks are starting to weigh on him. "After so many years, I just don't like to risk so much," he says. "We deal with explosives, and if you don't treat them well, if you don't respect fireworks, they will kill you." Ever the engineer, Mao takes a breath before starting again. "But they are actually very obedient, you know? You hit the button, they fire. It's physics. But you have to pay respect." Although Pyromagic has never had a serious accident, it is obvious that the dangers of fireworks are always on Mao's mind. He has an 11-year-old son, and when asked if he would want him to go into the business, Mao's unable to answer. But he acknowledges that if his son does, it will be a different world from the one in which Mao learned the craft. Technology is changing the game. "By the time my kid is grown up, fireworks will not be the only multimedia element. We're actually a multimedia company, not only fireworks, we have a lighting team, sound team, laser team, fireworks team, and LEDs all working together. "So he has to work on the multimedia side and not be too focused on fireworks like his father," he says. "I'm too focused on fireworks, because that's how I was brought up."

Deloitte China forecasts HK$50.3 billion fiscal surplus (By Tony Cheung tony.cheung@scmp.com) John Tsang’s HK$4.9 billion deficit estimate is wrong, accounting firm says as it predicts large surplus due to increases in land premium and other revenue - Financial Secretary John Tsang Chun-wah believes the government will see a deficit of HK$4.9 billion by the end of March. Financial Secretary John Tsang Chun-wah has probably got his maths wrong again, Deloitte China says. The accounting firm estimated the government would see a HK$50.3 billion surplus by the end of March instead of the HK$4.9 billion deficit that Tsang had predicted. The large surplus would largely be because of an HK$18 billion increase in land premium and a HK$20 billion increase in other revenue including stamp duty and investment income, according to Deloitte. At a press conference on Tuesday morning, the firm’s vice-chairwoman Yvonne Law suggested that the administration offer a series of tax incentives when Tsang announces the budget on February 26. Law’s proposal including waiving 75 per cent of the salaries tax, subject to a HK$12,000 ceiling; increasing the basic tax allowance from HK$120,000 to HK$126,000; and increasing child and dependent parent allowances to HK$77,000 and HK$42,000 respectively. To boost the city’s business competitiveness, Deloitte also proposed reducing the profit tax rate from 16.5 per cent to 16 per cent, and introducing a corporate allowance of HK$200,000.

Respect and tolerance for all must be enshrined in Hong Kong policy (By Kerry Kennedy) Kerry Kennedy says recent cases of discrimination in Hong Kong make such a step necessary - Rush-hour traffic at the Admiralty MTR station in Hong Kong on January 23, 2014. Chief Executive Leung Chun-ying's second policy address nailed his government's socially progressive credentials to the mast. Apart from middle class cries of "me too", and the usual opposition from those who will never give any credit to this government, support for the city's poor has been well received. One area in particular is educational support for Hong Kong's ethnic minorities. Long overdue, a new school curriculum could prepare these students for a better life, with greater potential to contribute to the good of Hong Kong. Yet, just as it seemed one aspect of Hong Kong's multicultural landscape was being addressed, another less positive element emerged. This was the very public exposure of alleged abuse against foreign domestic helpers that led one international news outlet to refer to Hong Kong's "slave maids". The television and print media have been relentless in their pursuit of the issue and the secretary for labour is contemplating induction courses for newly arrived domestic helpers to acquaint them with their rights. There are other blots on our multicultural copybook, too. Last March, the Court of Final Appeal made it clear to the government that a unified screening mechanism was necessary to deal with the city's refugees and asylum seekers. The government has been relying on the UN refugee agency to make judgments about who was and who was not a refugee. But a lack of resources on the part of the UNHCR often meant claimants waiting for years for a decision to be made. In the meantime, refugee claimants could not work and their children could not go to school. The government provides a small stipend for refugees but stories of refugee life in Hong Kong make it clear that such people from different parts of the world are neither welcomed nor greatly assisted. Apart from the racial discrimination evident in attitudes to domestic helpers and refugees, social discrimination experienced by mainland visitors is also a matter of daily comment in the media. Terms like "locust" have been used to describe mainlanders, resulting at one time in a full-page advertisement complaining about the impact of tourists from across the border. This situation has not been helped by the issue of mainland births in the city's hospitals and the need to place restrictions on the amount of baby formula that can be taken out of the city. Social discrimination is alive and well in Hong Kong. So the glimmer of hope offered for the city's ethnic minorities is overshadowed by other, less savoury, aspects of life in the city. Acknowledging Hong Kong's multi-ethnic, multicultural reality seems to be a priority not only for the government but for society as a whole. Calls for a harmonious society fall on deaf ears when blatant racial and social discrimination are part of daily life. Steps must be taken to eliminate all forms of discrimination from the city - democracy and discrimination cannot co-exist. The government can take the lead; this would be perfectly consistent with its socially progressive agenda. A multicultural policy should be developed that sets out the city's values of tolerance, respect, equality and fairness for all of the city's residents - much as it is done in the Hong Kong Bill of Rights. These values need to be enshrined in policy that makes it clear to the world where Hong Kong stands on these important issues, and it needs to be followed up with public education programmes. The Social Welfare Department and the Equal Opportunities Commission are ideal platforms for this public education work. Schools are where this work should begin, and families are the places where the message needs to be heard and practised. Multiculturalism, of course, comes with baggage; it can lead to a more cohesive society or a more fragmented society. Yet we only need to look at the teachings of the Buddha, Confucius or Jesus to see how human beings have been urged to live together in peace and harmony rather than conflict - it is not a question of politics but morality. Hong Kong can create the kind of society where the values of these teachers are lived out. This will involve a commitment to a vibrant multiculturalism that respects people from all cultures, values their contribution and encourages them to be more than they ever hoped they could be. This vision needs to be enshrined in a policy that signals in Hong Kong and beyond the city's values as a caring and just society. Professor Kerry Kennedy is director of the Centre for Governance and Citizenship at the Hong Kong Institute of Education

"Angry Birds, Google Maps are watching you": US, British spies tapping phone apps, Snowden papers show (By Associated Press in London) The Angry Birds game can be used to mine personal data from users, including sexual orientation, according to papers leaked by Edward Snowden (inset). Documents leaked by former NSA contactor Edward Snowden suggest that spy agencies have a powerful ally in Angry Birds and a host of other apps installed on smartphones across the globe. The documents, published on Monday by The New York Times, The Guardian and ProPublica, suggest that the mapping, gaming, and social networking apps which are a common feature of the world’s estimated 1 billion smartphones can feed America’s National Security Agency and Britain’s GCHQ with huge amounts of personal data, including location information and details such as political affiliation or sexual orientation. The size and scope of the programme are not publicly known, but the reports suggest that US and British intelligence easily get routine access to data generated by apps such as the Angry Birds game franchise or the Google Maps navigation service. The joint spying programme “effectively means that anyone using Google Maps on a smartphone is working in support of a GCHQ system”, one 2008 document from the British eavesdropping agency is quoted as saying. Another document – a hand-drawn picture of a smirking fairy conjuring up a tottering pile of papers over a table marked “LEAVE TRAFFIC HERE” – suggests that gathering the data does not take much effort. The NSA did not directly comment on the reports but said in a statement on Monday that the communications of those who were not “valid foreign intelligence targets” were not of interest to the spy agency. “Any implication that NSA’s foreign intelligence collection is focused on the smartphone or social media communications of everyday Americans is not true,” the statement said. “We collect only those communications that we are authorised by law to collect for valid foreign intelligence and counterintelligence purposes – regardless of the technical means used by the targets.”GCHQ said it did not comment on intelligence matters, but insisted that all of its activity was “authorised, necessary and proportionate”. Intelligence agencies’ interest in mobile phones and the networks they run on has been documented in several of Snowden’s previous disclosures, but the focus on apps shows how everyday, innocuous-looking pieces of software can be turned into instruments of espionage. Angry Birds, an addictive birds-versus-pigs game which has been downloaded more than 1.7 billion times worldwide, was one of the most eye-catching examples. The Times and ProPublica said a 2012 British intelligence report laid out how to extract Angry Birds users’ information from phones running the Android operating system. Another document, a 14-page-long NSA slideshow published to the web, listed a host of other mobile apps, including those made by social networking giant Facebook, photo sharing site Flickr, and the film-oriented Flixster. It was not clear precisely what information can be extracted from which apps, but one of the slides gave the example of a user who uploaded a photo using a social media app. Under the words, “Golden Nugget!” it said that the data generated by the app could be examined to determine a phone’s settings, where it connected to, which websites it had visited, which documents it had downloaded and who its users’ friends were. One of the documents said that apps could even be mined for information about users’ political alignment or sexual orientation. Google and Rovio Entertainment, the maker of Angry Birds, did not immediately return messages seeking comment on the reports. The Times‘ web posting on Monday of a censored US document on the smartphone surveillance briefly contained material that appeared to publish the name of an NSA employee. Computer experts said they were able to extract the name of the employee, along with the name of a Middle Eastern terror group the programme was targeting and details about the types of computer files the NSA found useful. Since Snowden began leaking documents in June, his supporters have maintained they have been careful not to disclose any intelligence official’s name or operational details that could compromise ongoing surveillance. The employee did not return phone or e-mail messages. Michael Birmingham, a spokesman for the Director of National Intelligence, said the agency requested the Times to redact the information. Danielle Rhodes Ha, a Times spokeswoman, attributed the posting to a production error and said the material had been removed.

 China*:  Jan 29 2014

South China Morning Post Editorial: Tennis ace Li Na a great ambassador for China, on and off the court - Li Na of China poses with the trophy on Brighton Beach in Melbourne. Sporting greatness is about more than winning trophies. Li Na claimed only her second tennis grand slam crown at the Australian Open at the weekend, but she is already one of the sport's most loved figures. Her sportsmanship, humour, determination and maverick ways make her an icon and inspiration to legions of players and fans. But perhaps her greatest achievement is helping bridge the divide between China and the West. Li's string of firsts has been the driving force behind an explosion of interest in the sport in mainland China. In 2004, she was the first Chinese player to win a Women's Tennis Association title; two years later at Wimbledon, she was the first player from the country to get to a grand slam quarter-final; then, in 2011, the first to make it to a grand slam final (the Australian Open); and later that year, at the French Open, the first Chinese player to win a grand slam. China now has 15 million players and tens of millions across the country watch her on television whenever she takes to the court; it is exposure that officials at home and internationally see as crucial to tennis' future. Such interest is put single-handedly down to Li, whose 22 million followers on weibo attest to her popularity. Notably, she has also been a trail-blazer in China for sport in general. Her splitting from the state-run system in 2008 to chart her own future gave her not only financial control, but also opportunities she would not otherwise have had. With confidence came the self-assuredness to take on the mainland media, which can be brutally critical of athletic performances. Her subsequent successes have given other athletes the courage to take their careers into their own hands. Beyond sport, though, Li is increasingly taking on a role like that of an ambassador. Her charisma, courage and charm have struck a chord with many in the West. That gives her powers well beyond the tennis court to bring together cultures that don't always understand one another. Li's latest win moves her a step closer to becoming a tennis great, and it also helps to educate and build trust.

First meeting of Beijing and Taipei cross-strait affairs officials (By Lawrence Chung in Taipei lawrence.chung@scmp.com) Taiwan to send top cross-strait affairs official for talks with mainland counterpart, the first such face-to-face encounter in over 60 years - Wang Yu-chi (left) and Zhang Zhijun. Taiwan will send a senior cross-strait affairs official to the mainland next month for talks with his counterpart there, in what is seen as an important breakthrough in mutual recognition between the two former rivals. Wang Yu-chi, head of Taiwan's Mainland Affairs Council, will meet Zhang Zhijun of the State Council's Taiwan Affairs Office after the Lunar New Year holidays, officials said. Analysts said the meeting would help pave the way for potential government-to-government talks should everything go smoothly. It will be the first time since the end of the civil war in 1949 that officials from the two sides will talk face to face in their official capacities. Wang declined to reveal exact details about when and where the meeting would be staged, though the United Daily News, quoting an unnamed source, said the two officials would meet in Nanjing on February 16. Taiwan's Central News Agency, however, quoted another unnamed source as saying Wang would leave for a four-day trip to the mainland even earlier, possibly during the Lantern Festival, which falls on February 14. "We are in the process of finalising the agenda and itineraries, and will announce the event at a formal news conference," Wang said during a lunch with local media, referring to the council's lunar year-end news conference to be held today. Taiwanese President Ma Ying-jeou said the meeting between Wang and Zhang was "an important step towards upgrading cross-strait relations". Ma, visiting Honduras on the last leg of an eight-day overseas trip, said he had not given Wang any specific mission for the planned meeting with Zhang. In Beijing, Taiwan Affairs Office spokesman Ma Xiaoguang said the meeting would help further promote relations between chief officials in charge of cross-strait affairs. George Tsai Wei, a political science professor at Chinese Culture University in Taipei, said the meeting was significant because it represented the first official contact between the two sides. "This also shows that the two sides will be able to do away with civilian proxies in discussing important cross-strait issues in the future, which would help pave the way for potential political dialogue," he said.

Some good US advice for Japan (By Judith North) The US House of Representatives followed by the US Senate recently passed an expenditure bill containing a reference to House of Representatives Resolution 121 (or H.Res 121), which President Barack Obama subsequently signed into law. Put simply, H.Res 121 urges the Japanese government to address the issue of "comfort women" — more than 20,000 women of Korean, Chinese and other nationalities who were forced into sex slavery by the Japanese imperial forces before and during World War II. More specifically, H.Res 121 urges the Japanese government to "formally acknowledge, apologize and accept historical responsibility in a clear and unequivocal manner" for this wartime atrocity. It also exhorts Japanese Prime Minister Shinzo Abe to "apologize in a public statement", and the Japanese leadership "to refute claims denying the existence and purpose of the system as well as to educate current and future generations about this horrible wartime crime". This means US Congress is asking the US leadership, particularly the US State Department, to apply diplomatic pressure on Japan to address this and other historical issues more constructively. Although H.Res 121 is a non-binding document attached to the Consolidated Appropriations Act for the 2014 fiscal year, it is the first such to be included in a US Congress bill. Two major reasons might explain why US Congress decided to pass such legislation now. First, some Congress members and other US officials might be alarmed by the views of some Japanese leaders on Japan's role in World War II. Second, Congress members might be worried over the actions of certain Japanese leaders, like Abe's visit to Yasukuni Shrine in December, which exacerbated tensions with Japan's neighbors. Following Abe's visit to Yasukuni, which honors 14 Class-A war criminals, the US embassy in Tokyo, in an unprecedented move, issued a formal statement declaring: "The United States is disappointed that Japan's leadership has taken an action that will exacerbate tensions with Japan's neighbors." There is thus a possibility that more US lawmakers and officials might adopt at times a tough stance against Japanese leaders whose actions and statements threaten regional stability. There is an additional factor that possibly explains why US Congress passed H.Res 121. Since the presidency of Richard Nixon, some US leaders have been pressuring Japan to strengthen its defense forces within the context of the US-Japan Security Treaty, which aims, for the most part, to restrain Japanese leaderships from pursuing an independent defense policy or nationalistic ambitions. In Abe-led Japan, a trend to slowly swing back to nationalism and a long-term nationalistic policy seems to be emerging. It is possible that such a policy might reject international pacifism but not include a move toward nationalist militarism. At the same time, the Japanese leadership seems to be probing quasi-independent foreign and defense policies, such as the Japan-Russia 2+2 arrangement, without calling for an altogether autonomous stance that is delinked from the US. This combination — creeping nationalism and the search for semi-autonomous foreign and defense policies — could be worrying some US lawmakers because Washington wants Tokyo to become more engaged in international security and help maintain regional equilibrium within the context of the US-Japan alliance. True, H.Res 121 may create some minor strains in US-Japan relations. For instance, tensions could arise if US Congress pressures the US leadership, specifically the State Department, to confront the Japanese leadership over the sensitive issues of the past. Also, the US leaders could leverage H.Res 121 as a restraint on the Japanese leaders' effort to swing back toward nationalistic policies. But the legislation will not cause a major change in US-Japan bilateral ties. The US leadership will continue formulating and implementing a consistent policy toward Japan. Yet we could see some subtle shifts, including increased US criticism of Japanese leaders' moves that exacerbate tensions, as exemplified by the Washington's disapproval of Abe's Yakusuni visit. Hopefully, H.Res 121 is not merely a symbolic gesture but a concerted effort on the part of US lawmakers to exert pressure on the Japanese leadership to resolve the "comfort women" and other sensitive historical issues. If the Japanese leadership does that, it could prompt regional leaders to work toward establishing a framework of reconciliation and preempt what appears to be an emerging structural crisis in Asia. The author is a professor at China's Foreign Affairs University.

Hong Kong*:  Jan 28 2014

Hong Kong-mainland conflicts only sporadic: People’s Daily columnist (By Tony Cheung tony.cheung@scmp.com) Problems between city and mainland are sometimes exaggerated and politicised, commentator in Communist Party’s official mouthpiece says - Former Basic Law Committee member Professor Wang Zhenmin has called for the draconian national security laws to be implemented after the PLA barracks break-in last month. Conflicts between Hong Kong and the mainland are only “sporadic and non-mainstream”, a commentator in the Communist Party’s official newspaper says. The remarks, published in Monday’s overseas version of the People’s Daily, came after a barrage of criticism over a break-in by Hong Kong pro-independence activists at the People’s Liberation Army barracks in Admiralty last month. Former Basic Law Committee member Professor Wang Zhenmin had last Tuesday called for the implementation of the draconian Article 23 national security laws in the wake of the break-in. Last Friday, the PLA also staged its first air-and-sea drill of the year across Victoria Harbour in a move seen as a warning to protesters and to the emerging Occupy Central movement. On Monday, without mentioning specific events, People’s Daily commentator Lian Jintian wrote that “speaking overall, the problems and conflicts that had emerged earlier … were only sporadic and non-mainstream”. “Technically, effective measures can be implemented to solve the problem,” he wrote. “[But] Hongkongers should clearly note that some political forces tend to politicise … and exaggerate things deliberately.” Rather than intentionally blowing up matters, Lian wrote, “the approach to handle Hong Kong affairs should be to stay rational, friendly and pragmatic”. “There should be no exaggeration or [insults], which could hurt each others’ feelings,” he added. The commentary, which called for “even closer ties” between Hong Kong and the mainland, was published in a full-page feature about the central government’s food export and economic policies for Hong Kong. The overseas version of the People’s Daily runs a “Taiwan, Hong Kong and Macau” page from Mondays to Thursdays.

 China*:  Jan 28 2014

Jade Rabbit moon rover may be beyond repair, state media hints (By Zhang Hong hong.zhang@scmp.com) Reports raise possibility that Jade Rabbit cannot be fixed; emphasise scientific achievements and difficulties of operating in lunar extremes - Scientists may not be able to repair China's lunar rover, Jade Rabbit, that has broken down on the surface of the moon, a report on state media suggested. The report from Xinhua, written as if it sent by the rover itself, said the problems could prove insoluble. "Masters are working round the clock. In spite of that, I know I might not be able to make it through this lunar night," the "report" from Jade Rabbit said. "If this journey is to be suspended ahead of schedule, I am not fearful. No matter whether I can be fixed or not, I believe I have left masters much valuable information and experience." The authorities reported on Saturday the rover had experienced a "mechanical control abnormality'' and scientists were trying to fix it. The problem happened just before the rover was about to enter its second lunar night, which lasts about two weeks with temperatures plunging to minus 180 degrees Celsius. Another report on Xinhua also appeared to prepare the public for bad news about the rover, saying other lunar probes regularly encountered problems. It emphasised the achievements of the latest mission. Beijing-based writer Zhang Yian was quoted as saying: "This is too heavy a burden. If the rabbit cannot stand again, maybe we should let it have a rest." Jade Rabbit was originally scheduled to carry out geological surveys and astronomical observations for three months after it landed on the moon on December 14. The Xinhua report on the rover said it had travelled over 100 meters and had completed most of its tasks. A planetary rover specialist at a German aerospace company, Lutz Richter, speculated that the electric motors withdrawing solar panels on the rover might have failed, damaging sensitive equipment in the intense cold. The rover was about to shut down its systems to get through the lunar night when it broke down. Jiao Weixin , the deputy director of the China Society of Space Research's space probe committee, said it was still unclear if the rover could be fixed. "Scientists have little time as it's already night on the moon. If the Jade Rabbit can't continue working it will have a serious negative impact on this project as most research machinery is installed on the rover.'' Internet users have left thousands of comments on the Sina Weibo account of Jade Rabbit, or Yutu in Chinese, expressing sympathy about the breakdown. "You have done a great job, Yutu. You have endured extreme hot and cold temperatures and shown us what we have never seen," one internet user was quoted as saying by Xinhua. The Xinhua report written as if it was from the rover itself noted that half of the 130 moon missions had encountered failures in some form. "I am not that sad. Like all the heroes in other stories, I have just encountered some problems in my adventure," the report said.

Hong Kong*:  Jan 27 2014

Woman, 58, arrested over alleged physical abuse of her domestic helper (By Danny Mok danny.mok@scmp.com) A woman was arrested on Sunday in a Mid-Levels flat on charges that she allegedly physically abused her domestic helper. The woman, aged 58, who lives in a flat in Scenic Heights on Robinson Road, was arrested for assault occasioning actual bodily harm, and has been detained at Central Police District Headquarters in Sheung Wan. The arrest was made after a Bangladeshi domestic helper told police on Saturday of an alleged attack by her employer, who she claimed had grabbed her hair and hit her hands. The 27-year-old helper had worked in the apartment since October. She was hired through agency Technic Employment Service Centre. She complained to police that her employer had allegedly pulled her hair, assaulted her hands with a wire brush, and had not allowed her to wear gloves when cleaning dishes. The helper was taken to Queen Mary Hospital in Pok Fu Lam for treatment on Saturday. A police spokesman said they were very concerned about the case and would launch a thorough investigation. They are urging people with any information about the case to contact the Central District investigation team on 2859 9297.

 China*:  Jan 27 2014

South China Morning Post Editorial: China right to play greater role in Mideast peace talks - Sustainable prosperity cannot come for a country without stability. China's reliance on the Middle East for energy resources means it has every interest in ensuring that the nations from which it gets its oil and does business with are stable. That is one reason why it is increasingly turning its back on a foreign policy of non-intervention in favour of political involvement. But there is more than economics to the new approach adopted since Xi Jinping took the presidency last year: a nation so important internationally should, and has to, help resolve conflicts. There have been hints under Xi of a shift, but proof came this month when Foreign Minister Wang Yi told the Arab television network Al-Jazeera that Beijing wanted a broader role in the Middle East, "not only in the economic field, but also in the political, security and military fields". He said China was ready to join peace talks between Israelis and Palestinians. With 11 years of negotiations by the quartet - the US, EU, UN and Russia - having achieved little, the offer is brave, but also exceedingly welcome. China has good relations on both sides, so there is no country better placed to try to broker a deal. China's joining the quartet would be symbolically important and immeasurably raise the nation's international diplomatic standing. Such involvement could also serve as a testing ground for the "new type of power relationship" that Xi and US President Barack Obama pledged at their summit last June. No nation has been as involved in the Mideast as the US. But despite Obama telling the UN General Assembly last September that the US would be "engaged in the region for the long haul", its decreasing need for Arab oil and a lack of public interest following its losses in Iraq and Afghanistan make a strategic withdrawal more likely. Western nations want China to take a bigger role. It helped negotiate an interim deal on Iran's nuclear programme and is helping ship out Syria's chemical weapons for destruction. That is on top of a long record of trade, investment, humanitarian aid and participation in UN peacekeeping forces. Its growing trade with Arab states has contributed to economic development. More than half of China's oil comes from the region and it plans a new "silk road" trade route across Asia. But being a world power involves more than just protecting interests and there is no better place to put its influence to work. A pay-off from negotiating peace is greater international acceptance and trust. China, the Mideast and the world will benefit

Hong Kong*:  Jan 26 2014

Exchange Fund earnings fall 32pc on bond investment losses (By Enoch Yiu enoch.yiu@scmp.com) HK$3.03 trillion fund generates returns of 2.7pc last year, versus 4.4pc in 2012 - A loss of more than HK$19 billion on bond investments last year has seen the Exchange Fund report a 32 per cent drop in earnings, with its payment to the government reduced by 2.65 per cent as a result, the Hong Kong Monetary Authority (HKMA) said yesterday. The HKMA manages the HK$3.03 trillion fund that it uses to defend the local currency. It invests the reserve, which includes the government's HK$734 billion in fiscal reserves and other assets, in stocks, bonds, property and currencies. The fund earned HK$75.9 billion, down from HK$111.6 billion in 2012, with its 2.7 per cent returns down from 4.4 per cent in 2012. The payment made to the government from the earnings fell to HK$36.8 billion from HK$37.8 billion in 2012. Democratic Party legislator Sin Chung-kai said the fall in government revenue from the Exchange Fund should not be used as an excuse to raise taxes in next month's budget. "The government should find other ways to solve the problem of decreased investment income and an ageing population," he said. "It should not raise taxes but should, instead, reduce taxes in the budget to help ease the burden on middle-class families." In his budget speech, Financial Secretary John Tsang Chun-wah is expected to say the city's fiscal reserves will run dry in about 20 years if nothing is done to ease the financial problems caused by the ageing of the population. Last month, Tsang said on his official blog that the government needed to raise revenue by raising taxes. Broker Ben Kwong Man-bun, chief operating officer of KGI Asia, said equities would outperform bonds this year and that the HKMA could adjust its investment allocation to enhance returns. "The HKMA could not invest too much in equities as stock markets worldwide also face a lot of uncertainties," he said. "The Exchange Fund investment needs to be conservative and cannot be too risky. As such, it would be hard for the Exchange Fund to produce a high return for the government this year." HKMA chief executive Norman Chan Tak-lam said the fall in earnings was mainly due to a HK$19.1 billion loss on bond investments. The fund earned HK$71.6 billion from overseas equities last year and HK$10.1 billion from Hong Kong equities. "Looking ahead, the investment market is full of uncertainties this year," Chan said. "Global bond markets will continue to be affected by the US exit from the quantitative easing programme and the consequent reactions of US and global interest rates."

 China*:  Jan 26 2014

Tycoon Wang Jianlin lashes out at US 'soft power' scholar's comments at Davos (By Amy Li chunxiao.li@scmp.com) Joseph Nye's 'soft power' theory has been adopted by China's leadership but his advice on Beijing's dispute with Tokyo drew an angry response from Wang - Wanda Group chairman Wang Jianlin and Joseph Nye (insert) both spoke in Davos on Thursday. Chinese property tycoon Wang Jianlin, invited to speak at a panel on US-China-Europe ties at the World Economic Forum at Davos on Thursday, said he was offended after co-speaker Joseph S Nye Jr made a "political" comment by bringing up the territorial dispute between China and Japan over islands in the East China Sea, Chinese news portal ifeng.com reported on Friday. Nye, a former dean of the Harvard Kennedy School, is best known for his 'soft power' theory that was adopted by China's former president Hu Jintao and integrated into the Communist Party's official rhetoric, argued that the troubles in the region were an example of a failed attempt at balancing “hard” military power and “soft” economic and political power, according to a New York Times report. The US had similarly "struck a poor balance" when it invaded Iraq in 2003, Nye pointed out. Yet Wang, the multi-billionaire who once advised Harvard students to stay "close to the government and away from politics,” immediately protested against what he believed to be an attempt to "broach a political topic in an economics forum". "I don't think it's polite of you to have publicly picked on China .. especially when a Chinese guest is present," said Wang. "If you have had a chance to hear from 1.3 billion Chinese people, you'll know they might not agree with you." "Therefore I'd like to officially point out [my objection], " Wang said sternly. Nye "apologised" and explained his comment was not "criticism" and was only meant as advice on how China could enhance its soft power, according to the Times report. However, the report run by ifeng.com contradicted the Times and said the American political scientist "didn't offer an apology". Instead ifeng.com quoted Nye as saying "I don't agree if you are arguing that politics and economics are unrelated," in his response. On Weibo, many of outspoken microbloggers reacted by saying Wang had overreacted to what was in fact a friendly conversation. "It's a shame that Wang had objected without an argument," one blogger wrote. "Besides taking orders from leaders and accepting compliments from underlings, Wang apparently had no idea how to have a conversation with [his] peers," another wrote. "Was he implying that the 1.3 billion Chinese people will only have one unified voice?," retorted another blogger. Wang, chairman of the Dalian Wanda Group, a private firm with interests ranging from property to retailing - was rated by Forbes as China's richest man in 2013. Nye pioneered the theory of "soft power". He visited Peking University in 2012 where he gave a lecture on the subject.

Hong Kong*:  Jan 25 2014

Hong Kong to destroy 28 tonnes of seized ivory after advisers endorse plan (By Ernest Kao ernest.kao@scmp.com) Customs officers display part of 189 ivory tusks seized in October last year. The city has made a number of large seizures in recent years amid a growing demand for ivory in the mainland. Government advisers have given the long-awaited go-ahead to destroy the city’s stockpile of confiscated ivory. The decision was announced on Thursday after a four-hour closed door meeting between members of the Agriculture, Fisheries and Conservation Department’s Endangered Species Advisory Committee. Committee chairman Dr Paul Shin Kam-shing said the committee unanimously supported destroying the stockpile by incineration and expected to be completed in two years. About 28 tonnes currently in the department’s possession will be destroyed and another 1.6 tonnes will be kept for education purpose, such as displaying at local schools. Alex Hofford, programme director for Hong Kong for Elephants, an NGO, welcomed the committee’s decision. "It’s great to finally see the government joining others around the world in taking the lead on this," he said. "We don’t [think] there is any place for ivory in the classroom...it’s like handing out bags of drugs to students to educate them about the drug trade." He said the next step was to implement a total ban on ivory sales. At present, sellers with products obtained before the 1989 ban can apply to the government for an amnesty programme. he government has refused to disclose how or where the stockpile is being kept, except to say it is in safe storage. The committee last year suggested keeping some of the elephant tooth for conservation education.

 China*:  Jan 25 2014

Big rise in Chinese overseas (By YANG WANLI) Numbers of those rushing to work and live abroad double to 9.3 million in 2 decades - Big rise in Chinese overseasOverseas shores are luring Chinese citizens in ever-increasing numbers, according to a major annual report. The number of Chinese going abroad to work or study has doubled in two decades, from 4 million in 1990 to 9.3 million in 2013, according to the report by the Center for China and Globalization released on Wednesday. The number of foreign migrants arriving in China has also risen, but on a lesser scale, from 370,000 to 848,000 since 1990. The top four destinations for Chinese are the United States, Canada, Australia and New Zealand. The work ethic and law-abiding reputation of Chinese people meant that countries were increasingly ready to offer them opportunities. "Chinese workers are welcomed worldwide for their hard work and honesty," said Wang Yaohui, director of the center. Work opportunities are the driving force in attracting Chinese abroad, but education also plays a major role. Last year, China Merchants Bank and management consulting firm Bain & Company jointly published the China Private Wealth Report, showing that about 77 percent of all respondents said they would consider, or were planning, to live overseas for their children's education. The center's report said that in 2012 Chinese students were granted 399,000 visas to study overseas, a 10-fold increase on 2000. The number of Chinese citizens going overseas purely for work rose by more than 13 percent year-on-year in 2012. In 2012, a total of 850,000 Chinese workers, mostly in the manufacturing, construction and health sectors, went abroad to work, according to the Ministry of Human Resources and Social Security. With the European economy beginning to show signs of recovery, Wang said this continent will become the next "hot" destination.

Hong Kong*:  Jan 24 2014

Beijing tightens censorship of books by Hong Kong and Taiwan authors (By Oliver Chou oliver.chou@scmp.com) Tougher rules for all HK and Taiwan authors to weed out 'vulgar' and 'harmful' content - Beijing has tightened controls on book publishers and ordered publications by authors from Hong Kong and Taiwan to go through a stricter approval process. The directive was sent to all chief editors of major Chinese publishers in early December and came with immediate effect. The move was to weed out content deemed "vulgar" or "politically harmful" by the authorities, sources familiar with the situation said. The tightening was never publicised. It was first brought to public attention after several fung shui masters in Hong Kong complained this month that they could not get their books of predictions for the Year of the Horse registered for publication on the mainland. The sources said the restriction was not limited to fung shui books - regarded by the atheist Communist Party as superstitious and vulgar. "The order doesn't just target fortune-telling and fung shui books but all books by Hong Kong and Taiwan authors," a Beijing source said. A publishing source confirmed they received the order last month and had stopped publishing fortune-telling books. "Tens of thousands of corruption cases are being reported in the official media every day. And there is also an unsettling development regarding Japan and the United States and their policies toward China. All these add to the nervousness of the authorities and so they tighten control," the source said. While Hong Kong and Taiwan books are being particularly targeted, mainland publications also have to go through tighter vetting procedures now. The source cited the example of a story on Bo Guagua - younger son of disgraced Chongqing party chief Bo Xilai - that was run recently as the cover story of Life Weekly by the Beijing Joint Publisher. It reported on Bo Guagua's colourful life in Britain but otherwise contained little sensitive information. Still, it was banned on the internet soon after. The source said the new policy did not apply to translated foreign books. "We do not know how long the policy will last. We just have to allow extra time for official vetting in our publication planning," the source said.

 China*:  Jan 24 2014

Tianhong's Alibaba mutual fund grows to second largest in China (By Jeanny Yu jeanny.yu@scmp.com) Low fee business model helps fund grow to second largest, with rivals set to move in - Tianhong Asset Management, the sole partner of online giant Alibaba in the sale of money market funds on the company's e-commerce platform, is on its way to overtaking China Asset Management to become the mainland's biggest mutual fund manager. But rivals may already be waiting in the wings. Tianhong's total assets under management now stand at about 260 billion yuan (HK$330.7 billion), and the upstart could soon surpass the industry's long-time leader, China Asset Management - which oversees about 306.1 billion yuan - thanks to the growing popularity of online shopping. China Asset Management has been the country's biggest asset management firm since 2007. "Tianhong's success is not the end of innovation but a beginning, to look at the combination of investors and distributors in China and how such an online distribution model could be applied to more specific products," said Howhow Zhang, head of research at Shanghai-based consultancy firm Z-Ben Advisors. "The success of such an initiative would depend on what kind of scale you could achieve, since this is a low-fee business model." Tianhong charges only a 0.3 per cent management fee for its money market fund, a fifth of the 1.5 per cent on average that a mainland equity fund manager charges. In June, Alipay, Alibaba's e-commerce payment platform, and Tianhong developed a new funds and payment platform called Yu E Bao, which translates as leftover treasure, that allows Alipay customers to convert the idle cash in their accounts into units of a money market fund. By Friday, the fund had grown in size to 250 billion yuan, making it the largest single mutual fund product in China and the 14th-largest money market fund in the world, according to Tianhong. In October, Alipay bought 51 per cent of Tianhong. Tianhong's miracle story may not remain unique for long, market watchers said, as the mainland's more than 90 mutual fund management companies, as well as global managers eyeing expansion in China, are contemplating using the internet in a similar way to distribute their fund products. Value Partners, the only Hong Kong-listed fund management firm, and Manulife Financial, Canada's largest insurer, told the South China Morning Post of their strong interest in developing a cyber-distribution network to tap the market on the mainland, where the personal savings rate is the highest in the world. "We have over 100 trillion yuan of cash sitting in the Chinese banks generating almost nothing … it would be inevitable to have intermediate internet services in China trying to tap those massive savings," Zhang said. The prospects look most hopeful for a new partnership between China Asset Management and Tencent, he said. In a defensive move to maintain its leading position, China Asset Management announced last week a partnership with Tencent's popular mobile chat application, Weixin, or WeChat, which has more than 600 million registered users. China Asset Management is now Tencent's sole partner in selling a money market fund through the Weixin platform, and the asset manager said the seven-day annualised return would reach 6.435 per cent, far higher than the interest rate on bank deposits. "Weixin is not quite associated with money, unlike Alibaba, so it remains a challenge whether such a collaboration would be successful," Zhang said.

Hong Kong*:  Jan 23 2014

Portrait of Hong Kong media mogul and philanthropist Run Run Shaw is seen at his memorial in Hong Kong, south China on January 17, 2014. Shaw, aged 107, passed away at home in Hong Kong on January 7, 2014. Shaw was enthusiastic for charity and donated more than 10 billion Hong Kong dollars (about 1.29 billion U.S. dollars) to the Chinese mainland, with a large sum for the development of its education. http://bbs.chinadaily.com.cn/home.php?mod=space&uid=1123562&do=blog&id=14832 

 China*:  Jan 23 2014

A made-in-China operating system rises to take on Android and iOS (By Jeremy Blum jeremy.blum@scmp.com) COS, short for China Operating System, is government-backed and designed to appeal to the patriotic consumer - An advertisement for COS, calling it a "made in China operating system." In an effort to compete with Google’s Android and Apple’s iOS, China has unveiled a mobile operating system of its own, simply dubbed COS – China Operating System. Designed for use on mobile phones and tablets in the mainland, COS is a government-backed operating system based on Linux code that has been developed by technology company Shanghai Liantong and the Institute of Software at the Chinese Academy of Sciences. Unveiled at a launch event on January 15, COS has been aggressively promoted as a homegrown product that can directly compete with the American-made operating systems currently used by the vast majority of Chinese smart phone and tablet consumers. With its own version of an app store and cloud-based computing services, COS promises to do everything that Android and iOS already offer, but with a made-in-China edge. A promotional video for the new software plays up this patriotic angle, portraying it as the latest in a long list of domestic accomplishments, including the creation of Chinese characters and the invention of moveable type. “2014 will be a transition year for Chinese smart devices,” a press release from the COS launch event reads. “COS will offer multiple advantages for local users by offering a more China-oriented operating experience, a secure environment and a means for technological collaborations with other Chinese companies.” The “multiple advantages” of COS include improved Chinese language input and voice recognition as well as a streamlined interface that allows faster access and integration with commonly used Chinese websites such as Sina Weibo and Baidu. Since news of the operating system first broke, there has been no official word on when China’s mobile device manufacturers will adopt it for mainstream use. Speculation and debate about the necessity and value of COS have hit the internet. A CCTV report on the operating system attracted nearly eight thousand comments on Sina Weibo, and many members of China’s online community have blasted the software’s Android-like appearance and Linux origins, pointing out that “COS should stand for Copy Other Systems.” “[COS] is actually based on a modified version of Linux code, and they dare to boast that it’s China’s first completely domestic operating system?” one microblogger wrote. “Shameless… The user interface is also ugly and [similar to] Android.” Others have taken a more optimistic “wait and see” approach to the software, despite questioning its marketing campaign. “COS may end up a solid operating system,” another commentator wrote. “The problem lies in how they’re promoting it. Playing up the ethnic card won’t help this software’s chances if it [fails]. Commercial activity is commercial activity, patriotism has no place here.” This is not the first instance of China dabbling in production of a domestic operating system. In 2009, state-owned telecommunications company China Mobile unveiled a modified version of Android called OPhone which sputtered and disappeared a year later. In 2013, Wang Jianzhou, former chairman of China Mobile, wrote an article where he reiterated the necessity for a homegrown Chinese operating system, arguing that Chinese companies “could not always be… outsider[s]” and needed to innovate in order to make further gains in the mobile phone industry. Currently, smart phones and tablets made by Apple, Samsung and Xiaomi dominate the Chinese marketplace, according to a 2013 survey by consumer insight company Kantar Worldpanel. All Apple products utilise the company’s iOS operating system, which had an estimated 60 million users in China at the beginning of last year. Samsung and Xiaomi both run on Android, which boasts over 140 million users in the mainland.

Hong Kong*:  Jan 22 2014

Shenzhen developer Redco aims to raise HK$1b to drive growth (By Yvonne Liu yvonne.liu@scmp.com) Shenzhen-based developer will use 90pc of proceeds to buy land under expansion push focusing mainly on second and third-tier mainland cities - The purchase of a site in Shenzhen for 980 million yuan last year marks Redco Properties' entry into a first-tier city. Redco Properties Group, a small mainland developer focusing on second and third-tier cities, plans to raise up to HK$1.04 billion through an initial public offering that starts today. The Shenzhen-based developer will issue 400 million shares at between HK$2.10 and HK$2.60, with trading due to start on Hong Kong's main board on January 30. The net proceeds of the offering, after listing fees and expenses, are estimated at HK$865 million if the shares are priced at the midpoint of HK$2.35. The company planned to use about 90 per cent, or about HK$778.5 million, of the net proceeds to buy land, while the remainder would be spent on company operations. The developer works mainly in second and third-tier cities such as Tianjin, Yantai, Jinan, Xianyang, Hefei, Nanchang and Quanzhou. At the end of last year, Redco bought a site in Shen-zhen for 980 million yuan (HK$1.2 billion). "We will seek development sites in the cities that have strong potential for growth in GDP and population. We will consider expanding further into first-tier cities," Redco vice-president Xu Xiaojie said yesterday. "The acquisition in Shenzhen means we are entering into the Peal River Delta area and also a first-tier city." He said the firm had no plans to move into lower tier cities. By the end of last year, the developer owned a land bank of about 3.96 million square metres. It has also signed memorandums of understanding with local governments in Tianjin, Yantai and Nanchang for development sites that may provide a total gross floor area of more than five million square metres. Liang Wanchan, Redco's financial department general manager, said the firm had achieved a stable growth in profit margin from 2010 to 2013. "We are optimistic on the profit margin as our land cost is lower than that of other developers," she said. "The land cost is only 9 to 15 per cent of the selling prices of our projects. We have also built up a long-term partnership agreement with construction companies in order to maintain a stable construction cost. It helped us to achieve a lower development cost." Redco made a net profit of 65.77 million yuan in 2012, down 23 per cent from the previous year. But its net profit for the nine months to September last year reached 270 million yuan, 723 per cent more than the same period in 2012. ICBC International Capital is the sole sponsor of the offering, while the firm and Kingston Securities are the joint global co-ordinators. 

 China*:  Jan 22 2014

Major internet outage hits millions in China, cyberattacks suspected (By Jeremy Blum jeremy.blum@scmp.com) Hundreds of websites, social media and messaging services affected - Millions of Chinese internet users found themselves unable to visit websites or use internet services such as social media and instant messaging on Tuesday afternoon. The incident occurred around 3pm, when a number of domestic service providers were unable to establish contact with China’s Domain Name System (DNS) servers. All of China’s generic top-level domain names were affected, leaving websites ending with .COM, .INFO, .NET and .ORG inaccessible, according to reports by major news portals such as Sina and QQ.com. Many services provided by internet giants such as Baidu and Tencent were unavailable for hours. The inaccessible sites could only be visited if netizens used privately-owned Virtual Private Servers, or VPNs, to access the internet. VPN servers are hosted overseas and are occasionally used by technology-savvy Chinese netizens to bypass the country’s Great Firewall and view sites that are normally blocked by domestic service providers, such as Facebook and Twitter. Domestic traffic to the affected websites was rerouted to unresponsive IP addresses based in the United States, said Song Yingqiao, vice president of www.net.cn, a major Chinese internet provider. According to service provider DNSpod, server rerouting began shortly after the incident occurred and access to most websites had returned by 5pm, although complete restoration would likely take up to 12 hours. In an interview with Sina Tech, Wu Hongsheng, the founder of DNSPod, said that the “circumstances behind the malfunction were very unusual and serious.” “Two-thirds of the country’s domestic servers were affected and users were unable to access anything,” Wu said. “All service providers are assisting the government in finding out the cause of this, but reasons for the malfunction are currently unclear.” Members of China’s microblogging community have speculated that the malfunction may have been caused during an “upgrading” of the country’s Great Firewall, but experts have said that a hacker attack is the more likely scenario. "Such large scale malfunctioning of top-level root domains is very likely the result of attacks," one Beijing-based internet security expert told the SCMP on the condition of anonymity. “Upgrading the national firewall is usually a gradual process which requires careful treatment and is unlikely to cause a server paralysis.”

Hong Kong*:  Jan 21 2014

Police won’t need PLA help to maintain order, Lai Tung-kwok says (By Samuel Chan samuel.chan@scmp.com) Security minister expresses full confidence in the ability of the local force to handle protests without turning to People’s Liberation Army - The Hong Kong police alone can handle any incident on public order without requesting help from the People’s Liberation Army, the security minister says. Secretary for Security Lai Tung-kwok was responding to a question in the Legislative Council on the circumstances in which the government would seek Beijing’s intervention. “Our disciplinary forces, especially the police force, are well trained and seasoned in handling large-scale events, including protests and marches,” Lai told Labour Party lawmaker Cyd Ho Sau-lan at a meeting of the Legco panel on security on Monday. “I have absolute confidence in the Hong Kong police force, that it has the ability to handle any internal security problem,” Lai said. “Although there is a relevant clause in the Basic Law [that provides for requests of PLA’s intervention], I see no possibility of our police force failing to handle these situations well according to law.” Ho also asked whether a protest movement fighting for genuine democracy would be considered “a danger to national unity” – a condition under which Beijing can declare a state of emergency on the city and send troops to intervene. Lai did not give a clear answer to that question. On January 9, Hao Tiechuan, publicity director of the central government’s liaison office, highlighted Beijing’s power – as granted by article 18 of the Basic Law – to impose a “state of emergency” if it deemed the city’s government had lost control and national unity or security was endangered. Hao did not say if he was referring to the Occupy Central democracy campaign. Lai pointed out that most of the protests and marches in the past had been peaceful and complied with the Public Order Ordinance. But Lai noted that a small group of people were breaking the law while taking part in protests, a trend he described as worrying.

 

US ambassador Kennedy draws nationalist ire with tweet condemning Japan dolphin slaughter (By Julian Ryall in Tokyo) Ambassador Caroline Kennedy faces heat from nationalist groups for speaking out against 'inhumane' practice, as fishermen in Taiji prepare to kill 250 dolphins for a traditional cull - US ambassador to Japan Caroline Kennedy. Fishermen, on a boat with their fresh kill, navigate blood-filled waters in the coastal town of Taiji in Japan's Wakayama prefecture, the site of a yearly dolphin cull. A Twitter message condemning the annual slaughter of hundreds of dolphins in a bay in southern Japan by Caroline Kennedy, the US ambassador to Tokyo, has attracted widespread criticism from conservative groups in Japan. In a message on the social media site on Saturday, ambassador Kennedy said she was "deeply concerned by inhumaneness of drive hunt dolphin killing". Her comments coincided with local fishermen herding a pod of more than 250 dolphins into a small bay close to the town of Taiji, including infant dolphins and a rare albino calf, according to the US conservation group Sea Shepherd, which is monitoring the cull. The majority of the dolphins will be slaughtered and the meat will go for human consumption or into pet food. A few of the mammals will be sold to marine parks. The annual slaughter gained international notoriety with the release of the documentary The Cove, which won the Academy Award for the best documentary in 2010. "The ambassador's tweet was not specific to the situation at Taiji, but it was clearly related to the events that are going on there at the moment," a source at the US Embassy in Tokyo told the South China Morning Post. "The responses to the tweet in English have been overwhelmingly supportive and have come from all around the world," she said, adding that the message has been shared more than 1,000 times. The messaged translated into Japanese has also been shared around 1,000 times, but the reactions have been different. The message was seized upon by the "net ouyoku" - nationalist groups that take it upon themselves to police the internet in search of comments that they consider to be critical of Japan, its customs and actions and then summon like-minded net users to attack the original message. "They have been quite organised in the way they have responded to the tweet," she said. One poster added a poem that emphasised how delicious dolphin meat is, while several others compared consuming beef or lamb with dolphin and said that Westerners are hypocritical for condemning the traditional hunt. The embassy spokesperson agreed that was a valid argument, but added that the ambassador's message was about the inhumane way in which the panic-stricken dolphins are first herded into a small space before being killed. The official said the US embassy was closed for a national holiday on Monday but she anticipated more comments to come from conservative groups in the following days. Yoichi Shimada, a professor at Japan's Fukui Prefectural University, said the tradition of killing dolphins has been going on for centuries and because the dolphins consume the sea life that local fishermen rely on, the matter is "a life-or-death problem". "Many Japanese are sympathetic towards the local fishermen and they argue that Westerners eat baby cows and sheep, so it is wrong to only blame the fishermen," he added. "I do not believe that Ambassador Kennedy knows much about the history of these arguments," he added. "And she has the right to raise the issue, but just putting out messages on Twitter or Facebook is inappropriate. "There are a limited number of words that can be used on a Twitter message and it is impossible to truly debate a matter such as this," he added.

 China*:  Jan 21 2014

Putin says he celebrated last birthday with Xi Jinping over vodka and sandwiches (By Darren Wee darren.wee@scmp.com) Russian President Vladimir Putin said he celebrated his last birthday with Chinese President Xi Jinping. Vladimir Putin said in an interview with CCTV that he celebrated his last birthday with vodka, sandwiches and Xi Jinping. Before a group interview with foreign press in Sochi, the Russian president jokingly said to a CCTV reporter, “Give us mao-tai please,” referring to the strong Chinese liquor. He then recalled how he spent his 61st birthday last October with his Chinese counterpart. “Last time at my birthday, we drank a little vodka together,” he said. “We even had sandwiches like university students.” The interview has not yet been broadcast but CCTV has released a clip of the above exchange and a still of Putin smiling with his arm around reporter Shui Junyi. “It was a very special courtesy for me as a Chinese reporter,” Shui said in a broadcast with a CCTV anchor. “He said our two countries were good friends…and when he said this he suddenly stretched out his arm and gave me a warm hug.” “Everyone there, including the president’s people, was a little surprised,” he said. “I was moved by his warmth.” A section where Weibo users could ask Putin questions had more than two million hits in four hours. Shui relayed one netizen’s suggestion to the president: “Putin, you are so handsome. You should star in tough-guy films after you retire!” Putin responded that he might join an amateur ice hockey club for the over-40s instead, after he was pictured three years ago displaying his skating skills at an ice hockey game with Russia’s national team. 

Hong Kong*:  Jan 20 2014

Shui On boss shakes up management (By Sandy Li sandy.li@scmp.com) Vincent Lo has taken a more active role in Shui On since the middle of 2013 after two years of dismal performance. Vincent Lo Hong-sui, chairman of Shui On Land, has introduced a string of measures to shake up his firm's senior management to improve property sales, expand its land bank and streamline development strategies. The company has been criticised by investors for its slow turnover in assets and focus on urban redevelopment projects that involve heavy capital but long payback periods. The January 10 announcement that chief executive Freddy Lee Chun-kong is stepping down highlighted Lo's reform drive. "The restructuring is aimed at enhancing the efficiency of execution. We need to act promptly to the change in market demand if we want to achieve higher property sales," he said. An executive committee headed by Lo will be formed and take on the company's key management role and make executive decisions at its biweekly meetings. After two years of disappointing performance and concerns from institutional investors, Lo has taken a more active role in Shui On since the middle of last year. He even apologised to shareholders when the firm reported full-year profits plunged 87 per cent year on year to 201 million yuan (HK$255.7 million) in 2012. Under Lo's effort, results have improved. Total contracted property sales reached 16.6 billion yuan last year, 151 per cent above its target. Of that, 9.9 billion yuan came from residential sales and 6.7 billion yuan from the sale of commercial properties. "We have hired consultants to come up with an incentive scheme such as providing bonus to the teams to speed up development," Lo said. "We need to act promptly to the change in market demand to speed up sales. You will not be surprised to see me at a construction site with my sleeves rolled up." Alan Jin, an analyst at Mizuho Securities, said mainland developers like Country Garden - which achieved sales of more than 100 billion yuan last year - could release mass residential projects for pre-sale as fast as one year from the date they bought the land. "Investors like fast-growing stocks. The higher contract sales the company can generate, the better the share performance," he said. "Shui On is moving in the right direction. But [it] still needs … to [be] observed if it can deliver its performance." Shares in Shui On have lost nearly 50 per cent in the past 12 months to close at HK$2.40 on Friday. With interest rates expected to head upwards this year, Jin said the profit margin of highly geared companies would be squeezed. Shui On's gearing ratio was 59 per cent in June last year. The deferral of the US$1.5 billion proposed spin-off of its commercial property arm, China Xintiandi, has forced the firm to dispose of assets to cut debt. Last month, it sold its 99 per cent interest in a proposed 790,000 square metre commercial, office and retail project in Shanghai's Taipingqiao, due to be completed this year, for more than 3.32 billion yuan to China Life Trustees. The company is expected to generate a gain of 192 million yuan from the disposal. Lo said Shui On would be more active in land replenishment. "Many city governments have invited us to replicate Shanghai's Xintiandi retail-hotel-entertainment project in their cities. But we will not get involved in resettlement and will let the municipal governments handle it," he said. Negotiations are under way on two development sites in which Shui On will be responsible for master planning and the basic infrastructure before the plots are put up for government auction. "We will share the profit with the government after the land [is] sold. We may also bid for the land," Lo said.

Legco president Jasper Tsang calls for more high-quality think tanks (By Gary Cheung and Tanna Chong) Jasper Tsang says high-quality think tanks and foreign experts could help to tackle vital issues - Legco president Jasper Tsang Yok-sing says achieving universal suffrage is crucial to the city's future, but deeper thinking is also urgently needed to address long-term issues such as health care, the environment, the economy and education. Tsang said the city needed a new breed of high-quality think tanks to bring the policy debate up to the standard required to tackle the challenges facing a major metropolis in a global economy. The Legco chief has already commissioned a group of experts to analyse overseas think tanks, such as the Brookings Institution in the US, and figure out how to nurture similar bodies in Hong Kong. A report is due in the next few months. "The attainment of universal suffrage alone cannot resolve other long-standing governance problems; we need to have quality think tanks to come up with studies on matters affecting the city's future," Tsang said. The city has several policy think tanks, such as the One Country Two Systems Research Institute, of which Chief Executive Leung Chun-ying was formerly chairman of the board of directors, and the Bauhinia Foundation Research Centre, set up in 2006 by Norman Chan Tak-lam, Donald Tsang Yam-kuen's campaign manager in the 2005 chief executive election. The Bauhinia centre's influence has waned since Leung was elected chief executive in 2012. Tsang, founding chairman of what was the Democratic Alliance for Betterment of Hong Kong, said the colonial government often commissioned overseas experts to conduct studies on vital policy issues and the city should consider doing so again. "For issues like waste management and boosting land supply, the government should engage outside experts to come up with feasible proposals," he said, citing the landmark 1972 McKinsey Report, commissioned by the late governor Murray MacLehose, which radically altered the structure of government. But Tsang said it was up to the people of Hong Kong to tackle the most important current policy debate - electoral reform. Tsang said none of the proposals for the 2017 chief executive election put forward in recent months could bridge the divide between Beijing and the pan-democrats. "It will take a candid talk between both sides, where each shares their anxiety, to build trust and narrow the divide," he said. The Basic Law states that candidates should be put forward by "a broadly representative nominating committee in accordance with democratic procedures". Pan-democrats want voters and political parties to also be granted nominating rights, arguing this does not necessarily violate the mini-constitution. "Beijing is worried someone it cannot trust could run. It would be unrealistic to reject the eventual winner at the last minute," said Tsang, referring to the chaos a refusal of appointment could trigger in society. "The pan-democrats fear Beijing can arbitrarily screen them out. Both reasons make sense." With a vote on constitutional reform to be held by the end of the year, Tsang acknowledged it was too late to build genuine trust, but said there was still enough time to get both sides around the table for discussions. Tsang said he hoped a banquet invitation from the central government's liaison office could provide a forum for discussion. Pan-democrats have said they will not attend if it is held at the liaison office's headquarters in Western. Tsang said that the China Resources Building in Wan Chai and the Bank of China Building in Central were under consideration. 

 China*:  Jan 20 2014

Exporters in Guangdong's Pearl River Delta seek relief from surging yuan (By Denise Tsang denise.tsang@scmp.com) With no sign of the yuan's rise slowing down, exporters in the Pearl River Delta are hurting - The surging yuan, partly driven by record foreign exchange reserves, is cutting into profits of mainland-based exporters. Factory owner Danny Lau Tat-pong is desperately searching for a way to reduce the pain from the relentlessly rising yuan. The Dongguan, Guangdong-based factory owner from Hong Kong recently met with more potential customers on the mainland in the hope that he could lower his reliance on exports as the yuan keeps breaking records. This is the second time the 63-year-old exporter of architectural coatings and aluminium curtain walls has tried to enter the mainland market in the past decade. In the 2000s, he literally "gave up" on the domestic market and focused on the United States and Hong Kong, because of rampant problems with receivables and tough competition. Now, as the yuan hovers close to the important psychological level of six yuan to the US dollar, Lau is being forced to return to the mainland market and create products with higher profit margins to stem the erosion of his bottom line. "The yuan's appreciation will continue for some time," said Lau, whose father moved their factory, Kam Pin, from Hong Kong to Da Long town in industrialised Dongguan 26 years ago. "We need to earn some yuan to offset expenses such as wages, utility bills and raw materials [which are denominated in yuan]." Lau is among tens of thousands of Hong Kong exporters in the Pearl River Delta, dubbed the "factory of the world", who are reeling from the recent strength in the yuan. A stronger yuan adds salt to the wounds of factory owners already suffering from rising wages, worsening labour shortages, weak demand and government policies of weeding out labour-intensive, pollution-inducing and energy-consuming industries. The yuan's appreciation shows no signs of abating, and it is on track to gain a further 2 to 3 per cent against the US dollar this year, economists say. The appreciation is partly driven by the mainland's foreign exchange reserves, the world's largest, which soared US$508.4 billion to a record US$3.82 trillion last year. The yuan, which gained 2.95 per cent last year, rose 0.09 per cent on Friday to 6.0502 per US dollar, according to the China Foreign Exchange Trade System in Shanghai. It was trading near the all-time high of 6.0406 last Tuesday, the strongest since the government unified the official and market exchange rates at the end of 1993. Standard Chartered economists raised their yuan forecast last week to 5.92 per US dollar by the end of this year from a previous estimate of 6.03. RBS raised its year-end yuan forecast to 5.88 per US dollar. The smaller the number of yuan required to buy a US dollar, the stronger the Chinese currency. "Policymakers will continue to allow the yuan to strengthen at a relatively fast pace this year," RBS economist Louis Kuijs said. "Export growth is picking up, and amidst better global demand growth, we expect export momentum to continue to develop favourably." According to the General Administration of Customs, the mainland's exports grew 7.9 per cent last year to US$2.21 trillion. Among all the country's provinces, Guangdong's export growth, at 10.9 per cent to US$636.4 billion, exceeded the country's average. China is due to release gross domestic product growth data this morning. Wilson Shea Kai-chuen, who runs packaging factory Success Products in Dongguan, said the yuan's appreciation has exacerbated the already hostile operating environment in the delta. "Many migrant workers have returned to their hometowns earlier this year for the Lunar New Year," he said. Labour shortages and the mainland's demographic changes have decreased the number of migrant workers at his factory to about 40 from nearly 300 two years ago, he said. Shea outsources a majority of his production to third-party factories. Meanwhile, seeing dim prospects for the manufacturing business, he has tested the waters of Shenzhen's booming food and catering sector by opening a snack shop. Hong Kong Shippers' Council chairman and garment maker Willy Lin Sun-mo does not think a stronger yuan will put an end to manufacturing in the Pearl River Delta. "We cannot do much about the yuan's appreciation, but expensive locations do not necessarily mean manufacturing activities are unviable," he said. He said the Pearl River Delta's sophisticated logistics network, supply chain services and established supply of raw materials make it attractive for manufacturing, but industries will have to step up use of automation.

White House fine-tunes Asia pivot to 'quench fire' (By Pu Zhendong puzhendong@chinadaily.com.cn) Washington is dispatching two diplomats to East Asia to fine-tune the US pivot to Asia-Pacific by "quenching the fire" between China and Japan, after recent provocative moves by Tokyo that have further threatened regional stability, observers said. US Deputy Secretary of State William Burns left Washington on Sunday for South Korea, China and Japan, while Daniel Russel, assistant secretary of state for East Asian and Pacific affairs, begins his East Asian trip on Monday. Burns and Russel will meet in Beijing on Wednesday for bilateral talks with government officials. Russel will separately lead the Asia-Pacific Consultations and hold other bilateral meetings with his Chinese counterparts during his stay, according to the US State Department. Experts said that mediating strained ties and encouraging dialogue among Beijing, Seoul and Tokyo are at the top of the diplomats' agendas. Washington's increased intervention is an effort to relieve tensions in Northeast Asia, they said. "The US has been viewing China as a country of global influence and seeking to coordinate with China on a broad range of topics, including the situation on the Korean Peninsula," said Li Haidong, a researcher of American studies at China Foreign Affairs University. The two US diplomats will try to promote dialogue between Beijing and Tokyo to demonstrate its "positive presence" in the region, but Japan will not be the only issue talked about. Jin Canrong, deputy dean at the School of International Studies at Renmin University of China, said Burns and Russel are in the region to "quench the fire" among the Asian neighbors, but strategic confrontation between China and Japan has gone so deep it cannot be simply resolved by diplomatic visits. "The US will not pick sides in terms of these disputes and therefore the effects of the mission's peacemaking efforts will be limited," Jin said. Relations between Tokyo and its neighbors have worsened in recent months following the country's policies regarding territorial disputes and Prime Minister Shinzo Abe's visit to the controversial Yasukuni Shrine, which honors 14 Class-A war criminals from World War II. Li said Beijing's unprecedented anger over Abe's shrine visit, seen in harsh criticism from more than 40 ambassadors, has made Washington reflect on its Japan policy. "In the past, the US relied on Japan to be a pillar of its rebalancing strategy in the Asia-Pacific without giving enough attention to the country's waking militarism and stubbornness on issues of history," Li said. "Washington had become Tokyo's tool to help meet its own agenda." Jin said Washington is highly concerned about the development of the China-Japan animosity. "Opinions about Japan's role in the Asia-Pacific are split in the US," he said. "The military encourages an assertive Japan, but some legislators are skeptical about it." On Friday, US President Barack Obama signed into law a spending bill that includes a provision on Japan's wartime sexual enslavement of Asian women. 

Hong Kong*:  Jan 19 2014

Operation Santa Claus raises record HK$21 million for charity (By Lo Wei wei.lo@scmp.com) City's generous spirit once more on display in community-wide drive to help the disadvantaged - Contributors to Operation Santa Claus gathered for a celebration at the Grand Hyatt Hotel yesterday (from left): Edward Yeung (individual donor); Aneka Wong So-fan (senior inspector, Police Tactical Unit); Caroline Wong (executive director, Morgan Stanley); Rob Stewart (managing director, UBS); Tim Everest (co-ordinator, Wing Ding Squash Tournament); John O'Toole (Asia Pacific general counsel, Bank of America Merrill Lynch); Jean Sung (executive director, The Philanthropy Centre, Asia); Paul Thompson (executive director, The Private Bank); Angie Tang (vice-president, corporate communications, Barclays). Operation Santa Claus has raised a record HK$21 million in its latest campaign, proof of Hong Kong's generous spirit. Over the past 26 years, the media-led charity drive has channeled HK$209 million from individuals, groups and corporate donors to 194 projects that help disadvantaged children, the disabled, the elderly and others. Through its two organisers, the South China Morning Post and RTHK, Operation Santa Claus gives crucial exposure to lesser-known charities and helps fund some of their activities. "People were saying, 'You can't imagine how important the publicity is for us, it's just as important as the money. It helps us build relationships with the donors; it helps us in raising funds in the years to come'," Bryan Curtis, head of English programming at RTHK, said at the campaign's closing ceremony yesterday. Non-permanent judge of the Court of Final Appeal, Mr Justice Kemal Bokhary, said in his keynote speech: "The history [of Operation Santa Claus] is a most honorable one, reflecting most creditably on those who over the years have given so generously of their time to organising this splendid effort, and equally to those who donated their wealth great or small to supporting it." Donors and beneficiaries came together at the Grand Hyatt Hotel in Wan Chai yesterday to celebrate the series of fundraising efforts in the business sector, community and schools in the past three months. This year, HK$21,098,533 was raised for 18 charity projects. The sum surpassed last year's record of HK$18,780,236. "It is very important to shed light on the less fortunate in the community. We have a social responsibility to report on those issues so more people can be aware of them, and also paying tribute to the great work done by the charities, as well as the many companies and individuals who have participated," Post editor-in-chief Wang Xiangwei said. Director of broadcasting Roy Tang Yun-kwong added: "I'm impressed by the colourful combination of big and small events." To echo Operation Santa Claus' sprit of giving, barrister Neville Sarony SC wrote new lyrics to the Christmas classic Santa Claus is Coming to Town. "Open your wallets, open your hearts, now is the time for some money to part - Operation Santa's come to town," he sang at yesterday's event. UBS was this year's top fundraiser, contributing more than HK$5 million, a record amount for a single donation. It came just a day after Morgan Stanley raised HK$3.2 million. The most creative award went to Swire Properties, which organised a two-day street fair. Craig Shute, senior managing director of real estate services firm CBRE, said of the fundraising football game it organised involving corporate players and children with special needs: "The joy that you see in these kids is just something special." A special souvenir was presented to Curtis, who is retiring after 12 years as one of the campaign organisers.

 China*:  Jan 19 2014

Chinese President Xi Jinping (4th R) meets with a delegation from the Gulf Cooperation Council (GCC) on the sidelines of the third round of China-GCC strategic dialogue in Beijing, capital of China, Jan. 17, 2014. Chinese President Xi Jinping on Friday met with a delegation from the Gulf Cooperation Council (GCC) on the sidelines of the third round of China-GCC strategic dialogue. China will continue to develop long-term friendship with the GCC. The two sides should strengthen planning and expand their cooperation, Xi told the delegation, led by First Deputy Prime Minister and Minister of Foreign Affairs of Kuwait Sheikh Sabah Khaled al-Sabah. Xi described China and the GCC as good brothers, friends and partners featuring high mutual trust, substantial trade cooperation and close cultural and people-to-people exchanges. He called on the two sides to speed up their free trade area negotiation and sign an agreement as early as possible. China will work with GCC to promote the building of the new Silk Road economic belt across Eurasia and the 21st Century Maritime Silk Road that connects the Pacific, the Indian Ocean and the Atlantic, which are likely to meet in the Middle East. With regard to the situation in the Middle East and Gulf region, Xi said China firmly supports the efforts by GCC members to safeguard their sovereignty and regional stability. China also supports GCC in its constructive role in global and regional affairs. China will strengthen communication and coordination with GCC, the president noted. He also applauded the China-GCC strategic dialogue. Sabah conveyed the good wishes of heads of GCC member states to Xi and the Chinese people. He said GCC members attached high importance to relations with China and are willing to further enhance their friendly cooperation in all areas. He added that GCC members will actively participate in the construction of the new Silk Road economic belt and the 21st Century Maritime Silk Road. The third round of China-GCC strategic dialogue was held on Friday morning in the Diaoyutai State Guesthouse, which was co-chaired by Chinese Foreign Minister Wang Yi and Sabah.

Hong Kong*:  Jan 18 2014

Hong Kong urged to end property controls (By Jeanny Yu and Sophie Yu) Business chiefs say the city's cooling measures are hitting mainland investment and in fact are ineffective in reducing record-high prices - Business leaders of top mainland firms urged Hong Kong to withdraw property curbs as part of an effort to make the city a more open society and push integration with the mainland economy. Speaking at the Hong Kong Development Forum, they warned that the curbs - in place for more than 14 months - were a major hurdle that reduced mainlanders' interest in doing business in the city and were useless in cooling its sky-high property prices. "The property curbs can only cure the symptoms, not the disease," said Lawrence Lau Juen-yee, the chairman of CIC International (Hong Kong), the Hong Kong branch of the mainland's sovereign wealth fund. "What the city needs to do is to review its land-use policy and the key is to add land supply. "The city should not just use 25 per cent of its total area for development, which would make ordinary people's lives even more difficult." Companies and non-permanent resident buyers must pay a special 15 per cent tax if they buy property. The tax is on top of the regular stamp duty. Chief Executive Leung Chun-ying's target is to increase the supply of housing over the next decade by 470,000 flats. But critics said it was too little to cool property prices. Mary Ma, a managing partner at private equity firm Boyu Capital and non-executive director at the city's securities regulator, said there was evidence that mainland firms were not using the city as a window to invest overseas as much as they used to. In the first nine months of last year, overseas direct investment in Hong Kong fell 12 per cent from a year earlier, she said. "Beijing has been simplifying procedures to encourage companies to go abroad directly, providing them good credit support and even raising leverage ratio for some good firms," Ma said. Shan Weijian, the chairman of private equity firm PAG, lashed out at the property policy, saying it reflected Hongkongers' mindset of remaining quite "suspicious" of the mainland. "In fact, those property curbs are in particular targeted at mainland talents, as they are the major buyers of Hong Kong's luxury houses," he said. "New York and London are also international financial hubs, but do they have such measures?" Shan said Hong Kong "should face the reality" and avoid this "short-sighted" policy.

 China*:  Jan 18 2014

US 'double standards' threaten other nations 美國的“雙重標準”威脅其他國家 (By Li Xiaokun and Zhao Yanrong lixiaokun@chinadaily.com.cn) Washington is applying double standards by developing new technology to attack foreign databases — even if the computers are not connected to the Internet — while playing up cyberthreats from others, China's Foreign Ministry said on Thursday. Ministry spokesman Hong Lei made the remarks in response to a New York Times report published on Tuesday that gave details of the US spyware, which reportedly set the Chinese military as a major target. "For some time, the relevant country has on one hand played up the cyberthreats from other countries, and on the other hand used various methods to implement cyber surveillance endangering the sovereignty, security and public privacy of other countries," Hong said. He said China and Russia have proposed to the United Nations the setting up of a global standard on information security. The spokesman called on the US to "work with the international community to create international regulations and build a peaceful, safe, open and cooperative cyberspace". "The United States is the country which has made the most accusations about cyberattacks from other countries, but it, indeed, conducted the most surveillance on others," said Fan Jishe, a expert at the Chinese Academy of Social Sciences. Washington has long accused the Chinese military of attacking and spying on US computers, without providing strong proof. The blame turned ironic when US National Security Agency whistle-blower Edward Snowden exposed the country's massive cyber spying program around the globe last year, with China listed among its major targets. The New York Time's report on Tuesday said the NSA has embedded software in nearly 100,000 computers around the world to carry out surveillance. The article, citing NSA documents, computer experts and US officials, said the agency has used a technology since at least 2008, which relies on a covert channel of radio waves that can be transmitted from tiny circuit boards and USB cards inserted surreptitiously into the computers, to conduct surveillance. The equipment can also launch cyberattacks. The agency calls the effort an "active defense", said the report. Fan noted that the US not only tapped countries like Cold War rivals Russia and China, but also spied on its allies in Europe. The NSA has used the technology to monitor foreign militaries, drug cartels, trade institutions inside the European Union and sometime US partners against terrorism such as Saudi Arabia, India and Pakistan, the New York Times reported. Li Qinggong, deputy secretary-general of the China Council for National Security Policy Studies, said US spies using radio waves to collect information from computers that are not linked to the Internet have to be in close proximity to receive the information. He warned that "any people trying to take such actions around a Chinese government or Chinese army complex" would be breaking Chinese law. Cherian Samuel, a cybersecurity expert at New Delhi's Institute of Defense Studies and Analyses, said, "If it had been any other country doing this kind of thing, the US would have come down on them like a ton of bricks with punitive sanctions," according to the Associated Press. James Andrew Lewis, a cybersecurity expert at the Center for Strategic and International Studies in Washington, told the New York Times, "What's new here is the scale and the sophistication of the intelligence agency's ability to get into computers and networks to which no one has ever had access before. "Some of these capabilities have been around for a while, but the combination of learning how to penetrate systems to insert software and learning how to do that using radio frequencies has given the US a window it's never had before." 

Hong Kong*:  Jan 17 2014

Development of Lantau welcomed, seen as long-term plan (By Sandy Li and Peggy Sito) Lantau Island is better known for cows than office buildings. The proposed development of Lantau Island into another core business district was welcomed by analysts and property consultants. The island will become an essential connecting point for journeys to and from Hong Kong, Zhuhai and Macau after the completion of the bridge linking the two special administrative regions and Macau’s neighbour Zhuhai in 2016 and the Tuen Mun-Chek Lap Kok road link in 2018. Ringo Lam, director of valuation at AG Wilkinson & Associates, said the most interesting part of Chief Executive Leung Chun-ying’s policy speech on Wednesday was the idea of developing Lantau. “But this must be a very long-term plan, as the business district in Kowloon East is just being developed,” Lam said. Leung announced a Lantau Development Advisory Committee had been set up to develop an East Lantau Metropolis to accommodate growth in Hong Kong’s population. “It will become a core business district in addition to Central and Kowloon East for promoting economic development and providing job opportunities,” he said in his second policy speech. The secretary for development, working with other government offices, will seek proposals through the committee to capitalise on the benefits brought by major infrastructure projects in the area and the synergy between Hong Kong and the Pearl River Delta, while striking a balance between development and conservation, Leung said. “What is new is the development of Lantau Island, but Leung’s different ways of looking for land are more or less the same as last year,” said Alfred Lau, an analyst at Bocom International. Lau said it shows the government’s commitment to exploring the development potential of the outlying islands.

 China*:  Jan 17 2014

China hails first test of hypersonic nuclear missile carrier (By Stephen Chen binglin.chen@scmp.com) US no longer only one with Mach 10 glider that can outfox defences and deliver nuclear warhead - In 2010, the US tested the Lockheed HTV-2 - a similar delivery vehicle capable of reaching speeds of up to Mach 20. China has flight-tested a hypersonic missile delivery vehicle capable of penetrating any existing defence system with nuclear warheads, according to the Pentagon. The hypersonic glide vehicle (HGV), dubbed the "Wu-14" by the United States, was detected flying at 10 times the speed of sound during a test flight over China on Thursday, a Pentagon official told the Washington Free Beacon, an online newspaper. A Pentagon spokesman later confirmed the report but declined to provide details. "We routinely monitor foreign defence activities and we are aware of the test," Marine Corpsc spokesman Lieutenant Colonel Jeffery Pool told the Beacon. Chinese military experts yesterday hailed the test as a breakthrough. t makes China the second country after the US to have successfully tested a hypersonic delivery vehicle capable of carrying nuclear warheads at a speed above Mach 10. Such a weapon has long been seen as a game-changer by security experts as it can hit a target before any of the existing missile defence systems can react. Once deployed, it could significantly boost China's strategic and conventional missile force. It is designed to be carried by an intercontinental ballistic missile. Once it reaches an undisclosed sub-orbital altitude, the vehicle jettisons from the rocket and nose-dives towards the target at a speed of Mach 10, or 12,359km/h. Russia and India are also known to be working on such a weapon. In 2010, the US tested the Lockheed HTV-2 - a similar delivery vehicle capable of reaching speeds of up to Mach 20. Last week's test shows that China has managed to close the gaps with the US. Chinese scientists said China had put "enormous investment" into the project. More than 100 teams from leading research institutes and universities have been involved in the project. Purpose-built facilities test various parts of the weapons system. The Chinese Academy of Sciences, for instance, has recently built one of the world's largest and most advanced hypersonic wind tunnels to simulate flights at up to Mach 15 at the Institute of Mechanics in Beijing. Professor Wang Yuhui , a researcher on hypersonic flight control at Nanjing University of Aeronautics and Astronautics, said she was not surprised by the test last week because China was technologically ready. The objective of hypersonic vehicles was to outmanoeuvre and penetrate a missile defence system, she said. "With a speed of Mach 10 or higher, it cannot be caught or tracked because defence systems don't have enough time to respond," Wang said. She said the US remained the indisputable leader in the field but no country was ready to deploy the first practical hypersonic missile as many technological challenges remained. One outstanding issue was how to achieve precise flight control at such high speeds. Scientists are also trying to develop a better "super material" that can withstand the high temperatures during hypersonic flights. "I am sure many tests will be carried out after last week's flight to solve the problems," Wang said. "It's just the beginning." Li Jie , a Beijing-based naval expert, said hypersonic weapons were of strategic and tactical importance to China. "Many technical issues have not been solved and no country has made it ready for use in the field," he said. "But it is a challenge we must surmount, and we are throwing everything we have at it." Ni Lexiong , a Shanghai-based naval expert, said China might still need some time to catch up with the US but the day could arrive sooner than many expect. "Missiles will play a dominant role in warfare and China has a very clear idea of what is important."

Top emitter China ‘doing things right’ on global warming’: UN climate official (South China Morning Post) UN climate chief Christiana Figueres.- It may be more known for its smog problems and its sizeable greenhouse gas emissions, but a UN climate change official says China is “doing it right” when it comes to addressing global warming, a report says. In an interview with Bloomberg at its New York headquarters, Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change, called China’s energy-efficiency standards for buildings and transportation as “some of the toughest”. She said the nation was realising that such efforts would pay off in the future. “They actually want to breathe air that they don’t have to look at. They’re not doing this because they want to save the planet. They’re doing it because it’s in their national interest,” she said in the report. Figueres, 57, cited the nation’s efforts towards energy efficiency, including helping reduce the cost of solar panels by 80 per cent since 2008 after backing photovoltaic technology, the report said. Compared to countries like the United States, Figueres also suggested that China could implement policies more smoothly as it faced less legislative stumbling blocks. Figueres is in charge of guiding more than 190 member-states in a UN-led initiative to draft an international treaty, replacing the 1997 Kyoto Protocol, to fight global warming by next year and which will take effect in 2020, the report said. Figueres expects a draft version of the next year treaty to be discussed at talks in Lima, Peru, in December. Crafting a deal will be facilitated by other countries realising, like China, that curbing climate change will have long-term benefits that offset short-term costs, she said. China, the world’s biggest carbon dioxide emitter, surpassing the US, has vowed to cut greenhouse gases through projects including the development of Chinese emissions trading schemes as early as 2012. The nation has been struggling with air pollution problems across the nation, blamed in part on its ramped-up industrial activities amid high-speed economic growth over the past few years

Japan recreate phony history in high school textbooks 日本在高中課本造成假歷史

Hong Kong*:  Jan 16 2014

More vacant stores, short-term leases in Causeway Bay, Tsim Sha Tsui (By Yvonne Liu yvonne.liu@scmp.com) Only luxury brands or jewellery shops are able to afford the rents that landlords are asking for, according to property consultancy CBRE - A vacant shop at the corner of Lee Garden Road and Foo Ming Street in Causeway Bay. Some landlords are willing to lowers rent to secure tenants. Rents in prime locations are tipped to stay firm. Causeway Bay continued to lure its share of shoppers over Christmas and the New Year, but beneath the lights and decorations all was not well for Hong Kong retailers. Data from the Hong Kong Tourism Board shows visitor arrivals in Hong Kong continue to increase. In November alone there were 4.58 million visitors to the city, up 8.6 per cent year on year. It is a safe bet that a fair number of those visitors made their way to Causeway Bay and other shopping precincts. But, despite the traffic, an increasing number of shops in areas such as Causeway Bay and Tsim Sha Tsui were vacant or were occupied on short-term leases over the holiday season. A spot check by the South China Morning Post showed that nine of the 53 street-level stores in Percival Street in Causeway Bay are vacant or being leased on short-term contracts, despite the street's proximity to Times Square and Russell Street, the most expensive shopping street in the world. The vacancy problem is even more serious on Foo Ming Street, where half of its 10 shops are vacant or leased on short-term contracts. Pak Sha Road and Lee Garden Road are in a similar situation. "Vacancy rates have increased since the fourth quarter of 2013 and it's particularly obvious on second-tier shopping streets," said Joe Lin, senior director of retail services at property consultancy CBRE. Top-tier shopping streets did not have the same problem, he added. Vacancies were also to be found in Tsim Sha Tsui's Cameron Road and Carnarvon Road, he said, but the problem was most acute in Causeway Bay, where rents have risen sharply over the last few years. "The shops are vacant because owners are being aggressive about achieving higher rents that only luxury brands or jewellery shops are able to afford," Lin said. "Previously, when retail sales were growing strongly, luxury brands might have considered renting a shop there. But they have slowed their expansion now and would consider expanding only in the most prime locations." Kenneth Yau, senior district sales director at agency Centaline, said in recent months some shop owners had been willing to accept lower rents in order to secure tenants. "Initially they were not willing to cut asking rents for shops on Hong Kong Island. Then, after hard bargaining, they lowered their rents 20 to 30 per cent, but even this did not secure tenants. Now there are more shops standing empty, which has increased the bargaining power of tenants." Lease renewals, which once resulted in rent increases of up to 80 per cent, were now leading to more modest increases, of 20 to 25 per cent, CBRE found in a survey. "We believe rents of second-tier shopping streets will drop more than 10 per cent this year, while rents in top-tier locations will stay firm or rise by only about 5 per cent," Lin said. As long as landlords keep to such adjustments of rents, vacancy rates could fall in the second quarter of this year, he said. "Retailers focused on selling mid-range products will be more active this year, as mainland tourists have adjusted their spending habits to buy these kinds of products," he said.

C.Y. Leung to unveil HK$3b boost for poor families in policy address (Gary Cheung gary.cheung@scmp.com) Chief Executive Leung Chun-ying will today unveil a HK$3 billion scheme to provide an annual financial boost to 700,000 people from low-income households. The initiative will be a key component of Leung's second policy address, which will focus on poverty alleviation, housing, health care, education and economic development. A source with knowledge of the scheme said working poor families whose monthly household income was below 60 per cent of median household income - which stood at HK$22,500 in the third quarter of last year - could apply for the subsidy. A family with at least one member who works for at least 208 hours a month will receive HK$1,000 per month, while a family with someone working for at least 144 hours a month will get HK$600. "A working poor household will be offered a monthly supplement of HK$800 for each non-working child, aged 18 or under, and another HK$800 for the second child," the source said. "There is no cap on the number of children eligible." A four-member family with two children could receive a supplement of HK$2,600 a month. To qualify, a family of four must have net assets totalling no more than HK$436,000. But families without children would also be eligible to receive the subsidy. The scheme is more generous than one proposed by Oxfam, where a family would receive HK$800 a month for the first two children aged 18 or under, adjusted downwards from the third child onwards to reflect the family's decreasing costs. In September, the government arrived at a figure of 1.31 million poor by drawing the poverty line at half the median household income. The number of working poor households - using a definition identical to the new poverty line - rose by 6,000 in 2012, bringing the total to 191,000. Leung will give an update on progress being made in areas such as housing, poverty alleviation and care for the elderly.

 China*:  Jan 16 2014

South Korean President Park Geun-hye urges Japan to acknowledge history 韓國總統樸槿惠敦促日本承認歷史 (By ZHANG YUNBI) Seoul tells Tokyo to honor apologies made for World War II misdeeds - Former "comfort women" Kil Un-ock (bottom left) and Kim Bock-dong (bottom right), who were forced to serve Japanese troops as sex slaves during World War II, participate in a rally to commemorate the 22nd anniversary of the "Wednesday protest against Japanese government policy" in front of the Japanese Embassy in Seoul. South Korean President Park Geun-hye publicly urged the Japanese Cabinet to show that it understands history correctly and to honor apologies made by former Japanese leaders for the country's World War II misdeeds. Park made the comments in a response to Japanese Prime Minister Shinzo Abe's Dec 26 visit to the controversial Yasukuni Shrine, which enraged both China and South Korea and has drawn worldwide condemnation. "I hope the current Japanese leaders will make sure they inherit the Murayama and the Kono statements and refrain from words and acts that put their sincerity into doubt," she said in an interview with CNN, according to the official website of Cheong Wa Dae, the presidential residence, on Tuesday. The Japanese prime minister in 1995, Tomiichi Murayama, made a statement at that time about the country's self-reflection, and made apologies for its war history. And in 1993, Yohei Kono, then the Japanese chief cabinet secretary, made a statement officially acknowledging the Japanese military's forcing of women from the Korean Peninsula and China to be sex slaves. "We were able to move forward with Korea's relationship with Japan over the years because Japanese political leaders have clearly stated through the Murayama as well as the Kono statement their correct understanding of history," Park said. Whether or not a Japanese leader honors the spirit of the two landmark statements has become a major benchmark by which Japan's Asian neighbors assess the country's officials. Shi Yuanhua, director of the Center for Korean Studies under the Institute of International Studies of Fudan University in Shanghai, said Abe's visit has increased tension in Northeast Asia, and both Beijing and Seoul will continue to criticize Abe on the historical issue. "Abe has made up his mind about countering China and serving as a keen pioneer of the US' rebalancing strategy in the Asia-Pacific," Shi said. "But the Park administration is different. It will continue to seek a great relationship with both Beijing and Washington." Immediately after Abe's visit to the Shrine — which many consider to be a symbol of Japan's unrepentant militarism with its salute to 14 high-level war criminals — Beijing and Seoul made strong statements of objection, and even Washington conveyed a rare "disappointment". On Dec 30, Park obliquely criticized Japan for "digging up wounds of the past" without mentioning the country by name. To make things worse, Abe's predecessor — former prime minister Yoshihiko Noda, publicly described Park Geun-hye as a "tattletale schoolgirl", something the Korea Times characterized as "not only committing a most glaring case of diplomatic rudeness but revealing his low-level, gender-based discrimination". "It seems as if Japanese leaders, in or out of power, were vying hard to ride on nationalistic sentiments of their ultra-rightist supporters," the newspaper said. Alongside the historical issues, Tokyo's relationship with Seoul was often overshadowed by the dispute over a chain of small islands located between the two, known as the Dokdo in South Korea and Takeshima in Japan. But South Korea's role is also complicated "because the US-South Korea alliance is a cornerstone of Seoul's diplomacy, while Japan is another diehard ally of the US", said Feng Wei, a professor of Japanese studies at Fudan. Nobuo Kishi, Abe's younger brother and Japan's vice-foreign minister is now visiting the US for damage control. "We would like them to, obviously, take each other into consideration, and we want our allies to get along well," said US Congressman Steve Chabot after meeting with Kishi on Monday. Chabot is chairman of the Subcommittee on Asia and the Pacific of the US House Committee on Foreign Affairs.

Hong Kong*:  Jan 15 2014

Hong Kong pulls off 20-year reign as world’s freest economy (By Stuart Lau stuart.lau@scmp.com) City tops world rankings again, but with Singapore snapping at its heels, American think tank says - The policy address slated for Wednesday may cast a shadow over the city's economic freedom. Hong Kong is the world’s freest economy yet again, in a two-decade reign of the position, a US-based think tank has reported. The chief executive’s policy address on Wednesday would be key to the future standing of the city, as a possible increase in public spending, especially on poverty alleviation, could weaken the score, the main researcher of the Heritage Foundation’s annual index of economic freedom said. The index shows Hong Kong continues to face fierce competition from second-placed Singapore, which narrowed the gap in the latest report. “In recent years, populist policies that increase spending and empower the administrative bureaucracy, as well as an increasing level of perceived corruption, have held back Hong Kong’s overall rating,” the foundation said in its 2014 Index of Economic Freedom report. Hong Kong also saw a “significant” 1.7 per cent drop in its ranking on freedom from corruption, recording 82.3 points. It was the city’s second-weakest criterion on the index after monetary freedom, at 82 points. Still, Hong Kong’s overall score, at 90.1, rose 0.8 points year on year – though the rate of growth was weaker than Singapore’s 1.4 points, which brought its score to 89.4. On the country, the report said its openness to global investment had facilitated the emergence of a more competitive financial sector. “However, state ownership or involvement in key sectors remains considerable, hampering achievement of Singapore’s full economic potential,” it said. Terry Miller, director of the foundation’s centre for international trade and economics, said any room for further improvement would be limited for Singapore. The possibility of Singapore overtaking Hong Kong depended on whether the city slipped in its own performance. Hong Kong has topped the index since it was launched in 1995.

TVB launches pay-to-watch internet television service (By Phila Siu phila.siu@scmp.com) TVB to launch mobile app GOTV for pay TV service allowing access to 10,000 hours of old dramas. The battle between Hong Kong Television Network and its rival Television Broadcasts Ltd intensified on Tuesday after TVB launched a pay-to-watch internet service that allows subscribers to watch dramas it has produced since it was founded in 1967. The launch came as HKTV was preparing for the July launch of its mobile TV service, which viewers will also be able to watch through internet-connected devices. But TVB general manager Cheong Shin-keong said its new service GOTV, was not started deliberately to steal business from Ricky Wong Wai-kay’s service, which he is launching after being denied a free-to-air licence. “We have been planning this for two years…and we are launching pay-to-watch services, not free TV. The timing of the matter may give you this idea, but the truth is that it is not,” Cheong said yesterday. But he admitted GOTV would be in “indirect competition” with HKTV. TVB is charging subscribers HK$59 a month, or HK$499 a year. Initially, the subscriptions will give audiences access to about 341 dramas –10,000 episodes in total – on their smartphones, tablets, or computers. TVB plans to put more dramas into the service gradually. Cheong said he hoped 100,000 people would have subscribed to the service by the end of the year. He did not reveal how much had been invested, but he believed it would take only one to two years to break even. He said about a million Hongkongers had subscribed to pay TV channels such as i-Cable and Now TV and he hoped that the number of GOTV subscribers “will not be embarrassing” in a few years’ time. “We are not competing against (HKTV) directly. But we are competing indirectly in the way that we are all fighting for the audience’s time,” Cheong said. TVB said earlier that it would terminate the leasing of six transmission stations to China Mobile Hong Kong, which HKTV bought last month to air its programmes. The broadcaster has cited legal uncertainties arising from China Mobile’s ongoing checks into the acquisition of its subsidiary to see if it violated mainland rules. Cheong said yesterday that TVB had already sent a letter to HKTV to request a meeting on this matter, but had not received a reply. The government rejected HKTV’s application for a free-to-air television licence several months ago. Then last month, it announced that it would be launching TV services through the internet from July 1. It will be offering content on three to five channels. At least one of the channels to be offered from July will be a 24-hour news channel. The content of the rest is yet to be decided, but most will be free, except video-on-demand services. Francis Fong Po-kiu, president of the Information Technology Federation, said that GOTV would pose a challenge to HKTV. The extent of the impact would be determined by the quality of the programmes offered. “It depends on whether HKTV can keep the quality of its programmes in the future,” he said. Fong also said that GOTV’s subscription price was reasonable. It should be able to attract a group of people who could not afford the time to watch television when the dramas were broadcast, but wanted to watch them when they had the time.

 China*:  Jan 15 2014

Chinese visitors to France to get fast-track visas (By Agence France-Presse in Paris and Laura Zhou in Hong Kong) Chinese visitors to France - the world's top tourist destination - are to get fast-track visas as part of celebrations marking the 50th anniversary of Paris establishing full diplomatic ties with Communist Beijing. Chinese visitors' travel requests will be processed within 48 hours, according to the new visa regime due to come into force on January 27 and tourism operators on the mainland expect an increase in numbers travelling as a consequence. “For us, the faster, the better,” Ye Xin, a travel agent based in Shanghai said, although she thought the new measure would not bring dramatic rises, as the current proceeding period is between three to five working days, France is the prime European destination for Chinese tourists – a record 1.4 million travelled there last year, and French Prime Minister Jean-Marc Ayrault said during a visit to Beijing last month his country saw as many as 300 million potential visitors. French Foreign Minister Laurent Fabius announced the measure yesterday as he unveiled year-long events feting the January 27, 1964 date on which France broke ranks with the US to open ties with the then-government of Mao Zedong - a decision that paved the way for China to gain global recognition. Fabius told a press conference that former French president Charles De Gaulle's "pioneering" decision "gave France a special position in China", which had been buttressed over the years. De Gaulle's decision caused diplomatic shockwaves at a time when the United States was still insisting the nationalist regime that had escaped to Taiwan should be considered the legitimate government of all of China. "It was a visionary decision with respect to a great power in the making, whose importance in world affairs today bears testimony to it," Fabius said. By way of comparison, full diplomatic relations between China and Britain were only established in 1972, and in 1979 with the United States. The events will include exhibitions in China showcasing the works of leading French artists such as Impressionist painter Claude Monet and sculptor Auguste Rodin. An exhibition on De Gaulle, France's wartime resistance hero who served as president between 1959 and 1969, will also take place and a bullet-riddled Citroen car in which he survived an assassination attempt by opponents of Algerian independence will be sent to China. Treasures from China's Han dynasty will be on display in Paris among several other events. "This will also be an occasion to promote France as a tourist destination to the Chinese public," Fabius said. France is the prime European destination for Chinese tourists, with a record 1.4 million visitors from China last year. The inauguration event for the year-long anniversary at the Grand Palais museum in Paris will include a solo performance by the famed Chinese pianist Lang Lang. China will also be the guest of honour at the Paris art fair in March, while the limelight will be on France in the Western China International Fair. A total of 97 million Chinese travelled out of the country last year, up 14 million up from the previous year, according to China’s National Tourism Administration, making mainlanders the world’s most numerous travellers. Meanwhile, Chinese tourists are described as “walking wallets”, as Chinese travellers spent 102 billion yuan (HK$129 billion) overseas, a 40 per cent rise on the previous year, according to the latest Green Book of China Tourism. “Europe has become a popular place to visit, shop and do business in recent years,” said Guo Shenghua, a visa agent based in Beijing, “It certainly is attractive to visitors [from the mainland].”

UN plea made on war victims (By HE WEI in Shanghai and ZHANG YUNBI in Beijing hewei@chinadaily.com.cn and zhangyunbi@chinadaily.com.cn) Comments seen by analysts as indirect criticism of Japan - Jeffrey Feltman is the UN under-secretary-general for political affairs. World leaders must be sensitive to the memory of war victims and address historical or territorial issues based on facts, according to a senior United Nations official. The UN encourages countries in Northeast Asia to find a common way to understand history, Jeffrey Feltman, UN under-secretary-general for political affairs, said in a China Daily interview during his trip to Shanghai. "The rest of the world looks at Northeast Asia as a model where you have the economic growth potential that other regions envy," Feltman said. "But we regret the fact that there are still issues of the past that continue to overshadow this region." He said it is essential that all UN members touch on the most sensitive issues, be they historical or territorial, based on the facts. Ties between China and Japan worsened after Japanese Prime Minister Shinzo Abe visited Tokyo's Yasukuni Shrine on Dec 26. Fourteen convicted class-A war criminals are honored at the shrine. The visit has especially angered China and South Korea, which view the shrine as a symbol of Japan's wartime aggression. In an unusual response, the United States, Japan's traditional ally, expressed disappointment over the visit. Shen Dingli, a professor of international relations at Fudan University in Shanghai, said Feltman's remarks expressed indirect criticism of Japan's behavior. Japanese Vice-Foreign Minister Nobuo Kishi started a five-day damage-control trip to the US on Monday to justify Abe's decision. Abe, who has pushed for a revision of textbooks to whitewash invasions by Japan during World War II, has sparked condemnation from the international community. Liu Jiangyong, deputy dean of the Institute of Modern International Relations at Tsinghua University, said leading Japanese figures have frequently visited the shrine. They have done so to revitalize its role as "a spiritual pillar of the past militaristic Japan and a public mood motivator that will rally support for Japan's future military operations overseas", Liu said. "The Japanese leadership should pay pilgrimage to victimized people in Asian neighbors, not just to the war dead of their own country," Liu said. In a People's Daily article on Monday, Chinese Ambassador to Japan Cheng Yonghua said Abe was deceiving everybody, including himself, when he explained that his visit to the shrine was to promise "no war". "Praying for peace and renewing the 'no war' pledge at such a place is nothing but a huge blasphemy of peace," the ambassador said. Feltman said it is crucial to addresses past issues without abusing history, and the cornerstone is to come up with a reference point that everyone agrees to in the future. "There is a common history that people in Northeast Asia have. We strongly believe that there is a way for leaders in this region to talk face to face and address this extremely sensitive issue directly and in a cooperative way," Feltman said. Feng Zhaokui, a researcher in Japanese studies at the Chinese Academy of Social Sciences, said the biggest problem for Japan is its dishonesty toward history. "Although Abe claimed that he is willing to talk to his Chinese counterpart face to face, it was Japan that closed the door to talks," Feng said.

Hong Kong*:  Jan 14 2014

US and Europe are leading economic recovery, Asian Financial Forum told (By Denise Tsang, Jeanny Yu, Ray Chan and Jasper Moiseiwitsch) World's financial players say developed countries will expand faster than emerging markets, driven by cheap energy, capital and labour - This year's Asian Financial Forum is playing host to more than 100 speakers, and will be attended by 2,300 people. The United States and Europe are leading the recovery in global economic growth, the heads of banks, corporations and development agencies said at the seventh annual Asian Financial Forum in Hong Kong yesterday. "The US has seen a broad-based recovery," said Victor Fung Kwok-king, chairman of the Fung Group, his family-owned global supply chain and retailer. "The danger of Europe falling off the cliff is no longer there." Chairman of Deutsche Bank's supervisory board Paul Achleitner said he was "extremely positive" about the economic outlook for the US and Europe. Among the factors driving the US forward, Achleitner cited cheap energy brought by advancements in shale-gas extraction, a growing supply of low-cost labour, technology-driven productivity gains and the availability of cheap capital. He was also upbeat about the euro zone, which he said was staging a turnaround after years of debilitating crisis. "To underestimate the potential of Europe would be a big investment mistake," Achleitner said, adding he would put 40 per cent of his investment capital in Europe, 30 per cent in the US and the rest in emerging markets. China Investment Corp chairman Ding Xuedong said the US recovery had accelerated in the past two years and Europe was bouncing back. The head of China's US$575.2 billion sovereign wealth fund said developed economies would expand faster than emerging markets, prompting him to look at opportunities in the US, including shale-gas projects and stakes in manufacturing and technology firms. Ding said the rolling back of bond purchases by the US Federal Reserve was pulling money out of Asian markets. "Emerging markets will feel the impact of the US tapering next year and may face a credit crunch." Asian Development Bank president Takehiko Nakao concurred. Asia used to enjoy the "economic tail winds" from technology transfer, foreign direct investment, exports and, most recently, ample liquidity after the 2008 global financial crisis, he said. Now the region was seeing those tail winds become head winds, in large part owing to tightening liquidity given tapering by the US Fed, said Nakao. "Asia should develop its capital markets further, in particular the corporate bond market," he said. Fiona Woolf, mayor of the City of London, the British capital's financial district, said infrastructure would be a focal point of global investments whereas information technology and "soft infrastructure" such as hospitals and schools were "definitely areas of investments" in emerging markets. She said investors should be mindful of whether their investments fell within a sound regulatory regime, and whether the government of a target country for their money welcomed foreign funds. A panel discussion involving Tu Guangshao , executive vice-mayor of Shanghai, and Levin Zhu Yunlai, president and chief executive of China International Capital Corporation, an investment bank, prompted questions about the viability of Shanghai's free-trade zone. The People's Bank of China said it would roll out detailed policies in the coming months to construct the long-waited "free trade account" system in the zone, said Tu. The Trade Development Council hosts the annual Asian Financial Forum to promote Hong Kong as a financial hub. This year there are more than 100 speakers over two days, with 2,300 attending. Speakers include Timothy Geithner, the former US Treasury secretary, Carlo Mazzi, deputy chairman of Prada, and Alexey Moiseev, Russia's deputy finance minister.

Shuanghui to apply next week for US$6 billion Hong Kong IPO, sources say (By George Chen and Ray Chan) Shuanghui's planned New Year initial public offering, one of the biggest in Asia, will pay down debt following Smithfield acquisition - Shuanghui's pork-processing plant in Henan province got a major boost after the acquisition of US pork producer Smithfield Foods. Shuanghui International, China's largest meat processor, plans to apply as early as next week for a listing on the Hong Kong stock exchange to raise up to US$6 billion, making it one of the biggest initial public offerings in Asia in recent memory, said people familiar with the situation. Shuanghui's plan for an offering comes less than five months after its US$4.7 billion acquisition of Smithfield Foods, the biggest pork producer in the US, vaulting the Henan-based company into the top ranks of firms involved in the processing of meat and meat products. The float underscores China's rise to the world's second biggest economy as mainland tycoons scour the world for acquisitions to expand their business. Company sources told the South China Morning Post that Shuanghui would file an A1 form, the official listing application, with Hong Kong Exchanges and Clearing next week and wait for a hearing after the Lunar New Year. If successful, the firm would list no later than April. "So far so good. Everything is on schedule," said one company source. Smithfield is expected to be included in the offering. The six investment banks hired for the listing include two major mainland securities houses - China Citic Securities and BOC International - and four large foreign banks - Goldman Sachs, UBS, Morgan Stanley and Standard Chartered, sources said. Market sources expect the stock offering to be popular as domestic demand for quality meat rises in lockstep with China's economic expansion. The Smithfield acquisition combines Shuanghui's strength - specifically its sales and distribution channels on the mainland - with a supply of raw meat from the US, where the demand for pork is decreasing. Given the size of the planned offering, bankers expect it to boost investor confidence in Hong Kong's stock market. The offer would enable the company - controlled by Wan Long, one of the mainland's richest men - to pay down outstanding debt, including Smithfield's net debt of US$2.4 billion, as well as a US$4 billion syndicated loan. In addition to the deleveraging process, Shuanghui's offering could provide a lucrative exit for early investors, including China's biggest private equity group CDH Investments and New Horizons, in which Winston Wen, the son of former premier Wen Jiabao, was a co-founder. CDH Investments has owned about 33.7 per cent of Shuanghui International through a number of investment vehicles since 2005, while New Horizons owns about 4.2 per cent, public filings showed. Goldman Sachs also owns about 5.2 per cent, while Singapore's state investor Temasek has a 2.8 per cent stake.

 China*:  Jan 14 2014

Another Communist Party princeling apologises for Cultural Revolution atrocities (By Chris Luo chris.luo@scmp.com South China Morning Post) A file photo of Mao Zedong meeting with Song Binbin on top of the Tiananmen Rostrum in August 1966. Song Binbin, centre, apologises at a gathering of former students and teachers in Beijing on January 11, 2014. I would like to express my ongoing grief and apologies to Principal Bian. The inability to protect school leaders is my lifelong regret,” Song was cited saying to all her teachers and classmates. Song denied taking part in the brutal beatings that killed the vice principal, but apologised for not doing enough to stop the violence because she was afraid to be blamed for hindering the “criticising and denouncing efforts". “I did not [intervene] and was unable to prevent the violence towards Principal Bian and other school officials,” she said. Song, who had lived in the US since the 1980s and moved back to Beijing in 2003, told The Beijing News that she hoped the students’ apologies could prompt public introspection over the events during the Cultural Revolution. “If we do not thoroughly understand and examine the mindset behind the entire Cultural Revolution era, similar incidents will happen again,” Song was quoted as saying. Other students who had participated in the violence also issued apologies to their late and surviving teachers. “[My teacher] is already over 90 years old, there isn’t much time left for an apology if I don't do it now,” said Wang Simei, who was also a student in 1966. In the past few years, a number of people who were student Red Guards during the Cultural Revolution have made belated public apologies to their former victims. The most prominent figure among them was Chen Xiaolu, the youngest son of People’s Liberation Army Marshal Chen Yi. A Red Guard leader during the Cultural Revolution, Chen first published a written apology online, and then expressed his remorse in person to his former teachers. The high-profile moves garnered national attention and triggered heated discussions online.

Hong Kong*:  Jan 13 2014

China's State Grid buys biggest chunk of HK Electric's IPO (By Reuters in Hong Kong) Li's Power Assets Holdings Ltd is planning to list its Hong Kong electricity business, HK Electric Investments, as it seeks funds for overseas expansion [Hutchison Whampoa is a Fortune 500 company and one of Hong Kong’s largest listed companies. It is 49.97 per cent owned by the Cheung Kong Group, a property company. Hutchison’s origins date back to two companies founded in the 19th century – Hong Kong and Whampoa Dock, established in 1863 by British merchant John Duflon Hutchison, and Hutchison International in 1877. In 1977, Hutchison became Hutchison Whampoa Ltd. Its operations include ports, with operations across Europe, the Americas, Asia, the Middle East and Africa, property and hotels, retailing through AS Watson & Co, PARKnSHOP supermarkets, Fortress electrical appliance stores, telecommunications through Hutchison Telecommunications International Ltd. It is also involved in infrastructure through its infrastructure arm, Cheung Kong Infrastructure, and has an interest in Hongkong Electric Holdings (HEH), the sole electricity supplier to Hong Kong Island and Lamma Island. Hutchison is also a major shareholder of Husky Energy, one of Canada’s largest energy and energy related companies. It is headed by Li Ka-shing, Asia’s wealthiest man, who has been nicknamed “Superman” because of his investment prowess.] Light decorations are seen at Queensway Plaza in Admiralty. Government-owned State Grid Corp of China is coming in as the biggest cornerstone investor in Li Ka-shing-backed HK Electric Investments’ up to US$5.7 billion Hong Kong initial public offering (IPO), according to people familiar with the matter . Li’s Power Assets Holdings Ltd is planning to list its Hong Kong electricity business, HK Electric Investments, as it seeks funds for overseas expansion. The IPO is set to be launched on Monday, they added. Depending on the final IPO pricing, State Grid will end up owing more than 15 per cent of HK Electric Investments after the IPO, set to be the biggest in Hong Kong since AIA Group Ltd’s US$20.5 billion deal in 2010. Cornerstone investors, including State Grid, are committing around 35 per cent, or about US$2 billion based on the upper end of the IPO estimates, one person said. The final size of the fundraising will depend on the eventual IPO price, which will be determined through a book-build process. Sources declined to be identified as the information is not public. Power Assets and State Grid cold not be reached for comments immediately.

 China*:  Jan 13 2014

Night fire destroys ancient Tibetan town in Yunnan (By Associate Press Beijing) There is no immediate report of casualties, and the cause of the fire is unclear - A cellphone photo taken on Jan. 11, 2014 shows the fire scene in the Dukezong Ancient Town of Shangri-la, a resort county in southwest China's Yunnan Province. A 10-hour inferno has razed an ancient Tibetan town in China’s southwest Yunnan province that’s popular with tourists. There is no immediate report of casualties, and the cause of the fire is unclear. The Deqen prefecture government said the fire broke out at 1:27 am on Saturday in the ancient Tibetan town of Dukezong. It says more than 1,000 firefighters responded to the blaze and brought it under control after 11 am. The official Xinhua News Agency says more than 100 houses were destroyed. The state-run China Central Television says most structures in Dukezong are made of wood and the fire spread easily because of dry weather. Photos and video footage show the town engulfed in a sea of fire that turned the night sky red.

Chinese tipsters giving a major boost to Xi's graft battle (By Keith Zhai keith.zhai@scmp.com) Government anti-graft agencies received nearly 2 million tip-offs from citizens across the country, resulting in thousands of prosecutions and punishments - Chinese president and Communist Party leader Xi Jinping appears to be getting plenty of help from the public in his escalating campaign to root out corruption in the world’s largest political organisation of more than 85 million. Anti-graft agencies across mainland China received 1.95 million reports from informants or whistle-blowers last year, which led to the prosecution of more than 172,500 cases and punishment meted out against 182,000 officials for violating party discipline, Huang Shuxian, a deputy director of the Party’s Central Commission for Disciplinary Inspection (CCDI), said in a press conference on Friday. In an annual report published on Tuesday, CCDI, the party’s top graft-fighting body, said reports from the public were an important information source for its investigations. The annual report also highlighted the importance of the new CCDI website, believed to be a brainchild of Wang Qishan, the head of the commission and a member of Politburo Standing Committee, the Party’s top power club. Since its launch in September, ordinary citizens across the country have been able to report suspected corruption cases directly to the commission via the site. The commission says it has received an average of 760 reports per day. Wang Qishan called the website a channel for people to exercise their right of supervision, and “a major move to improve anti-corruption work under new circumstances”, according to the official Xinhua News Agency. Earlier reports from Xinhua also said the site helped expose hundreds of cases involving officials violating government and party discipline, including using official vehicles for private purposes or spending public funds on lavish entertainment. The annual report released after president Xi Jinping made a keynote speech earlier this week in a high-profile meeting, which attended by three members of the party’s decision making Standing Committee. Xi urged officials to root out corruption from their own ranks and to “clean up the black sheep”. Fighting corruption has been a centrepiece of Xi’s administration. The commission said it had investigated 83,000 cases in rural areas and punished 87,000 officials. Xinhua also said last year’s crackdown on corruption had shown the top leaders of the party have “zero tolerance” for graft, no matter the officials are “tigers” or “flies”.

Hong Kong*:  Jan 12 2014

Run Run Shaw's body transferred to crematorium as top leaders pay respects (By Shirley Zhao and Samuel Chan) Photographers scramble for a shot as Run Run Shaw’s body arrives at Cape Collinson. An emotional younger son Vee-chung Shaw, pale and appearing weak, had to be helped from the crematorium. Mona Fong, Run Run Shaw's widow, leaves the funeral home for the crematorium on Friday. TVB executive chairman Norman Leung arrives to pay tribute to Sir Run Run Shaw on Run Run Shaw. More high-profile figures came to pay their respects at Sir Run Run Shaw’s funeral on Friday, among them the city’s former chief executives Tung Chee-wah and Donald Tsang Yam-kuen. The leaders separately came to pay their respects at the Hong Kong Funeral Home in North Point, where Shaw’s body had been transferred from the United Christian Hospital. Later, Shaw's remains were brought to the Cape Collinson Crematorium in Chai Wan at 11am on Friday. The government accepted a special request from the Shaw family to avoid the usual two-week wait for a funeral. Tung, accompanied by his wife, left the funeral home at around 9.30am, and Tsang and his wife arrived shortly after. Neither couple made any comment. Two of Shaw’s sons were present, as were officials from the media mogul’s flagship broadcaster TVB – executive director Mark Lee Po-on and deputy director for external affairs Tsang Sing-ming. Chief Executive Leung Chun-ying did not attend, although he earlier offered his condolences to the family. A day before, several state leaders paid tribute to media mogul and philanthropist as his relatives said a private goodbye at a memorial service at the funeral home. Zhang Xiaoming, director of Beijing's liaison office in Hong Kong, arrived before the service to relay the condolences of state leaders to Shaw's widow, Mona, and Norman Leung Nai-pang, executive chairman of TVB. Among those who sent messages were President Xi Jinping, former premier Wen Jiabao and National People's Congress chairman Zhang Dejiang. In his letter, Xi praised Shaw's love of the country and concern for the people, adding that Shaw would never be forgotten. Zhang also praised the mogul's contribution to Hong Kong's prosperity and stability, while Wen's letter highlighted his contribution to China's education and technology development. Chief Executive Leung happened to be at the same funeral home for his late friend and fellow surveyor Arthur Shia Tsai-fung on Thursday, but did not attend Shaw's service. Leung offered his condolences to the Shaw family via Norman Leung. Norman Leung said the whole family attended the private service at which Buddhist monks performed rites. He said an event was planned for Friday at which the public could pay tribute to the tycoon. Shaw died on Tuesday at the age of 107. The family did not give the cause of the death. The media mogul came to Hong Kong from Singapore in 1957 and bought land for a studio in Clear Water Bay. He is credited with almost single-handedly resurrecting the ailing film industry. Over the next 25 years, the Shaw Brothers made an estimated 900 films. He co-founded TVB in 1967 and was executive chairman for 30 years, during which time it became the city's leading station. A generous philanthropist, Shaw poured billions into the Sir Run Run Shaw Charitable Trust and The Shaw Foundation. It was reported that he had donated HK$6.5 billion locally and on the mainland, mainly in education.

 China*:  Jan 12 2014

Wang Yi stresses shared interests during Africa trip (By Agence France-Presse in Accra, Ghana) Foreign minister tells Ghana president Chinese investment on continent beneficial to both sides - Foreign Minister Wang Yi has promised that Chinese economic growth would benefit Africa, as he met Ghanaian President John Mahama in Accra. Wang, who is on a four-nation African tour, called 2014 a year of "ever-deepening reform" in China, with the target of "national rejuvenation". "The 1.3 billion people of China are working towards the modernisation of our country, something if achieved will be never-before seen in the history of mankind," Wang said. "Yet we have the confidence and the capability to achieve that strategic goal and in that process we are most willing to grow and prosper together with our African brothers." China has increasingly eyed Africa to help fuel and fund its burgeoning economy, which was forecast to have grown 7.6 per cent last year, according to government estimates. The administrations of President Xi Jinping and his predecessor, Hu Jintao , have closely courted African nations, with deals signed in sectors from oil and gas to agriculture and infrastructure. In January 2012, Wang's predecessor, Yang Jiechi , hailed Africa as a "golden ground" for foreign investment. In July, Beijing pledged to double its aid to the continent to US$20 billion a year. Chinese trade with Africa grew to US$200 billion in 2012, prompting talk of the continent as a potential battleground for a proxy economic "cold war" with Western powers. Wang said Ghana, an emerging oil producer that has enjoyed high growth rates in recent years, was an ideal partner. The country has been a relative haven of stability in volatile West Africa. "We believe there is a lot we can learn from them," Wang said, adding that Chinese involvement in Africa could have "mutual benefits" for everyone. The China Development Bank has agreed to a US$3 billion loan to Ghana's government to fund a variety of infrastructure projects, including in gas supply. Mahama said the work would transform the country but expressed concern as only about US$600 million of the loan had so far been disbursed. "We are very anxious to have that matter dealt with," he said.

Hong Kong*:  Jan 11 2014

Justice chief Rimsky Yuen and pan-democrats at odds on reform (By Stuart Lau, Jeffie Lam, Tony Cheung and Fanny W. Y. Fung) Rimsky Yuen hints that pan-democrats’ plan for public nomination may not be workable, as propaganda chief mentions Beijing’s powers [The Basic Law was drafted as part of the Sino-British Joint Declaration covering Hong Kong after its handover to China on July 1, 1997. The joint declaration stated that Hong Kong would be governed under the principle of ‘one country-two systems’ and would continue to enjoy its capitalist system and individual freedoms for 50 years after the handover.] The justice chief yesterday stopped short of dismissing the concept of public nomination as unconstitutional. But Secretary for Justice Rimsky Yuen Kwok-keung did cite a fresh argument against allowing the public to nominate candidates for the chief executive poll. Yuen also suggested that the three-track proposal floated by pan-democrats on Wednesday - which would allow for nominations from the public and political parties that would be approved as a formality by the nominating committee - could go against the mini-constitution. Yuen's comments came as Beijing's Hong Kong propaganda chief issued a reminder that the central government had the power to declare a "state of emergency" if it ever deemed the government had lost control of the city. Allowing the public to nominate candidates could violate Beijing's requirement of "balanced participation", Yuen said. "Someone suggested - I'm not saying this is necessarily the case - that it's very likely that candidates with the backing of a big political party, or a big bloc, will have stronger financial power and mobilisation power." This might lead to candidates securing nominations only from a particular sector or social class. "Will this be inconsistent with the principle of balanced participation as decided by the Standing Committee of the National People's Congress?" Yuen asked. At a separate event, Secretary for Constitutional and Mainland Affairs Raymond Tam Chi-yuen denied that Yuen's remarks contradicted his own previous comments. "I have never said whether anything contravenes the Basic Law or not," he said. On the Alliance for True Democracy's three-track proposal, Yuen said the suggestion that the nominating committee should merely approve public and party nominations could, in fact, be unconstitutional. "If the nominating committee ... has no choice but to confirm, as a matter of formality, [all] the nominations that got a certain [share] of the public's support ... this stands a high chance of violating the Basic Law," he said. Pan-democrats have been split this week over whether to treat all three tracks of the proposal as "indispensable", with alliance convenor Joseph Cheng Yu-shek refusing to clarify the matter. The Democratic Party has opposed bundling the three channels, drawing criticism from the People Power group and the League of Social Democrats. Democratic Party chairwoman Emily Lau Wai-hing said party members remained focused on fighting for a reform proposal that would allow people of different political beliefs to run for chief executive. Meanwhile, Hao Tiechuan , the publicity director of the central government's liaison office, highlighted Beijing's power - granted by Article 18 of the Basic Law - to impose a "state of emergency" if it deemed that the city's government had lost control and national unity or security was endangered. Hao did not say if his remarks were in response to pan-democrats' planned Occupy Central campaign.

Macau's casino boom propels Lui Che-woo to No 2 on Hong Kong's rich list (By Peggy Sito peggy.sito@scmp.com) Macau’s casino boom has catapulted Lui Che-woo, chairman of casino group Galaxy Entertainment, to No 2 among Hong Kong’s wealthiest tycoons, according to the latest Forbes Hong Kong Rich List. The 84-year old tycoon, also chairman of K.Wah Group, “made a whopping one-year-gain of US$11.5 billion in net worth”, Forbes said. Lui’s net worth of US$21 billion is more than double the US$9.5 billion it was last year, when he was the city’s fifth-richest man. “Macau is presently the world’s biggest gambling centre, and casinos there took in 18.6 per cent more cash last year than the year before,” said Forbes. While Lui more than doubled his wealth for a second year, he still lags Asia’s richest man, Li Ka-shing, who retains his top spot on the list with a net worth of US$32 billion, up US$2 billion from a year ago. Li, 85, has interests in ports, real estate, utilities, telecoms and resources through Cheung Kong, Hutchison Whampoa and Husky Energy, and received total dividends of US$1.7 billion in the last two years. No 3 on the list is Henderson Land Development chairman Lee Shau Kee, 85, whose wealth remains unchanged at US$20 billion. Lee also chairs Hong Kong & China Gas and Miramar Hotel & Investment.

World's largest gold coin on display in Hong Kong (By Danny Lee danny.lee@scmp.com) The 2012 Australian Kangaroo One Tonne Gold Coin is displayed in Hang Seng Bank's Headquarter in Central until Saturday. The world’s largest gold coin, on its first visit outside Australia, was unveiled on Thursday at the Hang Seng Bank headquarters in Central as part of a showcase tour for the historic Perth Mint. The enormous coin weighs 1,012 kilograms and is made from 99.99 per cent pure gold. It is 31 inches wide, more than 4.7 inches thick, and took some 18 months to manufacture. The coin carries the image of Queen Elizabeth II, the head of state, on one side and a leaping kangaroo on the other. The 2012 Australian Kangaroo One Tonne Gold Coin is worth HK$305 million, far more than the AU$1 million (HK$6.9 million) legal tender. Since the coin was released, its worth has dropped to HK$305 million from HK$431.66 million, as the value of gold has tumbled. Unveiling the golden disc, Andrew Fung Hau-chung, head of global banking and markets at Hang Seng Bank, said it was with luck that Perth Mint, a long-term customer of the bank, chose Hong Kong as a “strategically important” first visit. “We distribute Perth Mint’s gold coins, and is very popular in Hong Kong and with Chinese everywhere…it demonstrates Chinese as a whole like to accumulate gold and gold bars.” Despite the Chinese people’s huge appetite for gold, the huge coin will not be put on public display. Only ‘selected’ retail and commercial customers at Hang Seng Bank will be invited to view the coin at the bank’s headquarters. It will be on show there until January 11 before it heads to Berlin, Germany, for a world exhibition. On its release two years ago, Perth Mint chief executive Ed Harbuz said it was “the pinnacle of ingenuity and innovation”. “To cast and handcraft a coin of this size and weight was an incredible challenge - one which few other mints would even consider,” said Harbuz, at the time. Fung said a number of considerations, from a lack of space to host an exhibition to a range of security and safety concerns, ultimately prevented a full public display.

 China*:  Jan 11 2014

Fishing rules are 'normal practice' (By Li Xiaokun and Zhang Yan lixiaokun@chinadaily.com.cn and zhangyan@chinadaily.com.cn) Foreign vessels need permission to enter Hainan waters since Jan 1. Hainan province's demand that foreign fishing vessels entering its waters seek China's approval is a normal practice, the Foreign Ministry said on Thursday, refuting reports that it reflects Beijing's tougher stance on territorial disputes. "The goal is to strengthen the security of fisheries resources and to reasonably utilize and exploit them," ministry spokeswoman Hua Chunying said at a regular news conference when asked about the rules. "It is absolutely a normal routine practice" for an ocean state, she added. The regulation, approved by the provincial legislature of Hainan on Nov 29, took effect on Jan 1. It requires foreign fishing boats and foreigners to seek permission from relevant departments under the State Council to fish or carry out surveys on fisheries resources within waters administered by the southernmost island province. Hainan, which administers 2 million square km of water, said the new rule is to protect local fisheries resources. The news came into focus after foreign media highlighted it on Wednesday. The reports described the regulation as akin to Beijing's late November announcement of its Air Defense Identification Zone, which requires foreign planes to notify the Chinese government of flights through the zone. The area covers China's Diaoyu Islands. The Philippines' Department of Foreign Affairs said on Wednesday that Manila is checking the information. "We are verifying the news with our embassies in Beijing and Hanoi," said Foreign Affairs spokesman Raul Hernandez. Peter Paul Galvez, a Philippine defense department spokesman, told Reuters that Manila was ready to enforce fishing rules in the country's exclusive economic zone, which include regulations on the type of fish that can be caught. Chen Qinghong, a researcher on Philippine studies with the China Institutes of Contemporary International Relations, said, "the regulation is just a step for Hainan to complete local fisheries regulations and standardize law enforcement". "It should not be interpreted as Beijing adopting a tougher stance in pushing forward territorial claims. In my opinion, it has been sensationalized by media." Wang Hanling, an expert on maritime law with the Chinese Academy of Social Sciences, said the new rule targets severe infringement by foreign fishing vessels. He said the new rule was also based on China's increasing capability to protect its maritime interests. "It is not targeting certain countries. Due to various reasons, China has not been strict in maritime administration. Now we are making more efforts, not just in the South China Sea, but also in other directions such as the Yellow Sea and the East China Sea." Despite the new rule, Beijing will likely seek to avoid increasing frictions by enforcing them too zealously, City University of Hong Kong China politics expert Joseph Cheng told the AP. China's fisheries law allows confiscation of catches and fishing equipment as well as fines of up to 500,000 yuan ($83,000) for violators. Those who commit crimes will be investigated for criminal responsibility.

China's role in Middle East will be enhanced: FM (By China Daily) Editor's note: Foreign Minister Wang Yi was recently interviewed by Al Jazeera. The following is the transcript of the interview. Foreign Minister Wang Yi talks with an Al Jazeera reporter during a recent interview. I. You have concluded your first visit to five countries, namely, Palestine, Israel, Algeria, Morocco and Saudi Arabia. What is the purpose of this visit? How do you evaluate the outcome of this visit?

Wang Yi: This is my very first visit to the Middle East region as the foreign minister of China's new government. The trip has three goals: namely, to carry forward friendly relations; to deepen existing cooperation; and to promote peace talks.

China and the Arab states enjoy time-honored ties of friendship, forged by the 2,000-year old Silk Road. In modern times, China has firmly supported Arab states in their cause to win national independence and liberation. China is committed to carrying forward this traditional friendship. My Middle East trip has achieved this goal completely, as I have felt for myself the profound goodwill of the Arab states and their peoples for China and the Chinese people.

China works hard to deepen its cooperation with the countries in the region for mutual benefit. Last year, two-way trade reached nearly $300 billion, with China becoming the top trading partner of many Arab states. According to rough statistics, China's accumulated contractual value in the region totaled $120 billion, including a substantial input in infrastructure, such as roads, bridges and factories. More recently, China's direct investment in the region has grown rapidly. Already standing at $10 billion in accumulative terms, it keeps increasing with an incredible speed.

The Third Plenum of the 18th Communist Party of China Central Committee held not long ago, which made important arrangements on the comprehensive deepening of reform and opening-up, will bring about fresh and important opportunities for the cooperation between China and the countries in the region. China plans to develop a Silk Road economic belt that spans the Eurasia continent and a maritime Silk Road that links the Pacific with the Indian Ocean. We can see on a map that the two Silk Roads will cross in the Middle East region, which spells excellent opportunities and bright prospects for common development and common prosperity for China and the region's countries. During the visit, I discussed many new ideas and new plans of cooperation with Arab leaders. China is ready to share its experience in high-speed rail development with any country and participate in national rail network programs of the region's countries, thus benefiting these countries and their peoples.

Many hot-button issues in the Middle East are undergoing important changes. One key purpose of my visit is to follow through on President Xi Jinping's four-point proposal on the issue of Palestine. Moreover, I also discussed the Syrian and the Iranian nuclear issues of shared interest with the leaders of the region's countries. As their friend, China is ready to contribute its share to bring peace and stability to the region. On the whole, my visit has achieved its anticipated purpose. In Algeria, I elaborated on the new Chinese government's policy towards Arab states. I can summarize it as "four supports". That is, we support Arab states in following their chosen paths, we support Arab states in resolving the region's hot-button issues through political means, we support Arab states in achieving a win-win and common development with China, and we support Arab states in playing a bigger role in regional and international affairs and in more effectively safeguarding their legitimate rights and interests. This represents China's most fundamental position which also meets the aspiration and fundamental interests of the Arab countries and their peoples.

II. Though Palestine and Israel have resumed peace talks, the Middle East peace process remains confronted with many obstacles and challenges, such as expansion of Israeli settlements and other issues. How does China see the future of the peace process? China is the only permanent member of the Security Council that is not a Quartet member. Will China join the mechanism? What role will China play in the Middle East peace process?

The Palestine-Israel issue is a long-standing hot-button issue. Peace in the Middle East will be elusive if this issue is not resolved. As a permanent member of the Security Council, China has all along played its own role in seeking a solution. In May, China received visits by Palestinian and Israeli leaders at the same time. President Xi Jinping went out of his way to work with them respectively and made a four-point proposal to resolve the Palestine-Israel issue. He stressed that an independent Palestinian state and a peaceful coexistence between Palestine and Israel is the right direction of a settlement, that peace negotiation is the only realistic pathway to Palestine-Israel reconciliation, that "land for peace" and other principles are important foundation for advancing the Middle East peace process, and that international support is a necessary guarantee for moving the peace process forward. The four-point proposal by President Xi is highly comprehensive and has been well received by both Palestine and Israel and the international community at large.

During the visit, I spent long hours discussing with Palestinian and Israeli sides on President Xi's four-point proposal. I had a deep impression from the meetings that both sides saw their peace talks as the sole alternative, they both hoped to continue with it to a fruitful end, and they both saw the current moment as an important opportunity. I told both sides that mutual recognition of each other's right to exist is the prerequisite for peace talks, that mutual accommodation of each other's concerns is an indispensable element, and that putting oneself in the other's shoes is an advisable way to move the talks forward. In the peace talks, one should try to bring people around with reason rather than power. I told the two sides clearly that this land is the common homeland for both Palestinians and Israelis. The fact that the State of Israel has existed for over 60 years and the Palestinian brothers and sisters remain displaced without realizing their legitimate rights and interests to statehood is not fair, nor reasonable, and should not be allowed to go on. So we support the establishment of an independent State of Palestine on the basis of the 1967 borders and with East Jerusalem as its capital living in peace with Israel. In this way, peace in the Middle East will be guaranteed. We will continue to work toward such a direction. I believe that so long as both sides can work toward such a direction and with full support of the international community, a success of the peace talks will be highly hopeful. With respect to the Quartet mechanism, first, we hope that it can truly play a role, especially at this crucial juncture of Palestine-Israel peace talks. Second, China is open to the mechanism, and we are ready to join it if the Quartet so wishes. Third, even if the country doesn't join it, China will continue to work in its own way to move the peace process forward.

III. The Syria issue is also a complicated one. China and Russia have vetoed Syria-related draft resolutions three times, which caused a huge controversy. With bloodshed still going on in Syria, how does China see the future of the Syria issue? The Geneva II conference on Syria will soon be held. Will China participate in it and what kind of role will it play?

You mentioned China's voting record at the UN Security Council. I want to tell our Arab friends that as a permanent member of the Security Council, China is fully aware of its responsibility and obligation for upholding international peace and stability. China is very serious and prudent when it comes to voting at the Security Council. We go by such principles: First, to uphold the purposes of the UN Charter and basic norms governing international relations, particularly the principles of non-interference in the internal affairs of members and equality of all countries regardless of size. This underpins the very survival and development of the developing countries, small- and medium-sized countries in particular. Second, to uphold the independence, sovereignty and territorial integrity of each and every country, which is the basic texture of the international order. If this is breached, many countries may feel insecure. Third, to maintain peace and stability of the regions concerned. We take into consideration the fundamental and long-term interests of the countries and peoples in the region when making our judgment on the issue.

The Chinese side always believes that the Syria issue can only be resolved politically, and there can be no other way. The war there has been going on for three years and people have now realized that war can resolve nothing, and violence can only breed hatred. This is why more and more countries have come to favor a return to the track of political settlement.

To make the Geneva II conference a success, much work remains to be done. The most pressing task is to put an end to the war and violence. It's unthinkable that the two sides are sitting down at the negotiating table while the fighting is still going on. At the same time, the work to destroy Syrian chemical weapons must not stop. The process should move forward step by step, until a complete and thorough destruction of all such weapons is achieved. With Geneva II providing a platform for a political settlement of the Syria issue, the international community, China included, should create an enabling environment and atmosphere to this end, whereby urging the two sides in Syria to sit down at the negotiating table. We may offer suggestions, make proposals, and submit plans, but only for them to consider. We must refrain from imposing anything on them. The Syria issue, ultimately, needs to be resolved through equal-footed negotiations between the two sides in Syria. Such negotiations will be tortuous, and not smooth at all. What is clearly defined is the future course of peace negotiations, the goal of which is also clearly defined as the implementation of the Geneva Communique. We hope that the negotiations will not only take place but also continue. Though time-consuming, as the negotiations may be, we must do our best to keep their momentum.

Follow up: Will the Chinese Side participate in Geneva II?

Of course we will. We have already done a lot of work to promote Geneva II. So we hope the conference will start on Jan 22 as scheduled and play a due role.

IV. Egypt is the first Arab and African country to have established diplomatic relations with China, and former president Mohammed Morsi made China the first country he visited after assuming office. But Egypt has remained in the state of turbulence after the coup. How does China see the future of Egypt?

Egypt is an ancient civilization and a major Arab and African country. China and Egypt have a long history of friendly exchanges. Egypt has played a very important role in maintaining regional peace and stability. In more recent years, turbulence erupted inside Egypt, which is detrimental not only to the country's own stability and development but also to the role it is expected to play in the region. Egypt, in our view, is in the middle of political and social transition, and it is in search of a development path suited to its national conditions. In so doing, Egypt has our understanding and support. The Egyptians are a great people. They have the wisdom and ability to find a development path that is conducive to the country, acceptable to its people and suited to Egypt's realities. The recent situation in Egypt is moving in a positive direction and we just hosted a visit to China by the Egyptian foreign minister. It is my impression that Egypt is regaining its confidence, more willing to get engaged with the rest of the world, including the major countries, which is a highly positive development. We hope that Egypt will restore stability, achieve development and regain its role as a major country in the region.

V. Relations between Iran and the United States have eased to some extent, and the work on the Iranian nuclear issue has entered a new stage. However, differences between Iran and some Arab countries, Gulf countries in particular, have further widened. How does China balance its relations with the Gulf Arab countries, especially Saudi Arabia, while engaging with Iran?

China has always maintained normal and friendly relations with other countries on the basis of the Five Principles of Peaceful Coexistence. We enjoy friendly relations with Arab countries and at the same time maintain normal state-to-state relations with Iran. China's position on the Iranian nuclear issue has been a clear-cut and firm one. We oppose Iran's efforts to develop and possess nuclear weapons and support the establishment of a zone free of weapons of mass destruction in the Middle East. We have participated in the negotiation process on the Iranian nuclear issue. After 10 years of negotiation, the P5+1 and Iran have recently reached the first agreement in Geneva, making the first step toward a peaceful solution, which indeed has not come easily. This agreement, although an initial one, sets the necessary restrictions on Iran's nuclear program, thus removing the most urgent concern of the international community. What matters now is to properly implement the agreement. The six-month Geneva nuclear agreement will test the ability of Iran and the other parties to fulfill their responsibilities and obligations in real earnest. At the same time, it is imperative to lose no time in pushing ahead with the negotiations in order to reach a final agreement that provides a comprehensive and once-and-for-all solution to the issue, which is the only way to eliminate the issue for good. That will benefit both Iran and the region as a whole.

We hope Iran and the Arab Gulf countries will solve their problems through consultation and negotiation. We are working toward this goal. We believe that Iran and other countries in the region will iron out their differences and disputes properly and thereby live in greater harmony with each other.

VI. Peaceful use of nuclear energy is an important area of cooperation. Many Arab countries want to enhance cooperation with China in this area. When will we see China-Arab cooperation in this area start?

We will gradually start cooperation with Arab countries in the peaceful use of nuclear energy. This is a new area for mutually beneficial cooperation between China and Arab countries, to which China takes a positive attitude. This issue was raised in my meetings in both Algeria and Saudi Arabia during this visit, and relevant agreements were signed with some countries. There are broad prospects for cooperation in this area.

Follow up: China has launched satellites for many countries but not yet for any Middle East countries. When can we expect to see a satellite launched by China in the region?

We are more than happy to discuss with Arab countries about putting their satellites in space, if they so wish. We hope this will be materialized in the near future.

VII. Some people claim that China's role in the Middle East is largely economic. How will China play a bigger political role? Besides, we have noticed that China, as the second-largest economy in the world, has provided what seemed to be limited humanitarian assistance to the region when disaster hit, in particular to Syrian and Palestinian refugees. How would you explain it?

I think there are some misunderstandings on this. China is always ready to have cooperation for mutual benefit with all countries in this region, Arab countries in particular, not only in the economic field, but also in the political, security and military fields. Having said that, there is always a need for prioritization, and a need for China to build up its capabilities for sustained expansion of such cooperation. It is true that China-Arab cooperation in recent years has mainly focused on the economic field. That is because we believe that development holds the key to and serves as the foundation for solving all problems. Any solution to hot-button and political issues hinges on economic growth and better life for the people. As far as Arab countries are concerned, the most crucial task facing them is national development and economic revitalization. China is ready to do what it can to provide help and assistance as it has done in the past. Since 2012, China has provided humanitarian assistance on six occasions totaling $18 million to the Syrian people and Syrian refugees in Jordan, Turkey and Lebanon. China has offered support and assistance over the years, not just this year. Back in the days when we were extremely poor and less developed, we tightened our belt to support people in the Middle East in their just cause, especially the Palestinian people.

We will continue to do so in the future and furthermore, we will play a role in the political field as well. China's political role in the Middle East will only be enhanced, not diminished. In 2013, we hosted the visits to China by Palestinian and Israeli leaders at about the same time as the UN International Meeting in Support of Israeli-Palestinian Peace in Beijing. President Xi Jinping sent a congratulatory message to the meeting held by the United Nations to mark the "International Day of Solidarity with the Palestinian People". I attended the Palestinian-Israeli peace symposium during my Middle East visit and invited persons insightful from both sides to the symposium. We offered a platform for all to make their views heard, to seek more consensus and to raise the voice for peace together. I think this is a useful endeavor, and if continued, the voice for peace will become louder and the forces for peace will grow stronger. All this will help to provide impetus to and exert positive influence on the negotiations between the two sides. All in all, China's all-round role will gradually and more visibly be felt by Arab countries and get their understanding and support.

VIII. In face of the complicated situation in South Sudan, China, as a friend of South Sudan and with major interests in that country, has immediately sent an envoy there for mediation efforts. What is China's position on the South Sudan issue and what role will China play in this regard?

We are indeed following closely what is happening in South Sudan. What is most important for South Sudan is stability and development, without which the fundamental interests of all ethnicities in the country would be impaired. Conflicts will bring suffering to all the people, which is not in the interests of South Sudan at all. Since the outbreak of the conflict, China has urged the international community to send envoys for mediation efforts and has actively supported the mediation efforts of the IGAD countries. China has a four-point position on this issue. First, a cease-fire should take effect and violence should be stopped immediately, so as to make way for peace talks and to maintain law and order in the country. Second, it is imperative to launch an inclusive political dialogue process as soon as possible and find a solution acceptable to both sides. Third, the international community should intensify efforts for peace talks, urging both sides to engage in serious peace talks. Fourth, it is important to improve the humanitarian situation in South Sudan.

As large numbers of civilians have been caught in the crossfire and their life, property and personal safety have been threatened, the international community should support and help them as much as possible. At the same time, we hope and believe that the government of South Sudan will take concrete and effective measures to protect the lives and properties of the Chinese nationals in the country.

IX. You are an expert on Asian affairs. China has recently established the East China Sea Air Defence Identification Zone, which has drawn attention from various parties. How does China view the prospects of peace and stability in the Asia-Pacific, in particular, since the US has re-balanced its strategic focus away from the Middle East to the Asia-Pacific?

Let me say first of all that the Asian region is on the whole peaceful and promising, with countries living together in amity, and the regional economy maintaining a sound momentum of rapid development. Globally, Asia, East Asia in particular, has enjoyed the fastest growth and the biggest potential. As for some issues left from history that exist in the region, efforts are being made to find a solution through peaceful negotiations. Of course we know that the US has traditional influence and practical interests in this region, which we think is normal, since it is also a big nation in the Asia-Pacific. China respects the US' legitimate interests in the Asia-Pacific and hopes to see it play a constructive role in regional affairs. President Xi Jinping stated publicly that the vast Pacific Ocean has ample space for China and the US to both develop. In June 2013, President Xi Jinping and President Obama held a meeting at the Annenberg Estate in California, during which the two sides had an in-depth exchange of views on a wide range of topics and reached consensus on many issues. The meeting went well. In particular, President Xi Jinping proposed that China and the US should build a new model of major-country relationship and President Obama readily agreed to the idea. President Xi explained the three features of the proposed new model of major-country relationship, namely, first, no conflict or confrontation; second, mutual respect; and third, win-win cooperation. The US side subscribed to the idea fully.

We have since implemented the agreement reached between the two presidents and advanced the building of this new model of major-country relationship, starting first and foremost from the Asian region. I hope to see more communication and closer coordination and cooperation between China and the US, first in Asian affairs, for more commonalities, which may help develop sound interactions in this region. This serves not only the interests of China and the US, but also those of all countries in this region. We are making progress in all these areas.

As for the Air Defense Identification Zone in the East China Sea that you have mentioned, there is actually nothing unusual about it. Dozens of countries have already done so and some did it long ago. For example, Japan established its ADIZ as early as in 1969. The Republic of Korea and India, both our neighbors, have set up their ADIZ as well. To establish the ADIZ is China's legitimate right and is in full accord with international law and practice. Moreover, the ADIZ is not territorial airspace, still less no-fly zone. Its establishment will not change the legal status of the airspace concerned, nor will it affect the freedom of flight ensured by international law. Our ADIZ has been in place for some time now and the area has been very peaceful with no flight of any airlines being affected. In retrospect, Japan and the US did overreact. Allow me to quote a Chinese saying: it is not permissible to only allow magistrates to burn down houses while forbidding common people to even light lamps. All countries are equal. We established the ADIZ only recently while some other countries did it long ago. It is really unfair to make all sorts of criticisms and even accusations against China for doing so. Details of the ADIZ may differ from country to country, as there are no explicit international laws and regulations governing ADIZ. If there are any questions about ADIZ specifics, we are ready to sit down and talk about it. It is absolutely unnecessary to get restless or even make groundless accusations against China as Japan did. In fact, there may be other considerations behind Japan's reactions.

It is possible that they would like to create tension between China and Japan on purpose, which would enable Japanese leaders to press ahead with their plan in Japan and break away from post-World-War II restrictions on Japan. We have noted that Japan has stepped up its rearmament recently, a move calling for attention. In particular, when the authorities in Japan fail to correctly understand Japan's history of aggression, Japan's rearmament move cannot but sound the alarm to its neighbors and the international community.

Recently, Japanese Prime Minister Abe paid homage to the Yasukuni Shrine in total disregard of opposition of people of various countries. Our friends from Arab states may not know the shrine very well. It is a symbol of the militaristic aggression. Until this day, all the exhibits in the shrine are designed to justify Japan's decision to launch that war of aggression at the time, and the 14 Class-A war criminals tried at the International Military Tribunal for the Far East are still honored in the shrine. This is the place that Abe visited. Worse even, he calls the war criminals "the souls of the war dead" and "pays deepest respect" to them. He has gone too far and what he has done is way beyond Japan's domestic affairs. In essence, it is an attempt to whitewash Japan's war of aggression, overturn the just trial of the International Military Tribunal for the Far East, challenge the outcomes of World War II and the resultant post-war order and lead Japan to danger. Lessons of the history have to be learned. This is not just a problem between China and Japan, but rather an issue to which the whole international community should pay much attention. Nobody should be allowed to turn back the wheels of the history or backtrack. Back then, Japanese fascists committed atrocities in Asia, just as German fascists did in Europe. In China alone, the Japanese war of aggression inflicted casualties of as many as 35 million, not to mention countless property losses. The Chinese nation is tolerant and generous. We have given up war reparations, and furthermore we have told our people that the Japanese people are also victims of militarism and that only the militarists should be held responsible for the war. In other words, Class-A war criminals honored at the Yasukuni Shrine should take the responsibility for the war of aggression.

Now, Abe went so far as to pay homage to these Class-A war criminals. He has crossed the bottom line of human conscience, which is completely unacceptable, not only to China, but to the whole international community. It would be unimaginable if this took place in Europe. The only way to open up the future is to expose and condemn the past; and the only way for Japan to win back the trust of its neighbors is to commit itself to peace. We hope that Japanese leaders will understand this most basic principle and respect human conscience and internationally recognized red line.

Japan's move to repatriate war dead will face backlash from China, S Korea: analysts - The Japanese government is drawing up legislation that will make the repatriation of the bodies of its second-world-war dead a “state responsibility”, but analysts anticipate the initiative will attract renewed criticism from China and South Korea.

China calls for worldwide ‘warning’ to Japan over war tribute visit - China on Wednesday called for a worldwide “warning” to Japan’s Prime Minister Shinzo Abe over his visit to a contested war shrine as it took the mounting feud between the two nations to the United Nations.

Visa hassles, bureaucracy and politics dampen Chinese business enthusiasm for India - China and India have repeatedly vowed to attract investment from each other with many Chinese companies viewing the South Asian giant as a promising source of growth, but the realities of doing business in India often sour their hopes as they face red tape and distrust fuelled by decades-old riva

At 97 million and growing, China has most outbound tourists (By Yang Wanli) Chinese tourists pose for photographs in front of a 7.4-meter-long great white shark replica in Sydney Harbour in November. Chinese overtook US citizens as the world's biggest-spending travelers in 2012. China had the highest number of outbound tourists and amount of overseas spending in the world last year, according to a report released on Wednesday. Ninety-seven million Chinese traveled abroad in 2013, beating the 2012 mark by roughly 14 million, according to the China National Tourism Administration. The number is expected to surpass 100 million this year. The report released on Wednesday by the Tourist Research Center of the Chinese Academy of Social Sciences said that China's tourists have had the world's strongest purchasing power since 2012. They overtook German and US tourists as the world's biggest-spending travelers in 2012, spending $102 billion overseas, a 40-percent increase from 2011. Most Chinese tourists traveled to Asian and European countries, the report said, accounting for 75 percent of overseas tourists in those countries. Song Rui, director of the center, said the 2013 figures for overseas spending have yet to be released, but there will "definitely" be a new record by Chinese tourists. "Chinese tourists spend so much abroad that some foreigners are calling us the 'walking wallets', " Song said, who added that Chinese travelers who purchased luxury products during the 2012 London Olympics led Britons to coin the term "Peking Pound" for Chinese spending power. The report said Chinese tourists spent on average $7,107 per person during their trips in the US in 2011. The average amount of spending by a tourist in the US that year, according to the US Commerce Department, was $2,440. With increased spending and traveling by Chinese travelers, more travel service providers in foreign countries are adjusting their business models. Hotel groups, including Hilton Worldwide and Starwood Hotels & Resorts Worldwide, have designed new services specifically for Chinese customers. By August 2013, all of Hilton's hotels worldwide were providing a service called "Hilton Huanying" that provides Chinese tea pouches and teapots in guestrooms. Chinese food is also being served in its hotels. Nineteen of Starwood's hotels around the world are able to provide services in Mandarin and offer chopsticks during meals.

Hong Kong*:  Jan 10 2014

Kerry Properties maintains prices amid heavy discounting (By Yvonne Liu yvonne.liu@scmp.com) Agents see good response to flats at The Summa, even with prices higher than at some projects - Developer Kerry Properties has chosen not to follow the market trend of heavily discounting the prices of flats in its project The Summa, which will be released for sale this week. In sharp contrast to steeply discounted launch prices announced last week by rival Cheung Kong (Holdings) at its Diva project in Tin Hau, Kerry has priced its units in The Summa in Sai Ying Pun at the same level as previously released new projects in the vicinity, and above secondary market prices for the area. Cheung Kong grabbed the market's attention last week with the launch of units in The Diva, a single-block building at 133 Electric Road in Tin Hau, near Causeway Bay Market, at average asking prices of HK$22,514 per sq ft for the 118 flats, which range in size from 493 to 741 square feet. That is 16 per cent below the average price per square foot of saleable area of HK$26,779 achieved in November by Henderson Land for its nearby project The Hemispheres. Buyers at The Diva who qualify for the maximum discount on offer when the flats are sold from Friday this week will enjoy a discount of 25 per cent on The Hemispheres' prices if they buy their flat by Tuesday and for cash, and join the project's Club Lifestyle. The minimum price of a 493 sq ft flat in the project works out at HK$7.97 million after discounts. Kerry Properties' The Summa in Sai Ying Pun will also be launched for sale this week. The development in Hing Hong Road, near King's College, comprises 168 flats, and according to the price list released on Friday last week the average price per square foot of saleable area of the first batch of 50 flats works out at HK$27,202. The saleable area of the flats is between 756 and 1,513 sq ft, and prices will range between HK$17.92 million and HK$49.9 million. The average price after discounts is HK$22,989 per sq ft - higher than secondary market prices in the district, which range between HK$13,000 and HK$18,000 per sq ft. But the prices are similar to those achieved by Sun Hung Kai Properties at its Imperial Kennedy project, also in Western district. The average discounted price of the first flats released for sale there in November was HK$23,035 per sq ft. Despite the pricing, the market response to the release of the flats in The Summa was positive, said Shiu Ka-kuen, a district sales manager at Centaline Property. "Most of the interested home seekers are upgraders who live in the district," he said. In contrast, many buyers who had indicated an interest in units in The Diva were investors, according to Eddie Tao, at Hong Kong Property Agency. Kerry Properties is part of the Kerry Group, which also controls SCMP Group, publisher of the South China Morning Post.

 China*:  Jan 10 2014

Chinese e-commerce giant Taobao bans bitcoin (By Angela Meng and Danny Lee) Mainland's largest online marketplace cites new government regulations for digital currency ban -Online shops using the Taobao platform could risk losing their accounts if they are found selling bitcoin or the software and equipment used to create the digital currency. Taobao, China's largest e-commerce platform, yesterday banned cryptocurrency bitcoin, the mining software and related materials, citing new government regulations. The mainland giant said: "In an effort to promote healthy growth of the online trading market and more effectively protect our members' interests, Taobao will make several adjustments in compliance the relevant state regulations and policies." The adjustments will take effect on January 14. Online shops using the Taobao platform could risk losing their accounts if they are found selling bitcoin or the software and equipment used to create the digital currency. This comes just as the value of bitcoin tumbled again after weeks of recovery, and once again highlighted its volatility. The unit price reached 5,970 yuan (US$986) per coin on Monday, and despite a regained momentum due to wider acceptance of the virtual currency to pay for goods and services, it fell back to 4,718 yuan. "The prices may have been reacting to the Taobao news" said Bobby Lee, CEO of China's largest bitcoin exchange, "but in the long term it won't affect bitcoin. People will find new ways of acquiring mining material. "It looks like they're just being cautious in light of what PBOC issued on December 5 and 16." A month after the People's Bank of China issued back-to-back demands on banks and third-party payment providers to cut off bitcoin's life support, social gaming platform Zynga announced a deal with BitPay, the online payment processor backed by Li Ka-shing. Online retailer Overstock as also decided to accept the virtual currency. Despite the Taobao ban on bitcoin, Zennon Kapron, head of Shanghai financial research consultancy Kapronasia, said volume on exchanges has largely recovered. "With China trading, a lot of the less serious investors have left the exchanges as it is more difficult to trade … but the Chinese are intuitive people and have found funding ways that fit within the regulation." A number of factors saw prices rebound sharply on the mainland, explained Kapron. "The acceptance of bitcoin by Overstock and Zynga [played] a big part," said Kapron. "In addition, Chinese investors now have ways of exchanging bitcoin again, and we have got some of the key regulation out of the way as we know what the stance of the [People's Bank of China] is, so a lot of this is already priced in." In Legco yesterday, Secretary for Financial Services and the Treasury Chan Ka-keung said no new rules were forthcoming to deal with the rise of bitcoin and other virtual currencies. He came under fire from lawmakers for the government and bitregulator's stand-off approach. "The government has underestimated the speed of development of bitcoin locally and internationally," said lawmaker Chan Kam-lam.

Hong Kong*:  Jan 9 2014

Shaw remembered for his pioneering work in cinema (By China Daily) Hong Kong media mogul and philanthropist Run Run Shaw speaks in Chongqing in this file photo. Hong Kong media mogul and philanthropist Sir Run Run Shaw passed away peacefully at his home in Hong Kong on January 7, 2014. He was 107. Shaw, born on November 19, 1907, was one of the most influential figures in the Asian entertainment industry and the founding father of Shaw Brothers Studio and Television Broadcast Limited, which dominated media production in Hong Kong. Shaw's involvement with cinema began at the age of 19, when he joined his brother Rumne Shaw to establish the Shaw Organization in Singapore in the summer of 1926, which later became Shaw Studios. From 1929 to 1933, influences from economic slowdowns in the US spread worldwide which affected Asian cinemas. Many theaters were forced to close, but the Shaw brothers carried on. Shaw was the first to propose filming audible Chinese films, as he realized the disadvantages Chinese films had in comparison to audible films that were already popular in the West. He was once quoted as saying, "Times are hard, and no one wants to spend money on audible films. This is an opportunity for us. Let's be the first to do this." By the 1960's, Shaw Brothers was Asia's biggest producer of movies, including The Magnificent Concubine, which won the Grand Prix at the 1962 Cannes Film Festival. It was also Shaw Studios that introduced kung fu films to the world.

 China*:  Jan 9 2014

Chinese research ship 'Snow Dragon' breaks free from ice zone - Xinhua. Chinese ship trapped in ice since Friday after helping rescue Russian ship successfully escapes dangerous floes - The Chinese icebreaker Xue Long, or Snow Dragon, is blocked by thick ice after successfully transferred passengers aboard stranded Russian science vessel. A Chinese scientific research ship trapped in Antarctican floes after it helped rescue passengers from another ice-stranded Russian vessel has broken free from a dangerous zone of floating ice and sailed into clear waters, the official Xinhua News Agency said on Tuesday. The successful escape happened at around 6pm Beijing time, Xinhua said. The official China Daily reported earlier on Tuesday that a growing westerly wind could give the Xue Long, or Snow Dragon, its best chance of escaping the heavy ice in which it has been trapped since last Friday. The Xue Long’s helicopter last Thursday ferried 52 passengers on the stranded Russian ship Akademik Shokalskiy, which had been trapped for 10 days, to the safety of an Australian vessel. “Its performance, especially the success in rescuing all the passengers, has been given the thumbs up by global public opinion,” the Global Times said in an editorial. “China should be proud of it.” “Xue Long’s mission is an epitome of China’s attitude toward its international obligations,” it added. But the Chinese ship then became surrounded by ice itself, and an effort to break free early on Saturday was unsuccessful. It has 101 people on board, while 22 crew remain on the trapped Shokalskiy. The Chinese ship – which includes a gym, movie theatre and ping-pong tables among its facilities – has enough food supplies to last until April and enough fresh water for the next month, Xinhua had reported. An American vessel Polar Star, a US Coast Guard icebreaker, was dispatched to come to the aid of the two trapped ships and was expected to arrive on Sunday.

Hong Kong*:  Jan 8 2014

Investors give nod to Power Assets spin-off (By Ray Chan ray.utchan@scmp.com) Utilities firm pitches the HK$44.4b deal to selected institutions while concerns grow about potential earnings dilution and unattractive yield - Hongkong Electric reported a net profit of HK$3.56 billion for the nine months to September last year. Power Assets, an international utilities firm controlled by Asia's richest man, Li Ka-shing, said its shareholders had approved a proposed spin-off listing of its Hong Kong electricity arm, paving the way for a fund-raising scheme worth up to HK$44.4 billion. A handful of minority shareholders had opposed the separate listing and management had explained the benefits of floating the assets to them, Power Assets chairman Canning Fok Kin-ning said after the poll at a shareholders' meeting yesterday. More than 99.7 per cent of Power Assets' shareholders voted to approve the deal, the firm said in a statement submitted to the Hong Kong stock exchange. Bankers said the company had started to pitch the trust deal, which should pay an annualised return of 5.5 to 7.3 per cent, to selected institutional investors, with a formal roadshow next week. Pricing is expected to be announced on January 22, with trading scheduled to begin a week later. Market views on the proposed spin-off listing are fairly divided. A number of long-term investors expressed concern about earnings dilution after the listing of the Hong Kong assets - the biggest contributor to Power Assets' earnings - following persistent weakness in the company's share price since it announced the deal in September. Adding to concerns about the deal, market analysts cited the unattractive yield from mature assets and Li's track record in selling his port assets through a US$5.5 billion trust listing in Singapore. Shares of Hutchison Port Holdings Trust have plunged 34 per cent since it went public in March 2011. Fok, who also heads Hutchison Whampoa, said Power Assets, which will own 30 to 49 per cent of the units in the trust, HK Electric Investments, would reserve about 10 per cent of the spin-off deal for existing shareholders. Known for his deal-making skills, octogenarian Li is also seeking a spin-off of Hutchison's retail arm, AS Watson, after scrapping plans to sell its supermarket chain, ParknShop, last year. The initial public offering of AS Watson, which also operates drug stores and electronic gadget chains, could easily fetch a further HK$98 billion. Shares in Power Assets fell 1.48 per cent to HK$59.90 yesterday, slightly above their 52-week low of HK$58.80, while the benchmark Hang Seng Index eased 0.58 per cent. If everything goes smoothly, the HK$44.4 billion spin-off of Power Assets' Hong Kong electricity arm would be the biggest listing in the city since October 2010, when pan-Asian insurer AIA raised more than US$20.4 billion. Hongkong Electric, which started operations in 1889, provides electricity to about 568,000 customers on Hong Kong and Lamma islands. The company, one of two major power suppliers in the city, reported a net profit of HK$3.56 billion in the nine months to September last year, when it had a net asset value of HK$14.03 billion. Goldman Sachs and HSBC are the global co-ordinators for the trust's listing and sale of the units.

HKFA official calls for government action after Happy Valley players questioned by ICAC (By Chan Kin-wa kinwa.chan@scmp.com) Sports governing body still needs government's help in straightening out the sport, vice-chair says, amid flurry of alleged game-rigging incidents - Happy Valley player Lau Kai-shing (left) is taken to the ICAC headquarters. A Hong Kong Football Association official has appealed for the government’s help to “put the sport back on track” after a string of suspected match-fixing cases in recent weeks. His call came hours after graft-busters took into custody members of first-division side Happy Valley on Sunday night. Local soccer guru Steven Lo Kit-sing, convenor of powerhouse club South China and vice-chairman of the association, said he hoped concerned government agencies could take action against any wrongdoing in the sport. “Soccer is an important sport in Hong Kong and worldwide and if there is something that has gone wrong, we must tackle it,” he said. “But since we are only a sports governing body, we need the help of the authorities.” A number of Happy Valley players were hauled away by officers of the Independent Commission Against Corruption (ICAC) on Sunday after losing 5-0 to Sunray Cave Sun Hei at Tsing Yi Sports Ground. Happy Valley Athletic Association chairman Pui Kwan-kay said he was informed of the incident but had no further details. The scandal comes amid an HKFA probe into another top-flight club, Tuen Mun, which also faced allegations of match-fixing. The side recently said it would deregister all its players and sack its mainland sponsor ahead of an inquiry into the way they lost a match to Yokohama in December. The game was headed to a 1-1 draw when Tuen Mun defender Li Ming scored an own goal in the dying seconds. Lo said he hoped the recent shake-up would not affect Hong Kong’s plans to launch its first ever Premier League in September. Among the Happy Valley players taken into custody were mainlanders Fan Weijun and Chao Pengfei, Croatian midfielder Sasa Mus, Bosnian goalkeeper Darko Bozovic, and local midfielders Lau Ka-shing and Wilfred Bamnjo, a Cameroonian who has played for Hong Kong for more than seven years. They were taken in separate cars to the ICAC headquarters in North Point. Other team members were taken there in two minibuses. Media reports said the club’s Argentine technical director, Sergio Timoner, was also being held. The ICAC said it would not comment on individual cases. Valley and Tuen Mun are the only sides in the 12-team league that are mainly supported by mainland commercial sponsors. 

 China*:  Jan 8 2014

China destroys 6.1 tonnes of confiscated ivory in gesture reflecting major policy shift (By Mimi Lau mimi.lau@scmp.com) China destroyed over six tonnes of confiscated ivory for the first time in Guangdong’s Dongguan, marking a significant effort to combat illegal wild elephant tusk trading by the world’s largest ivory consumer. The destruction of confiscated ivory by Chinese authorities is the first landmark gesture reflecting a policy shift by Beijing in the handling of confiscated ivory which used to be kept in storage without further action. The destruction ceremony kicked off in the afternoon in Dongguan’s Machong township where 6.1 tonnes of ivory sculptures and raw tusks over three feet long each were crushed into pieces by two giant machines, witnessed by diplomats, international guests, conservationists and media. Ivory is worth between US$1,000 and US$2,000 per kilogram in the black market, according to John Scanlon, secretary general of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). The destruction comes a month after China pledged during the African Elephant Summit in Botswana of Africa on December 2 last year to take action in combating ivory trading, according to Zhang Li, associate professor at Beijing Normal University and elephant expert. "It’s a really big and quick decision just in one month," Zhang said. "After Gabon, Kenya, the Philippines and the United States, China is the next government to take real action to destroy illegal ivory stockpiling. This shows strong willing from China to protect the wild elephant population as well as wildlife trade," he added. "This is significant progress because there is an elephant crisis caused by record-high poaching in the past two to three years," Zhang said. Chinese demand for ivory has been blamed for keeping poachers in business. Trinkets made from ivory, sometimes known as "white gold", are a traditional symbol of wealth and status in China. Some of the illegal ivory is believed to go through Hong Kong. According to Monitoring the Illegal Killing of Elephants (MIKE), a body set up as part of an international regulation over the legal sale of ivory from approved countries, about 7.5 per cent of wild African elephants were slaughtered in 2012, along with a further 7.9 per cent in 2011 wild, surpassing the average growth rate of 5 per cent. "This means in the past years, wild African elephants’ populations declined by 2 per cent every year. In about 50 years, they will disappear without major protection efforts. It’s a serious problem caused by poaching and illegal killing," Zhang said. In 2013, there were around 470,000 wild African elephants compared to 1979 when the population stood over 1.3 million, according to Zhang. China has confiscated at least 16 tonnes of ivory in the past three years, according to media reports. Zhang said the remaining stockpiles have not destroyed because they are subject to ongoing court proceedings. However, the total volume of ivory stockpiling in China remains unknown. Andrea Crosta, executive director and co-founder of Elephant Action League, said the destruction was an important symbolic gesture from China in acknowledging that illegal ivory, being the product of illicit and criminal activities, sometimes even linked to terrorist groups, must be destroyed. "It’s a moral obligation to destroy the seized ivory, all over the world, not just in China," said Crosta, who added that many people die every year trying to protect or kill an elephant, with orphans and widows left behind and terrorist groups getting funds from poaching wild elephants. However, Crosta said he feared today’s public destruction could be nothing more than a public relations exercise designed to ease international pressure by showing the world China is taking action – even though it did not destroy all of its confiscated ivory. “Tens of tonnes of illegal ivory keep entering China every year and are laundered into the legal market. This is the single most important factor behind the current elephant poaching crisis,” Crosta said. The ivory seized in the city since 2010 is equivalent to the tusks of just 3,300 elephants, yet 25,000 African elephants were slaughtered for their ivory in 2012 alone. Crosta says a lot more is being successfully smuggled. The price in 2010 is about US$700 per kg. More than six tonnes of elephant ivory worth close to HK$50 million was confiscated in Hong Kong from October 2012 to January 2013. A ban on the global trade of ivory has been in place since 1989. There have been two one-off, sanctioned sales since, in 1999 and then in 2007, when 106 tonnes of ivory stockpiles were sold mainly to China and Japan. There has been a sharp rise in poaching since the last sanctioned sale in 2007, data from the Convention of International Trade of Endangered Species (CITES) shows. At the same time, the wholesale price of ivory has tripled since 2006, alongside increased demand for the precious item at auction houses, according to a 2011 report by Gabriel’s organisation on ivory markets in China.

Hong Kong*:  Jan 7 2014

'Worst is over' for Hong Kong real estate, says chiu (By Peggy Sito peggy.sito@scmp.com) Cheung Kong executive director says low rates will continue to benefit housing and criticises those who say US tapering will damage the market - Justin Chiu says the market overreacted to the impact of the US Fed's tapering on Hong Kong property. The worst is over for Hong Kong's housing market, says Cheung Kong executive director Justin Chiu Kwok-hung, who has a blunt assessment of pundits calling a market correction because of reduced US monetary stimulus: they are "too simple-minded". "I believe the low interest rate environment will continue into 2015, as the US tapering is being launched in a gradual process," said Chiu, referring to a cut in the Federal Reserve's bond-buying program. Any rate rise would be in the order of a quarter of a percentage point to half a percentage point, he said. The low interest rate regime would continue to benefit the housing sector. Chiu made the comments as the developer prepares to launch its 118-unit Diva residential project in Electric Road, Tin Hau, this week. Cheung Kong on Thursday said the average price of the first 50 flats at Diva would be HK$22,514 per square foot, 16 per cent less than for units at a nearby Henderson Land project, The Hemispheres, released in November, without factoring in extra discounts. Cheung Kong, the largest property developer in Hong Kong by market capitalisation, this year plans to sell five residential projects, totalling more than 4,000 units, with a sales revenue goal of more than HK$30 billion. "The worst is over for the city's housing market. You can see from the strong sales responses for the recent new project launches, " Chiu said, adding that home prices had found their support. The US Fed announced in December it would start to taper its aggressive bond-buying programme to US$75 billion a month, from US$85 billion, from this month. "The market had overreacted to the impact of the US tapering on Hong Kong property," Chiu said. Market observers have voiced concern in recent months that a winding back in US quantitative easing would reduce liquidity in the market - a move also expected to push up interest rates. The Hong Kong Monetary Authority has said that asset prices in emerging markets would be under pressure amid possible capital outflows. However, Chiu said: "Whoever still uses [tapering] as a reason to predict sharp price falls are being too simple-minded." US interest rates would rise at a gradual pace, he said. Housing transactions in the city plunged last year after the introduction of measures aimed at cooling the market, including a doubling of stamp duties and tightened mortgage lending. Figures from the Land Registry last week showed there were 50,676 residential transactions last year, 37.7 per cent fewer than the 81,333 deals recorded in 2012. The total value of transactions dropped 33.9 per cent to HK$298.94 billion. However, prices in the secondary market rose 2.8 per cent in 2013, according to Centaline Property Agency. Chiu said that, after months of monitoring the market, developers had indentified increased transaction costs as the greatest deterrence for buyers. "Developers are paying the extra costs for buyers, so they are starting to come back," said Chiu, whose company is offering early buyers at Diva a 7.5 per cent discount on stamp duties, as part of a package of sweeteners. He said the secondary market would remain quiet as individual flat owners were unable to pay extra costs for buyers.

Third runway takes priority over train depot, says Airport Authority chairman Marvin Cheung (By Olga Wong olga.wong@scmp.com) Airport Authority chairman argues expansion is most important following dispute within the authority over plans for key development site - The proposed third runway should take priority over commercial development at the airport, Airport Authority chairman Marvin Cheung Kin-tung said in his first media interview since a split emerged in the authority's board over plans for a key development site. The board voted unanimously last week in favour of building a train depot on the site of a temporary golf course, a location some board members had wanted to use purely for a shopping and hotel development. Board member Vincent Lo Hong-sui had threatened to quit the board over the issue but changed his stance after learning that moving the railway depot would delay the third runway by a year. "According to the Airport Authority Ordinance, the first [purpose] of the authority is to develop the airport. The provision of other facilities is secondary. This says building the airport should always be our main task," Cheung told the South China Morning Post. He said Chief Executive Leung Chun-ying had been kept informed about the authority's discussions. Lo is a Leung supporter. The row broke out in November when Lo tendered his resignation as chairman of the authority's infrastructural planning committee after the authority's management insisted the depot for the driverless electric train that will service the new runway should be located under the commercial development. Lo argued that the depot would reduce by billions of dollars the value of the 120,000 square metre site between Terminal Two and the AsiaWorld-Expo complex. The authority said moving the depot closer to the new runway would delay the environmental impact assessment on the controversial runway plan, which is being fought by environmentalists who claim reclamation work will destroy the habitat of the rare Chinese white dolphin. All board members, including government officials, accepted the argument that the cost of delaying the runway, work on which is due to begin in 2015, could vastly outweigh the reduction in the value of the commercial plan. "It's true that [keeping the depot] will discount the land value," Cheung said. "But do you know how much the cost of the Hong Kong-Zhuhai-Macau bridge increased after its tender was delayed for a year? With the runway project costing more than HK$130 billion, can you estimate how much more we would have to pay if it was delayed for a year?" The government had estimated that the 10-month delay in the HK$58 billion bridge project, the result of a judicial review application, had pushed costs up by HK$6.5 billion. The increase was blamed on rising material costs and a higher risk induced by a tighter schedule. Cheung said moving the depot would delay the new runway by a year, rather than the three to six months suggested by Lo. And he said he would do all he could to keep Lo on the board and as head of the infrastructure committee. Lo has been tipped as a possible successor to Cheung, whose tenure was extended for 12 months last year. He added the matter was never personal. "It is a very important matter that requires detailed discussion," he said. "We should not make an impetuous decision … There could be misunderstanding. It is a complicated issue that takes time to understand. "I have never been opposed to any idea [being raised] or lobbied anyone to support the management. My role is to facilitate the discussion so that both sides of arguments can be heard."

Bluefin tuna goes for a song at Tokyo auction; Hong Kong unlikely to benefit (By Ernest Kao and Agencies) The cost of bluefin tuna at the year's first auction in Tokyo's Tsukiji fish market declined compared to 2013, despite deep concerns over the sustainability of stocks - A giant bluefin tuna sold at auction in Japan yesterday for about 95 per cent less than the record-breaking sum paid last year - but Hong Kong diners are unlikely to see too steep a drop in prices for the delicacy. The 230kg fish was purchased at the Tsukiji market's first auction of the year for 7.36 million yen (HK$545,000), significantly lower than the 155.4 million yen paid for a fish of similar quality in 2013. It is the first time in five years that the auction price has slipped below 10 million yen. Bluefin is usually the most expensive fish available at Tsukiji, the biggest fish and wholesale seafood market in the world. Intense bidding last year sent prices skyrocketing and deterred other bidders from vying with the popular Sushi-Zanmai restaurant chain. The same chain won this year's auction. Kiyoshi Kimura, whose Kiyomura Company operates the restaurants, said: "I'm glad that the congratulatory price for this year's bid went back to being reasonable." The rival Hong Kong-linked Itamae-Sushi chain was top bidder for the biggest bluefin four years in a row until 2012. Founder Ricky Cheng Wai-tao famously became the first non-Japanese to claim top prize at the annual auction after he forked out HK$430,000 for a bluefin in 2008. His last winning bid, in 2011, was for a record HK$3 million bluefin weighing 342kg. Cheng could not be reached for comment yesterday. Federation of Restaurants & Related Trades President Simon Wong Ka-wo said the lower auction price would not signify too much of a drop in bluefin tuna prices at local restaurants. "Bluefin tuna is generally priced very high and not that many people can afford it, so retail prices are not likely to be affected too much," he said. Jackel Lui, who manages a high-end Japanese restaurant in Hong Kong, agreed. "Previous 'sky high' bids for tuna in Japan were just public relations gimmicks. They did not reflect the true market prices for bluefin tuna," he said. Lui said many restaurants in Hong Kong did not have bluefin tuna on their menus any more and instead were sourcing the less endangered yellowfin, farmed tunas or tunas from other parts of the world such as the Philippines or the United States. Chamber of Seafood Merchants Chairman Lee Choi-wah said the low figure could signify weakness in the Japanese seafood export industry, a weaker yen and worries about declining global stocks of bluefin tuna. Part of this year's price decline was also in part due to the greater number of bluefins available from Oma, the city in northern Japan that is a top site for tuna fishing. Decades of overfishing have seen global tuna stocks crash, leading some Western nations to call for a ban on catching endangered Atlantic bluefin tuna. "The population has effectively been decimated," said Amanda Nickson, director for global tuna conservation for The Pew Environment Group. "Over 90 per cent of bluefin tuna are caught before they reach reproductive age. You have to wonder if this is remotely sustainable."

 China*:  Jan 7 2014

Tech companies try to build a smarter farming industry on mainland China (By Mandy Zuo mandy.zuo@scmp.com) As food scandals mount, companies make risky move into unfamiliar field to capitalise on demand for safer alternatives - A worker picks blueberries for Joyvio, an agricultural subsidiary of mainland computer manufacturer Lenovo. It has been a four year-journey - one marked by mockery and doubt - for internet pioneer NetEase to bring its first pigs to market. You read that correctly - pigs. The mainland internet pioneer is one of a growing number of companies better known for their manufacturing or online commerce sites that are dabbling in agriculture. Growing public despair over a never-ending parade of food scandals - plus an eye for a commercial opportunity - has prompted these successful businesses to undertake what some might regard as risky, even reckless, adventures outside their areas of expertise. The latest company seeking to get some dirt under its nails is LeTV, the online video portal in Beijing. Having already expanded into a conglomerate involved in not only filmmaking but also television manufacturing and wine trading, the company recently leased a 200-hectare farm in Linfen , Shanxi . There, it will grow organic grapes, vegetables, flowers and seedlings using what it calls ecological farming methods. It also bought a cluster of villas to develop an "ecological manor". Li Rui , the CEO of Beijing Wangjiu Electronic Commerce - the LeTV subsidiary that is managing the project - said the company saw opportunities amid concerns about food quality and safety, and the lack of trustworthy domestic brands. "The situation now is that everyone - rich or poor- has no idea whether cooking oil or flour or other foodstuffs are safe," he said. "Safe, better-quality food is what all Chinese hope for." For some big players, such moves have seen quick results. Lenovo, the world's largest maker of personal computers, set up its horticultural subsidiary, Joyvio, in 2012. It has already become China's largest producer and distributor of blueberries and kiwi fruit. Organic oranges grown by former "Tobacco King" Chu Shijian , the owner of Yunnan Hongta, have been selling well online during the past year. Chu, now 85, was jailed for life in 1998 for corruption but was given medical parole in 2002 - the year he planted the orchard that made him a millionaire anew. Wangjiu's Li, meanwhile, was not expecting an early payback: "Agricultural investments have long return periods and bear high risks". To spread the risk, he diversified the operations. "We're doing it in a different way - combining other types of business to make it sustainable with high-added value," he said. Wei Guofeng , a Shanghai-based researcher and "new agriculture" advocate, said modern farming was quite challenging for computer makers or online retailers as biotechnology was totally new to them. "The biggest challenge is logistics: how to get your product, something with neither a concept nor brand, to the consumers' table, in your own way," he said. "It's not just about growing the produce, but storage, sales, and how to build the brand." Meanwhile, NetEase released a statement last month explaining why its farm venture has yet to bring home the bacon. "We overestimated ourselves, and … underestimated the problems in pig-raising", it said. "Agriculture is a brand new field for NetEase, and managing a complicated supply chain is not what an internet company is good at," it said, adding that its difficulties ranged from selecting the farm's location, the best livestock, managing the waste and smell, and dealing with a record heat wave in Zhejiang , where the farm was located. The farm had only 400 pigs so far, of which only about 100 were expected to be ready for slaughter in the near future. Xu Feng, the company's public relations manager, described the venture as a "public welfare project that NetEase is serious about". "[We] hope our creative approach will bring some new ideas to the whole industry," Xu said. Professor Du Xiangge , who leads China Agricultural University's Research Centre of Organic Agricultural Technology, said that despite the companies' varying results, the trend of innovative investment in agriculture was a good sign, both for environmental protection and food safety. "These companies have foundations, technology and other resources," he said. "Such 'positive energy' should be encouraged."

Hong Kong*:  Jan 6 2014

Doctor charged with ‘professional misconduct’ over death of celebrity couple’s child (By Lo Wei lo.wei@scmp.com) Medical Council hears evidence from singer Peter Cheung Shung-tak in case of the death of his first-born child with former actress Eugina Lau Mei-kuen - A doctor standing trial over the death of singer Peter Cheung Shung-tak’s new born baby has been accused of inappropriately inducing the birth and arriving late at the hospital to carry out the delivery. Obstetrician and paediatrician Dr Christine Choy Ming-yan, who delivered former actress Eugina Lau Mei-kuen’s first child in 2005, is charged of professional misconduct. The baby was pale and unresponsive after birth at St Teresa’s Hospital. He died a day later, the Medical Council heard. The couple were going for a check-up at Choy’s clinic on the morning of February 18, 2005, almost a month before the date the baby was due on March 11. Lau, who was 37 years old at the time, showed no signs of labour but Choy ruptured her amniotic membrane (releasing her waters) and declared Lau ready to give birth, Cheung testified on Sunday morning. “We were very shocked. It was a normal check-up then she [Choy] said the baby is ready to be born. We hadn’t even prepared the delivery bag,” Cheung said. The couple had trusted the doctor and were friends with her, he said. Following Choy’s advice, they drove home to pack their things, Cheung said. Lau’s waters had flowed and made a mess, he added. The couple drove to the hospital and arrived around noon, Cheung said. They waited for Lau to go into labour, thinking Choy would arrive soon, he said. Choy arrived at the hospital at 11pm, 12 hours after she had ruptured the membrane. The doctor had attended her brother’s birthday party that day, the prosecuting officer said. A video taken by Cheung of the labour was shown to the council. The baby, Cheung Tin-lam, born after midnight on February 19, was not crying and was unresponsive, the video showed. The baby was given breathing support, but died the next day. The hearing continues.

 China*:  Jan 6 2014

Beijing site of next Apec summit designed to impress (By Xu Donghuan donghuan.xu@scmp.com) Yanqi Lake location for regional summit is meant to be a welcome - and welcoming - green departure from Beijing's tarnished, polluted image - VIP villas on the site reflect the styles of various parts of China, ranging from Inner Mongolia to the tropical south. In the three months since China announced it would host this year's Apec summit in Beijing, preparations have been well under way at Yanqi Lake, a popular tourist destination in the outskirts of the capital. On an islet in the lake in Huairou district, an hour's drive northeast of the city centre, construction of a retreat is nearing completion. The retreat will include a conference centre, a waterfront luxury hotel and 12 VIP villas. The overall conference- centre project, which began in 2009, is being developed by Beijing Enterprises Group Real Estate Company, a subsidiary of the state-owned and Hong Kong-listed Beijing Enterprises Group. It is hoped that the green development will present a new image of Beijing, which has been tarnished by years of haphazard development, heavily polluted air, congested roads and many old buildings torn down to give way to radical structures that seem out of place. "A site away from the noise, pollution and heavy traffic in the city centre is ideal for such an important international conference," said Zhong Bing of AECOM, a global design firm commissioned to take charge of the overall planning on the islet. "With this project, we are trying to preserve, as much as we can, the original habitat on the island and create buildings that fit with the surroundings. It will be a model of sustainable development in Beijing." Upon completion, the 65-hectare islet will be a showcase of unique architectural designs. Besides the VIP villas, which dot the island and are based on designs drawn from different regions of China, the conference centre, which sits in the middle of the island, takes the style of ancient Chinese architecture, with flying eaves symbolising a big bird flapping its wings before taking flight. The conference centre has the capacity to accommodate 5,000 participants. Apart from the architecture, the landscaping is also expected to impress the conference participants with a motley of autumn colours on trees selected from different parts of China. The islet will also be a haven for migratory birds, with 150 nests built especially for them. All the sewage from the islet will be transported to a local plant for treatment. Solar panels and other clean power technology are widely used in the buildings. The site used to be a peninsula, and a 20-metre-wide channel was created to make it an islet, partly for security reasons. The islet is part of a 1,600-hectare green development zone. No coal burning and no vehicles with high exhaust emissions will be allowed in the area from this year. The 180-hectare Yanqi Lake, also known as the swan lake, attracts flocks of migratory birds every year. Other famous tourist spots in the zone include a 1,600-year-old Buddhist temple and the Great Hall. The area was originally planned as a showcase of green development with facilities to host high-end international conferences. On October 8 at the end of last year's Asia-Pacific Economic Co-operation (Apec) summit in Bali, the Chinese delegation announced Yanqi Lake as the venue of the next summit. The overall cost of the project is 20 billion yuan (HK$25.4 billion), which includes 3 billion yuan for the facilities on the islet, according to www.qianlong.com a site run by the Beijing Municipal Government. Though the central government is determined to impress the leaders from the 21 Apec member states, some villagers who have been relocated to new settlements are not happy with the arrangement. A cluster of new high-rise apartments has been erected in the district centre of Huairou for the 780 relocated households from the three villages on the islet that have been demolished. A 72-year-old villager from Quanshuitou village, who did not want to give his name, said few villagers were willing to leave the islet. "Our family has lived on the islet for many generations. They came and dumped our belongings on to a truck and then smashed our house. We had no choice but to leave," he said. "Now without any vegetable fields, I have to buy everything from the market." However, Zhang Qi, a 50-year-old villager from the nearby town of Huaibei, welcomed the new development in Huairou. "It's always a good thing to bring more people from the city to our place," he said. Apec conference centre architects draw on Chinese influences (By Xu Donghuan donghuan.xu@scmp.com) The main conference hall (right) and the observation tower of the Yanqihu (Yanqi Lake) Conference Resort, are under construction. The conference resort will hold the APEC meeting in 2014. Architects designing the venue for the Apec summit in Beijing next year say developers in the capital are increasingly keen on putting up buildings inspired by Chinese culture rather than international designs that may be out of character in the city. The Asia-Pacific Economic Co-operation leaders forum will be held at Yanqi Lake to the north of Beijing and organisers wanted buildings that are contemporary, but also distinctly Chinese, the architects said. "In the past decade, because we were less sure of our own cultural heritage, we tended to look to the West for design ideas,'' said Zhong Bing, a Shenzhen-based architect and an executive at the design firm commissioned to take charge of the project. "Nowadays we receive more requests from developers who prefer designs that are more Chinese.'' The Apec project involves building a conference centre, hotel and 12 VIP villas. "For this project they want something Chinese, contemporary and global,'' said Mao Xiaobing, another architect on the project. "They don't want a simple imitation of either Western or traditional Chinese designs. We think this approach represents the real direction of contemporary Chinese architecture." The villas, each with two presidential suites, a swimming pool and 20 to 40 guest rooms, are based on designs drawn from different regions. "The idea is for the participants to experience the diversity of Chinese culture," said Zhong. Between each villa, trees will be planted to guarantee privacy. The 40,000 square-metre conference centre will be a mix of traditional and modern architectural styles, the architects said. "The most striking feature in my design is the upward eaves which extend 17 metres on four corners. It symbolises a big bird extending its wings before flight," said Liu Fanglei, an architect at the Beijing Institute of Architectural Design. "It is taken from the architectural style of the Han and Tang dynasties. At the height of Chinese civilisation, the two dynasties produced marvels of architecture," he said. "It's sad that now we have so many new buildings across China which have little to do with our place and our culture." The conference centre will be on the middle of a 65-hectare island with the guest houses radiating out from it. "We want the buildings to merge well with the surroundings," said Mao.

China's ambassador to US blasts Japan's Abe (By By Chen Weihua in Washington chenweihua@chinadailyusa.com) Chinese Ambassador to the United States Cui Tiankai had harsh words for Japanese Prime Minister Shinzo Abe, whose recent visit to the controversial Yasukuni shrine in Tokyo sparked fresh outrage among neighboring countries. Cui said he does not personally hold any hope for Abe, and the Japanese leader should be held responsible for damaging relations between China and Japan. Abe visited Yasukuni on Dec 26, the first anniversary of his second-term premiership. The shrine honors Japan's war dead, including 14 Class-A World War II war criminals. "It is not a separate or random incident but has a deep background," Cui told journalists at the Chinese embassy in Washington DC on Friday afternoon. Cui believes what Abe has done cannot be explained as a personal action but rather as one of a prime minister and national leader. "This is a political action with clear political purpose," said Cui, who was China's vice-foreign minister before assuming his current post in April 2013. Cui said Abe should have been fully aware of the negative impact of the Yasukuni issue on Japan's relations with its neighbors. Abe became the first sitting Japanese prime minister in seven years to visit Yasukuni. The previous visit was made by then prime minister Junichiro Koizumi, when Abe served as chief cabinet secretary. "Why did he choose to pay homage to the Yasukuni shrine after seven years? This utterly reflects his view on history, his political stance and his policy direction," said Cui, who had served as China's ambassador to Japan from 2007 to 2010. "This issue, ultimately, is about whether the hard-won achievements of the world's antifascist war still count, and whether the post-war international order should be protected and whether Japan under Abe can continue on a path of peaceful development," Cui said. The war criminals honored at the Yasukuni include Iwane Matsui — a Japanese Imperial Army general who ordered the massacre of 300,000 Chinese civilians and unarmed soldiers in Nanjing from late 1937 to early 1938 — and Hideki Tojo — the then Japanese prime minister who was responsible for the attack on Pearl Harbor in December 1941, which drew the US into WWII. Cui said Abe's homage to these war criminals shows he wants to follow in their footsteps and reverse history's verdict. "Fundamentally, he wants to go back to the militarist path," he said. "So this is a matter of principle and absolutely not a personal or random action." While China and South Korea have expressed outrage at Abe's visit, the US government has also expressed its disappointment. Some mainstream US and European media published editorials denouncing Abe. In an editorial on Dec 28, the Washington Post described Abe's visit as a "provocative act". Cui said: "The international community should have a clear view on this … and we should not allow Abe to lead Japan in the wrong direction." Both Chinese and South Korean leaders have refused to meet Abe in recent years. Throughout his career, the right-wing Japanese leader has pushed for the revision of textbooks to whitewash Japan's WWII history; denied that government coercion was involved when "comfort women" from South Korea, China and the Philippines were forced into prostitution by the Japanese empire; and questioned whether Japan's wartime actions should be defined as "aggression". In the past year, Abe has also advocated revisions to Japan's pacifist constitution — a message he reiterated in his New Year's message last week. Article 9 of the Japanese constitution forbids the use of war to settle international disputes. Cui believes most Japanese people, who are peace-loving and want to live in peace with neighboring countries, will not support Abe's actions. A telephone survey by Kyodo News a week ago found 70 percent of respondents want Abe to heed the diplomatic fallout following his shrine visit. "If Abe's policy leads Japan in a wrong direction and history repeats itself, it will be the Japanese people who will become victims," Cui said. "So I think Japanese people can see through his deception."

Hong Kong*:  Jan 5 2014

Government subsidies proposed to end shortage of skilled labour (By Olga Wong olga.wong@scmp.com) Proposal for subsidies to help industries hit by a shortage of skilled labour bring in trainees set to be outlined in chief executive's policy address - Industries hit by a shortage of skilled labour could be offered government subsidies to attract trainees by raising wages. The idea has arisen with more school-leavers shunning manual jobs to attend university. A source close to the government believed Chief Executive Leung Chun-ying would address the issue in his policy address on January 15. Sectors set to benefit include electrical work, lift maintenance and car and aircraft repairs. These are identified as industries struggling to attract young people because of the relatively low starting wages and harsh working environment. The extent of the subsidies needed was unclear, but the source said the extra costs would be shared by both the administration and employers. "Companies should shoulder some of the responsibility for grooming fresh blood," the source said. "It will alleviate their staffing problems in the long run." A trainee electrician makes about HK$8,000 a month, less than half the wages of a fully trained and registered colleague. Typically, it takes about six years to complete the training and apprenticeship. But demand in the industry is rising because of the many new jobs being created by the expansion of the MTR and construction of the high-speed-rail link to Guangdong. Wong Kam-fai, chairman of the Electrical Engineering Professional Employees Association, welcomed the idea of subsidies. He said the industry, which employs about 70,000 people, would have to rely on imported labour if no effort was made to train young locals. Wong attributed the labour shortage to the increasingly common practice of big companies outsourcing work to contractors. "Small companies with limited resources don't bother to train newcomers. Their contracts are project-based so they don't have long-term vision," he said. "On the other hand, parents don't like their children giving up academic study for vocational training. Youngsters don't like working in buildings without air-conditioning or works involving heavy labour." In the UK, a planned upgrade to utilities infrastructure is set to see spending in the sector surge by £100 billion (HK$1.28 trillion) up to 2023, but companies in the industry say the county lacks the 200,000 skilled workers needed to do the jobs. The UK government has now injected more than £1 billion into a scheme to create 100,000 apprenticeship places. The Hong Kong government has noted in its population policy the need to change the mentality of Hongkongers who place academic education before vocational training. It will encourage employers to take a more active role in technical education. The government hoped to revamp a four-decade-old apprenticeship scheme and tackle challenges brought by an ageing population and shrinking workforce, the source said. It is also determined to use all available local labour before considering importing workers. The unemployment rate of 15- to 24-year-olds remained high at 9.7 per cent in 2012, compared to the overall average of 3.5 per cent. The figure does not take into account about 30,000 not engaged in employment, education or training, a population policy consultation document released in October showed.

Kerry Properties offering discounts of up to 15.8 per cent on new project (By Sandy Li sandy.li@scmp.com) Known for luxury homes in the Mid-Levels, such as Soho 38, Kerry said it is pricing The Summa with reference to its own projects, as there is little new supply in Sai Ying Pun. Kerry Properties is offering a total discount of 15.8 per cent, including a stamp duty subsidy of as much as 8.5 per cent, to boost sales at The Summa, its residential project in Sai Ying Pun to be launched next week. After that discount, the average price of the first 50 units at the 168-unit project is HK$22,989 per square foot. Chu Ip-pui, executive director of the developer, described the net amount as a “happy price” for homebuyers. The minimum price of a 756 sq ft flat on the 10th floor is HK$15.24 million after deducting the discount, compared with the list price of HK$17.92 million. “The launch price has taken as reference Kerry’s luxury projects, as there is no new supply in the area,” Chu said. Based on the discounted prices, he expects the first batch of 50 units to pull in a total of more than HK$1 billion if all are sold. Chu rejected the suggestion that the lower-price strategy for The Summa aimed to fend off competition from rival Cheung Kong’s heavily discounted Diva residential project in Tin Hau, saying the projects would each target a different group of buyers. Cheung Kong priced the first 50 flats at its project on Thursday at an average of HK$22,514 per sq ft. With the maximum discount of 25 per cent, the average price would be HK$16,886 per sq ft. Kerry Properties is a member of the Kerry Group, which controls the firm that publishes SCMP.com and the South China Morning Post.

Causeway Bay, Central, Mong Kok roadside pollution levels ‘serious’ on new air quality index (By Danny Lee danny.lee@scmp.com) Air quality readings at Yuen Long, Tsuen Wan, Kwai Chung and Sha Tin hit their worst levels on Hong Kong’s new air quality health index (AQHI) on Friday, posing a serious public health risk. Readings at Kwai Chung and Sha Tin during the evening rush hour reached the level that carries the most severe health advice: urging children, the elderly and people with heart or respiratory illnesses to avoid outdoor activities, especially in areas of heavy traffic. General monitoring stations from 10 other sites recorded AQHI levels of 8 (very high) and above at 6pm on Friday evening. Meanwhile, roadside pollution levels at Causeway Bay, Central and Mong Kok all reached ‘serious’ levels (10+). In a statement, the Environmental Protection Department said: “The elevated health risk is due to high levels of suspended particulates and nitrogen dioxide brought about by light wind, which has been prevailing over the territory since this morning, and the high level of ozone in the region.” A Hong Kong Observatory spokeswoman said winds over the New Territories were “quite light” on Friday afternoon. “We expect the hazy conditions to continue tomorrow,” said the spokeswoman. “The particulates and particles will accumulate over the territory because the winds are quite light.” Cooler, fresher weather is expected on Saturday morning, with minimum temperatures reaching 16 degrees Celsius expected in urban areas, and a maximum temperature of 21 degrees later in the day. The new AQHI was launched at the start of the week and a 10+ reading recorded at the Causeway Bay roadside monitoring station on Wednesday marked the first time the AQHI reached the most serious level. But it’s not all been as straightforward for environmental officials as a ‘system adjustment’ in Tai Po started registering 10+ levels, but this was later confirmed to be a false alarm. The new index, analyses three-hour average concentrations of ozone, nitrogen dioxide, sulphur dioxide and tiny particles (PM2.5 and PM10), using a scale from 1 to 10, and 10+. The level of combined pollutants is divided into five health-risk categories – low, moderate, high, very high and serious.

 China*:  Jan 5 2014

‘Meth village’ in massive raid was home to gangs with AK47s, hand grenades (By Adrian Wan in Beijing adrian.wan@scmp.com) Paramilitary police confiscate seized crystal meth in Boshe village. Police cars are seen during a raid where three tonnes of crystal meth were seized at Boshe village, Lufeng, Guangdong province, December 29, 2013. It was no overkill when more than 3,000 well-armed policemen and paramilitary troops, aided by helicopters and coastguard speedboats, swooped in on a seaside village in Guangdong for a drug bust on Sunday, state media said. When the authorities attempted to enter Boshe village before, they met with violent resistance from drug gangs armed with AK47s, homemade hand grenades and cross bows, the official Nanfang Daily reported on Friday. And the massive operation on the village, in the Lufeng area of Guangdong province, yielded astonishing results. Along with the three tonnes of crystal methamphetamine and 23 tonnes of drug-making ingredients seized, the police arrested 182 suspects belonging to 18 large drug gangs, and also seized at least nine guns and one hand grenade, state media reported. Among those arrested were 14 local Communist Party cadres who allegedly provided protection for the meth-making gangs running amok in the village, according to the newspaper. Previous raids were hampered by villagers who came out on their motorcycles in the hundreds, blocking the village's narrow roads. Some were even armed with AK-47 assault rifles, homemade grenades and other weapons. The drug rings produced "Ice", or crystal methamphetamine, and have claimed a sizeable share of China's underground drug market, selling their product as far afield as northeastern provinces and the southwestern metropolis of Chongqing, state media said. The arrest of ringleader Cai Dongjia, who was also the village party chief, was a crucial victory in years of police operations against the village's meth industry. Cai used to be involved in making drugs, but has acted mostly as a protector for the gangs in recent years, and was suspected of embezzlement and bribing other officials, state media said. Cai Hanwu, another local party official suspected of involvement in the drug trade, was sleeping at home when arrested. Police found 350 kilograms of meth at his home. “These villages aren’t big, but drug-making households were commonplace,” an unnamed police officer was quoted as saying. More than 20 per cent of the 1,700 households in the village are suspected of involvement in the meth industry, which has seriously polluted the village’s ground water and damaged crops, Xinhua quoted Qiu Wei, a senior official with the anti-narcotics bureau of Guangdong police as saying. "Lufeng has long been notorious for drugs. Over the past three years, it has been the source of one-third of the crystal meth sold nationwide," Qiu said. Provincial police deputy director Guo Shaobo said Sunday's operation was the largest drug bust in the province's history in terms of arrests, drugs and raw materials seized. 

American double standard - Chinese life worth less than us. 美國的雙重標準 - 中國人的生命價值低於美國人。

Hong Kong*:  Jan 4 2014

Cheung Kong woos Diva buyers with discounts (By Yvonne Liu yvonne.liu@scmp.com) [Hutchison Whampoa, one of Hong Kong’s largest listed companies, is controlled by Cheung Kong Group, a property company. Hutchison's operations span ports, property and hotels, retailing, power generation and telecommunications. It owns Cheung Kong Infrastructure, and is headed by Li Ka-shing, Asia’s wealthiest man.] Cheung Kong has priced the first batch of flats at its Diva residential project in Tin Hau at about 20 per cent below that of a project launched nearby in November. "We wanted to surprise the market with a higher discount on the first batch of flats. It's our first new project this year. We hope people will find our asking prices reasonable," executive director Justin Chiu Kwok-hung said. The developer yesterday announced the average price of the first 50 flats at the 118-unit Diva is HK$22,514 per square foot, 16 per cent less than the price of Henderson Land's The Hemispheres released for sale in November, without extra discounts. Diva sales will start next week. Cheung Kong is offering a maximum total discount of 25 per cent for Diva flats, compared with the 21 per cent discount Henderson offered for The Hemispheres. Cheung Kong's offer includes 7 per cent discount on cash payment, 3 per cent discount to club members and 7.5 per cent discount on stamp duties. A further 7.5 per cent discount is available to buyers only until January 14. Corporate buyers can also gain this discount but it is limited to the first 10 buyers. With the discount, the average price of the flats at Diva comes to HK$16,886 per square foot, 20 per cent less than The Hemispheres' HK$21,155. The minimum price of a 493 square foot unit on the third floor is HK$7.97 million. Andy Chong, senior director at Ricacorp, said: "The asking price falls short of my expectations. I thought it would at least be HK$19,000 per square foot. Probably the developer plans to boost property sales this year after they were unable to meet the sales target last year." Chiu was confident Diva would sell well and that the firm's overall sales this year would be better than last year. Meanwhile, Sun Hung Kai Properties sold all the 195 flats of its fourth batch at Century Gateway II in Tuen Mun on Wednesday, in the strongest New Year's Day sales of the past decade. Sharmaine Lau Yuen-yuen, chief economist at mReferral Mortgage Services, said strong primary market sales boosted mortgages for new homes by 70 per cent to 643 in December, the highest in six months. But mortgages for existing properties continued to fall, hitting the lowest level in nearly two years. ARA Asset Management, an affiliate of Cheung Kong Group, has sold International Financial Centre in Nanjing for about three billion yuan (HK$3.8 billion). It was owned by a real estate fund managed by ARA.

Manila bus siege survivor Yik Siu-ling ‘reborn’ after surgery in Taiwan (By Lawrence Chung in Taipei lawrence.chung@scmp.com) Yik Siu-ling shares a celebratory cake with surgeon Wei Fu-chan at Chang Gung Hospital in Taiwan. Yik Siu-ling (right) with her twin sister, Elaine. Manila hostage-crisis survivor Yik Siu-ling said yesterday she felt "reborn" and hopeful for her future after a successful jaw operation in Taiwan. But the 37-year-old hit out at the Hong Kong hospital responsible for previous, failed treatment of her shattered jaw and said she had never received a satisfactory explanation for what went wrong. Yik underwent 33 operations in three years at the Prince of Wales Hospital in Sha Tin, but problems with inflammation and bone abnormalities meant the jaw reconstruction work had to be reversed. A former top surgeon at the hospital this week called for an inquiry into the mother-of-one's treatment, which he said caused her "unnecessary suffering". "I am quite unhappy because the hospital did not explain to me what went wrong three years ago," said Yik, who sat in a wheelchair as she met the media for the first time since undergoing microsurgery on her lower jaw at Chang Gung Hospital on December 18. "I feel that Prince of Wales Hospital did not do well in the area of explanation," she said in response to a question from the South China Morning Post. Asked about comments by Professor Andrew Burd, former head of plastic, reconstructive and aesthetic surgery at Prince of Wales, who had said the hospital's managers had prioritised media management over medicine, Yik said she was "not clear about that". "Actually, doctors in Hong Kong were quite good to me and helped me a lot three years ago," she said, adding that surgery was never easy. She said she had spent some HK$400,000 so far in Taiwan and was not sure whether she would be able to cover the final bill when it arrived. She received an undisclosed sum from Filipino businessmen for the operation as part of a reconciliation effort between Manila and Hong Kong. The two have been at loggerheads since eight Hongkongers were killed by fired policeman Rolando Mendoza in August 2010. "The surgery cost is well over HK$1 million, and being a foreigner it's difficult for me to get any discount or exemptions," she said, adding that if she did not have enough to pay for follow-up operations, including plastic surgery, she might have the operations in Hong Kong. Despite the financial help from the Filipino businessmen, Yik said the row between Hong Kong and the Philippines had yet to be settled because Manila had not apologised or provided compensation to other survivors and the families of victims. Dr Wei Fu-chan, who led the team of surgeons that operated on Yik, said his patient would have new teeth implanted in about four months. "In six months, she should be able to return to the condition she had hoped for, and show others her new appearance," Wei said, adding that Yik should be able to chew without difficulty in one year.

 China*:  Jan 4 2014

Drug raids in Lufeng, Guangdong, seize 3 tonnes of crystal meth (By He Huifeng huifeng.he@scmp.com) Massive crackdown on community near Lufeng ends in seizure of 3 tonnes of Ice and 182 arrests - A massive Guangdong drugs operation involving more than 3,000 personnel in 109 separate raids ended in the seizure of three tonnes of Ice and 182 arrests - all in a single village. The huge swoop was on the village of Boshe in the notorious drug-producing area centred on the eastern city of Lufeng .The 182 suspects allegedly belonged to 18 production and trafficking rings based in and around Boshe. Another 23 tonnes of raw materials for drug production were recovered. Police did not reveal whether the seized Ice, or crystal methamphetamine was for export or domestic consumption. Nor did they reveal its value, but it is estimated to be worth about HK$1.8 billion in Hong Kong. "Lufeng has long been notorious for drugs. Over the past three years, it has been providing one-third of the crystal meth nationwide," Xinhua quoted a senior official of the Guangdong police anti-narcotics bureau, Qiu Wei , as saying. He added that Boshe was the most notorious area for drugs in Lufeng, with more than a fifth of households linked to production and trafficking rings. Paramilitary personnel, police and border guards from Guangzhou, Shantou , Huizhou , Meizhou and Heyuan launched the raids on the village - population 14,000 - before dawn on Sunday using helicopters and speedboats. Provincial police deputy director Guo Shaobo said it was the province's largest drug bust in terms of arrests, drugs and raw materials seized. It also represented the broadest co-operation among government units. Lufeng has a long history of producing drugs since the 1990s. More than half the 500 prisoners in the city's detention centre were involved in drug-related crimes, the Southern Metropolis Daily reported. It said Lufeng was an impoverished area where most of the farmland was sandy. Growing numbers of villagers had joined the drug rings and turned their homes and farms into crystal meth factories, it said. The drug rings were usually armed with guns and local villagers helped with tip-offs about impending raids, thwarting recent police crackdowns. "It's an open secret in Lufeng and Shantou that many local corrupt officials have helped protect those drug gangs for years," said Li Wei, a Shantou resident. Guo said Guangdong police had detained 10,836 suspected drug traffickers and seized 8.1 tonnes of drugs since launching "Operation Thunder" on July 30 to curb the drug trade. The Public Security Ministry's Narcotics Control Bureau said last year that police cracked more than 122,000 drug-related cases in 2012 and arrested 133,000 suspects. Among the 45.1 tonnes of drugs seized were 16.2 tonnes of crystal meth.

Hong Kong*:  Jan 3 2014

Public's trust in Hong Kong media sinks to all-time low, credibility poll shows (By Jennifer Ngo) RTHK and South China Morning Post lead their categories, but overall score for Hong Kong media dip to lowest since Chinese University survey was launched in 1997 - Hong Kong news media credibility dipped to an all-time low since 1997 according to a Chinese University survey released on Thursday. The 30 print and electronic media organisations received an overall rating of 6.18 out of 10 from phone survey respondents, with 10 being “extremely credible”. The university’s School of Journalism and Communication, which conducted the poll in late November and early December last year, also asked the 970 participants to rate each media outlet on a 10-point scale. Readers’ trust has dropped since the 6.84 overall score in 2009, and 6.36 in 2010. The latest figure also marks the lowest point since 1997, when the survey was introduced. The poll has been done irregularly since then – in 2001, 2006, 2009, 2010 and last year. Public broadcaster Radio Television Hong Kong (RTHK) was deemed the most credible among eight electronic media, with an average rating of 6.99. Asia Television Limited (ATV) scored the lowest with an average of 4.74. Television Broadcasts Limited (TVB), meanwhile, dropped two spots from second to fourth-most-credible among electronic media outlets. The South China Morning Post was ranked the most credible among 22 print media – a place it has held since the 2006 edition of the poll – with an average score of 6.98. It was followed by the Hong Kong Economic Times at 6.78 and then by MingPao at 6.74. Sharp Daily, a free newspaper also owned by Apple Daily publisher Jimmy Lai Chi-ying, was found to be the least credible among print outlets, with a score of 4.46. It went out of print after 25 months of operations. Regarded as a Communist Party mouthpiece, Ta Kung Pao ranked second to last with 4.68 points. This year, the survey included three free newspapers – Sky Post, Sharp Daily and the New Evening Post. Another new entry was House News, the first online-only news portal posting original content, but it was counted in the “print media”. It ranked 10th in the category.
CREDIBILITY RANKINGS (2013):
Electronic Media 
1 RTHK 6.99 points
2 Commercial Radio 6.48
3 Cable News 6.38
4 TVB 6.25
5 Now TV 6.14
6 Metro Radio 5.92
7 HKBN bbTV 5.74
8 ATV 4.74 

Print Media
1 South China Morning Post 6.98
2 Hong Kong Economic Times 6.78
3 MingPao 6.74
4 The Standard 6.71
5 Hong Kong Economic Journal 6.46
6 Singtao Daily 6.42
7 Headline Daily 5.87
8 Oriental Daily 5.85
9 Am730 5.82
10 House News 5.76
11 SingPao 5.75
12 Metro Daily 5.71
13 Hong Kong Daily News 5.46
14 Sky Post 5.44
15 Hong Kong Commercial Daily 5.21
16 The Sun (Hong Kong) 5.15
17 Apple Daily 4.98
18 New Evening Post 4.94
19 Wen Wei Po 4.89
20 Ta Kung Pao 4.68
21 Sharp Daily 4.46
22 Tin Tin Daily News* -
*Now-defunct paper was only included until the 2001 survey, but was included in the latest list for comparison.
Source: Chinese University

Beijing singer breaks news of Hong Kong 'divorce' from son of revolutionary hero (By Amy Li chunxiao.li@scmp.com) Actress and social icon Zhao Xinyu announced via Weibo on Wednesday her divorce in Hong Kong from Ye Xuanlian, son of the late revolutionary hero Marshal Ye Jianying - A family photo of Zhao Xinyu, her son and Ye Xuanlian that she posted in December. Zhao Xinyu,a Beijing socialite and singer known for her lavish and controversial lifestyle, announced on Weibo on Thursday morning that she had officially divorced Ye Xuanlian, son of late Marshal Ye Jianying, one of China's most revered founding fathers. "On December 31, 2013, I applied to divorce Mr Ye Xuanlian in Hong Kong. A 24-year-old marriage ended. I received 6 million yuan from Ye," read her post. Zhao was born in 1969, according to Chinese media. But her announcement seemed to have generated more questions than answers. Many on social media said they were surprised since, following years of rumours, Zhao confirmed on Weibo less than a month ago that she was married to Ye. Zhao is mother to Ye's only son, Ye Zhaoyang, according to the rumours. Ye's former wife, Susan So, died in 2012, according to Chinese media reports. The married couple seemed to have resided in Hong Kong prior to So's death. Ye is known to be a member of the Communist Party but seemed to have spent most of his time running businesses in Hong Kong, according to the Chinese business website Hexun.com. It is not clear if Ye is a Hong Kong resident. In December, Zhao confronted a microblogger who questioned her relationship with Ye by replying: "My husband is Ye Xuanlian". Zhao also posted a family photo of herself, Ye, and a young boy who appeared to be their son. "Thank you for caring about me, my friends, I am happy," she wrote. Many speculated that, based on her posts, Zhao and Ye had finally tied the knot some time after Ye's wife passed away. This was never confirmed. Yet the son Zhao bore seemed to have been accepted by Ye's wife So and their children. When Ye's daughter, Ye Mingzi, got married in Beijing in 2009, Ye Zhaoyang appeared in a couple of the wedding photos, standing next to Ye Xuanlian, So, and Ye Mingzi. Over the years, the "mysterious" relationship has drawn a lot of attention and interest from online users. Among other things, bloggers questioned how Ye Xuanlian was able to get away with having a mistress and son without being punished by the authorities. Others wondered if the marriage between Zhao and Ye was indeed legal as the image of two certificates she posted on Wednesday on Weibo seemed to indicate. "Isn't it illegal to be married with two women at the same time?," many asked. Zhao, outspoken and sometimes defiant, has often fallen victim to verbal attacks on Weibo, yet she has always fiercely defended her lifestyle and her decisions. An active party goer who claimed to be close with celebrities such as singer Faye Wong and author Hong Huang, Zhao has been frequently featured in the news. In 2009, she was accused of being the mastermind behind an attack on an image of actress Zhang Ziyi. A group of thugs, after shouting obscenities outside Zhang's Beijing home, destroyed a huge poster of her by pouring black ink over it. Zhao later denied she was involved in the attack. Zhao didn't respond to an inquiry sent by the Post on Thursday. Yet on Thursday afternoon, she posted a message that seemed to have offered an explanation for the divorce. "There is nothing to be surprised about," read her post, "Someone from the entertainment business with a child has broken into my home, and it's too crowded for me." "Is this karma?," commented many in response.

 China*:  Jan 3 2014

China denounces ‘despicable’ arson attack at San Francisco consulate 中國譴責在舊金山中國領事館'卑鄙'縱火 (By Keira Lu Huang keira.huang@scmp.com) China has condemned an arson attack on the Chinese Consulate-General in San Francisco, which was torched on Wednesday evening at 9.25pm, severely damaging the front door. The consulate reported on its website that a suspect who had emerged from a parked minivan in front of the main entrance of the consulate had poured two buckets of petrol onto the front door and then set it on fire. Officials from the San Francisco Police Department, Fire Department, and the Bureau of Diplomatic Security of the US State Department arrived on the scene immediately. No one was hurt in the incident, and an investigation is now underway. “The attack is a violent crime, posing a threat to the safety of the consulate staff and the residents living nearby,” the consulate spokesperson remarked on the arson attack. “We strongly condemn this despicable act and have already made representations with the US side on the attack. “We urge the US side to take all necessary measures to provide adequate protection for Chinese consular personnel and properties, and bring the culprit(s) to justice as soon as possible.” The consulate was attacked in a similar incident in March 2008, in which a flammable liquid was poured on a metal door at the building and set alight at around 4am.

Beijing urges Japan's Shinzo Abe to learn from post-war German leaders - German Chancellor Willy Brandt falls to his knees at a Polish monument to wartime victims. 北京敦促日本安倍晉三從戰後德國領導人學習 - 德國總理勃蘭特跪倒在波蘭受害者紀念戰碑 (By Agence France-Presse in Beijing) Chinese state media kept up the heat on Japanese Prime Minister Shinzo Abe on the first day of the new year, urging him to learn from Germany in dealing with divisive historical issues. "Abe's conspicuous lack of historical honesty contrasts shamefully with the courage and vision of late West German Chancellor Willy Brandt," Xinhua said in a commentary. It highlighted Brandt's 1970 visit to a monument in Poland to victims of the 1943 Warsaw Ghetto uprising - a revolt by Jews against deportations to Nazi death camps that was brutally crushed by German troops - when he famously fell to his knees. What Brandt did was a "spontaneous act of genuine repentance", Xinhua added. "He said no words, but his silent apology spoke a lot: Germany repents its history, is willing to make up for the past, and stands ready to earn the international trust it needs to move on." The Beijing News ran photos of Brandt kneeling in Warsaw and current German chancellor Angela Merkel standing before a wreath with her head bowed during a visit to the site of the Dachau concentration camp. The photos accompanied short articles on reactions - including by the German government - to Abe's shrine visit. "The sincere remorse and in-depth reflection of Brandt and other German leaders paved the way for their nation to be accepted by the international community," Xinhua said. "The moment Brandt knelt down, his nation stood up." Yesterday one of Abe's cabinet ministers paid his own visit to the shrine. Yoshitaka Shindo said he was renewing a wish for peace.

Hong Kong*:  Jan 2 2014

Happy New Year! Thousands line Victoria Harbour to welcome 2014 (By Danny Lee, Johnny Tam, Shirley Zhao and Ng Kang-chung) Choking air pollution not enough to deter tens of thousands of revellers - Cheers and applause echoed through the streets of Hong Kong as the clock turned midnight, marking the arrival of 2014. At midnight, according to police estimates, there were almost 400,000 revellers on both sides of the Victoria Harbour – 320,000 gathered in West Kowloon, Tsim Sha Tsui and Hung Hom while 62,000 assembled in Central, Wan Chai and Causeway Bay. The biggest crowds were drawn to Victoria Harbour. Waves of people flooded vantage spots along the waterfront in Tsim Sha Tsui, Central, and Golden Bauhinia Square in Wan Chai, where an eight-minute musical fireworks display lit up the skies. Tens of thousands saw in the new year despite choking air pollution, and people hugged and kissed as the countdown ended. One couple had an especially passionate kiss. As the clock ticked down to the end of 2013, Paul Kwok went down on one knee and, to loud cheers from fellow revellers at Times Square in Causeway Bay, asked girlfriend Carol Wong: “Will you marry me?” After a short pause, a surprised Wong replied with a loud, “Yes.” Kwok said: “I want to be with her for the rest of my life so I decided to make a marriage proposal when it is the turn of the year 2013 to 2014.” In Cantonese, “13-14” is pronounced like the phrase “being together for a lifetime”. The couple have been dating for about a year. Those seeking a more luxurious night joined countdown cruises touring the harbour. The Marine Department estimated there were 100 pleasure boats in the harbour, and 28 marine launches went on patrol to do safety checks. In Lan Kwai Fong most bars and clubs reported full houses. Some expected business 50 per cent higher than usual. Among the revellers was pilot Rob Jones, whose New Year wish was for Hong Kong to turn “greener” this year. “It makes me sad that the haze is here most of the time,” he said. Roadside recordings under the air quality health index rose above 10 in Causeway Bay, indicating8 a “serious” risk to health, and hovered around 9, indicating a “very high” risk, in Central. Fellow pilot Isaac Zhang said: “I hope for cheaper drinks … especially with the cost of living going up at the moment.” At Times Square young revellers gathered in their thousands to watch the countdown show. Mainland tourist Wayne Wang, 32, from Beijing, said: “I came to celebrate the New Year with everyone and hope everyone will have a smooth year ahead.” Instead of the usual Apple countdown, revellers at Times Square witnessed the dropping from a 22-metre tall LED tower of a big sweet, as seen in the popular smartphone game Candy Crush. On the Kowloon side of the harbour, fun-seekers and shutterbugs gathered as early as noon. Many people brought portable stools or sheets to rest on. Hong Yan, from Shenzhen, said celebrating the new year in Hong Kong was more fun than in the border city, and there were more festivities. This afternoon, crowds on Canton Road will be greeted by more than 530 traditional Chinese mascots in a dragon and lion dance parade.

 China*:  Jan 2 2014

China ‘mulls revamping military regions in bid to strengthen attack capability’ (By Agence France-Presse) Japanese newspaper report comes amid rising tensions in region - China is considering reorganising its seven military regions into five in a bid to respond more swiftly to a crisis, the Japanese daily Yomiuri Shimbun reported on Wednesday. The news comes amid rising tensions over Beijing’s territorial claims in the region, with China and Japan squaring off over a chain of uninhabited islands in the East China Sea. Each of the new military regions will create a joint operations command that controls the army, navy and air force as well as a strategic missile unit, the major daily said citing senior Chinese military officials and other sources. The planned revamp would mark a shift from the current defence-oriented military that relies mainly on the army to one that ensures more mobile and integrated management of the army, navy, air force and strategic missile units, Yomiuri said. “It is a proactive measure with eyes on counteracting the Japan-US alliance,” the daily quoted one of the officials as saying. Tokyo and Beijing are locked in a simmering territorial row over Tokyo-controlled Senkaku Islands in the East China Sea which China also claims and calls the Diaoyus. The United States, while insisting it does not take sides on sovereignty disputes, has said that the islands are under Tokyo’s management and so come under a security treaty in which it is required to defend officially pacifist Japan against attack. Under the proposed military structure China aims to strengthen its attack capability to secure air and naval superiority in the South China Sea and the East China Sea, the daily said. The newspaper also reported that Japan plans to deploy its first “Global Hawk” unmanned surveillance planes at an airbase in Misawa, on the northern tip of Japan’s main Honshu Island, adjacent to a US airbase where the same type of aircraft will be based later this year. Japan’s defence ministry plans to deploy three Global Hawk drones between April next year and March 2016, Yomiuri said. Misawa is located about 2,300 kilometres (1,430 miles) north of the Senkakus which Chinese coastguard ships have frequently approached, sometimes moving into territorial waters, since Tokyo nationalised some of the islands in September 2012. Equipped with sophisticated sensors and radars, the Global Hawk drone is capable of flying more than 30 hours non-stop and detecting the movements of vessels, aircraft and missiles within a radius of 500 kilometres from an altitude of 18,000 metres. It does not have attack capability. The defence ministry and the US air force will jointly maintain the drones to ensure they operate effectively, the report said. In addition, information collected by the Global Hawk will be shared and jointly analysed, Yomiuri said. China, which has been ramping up military spending over its past decade of strong economic growth, has also tussled with the Philippines and Vietnam over maritime territories. 

Gen Y's motto: Show me the money (By Shi Jing) Graduates seek job opportunities at an employment fair in Beijing on Dec 13. A survey has found that the most important metric of career success for China's Generation Y (aged 18 to 30) is creating personal wealth. When it comes to defining success, the standards vary from person to person and can include intangible rewards. But with few exceptions, young people in China these days have one main requirement: cold, hard cash. In a survey by global human resources firm Hays, by far the most important metric of career success for China's Generation Y (aged 18 to 30) is creating personal wealth, as 64 percent of the 1,000 young people surveyed listed it as their top priority. In other surveyed countries, job satisfaction and enjoyment of work were the top priorities. But China's Generation Y workers are less likely than those in other countries to look for work flexibility — and far more likely to be driven by the potential to earn a bonus. "This is not surprising, given that China remains a relatively poor developing country where many people have been attracted to the cities from rural areas in the hope of making a better life for themselves. "Generation Y Chinese now have the chance to increase their income by working hard and furthering their careers. Making money appears to be the most important incentive for the majority of people surveyed," said an expert at Hays. Lu Yao, 30, has had three jobs since he finished graduate school in 2009. In each case, the motivation was the same: more money. Cash is king - Lu's first job was as a consultant at an overseas bank. The pay was good enough for a fresh graduate — about 7,000 yuan ($1,140) a month. But it was only good enough for two years, at which point he went to work as a product manager at a domestic securities company. Disheartened by the mainland stock market's lethargic performance throughout much of 2013, he moved again in November, going to a smaller securities company that nonetheless pays better. "It was kind of sad for me to see the company where I worked shrink over the years. But cash is king," he said. "I need the money to pay a mortgage, prepare for a wedding and maintain my current living standard. "Considering all these things, money always comes first compared with all other things, such as the company's reputation or what the boss is like," he said. Tang Aijiao, 29, used to work for a large electronics and information group in Shanghai. She was mainly responsible for making videos for the company's communications department, a job many outsiders would jump at. But she quit in October, also over money. "The company wanted me to work in the United States branch office for at least three months every year. But they refused pay me extra for this. That is totally unfair. I immediately handed in my resignation without hesitating," she said. A month later, she landed a job at a domestic advertising agency in Shanghai, heading the new media department. "The content of the job is up-to-the-moment. I can learn a lot, and I don't need to relocate overseas. The most important thing is, my monthly salary has risen from 6,000 yuan to 10,000 yuan. Why not?" she said. Even those who can profit from their family business may fret over money. Wan Ling, 28, has been working in the hardware business started by her grandfather in the early 1990s. As a sales manager, she makes roughly 10,000 yuan every month, which is considered very good among her peers. But for her, it's never enough. "I really like shopping. So a 10,000 yuan salary can hardly suffice," she laughed. "But the most important thing is, I don't want to live under the wings of my grandfather or my family all my life. "I want to have my own business, using all I learned at school and devoting all my passion to it," she said. Different place. "In some important respects, the findings show that China is a very different place than the United Kingdom or other Western countries, said James Cullens, group human resources director of Hays. "Young people have different values, as you might expect in a very different culture stretching back for thousands of years. "Yet in other ways, young people appear the same everywhere in the world," Cullens said. Although young Chinese people are eager to earn money, they have a deeply rooted respect for learning — far stronger than in other countries surveyed. When asked what they wanted most from their careers, 55 percent rated acquiring knowledge and expertise as a priority — far higher than in other countries. Young Chinese also value opportunities for training and development and ongoing study opportunities, seeing these as routes to a successful career. Organizations able to offer such opportunities, coupled with clear personal development strategies, are likely to have the edge as attractive employers in the eyes of many talented and ambitious young Chinese people, the survey found. Another finding of the survey was that Generation Y Chinese, while keen to make money and enjoy a successful career, also crave recognition for their achievements. Asked how they would define career success, creating personal wealth came out on top, but it was closely followed by the wish to gain public and professional recognition. Even job titles may, for some people, have a disproportionate value. Hays noted that human resources managers need to consider this as part of the overall employment offer. Yang Kai, 29, has been working in his father's company in Shanghai, which exports glassware to Europe, since he earned a postgraduate degree in Australia four years ago. He chose to study business administration with the goal of taking over the family business. "I don't care how much the company pays me. My only wish is to take over my father's business. At this point, our company is only taking orders and doing the simple manufacturing work. "I wish to export our own designs to European countries, which is definitely my long-term career goal," he said.

China ready to further advance ties with US: Chinese FM (By Xinhua) China is willing to work with the United States to continue to promote the development of Sino-US relations in 2014, Chinese Foreign Minister Wang Yi said Tuesday. To that end, China stands ready to work with the United States to implement the important consensus reached by Chinese President Xi Jinping and US President Barack Obama, make concerted efforts to build a new type of major country relationship, advance practical cooperation, and properly handle differences, said Wang in a telephone conversation with US Secretary of State John Kerry. China and the United States will mark the 35th anniversary of their diplomatic ties on January 1, 2014, Wang said. Over the past 35 years, Sino-US relations have achieved historic progress, which has brought enormous benefits to the two countries and two peoples and played an important role in promoting regional and global peace, stability and prosperity, he said. Echoing Wang's remarks, Kerry said that in the current international and regional situation, the two countries need to cooperate in an increasing number of areas. In the new year, Kerry said, the United States hopes to boost exchanges and cooperation with China, remain committed to building a new model of major country relations and jointly cope with global challenges so as to exercise more positive influences on the world. They also exchanged views on such issues as that concerning Japan, the situation on the Korean Peninsula, the peace talks between Israel and the Palestinians.

Hong Kong*:  Jan 1 2014

NSA's elite hacking unit revealed (By Associated Press in London) Agents tampered with computers before delivery; used Microsoft’s crash reports in spying, according to Der Spiegel magazine - Microsoft's crash reports, which its engineers use to fix bugs, was used to help spies break into Windows, a report says. A German magazine lifted the lid on the operations of the National Security Agency’s hacking unit, reporting that American spies intercept computer deliveries, exploit hardware loopholes and even hijack Microsoft’s internal reporting system to spy on their targets. Der Spiegel‘s revelations on Sunday relate to a division of the NSA known as Tailored Access Operations (TAO) which is painted as an elite team of hackers specialising in stealing data from the toughest of targets. Citing internal NSA documents, the magazine said that TAO’s mission was “getting the ungettable”, and quoted an unnamed intelligence official as saying that the team had gathered “some of the most significant intelligence our country has ever seen”. Der Spiegel said TAO had a catalogue of hi-tech gadgets for particularly hard-to-crack cases, including computer monitor cables specially modified to record what is being typed across the screen, flash drives secretly fitted with radio transmitters to broadcast stolen data over the airwaves and fake base stations intended to intercept mobile phone signals on the go. The NSA does not just rely on James Bond-style spy gear, the magazine said. Some of the attacks described in the report exploit weaknesses in the architecture of the internet to deliver malicious software to specific computers. Others take advantage of weaknesses in hardware or software distributed by some of the world’s leading information technology companies, including Cisco Systems and China’s Huawei Technologies, the magazine reported. Der Spiegel cited a 2008 mail order catalogue-style list of vulnerabilities that NSA spies could exploit from companies such as California-based Western Digital Corporation or Texas-based Dell. The magazine said that suggested the agency was “compromising the technology and products of American companies”. Microsoft’s weakness - Old-fashioned methods get a mention, too. The report said that if the NSA tracked a target ordering a new computer or other electronic accessories, TAO could tap its allies in the FBI and the CIA, intercept the hardware in transit, and take it to a secret workshop where it could be fitted with espionage software before being sent on its way. This is among the NSA’s “most productive operations”, and has helped harvest intelligence from around the world, one document cited in the report stated. One of the most striking reported revelations concerned the NSA’s alleged ability to spy on Microsoft’s crash reports, familiar to many users of the Windows operating system as the dialogue box which pops up when a game freezes or a Word document dies. The reporting system is intended to help Microsoft engineers improve their products and fix bugs, but Der Spiegel said the NSA was also sifting through the reports to help spies break into machines running Windows. One NSA document cited by the magazine appeared to poke fun at Microsoft’s expense, replacing the software giant’s standard error report message with the words: “This information may be intercepted by a foreign sigint [signals intelligence] system to gather detailed information and better exploit your machine”. Microsoft said that information sent by customers about technical issues in such a manner is limited. “Microsoft does not provide any government with direct or unfettered access to our customer’s data,” a company representative said on Sunday. “We would have significant concerns if the allegations about government actions are true.” Sourced from Snowden? Microsoft is one of several US firms that have demanded more transparency from the NSA and worked to bolster their security in the wake of the revelations of former intelligence worker Edward Snowden, whose disclosures have ignited an international debate over privacy and surveillance. Der Spiegel did not explicitly say where its cache NSA documents had come from, although the magazine has previously published a series of stories based on documents leaked by Snowden, and one of Snowden’s key contacts, American filmmaker Laura Poitras, was listed among the article’s six authors. It was as yet unclear whether Snowden was the source for the latest story. Another company mentioned by Der Spiegel, though not directly linked with any NSA activity, was Juniper Networks, a computer network equipment maker in California. “Juniper Networks recently became aware of, and is currently investigating, alleged security compromises of technology products made by a number of companies, including Juniper,” the company said in an e-mail. “We take allegations of this nature very seriously and are working actively to address any possible exploit paths.” If necessary, Juniper said, it would, “work closely with customers to ensure they take any mitigation steps”.

Hong Kong's new air quality index, phone app debut to 'very high' smog readings (By Ernest Kao ernest.kao@scmp.com) A ratings system to replace the decades-old API off to a smoggy start with particulate readings at risky levels - A visitor at The Peak finds the city skyline veiled in a haze. The new Air Quality Health Index (AQHI) launched without a glitch on Monday morning – but it was still bad news overall in terms of overall air quality. Urban roadside pollution at all three roadside air quality monitoring stations hit levels of “10” by 6pm on Monday, corresponding to “very high” levels on the index’s new five-tier health risk scale. The AQHI replaced the 18-year-old Air Pollution Index (API) on Monday. The new index now analyses three-hour readings of the average concentrations of four major pollutants on a a scale of one to 10 and 10+, and is grouped into five colour-coded health-risk categories: low (green), moderate (orange), high (red), very high (brown) and serious (black). At Causeway Bay, the AQHI reached a "very high" level of 9 at 1pm. Levels of PM10 – suspended particles tiny enough to penetrate the lungs – hit 116 micrograms per cubic metre. The World Health Organisation considers any level above 50 micrograms per cubic metre unsafe. By 6pm in the evening, the Causeway Bay, Central and Mong Kok stations had all hit level 10, just one level short of "severe". The Environmental Protection Department gave all three a health advice alert of “C”, meaning children, elderly and people with existing heart or respiratory illnesses are urged to "reduce to the minimum" physical exertion and activities outdoors, especially in areas of heavy traffic. Pollution at most of the city’s 12 general stations, including a new one at Tuen Mun, hovered at “moderate” health risk levels of 5 and 7 in the afternoon before deteriorating in the late evening. Central/Western, Sham Shui Po, Kwai Chung, Yuen Long and Tuen Mun hit levels as high as 9 at 6pm. Meanwhile, a new free smartphone app which issues alerts and allows users to check monitoring station data in real time, was launched simultaneously. But most citizens today did not seem aware of the new development, nor did they feel an app would make a difference. “I didn’t even know how the old API worked so I don’t think the data from the new index or app would be very helpful,” said Jack But, 28, who works in Causeway Bay. “Air pollution seems bad everyday so I can’t imagine why an app would be useful.” Student Joey Lam said she would consider downloading the app but questioned whether alerts would really be helpful for public awareness of pollution and health. “So people get an alert everyday at 7am, and then what? They’ll probably just look at it and then forget about it,” said Lam. “And what about the elderly people who do not have smartphones?” Australian schoolteacher Joe Butler was more sceptical. “Even if the air is visibly bad, the government always finds a way to say it’s fine.” “I live in Tung Chung so I can taste and see the bad air. I don’t need an app to tell me how bad it is … I’d rather the government spend more effort trying to tackle pollution at the source.” Butler said he would leave Hong Kong in the next few years partly due to the worsening air quality. “It’s a long-term concern I have for my three children.” The department’s new mobile app comes with a set of user friendly features. A location-based based shows users the level of pollution in each district. Alerts and notifications for roadside pollution data and risk levels can be customised and are sent twice each day, with the first at 7am. The EPD says the new AQHI system aims to better communicate air pollution information to the public to alert them to take precautions as necessary.

German magazine reveals NSA hacking tactics (By China Daily) A German magazine lifted the lid on the operations of the National Security Agency's hacking unit Sunday, reporting that American spies intercept computer deliveries, exploit hardware vulnerabilities, and even hijack Microsoft's internal reporting system to spy on their targets. Der Spiegel's revelations relate to a division of the NSA known as Tailored Access Operations, or TAO, which is painted as an elite team of hackers specializing in stealing data from the toughest of targets. Citing internal NSA documents, the magazine said Sunday that TAO's mission was "Getting the ungettable," and quoted an unnamed intelligence official as saying that TAO had gathered "some of the most significant intelligence our country has ever seen." Der Spiegel said TAO had a catalog of high-tech gadgets for particularly hard-to-crack cases, including computer monitor cables specially modified to record what is being typed across the screen, USB sticks secretly fitted with radio transmitters to broadcast stolen data over the airwaves, and fake base stations intended to intercept mobile phone signals on the go. The NSA doesn't just rely on James Bond-style spy gear, the magazine said. Some of the attacks described by Der Spiegel exploit weaknesses in the architecture of the Internet to deliver malicious software to specific computers. Others take advantage of weaknesses in hardware or software distributed by some of the world's leading information technology companies, including Cisco Systems, Inc, the magazine reported. Der Spiegel cited a 2008 mail order catalog-style list of vulnerabilities that NSA spies could exploit from companies such as Irvine, California-based Western Digital Corp. or Round Rock, Texas-based Dell Inc. The magazine said that suggested the agency was "compromising the technology and products of American companies." Old-fashioned methods get a mention too. Der Spiegel said that if the NSA tracked a target ordering a new computer or other electronic accessories, TAO could tap its allies in the FBI and the CIA, intercept the hardware in transit, and take it to a secret workshop where it could be discretely fitted with espionage software before being sent on its way. Intercepting computer equipment in such a way is among the NSA's "most productive operations," and has helped harvest intelligence from around the world, one document cited by Der Spiegel stated. One of the most striking reported revelations concerned the NSA's alleged ability to spy on Microsoft Corp.'s crash reports, familiar to many users of the Windows operating system as the dialogue box which pops up when a game freezes or a Word document dies. The reporting system is intended to help Microsoft engineers improve their products and fix bugs, but Der Spiegel said the NSA was also sifting through the reports to help spies break into machines running Windows. One NSA document cited by the magazine appeared to poke fun at Microsoft's expense, replacing the software giant's standard error report message with the words: "This information may be intercepted by a foreign sigint (signals intelligence) system to gather detailed information and better exploit your machine." Microsoft said that information sent by customers about technical issues in such a manner is limited. "Microsoft does not provide any government with direct or unfettered access to our customer's data," a company representative said in an email Sunday. "We would have significant concerns if the allegations about government actions are true." Microsoft is one of several US firms that have demanded more transparency from the NSA - and worked to bolster their security - in the wake of the revelations of former intelligence worker Edward Snowden, whose disclosures have ignited an international debate over privacy and surveillance. Der Spiegel did not explicitly say where its cache NSA documents had come from, although the magazine has previously published a series of stories based on documents leaked by Snowden, and one of Snowden's key contacts - American documentary filmmaker Laura Poitras - was listed among the article's six authors. No one was immediately available at Der Spiegel to clarify whether Snowden was the source for the latest story. Another company mentioned by Der Spiegel, though not directly linked with any NSA activity, was Juniper Networks Inc, a computer network equipment maker in Sunnyvale, Calif. "Juniper Networks recently became aware of, and is currently investigating, alleged security compromises of technology products made by a number of companies, including Juniper," the company said in an email. "We take allegations of this nature very seriously and are working actively to address any possible exploit paths." If necessary, Juniper said, it would, "work closely with customers to ensure they take any mitigation steps."

 China*:  Jan 1 2014

Japanese Prime Minister Shinzo Abe ‘unwelcome’ in China after war shrine visit (By Teddy Ng in Beijing, Zhuang Pinghui and Kristine Kwok) Talks are ruled out as fears grow that the strained relations with China will only improve when Japan's prime minister is out of office [Yasukuni Shrine, located in Tokyo, Japan, is dedicated to over 2,466,000 Japanese soldiers and servicemen who died fighting on behalf of the Emperor of Japan in the last 150 years. It also houses one of the few Japanese war museums dedicated to World War II.The shrine is at the center of an international controversy by honoring war criminals convicted by a post World War II court including 14 'Class A' war criminals. Japanese politicians, including prime ministers and cabinet members have paid visits to Yasukuni Shrine in recent years which caused criticism and protests from China, Korea, and Taiwan.] Shinzo Abe at Tokyo stock exchange yesterday. Beijing said yesterday that Japanese prime minster Shinzo Abe would be "unwelcome" in China because of his visit to a shrine honouring Japan's war dead, including war criminals. The remarks suggest that the chances of any improvement in Sino-Japanese ties will be slim as long as Abe is in office, analysts said. Foreign ministry spokesman Qin Gang said yesterday that leaders of the world's second- and third-largest economies would not have any political dialogue at the highest level. "Since assuming office, Abe has miscalculated on Sino-Japan ties, and made mistake after mistake, especially visiting the Yasukuni Shrine which houses class A war criminals. These people are fascists, the Nazis of Asia," Qin said. "Of course the Chinese people don't welcome such a Japanese leader, and Chinese leaders will not meet him. Abe has himself shut the door on talks with Chinese leaders." Abe said that he hoped for talks with Beijing after visiting the shrine last week - the first pilgrimage to the Shinto-style war shrine by a sitting Japanese prime minister since Junichiro Koizumi's visit in 2006. "Abe's hypocrisy in his claims of prioritising relations with China and hopes for dialogue with the Chinese leaders has been fully revealed," Qin said. "Now, Abe needs to admit his mistakes to the government and people of China, cut loose from the past and make a new start." On civilian ties - as opposed to government ties - between the two countries, Qin said Abe's actions had created a "tremendous obstacle" to bilateral co-operation and would "eventually hurt Japan's own interests". Analysts said Beijing's latest remarks suggested there would be no bilateral summit as long as Abe is in office. Liu Jiangyong , deputy dean of Tsignhua University's Institute of Modern International Relations, said Abe had inflicted greater damage on Sino-Japanese ties than Koizumi. "Abe's recent moves are all targeting China … and at the year end he visits Yasukuni to report his work," Liu said. Da Zhigang, a Japanese affairs specialist at the Heilongjiang Academy of Social Science, said Beijing has lost hope with Abe, and will wait for Abe's successor to improve Sino-Japanese relations. "Abe will not have the chance to visit China, and talks between him and Chinese leaders on the sidelines of international meetings are also not possible," Da said. "But China is unlikely to resort to economic sanctions because this will hurt China's trade and trigger sentiment in China." Zhang Baohui, a security specialist at Lingnan University, said there was almost no room for improvement in Sino-Japan relations under Abe. "The Sino-Japan relationship is in a very difficult situation given the two nations are embroiled in bitter territorial disputes, and the matter is now seriously complicated by historical issues." Liu said relations between China and Japan would continue to deteriorate under Abe's reign. While Abe's Liberal Democratic Party is due to have another round of elections in 2015, Abe faces tremendous pressure both internationally and domestically in his bid to be re-elected as the party's president. "If the Japanese people are not happy with his foreign policy, and if the economy does not improve, if the stock market's bubble bursts, Abe could fail," Liu said.

China's sharp-eyed science satellite goes live (By Zhao Lei zhaolei@chinadaily.com.cn) China's science community moved closer to its goal of a fully integrated system for making high-resolution observations of the Earth's surface from space on Monday, as the first satellite of that system was officially put into operation. The activation of the Gaofen-1 satellite marks a milestone in a program that will substantially improve the nation's capabilities in disaster relief, surveying and environmental protection, the State Administration of Science, Technology and Industry for National Defense, which oversees the program, said in a statement. The administration said the satellite is able to obtain high-resolution data over vast swaths of land, noting it will take only four days to map the entire globe. Gaofen-1 was sent into space aboard a Long March-2D rocket from Jiuquan Satellite Launch Center in Gansu province on April 26. After entering orbit, it underwent eight months of trial operation and tests. Now it's live. Developed by the China Academy of Space Technology, Gaofen-1 will be followed by another four or five satellites before the end of 2016 to form the high-definition Earth observation system — among China's 16 most important national projects in science and technology. The satellite is equipped with a 2-meter-resolution, charge-coupled camera, an 8-meter multispectrum imager, and four 16-meter, wide-field multispectrum imagers. The equipment enables the satellite to take a clear picture of a single automobile on the surface. Major users of the Gaofen-1 are the ministries of land and resources, environmental protection and agriculture. Another 15 central departments also signed agreements allowing them to access satellite information. "Compared with other remote-sensing satellites, Gaofen-1 has greater capabilities in terms of Earth surveys and can significantly improve our nation's performance in this field,” said Wang Chengwen, deputy commander of the Gaofen-1 project. By improving the precision and timeliness of data, the satellite could play an important role in disaster relief in a country hit often by earthquakes, floods and other natural calamities. During its shakedown period after entering orbit, the satellite helped assess the status of deserts in the Aibi Lake area, in the Xinjiang Uygur autonomous region; provided relief workers with high-resolution photos of places affected by the magnitude-6.6 quake that shook Gansu province in July; and recorded the record-breaking floods that hit Heilongjiang province in August, according to Wang. "Using Gaofen-1, we could obtain information of the flooded areas in a timely and precise manner,” said Yang Guangyuan, deputy director of Heilongjiang provincial bureau of water resources. "It provided pictures with accurate coordinates for each place, and it updated very quickly.” In addition, at the request of the Asia-Pacific Space Cooperation Organization, the satellite helped Pakistani authorities see areas hit by a magnitude-7.7 earthquake on Sept 24. The satellite can help improve land-resource surveying, environmental monitoring, geographical and oceanic mapping as well as provide support to precision agriculture. "With the assistance of satellite surveys, we found that the total area of China's wetlands has decreased by 33 percent over the past 30 years. Next, we will use Gaofen-1 to analyze the reasons for the changes,” Yang said. The project to set up a high-resolution Earth observation system received government approval and was launched in 2010. China intends to establish an extremely precise Earth observation system integrated with other measures for a complete observation system that works in all weather at all hours of the day and across the globe. There are more than 50 countries that own or operate Earth observation satellites, and the data they collect is used for economic and social activities and in scientific research. 

Shanghai's shipping industry raises doubts over snubbing in new Free Trade Zone (By Daniel Ren ren.wei@scmp.com) The China (Shanghai) Pilot Free Trade Zone at the Yangshan Deep Water Port is seen in Shanghai on Nov. 29, 2013. Xiong Hao, a senior executive at a Shanghai shipping firm, doubts whether the city’s proposed Free Trade Zone has what it takes to make it a world-class trading hub. “The officials want to bite-off more than they can chew,” Xiong told the South China Morning Post. “They don’t seem to understand the role of a free-trade zone and it doesn’t make sense to me that the financial sector rather than trade and shipping, is given priority.” The mainland’s commercial sector initially embraced the plan for a free trade zone with hopes of establishing a mini-Hong Kong territory exempt from custom intervention. But concerns have since grown that the development plan amounts to no more than a renewed effort to transform Shanghai into a global financial centre. Beijing and local authorities have pledged to make the yuan fully convertible in the FTZ, which will initially cover an area of about 30 square kilometres. They have stressed that the zone will be distinct from counterparts around the world, with a focus on financial liberalisation within the area. “But the manufacturing sector should be the backbone of an economy,” said Xiong, an assistant general manager at Shanghai Jump International Shipping. “It is advisable for the government to give tremendous support to the manufacturing and commodity trading sectors by making the most of the policies in the free-trade zone.” Beijing has yet to unveil detailed operating guidelines covering the trial run of the FTZ, which was officially launched at the end of September, and until now all eyes have been on what financial institutions registered in the zone may be allowed to do. But Xiong and other shipping industry officials have already envisioned huge business opportunities arising from loosened custom intervention, and they believe the shipping sector should be among the top beneficiaries of the zone. “The Yangshan Deep-water Port could take a leap forward based on the free-trade zone policies, giving Shanghai a big boost to establish an international shipping centre,” said Liu Wei, a professor at the Shanghai Maritime University. “Great changes will take place should the customs’ authority really relinquish its supervisory role.” The Yangshan Port is a bonded area where import tariffs are not imposed unless the goods are on-shipped into other areas, and it is regarded as having the world’s best facilities. But until now customs’ procedures have proved to be a major stumbling block to the port’s development into a major international trans-shipment hub. Shanghai handled 32.5 million 20-foot-equivalent units last year, retaining the title of the world’s busiest container port for the third consecutive year. However, only 5.5 per cent of the cargos fell into the category of international trans-shipment – cargoes handled in Shanghai which will be transferred to other vessels bound for foreign destinations after temporary storage. In Hong Kong, international trans-shipments accounted for more than 50 per cent of total container throughput. “A free flow of cargos would be achieved at the free-trade zone, and eventually help Shanghai handle more international trans-shipments,” Liu said. “All the goods inside the zone are supposed to be exempt from local custom procedures and oversights, and the logistics’ services will be given free play to quicken cargo flows.” Under the blueprint endorsed by Beijing, a 14-square-kilometre area at the Yangshan Port is earmarked for the free-trade zone, which is aimed at bolstering the growth of the shipping industry. Analysts said wasn’t big enough to ensure its success. About half of the 14 sq km is in Lingang New City which is connected with the Yangshan islands via the 32.5km cross-sea Donghai Bridge. “Lingang has a huge potential to become a regional manufacturing base,” said Lu Ming, an agent with Shanghai Ocean Shipping Agency. “A big free-trade zone area at Lingang would attract billions of dollars investment to set up productions there. “Manufacturers can process goods for both the mainland and foreign markets.” A larger free-trade zone in Shanghai would also help the city’s long-term economic growth. The mainland government is pushing the notion that locally-made products should rise up the value chain in order to maintain the rapid growth of the economy, after a strengthening yuan and rising labour costs have dented China’s role as the world’s manufacturing hub. “Going back to basics is important,” said Xiong. “The free-trade zone can technically help China to recover the lost ground in manufacturing. “What’s the point of focusing on finance while putting shipping and trade aside.” 

Long lines for 'Xi Jinping Combo' at Beijing restaurant after president's visit (By Vanessa Pao vanessa.pao@scmp.com) A serving of food at a Qingfeng chain restaurant in Beijing similar to what Chinese President Xi Jinping ate when he visited on Saturday, is pictured at the Qingfeng steamed buns restaurant in Beijing. Customers line up to buy steamed buns which Chinese President Xi ate on Saturday, at the Qingfeng steamed buns restaurant in Beijing. The Qingfeng Steamed Bun chain restaurant in Beijing where Chinese president Xi Jinping enjoyed a much-publicised meal on Saturday has removed the table the president sat at for fear that customers would fight over the spot. “It’s not that we want to keep the table to ourselves as a souvenir; it’s mainly out of safety concerns,” one staffer who only gave her surname, Wang, told a South China Morning Post reporter. Since stories of Xi's Saturday visit made national headlines, the restaurant has seen an overwhelming swarm of customers, say waiters and the manager. Waiters at the entrance had to warn customers that they would have to wait for around an hour before getting a table and their food. But undeterred locals and tourists flocked to the humble eatery in western Beijing, forming long queues snaking through the entrance hall into its 500-square-metre dining area. At lunch hour on Monday, the man waiting at the end of the pick-up queue had a ticket with the number 597. Most customers in the line were busy taking pictures of the store. Many who finally reached the counter had only one simple request: "Just give me the 'Xi Combo!'”. The President had ordered steamed buns stuffed with pork and onion, a green vegetable dish and a stew with pork liver and intestines. Zhuo Guizhen, a Beijinger and frequent of the restaurant, said it was the first time she saw so many customers here. Olivia Chao, a Chinese-Australian tourist travelling with her family in Beijing, was having exactly what Xi ordered. “My relatives in Australia called us yesterday saying they saw in the news that China’s president dined at this restaurant, so we came today to have a taste of the buns,” she said. The chain store has seen an explosion of customers since Xi's visit, said the store manager, He Yuanli, as she rattled around the crowded restaurant collecting used trays and wiping down tables. Most customers came for the "Xi Combo," she said. A staffer from Qingfeng’s headquarters, who came to the branch to help out because of the overwhelming number of diners, said the store had already replaced the table Xi actually used last Saturday in case customers would fight over it. But Wang said the chain had no plan to add the 21-yuan (HK$27) “Xi Combo” to its set menu yet. “We don’t want to use his visit as a stunt to make money,” she said. 

Hong Kong*:  Dec 31 2013

Developers sniff out better deal at MTR site (By Sandy Li sandy.li@scmp.com) Tin Shui Wai site draws 19 expressions of interest on hopes of reduced land premium - MTR Corp's second attempt at tendering a large residential site near the Tin Wing Light Rail Station in Tin Shui Wai saw 19 developers submit expressions of interest yesterday, the second-biggest response since April. Market observers said the strong initial response indicated developers held high expectations that the Lands Department would soften its stand on the land premium payable after the site failed to attract any bids in February. In light of market sentiment, they said they believed the department would have to cut the original HK$2.69 billion land premium for the site by 10 per cent to 25 per cent in order to encourage bidding. "The initial response is much better than what the market expected," said Alvin Lam, a director at Midland Surveyors. "It shows big and small developers wanted to enter first as this round is only for expressions of interest. "They don't want to miss any chance in case the government lowers the land premium." Developers lining up before yesterday's noon deadline to submit tenders to develop the site included Cheung Kong, Sun Hung Kai Properties, Henderson Land, Sino Land, Nan Fung, Chinachem, Lai Sun Development, Asia Standard and Wheelock & Co. The site will yield a gross floor area of 982,280 square feet, or 1,500 units. MTR Corp withdrew the residential site in Tin Shui Wai from tendering in February when no developer submitted a bid due to the high land premium to be charged by the Lands Department. The tendering of an MTR site at Long Ping Station (South) in Yuen Long in April saw 20 developers submit expressions of interest, making it the most popular offering this year. Ringo Lam, a director of valuation at AG Wilkinson & Associates, said the Lands Department would have to reduce the land premium by 10 per cent in order to attract bidders. Market observers forecast the land premium for the Tin Shui Wai site could be lowered to between HK$2 billion and HK$2.42 billion, or HK$2,000 to HK$2,463 per square foot. Excluding interest expenses, the land and construction cost for the site could reach HK$5 billion to HK$5.8 billion, they said.

 China*:  Dec 31 2013

 

High-speed rail opens up line of prosperity (By He Huifeng huifeng.he@scmp.com) New Shenzhen-Xiamen bullet train links three important economic hubs for first time, as well as making business trips and holidays much easier - The new high-speed railway between Shenzhen and Xiamen opened yesterday, slicing the journey from an area many Hongkongers call home to the southeast coast from 15 hours to just 3-1/2 hours. The 514km line is also a major breakthrough in connecting the rich, but relatively less accessible area of eastern Guangdong to the rest of the Pearl River Delta, Hong Kong and Fujian province. More than 21.4 million people live in the areas of Chaozhou and Shantou (known collectively as Chaoshan). Many Hongkongers, including Hong Kong's richest man Li Ka-shing, hail from the area. The new train line, with 18 stations, also connects the Pearl River Delta, with a population of 140 million, with Fujian province, with a population of more than 37 million. Guangdong officials said travel from any place in the delta to Fujian would now take less than four hours. The new line also connects with another high-speed line from Xiamen to Shanghai, linking for the first time the three important economic hubs of the Pearl River Delta, the proposed western Taiwan straits economic zone, and the Yangtze River Delta. Twenty-six trains will depart from Shenzhen daily to different destinations including Xiamen, Shanghai, Nanjing and Hangzhou . Travel time from Shenzhen to Xiamen will be cut from 15 hours to 31/2. Two trains will run daily between Guangzhou and the new Chaoshan station built between Chaozhou and Shantou. Passengers on the first train to Xiamen said ticket prices were competitive. A one-way first-class ticket from Shenzhen cost 181 yuan (HK$229), while a second-class ticket cost 150.50 yuan, cheaper than a coach service (190 yuan) and flying, which usually costs more than 700 yuan. Guo Qianxiang, a Chinese medicine practitioner from Guangzhou, said he saved time and money on his trip. "I work in Guangzhou and go back home to Shantou once a month. In the past, it took at least four hours and more then 1,000 yuan by plane, or six hours and 180 yuan by coach. Today, I would only spend 164 yuan and less than three hours for the trip," he said. A Fujian tourism bureau official, who was on the train yesterday to promote tourism, said the province was rolling out discounts for hotels in Xiamen in the hope that the new line would bring a 30 per cent rise in the number of tourists from Hong Kong and the Pearl River Delta. Authorities have not provided any official estimates on the project's cost, but mainland media estimate it at 41.7 billion yuan. "I am looking forward to the opening of the railway. It will save me a lot of money and time on transportation," said a woman from Zhangzhou city in Fujian, who travels to Hong Kong to shop two or three times a year. "It costs at least 2,000 yuan to fly to Hong Kong through Shenzhen. Now it only costs about 200 yuan. I will definitely go to Hong Kong more often." However, some passengers complained their ears popped due to a sudden change in air pressure as the train sped through tunnels. The journey goes through 71 tunnels and crosses 159 bridges. "Making phone calls is a big problem on the train," said a businessman from Wenzhou . "If I can not be reached by mobile for eight hours or even 12 hours, I would miss many important calls from clients." Some passengers also complained about insufficient public transport to the new Chaoshan station, which is about 40 minutes drive from both Chaozhou and Shantou cities. China's railway network now spans more than 100,000km, including 10,000km of high speed lines, as of Saturday, when several new rail links started operations in addition to the Shenzhen-Xiamen line. These include the Xi'an-Baoji high rail, the Chongqing-Lichuan railway, and others in Guangxi .

Hong Kong*:  Dec 30 2013

Pan-democrats clash over proposed electoral reform compromise for 2017 (By Jeffie Lam jeffie.lam@scmp.com) 'Heartbroken' Ronny Tong Ka-wah rejects suggestion he betrayed Hongkongers with 2017 plan that ignores public nomination - Civic Party lawmaker Ronny Tong Ka-wah sounded close to tears yesterday as he spoke of his heartbreak at being labelled "the betrayer of Hong Kong" by fellow pan-democrats after he put forward a controversial proposal for electoral reform. Tong also hit back at his critics, saying they set unreasonably high demands in the battle for electoral reform by insisting on a three-track nomination system for chief executive candidates that includes a nominating committee as well as public and party nominations. "Some onlookers might think pan-democrats have been bidding too high," Tong told Commercial Radio yesterday. "First they accept a proposal with a low nomination threshold. Then they call for public nomination. Now they say no part of the three-track system can be omitted. "It is a bid [that is] too high that may make opponents doubt if they really have the sincerity to take part in talks." In his own proposal for reform put forward in October, the barrister and lawmaker suggested widening the franchise of the nominating committee by including all elected district councillors and replacing corporate voting in some subsectors with individual votes. It did not include the idea of public nomination. If the nominating committee was broadly representative - with two-thirds of its members directly elected by Hongkongers - it would avoid any threat of candidates being screened, he argued. Yesterday, his voice was choked with emotion as he said: "I did not betray Hongkongers. It is especially heartbreaking to be blamed by pan-democrat allies." Tong's remarks did not impress Professor Joseph Cheng Yu-shek - convenor of the Alliance for True Democracy. "Given that two polls have shown that most people favour public nomination, the alliance only wants to clearly reflect Hongkongers' views," he said. "This is not a matter of making a high bid." Basic Law Committee vice-chairwoman Elsie Leung Oi-sie had attempted to slam the door shut on the idea of public nomination, but yesterday Raymond Tam Chi-yuen, the secretary for constitutional and mainland affairs, sounded a softer note from the government. He said the government was open to a reform proposal put forward by Hong Kong University law professor Albert Chen Hung-yee which would keep the substantial nominating power of the committee. Chen has suggested dividing the nominating process into two stages - an initial public recommendation of candidates, followed by an internal ballot by a nominating committee to draw up a shortlist. "We have to look into the details," Tam said of the proposed two-stage process, "before making an overall judgment."

 China*:  Dec 30 2013

Shrine visit fury mounts (By PU ZHENDONG in Beijing, CAI HONG in Tokyo and ZHANG YUWEI in Washington puzhendong@chinadaily.com.cn) Protesters shout slogans against Japanese Prime Minister Shinzo Abe outside the Japanese embassy in Seoul on Friday. Abe paid his respects on Thursday at the controversial Yasukuni Shrine in a move that drew sharp rebukes from China and South Korea, who warned that the visit celebrates Japan’s militaristic past. World powers and Asian neighbors united in their condemnation of Abe - Outrage from Asian neighbors and world powers continued to grow on Friday over Japanese Prime Minister Shinzo Abe's visit to a controversial shrine. Observers described the visit to Tokyo's Yasukuni Shrine, made on Thursday, as a dangerous attempt to redefine Japan's militaristic wartime history. The shrine honors 14 of Japan's World War II Class A war criminals among the country's war dead. Abe's decision prompted the United States to reconsider its level of support for its Asian ally, while Russia and the European Union also voiced concerns. Chinese Foreign Ministry spokeswoman Hua Chunying reiterated Beijing's indignation, attacking Japan's justification for the visit as "feeble and futile" and urging it to take responsibility in maintaining regional stability. "What we have seen in the past year from Abe's words and conduct is only hypocrisy, arrogance and self-contradiction, as he tried to deny World War II aggression, a military build-up and a challenge to the post-war world order," Hua said. "It is obvious that Abe's retrograde actions have induced condemnation from Chinese people, for which Japan should bear all the consequences," she said. "It's Tokyo's choice — whether to reflect on history thoroughly and develop future-oriented ties with neighbors, or cling to its wrong and dangerous course, being isolated by the world." The foreign affairs committee of the National People's Congress also issued a statement on Friday condemning Abe's visit to the shrine. China and South Korea, both victims of Japan's past atrocities, voiced their anger over the shrine visit on Thursday. Beijing summoned Tokyo's ambassador to deliver a "strong reprimand", while Seoul expressed its anger and urged Tokyo to stop "beautifying its invasion". Analysts, describing Abe as "politically and morally tone deaf" and his actions as "irresponsible", said his visit was foolish and did nothing but exacerbate an already sour relationship with other Asian nations that suffered under Japan during World War II. Jeff Kingston, director of Asian studies at Japan's Temple University, said Japan has turned its history into an issue when it should be seeking the cooperation of China and South Korea. "Trampling on neighbors' sensitivities about their shared past also limits room for managing territorial disputes involving both countries, or making headway on a range of other pressing issues," CNN quoted Kingston as saying. Lyu Yaodong, director of the Japanese diplomacy department at the Institute of Japan Studies under the Chinese Academy of Social Sciences, said the real intention of Abe's shrine visit was to publicize the Japanese leader's view of the country's history. "The visit has made it more difficult for Tokyo to mend its sabotaged ties with Beijing and Seoul. It also goes against Japan's ambition to be a world power," Lyu said. In a rare critical tone, Washington on Thursday also criticized Tokyo for exacerbating tensions. Liu Jiangyong, an expert in Japanese studies at Tsinghua University, said: "The swift response from Washington shows that Abe has trespassed on the bottom line of the US' conception of history and war. On historic issues, Washington and Tokyo contradict each other." Jon Taylor, a political science professor at the University of St Thomas in the US, said the visit hurts the US-Japan relationship and gives the White House an unneeded headache. "There is a concern that Abe may be using this as a way to deflect problems in the economy by pushing Japanese nationalism, which is never a good thing," Taylor said. Weston Konishi, an expert on Asia, said the US wants to show strong support for Japan as Tokyo struggles with territorial issues with its neighbors. "But at the same time, the US is very concerned about prime minister Abe's views toward history, and how that might exacerbate tensions," Konishi was quoted by AFP as saying. "It certainly complicates what the US is trying to do in Asia." On Thursday, Russian Foreign Ministry spokesman Alexander Lukashevich expressed regret over Abe's visit. He said that some forces in Japan have a different evaluation of the outcome of World War II compared with the understanding shared by the world. Catherine Ashton, European Union foreign policy chief, said in a statement that Abe's decision is not conducive to easing tensions in the region or improving relations with neighbors, especially China and South Korea. Gao Hong, deputy director of the Institute of Japanese Studies at the Chinese Academy of Social Sciences, said the international community is seriously concerned about Abe's visit because it challenges the human conscience and the post-war world order. Conciliatory tone. Acknowledging that the visit has become a political and diplomatic issue, Abe struck a conciliatory tone soon afterwards. "It is not my intention at all to hurt the feelings of the Chinese and Korean people," he said. "I have renewed my determination before the souls of the war dead to firmly uphold the pledge never to wage a war again." Abe did not visit the Yasukuni Shrine during his previous tenure as prime minister in 2006. In October, several Japanese cabinet officials and more than 150 legislators visited the shrine. Abe refrained from visiting in person then, but sent an offering. 

Hong Kong*:  Dec 29 2013

Accounting body fights corner (By Enoch Yiu enoch.yiu@scmp.com) President of HK watchdog says reforms are necessary to bring city into line with international standards, but is against extreme change - The new head of Hong Kong's accountancy watchdog says it is determined to remain the key oversight agency for the city's 36,000 accountants despite a government proposal to reassign its regulatory authority to a new body. Clement Chan Kam-wing (pictured), the president of the Hong Kong Institute of Certified Public Accountants, said reforms were on the table and necessary to bring Hong Kong's accountancy regime into line with international standards, but that extreme reform could not be countenanced. "We agree to reform our audit regulatory regime in a bid to match international practices," Chan told the South China Morning Post. "But we will not agree to extreme reforms that go as far as those in the United States where the accountancy body abandoned all its regulatory functions." The government plans to canvas public opinion in the first quarter of next year about major accounting reform that could result in a law change in 2015 to scrap many of the institute's regulatory functions - including its role in maintaining a register of accountants, setting standards, surveillance of accounting firms, and discipline of accountants found by it to have been guilty of misconduct. These powers may be transferred to the Financial Reporting Council that was set up in 2006 to investigate audit failures of listed companies. The proposal is designed to strengthen oversight of a sector in the city's financial industry that critics say seriously lags international practice. Chan said the institute would agree to give up the powers of making routine inspections of accounting firms and agree to shift those powers to the FRC. The institute would also agree to give up its disciplinary powers, although it did not agree that these powers should be shifted to the FRC. "The FRC is responsible for investigations. If it is also to decide how to punish the accountants, it is like playing the role of policeman and judge in one go. There would be conflict, and it would be better to have an independent member-formed panel or organisation to decide on penalties." A report commissioned by the council and released in October found that Hong Kong's self-regulatory system was outdated and failed to match the standards of the European Union. This led to Hong Kong failing to secure membership of the International Forum of Independent Audit Regulators - an organisation of audit regulators. The report noted that in the 40 markets that were examined, one or more non-accountancy bodies were established to undertake the regulatory oversight of the sector. "As an international financial centre, we agreed we needed to reform our system to match international standards," Chan said. "But we do not necessarily need to go for the US model. Rather, we think the British or German model would be more ideal," he said. Chan said the institute also refused to give up its regulatory roles in training, licensing, and standard-setting for accountants. In the US these functions are handled by a non-accountant body, but he said he did not agree with this. "We do not agree with the US model as registration and standard-setting are very much an industry issue. The HKICPA has the professionals to understand what the industry needs," he said. In Britain and Germany accounting bodies retained these functions although they were exercised under independent oversight. "The key is to allow independent oversight on how the HKICPA carries out these regulatory functions," he said.

 China*:  Dec 29 2013

Beidou to achieve global coverage by 2020 (By Xinhua) China will launch upgraded satellites and expand its regional Beidou Navigation Satellite System (BDS) to global coverage by 2020, a spokesman for the system said on Friday. "BDS' general performance is expected to be improved by one to two times from the current level and its positioning accuracy could be upgraded to meter or even sub-meter level" by 2020, BDS spokesman Ran Chengqi said at a press conference. BDS began providing positioning, navigation, timing and short message services to civilian users in China and surrounding areas in the Asia-Pacific region in December 2012. Over the past year, positioning has been accurate to within ten meters, according to Ran, director of the satellite navigation office. "Performance is better in some regions," he said. Accuracy can reach seven meters in Chinese cities like Beijing, Zhengzhou, Xi'an and Urumqi and five meters in low-latitude regions such as the Association of Southeast Asia Nations (ASEAN). The office issued an interface control document (ICD) for open service signal B2I in both Chinese and English on Thursday. "B2I, which updates B1I released last year, means BDS has entered the era of multifrequency application," Ran said. "It means the system can provide more accurate navigation." Companies from both home and abroad could develop high-precision dual-frequency BDS receivers on the basis of this, according to the spokesman. China launched the first BDS satellite in 2000. Prior to the official launch of the system a year ago, a preliminary version of the system has been used in traffic control, weather forecasting and disaster relief work since 2003.

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

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